STIPULATION OF SETTLEMENT

Transcription

1 IN THE CIRCUIT COURT OF GREENE COUNTY, ARKANSAS DANNY THOMAS AND IRMA THOMAS, et al. Plaintiffs, CASE NO v. SOUTHERN PIONEER LIFE INSURANCE COMPANY. Defendant. Et STIPULATION OF SETTLEMENT

2 TABLE OF CONTENTS Page I. INTRODUCTION 1 A. The Action 1 B. Plaintiffs' Litigation Efforts And Reasons For Settling 2 C. No Admissions and Defendant's Reasons for Settling 3 IL DEFINITIONS 3 III. SETTLEMENT RELIEF 8 A. Claim Opportunity 8 B. Payment of Claim Relief; Negotiation of Checks 8 IV. CLAIM REVIEW PROCESS 9 A. Overview 9 B. Claim Filing and Review Process 11 V. NOTICE TO THE CLASS AND COMMUNICATIONS 13 A. Overview 13 B. The Mail Notice 14 C. Internet Site 15 D. Notice Of Exclusion And Objection Rights 15 E. Notice Of Fees And Costs 16 F. Publication Notice 16 G. Retention Of Administrator 16 H. Communications 17 VI. REQUESTS FOR EXCLUSION 17 VII. OBJECTIONS TO SETTLEMENT 18 A. Objections 18 B. Appearance at Fairness Hearing 19 C. Waivers 19 D. Resolution of Objections 19 VIII. RELEASE AND WAIVER, AND ORDER OF DISMISSAL 19 A. Release And Waiver - Definitions 19 B. Release and Waiver 20 C. Order of Dismissal 24 IX. REPRESENTATION; ATTORNEYS' FEES, COSTS, AND EXPENSES 24 1

3 TABLE OF CONTENTS (continued) Page A. Attorneys' Fees, Costs and Expenses 24 B. Costs of Administration 25 C. Incentive Payment 25 D. No Other Costs 25 X. ORDER OF NOTICE, FAIRNESS HEARING, AND ADMINISTRATION 26 A. Hearing Order 26 B. Representative Plaintiffs Will Not Opt Out, Object or Appeal 29 XI. FINAL APPROVAL AND FINAL ORDER AND JUDGMENT 29 XII. MODIFICATION OR TERMINATION OF THE SETTLEMENT AGREEMENT 32 XIII. GENERAL MATTERS AND RESERVATIONS 35 2

4 IT IS HEREBY STIPULATED AND AGREED, by, between, and among Danny Thomas and Ionia Thomas (hereinafter "Plaintiffs"), in their individual and representative capacities, and Southern Pioneer Life Insurance Company, (hereinafter "Southern Pioneer" or "Defendant"), through their duly authorized counsel, that the lawsuit styled Danny Thomas, et al. v. Southern Pioneer Life Insurance Company, Case No , in the Circuit Court of Greene County, Arkansas (hereinafter the "Action"), and the matters raised by, or which could have been raised by, the Action, based on the facts alleged in the Complaint, are settled, compromised, and dismissed on the merits and with prejudice on the terms and conditions set forth in this Stipulation of Settlement (hereinafter the "Stipulation", "Settlement Agreement" or this "Agreement") and the Release set forth herein, subject to the approval of the Court. I. INTRODUCTION A. THE ACTION This Action involves credit insurance sold by car, truck, boat, motorcycle, RV and tractor dealers (hereafter collectively referred to as "dealers") to purchasers and lessees to protect them against the risk of default in the event they die or are disabled and are unable to keep up with their loan or lease payments. The credit insurance at issue is single premium insurance that typically covers the scheduled duration of the related loan or lease. Plaintiffs allege that Defendant has breached its single premium credit life and disability insurance contracts with some insureds because an unknown subset of them have paid off their loans or leases prior to the scheduled payoff or lease termination date, and Defendant has not refunded their unearned premium. Plaintiffs commenced this Action in July of The Complaint in this Action alleges claims on behalf of Plaintiffs and a class of "similarly situated" persons for breach of contract and breach of "statutory duties" for the alleged failure to refund unearned premiums. Plaintiffs allege that some unknown fraction of the Defendant's insureds have paid off their 1

5 underlying loans or leases but have not received premium refunds. Plaintiffs interpret their and all Class Members' insurance contracts to say that a refund is owed automatically when an individual pays off the related loan regardless of notice to Defendant. Defendant disputes that interpretation of the insurance contracts and maintains that notice is required as a matter of law in the relevant states. B. PLAINTIFFS' LITIGATION EFFORTS AND REASONS FOR SETTLING Before and after commencing this Action, and during settlement negotiations, counsel for Plaintiffs' conducted a thorough examination and evaluation of the relevant law and facts to assess the merits of Plaintiffs' claims and potential claims and to determine how best to serve the interests of Plaintiffs and the Class. In the course of this examination, counsel for Plaintiffs have reviewed documents and financial information produced by Defendant. Plaintiffs' counsel also have carefully considered the merits of Plaintiffs' claims, and the defenses raised by Defendant. Based upon their discovery, investigation, and evaluation of the facts and law relating to the matters alleged in the pleadings, Plaintiffs and counsel for Plaintiffs and the Class have agreed to settle the Action, pursuant to the provisions of this Settlement Agreement, after considering such factors as (i) the substantial benefits to Plaintiffs and the Class under the terms of this Agreement; (ii) the uncertainty of being able to prove the allegations in the Complaint; (iii) the uncertainty of being able to overcome Defendant's defenses thereto; (iv) the difficulty of identifying the Class or prove damages on an individual Class Member basis; (v) the attendant risks of litigation, especially in complex actions such as this, as well as the difficulties and delays inherent in such litigation; and (vi) the desirability of consummating this Agreement promptly in order to provide effective relief to Plaintiffs and the Class. 2

6 C. NO ADMISSIONS AND DEFENDANT'S REASONS FOR SETTLING Defendant expressly denies any wrongdoing alleged in the Complaint and other pleadings in the Action and does not admit or concede any actual or potential fault, wrongdoing, or liability in connection with any facts or claims which have been or could have been alleged against it in the Action. Defendant nonetheless considers it desirable for the Action to be settled and dismissed, because this Settlement will (i) provide substantial benefits to Southern Pioneer's policyholders; (ii) confer benefits on Defendant, including the avoidance of further expense and disruption of the management and operation of Defendant's business due to the pendency and defense of the Action; (iii) finally put Plaintiffs' claims and the underlying matters to rest; and (iv) avoid the substantial expense, burdens, and uncertainties associated with a finding of liability and damages for Plaintiffs on the claims raised in this Action. II. DEFINITIONS A. As used in this Agreement and the attached exhibits (which are an integral part of this Agreement and are incorporated in their entirety by this reference), the following terms have the following meanings, unless a part or subpart of this Agreement or its exhibits otherwise provides: 1. "Action" means the lawsuit styled Danny Thomas, et al. v. Southern Pioneer Life Insurance Company, Case No , in the Circuit Court of Greene County, Arkansas. 2. "Administrator' and "Settlement Administrator" means any third party agent or administrator whom Defendant may retain to help implement the terms of the proposed settlement. 3. "Agreement" or "this Agreement" means this Stipulation of Settlement also referred to as this Settlement Agreement. 3

7 4. "Attorneys' Fees" means such funds as may be awarded to Lead Counsel to compensate them (and all other attorneys for Plaintiffs) for their fees and all litigation expenses incurred by Plaintiffs or Lead Counsel in connection with the Action. 5. "Class" and "Class Members" mean all persons to whom Southern Pioneer Life Insurance Company ("Southern Pioneer") issued single premium credit life or disability insurance coverage in connection with a loan that originated at a dealer when financing or leasing a car, truck, boat, motorcycle, RV or tractor where such coverage either remains in force, or was scheduled to continue in force through its expiration to a date during the Class Period, and who paid off their loan in connection with the financing or leasing of that car, truck, boat, motorcycle, RV or tractor prior to the scheduled maturity date, but did not receive a full refund of unearned premium, when such refund was in excess of one dollar ($1.00). Excluded from the Class are: (i) all individuals who received any payment of any claim under the policy at issue, including but not limited to a claim benefit payment, (ii) individuals who are or were during the Class Period officers, directors or employees of Southern Pioneer, (iii) individuals whose loans or leases were discharged in bankruptcy, (iv) individuals whose coverage was terminated because the loan collateral or leased vehicle was repossessed, (v) any justice, judge or magistrate judge of the United States or any State, their spouses, and persons within the third degree of relationship to either of them, or the spouses of such persons, (vi) individuals who purchased coverage on which unearned premiums were previously refunded (vii) individuals whose coverage was rescinded; and/or (viii) all individuals who request to be excluded from the Class. 6. "Class Complaint'means the Complaint in this Action. 4

8 7. "Class Notice" means the Notice of Class Action, Proposed Settlement, Fairness Hearing and Right to Appear to be provided to Class Members pursuant to Section V of this Agreement, in the form attached as Exhibit B to this Agreement. 8. "Class Period" means the period commencing on a date the number of years before July 8, 2009, in each State as the following statutes of limitation periods for breach of contract and continuing through and including the date of the Hearing Order preliminarily approving this settlement and this Settlement Agreement, inclusive: AR 5 years; KS 5 years; LA 10 years; MO 10 years; MS 3 years; OK 5 years; TN 6 years; and TX 4 years. 9. "Court" means the Circuit Court of Greene County, Arkansas. 10. "Defendant" means Southern Pioneer Life Insurance Company. 11. "Defendant's Counsel" means the law firms of Branch, Thompson, Warmath & Dale, P.A. and Maynard, Cooper & Gale, P.C. 12. "Fairness Hearing" means the hearing at or after which the Court will make a final decision whether to approve this Settlement Agreement as fair, reasonable, and adequate. 13. "Final Order and Judgment" means the order approving the settlement and this Settlement Agreement, and the judgment entered pursuant to that order, as contemplated in Section XI of this Agreement and in the form attached as Exhibit E to this Agreement. 14. "Final Settlement Date" means the date on which the Final Order and Judgment becomes final. For purposes of this Agreement: a. if no appeal has been taken from the Final Order and Judgment, Final Settlement Date means the date on which the time to appeal therefrom has expired; or b. if any appeal has been taken from the Final Order and Judgment, Final Settlement Date means the date on which all appeals therefrom, including petitions for rehearing or reargument, petitions for rehearing en banc, and petitions for certiorari or any other faun of review, have been finally disposed of in a manner that affirms the Final Order and Judgment. 5

