Exhibit 10.
IMPOUND OF FUNDS AGREEMENT
This Agreement, dated July 25, 2001, by and between Temporary Financial
Services, Inc. (hereinafter referred to as "Issuer") and Sterling Savings Bank
(hereinafter referred to as the "Depository"). The Depository is located at 000
X. Xxxx , Xxxxxxx, XX 00000.
The Issuer warrants that it intends to apply for authority from the
Administrator of Securities of the State of Washington to sell certain
securities and the Issuer intends that, if it is unable to sell securities in
the sum of $ 1,000,000 by the XX day of YY, 2001 (which date may, in the sole
discretion of the Issuer, be extended for up to an additional 180 days upon
written notice to the Depository) then the offering shall be terminated and the
proceeds paid in by each of the subscribers shall be returned to them pursuant
to this Agreement.
The Depository is willing to act as the depository hereunder.
In consideration of the mutual covenants and of other good and valuable
consideration, the parties agree as follows:
1. The Issuer shall deposit all monies received from the sale of securities
in a special impound account in the depository to be designated the "Temporary
Financial Services, Inc Impound Account" (the "Impound Account"). The Issuer and
its agents shall cause all checks received by it for the payment of securities
to be made payable to the Depository Impound Account. The Issuer agrees to
include with the deposits made in the Impound Account a copy of each
subscription agreement which shall include the name, address and social security
or other tax identification number of each Subscriber and the date and amount of
each subscription. All funds so deposited shall be held in escrow by the
Depository, and shall not be subject to judgment or creditors claims against the
Issuer unless and until released to said Issuer in accordance with this
Agreement.
2. Unless the Administrator directs to the contrary, the funds deposited in
the Impound Account may be invested as directed by the Issuer in bank
certificates of deposit, United States government obligations or placed in an
interest bearing savings account.
3. Deposits in the form of checks which fail to clear the bank upon which
they are drawn, together with the related subscription agreement, shall be
returned by the Depository to the Subscriber. A copy thereof shall be sent to
the company.
4. If the funds deposited in the Impound Account amount to or exceed $
1,000,000 (The Minimum Subscription), the Issuer shall request the Depository to
confirm the aggregate amount of deposit, the names of all subscribers and the
amount deposited by each. The Issuer shall forward the Depository confirmation
to the Securities Administrator. The Depository shall continue to hold such
funds and all other funds thereafter deposited with it hereunder until it has
received a direction in writing from the Administrator instructing the
Depository as to the disposition of the funds.
5. Upon receipt by the Depository of written notification signed by the
Issuer advising that it was unable to sell the minimum subscription within the
specific offering period, the funds deposited in the Impound Account shall be
returned by the Depository to the Subscribers according to the amount each
contributed. All accrued interest, without deduction for Depository costs and
fees, will be divided and returned to subscribers based upon the investment.
6. If, at any time prior to the disbursement of funds by the Depository as
provided in Paragraph 4 or 5 of this Agreement, the Depository is advised by the
Administrator that the registration to sell securities of the Issuer has been
suspended or revoked, that any condition of its registration permit has not been
met or that any provision of the Washington securities laws have not be complied
with, then the Administrator may direct the Depository not to disburse the
proceeds until further notice by the Administrator.
7. This Impound Agreement shall terminate upon the disbursement of funds
pursuant to Paragraphs 4 or 5; provided, however, the Issuer may abandon the
public offering. Upon the receipt of a letter from the Issuer stating that the
offering has been abandoned, copy to the Administrator, the Depository is
authorized to return the monies received hereunder to the subscribers according
to the amount each subscriber contributed with all accrued interest, without
deduction for Depository costs and fees, and this Agreement shall terminate upon
said distribution.
8. The sole duty of the Depository other than as herein specified, shall be
to establish and maintain the Impound Account and receive and hold the funds
deposited by the company pursuant to all applicable banking laws and regulations
of the State of Washington.
9. The Issuer acknowledges that the Depository is performing the limited
function of Depository and that this fact in no way means the Depository has
passed in any way upon the merits or qualifications of, or has recommended, or
given approval to, any person, security or transaction. A statement to this
effect shall be included in the offering circular.
10. The Administrator may, at any time, inspect the records of the
Depository, insofar as they relate to this Agreement, for the purpose of making
any determination hereunder or effecting compliance with and conformance to the
provisions of this Agreement.
11. The Depository shall be paid a fee of $500.00 for its services
hereunder. In the event that it shall be necessary to return subscriber funds,
the bank shall receive an additional fee of $5.00 per subscriber plus
reimbursement for time incurred at $40.00 per hour.
12. 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 Depository named herein should be unable or unwilling to
continue as such depository, then the Company may substitute, with the consent
of the Administrator, another person to serve as Depository.
IN WITNESS WHEREOF, the parties have executed this Agreement the 25th day
of July, 2001.
Issuer: Temporary Financial Services, Inc.
By _________________________________________
Xxxx X. Xxxxxxx, President
Depository: Sterling Savings Bank
By _________________________________________
ACKNOWLEDGED:
_________________________________________
Securities Division
State of Washington
