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Pursuant to the Escrow Agreement, WIB opened a bank account
(hereinafter sometimes referred to as the Escrow Account) in which
to maintain the escrow fund. Only authorized employees of WIB
could withdraw funds from the Escrow Account. The money deposited
into the Escrow Account came primarily from the following sources:
(1) The money W&H advanced to pay for petitioner’s fundraising
expenses and operational expenses, and (2) the contributions made
by the general public in response to the fundraising letters
mailed under the Contract. All of the revenues from petitioner’s
direct mail campaign, not merely the profits from the mailings,
went into the Escrow Account.
C. Petitioner’s “Draw” Arrangement
As indicated above, during its discussions with petitioner
about entering a possible fundraising contract, W&H offered to
provide funds with which petitioner could continue to operate.
W&H furnished such funds to petitioner after the Contract was
executed.
A December 17, 1984, letter agreement between petitioner and
W&H provides, in pertinent part, as follows:
In order to meet your cash flow needs for administration
and program, you [petitioner] plan to transfer funds from the
escrow account that were generated from * * * [prospect
letter mailings]. To date $5,000 was transferred on November
1, $5,000 was transferred on December 1, and you plan to
transfer another $5,000 on January 1, 1985.
This letter acknowledges the fact that these transfers *
* * are made in such a manner from * * * [prospect letter
mailing] revenues will be replenished from UCC’s income from
* * * [housefile letter] mailings within six months of
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