9 15. "Hearing Order" means the order to be entered by the Court concerning the preliminary approval of the settlement, certification of the settlement Class, notice, administration, and the Fairness Hearing, as contemplated in Section X of this Agreement and in the form attached as Exhibit D to this Agreement. 16. "Lead Counsel" or "Plaintiffs' Counsel" means the law finis of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. and Daughtery, Crawford & Brown, LLP and attorney Brian Dover. 17. "Mail Notice" means the notice to be provided to Class Members pursuant to Section V of this Agreement, in the form attached as Exhibit A to this Agreement. 18. "Plaintiffs" means Danny Thomas and Irma Thomas. 19. "Parties" means Plaintiffs and Defendant. 20. "Policy" or "Policies" means single premium credit life or credit disability insurance policies or certificates issued by Southern Pioneer in connection with a loan that originated at a dealer when financing or leasing a car, truck, boat, motorcycle, RV or tractor. 21. "Postal Service" means the United States Postal Service. 22. "Publication Notice' means the published newspaper summary of notice to the Class, including notice of the proposed settlement, Fairness Hearing, and the Class Members' exclusion and objection rights, as more particularly described in V(F) of this Settlement Agreement. 23. "Release" means the release and waiver set forth in Section VIII of this Agreement. 24. "Released Transactions" means the right or entitlement to a refund of unearned premium under a Policy or Policies, where the indebtedness or obligations under the loan or 6

10 lease insured by such Policy or Policies has been extinguished by payment before the scheduled maturity or termination, but shall not include claims for Policy benefits. 25. "Releasees" means Southern Pioneer Life Insurance Company, its predecessors, successors and assigns, and all of its respective past and present divisions, subsidiaries, parent companies, and affiliated companies (which shall include any person or entity which controls, is controlled by, or is under common control with any such party), and all of the officers, directors, employees, agents, brokers, distributors, representatives and attorneys of all such entities. Releasees shall also specifically include all car, truck, boat, motorcycle, RV and/or tractor dealers, agents or any of their affiliated entities originating a Policy or Policies issued by Southern Pioneer and all lenders and beneficiaries under a Policy or Policies issuing a loan or lease insured by Southern Pioneer and all of their respective past and present divisions, subsidiaries, parent companies, and affiliated companies (which shall include any person or entity which controls, is controlled by, or is under common control with any such party). 26. "Settlement" means the resolution of the Action by amicable agreement of the Parties on the terms and conditions provided in this Settlement Agreement. 27. "Settlement Agreement" or "this Settlement Agreement" means this Stipulation of Settlement and the attached or annexed Exhibits, including any subsequent amendments thereto and any exhibits to such amendments. B. All other capitalized terms used in this Agreement shall have the meaning ascribed to them herein. III. SETTLEMENT RELIEF Pursuant to this Settlement Agreement, Defendant will make available the following settlement relief to Class Members: 7

11 A. CLAIM OPPORTUNITY For those Class Members who do not exclude themselves from this Settlement and who submit a timely and certified-under-penalties-of-perjury Claim Form, accompanied by the required verification documentation described in Subsection IV(A)(4), in the manner required by Section IV of this Settlement Agreement (the "Eligible Settlement Class Members"), Defendant, or the Settlement Administrator, shall pay to each such Eligible Settlement Class Member one hundred five percent (105%) of the amount of any unearned premium refund where the indebtedness insured under a Policy or Policies for that Eligible Settlement Class Member on an insured car, truck, boat, motorcycle, RV or tractor loan or lease was extinguished before the scheduled termination by payment, and with calculation of such unearned premium refund to be based on the premium information shown on their Certificate of Insurance and reflected in the Defendant's database. If a verification document accompanying a valid Claim Form reflects only the month in which a loan was paid off, then the refund shall be calculated as if the loan were paid off on the first day of that month. B. PAYMENT OF CLAIM RELIEF; NEGOTIATION OF CHECKS Class settlement relief shall be paid by Defendant, or the Settlement Administrator, without interest, by check within thirty (30) days following creation of the final list of Eligible Settlement Class Members and calculation of each such Eligible Settlement Class Member's settlement relief pursuant to Section IV(B) of this Agreement; provided however, that any such delivered check which has not been negotiated by the payee, within ninety (90) days after issuance shall be cancelled, and Defendant shall have no further obligation to continue efforts to distribute settlement relief to such Class Member; provided further however, the settlement relief checks shall state "void after 90 days," and any funds left unclaimed by the Eligible Class 8

12 Members due to their failure to negotiate the settlement relief checks within the time frame set out above shall be placed in a separate account by the Settlement Administrator to cover fees and/or costs arising from or relating to administrative responsibilities occurring after the final settlement approval date including, but not limited to, the potential reissuance of voided checks. IV. CLAIM REVIEW PROCESS A. OVERVIEW 1. Administration of this Settlement will involve Mail Notice, creation of an Internet site, Class Notice, Publication Notice, and a Claim review and payment process. Defendant shall provide a Mail Notice and make available a Class Notice in the manner set forth in Section V of this Settlement Agreement, describing the general nature of the settlement, and permitting those Class Members so desiring to opt out of, or object to, the settlement. The Mail Notice shall include: (1) Notice (2) directions to the Internet site and (3) a Class Action Claim Foiui. 2. The form of the Class Action Claim Forni agreed upon by the Parties (to be included within the Mail Notice, and posted on the Internet site) is contained within Exhibit B to this Agreement (provided that the font size, folding, and other printing elements or presentation may be adjusted to accommodate a booklet or other format and for efficient envelope and postage considerations). 3. The Internet Site shall make available for downloading the Mail Notice, the Class Notice, the Class Action Claim Form and Instructions for completing the Class Action Claim Form. 4. The Instructions on the Internet site shall require Class Members making settlement Claims to provide Defendant with the following information which must be certified 9

13 to under penalties of perjury (but without the necessity of a separate notarial acknowledgement) and documents: a. that there was a pay off or other voluntary termination of the Claimant's insured loan or lease prior to the scheduled expiration date of coverage; b. the date the Claimant paid off their car, truck, boat, motorcycle, RV or tractor loan in full or otherwise terminated the lease; c. a representation that the Claimant did not receive a refund of unearned premium; and d. the Claimant shall provide documentary verification of the early termination of their car, truck, boat, motorcycle, RV or tractor loan or lease by payment, reflecting the date of such tem iination, from one of the following; (1) the lender to whom the Claimant made the final payment on their car, truck, boat, motorcycle, RV or tractor loan or lease; (2) the dealer from whom they purchased or leased the car, truck, boat, motorcycle, RV or tractor, or a dealer to whom they traded the car, truck, boat, motorcycle, RV or tractor; (3) the Department of Motor Vehicles in the state where the vehicle was registered; or (4) some other documentary proof (such as a report from a commercial credit reporting agency) confinning the payoff 10

14 or other early termination of the loan or lease covered by the Southern Pioneer policy, together with the date of such early tei 5. The Instructions on the Internet site shall list the names, mailing addresses, phone numbers and website addresses of Equifax, Experian and TransUnion credit reporting agencies. The Instructions shall further advise Class Members that they may independently obtain a credit report from a commercial vendor for a separate fee, if any, to be paid by the Claimant, which may reflect information concerning the early termination of their loan or lease. If a verification document accompanying a valid Claim Form reflects only the month in which a loan was paid off, then the refund shall be calculated as if the loan were paid off on the first day of that month. 6. The Instructions on the Internet site shall advise Class members of the address to which to post the Claim Foiln and the accompanying verification documents in order to submit a valid settlement Claim. 7. The Instructions on the Internet site and Claim Form shall each include the following caution: CLAIMS MAY BE AUDITED. CLAIMANTS SUBMITTING FRAUDULENT CLAIMS WILL BE SUBJECT TO PROSECUTION. B. CLAIM FILING AND REVIEW PROCESS 1. To be eligible to receive settlement relief in this Settlement, each Class Member will be required to deposit a completed and certified Claim Form with accompanying verification documents with the United States Postal Service addressed to Defendant, or the Settlement Administrator, on a date no later than thirty (30) days after the date of the Fairness Hearing (the"claim Deadline"). 11

