ESCROW AGREEMENT
Exhibit 99.8
THIS AGREEMENT (the “Agreement”) is entered into this 1st day of August, 2008, by and between
LEBANON MUTUAL INSURANCE COMPANY, a Pennsylvania mutual insurance company (“Company”), XXXXXXX MTS
PARTNERS, LLC, a Pennsylvania limited liability company (“Xxxxxxx MTS”), and CHRISTIANA BANK &
TRUST COMPANY, a Delaware banking corporation (“Escrow Agent”).
WITNESSETH:
WHEREAS, the Company proposes to offer and sell to eligible subscribers and other purchasers
up to 1,588,889 shares of common stock (the “Shares”) of LMI Holdings, Inc. (“LMI Holdings”), at a
price of $10.00 per Share, in a subscription offering and a community offering (collectively, the
“Offering”); and
WHEREAS, the stock order form to be entered into by investors offering to acquire Shares
provides that all collected funds received with subscriptions for the Shares (the “Proceeds”) will
be placed in an account (the “Escrow Account”) with the Escrow Agent until such times as the Escrow
Agent is required to release such Proceeds to LMI Holdings or return the Proceeds, without
interest, to the subscribers; and
WHEREAS, the Escrow Agent has consented to act as escrow agent subject to the conditions and
requirements set forth herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Appointment of Escrow Agent. The Company hereby appoints the Escrow Agent to act
as the escrow agent hereunder, and the Escrow Agent hereby accepts such appointment. The Escrow
Agent agrees to deposit all of the Proceeds into the Escrow Account and to hold and release the
funds in the Escrow Account in accordance with the terms hereof.
2. Responsibilities and Obligations of Escrow Agent
a. The Escrow Agent shall have no responsibility, obligation, duty (including fiduciary duty)
or liability hereunder, except those expressly provided for in this Agreement.
b. The Escrow Agent shall have no responsibility, obligation, duty (including fiduciary duty),
or liability to any person with respect to any action taken, suffered, or omitted to be taken by it
in good faith under this Agreement and shall in no event be liable hereunder except for its gross
negligence or willful misconduct.
c. No reference in this Agreement to any other agreement shall be construed or deemed to
enlarge the responsibilities, obligations, duties, or liabilities of the Escrow Agent set forth in
this Agreement, and the Escrow Agent is not charged with the knowledge of any other agreement.
d. The Escrow Agent shall be protected in relying upon the truth of any statement contained in
any notice, and without inquiry as to any other facts, that appears to be genuine and to be signed
by the proper person or persons, and is entitled to believe all signatures are genuine and that any
person signing any document who claims to be duly authorized, is in fact so authorized.
e. The Escrow Agent shall be entitled to act on any instruction given to it in writing by the
Company.
f. The Escrow Agent shall be entitled to act in accordance with any court order or other final
determinations by any governmental authority with jurisdiction of the matter.
g. The Escrow Agent shall have no responsibility to make payments out of the Escrow Account in
an amount in excess of the amount of good funds deposited in the Escrow Account, together with any
earnings thereon, at the time any payment is to be made.
h. In the event that the Escrow Agent should at any time be confronted with inconsistent
claims or demands from the Company and any other person, the Escrow Agent shall have the right to
file an interpleader action in any court of competent jurisdiction within the State of Delaware, to
which jurisdiction the Company hereby agrees to submit, and request that such court determine the
rights of the Company and all other persons with respect to this Agreement, and upon doing so, the
Escrow Agent automatically shall be released from any obligations or liabilities as a consequence
of any such claims or demands.
i. The Escrow Agent may execute any of its powers or responsibilities hereunder and exercise
any rights hereunder either directly or by or through its agents or attorneys. Nothing in this
Agreement shall be deemed to impose upon the Escrow Agent any duty to qualify to do business or to
act as a fiduciary or otherwise in any jurisdiction. The Escrow Agent shall not be responsible for
and shall not be under a duty to examine or pass upon the validity, binding effect, execution or
sufficiency of this Agreement or of any agreement amending or supplementing this or any other
agreement.
j. The Escrow Agent shall have no responsibility for any federal, state, local or
international tax reporting relating to taxable income or gains on the Escrow Account earned during
the existence of the Escrow Account.
3. Compensation of Escrow Agent
Escrow Agent shall be entitled to compensation for its services rendered as agreed to in
Schedule A attached hereto.
4. Indemnification of Escrow Agent
The Escrow Agent shall be indemnified and held harmless by the Company against any claim or
charge made against it by reason of any action or failure to act in connection with any of the
transactions contemplated by this Agreement, and against any loss the Escrow Agent may sustain in
carrying out the terms of this Agreement, including, without limitation, reasonable
legal fees and expenses incurred in connection with any matter related to the performance of
the Escrow Agent’s duties hereunder, but excluding any loss the Escrow Agent may sustain as a
result of its gross negligence or willful misconduct.
5. Termination and Resignation
a. This Agreement shall terminate when the Escrow Agent or its successor or assign receives
written notification of termination including final disposition instructions signed by the Company
and upon the actual final disposition of the monies held in escrow hereunder. The rights and
obligations of the Company and the Escrow Agent shall survive the termination hereof.
b. The Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent
hereunder by giving the Company not fewer than thirty (30) days prior notice thereof. As soon as
practicable after its resignation, the Escrow Agent shall turn over to a successor escrow agent
appointed by the Company all monies held hereunder upon presentation of the document appointing a
new escrow agent and its acceptance thereof. If no new escrow agent is so appointed within the
thirty (30) day period following such notice of resignation, the Escrow Agent may designate its
successor by written notice to the Company so long as such successor is a bank or trust company and
provided such successor must agree in writing to be bound by this Agreement. Upon the designation
of such successor escrow agent, the resigning Escrow Agent shall be released from any and all
liabilities arising thereafter provided that such successor escrow agent agrees to be bound by the
terms and provisions of this Agreement. If no successor escrow agent is appointed within 30 days,
Escrow Agent reserves the right to forward this matter, and all monies in the Escrow Account, to a
court of competent jurisdiction at the expense of the Company.
