ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of the
28th day of December, 2006, by and among American Network Insurance Company, a
Pennsylvania corporation ("ANIC"), Security National Life Insurance Company, a
Utah corporation ("SNLIC"), the owner of all issued and outstanding shares of
Southern Security Life Insurance Company and Preferred Insurance Capital
Consultants, LLC, a Florida limited liability company (the "Escrow Agent").
WITNESSETH:
WHEREAS, contemporaneously with the execution of this Agreement, ANIC has
entered into Stock Purchase Agreement with SNLIC to purchase 100% of the shares
(the "Stock") in Southern Security Life Insurance Company, a licensed insurance
company in the State of Florida (the "Company") for the sum of $400,000 plus an
amount equal to the Capital and Surplus of Southern Security Life Insurance
Company as of December 31, 0000 Xxxxxxxxx Xxxxxxxxx, subject to later adjustment
per the Stock Purchase Agreement (the "Purchase Price");
WHEREAS, in the event that the transaction is not approved by the
appropriate regulatory parties or both parties agree, the Approximate Purchase
Price consisting of the sum of $400,000 plus an amount equal to the Capital and
Surplus of the Company as of September 30, 2006 shall be immediately returned to
ANIC.
WHEREAS, the Escrow Agent is willing to act as escrow agent hereunder
without compensation;
NOW, THEREFORE, in consideration of premises and the mutual promises,
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. Establishment of Purchase Price.
Simultaneously with the execution hereof, ANIC shall deliver to the Escrow
Agent the Approximate Purchase Price to be held in an interest bearing account
at Bank of America with a Florida interest benefit of purchase ("Account"). The
Approximate Purchase Price shall be held in the Account until the said
transaction has been approved or disapproved by the Appropriate Regulatory
Parties.
SECTION 2. Distribution of Purchase Price.
2.1 Action Upon Approval by the Appropriate Regulatory Parties. Upon
satisfaction of said condition subsequent, the Escrow Agent shall wire transfer
the Approximate Purchase Price being held in the escrow account to an account of
SNLIC designated by SNLIC. All investment income and interest earned in the
escrow account shall be transferred to ANIC.
2.2 Action Upon Disapproval by the Appropriate Regulatory Parties. Upon
disapproval by the Appropriate Regulatory Parties or in the event said condition
subsequent is not satisfied on or before June 30, 2007, or on or before such
later date as the Seller and Purchase may mutually agree in writing, this Escrow
Agreement shall be rescinded and the Escrow Agent shall wire transfer the
Approximate Purchase Price and interest accrued thereon being held in the escrow
account to an account of ANIC designated by ANIC.
2.3 Action Upon Mutual Termination. In the event that both parties agree to
terminate the Stock Purchase Agreement pursuant to Article VIII or the Escrow
Agreement, the Escrow Agent, upon written direction by both ANIC and SNLIC shall
return the Approximate Purchase Price to ANIC.
SECTION 3. Escrow Agent.
3.1 Duties. It is agreed that the duties and obligations of the Escrow
Agent are those herein specifically provided and no other. The Escrow Agent
shall have no liability or obligation with respect to the Approximate Purchase
Price except for the Escrow Agent's willful misconduct or gross negligence. The
Escrow Agent's sole responsibility shall be for the safekeeping and disbursement
of Approximate Purchase Price in accordance with the terms of this Escrow
Agreement. The Escrow Agent shall have no implied duties or obligations and
shall not be charged with knowledge or notice of any fact or circumstance,
except as specifically set forth herein or in a notice delivered pursuant
hereto.
3.2 Right to Follow Instructions. Escrow Agent shall not incur any
liability for following the instructions herein contained or expressly provided
for, or written instructions given by the parties hereto.
3.3 Conflicting Instructions. In the event that Escrow Agent shall be
uncertain as to its duties or rights hereunder or shall receive instructions,
claims or demands from any party hereto which, in its opinion, conflict with any
of the provisions of this Agreement, it shall be entitled to refrain from taking
any action until receipt of a Final Determination.
3.4 Changes to Agreement. Escrow Agent shall not be bound by any
modification, amendment, termination, cancellation, rescission or super session
of this Agreement unless the same shall be in writing and signed by all the
other parties hereto and, if its rights, duties, immunities or indemnities as
the Escrow Agent are affected thereby, unless it shall have been given its prior
written consent thereto.
3.5 Release of Escrow Agent. Escrow Agent may at any time resign by giving
written notice of its resignation to the parties hereto at their respective
addresses set forth in this Agreement, at least thirty (30) days prior to the
date specified for such resignation to take effect, and upon the effective date
of such resignation, all property then held by the Escrow Agent shall be
delivered by it to such person as may be jointly designated by ANIC and SNLIC,
whereupon all of the Escrow Agent's duties and obligations hereunder shall cease
and terminate.
3.6 Termination of Escrow Agent Duties.
(a) In the event that both parties agree to terminate the Stock
Purchase Agreement pursuant to Article VIII or Escrow Agreement,
the Escrow Agent, upon written direction by both ANIC and SNLIC
shall return Approximate Purchase Price to ANIC.
(b) Upon disapproval by the Appropriate Regulatory Parties or in the
event said condition subsequent is not satisfied on or before
June 30, 2007, or on or before such later date as the Seller and
Purchase may mutually agree in writing, this Escrow Agreement
shall be rescinded and the Escrow Agent shall wire transfer the
Approximate Purchase Price and interest accrued thereon being
held in the escrow account to an account of ANIC designated by
ANIC.
SECTION 4. Miscellaneous.
4.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida (without giving effect to the
conflict of law principals thereof).
4.2 Notices. All notices that are required or may be given pursuant to the
terms of this Agreement shall be in writing and shall be sufficient in all
respects if delivered by hand or via a national overnight courier service or
mailed by registered or certified mail postage to:
If to Escrow Agent:
Preferred Insurance Capital Consultants, LLC
Attn: Xxxxxxx Xxxxxxxxx
00 XX 0xx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
with copy to:
Xxxxxx & Associates
Attn: Xxxxxx Xxxxxx, Esq.
1555 Palm Beach Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
If to Security National Life Insurance Company:
Security National Life Insurance Company
Attn: Xxxxx X. Xxxxx
0000 Xxxxx 000 Xxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
with copy to:
Mackey Price Xxxxxxxx & Xxxxxx
Attn: Xxxxxxx X. Xxxxxx, Esq.
00 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
If to American Network Insurance Company:
c/o: Penn Treaty American Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Or such other address or addresses, as shall be designated by a party hereto, to
the others in writing. Any such notice, claim or other communication shall be
deemed conclusively to have been given and received (i) on the first business
day following the day timely received by national overnight courier, with the
cost of delivery prepaid; or (ii) when otherwise personally delivered to the
addressee.
4.3 Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof, and supersedes all
prior oral or written agreements, commitments or understandings among them with
respect to the matters provided.
4.4 Modification. This Agreement may be modified, altered or amended only
by a written instrument signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date of first written above.
SECURITY NATIONAL LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx, President
AMERICAN NETWORK INSURANCE COMPANY
By /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx, Executive Vice President
Escrow Agent (Preferred Insurance Capital Consultants)
By___________________________________
Xxxxxxx Xxxxxxxxx