15 2. Defendant or the Settlement Administrator shall receive and process all timely Claim Forms (rejecting any that are late, or do not comply with valid claim requirements, including the required certification of infoiniation and documentary verification evidence set forth in Subsection IV(A)(4)(d) above). Any Class Member who does not post a properly completed, certified and verified Claim Form by the Claim Deadline shall be deemed to have waived any claim to settlement relief. Any Claimant's failure to certify or provide any of the required information on the Claim Fort 1, or the documentary verification of the early termination of their car, truck, boat, motorcycle, RV or tractor loan or lease, and the date of such termination, required in Subsection IV(A)(4) above, shall result in the putative Claim being deemed invalid, and Defendant shall have no further obligation to process or make any settlement payment on such invalid Claim. 3. Within twenty (20) days after the end of each monthly period from the mailing of the Mail Notice until the Claim Deadline, the Settlement Administrator shall provide a list of all invalid Claims with reason(s) each Claim is invalid to Plaintiffs' counsel, with a copy to Defendant. For any invalid Claim on which Plaintiffs' counsel disagrees with the Settlement Administrator's initial invalidity determination, Plaintiffs' counsel may communicate with such Claimant, and if following that communication the Claimant submits a corrected Claim Form or omitted documentary verification, Plaintiffs' counsel may request that the Settlement Administrator reconsider its preliminary invalidity determination on such Claim, and provided that such corrected Claim Farm or omitted verification documentation is submitted by the Claim Deadline, the Settlement Administrator shall reconsider the Claim and make a final validity determination based on the objective criteria for submission of a valid claim appearing in Subsection IV(A)(4) above. 12

16 4. Within ninety (90) days after the Claim Deadline, the Settlement Administrator shall prepare a list of claiming Class Members who did not exclude themselves from the Class and who submitted valid Claim Forms (the "Eligible Settlement Class Members"). Upon creation of the list of Eligible Settlement Class Members for the Action, Defendant, or the Settlement Administrator, shall pursuant to the terms of the policies, information in Defendant's databases, applicable state law, and in accordance with the payoff information appearing in the verification documentation submitted with the. Claim Form, calculate one hundred five percent (105%) of the amount of any unearned premium refund for each of the claiming Class Members on the list of Eligible Settlement Class Members. If a verification document accompanying a valid Claim Faun reflects only the month in which a loan was paid off, then the refund shall be calculated as if the loan were paid off on the first day of that month. 5. Following calculation of the amount of any unearned premium refunds for Eligible Settlement Class Members as provided in Section IV(B)(4), Defendant, or the Settlement Administrator on behalf of Defendant, shall distribute such settlement relief to Eligible Settlement Class Members as provided in Section III(B) of this Agreement. V. NOTICE TO THE CLASS AND COMMUNICATIONS A. OVERVIEW Subject to the requirements of the Hearing Order, Notice to the Class will include a first class mailing to those Class Members for whom Southern Pioneer's electronic database reflects a mailing address. In addition, Defendant shall issue Publication Notice and create an Internet site not less than sixty (60) days before the date set by the Court for a fairness hearing and within forty-five days of filing this Agreement, or as otherwise directed by the Court. 13

17 B. THE MAIL NOTICE Not less than sixty (60) days before the date set by the Court for a fairness hearing regarding settlement in the Action, a Mail Notice and Class Action Claim Form shall be sent by means of separate first class mailings to all Defendant's insureds who (i) purchased single premium credit life or disability insurance in connection with a loan that originated with a dealer when purchasing or leasing a car, truck, boat, motorcycle, RV or tractor where such policy either remains in force, or continued in force through its expiration to a date during the Class Period, (ii) for whom the business records of Defendant do not reflect any pay off or other teimination of the loan or lease prior to the scheduled maturity date, and (iii) for whom Defendant's electronically maintained database reflects a mailing address. The above-described persons for whom Defendant has a mailing address maintained in its database will be placed on an initial list, and the Administrator will attempt to obtain an updated or confiuned address for those persons using the following process: 1. Before posting of the Mail Notice with the United States Postal Service, the Administrator shall be provided a list of potential class members meeting the criteria identified above so it can obtain more current addresses for Insureds on the list of potential class members using the National Change of Address (NCOA) database. To the extent any persons exist for whom Defendant does not have a mailing address in its electronic database, or for whom Defendant could not obtain a confirmed mailing address, those persons shall receive Notice via Publication and the Internet site. 2. The Mail Notice shall detail how those putative Class Members so desiring may opt out or object to the settlement. 3. The Mail Notice shall also include the Claim Form described in 14

18 Subsection IV(A) above. C. INTERNET SITE No later than the date of mailing of the Mail Notice, Defendant shall establish an Internet site which shall contain copies (which can be downloaded or printed) of the Stipulation of Settlement and Exhibits, the Class Notice, and a Frequently Asked Questions (FAQ) page with responses substantively identical to those appearing in the Mail Notice. The Internet site shall also contain a Class Action Claim Form and Instructions which also may be downloaded or printed from the Internet site. The Internet site shall have this Unifoim Resource Locator The Internet site shall remain open and accessible until sixty (60) days after the last day for Class Members to receive claim payments. D. NOTICE OF EXCLUSION AND OBJECTION RIGHTS The Class Notice shall advise Class Members that (i) they may exclude themselves from (opt out of) the Class by submitting a written exclusion request postmarked no later than fifteen (15) days before the date of the Fairness Hearing; (ii) any Class Member who has not submitted a written request for exclusion may, if he or she desires, object to the proposed settlement by filing and serving a written statement of objections no later than fifteen (15) days before the Fairness Hearing; (iii) any Class Member who has filed and served written objections to the proposed settlement may enter an appearance at the Fairness Hearing either personally or through counsel; and (iv) any judgment entered in the Action, whether favorable or unfavorable to the Class, will include and be binding on all Class Members who have not been excluded from the Class, even if they have objected to the proposed settlement and even if they have any other claim, lawsuit or proceeding pending against Defendant. 15

19 E. NOTICE OF FEES AND COSTS The Mail Notice and the Class Notice will provide information about the Attorneys' Fees. The Notices also will state that Defendant will pay the Attorneys' Fees and any costs arising from notifying the Class or administering the proposed Settlement, and that individual Class Members will be responsible themselves for any fees and costs of any persons they may retain to represent them for any reason, including, but not limited to, counsel retained in connection with the Fairness Hearing. F. PUBLICATION NOTICE Defendant shall cause to be published a Publication Notice at least sixty (60) days before the date set by the Court for the Fairness Hearing. The Summary Publication Notice shall be at least 1/6 page in size, and shall be published at least twice within one week in the Paragould Daily Press, Little Rock Arkansas Democrat-Gazette, Ft. Smith Times-Record, Batesville Daily Guard, Jonesboro Sun, Cleveland (MS) Bolivar Commercial, Greenville Delta Democrat Times, Texarkana Gazette, and Muskogee Phoenix to cover markets where class members live and for those class members for whom current addresses could not be determined. The Summary Publication Notice shall detail how those Class Members so desiring may opt out or object to the settlement, and how Class Members may access the Internet site where they may download a Claim Form necessary to make a claim for settlement relief G. RETENTION OF ADMINISTRATOR Defendant may retain one or more Settlement Administrators to help Defendant implement the terms of the proposed settlement. Defendant may direct the Settlement Administrator to assist with various administrative tasks in implementing the Settlement as 16

20 Defendant shall deem appropriate in its sole discretion. Defendant shall pay the fees and expenses of the Settlement Administrator. H. COMMUNICATIONS 1. Defendant expressly reserves the right to communicate with and respond to inquiries from policyholders and Class Members orally and/or in writing, and may do so through any appropriate representatives, and to engage in any other communications within the noirual course of Defendant's business. Any inquiries from Class Members concerning this Settlement shall be referred to Lead Counsel. 2. The Parties agree that neither they nor their counsel or any entity or person affiliated with any of them, or controlled by or under common control with any of them, shall publish through the media, on the Internet, or otherwise any press or other release regarding the Settlement, without the other party's prior review and approval, which approval shall not be unreasonably withheld or delayed. VI. REQUESTS FOR EXCLUSION A. Any potential Class Member who wishes to be excluded from the Class must mail a written request for exclusion to the Clerk of the Court, in care of the post office box rented by the Administrator or Defendant for that purpose, postmarked no later than fifteen (15) days before the Fairness Hearing, or as the Court otherwise may direct. The original or authenticated photocopies of the requests for exclusion shall be filed with the Court by Lead Counsel or Defendant's Counsel at or before the Fairness Hearing. B. Any potential Class Member who does not file a timely written request for exclusion as provided in Subsection VI(A), shall be bound by all subsequent proceedings, orders, 17

21 and judgments in this Action, even if such person has litigation pending against Defendant relating to the Released Transactions. VII. OBJECTIONS TO SETTLEMENT A. OBJECTIONS Any Class Member who has not filed a timely written request for exclusion and who wishes to object to the fairness, reasonableness, or adequacy of this Settlement Agreement or the proposed Settlement, or to the award of Attorneys' Fees, must serve on Lead Counsel and Defendant's Counsel and file with the Court, no later than fifteen (15) days before the Fairness Hearing or as the Court otherwise may direct, a statement of the objection, as well as the specific reason(s) for each objection, including any legal support the Class Member wishes to bring to the Court's attention and any evidence the Class Member wishes to introduce in support of the objection. Class Members may do so either on their own or through an attorney hired at their own expense. Class Members and their own attorneys, at their own expense, may inspect the documents disclosed through discovery or otherwise to Lead Counsel by Defendant in this Action, by entering into a Stipulation of Confidentiality in the form attached as Exhibit C to this Agreement. Lead Counsel will inform Defendant's Counsel promptly of any requests by Class Members or their attorneys for access to such documents. If a Class Member hires an attorney to represent him or her, the attorney must (i) file a notice of appearance with the Clerk of Court no later than fifteen (15) days before the Fairness Hearing or as the Court otherwise may direct, and (ii) serve a copy of the notice on Lead Counsel and Defendant's Counsel no later than fifteen (15) days before the Fairness Hearing. The parties agree that they will cooperate to depose objectors at a mutually agreeable time and place 18

