COMMERCIAL PLEDGE AGREEMENT

Exhibit 10.20

COMMERCIAL PLEDGE AGREEMENT

Principal   $8,000,000.00

Loan Date

Maturity

Loan No.   00000000

Call/Coll

Account   40000

Officer   MRD

Initials

References in the boxes above are for Xxxxxx's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations.

Grantor:

UTG, Inc.

Lender:

Illinois National Bank

0000 X. Xxxxx Xx.

Main Branch

Frontage Rd. East

000 X. Xxxxxxx

Springfield, IL  62703

Springfield, IL  612701

Company:

Universal Guaranty Life Insurance Company

0000 X. Xxxxx Xx.

Frontage Rd. East

Springfield, IL  62703

THIS COMMERCIAL PLEDGE AGREEMENT dated November 20, 2012, is made and executed between UTG, Inc. ("Grantor'), Universal Guaranty Life Insurance Company ("Company"), and Illinois National Bank ("Lender").

GRANT OF SECURITY INTEREST.  For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral"as used in this Agreement means Grantor's present and future rights, title and interest in and to the following described investment property, together with any and all present and future additional thereto, substitutions therefore, and replacements thereof, together with any and all present and future certificates and/or instruments evidencing any stock and further together with all income and Proceeds as described herein:

400,000 shares of Universal Guaranty Life Insurance Company stock, Certificate Numbers 111

Grantor has delivered to Lender the certificates representing all of the shares of stock, together with undated stock powers executed in blank.

CROSS-COLLATERALIZATION. In addition to the Line of Credit, this Agreement secures all obligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable.

RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether checking, savings, or some other account).  This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in the future.  However, this does not include any IRA or Xxxxx accounts, or any trust accounts for which setoff would be prohibited by law. Grantor authorizes Xxxxxx, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at Xxxxxx's option, to administratively freeze all such accounts to allow Lender to protect Xxxxxx's charge and setoff rights provided in this paragraph.

REPRESENTATIONS AND WARRANTIES.  Grantor represents and warrants to Lender that:

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Ownership.  Grantor is the lawful owner of the Collateral free and clear of all security interests, liens, encumbrances and claims of others except as disclosed to and accepted by Xxxxxx in writing prior to execution of this Agreement.

Right to Pledge.  Grantor has the full right, power and authority to enter into this Agreement and to pledge the Collateral.

Authority; Binding Effect.  Grantor has the full right, power and authority to enter into this Agreement and to grant a security interest in the Collateral to Lender.  This Agreement is binding upon Grantor as well as Grantor's successors and assigns, and is legally enforceable in accordance with its terms.  The foregoing representations and warranties, and all other representations and warranties contained in this Agreement are and shall be continuing in nature and shall remain in full force and effect until such time as this Agreement is terminated or cancelled as provided herein.

No Further Assignment. Grantor has not, and shall not, sell, assign, transfer, encumber or otherwise dispose of any of Grantor's rights in the Collateral except as provided in this Agreement.

No Defaults. There are no defaults existing under the Collateral, and there are no offsets or counterclaims to the same.  Grantor will strictly and promptly perform each of the terms, conditions, covenants and agreements, if any, contained in the Collateral which are to be performed by Grantor.

No Violation.  The execution and delivery or this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party.

Financing Statements.  Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect Xxxxxx's security interest.  At Xxxxxx's request, Xxxxxxx additionally agrees to sign all other documents that are necessary to perfect, protect, and continue Xxxxxx's security interest in the Property.  Grantor will pay such filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs.  Grantor irrevocably appoints Lender to Grantor changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes, Grantor will promptly notify the Lender of such change.

Company Stock.  The Collateral is all of the issued stock of the Company, which is presently owned or controlled by Grantor.  If Grantor at any time owns or controls any other shares of stock of the Company, all such stock shall without further act or deed be subject to all of the terms and conditions of this Agreement and Grantor must immediately take such action to perfect Xxxxxx's lien and security interest as Lender may request, including executing undated blank stock powers and delivering the stock certificate(s) representing such shares.

Options. There are no options or other rights to purchase or otherwise acquire the Collateral outstanding at this time.

Issued Stock.  All of the outstanding shares of stock of the Company have been duly and validly issued by the Company, and they are fully paid and nonassessable.

Pledge.  There are no existing agreements with respect to the Collateral between Grantor and any other person or entity (other than the Lender).

