IMPOUNDMENT AGREEMENT.
THIS IMPOUNDMENT AGREEMENT made and entered into this 9TH DAY OF FEBRUARY, 1999,
by and between PROFORMANCE RESEARCH ORGANIZATIONS (hereinafter called the
Issuer), BANK WINDSOR (a national or state) banking association or trust company
with principal offices in MINNEAPOLIS, MINNESOTA (hereinafter called the
Impoundment Agent), and GLOBAL FINANCIAL GROUP, INC. whose address is 000
XXXXXXXXXX XX. XXX 0000, XXXXXXXXXXX, XX, 00000 (hereinafter called the
Underwriter);
WITNESS THAT:
WHEREAS, Issuer has applied to the commissioner of commerce for the State of
Minnesota (hereinafter called the commissioner) for registration of 1,000,000
COMMON SHARES (description of securities) for sale to the residents of the State
of Minnesota; and
WHEREAS, as a condition of registration of such offering under the Securities
Laws of the State of Minnesota the commissioner requires that the Issuer provide
for the impoundment of the proceeds to be received from such offering of
securities; and
WHEREAS, the Issuer, the Impoundment Agent and the Underwriter desire to enter
into an agreement with respect to the said impoundment of proceeds;
NOW, THEREFORE, in consideration of the premises and agreements set forth
herein, the parties hereto agree as follows:
1. PROCEEDS TO BE PLACED IN ESCROW:
All proceeds received from the sale of the securities subject to this
Impoundment Agreement on or after the date hereof shall be paid to the
Impoundment Agent within two business days from the date of sale and deposited
by Impoundment Agent in an escrow account. During the term of this Impoundment
Agreement, the Issuer and Underwriter shall cause all checks received by them in
payment for such securities to be either payable to the Impoundment Agent or
endorsed forthwith to the Impoundment Agent.
2. IDENTITY OF SUBSCRIBERS:
The Issuer and Underwriter shall cause to be delivered to the Impoundment Agent
two signed counterparts of each Subscription Agreement which shall contain,
among other things, the name and address of each subscriber thereto, the date
and amount subscribed, and the amount paid, or, in the alternative, shall
furnish to the Impoundment Agent with each deposit of funds in the impoundment a
list of the persons who have subscribed the money, showing the name, address,
date and amount of subscription, and amount of money paid. All proceeds so
deposited shall remain the property of the subscriber and shall not be subject
to any liens or charges by the Impoundment Agent or Underwriter, or judgments or
creditors' claims against the Issuer until released to the Issuer as hereinafter
provided.
3. DISBURSEMENT OF FUNDS:
Upon the receipt by Impoundment Agent of amounts paid in of not less than
$5,000,000, the Impoundment Agent shall forthwith notify the commissioner in
writing of the impoundment of such amounts. Upon receipt by Impoundment Agent of
written authorization from the commissioner, then said Impoundment Agent, on
demand of the Issuer, shall pay over to the Issuer all impounded funds. If the
specified minimum amount of proceeds have not been impounded during the term of
impoundment, then, within three business days after the last day of the term of
impoundment, the Impoundment Agent shall notify the commissioner in writing that
the conditions of impoundment have not been satisfied, and shall within a
reasonable time, but in no event not more than thirty (30) days after the last
day of the term of impoundment, refund to each subscriber at the address
appearing on the Subscription Agreement or list of subscribers, or at such other
address as shall be furnished the Impoundment Agent by the subscriber in
writing, all sums paid pursuant to the subscription, and shall then notify the
commissioner in writing of such refund.
4. TERM OF IMPOUNDMENT:
This impoundment shall terminate on the 180TH day following the effective date
of the registration of the Issuer's securities in the State of Minnesota, unless
extended by the consent in writing of the parties hereto and all subscribers to
the securities subscribed to date and the commissioner. Upon termination hereof,
whether after extension or otherwise, the Impoundment Agent shall disburse the
funds in the impoundment account in the manner and upon the terms directed in
paragraph three hereof. The Issuer may abandon the sale of securities anytime
prior to the date above. Upon the receipt of a copy of the Resolution
authorizing said abandonment, duly attested to by the Secretary of the Issuer,
accompanied by the written consent of the commissioner, Impoundment Agent shall
be authorized to refund the moneys received from the subscribers.
5. TERMINATION BY REVOCATION OR SUSPENSION:
If at anytime prior to the termination under paragraph four of this impoundment,
said Impoundment Agent is advised by the commissioner that the registration to
sell securities has been revoked or suspended, said Impoundment Agent shall
thereupon return all funds to the respective subscribers.