22 B. APPEARANCE AT FAIRNESS HEARING Any Class Member who files and serves a written objection, as described in the preceding Subsection VII(A), may appear at the Fairness Hearing, either in person or through personal counsel hired at the Class Member's expense, to object to the fairness, reasonableness, or adequacy of this Settlement Agreement or the proposed Settlement, or to the award of Attorneys' Fees. Class Members, or their attorneys, intending to make an appearance at the Fairness Hearing must serve on Lead Counsel and Defendants Counsel and file with the Court, no later than fifteen (15) days before the Fairness Hearing or as the Court otherwise may direct, a notice of their intention to appear at the Fairness Hearing. C. WAIVERS Any Class Member who fails to comply with the provisions of the preceding Subsections VII(A) and (B) shall waive and forfeit any and all rights he or she may have to appear separately and/or object, and shall be bound by all the terms of this Settlement Agreement and by all proceedings, orders, and judgments in this Action. D. RESOLUTION OF OBJECTIONS The Parties shall cooperate fully in opposing and/or resolving all objections. VIII. RELEASE AND WAIVER, AND ORDER OF DISMISSAL Plaintiffs and the Class will agree to a release and waiver as follows: A. RELEASE AND WAIVER DEFINITIONS For purposes of this release and waiver (the "Release"): 1. The term "Releasees" means Southern Pioneer Life Insurance Company, its predecessors, successors and assigns, and all of their respective past and present divisions, subsidiaries, parent companies, and affiliated companies (which shall include any person or entity which controls, is controlled by, or is under common control with any such party), and all 19

23 of the officers, directors, employees, agents, brokers, distributors, representatives and attorneys of all such entities. Releasees shall also specifically include all car, truck, boat, motorcycle, RV or tractor dealers, agents or any of their affiliated entities originating a Policy or Policies issued by Southern Pioneer, and all lenders and beneficiaries under a Policy or Policies issuing a loan or lease insured by Southern Pioneer, and all of their respective past and present divisions, subsidiaries, parent companies, and affiliated companies (which shall include any person or entity which controls, is controlled by, or is under common control with any such party). 2. The term "Released Transactions" means the right or entitlement to a refund of unearned premium under a Policy or Policies, where the indebtedness or obligations under the loan or lease insured by such Policy or Policies has been extinguished before the scheduled maturity or termination, but shall not include claims for Policy benefits. 3. "Policy" or "Policies" means single premium credit life or credit disability insurance policies or certificates issued by Southern Pioneer, in connection with a loan that originated at a dealer when financing or leasing a car, truck, boat, motorcycle, RV or tractor. 4. All other capitalized terms used in the Release shall have the meanings ascribed to them in the Settlement Agreement. B. RELEASE AND WAIVER 1. Plaintiffs and all Class Members (who have not been excluded) hereby expressly agree that they shall not now nor hereafter institute, maintain, assert, or participate in any action or claim against the Releasees, either directly or indirectly, derivatively, on their own behalf, on behalf of the Class, or on behalf of any other person or entity, and release and discharge the Releasees from any and all causes of action, claims, damages, equitable, legal, and administrative relief, interest, demands, or rights, including, without limitation, claims for 20

24 premium refunds, bad faith, mental anguish or other claims, whether based on federal, state, or local law, statute, ordinance, regulation, contract, common law, or any other source. This Release and Waiver is limited to any and all claims or allegations which have been, could have been, may be, or could be alleged or asserted in the past, present, or in the future by Plaintiffs or any Class Member against the Releasees or any of them in the Action or in any other court action or before any administrative body (including any state insurance department or other regulatory entity or organization), tribunal, arbitration panel, or other adjudicatory body, on the basis of, connected with, arising out of, or related to, in whole or in part, the Released Transactions and any performance, servicing and/or administration relating to the Released Transactions, which include without limitation: a. any or all of the acts, omissions, facts, matters, transactions, or occurrences which have been, could have been, or were directly or indirectly alleged, asserted, described, set forth or referred to in the Action; b. any or all of the acts, omissions, facts, matters, transactions, occurrences, sales presentations, disclosures, advertisements, applications, enrollment documents, or any oral or written statements, disclosures or representations allegedly made in connection with or directly or indirectly relating to the Released Transactions, including without limitation any acts, omissions, facts, matters, transactions, occurrences, illustrations, disclosures, advertisements, applications, enrollment documents, or oral or written statements or representations relating to; 21

25 (1) early termination of a Policy or Policies or the right to a refund of unearned premium; (2) any act, transaction, practice or conduct arising or occurring prior to the date hereof, which is actionable, or claimed to be actionable, under any statutory or common law of the United States or any state thereof; (3) any act or omission which existed or occurred, or presently exists, or may in the future exist or occur, as a result of any act, transaction, practice or conduct which occurred prior to the date hereof; and/or (4) any other act, transaction, practice or conduct whatsoever that occurred prior to the date hereof, whether or not Plaintiffs or Class Members presently have knowledge of the acts, transactions, practices, conduct or other matters covered herein; c. any and all claims for attorneys' fees, costs, or disbursements incurred by Lead Counsel or any other counsel representing Plaintiffs or the Class Members, or by Plaintiffs or the Class Members, or any of them, in connection with or related in any manner to the Action, the settlement of the Action, the administration of such settlement, and/or the Released Transactions, except to the extent otherwise specified in this Stipulation of Settlement; and 22

26 d. any or all acts, omissions, facts, matters, transactions, occurrences, or oral or written statements or representations in connection with, or directly or indirectly relating to, the Stipulation of Settlement or the settlement of the Action. 2. In connection with this Release and Waiver, Plaintiffs and the Class Members acknowledge that they are aware that they may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those which they now know or believe to be true with respect to the matters released herein. Nevertheless, it is the intention of Plaintiffs and the Class Members in executing this Release and Waiver to fully, finally, and forever to settle and release all such matters, and all claims relating thereto, that exist, hereafter may exist, or might have existed (whether or not previously or currently asserted in any action, including the Action). The Plaintiffs and the Class Members expressly acknowledge certain principles of law applicable in some states which provide that a general release does not extend to claims that a creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. Notwithstanding the choice of law provision in this Settlement Agreement, to the extent that such law may be applicable, Plaintiffs and the Class Members hereby agree that these provisions and all similar federal and state laws, rights, rules, or legal principles of any other jurisdiction that may be applicable here, are hereby knowingly and voluntarily waived and relinquished by Plaintiffs and the Class Members, and Plaintiffs and the Class Members agree and acknowledge that this provision is an essential term of the Settlement Agreement and this Release and Waiver. 3. Nothing in this Release and Waiver shall preclude any action to enforce 23

27 the terms of the Stipulation of Settlement. 4. Plaintiffs and the Class Members hereby agree and acknowledge that the provisions of this Release and Waiver together constitute an essential term of the Stipulation of Settlement. C. ORDER OF DISMISSAL The Parties shall seek and obtain from the Court, as a condition of settlement, a Final Order and Judgment (as to which the time for appeal has expired without any modifications to the Final Order and Judgment). The Final Order and Judgment shall, among other things, (i) approve the Stipulation of Settlement as fair, reasonable, and adequate; (ii) dismiss the Action with prejudice and on the merits; and (iii) incorporate the terms of the Release. IX. REPRESENTATION; ATTORNEYS' FEES, COSTS, AND EXPENSES A. ATTORNEYS' FEES, COSTS AND EXPENSES Lead Counsel agrees to make, and Defendant agrees not to object to, an application for the award of Attorneys' Fees in this Action not to exceed a total of $755, Subject to the conditions set forth below, the Attorneys' Fees, which shall include all fees, costs, and litigation expenses incurred by Plaintiffs and all Plaintiffs' counsel, including Lead Counsel, in or relating to this Action and the Federal Action, which are actually awarded by the Court up to an amount not to exceed $755,000.00, will be paid by Defendant to the Lead Counsel law firm of Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. within thirty (30) days after the Final Settlement Date in this Action by settlement check to Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.1 1 "Final Settlement Date" means the date on which the Final Order and Judgment becomes final. For purposes of this Stipulation of Settlement: (a) if no appeal has been taken from the Final Order and Judgment, Final Settlement Date means the date on which the time to appeal therefrom has expired; or (b) if any appeal has been taken from the Final Order and Judgment, Final Settlement Date means the date on which all appeals therefrom, including 24

28 B. COSTS OF ADMINISTRATION Defendant will bear the following expenses reasonably incurred after the execution of this Agreement: printing and mailing costs of the Mail Notice, and the cost of creating and maintaining the Internet site; the Publication Notice; fulfilling any requests for the Class Notice; any processing costs for requests for exclusion; fees and disbursements to the Settlement Administrator and any other third-party contractors or administrators, if any; and Attorneys' Fees. C. INCENTIVE PAYMENT For their endeavor on behalf of the Class, and in lieu of the potential claim opportunities under Sections III(A) and IV, or cash payments otherwise due them as a member of the Class, Defendant shall pay Danny Thomas the sum of $2, and Jima Thomas the sum of $2,500.00; and shall deliver to Plaintiffs' Counsel such checks made payable to them, within thirty (30) days after the Final Settlement Date. D. NO OTHER COSTS Neither Defendant nor its past, present and/or future parents (including without limitation intermediate parents, ultimate parents, and any retailers who contract with any of them), subsidiaries, shareholders, affiliates, predecessors, successors, and assigns, nor any of their respective past, present, or future officers, directors, employees, representatives, attorneys, heirs, administrators, executors, predecessors, successors, and assigns shall be liable or obligated to pay any fees, expenses, costs, or disbursements to, or incur any expense on behalf of, any person, petitions for rehearing, petitions for rehearing en banc, and petitions for certiorari or any other form of review, have been finally disposed of in a manner that affinns the Final Order and Judgment. 25

