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EXHIBIT 10.16
IMPOUND ACCOUNT AGREEMENT
This Impound Account Agreement (the "Agreement") is made and entered into as of
January 26, 2000 by and among Humboldt Bancorp, a California corporation
("Company") and Pacific Coast Bankers' Bank, a California banking corporation
("Impound Agent").
1. RECITALS OF FACT.
It is anticipated that Company will offer shares of its common stock for
sale pursuant to a registration statement filed with the Securities Exchange
Commission (the "Offering"). The Company desires that all funds received from
various persons (the "Subscribers") as subscriptions for shares of Company's
stock be placed in an impound account with a bank or trust company authorized to
do business in California, and desires that Impound Agent act as the depository
for such funds. The Company intends at this time to issue and sell a minimum of
$4,000,000 worth of shares and a maximum of $8,000,000 worth of shares of its
stock at a price to be determined by the Company and to deposit all funds
received from the Subscribers as subscriptions for such shares with Impound
Agent as depository.
2. APPOINTMENT OF IMPOUND AGENT AS ESCROW AGENT.
The Company hereby appoints Pacific Coast Bankers' Bank as Impound Agent
and Pacific Coast Bankers' Bank hereby accepts such appointment, subject to the
terms and conditions set forth in this Agreement.
3. SUBSCRIPTION FUNDS HELD IN IMPOUND ACCOUNT.
All funds received from the issuance of shares of the Company's stock
will be placed in an escrow account with Impound Agent, to be held by Impound
Agent. Such funds shall not become the property of or be released to Company
unless and until Company has sold the minimum of $4,000,000 worth of shares of
common stock and held its first closing. After the Company has held its first
closing, the Company may hold as many other closings as it deems appropriate
until it has sold $8,000,000 worth of shares, upon five (5) days notice to
Impound Agent, on which dates Impound Agent shall release additional funds
received from Subscribers to the Company. The Offering will end on the earlier
of (i) 45 days from the effective date of the registration statement with the
right to extend such date by an additional 15 days, (ii) the date on which
Company sells its final shares totaling $8,000,000, or (iii) such earlier date
on which Company decides to close Offering.
4. SUBSCRIPTIONS FOR SHARES.
Subscription agreements for shares of the Company's common stock will be
completed and submitted to Impound Agent in triplicate, along with checks and
other payment orders for the
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amount of the subscriptions. Checks and other payment orders shall be made
payable to Pacific Coast Bankers' Bank fbo "Humboldt Bancorp". The Company will
inform Impound Agent of its intent to accept or reject subscriptions or to
accept a subscription in part. If any subscriptions are rejected or accepted
only in part, Impound Agent will refund the rejected amount to the Subscriber.
Upon a closing of the Offering, Impound Agent will return one copy of the
subscription agreement to the Subscriber, return one copy to Company, and retain
one copy for Impound Agent's records.
5. INVESTMENT OF IMPOUND FUNDS.
All funds received from the Subscribers as subscriptions for shares of
the Company's stock which are accompanied by copies of executed subscription
agreements for such subscriptions including any interest earnings on such funds,
will be placed in an impound account (the "Impound Account") with Impound Agent,
to be held by Impound Agent in the manner provided in this Agreement.
Upon the clearing of checks received for subscriptions for shares under
normal banking practices and as and when directed in writing by Company, Impound
Agent shall invest and reinvest available funds deposited with it pursuant to
this Agreement in either (a) short-term (not to exceed 90 days) negotiable
direct obligations of the U.S. Treasury, (b) short term certificates of deposit
issued by Impound Agent, or (c) overnight federal funds. Such investments shall
at all times be subject to and authorized in accordance with the applicable laws
and regulations. Impound Agent shall not be liable or responsible for any loss
resulting investments made pursuant to this Section 5, except for losses which
result from the gross negligence or intentional misconduct of Impound Agent.
6. TERM.
This Impound Agreement shall commence as of the date set forth above and
shall expire upon distribution of the Impound Account as described in Section 7,
below.