No Adverse Changes.  Grantor represents and warrants that neither Grantor, nor any of its partially or wholly owned subsidiaries, have experienced any materially adverse changes in (i) its financial condition since 8/22/12, and (ii) the character of the Collateral since 8/22/12.

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XXXXXX'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL.  Lender may hold the Collateral until all indebtedness has been paid and satisfied. Thereafter Lender may deliver the Collateral to Grantor or to any other owner of the Collateral.  Lender shall have the following rights in addition to all other rights Lender may have by law:

Maintenance and Protection of Collateral. Lender may, but shall not be obligated to, take such steps as it deems necessary or desirable to protect, maintain, insure, store or care for the Collateral, including paying of any liens or claims against the Collateral.  This may include such things as hiring other people, such as attorneys, appraisers or other experts.  Xxxxxx may charge Grantor for any cost incurred in so doing.  When applicable law provides more than one method of perfection of Xxxxxx's security interest, Xxxxxx may choose the method(s) to be used.  If the Collateral consists of stock, bonds or other investment property for which no certificate has been issued, Grantor agrees, at Xxxxxx's request, either to request issuance of an appropriate certificate or to give instructions on Xxxxxx's forms to the issuer, transfer agent, mutual fund company, or broker, as the case may be, to record on its books or records Xxxxxx's security interest in the Collateral.  Xxxxxxx also agrees to execute any additional documents, including but not limited to, a control agreement, necessary to perfect Xxxxxx's security interest as Xxxxxx may desire.

Income and Proceeds from the Collateral.  Lender may receive all Income and Proceeds and add it to the Collateral.  Xxxxxxx agrees to deliver to Xxxxxx immediately upon receipt, in the exact form received and without commingling with other property, all income and Proceeds from the Collateral which may be received by, paid, or delivered to Grantor or for Grantor's account, whether as an addition to, in discharge of, in substitution of, or in exchange for any of the Collateral.

Application of Cash.  At Lender's option, Lender may apply any cash, whether included in the Collateral or received as income and Proceeds or through liquidation, sale, or retirement, of the Collateral, to the satisfaction of the Indebtedness or such portion thereof as Lender shall choose, whether or not matured.

Transactions with Others.  Lender may (1) extend time for payment or other performance, (2) grant a renewal or change in terms or conditions, or (3) compromise, compound or release any obligation, with any one or more Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems advisable, without obtaining the prior written consent of Grantor, and no such act or failure to act shall affect Lender's rights against Grantor or the Collateral,

All Collateral Secures Indebtedness. All Collateral shall be security for the Indebtedness, whether the Collateral is located at one or more offices or branches of Lender, This will be the case whether or not the office or branch where Grantor obtained Grantor's loan knows about the Collateral or relies upon the Collateral as security.

Collection of Collateral.  Lender at lender's option may, but need not, collect the income and Proceeds directly from the Obligors.  Grantor authorizes and directs the Obligors, if Xxxxxx decides to collect the Income and Proceeds, to pay and deliver to Lender all Income and Proceeds from the Collateral and to accept Xxxxxx's receipt for the payments.

Power of Attorney.  Grantor irrevocably appoints Lender as Grantor's attorney-in-fact, with full power of substitution,  (a) to demand, collect, receive, receipt for, sue and recover all Income and Proceeds and other sums of money and other property which may now or hereafter become due, owing or payable from the Obligors in accordance with the terms of the Collateral;  (b) to execute, sign and endorse any and all instruments, receipts, checks, drafts and warrants issued in payment for the Collateral;  (c) to settle or compromise any and all claims arising under the Collateral, and in the place and stead of Grantor, execute and deliver Xxxxxxx's release and acquittance far Grantor;  (d) to file any claim or claims or to take any action or institute or take part in any proceedings, either in Xxxxxx's own name or in the name of Grantor, or otherwise, which in the discretion of Lender may seem to be necessary or advisable; and  (e) to execute in Grantor's name and to deliver to the Obligors on Grantor's behalf, at the time and in the manner specified by the Collateral, any necessary instruments or documents.