29 either directly or indirectly, in connection with this Action, this Agreement, or the proposed Settlement, other than the amount or amounts expressly provided for in this Agreement. X. ORDER OF NOTICE, FAIRNESS HEARING, AND ADMINISTRATION A. HEARING ORDER The Parties will seek and attempt to obtain from the Court entry of an order (the "Hearing Order"), in the form attached hereto as Exhibit D (unless otherwise agreed by the Parties): 1. Providing for preliminary certification of the Class for settlement purposes only; 2. Finding that the proposed Settlement is beneficial to the Class and warrants sending the Mail Notice to the Class; 3. Scheduling the Fairness Hearing to be held on or at such other date as the Court may direct, to consider the fairness, reasonableness, and adequacy of the proposed Settlement and whether it should be approved by the Court; 4. Approving the proposed Mail Notice, and Publication Notice, and the notice methodology described in this Settlement Agreement; 5. Directing Defendant or its designee(s) to cause the Mail Notice to be mailed and the Internet site created, not less than sixty (60) days before the Fairness Hearing; 6. Determining that the Mail Notice, Class Notice and Internet site (containing both Notices, etc.) (i) are the best practicable notice; (ii) are reasonably calculated, under the circumstances, to apprise Class Members of the pendency of the Action and of their right to object to the proposed Settlement or exclude themselves from the Class; (iii) are reasonable and constitute due, adequate, and sufficient notice to all persons entitled to receive notice; and (iv) meet all applicable requirements of the Arkansas Rules of Civil Procedure, the 26

30 Due Process Clause of the United States Constitution, and the Local Rules of the Court; 7. Requiring Defendant to file proof of the mailing of the Mail Notice at or before the Fairness Hearing; 8. Authorizing Defendant, including its representatives and any other retained personnel, to communicate with potential Class Members, Class Members, and other present or fol ler policyholders of Defendant about the Action and the terms of the proposed Settlement, and to engage in any other communications within the normal course of Defendant's businesses; 9. Requiring each Class Member who wishes to exclude himself or herself from the Class to submit an appropriate, timely written request for exclusion, postmarked no later than fifteen (15) days before the date of the Fairness Hearing, to the Clerk of the Court, in care of the post-office box rented for that purpose; 10. Preliminarily enjoining all Class Members who have not timely excluded themselves from the Class as to a Policy, and anyone acting on their behalf or for their benefit, from filing, commencing, prosecuting, intervening in, participating in as class members or otherwise, or receiving any benefits or other relief from, any other lawsuit, arbitration, private attorney general action, or administrative, regulatory or other proceeding or order in any jurisdiction, based on or relating in any way to the claims and causes of action in this Action and/or the Release and/or the Released Transactions or the facts and circumstances relating thereto; 11. Ruling that any Class Member who does not submit a timely written request for exclusion from the Class will be bound by all proceedings, orders, and judgments in this Action, even if such Class Member has previously initiated or subsequently initiates 27

31 individual litigation or other proceedings against Defendant relating to a Released Transaction; 12. Requiring each Class Member who wishes to object to the fairness, reasonableness, or adequacy of the Settlement Agreement or the proposed settlement, or to the award of Attorneys' Fees, to serve on Lead Counsel and Defendant's Counsel and to file with the Court, no later than fifteen (15) days before the Fairness Hearing, or at such other time as the Court may direct, a statement of the objection, as well as the specific reasons for each objection, including any legal support the Class Member wishes to bring to the Court's attention, and any evidence the Class Member wishes to introduce in support of his or her objection, or be forever barred from separately objecting; 13. Requiring any attorney hired by a Class Member at the Class Member's expense for the purpose of objecting to the Settlement Agreement or the proposed Settlement, or to the award of Attorneys' Fees, to file with the Clerk of Court, and serve on Lead Counsel and Defendant's Counsel, a notice of appearance, no later than fifteen (15) days before the Fairness Hearing or as the Court otherwise may direct; 14. Requiring any Class Member who files and serves a written objection and who also intends to make an appearance at the Fairness Hearing, either in person or through personal counsel hired at the Class Member's expense, to serve on Lead Counsel and Defendant's Counsel and file with the Court, no later than fifteen (15) days before the Fairness Hearing or as the Court otherwise may direct, a notice of their intention to appear at the Fairness Hearing; 15. Authorizing Defendant to (i) establish means necessary to administer the proposed settlement relief, and (ii) retain one or more Administrators to help administer the proposed Settlement, including the notice provisions, if necessary; 28

32 16. Directing Defendant's Counsel and Lead Counsel to promptly furnish each other and other counsel with copies of any and all objections or written requests for exclusion that might come into their possession; 17. Providing a means for those filing objections to obtain access at Lead Counsel's office to the documents disclosed through discovery to Plaintiffs' counsel by Defendant in this Action, at their own expense, provided that such individuals enter into a Stipulation of Confidentiality in the form of Exhibit C to this Agreement; and 18. Containing any additional provisions that might be necessary to implement and administer the ten is of the Settlement Agreement and the proposed Settlement. B. REPRESENTATIVE PLAINTIFFS WILL NOT OPT OUT, OBJECT OR APPEAL Plaintiffs will not file a claim for settlement relief under Sections III(A) or IV above, request exclusion from the Class, object to the proposed Settlement, or file an appeal from or otherwise seek review of any order approving the proposed Settlement. XI. FINAL APPROVAL AND FINAL ORDER AND JUDGMENT After the Fairness Hearing, and upon the Court's approval of the Settlement Agreement, the Parties shall seek and obtain from the Court a Final Order and Judgment in the form of Exhibit E attached to this Agreement. The Final Order and Judgment will (among other things): A. Find that the Court has personal jurisdiction over all Class Members and that the Court has subject matter jurisdiction to approve the Settlement Agreement, including all exhibits thereto; B. Approve the Settlement Agreement and the proposed Settlement as fair, reasonable, and adequate as to, and in the best interests of, each of the Parties and the Class Members; direct the Parties and their counsel to implement and consummate the Settlement 29

33 Agreement according to its teens and provisions; and declare the Settlement Agreement to be binding on, and have res judicata and preclusive effect in all pending and future lawsuits or other proceedings maintained by or on behalf of, the Plaintiffs and all other Class Members, relating to the Action and/or Released Transactions, as well as their heirs, executors, administrators, successors, and assigns; C. Confirm certification of the Class as modified by this Settlement Agreement for settlement purposes; D. Find that the Mail Notice, Class Notice and Internet site, and the notice methodology implemented pursuant to the Settlement Agreement: (i) constitute the best practicable notice; (ii) constitute notice that is reasonably calculated, under the circumstances, to apprise Class Members of the pendency of the Action, their right to object to or exclude themselves from the proposed settlement, and to appear at the Fairness Hearing; (iii) are reasonable and constitute due, adequate, and sufficient notice to all persons entitled to receive notice; and (iv) meet all applicable requirements of the Arkansas Rules of Civil Procedure, the Due Process Clause of the United States Constitution, and the Local Rules of the Court; E. Find that Lead Counsel and the Plaintiffs adequately represented the Class for purposes of entering into and implementing the Settlement, and finding and awarding reasonable Attorneys' Fees to counsel for Plaintiffs; F. Dismiss the Action with prejudice (including all individual claims and Class claims presented thereby or which could have been presented thereby), without fees or costs to any Party except as provided in the Settlement Agreement; 30

34 G. Incorporate the Release, make the Release effective as of the date of the Final Order and Judgment, and forever discharge the Releasees from any claims or liabilities arising from or related to the Released Transactions; H. Bar and enjoin all Class Members who have not been timely excluded from the Class, or anyone acting on their behalf or for their benefit, from (i) filing, commencing, prosecuting, intervening in, participating in (as class members or otherwise), or receiving any benefits or other relief from, any other lawsuit, arbitration, or administrative, regulatory or other proceeding or order in any jurisdiction based on or relating to the claims and causes of action in this Action and/or set forth in the Release herein and/or the Released Transactions, and/or the facts and circumstances relating thereto or (ii) organizing such nonexcluded Class Members into a separate class for purposes of pursuing as a purported class action (including by seeking to amend a pending complaint to include class allegations, or by seeking class certification in a pending action) any lawsuit based on or relating to the claims and causes of action, or the facts and circumstances relating thereto, in this Action and/or the Release and/or the Released Transactions as to any Policy; I. Permit the Parties, by mutual agreement, to amend, modify or expand the provisions of this Agreement, including all exhibits hereto, subject to the conditions and limitations as stated in Section XII(A) of this Settlement Agreement; J. Authorize Defendant, at its sole discretion and without approval from the Court, to implement the Settlement prior to the Final Settlement Date; and K. Without affecting the finality of the Final Order and Judgment for purposes of appeal, retain jurisdiction as to all matters relating to administration, consummation, 31

35 enforcement, and interpretation of the Settlement Agreement and the Final Order and Judgment, and for any other necessary purpose. XII. MODIFICATION OR TERMINATION OF THE SETTLEMENT AGREEMENT A. The terms and provisions of this Agreement may be amended, modified, or expanded by agreement of the Parties; provided however, that after entry of the Final Order and Judgment the Parties may effect such amendments, modifications, or expansions of this Agreement and its implementing documents (including all exhibits hereto), but only after notice to or approval by the Court, except that such notice and approval is not necessary where such changes are consistent in all material respects with the Court's Final Order and Judgment or do not limit the rights of Class Members. B. Defendant, at its sole discretion and without approval of the Court, may implement the terms of the Settlement prior to the Final Settlement Date (in which case "Final Settlement Date" herein shall, as necessary, mean the date set by Defendant). C. This Agreement will temiinate at the sole option and discretion of either Defendant or the Plaintiffs if (i) the Court, or any appellate court(s), rejects, modifies, or denies approval of any portion of the Settlement Agreement or the proposed Settlement that the terminating party in their sole judgment and discretion reasonably determines is material, including, without limitation, the terms of settlement relief, the findings of the Court, the provisions relating to notice, the definition of the Class, and/or the terms of the Release; or (ii) the Court, or any appellate court(s), does not enter or completely affirm, or alters or expands, any portion of the Final Order and Judgment, or any of the Court's findings of fact or conclusions of law, that the terminating party in its (or her) sole judgment and discretion believes is material. The terminating party must exercise this option to withdraw from and terminate the Settlement 32