6. CONSENT OF COMMISSIONER TO RELEASE FUNDS:
No funds shall be released to the Issuer hereunder except upon the express
written authorization of the commissioner. If the commissioner finds that any
conditions of this Agreement have not been satisfied, or that any provisions of
the Minnesota Securities Laws or regulations have not been complied with, then
the commissioner may withhold such authorization for release of funds by the
Impoundment Agent to the Issuer and may direct the Impoundment Agent to return
the funds to the subscribers. In making a determination hereunder, the
commissioner may require from the Issuer a statement of all expenses and/or all
amounts paid into the escrow, certified by an independent certified public
accountant or an officer of the Issuer and any further financial or other
information as the commissioner may deem appropriate or helpful in making such
determination.
7. INSPECTION OF RECORDS:
The commissioner may, at any time, inspect the records of the Impoundment Agent,
insofar as they relate to this Impoundment Agreement, for the purpose of
determining compliance with and conformance to the provisions of this
Impoundment Agreement.
8. DUTY AND LIABILITY OF THE IMPOUNDMENT AGENT:
The sole duty of the Impoundment Agent, other than as herein specified, shall be
to receive said funds and hold them subject to release, in accordance with the
written instructions of the commissioner, and the Impoundment Agent shall be
under no duty to determine whether the Issuer is complying with requirements of
the commissioner in tendering to the Impoundment Agent said proceeds of the sale
of said securities.
The Impoundment Agent may conclusively rely upon and shall be protected in
acting upon any statement, certificate, notice, request, consent, order or other
document believed by it to be genuine and to have been signed or presented by
the proper party or parties. The Impoundment Agent shall have no duty or
liability to verify any such statement, certificate, notice, request, consent,
order or other document and its sole responsibility shall be to act only as
expressly set forth in this Impoundment Agreement. The Impoundment Agent shall
be under no obligation to institute or defend any action, suit or proceeding in
connection with this Impoundment Agreement unless first indemnified to its
satisfaction. The Impoundment Agent may consult counsel in respect of any
question arising under this Impoundment Agreement and the Impoundment Agent
shall not be liable for any action taken or omitted in good faith upon advice of
such counsel. All funds held by Impoundment Agent pursuant to this Impoundment
Agreement shall constitute trust property for the purposes for which they are
held and the Impoundment Agent shall not be liable for any interest thereon.
9. IMPOUNDMENT AGENT'S FEE:
The Impoundment Agent shall be entitled to reasonable compensation for its
services. The fee agreed upon for services rendered hereunder is intended as
full compensation for the Impoundment Agent's services as contemplated by this
Agreement; provided, however, in the event that the conditions of this
Impoundment Agreement are not fulfilled, or the Impoundment Agent renders any
material service not contemplated in this Agreement, or there is any assignment
of interest in the subject matter of this Impoundment Agreement, or any material
modification hereof, or if any material controversy arises hereunder, or the
Impoundment Agent is made a party to or justifiably intervenes in any litigation
pertaining to this Impoundment Agreement, or the subject matter hereof, the
Impoundment Agent shall be reasonably compensated for such extraordinary
services and reimbursed for all costs and expenses, including reasonable
attorney's fees, occasioned by any delay, controversy, litigation, or event, and
the same may be recoverable from the Issuer only.
10. BINDING AGREEMENT AND SUBSTITUTION OF IMPOUNDMENT AGENT:
The terms and conditions of this Agreement shall be binding on the heirs,
executors and assigns, creditors or transferees, or successors in interest,
whether by operation of law or otherwise, of the parties hereto. If, for any
reason, the Impoundment Agent named herein should be unable or unwilling to
continue as such Impoundment Agent, then the other parties to this Agreement may
substitute, with the consent of the commissioner, another Impoundment Agent. Any
apportionment of the fees provided for in paragraph nine will be subject to
agreement of the parties.
11. ISSUANCE OF CERTIFICATES:
Until the terms of this Agreement have been met and the funds hereunder released
to the Issuer, the Issuer may not issue any certificates or other evidences of
securities, except subscription agreements.
IN WITNESS WHEREOF, the parties hereto have executed this Impoundment Agreement
on the date first above written.
PROFORMANCE RESEARCH
By
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BANK WINDSOR
By
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Its (an authorized signature)
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GLOBAL FINANCIAL GROUP, INC.
By
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Its (an authorized signature)
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Accepted for filing:
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Commissioner of Commerce