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Perfection of Security Interest.  Upon Xxxxxx's request, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral.  When applicable law provides more than one method of perfection of Xxxxxx's security interest, Xxxxxx may choose the method(s) to be used.  Upon Xxxxxx's request, Grantor will sign and deliver any writings necessary to perfect Xxxxxx's security interest.  If any of the Collateral consists of securities for which no certificate has been issued, Grantor agrees, at Xxxxxx's option, either to request issuance of an appropriate certificate or to execute appropriate instructions on Xxxxxx's forms instructing the issuer, transfer agent, mutual fund company, or broker, as the case may be, to record on its books or records, by hook-entry or otherwise, Xxxxxx's security interest in the Collateral.  Grantor hereby appoints Xxxxxx as Xxxxxxx's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties.  This is a continuing Security Agreement and will continue in effect even though all or any part of the Indebtedness is paid in full and even though for a period of time Grantor may not be indebted to Lender,

XXXXXX'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Xxxxxx's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or nay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Larder deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral.  All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor.  All such expenses will become a part of the Indebtedness and, at Xxxxxx's option, will (A) be payable on demand: (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.  The Agreement also will secure payment of these amounts.  Such right shall be in addition to all other rights and remedies to which Xxxxxx may be entitled upon Default.

LIMITATIONS ON OBLIGATIONS OF LENDER.  Lender shall use ordinary reasonable care in the physical preservation and custody of the Collateral in Xxxxxx's possession, but shall have no other obligation to protect the Collateral or its value.  In particular, but without limitation, Lender shall have no responsibility for (A) any depreciation in value of the Collateral or tar the collection or protection of any Income and Proceeds from the Collateral, (B) preservation of rights against parties to the Collateral or against third persons, (C) ascertaining any maturates, calls, conversions, exchanges, offers, tenders, or similar matters relating to any of the Collateral, or (D) informing Grantor about any of the above, whether or not Lender has or is doomed to have knowledge of such matters. Except as provided above, Lender shall have no liability for depreciation or deterioration of the Collateral.

REINSTATEMENT OF SECURITY INTEREST.  If payment is made by Grantor, whether voluntarily or otherwise, or by guarantor or by any third party, on the Indebtedness and thereafter Lender is forced to remit the amount of the: payment (A) to Grantor's trustee in bankruptcy or to any similar person under any federal or state bankruptcy law or law for the relief of debtors, (B) by reason of any judgment, decree or order of any court or administrative body having jurisdiction over Lender or any of Lender's property, or (C) by reason of any settlement or compromise of any claim made by lender with any claimant (including without limitation Grantor), the Indebtedness shall be considered unpaid for the purpose of enforcement of this Agreement and this Agreement shall continue to be effective or shall be reinstated, as the case may be, notwithstanding any cancellation of this Agreement or of any note or other instrument or agreement evidencing the indebtedness and the Collateral will continue to secure the amount repaid or recovered to the same extent as if that amount never had been originally received by Xxxxxx, and Grantor shall be bound by any judgment, decree, order, settlement or compromise relating to the Indebtedness or to this Agreement.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default.  Grantor fails to make any payment when due under the Indebtedness.

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Other Defaults.  Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor.

Default in Favor of Third Parties.  Any guarantor or Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor's or Grantor's property or ability to perform their respective obligations under this Agreement or any of the Related Documents.

False Statements.  Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Defective Collateralization.  This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by a creditor of Grantor or by any governmental agency against any collateral securing the indebtedness.  This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Xxxxxx.  However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Xxxxxx written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Grantor.  Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or Guarantor dies or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

Adverse Change.  A material adverse change occurs in Grantor's financial condition, or Xxxxxx believes the prospect of payment or performance of the Indebtedness is impaired.

Insecurity.  Lender in good faith believes itself insecure.

Cure Provisions.  If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after Lender sends written notice to Grantor demanding cure of such default:  (1) cures the default within ten (10) days; or (2) if the cure requires more than ten (10) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

COMPANY OBLIGATIONS.  The following provisions are additionally binding upon Company as a part of this Agreement:

Authorized Pledge.  The Agreement constitutes an Authorized Pledge by Grantor.  As used herein, Authorized Pledge means a Pledge of Shares approved by the Company before any default in the indebtedness secured by such pledge.

Claims and Liens.  Company attests that at the time of execution of this Agreement, that there are no claims or liens against the Collateral other than to Lender to its knowledge.  The records of Company reflect no other claims or liens against the Collateral.

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Debt of Grantor.  Lender shall not be liable for any indebtedness or obligations of Grantor to the Company or any other person or entity.

Information.  Upon written request by Xxxxxx from time to time, the Company will furnish information relating to the Collateral to the extent such information is generally available to Non-Voting Shareholders and may be acquired or furnished by the Company without unreasonable effort or expense.