36 Agreement no later than thirty (30) days after receiving notice of the event prompting the termination. D. Notwithstanding the preceding Section XII(C), Plaintiffs may not terminate the Settlement Agreement because of the amount of Attorneys' Fees awarded by the Court or any appellate court(s). E. Defendant also may unilaterally withdraw from and terminate the Settlement Agreement if those persons or entities who elect to exclude themselves from the Class number more than 100 Members; provided however, that in expressing the right to teiniinate the Settlement Agreement under this Subsection, Defendant must do so no later than ten (10) days prior to the Fairness Hearing. F. If an option to withdraw from and terminate the Settlement Agreement arises under Section XII(C) and/or Section XII(E) above, neither Defendant nor Plaintiffs are required for any reason or under any circumstance to exercise that option. G. If the Settlement Agreement is terminated pursuant to Section XII(C) and/or Section XII(E) above, then: 1. The Settlement Agreement shall be null and void and shall have no force or effect, and no party to this Agreement shall be bound by any of its terms, except for the terms of this Section XII(G), and Section XIII(B), below; 2. All of its provisions, and all negotiations, statements, and proceedings, including court proceedings, relating to it, shall be without prejudice to the rights of Defendant, Plaintiffs, or any other Class Member, all of whom shall be restored to their respective positions existing immediately before the execution of this Agreement, including their respective positions as Parties in the Action; 33

37 3. Defendant and its present and former directors, officers, agents, employees, attorneys, and representatives expressly and affirmatively reserve all defenses, arguments, and motions as to all claims that have been or might later be asserted in the Action, including the argument that the Action may not be litigated as a class action, and restored to their respective positions existing immediately before the execution of this Agreement; 4. Plaintiffs and their current and former predecessors, successors, heirs, agents, or assigns expressly and affirmatively reserve and do not waive any and all motions as to, and arguments in support of, all claims, causes of action, or remedies that have been or might later be asserted in the Action; 5. Neither this Agreement, nor the fact of its having been made, shall be admissible or entered into evidence in this Action for any purpose whatsoever; and 6. Any order or judgment approving or implementing this Settlement Agreement after the date of this Agreement will be deemed vacated and will be without any force or effect. XIII. GENERAL MATTERS AND RESERVATIONS A. The obligation, although not necessarily the ability, of the Parties to conclude the proposed Settlement is and will be contingent upon each of the following: 1. Entry by the Court of the Final Order and Judgment approving the Settlement, from which the time to appeal has expired and which has remained unmodified after any appeal(s); and 2. Any other conditions stated in this Settlement Agreement. B. The Parties and their Counsel agree to keep confidential the existence and contents of this Agreement and all related negotiations until the date on which the Hearing Order 34

38 is entered; provided however, that this Section XIII(B) shall not prevent the disclosure, prior to the date on which the Hearing Order is entered, of information concerning the proposed Settlement, this Agreement or any related negotiations, to (i) regulators, financial analysts, and/or employees and agents of Defendant, where Defendant deems such disclosure necessary to effectuate the terms and conditions of this Agreement or otherwise comply with applicable law; and (ii) any other person or entity (such as experts, courts, and/or Administrators) to which the Parties agree disclosure must be made in order to effectuate the terms and conditions of this Agreement. C. Within thirty (30) days after the Final Settlement Date (unless the time is extended by agreement of the Parties), Plaintiffs and their counsel, including Lead Counsel, shall return to Defendant's Counsel all documents produced by Defendant in this Action (and all copies of such documents in whatever foiiii made or maintained), as well as transcripts of any statements, interviews, or depositions provided by Defendant or its current or former officers, employees, or agents, and any exhibits to those statements, interviews, or depositions, except that Plaintiffs' counsel, including Lead Counsel, may retain their work product, copies of court filings and official transcripts and exhibits. In the event this Agreement is terminated pursuant to Section XII, documents produced to Plaintiffs as part of the litigation and prosecution of this Action shall not be returned until the litigation ceases. Defendant agrees to store and preserve all materials returned by Plaintiffs and their counsel, including Lead Counsel, pursuant to this Section XIII(C) for at least one year after the.final Settlement Date. D. By execution of this Settlement Agreement, Defendant does not intend to release any claim Defendant may have against any car, truck, boat, motorcycle, RV or tractor dealer, 35

39 insurer, reinsurer, or any lender and/or financial institutions for any claim, cost or expense hereunder, including attorneys' fees and costs. E. Lead Counsel represent that they are (i) authorized to enter into this Agreement on behalf of Plaintiffs, and (ii) are seeking to protect the interests of the entire Class. F. Plaintiffs represent and certify that (i) they have agreed to serve as representatives of the Class certified herein, as modified; (ii) they are familiar with the pleadings in this Action; (iii) they are willing, able, and ready to perform any of the duties and obligations of representatives of the Class; (iv) they have consulted with Lead Counsel about the Action, the results of the fact-finding in the Action, the form and substance of the Settlement Agreement, and the obligations of a representative of the Class; (v) they have authorized Lead Counsel to execute this Agreement on their own and the Class' behalf; and (vi) they will remain and serve as a representative of the Class until the terms of the Settlement Agreement are effectuated, the Settlement Agreement is terminated in accordance with its terms, or the Court at any time determines that Plaintiffs cannot represent the Class. G. Defendant's Counsel represents that it is authorized to enter into this Agreement on behalf of Defendant and any attorneys who have represented or who now represent Defendant in the Action. H. This Agreement sets forth the entire agreement among the Parties with respect to its subject matter, and it may not be altered or modified except by written instrument executed by Lead Counsel and Defendant's Counsel. The Parties expressly acknowledge that no other agreements, arrangements, or understandings not expressed in this Settlement Agreement exist among or between them. 36

40 I. Whenever this Agreement requires or contemplates that one Party shall or may give notice to the other, notice shall be provided by facsimile, next-day (excluding Sunday) express delivery service and delivery, as follows: 1. If to Defendant, then to: Jeffrey M. Grantham John A. Smyth III MAYNARD, COOPER & GALE, P.C AmSouth/Harbert Plaza 1901 Sixth Avenue North Bilmingham, Alabama Telephone: (205) Facsimile: (205) j grantham@maynardc o open com j smyth@m aynardco op er. com and Robert F. Thompson BRANCH, THOMPSON, WARMATH & DALE, P.A. 414 West Court Street Paragould, AR phone fax rft3@paragould.net 2. If to Plaintiffs, then to: Brian D. Dover P.O. Box 970 Jonesboro, AR phone fax doverlaw@rittemet.com C. Lance Gould BEASLEY, ALLEN, CROW, METHVIN, PORTS & MILES, P.C. 218 Commerce Street Montgomery, AL phone fax lance.gould@beasleyallen.com 37

41 Dustin T. Brown DAUGHTERY, CRAWFORD & BROWN, LLP 1430 Wynnton Road Columbus, Georgia phone fax J. All time periods set forth herein shall be computed in calendar days unless otherwise expressly provided. In computing any period of time prescribed or allowed by this Agreement or by order of court, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday, or legal holiday, or, when the act to be done is the filing of a paper in Court, a day on which weather or other conditions have made the office of the Clerk of the Court inaccessible, in which event the period shall mean until the end of the next day that is not one of the aforementioned days. As used in this subsection, "legal holiday" includes New Year's Day, Birthday of Martin Luther King, Jr., Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, Christmas Day, and any other day appointed as a, holiday by the President or the Congress of the United States. K. The Parties reserve the right, subject to the Court's approval, to make any reasonable extensions of time that might be necessary to carry out any of the provisions of this Settlement Agreement. L. The Parties agree that this Agreement is clear and unambiguous and was drafted by counsel for the Parties at arm's length, and that no parole or other evidence may be offered to explain, construe, contradict, or clarify its terms, the intent of the Parties or their Counsel, or the circumstances under which the Agreement was made or executed. 38

42 M. In no event shall the Settlement Agreement, any of its provisions or any negotiations, statements, or proceedings relating to it in any way be construed as, offered as, received as, used as, or deemed to be evidence of any kind in the Action, any other action, or in any judicial, administrative, regulatory, or other proceeding, except in a proceeding to enforce this Agreement. Without limiting the foregoing, neither this Agreement nor any related negotiations, statements, or court proceedings shall be construed as, offered as, received as, used as, or deemed to be evidence or an admission or concession by any person, including but not limited to, of any liability or wrongdoing whatsoever on the part of Defendant, Plaintiffs, or the Class, or as a waiver by Defendant, Plaintiffs, or the Class of any applicable defense, including without limitation any applicable statute of limitations. N. Defendant expressly denies any wrongdoing alleged in the Class Complaint or any other pleading or paper, and does not admit or concede any actual or potential fault, wrongdoing, or liability in connection with any facts or claims that have been or could have been alleged against Defendant in the Action. O. Neither this Settlement Agreement nor any of the settlement relief provided in this Settlement Agreement shall be interpreted to amend or alter in any way the contractual tetras of any insurance Policy, or to constitute a novation or termination of any insurance Policy. P. No opinion concerning the tax consequences of the proposed Settlement to individual Class Members is given or will be given by Defendant, Defendant's Counsel, or Plaintiffs' Counsel, nor are any representations in this regard made or any warranties made by virtue of this Agreement. The Parties, their successors and assigns, and their Counsel, undertake to implement the terms of this Agreement in good faith, and to use good faith in resolving any disputes that may arise in the implementation of the terms of this Agreement. 39

