Buyer’s Trustee and Endowment Care and Pre-Need Trust Funds. Buyer shall, prior to Closing, (i) secure all licenses, permits and other governmental authorizations and approvals required by the Commonwealth of Pennsylvania and the States of North Carolina, Alabama and Georgia as a prerequisite to Buyer selling Pre-/At-Need Contracts or accepting funds paid by customers toward Pre-/At-Need Contracts with the Business; and (ii) select and formally designate a trustee or trustees (“Buyer’s Trustee”) that is qualified under applicable Laws to receive all bank, trust or other funds or accounts, excluding insurance premium payments, containing amounts that have been received by Sellers prior to the Effective Time pursuant to Pre-/At-Need Contracts for pre-need funeral or cemetery merchandise and/or services to be provided by the Business (“Pre-Need Trust Funds”), or which are being held as endowment care, perpetual care, extended care or similar trust funds (“Endowment Care Funds”), or which are being held as pre-construction trust funds (“Pre-construction Trust Funds”) (all herein collectively the “Trust Funds”). At or prior to Closing, Buyer shall present to Sellers documentary evidence of satisfaction of the above requirements (“Trust Fund Verification Documents”). On the Closing Date, all amounts held in the Trust Funds shall be transferred for safekeeping to Buyer’s Trustee, provided that certain amounts shall be transferred to Buyer’s Trustee after Closing pursuant to Section 5.5. Buyer agrees that all such amounts will be held, administered and withdrawn in accordance with state and federal law. Also prior to Closing, Buyer shall obtain and have available at Closing for delivery to the North Carolina Cemetery Commission, a bond which is legally and financially adequate to cause the North Carolina Cemetery Commission to release the existing bond(s) currently in its possession and previously provided to it by SCI North Carolina Funeral Services, Inc. regarding that entity’s Pre-/At-Need Contract performance liability for all of the North Carolina cemetery Locations.
Buyer’s Trustee and Endowment Care and Pre-Need Trust Funds. Buyer shall, prior to Closing, (i) secure all licenses, permits and other governmental authorizations and approvals required by those jurisdictions listed on Exhibit D as a prerequisite to Buyer selling Pre-/At-Need Contracts or accepting funds paid by customers toward Pre-/At-Need Contracts with the Owned Business; and (ii) select and formally designate a trustee or trustees (“Buyer’s Trustee”) that is qualified under applicable Laws to receive all bank, trust or other funds or accounts, excluding insurance premium payments, containing amounts that have been received by Seller prior to the Effective Time pursuant to
Buyer’s Trustee and Endowment Care and Pre-Need Trust Funds. Subject to receipt of the prior order of the Court to do so, at Closing, all the Trust Funds shall be transferred to the escrow agent or trustee for each Owned Location as designated by the Buyer for deposit in the trust or escrow accounts maintained for such Owned Location (the “Buyer Designated Trust/Escrow Accounts”). For avoidance of doubt, Trust Funds shall include monies repatriated by the Receiver of approximately $7.0 million (the “Repatriated Funds”) which shall be transferred at Closing to Buyer by the Receiver. At Closing, Buyer shall advance moneys, for the purpose of covering a portion of the Trust Shortfalls, in the amount of $14,807,668.78, which shall be transferred to the trustee or escrow agent for deposit in the Buyer Designated Trust/Escrow Accounts as agreed by the Buyer with the States of Indiana, Michigan and Ohio, as the case may be. It is expressly agreed that the amount of $4,256,668.78 out of the Repatriated Funds and the amount transferred by Buyer under this Section 5.5 will be transferred to the Buyer Designated Trust/Escrow Accounts as directed by the State of Michigan.