7. DISTRIBUTION.
a. Upon receipt of notice to Impound Agent that the minimum of
$4,000,000 worth of shares of Company's common stock have been fully subscribed,
Impound Agent will release all funds (including interest earned thereon) in the
Impound Account to Company on the first closing date, pursuant to Company's
written instruction signed by two of its officers.
b. If Company has not sold the minimum shares required by 45 days from
the effective date of the registration statement with the right to extend such
date by an additional 15 days and directs Impound Agent to distribute the
Impound Account to the Subscribers, then the Impound Account shall be
distributed to the Subscribers as follows: each Subscriber shall receive the
full amount of his or her subscription, with interest and without deduction for
expenses.
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c. In the event that the Impound Account is distributed pursuant to
Section 7b, above, all remaining obligations of Company described in Sections 9,
10a, 10b and 10f shall, without any further notice, become the obligation of
Company. The obligations created pursuant to this Section 7c shall continue
after the expiration of this Agreement.
d. In the event that the Impound Account is distributed pursuant to
Section 7b, above, Impound Agent shall, as to each Subscriber, file Form 1099
with the State of California and the Internal Revenue Service, respectively.
8. INFORMATION TO COMPANY.
From time to time upon the request of Company, Impound Agent will
provide Company with information relative to the total number of subscriptions
received pursuant to this Agreement together with the aggregate number of shares
for which subscriptions have been received and the total amount of funds
received and collected. Upon termination or expiration of this Agreement,
Impound Agent shall provide an accounting of funds received, invested and
disbursed pursuant to this Agreement together with a list of Subscriber names
and addresses and the number of shares purchased by each Subscriber, and shall
return all original subscription agreements to Company.
9. UNPAID CHECKS.
In the event that any check received by Impound Agent is returned unpaid
by the drawee bank, Impound Agent will resubmit the check to the drawee
financial institution for repayment. In the event that any such resubmitted
check is returned unpaid a second time, Impound Agent may withdraw from the
funds held by it pursuant to this Agreement the amount of that check together
with an amount representing the applicable savings rate payable on the amount of
the check for the period during which the funds are credited as available funds
under this Agreement. Impound Agent shall forward any such check to Company
endorsed to Company without recourse. In the event that any such check is
returned to Impound Agent as unpaid after the funds represented thereby have
been distributed to any person, upon notification by Impound Agent Company shall
promptly pay the amount of that check to Impound Agent and Impound Agent shall
forward the check to Company endorsed to Company without recourse.
10. RIGHTS OF IMPOUND AGENT.
a. Company agrees to pay the regular fees of Impound Agent, as stated on
the attached fee schedule, as well as any reasonable fees for extraordinary
services performed by Impound Agent pursuant to this Agreement and agreed to in
writing by Company. Company also agrees to pay and/or reimburse Impound Agent
for its reasonable expenses and disbursements, including those of its agents,
consultants and attorneys. The obligations described in this section shall
continue notwithstanding the expiration or termination of this Agreement for any
reason.
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b. If conflicting demands are made or notices served by the parties upon
Impound Agent with respect to the Impound Account, Impound Agent shall be
entitled to refuse to comply with any such claim or demand and to suspend
performance of this Agreement so long as such disagreements shall continue; in
so doing Impound Agent shall not be held liable for damages or interest to
Company or to any person (including but not limited to Subscribers) for failure
to comply with such conflicting or adverse demands, Impound Agent shall be
entitled to continue to refrain and refuse to act until:
(i) the rights of the adverse claimants have been finally
adjudicated in a court assuming and having jurisdiction of the parties and/or
the money, papers, and property involved in the claim or demand; and/or
(ii) all differences have been settled by mutual agreement and
Impound Agents has been notified of the settlement in a writing signed by all of
the interested persons.
In the alternative, Impound Agent may file a suit in interpleader
for the purpose of having the respective rights of the claimants adjudicated,
and deposit with the court all money, papers, and property held pursuant to this
Agreement, and Company agrees to pay all costs, expenses and reasonable
attorney's fees incurred by Impound Agent in connection therewith, the amount
thereof to be fixed and a judgment thereof to be rendered by the court in such
suit.
c. Impound Agent shall act as a depository only and is not
responsible or liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of any instrument deposited with it pursuant to this
Agreement, or with respect to the form or execution of any such instrument, or
the identity, authority, or rights of any person executing or depositing any
such instrument.
d. Impound Agent shall have no responsibility for notifying
Company or any Subscriber of any sale, resale, loan, exchange or other
transaction involving any property described in this Agreement or of any profit
realized by any person or corporation in connection therewith, regardless of the
fact that such transactions may be handled by Impound Agent.