43 Q. The Parties, their successors and assigns, and their Counsel, agree to cooperate fully with one another in seeking Court approval of the Settlement Agreement and to use their best efforts to effect the prompt consummation of the Settlement Agreement and the proposed settlement. R. This Agreement may be signed in counterparts, each of which shall constitute a duplicate original. S. This Agreement shall be construed and enforced in accordance with the laws of the State of Arkansas. 40

44 Agreed to this day of, APPROVED AND AGREED T() BY AND ON BEHALF OF DANNY THOMAS AND IRMA THOMAS IN THEIR INDIVIDUAL AND REPRESENTATIVECAPACITIES By: BRIAN DOVER, F Q. B 0- C1 CE LD,ESQ. By; DUSTIN T. BROWN, ESQ, LEAD COUNSEL FOR PLAINTIFFS 41

45 APPROVED AND AGREED TO BY AND ON BEHALF OF SOUTHERN PIONEER LIFE INSURANCE COMPANY By: By: Afv\, JEFFREY MCNT A, ESQ. By: ROBERT F. THOMPSON COUNSEL FOR SOUTHERN PIONEER LIFE INSURANCE COMPANY 42

46 EXHIBIT

47 MAIL NOTICE If you purchased credit life and/or credit disability insurance from Southern Pioneer Life Insurance Company in connection with the financing or leasing of a car, truck, boat, motorcycle, RV or tractor, paid off your loan or terminated your lease early, and did not receive a refund of unearned premium, you may be eligible to receive a payment from a class action settlement. Please see for complete details of this class action settlement, including a Class Action Notice and Instructions The settlement will provide refunds to certain former insureds who paid off their car, truck, boat, motorcycle, RV or tractor loans or terminated their leases early. If you qualify, you may send in a claim form and supporting documentation to get benefits, or you can exclude yourself from the settlement, or object to it. The Circuit Court of Greene County, Arkansas authorized this notice. Before any money is paid, the Court will have a hearing to decide whether to approve the settlement. WHO'S INCLUDED? Depending on the date on which you purchased your insurance and the state in which you purchased it, you may be a class member if (i) you purchased credit life and/or credit disability from Southern Pioneer Life Insurance Company ("Southern Pioneer") in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor; (ii) you paid your loan off or terminated your lease early; and (iii) you did not receive a refund of the unearned insurance premium. Certain categories of insureds have been excluded from the class. If you're not sure you are included, you can get more information, including a detailed notice, at the Internet site at the bottom of this notice. The lawsuit claims that Southern Pioneer failed to provide unearned premium refunds when certain insureds who purchased credit life and/or credit disability insurance in connection with a Loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor canceled their insurance before the scheduled termination date. Southern Pioneer denies that it did anything wrong. The Court did not decide which side was right. Both sides agreed to the settlement to resolve the case, avoid further litigation, and get unearned premium refunds to insureds. The two sides disagree on whether the insureds could prevail at trial, and how much money could have been won if the insureds had won at trial. WHAT DOES THE SETTLEMENT PROVIDE? For each Southern Pioneer single premium credit life and/or credit disability Policy(ies) Class Members were issued in connection with a loan that originated at a dealership when purchasing or leasing a car, truck, boat, motorcycle, RV or tractor that terminated by payment before the scheduled expiration date, Class Members who submit a timely claim verified with acceptable documentation will be entitled to 105% of the unearned premium on each such Policy(ies). WHAT'S THIS ABOUT?

48 In exchange for the benefits to be provided under the proposed settlement, Class Members release Southern Pioneer from all liability for claims for refunds or matters relating to premiums relating to the their credit life and/or credit disability policies. This release is described in detail in the Stipulation of Settlement. HOW DO YOU SUBMIT A CLAIM? If you wish to obtain settlement benefits, you must submit a properly executed, valid Claim Form, as well as documentary verification of the early termination of your vehicle loan or lease, reflecting the date of such termination. Mail your Claim Form to the Claims Administrator at For more information regarding the types of documentary verification that are acceptable, please visit the Internet site at the bottom of this notice. WHAT IS THE CLAIM DEADLINE? There is a strict deadline for returning Class Action Claim Forms together with the required verification documentation. You must mail the certified Class Action Claim Form *and all -- required-verification doeuments-so -that-they are postmarked on or before. If you fail to meet that deadline, you will not be entitled to or receive settlement benefits. to consider whether to approve the settlement and a request by lawyers representing all Class Members (Brian Dover, Beasley, Allen, Crow, Methvin, Portis & Miles and Daughtery, Crawford & Brown LLP) for $755,000 total in attorneys' fees and costs for investigating the facts, litigating the case, and negotiating the settlement. The fees and costs won't reduce your premium refund. You may ask to appear at the hearing, but you don't have to. HOW DO YOU OBTAIN FURTHER INFORMATION? If you wish to obtain copies of the detailed notice, Stipulation of Settlement, the Class Notice or the Class Action Claim Form, you may download copies at the Internet site You may also mail your request for information to the administrator at DO NOT TELEPHONE THE COURT OR THE CLERK OF THE COURT. WHAT ARE YOUR OTHER OPTIONS? You are not obligated to submit a claim or participate in the settlement. If you do not want to be legally bound by the settlement, you must exclude yourself by, or you won't be able to sue, or continue to sue, Southern Pioneer about the legal claims in this case. If you exclude yourself, you can't get an unearned premium refund from this settlement. If you do not exclude yourself from the settlement, you may object to it by. The detailed notice explains how to exclude yourself or object. The Court will hold a hearing in this case on in

49 EXHIBIT

50 (Notice of Class Action, Proposed Settlement, Fairness Hearing and Right to Appear; Instructions and Class Action Claim Form) NOTICE OF CLASS ACTION, PROPOSED SETTLEMENT, FAIRNESS HEARING AND RIGHT TO APPEAR To all persons who purchased a single premium credit life and/or credit disability insurance policy from Southern Pioneer Life Insurance Company in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor and who paid off their loan or ended their lease during the Class Period for your State1, but who did not receive a full refund of unearned premium; you may be eligible to receive a payment from this class action settlement. An Arkansas court authorized this notice. This is not a solicitation from a lawyer. You are not being sued. You were sent a Mail Notice because you purchased single premium credit life or credit disability insurance from Southern Pioneer Life Insurance Company (hereinafter "Southern Pioneer" or "Defendant") in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor. You may be entitled, to a refund of any unearned portion of the premium(s).. The settlement will provide a refund of unearned premium to class members who purchased single premium credit life or disability insurance from Southern Pioneer in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor, where class members paid off that loan or lease before the insurance was scheduled to expire, but did not receive a full refund of unearned premium. I The Class Period begins on the following date, depending on statute of limitations for the State where you purchased your policy: Arkansas July 8, 2004; Kansas July 8, 2004; Louisiana July 8, 1999; Missouri July 8, 1999; Mississippi July 8, 2006; Oklahoma July 8, 2004; Tennessee July 8, 2003; and Texas July 8, 2005 The Class Period ends on 2013 [date of Hearing Order].

51 Class members with timely mailed and verified claims will receive 105% of their unearned premium. The settlement resolves a lawsuit over whether Defendant was required to refund unearned premiums upon an early payoff of their covered loans or leases when Defendant did not receive notice of the early payoff. The settlement avoids costs and risks to class members from continuing the lawsuit, pays money to policyholders who make claims giving certain information certified under penalties of law and verified with documentation confirming the early payoff of their loan or lease, and releases Defendant from liability. Lawyers for the class members will ask the Court to approve their attorneys' fees and litigation costs of $755, for investigating the facts, litigating the case, negotiating the settlement, and assisting class members in connection with the settlement. The two sides disagree on whether the class would recover anything if the case went to trial, and have agreed to settle rather than risk the uncertainty of trial. Your legal rights are affected whether you act or do not act. These rights and options and the deadlines to exercise them are explained in the Notice of Settlement and related papers, all of which can be printed from If you do not have access to the internet or wish to obtain a hard copy of the full settlement package directly, call and you will be sent a copy via United States Mail. Read these materials carefully! The Court still has to decide whether to approve the settlement. Payments will be made only if the Court approves the settlement and after appeals, if any, are resolved. Please be patient. Receive a payment if: (a) you purchased single premium credit life or disability insurance from Defendant in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor during the Class Period; (b) you paid off your loan or lease early; (c) you did not receive a full refund of unearned premium; (d) you have not made a claim under your coverage; and (e you make a timel certified and verified claim in the Settlement. Receive no settlement claim opportunity or payment. This is the only option that allows you to ever be part of any other lawsuit atainst Defendant about the le!al claims in this case.

52 Write to the Court if you do not approve of the settlement. Ask to speak in Court about the fairness of the settlement. Lose the opportunity to submit a claim for a premium refund if the settlement is approved by the Court.