6. Receipt and Deposit of Funds Into Escrow Account
The Company shall direct all subscribers to make their checks and money orders payable to the
Escrow Agent, and all funds from subscribers of the Offering shall be sent directly to the Stock
Information Center established by the Company and managed by Xxxxxx, Xxxxxxxx & Company, Inc.
(“Stifel”), together with a dated stock order form for the Shares (the “Order Form”) containing the
name of the subscriber, the subscriber’s address and the number of shares desired to be purchased.
The Company shall cause Stifel to forward to the Escrow Agent all checks or money orders received
at the Stock Information Center, together with a report showing the name of the subscriber, the
time and date that the Order Form was received, and the amount of subscription funds received from
each subscriber. Such checks and money orders will be sent by Federal Express by 12:00 noon of the
next business day after receipt by the Stock Information Center. The Escrow Agent shall deposit in
the Escrow Account all checks and money orders from subscribers received by the Escrow Agent.
Funds received from subscribers shall only be invested as permitted under SEC Rule 15c2-4. The
Escrow Agent shall invest all monies in the Escrow Account in the SEI Daily Income Trust Treasury
Fund Number 138.
7. Release of Funds From Escrow Account
The Escrow Agent shall hold all funds received from the Offering pursuant to the terms of this
Agreement, until the Escrow Agent has received a written certificate of an officer of the Company
stating that all of the conditions to completion of the conversion of the Company from mutual to
stock form have been completed (collectively, the “Escrow Conditions”). Upon satisfaction of the
Escrow Conditions, the Escrow Agent shall promptly disburse all funds held in the Escrow Account to
LMI Holdings by a wire transfer of immediately available funds. In the event that the Escrow
Conditions are not satisfied on or before , 200 , the Escrow Agent shall (i) issue a refund
check to each subscriber in the amount of the collected funds received from the subscriber, without
interest, and (ii) pay all accrued interest and other earnings on funds in the Escrow Account to
LMI Holdings by check.
8. Collection Procedure
The Escrow Agent is hereby authorized to forward each check received for collection and, upon
collection of the proceeds of each check, deposit the collected proceeds into the Escrow Account.
Any check returned unpaid to the Escrow Agent shall be returned to the Company or redeposited at
the request of the Company. If the Company rejects any subscription for which the Escrow Agent has
already collected funds, the Escrow Agent shall promptly issue a refund check to the rejected
subscriber in the amount of the collected funds. If the Company rejects any subscription for which
the Escrow Agent has not yet collected funds but has submitted the subscriber’s check for
collection, the Escrow Agent shall promptly issue a check in the amount of the subscriber’s check
to the rejected subscriber after the Escrow Agent has cleared such funds. If the Escrow Agent has
not yet submitted a rejected subscriber’s check for collection, the Escrow Agent shall promptly
remit the subscriber’s check directly to the subscriber.
9. Notices
All notices provided for herein shall be in writing, shall be hand delivered or delivered by
facsimile machine or by any express courier, shall be deemed given when received, and shall be
addressed to the Company and the Escrow Agent at their respective addresses as follows:
a. To the Company:
|
Lebanon Mutual Life Insurance Company 000 Xxxx Xxxx Xxxxxx Xxxxxx, XX 00000 Attention: Xxxxxx X. Xxxxxxxxx, Xx. Fax: (000) 000-0000 |
|
b. To the Escrow Agent:
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Christiana Bank & Trust Company 000 Xxxxxxxx Xxxxxx Xxxxx 000 Xxxxxxxxxx, XX 00000 (Fax) 000-000-0000 |
c. To Xxxxxxx MTS:
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Xxxxxxx MTS Partners, LLC 000 Xxxxxxx Xxxxxxxx Xxxxxx Xxxxx 000 Xxxx xx Xxxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxxxx Fax: (000) 000-0000 |
10. Parties Bound
This Agreement shall inure to the benefit of and be binding upon the successors and assigns of
the Company and the Escrow Agent.
11. Amendment
This Agreement cannot be modified, amended, supplemented, or changed, nor can any provision
hereof be waived, except by a written instruction executed by the Company and the Escrow Agent.
12. Assignment
Neither party may assign its rights and/or obligations under this Agreement without the
written consent of the Company and the Escrow Agent, which consent shall not be unreasonably
withheld.
13. Applicable Law
This Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware.
14. Severability
If at any time subsequent to the date hereof, any provision of this Agreement shall be held by
any court of competent jurisdiction to be illegal, void, or unenforceable, such provision shall
have no effect upon and shall not impair the enforceability of any other provision of this
Agreement.
15. Responsibility for Payment
Xxxxxxx MTS agrees to pay all fees and expenses owed to the Escrow Agent under this Agreement.
The Escrow Agent agrees (i) to look solely to Xxxxxxx MTS for payment of such fees and expenses,
and (ii) the Company shall have no responsibility to pay any fees or expenses owed to the Escrow
Agent under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed the day
and year first above written.
| LEBANON MUTUAL INSURANCE COMPANY |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxxxxxxx, Xx. | |||
| Title: | President | |||
| CHRISTIANA BANK & TRUST COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXX MTS PARTNERS, LLC |
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| By: | ||||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Manager | |||
