Negative Pledge Agreement

Exhibit 10.8


NEGATIVE PLEDGE AGREEMENT


Borrower: UTG, INC


5250 South Sixth Street


Springfield, IL 62703


Lender: First Tennessee Bank National Association


Financial Institutions


845 Crossover Lane, Suite 150


Memphis, TN 38117


THIS NEGATIVE PLEDGE AGREEMENT dated December 8, 2006, is made and executed between UTG, Inc. () and First Tennessee Bank National Association () on the following terms and conditions and in connection with Lender extension of credit to Borrower in the original principal amount of A) 18,000,000.00 and B) $5,000,000.00 evidenced by the Notes and further evidenced by Loan Agreement between Lender and Borrower ( Agreement) of even date herewith. Unless otherwise defined in this Agreement, capitalized terms used herein shall have the meanings ascribed to them in the Loan Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loans, Lender is relying upon Borrower representations, warranties, and agreements as set forth in this Agreement, and (B) all such Loans shall be and remain subject to the terms and conditions of this Agreement.


TERM. This Agreement shall be effective as of December 8, 2006, and shall continue in full force and effect until such time as all of Borrower Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.


REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:


Organization. Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Delaware. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains its principal office at 5250 South Sixth Street, Springfield , IL. Unless Borrower has designated otherwise in writing, this is the principal office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower state of organization or any change in Borrower name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower business activities.


Authorization. Borrower execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower properties.


Financial Information. Each of Borrower financial statements supplied to Lender truly and completely disclosed Borrower financial condition as of the date of the statement in accordance with generally accepted accounting principles, consistently applied (), and there has been no material adverse change in Borrower financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations required to be disclosed in accordance with GAAP except as disclosed in such financial statements.


Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.


Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and ...