e. Company agrees to hold harmless and indemnify Impound Agent,
its directors, officers, employees and agents for any loss, cost, liability,
damage or expense, including reasonable attorneys' fees and expenses, arising
out of or relating to this Agreement, the Impound Account, the performance of
Impound Agent's duties under this Agreement, or to any offering circular,
disclosure document or any subscription agreement relating to this Agreement;
provided, however, that no indemnification will be made for any act of
intentional misconduct or gross negligence of Impound Agent.
f. Impound Agent:
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(i) shall be deemed conclusively to have given and delivered any
notice required to be given or delivered by it pursuant to this Agreement if the
same is in writing, signed by any one of Impound Agent's authorized officers and
mailed to Company at the addresses set forth in this Agreement;
(ii) shall be entitled to consult with legal counsel and shall
not be liable for any action taken or omitted by that counsel;
(iii) shall not, by act, delay, omission or otherwise, be deemed
to have waived any rights or remedies under this Agreement unless such waiver is
in a writing signed by Impound Agent; a waiver by Impound Agent of any right or
remedy on any one occasion shall not be construed as a bar to or waiver of any
such right or remedy on any future occasion;
(iv) shall not be liable for any action taken or omitted to be
taken in good faith, and shall be liable only for its own gross negligence or
intentional misconduct;
(v) shall be entitled to rely on any paper, request, certificate,
schedule, notice or other document which it in good faith believes to be genuine
and to have been signed or adopted by the proper party or parties;
(vi) shall under no circumstances be required to risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it; and
(vii) shall have no duties or responsibilities except those
expressly set forth in this Agreement, and the permissive right of Impound Agent
to do things or omit to do things as set forth in this Agreement shall not be
construed as a duty.
11. REPRESENTATIONS REGARDING IMPOUND AGENT.
Company represents and agrees that it has not made nor will it in the
future make any representation that states or implies that Impound Agent has
endorsed, recommended or guaranteed the purchase, value, or repayment of the
securities offered for sale by Company.
12. MISCELLANEOUS.
a. This Agreement may be amended only by the written agreement of
Company and Impound Agent. This Agreement shall be governed by the laws of the
State of California.
b. This Agreement represents the entire agreement between Company and
Impound Agent.
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If Company or any of its officers, directors or agents has executed any
other agreements or documents relating to the subject matter of this Agreement,
or if any agreement is deposited under or arises out of this Agreement, Impound
Agent shall not be deemed a party to or be responsible for any provision thereof
unless expressly set forth in this Agreement or in a schedule to this Agreement.
Impound Agent shall be under no duty to enforce any such other agreement. In
case of any conflict between this Agreement and any such other agreement or
document or any schedule thereto, the provisions of this Agreement shall be
controlling.
c. This Agreement may be executed and entered into in several
counterparts, each of which shall be deemed to be an original, and all of which
shall constitute but one and the same instrument.
d. Impound Agent will not resign as Impound Agent under this Agreement
after the receipt of any funds from Subscribers without the express written
consent of Company.
e. Any notice, report, demand, waiver or consent required or permitted
pursuant to this Agreement shall be in writing and shall be given by prepaid
first class mail, addressed as follows:
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To Impound Agent:
Mail Instructions
000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Impound Account
Wire Instructions
Pacific Coast Bankers' Bank
ABA No. 000000000
Attention: Impound Account FBO
To Company:
Humboldt Bancorp
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx, President
IN WITNESS WHEREOF, Company and Impound Agent have executed the Agreement on the
day and year first written above.
HUMBOLDT BANCORP
("COMPANY")
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By: Xxxxxxxx Xxxxx By:
Its: President Its:
PACIFIC COAST BANKERS' BANK
("IMPOUND AGENT")
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By: Xxxxx Xxxxxxx
Its: Senior Vice President & COO
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SCHEDULE OF FEES
Basic Impound Account Fee $1,500.00
Subscription Fee $5.00 per Subscription
Rejected/Return Subscription Fee $10.00 per Subscription
Return Checks $10.00 per check
Miscellaneous Fees at cost: Postage
Envelopes
Address Stamp
Overnight Mail
Fees are due and payable upon the release of funds to Company
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