Issued Shares.  The Company warrants and represents that 400,000 of common voting shares have been issued by the Company, which shares are fully paid and nonassessable.  Grantor holds 100% of the Company's issued common voting shares as of the date of this Agreement.  The records of the Company reflect no issued shares exist other than those issued to Grantor.  During the terms of the Line of Credit and/or this Agreement, the Company shall not issue any new shares, of any kind, to anyone, at anytime, without the prior express written agreement and approval of Lender.

Dividends and Distributions.  During the term of the Line of Credit and/or this Agreement, unless prior express written approval has been provided by Lender, the Company shall not pay a dividend or distribution of cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding 12 months, exceeds the greater of (1) 10% of statutory-basis policyholders' surplus as of the prior December 31, or (2) the statutory-basis net income of the Company for the prior year.  As of this date, this is defined as an "Extraordinary Dividend."

Domiciliary.  The Company's present domiciliary is the State of Ohio.  During the term of the Line of Credit and/or this Agreement, the Company shall not change its domiciliary state without the prior express written approval of Lender.

Signatures.  It is a condition precedent to the effectiveness of this Agreement that it be signed not only by the Company in the space indicated below, but also by Grantor and Xxxxxx in the spaces indicated below.

ONGOING BUSINESS OF GRANTOR AND COMPANY.  The following provisions are made a part of this Agreement:

Business Affairs of Grantor and Company. During the term of the Line of Credit and/or this Agreement, without Lender's prior approval, neither Grantor nor Company shall, or shall permit the other to:

(i)	Sell, liquidate or otherwise transfer any of the Grantor's and/or Company's assets, or transfer all or substantially all of its insurance risk, outside the ordinary course of its business;
(ii)	Merge or consolidate with another entity or entities;
(iii)	Issue, sell, grant, transfer or otherwise dispose of any shares of Company's stock; or
(iv)	Amend, repeal or otherwise modify its articles of incorporation or bylaws or Grantor and/or Company

DEBT TO EQUITY RATIO.  The following provisions are made a part of this Agreement:

Grantor Debt to Equity.  Company's debt to equity ratio shall not exceed 13.00x on a statutory basis during the term of the Line of Credit and/or this Agreement.  If Company's debt to equity ratio ever exceeds 13.0x during the term of the Line of Credit and/or this Agreement, it shall be deemed on Event of Default.

Company Debt to Equity.  Grantor's debt to equity ratio shall not exceed 9.00x on a consolidated basis during the term or the Line of Credit and/or this Agreement.  If Grantor's debt to equity ratio ever exceeds 9.0x during the term of the Line of Credit and/or this Agreement, it shall be deemed on Event of Default.

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RIGHTS AND REMEDIES ON DEFAULT.  If an Event of Default occurs under this Agreement, at any time thereafter, Lender may exercise any one or more of the following rights and remedies:

Accelerate Indebtedness.  Declare all lndebtedness, including any prepayment penalty which Grantor would be required to pay, immediately due and payable, without notice of any kinds to Grantor.

Collect the Collateral.  Collect any of the Collateral and, at Xxxxxx's option and to the extent permitted by applicable law, retain possession of the Collateral while suing on the Indebtedness.

Sell the Collateral.  Sell the Collateral, at Xxxxxx's discretion, as a unit or in parcels, at one or more public or private sales.  Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender shall give or mail to Grantor, and other persons as required by law, notice at least ten (10) days in advance of the time and place of any public sale, or of the time after which any private sale may be made.  However, no notice need be provided to any person who, after an Event of Default occurs, enters into and authenticates an agreement waiving that person's right to notification of sale.  Grantor agrees that any requirement of reasonable notice as to Grantor is satisfied if Lender mails notice by ordinary mail addressed to Grantor at the last address Grantor has publication in any newspaper of general circulation in the county where the Collateral is located, setting forth the time and place of sale and a brief description of the property to be sold.  Lender may be a purchaser at any public sale.  This provision is expressly agreed to by Xxxxxx, Grantor, and the Company.

Sell Securities.  Sell any securities included in the Collateral in a manner consistent with applicable federal and state securities laws.  If, because of restrictions under such laws, Lender is unable, or believes Xxxxxx is unable, to sell the securities in an open market transaction, to one or more persons or to a restricted group of persons, even though such sale may result in a price that is less favorable than might be obtained in an open market transaction.  Such a sale will be considered commercially reasonable.  If any securities held as Collateral are "restricted securities" as defined in the Rules of the Securities and Exchange Commission (such as Regulation D or Rule 144) or the rules of state securities departments under state "Blue Sky" laws, or if Grantor or any other owner of the Collateral is an affiliate of the issuer of the securities, Xxxxxxx agrees that neither Grantor, not any member of Grantor's family, nor any other person signing this Agreement will sell or dispose of any securities of such issuer without obtaining Xxxxxx's prior written consent.

Rights and Remedies with Respect to Investment Property, Financial Assets and Related Collateral.  In addition to other rights and remedies granted under this Agreement and under applicable law, Lender may exercise any or all of the following rights and remedies: (I) register with any issuer or broker or other securities intermediary any of the Collateral consisting of investment property or financial assets (collectively herein, "investment property") in Lender's sole name or in the name of Xxxxxx's broker, agent or nominee; (2) cause any issuer or broker or other securities intermediary to deliver to Lender any of the Collateral consisting of securities, or investment property capable of being delivered; (3) enter into a control agreement or power of attorney with any issuer or securities intermediary with respect to any Collateral consisting of investment property, on such terms as Lender may deem appropriate, in its sole discretion, including without limitation, an agreement granting to Lender any of the rights provided hereunder without further notice to or consent by Grantor; (4) attorney-in-fact, coupled with an interest, for the purpose of executing such control agreement on Grantor's behalf; (5) exercise any and all rights of Lender under any such control agreement or power of attorney; (6) exercise any voting, conversion, registration, purchase, option, or other rights with respect to any Collateral; (7) collect, with or without legal action, and issue receipts concerning any notes, checks, drafts, remittances or distributions that are paid or payable with respect to any Collateral consisting of investment property.  Any control agreement entered with respect to any investment property shall contain the following provisions, at Xxxxxx's discretion.  Lender shall be authorized to instruct the issuer, broker or other securities intermediary to take or to refrain from taking such actions with respect to the investment property as Lender may instruct, without further notice to or consent by Grantor.  Such actions may include without limitation the issuance of entitlement orders, account instructions, general trading or buy or sell orders, transfer and redemption orders, and stop loss orders.  Lender shall be further entitled to instruct the issuer, broker or securities intermediary to sell or to liquidate any investment property, or to pay the cash surrender or account

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termination value with respect to any and all investment property, and to deliver all such payments and liquidation proceeds to Lender.  Any such control agreement shall contain such authorizations as are necessary to place Lender in "control" of such investment collateral, as contemplated under the provisions of the Uniform Commercial Code, and shall fully authorize Lender to issue "entitlement orders" concerning the transfer, redemption, liquidation or disposition of investment collateral, in conformance with the provisions of the Uniform Commercial Code.

Foreclosure.  Maintain a judicial suit for foreclosure and sale of the Collateral.

Transfer Title.  Effect transfer of title upon sale of all or part of the Collateral.  For this purpose, Xxxxxxx irrevocably appoints Xxxxxx as Xxxxxxx's attorney-in-fact to execute endorsements, assignments and instruments in the name of Grantor and each of them (if more than one) as shall be necessary or reasonable.

Other Rights and Remedies.  Have and exercise any or all of the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, at law, in equity, or otherwise.

Application of Proceeds.  Apply any cash which is part of the Collateral, or which is received from the collection or sale of the Collateral, to reimbursement of any expenses, including any costs for registration of securities, commissions incurred in connection with a sale, attorneys' fees and court costs, whether or not there is a lawsuit and including any fees on appeal, incurred by Lender in connection with the collection and sale of such Collateral and to the payment of the Indebtedness of Grantor to Lender, with any excess funds to be paid to Grantor as the interests of Grantor may appear.  Xxxxxxx agrees, to the extent permitted by law, to pay any deficiency after application of the proceeds of the Collateral to the Indebtedness.

Election of Remedies.  Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently.  Election by Xxxxxx to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement, after Xxxxxxx's failure to perform, shall not affect Xxxxxx's right to declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of this Agreement:

Amendments.  This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement.  No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

Attorneys' Fees;  Expenses.  Xxxxxxx agrees to pay upon demand all of Xxxxxx's costs and expenses, including Xxxxxx's attorneys' fees and Xxxxxx's legal expenses, incurred in connection with the enforcement of this Agreement.  Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement.  Costs and expenses include Xxxxxx's attorneys' fees and 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.  Grantor also shall pay all court costs and such additional fees as may be directed by the court.

Caption Headings.  Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

Governing Law.  This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Illinois without regard to its conflicts of law provisions.  This Agreement has been accepted by Xxxxxx in the State of Illinois.

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Choice of Venue.  If there is a lawsuit, Xxxxxxx agrees upon Xxxxxx's request to submit to the jurisdiction of the courts of Sangamon County, State of Illinois.

No Waiver by Xxxxxx.  Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Xxxxxx.  No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right.  A waiver by Xxxxxx of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement.  No prior waiver by Xxxxxx, nor any course of dealing between Xxxxxx and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions.  Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

Notices.  Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement.  Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address.  For notice purposes, Xxxxxxx agrees to keep Xxxxxx informed at all times of Xxxxxxx's current address.  Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.

Communications.  Grantor acknowledges that Xxxxxx shall have legitimate reasons to communicate with Company regarding the Indebtedness, before and after a default.  Grantor consents to all communications between Lender and Company regarding the Collateral, the Indebtedness, and other matters relating to the subject matter of this Agreement.

Severability.  If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance.  If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement.  Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.

Successors and Assigns.  Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be finding upon and inure to the benefit of the parties, their successors and assigns.  If ownership of the Collateral becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness.

Time is of the Essence.  Time is of the essence in the performance of this Agreement.

Waive Jury.  All parties to this Agreement hereby waiver the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party.

DEFINITIONS.  The following capitalized words and terms shall have the following meanings when used in this Agreement.  Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America.  Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require.  Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:

COMMERCIAL PLEDGE AGREEMENT

Loan No.___________ (Continued) Page 10

Agreement.  The word "Agreement" means this Commercial Pledge Agreement, as this Commercial Pledge Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Pledge Agreement from time to time.

Borrower.  The word "Borrower" means UTG, Inc. and includes all co-signers and co-makers signing the Note and all its successors and assigns.

Collateral.  The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement.

Company.  The word "Company" means Universal Guaranty Life Insurance Company and all of its successors and assigns.

Default.  The word "Default" means the Default set forth in this Agreement in the section titled "Default".

Event of Default.  The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement, and elsewhere.

Grantor.  The word "Grantor" means UTG, Inc..

Guarantor.  The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness.

Guaranty.  The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.

Income and Proceeds.  The words "Income and Proceeds" means all present and future income, proceeds, earnings, increases, and substitutions from or for the Collateral of every kinds and nature, including without limitation all payments, interest, profits, distributions, benefits, rights, options, warrants, dividends, stock dividends, stock splits, stock rights, regulatory dividends, subscriptions, monies, claims for money due and to become due, proceeds of any insurance on the Collateral, shares of stock of different par value or no par value issued in substitution or exchange for shares included in the Collateral, and all other property Grantor is entitled to receive on account of such Collateral, including accounts, documents, instruments, chattel paper, investment property, and general intangibles.

Indebtedness.  The word "Indebtedness" means the indebtedness evidenced by the Line of Credit or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of the Related Documents.  Specifically, without limitation, indebtedness includes all amounts that may be indirectly secured by the Cross-Collateralization provision of this Agreement.

Line of Credit.  The words "Line of Credit" mean the operating line of credit executed by UTG, Inc. in the amount of $8,000,000.00 dated November 20, 2012, together with all renewals of, extensions of, modifications of, refinancing of, consolidations of, and substations of the operating line of credit.

Lender.  The word "Lender" means ILLINOIS NATIONAL BANK, its successors and assigns.

Obligor.  The word "Obligor" means without limitation any and all persons obligated to pay money or to perform some other act under the Collateral.

Property.  The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral Description" section of this Agreement.

COMMERCIAL PLEDGE AGREEMENT

Loan No.___________ (Continued) Page 10

Related Documents.  The words "Related Documents" mean all promissory notes, credit agreements, lines of credit, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether not or hereafter existing, executed in connection with the Indebtedness.

GRANTOR AND COMPANY HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL PLEDGE AGREEMENT AND AGREE TO ITS TERMS.  THIS AGREEMENT IS DATED November 20, 2012.

GRANTOR: UTG, INC.			COMPANY: UNIVERSAL GUARANTY LIFE INSURANCE COMPANY
/s/ Xxxxx X. Xxxxxx			/s/ Xxxxx X. Xxxxxx
XXXXX X. XXXXXX, President			XXXXX X. XXXXXX, President
/s/ Xxxxxxxx X. Xxxxxx			/s/ Xxxxxxxx X. Xxxxxx
XXXXXXXX X. XXXXXX, CFO/Secretary			XXXXXXXX X. XXXXXX, CFO/Secretary
LENDER: ILLINOIS NATIONAL BANK
By:	/s/ Xxxx Xxxxxxx
	XXXX X XXXXXXX, Vice President