53 BASIC INFORMATION 1. Why did I receive this notice package? 2. What is this lawsuit about? 3. Why is this a class action? 4, Why is there a settlement? WHO IS IN THE SETTLEMENT 5, How do I know if I am a class member? 6. Which credit insurance products are included? 7. Who is excluded from the class definitions? Tug; SETTLEMENT BENEFITS WHAT YOU RECEIVE 8. What does the settlement provide? 9. What will I receive from the settlement? HOW YOU RECEIVE A PAYMENT SUBMITTING A CLAIM FORM 10. How can I receive a payment? 11. When would I receive my payment? 12. What am I giving up to receive a payment or to stay in the Class? EXCLUDING YOURSELF FROM THE SETTLEMENT 13. How do I get out of the settlement? 14. If I do not exclude myself, may I sue Defendant for the same thing later? 15. If I exclude myself, can I receive money from this settlement? THE LAWYERS REPRESENTING YOU 16. Do I have a lawyer in the case? 17. How will the lawyers be paid? OBJECTING TO THE SETTLEMENT 18. How do I tell the Court that I do not like the settlement? 19. What is the difference between objecting and excluding? THE COURT'S FAIRNESS HEARING 20. When and where will the Court decide whether to approve the settlement? 21. Do I have to come to the hearing? 22. May I speak at the hearing? IF YOU DO NOTHING 23. What happens if I do nothing at ali? OBTAINING MORE INFORMATION 24. Are there more details about the settlement? PAGE PAGE PAGE PAGE PAGE PAGE PAGE PAGE PAGE PAGE

54 BASIC INFORMATION lid I receive the mail notice and aint form? You were sent the mail notice and claim form because you purchased single premium credit life or disability insurance from Defendant in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor which is still in force or expired during the relevant period starting on the commencement of the applicable limitation period for a breach of contract claim in your state (see note 1 of this Notice) and ending [date of Hearing Order], We do not know whether you paid off your car, truck, boat, motorcycle, RV or tractor loan or lease before its scheduled end date. We need to know whether you did. If you did not, you cannot make a valid settlement claim. If you did, you can submit the Claim Form. The Court ordered this notice be sent to you because you have a right to know about a proposed settlement of a class action lawsuit, and about your options, before the Court decides whether to approve the settlement. If the Court approves it, and after objections and appeals, if any, are resolved affirming that approval, Defendant will make the payments that the settlement allows. This package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to receive them. The Court in charge of the case is the Circuit Court of Greene County, Arkansas, and the case is known as Danny Thomas, et al. v. Southern Pioneer Life Insurance Company, Case No in the Circuit Court of Greene County, Arkansas. The persons who sued are called "Plaintiffs," and the company they sued, Southern Pioneer, is called the "Defendant." aril Consumers purchased single premium credit life or disability insurance from Defendant in connection with loans that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor. The settlement resolves a dispute over whether Defendant was required to refund unearned premiums to policyholders upon an early payoff of their covered car, truck, boat, motorcycle, RV or tractor loan or lease when Defendant did not receive notice of the early payoff. The Plaintiffs claim that under the terms of the policy(ies) and applicable state laws and regulations, if they paid the indebtedness on the covered loan or lease before the scheduled maturity or termination, they are automatically entitled to a refund of unearned premium from the credit life or disability insurance policy, regardless of notice to Defendant. The Defendant insists that under the policy and the applicable state laws and regulations, it is not required to refund the unearned premium until it receives notice of early loan payoff or lease termination. The Defendant denies it did anything wrong..1.4:k. as.a,:ac -

55 In a class action, one or more people, called Class Representatives (in this case Danny Thomas and Irma Thomas), sue on behalf of people who have similar claims. All these people are.a Class or Class Members. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class. Judge Pam Honeycutt is in charge of this class action. ffis thei.e a settlemen The Court did not decide in favor of Plaintiffs or Defendant. Instead, both sides agreed to a settlement. That way, they avoid the cost of a trial, and the people affected will receive compensation. The Class Representative and the attorneys think the settlement is best for everyone in the class. WHO IS IN THE SETTLEMENT To see if you will receive money from this settlement, you first have to decide if you are a Class Member. asamen, In this case, everyone who fits the following description is a Class Member: All persons to whom Southern Pioneer issued a single premium credit life or credit disability insurance policy in connection with a loan that originated at a dealership when financing or leasing a car, truck boat, motorcycle, RV or tractor, where such policy either remains in force, or was scheduled to continue in force through its expiration to a date during the Class Periog2 and who paid off their loan or lease in connection with the financing or leasing of that car, truck, boat, motorcycle, RV or tractor prior to the scheduled maturity date, but did not receive a full refund of unearned premium, subject to certain exclusions described below. insurance s are include All single premium credit life and disability policies issued by Defendant in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor where the records of Southern Pioneer indicate that such loans or leases are in force or had a scheduled expiration date from the commencement of the Class Period in your State (see note 2 below) through, where the indebtedness on the financing or leasing of the car, truck, boat, motorcycle, RV or tractor was paid before the scheduled end date of the policy, are included in this settlement. 2 Depending on statute of limitations for the State where you purchased your policy, the Class Period begins on the following date: Arkansas July 8, 2004; Kansas July 8, 2004; Louisiana July 8, 1999; Missouri July 8, 1999; Mississippi July 8, 2006; Oklahoma July 8, 2004; Tennessee July 8, 2003; and Texas July 8, 2005 The Class Period ends on 2013 [date of Hearing Order].

56 In this case, everyone who fits the following description is excluded from and not a member of the Class: (i) All individuals who received any payment of any claim under the policy at issue, including but not limited to a claim benefit payment, (ii) individuals who are or were during the Class Period officers, directors or employees of Southern Pioneer, (iii) individuals whose loans or leases were discharged in bankruptcy, (iv) individuals whose coverage was terminated because the loan collateral or leased vehicle was repossessed, (v) any justice, judge or magistrate judge of the United States or any State, their spouses, and persons within the third degree of relationship to either of them, or the spouses of such persons, (vi) individuals who purchased coverage on which unearned premiums were previously refunded, (vii) individuals whose coverage was rescinded,. and/or (viii) all individuals who request to be excluded from the Class. THE SETTLEMENT BENEFITS WHAT You RECEIVE dew t piovi 4.4 _ Defendant has agreed to pay an unearned premium refund to class members who purchased single premium credit life or disability insurance from Defendant in connection with a loan that originated at a dealership when financing or leasing a car, truck, boat, motorcycle, RV or tractor, where class members paid off their loan or lease in connection with the financing or leasing of that car, truck, boat, motorcycle, RV or tractor prior to the scheduled maturity or termination date, but did not receive a refund of unearned premium, and make a timely certified and verified claim. If you submit a timely certified claim verified with acceptable documentation you will receive 105% of your unearned premium. How You RECEIVE A PAYMENT SUBMITTING A CLAIM FORM w can, receive a To apply for a refund you must complete and mail back the Class Action Claim Form that was attached to the Mail Notice or downloaded from the Internet site. Read the Claim Form Instructions carefully. Fill out the form. Attach the required verification documents listed in the Form. Sign the form. Mail it postmarked no later than the date indicated in the Instructions.

57 The Court will hold a final hearing on, to decide whether to approve the settlement. If the Court approves the settlement and if there are objectors, it is possible, but unusual, for there to be appeals. Payments will not be made unless and until the settlement is approved by the Court and by any appeals court which may be asked to review the settlement approval. If this unusual event occurs, please be patient. Unless you exclude yourself, you are staying in the Class, and that means that you cannot sue, continue to sue, or be part of any other lawsuit against Defendant about the legal issues in this case. It also means that all of the Court's orders will apply to you and legally bind you. You also agree to release all claims against Defendant, including all claims asserted in this litigation and claims relating to all acts or omissions relating to refunds on your credit life or disability insurance. However, if you have a pending or future claim or lawsuit relating to payment of policy benefits with Defendant, this settlement and release will not affect that claim or lawsuit. EXCLUDING YOURSELF FROM THE SETTLEMENT If you do not want a payment from this settlement, but you want to keep the right to sue or continue to sue Defendant on your own about the legal issues in this case,.then you must take steps to get out. This is called excluding yourself from or is sometimes referred to as opting out of the settlement Class. To exclude yourself from the settlement, you must send a letter by mail saying that you want to be excluded from Danny Thomas, et al. v. Southern Pioneer Life Insurance Company, et al., CV , Circuit Court of Greene County, Arkansas. Be sure to include your name, address, telephone number, and your signature. You must mail your exclusion request postmarked no later than, 2013, to: Thomas Unearned Premium Refund Settlement P.O. Box You cannot exclude yourself on the phone or by . If you exclude yourself, you will not receive any settlement benefits or the opportunity to make a claim for a premium refund, and you cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. You may be able to sue (or continue to sue) Defendant in the future.

58 later No. Unless you exclude yourself, you give up the right to sue Defendant for the claims that this settlement resolves. If you have a pending lawsuit, speak to your lawyer in that lawsuit immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is No. If you exclude yourself, you may not send in a Claim Form to ask for any money. THE LAWYERS REPRESENTING YOU Brian D. Dover, P.O. Box 970, Jonesboro, AR 72403, C. Lance Gould of BEASLEY, ALLEN, CROW, METHVIN, PORTS & MILES, P.C., 218 Commerce Street, Montgomery, AL 36104, and Dustin T. Brown, DAUGH l'ery, CRAWFORD & BROWN, LLP, 1430 Wynnton Road, Post Office Box 1118, Columbus, Georgia represent you and other Class Members in this case. These lawyers are called Class Counsel. If you want to be represented by your own lawyer, you may hire one at your own expense. Class Counsel will ask the Court for reimbursement of attorneys' fees and expenses up to $755, Defendant will separately pay these fees and expenses. Defendant will not oppose these fees and expenses and will also separately pay the costs to administer the settlement. OBJECTING TO THE SETTLEMENT You can tell the Court that you do not agree with the settlement or some part of it. If you are a Class Member, you may object to the settlement if you do not like any part of it. You can give reasons why you think the Court should not approve it. The Court will consider your views. To object, you must send a written statement saying that you object to the Danny Thomas, et al. v. Southern Pioneer Life Insurance Company, Case No , in the Circuit Court of Greene County, Arkansas. Be sure to include your name, address, telephone number, your signature, and the reasons you object to the settlement including any legal support. Mail the objection to these six different places postmarked no later than, 2013: