EXHIBIT 10.17
BioQuest International, Inc.
Dutch Auction Escrow Agreement
AGREEMENT made as of the ___ day of August, 2001, by and between TransferOnline,
Inc. (the "Escrow Agent") and BioQuest International, Inc. (the "Issuer").
1. PROPERTY DEPOSITED IN ESCROW. The Issuer and the Escrow Agent shall
establish an account with American Pacific Bank (the "Depository") in
Portland, Oregon, entitled "BioQuest IPO Escrow Account" (the "Escrow
Account"). All deposits (the "Deposits") of monies put in by bidders, and
equal to their total bid amount shall be placed in this non-interest
bearing escrow account as part of the bidding process of the Issuer's
best-efforts, self-underwritten, Dutch Auction, 1,000,000 share
all-or-nothing offering. The Escrow Agent will log on to the online
interactive interface as each Bid (and associated Deposit) is received and
will enter the Unique Bid Number (the "UBN") which MUST accompany each
submission of funds per the online bidding instruction. In the event a UBN
does not accompany funds, an email will be sent to the bidder by the Escrow
Agent indicating that they need to provide the UBN in order for their bid
to be accepted. Assuming monies are received by the Escrow Agent and
accompanied by the UBN, then the Escrow Agent will check the total amount
of the funds received with the online bid to insure that the totals match.
If they do, the bid will be "accepted" and moved online from a "pending"
status to an "accepted" status. Funds will be held in the Escrow Account,
identified by each UBN, until the close of the auction. In the event funds
received are not "good funds", a "denied" status will replace the "pending"
status online and the bidder will receive an email indicating the reason
for denial. Once the reason for denial has been corrected by the bidder,
the Escrow Agent will change the status from "denied" to "accepted". The
Escrow Agent shall deliver via email, to all bidders, interim receipts for
the amount of funds deposited in the Escrow Account, and copies of such
receipts shall be delivered to the Issuer, said interim receipts to be
substantially in the form of Exhibit A hereto.
2. AUTHORITY OF THE ESCROW AGENT. The Escrow Agent shall collect, hold in the
Escrow Account, deal with and dispose of the Deposits held by it hereunder
in the following manner:
2.1 If bids and monies for 1,000,000 shares or more have been received
during the period of the Dutch Auction (as defined in paragraph 2.6
below), the Auction has been closed as required by the series of
algorithms embedded in the licensed technology all monies associated
with the Dutch Auction, deposited in the Escrow Account following
audit by the Auditor, all monies due to be returned to successful and
unsuccessful bidders will be returned to them, be paid over and
delivered to the Issuer upon its written request.
2.2 If bids and monies for less than 1,000,000 shares have been
received during the Dutch Auction Offering Period (as defined in
paragraph 2.6 below), then the offering will be canceled and all
monies deposited in the Escrow Account shall be returned, by
check, to all bidders, as soon as provided below.
2.3 If bids and monies for 1,000,000 shares or more have been
received during the Dutch Auction Offering Period (as defined in
paragraph 2.6 below), and the Auction is about to be closed, the
Issuer will send to each bidder a "confirmation" email announcing
the Issuer's intention to close the Auction, and giving them a
final opportunity to withdraw any of their bids from the Auction.
The body of the email will instruct them to go to
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ website and to go to their personal bid file
under "My Bids" where they will have a final opportunity to
cancel their bid(s). Each bidder will be given 24 hours to
cancel. Those bids not canceled within the 24 hour time period
will continue to be valid as an accepted bid and considered for
processing and allocation at the close of the Auction. After the
24 hours time period has expired, all "accepted" bids will be
considered for declaration of success and allocation within the
Dutch Auction Process.
The "clearing price," in accordance with the licensed Dutch
Auction technology and associated algorithms, will then be
determined by beginning with the highest bids and working down
until all 1,000,000 shares have been allocated. In case more bids
are received than shares are available at the "clearing" (or
lowest) price, shares will be allocated at that dollar bid price
on a prorata basis. The "clearing price" is thus established at
the lowest price that all 1,000,000 shares have been allocated,
and all bidders at or above the clearing price will be deemed
successful bidders.
2.4 All successful bidders will be notified by email once the Auction
has officially closed, the Auction process has been audited and
the clearing price has been established. Successful bidders will
be told the clearing price which they will pay for their shares
(at or below their bid price), and the number of shares allocated
to them. Refund checks will then be cut for each successful
bidder for the difference between the amount they submitted to
the Escrow Agent along with their bids, and the total amount of
the shares allocated them multiplied by the clearing price. It is
expected that these checks will be cut and mailed no later than
10 business days after the audit has been completed and
concurrent clearance by the SEC of Issuer's Post-Effective
Amendment relating to the finalized prospectus. All successful
bidders will receive a copy of the associated final prospectus
concurrently.
2.5 All unsuccessful bidders, being defined as those who submitted
bids below the clearing price, will have 100% of the monies they
submitted to the Escrow Agent along with their bids, refunded to
them. It is expected that these checks will be cut and mailed no
later than 10 business days after the audit has been completed
and concurrent clearance by the SEC of Issuer's Post-Effective
Amendment relating to the finalized prospectus.
2.6 The "Offering Period" shall mean a period of not more than 90
days commencing on the date of effectiveness. Since the offering
will terminate at a point in time after the 1,000,000 share
all-or-nothing minimum has been met and the algorithm embedded in
the licensed Dutch Auction technology based upon general market
conditions during the period following effectiveness of the
registration statement indicates when the auction will close, the
offering is subject to termination before the 90 days. The Issuer
shall give the Escrow Agent prompt notice of when the Dutch
Auction commences.
2.7 Prior to delivery of the escrowed Deposits to the Issuer as
described above, neither the Escrow Agent nor the Issuer shall
have any title to or interest in the Deposits in the Escrow
Account or in any interest earned thereon and such Deposits and
interest shall under no circumstances be subject to the
liabilities or indebtedness of the Issuer or the Escrow Agent.
2.8 The Escrow Agent shall cause all Deposits deposited with it
pursuant to this Agreement to be maintained and invested as the
Issuer shall from time to time direct by written instrument
delivered to the Escrow Agent, in certificates of deposit,
savings accounts (of banks including the Depository) or direct
United States Government obligations which can be readily
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liquidated on twenty-four hours notice so that 100% of the
Deposits so deposited with interest thereon can, if necessary, be
returned to bidders (as defined in paragraphs 2.4 and 2.5 above).
It is expressly agreed that the Escrow Agent is not guaranteeing
that any interest or profits will accrue on the funds deposited
with the Depository under this Agreement. If the 100% of the
Deposits so deposited are not realized upon such liquidation, the
Issuer shall pay the difference into the Escrow Account for
distribution to the bidders. The Escrow Agent shall incur no
liability for any loss suffered so long as it follows such
directions.
2.9 At any time prior to the termination of this Agreement, for
whatever reason, the Issuer may notify the Escrow Agent that a
bid of a bidder has not been accepted or has only been partially
accepted, and the Issuer may direct the Escrow Agent to return as
soon thereafter as may be practicable any Deposits held in the
Escrow Account for the benefit of such bidder directly to such
bidder, without interest. If any check transmitted to the Escrow
Agent in connection with a bid shall remain uncollected for any
reason, the Escrow Agent shall return such check, together with
any other material or documents received by it in connection with
the bid, to the Issuer.
2.9.1 The Escrow Agent shall not be obligated to inquire as to the
form, manner of execution or validity of any documents herewith
or hereafter deposited pursuant to the provisions hereof, nor
shall the Escrow Agent be obligated to inquire as to the
identity, authority or rights of the persons executing the name.
In case of conflicting demands upon it, the Escrow Agent may
withhold performance under this Agreement until such time as said
conflicting demands shall have been withdrawn or the rights of
the respective parties shall have been settled by court
adjudication, arbitration, joint order or otherwise.
2.9.2 The Escrow Agent shall not be required to separately record on
its books the name, address and amount of each bid as received,
but shall keep the lists delivered to it pursuant to paragraph 1
above.
3. FEES AND EXPENSES OF ESCROW AGENT. The fees and expenses of the Escrow
Agent shall be as determined in accordance with the fee schedule annexed as
the attached Exhibit B. All fees and expenses referred to in this paragraph
shall be paid by the Issuer, subject to reimbursement by the Issuer.
4. LIABILITY OF ESCROW AGENT; STANDARD OF CARE. The Escrow Agent shall not be
liable for any action taken or omitted by it in good faith in accordance
with the advice of its counsel and in no event shall it be liable or
responsible except for its own negligence or willful misconduct.
Specifically, the Escrow Agent shall be entitled to rely upon, and shall be
fully protected from all liability, loss, cost, damage or expense in acting
or omitting to act pursuant to any instruction, order, judgement,
certification, affidavit, demand, notice, opinion, instrument or other
writing delivered to it hereunder without being required to determine the
authenticity of such document, the correctness of any fact stated therein,
the propriety of the service thereof or the capacity, identity or authority
of any party purporting to sign or deliver such document.
5. Indemnification of Escrow Agent. The Issuer agrees to indemnify and hold
harmless the Escrow Agent and its officers, employees and agents from and
against reasonable fees and expenses of the Escrow Agent, including but not
limited to judgments, reasonable attorneys' fees and other liabilities
which the Escrow Agent may incur or sustain by reason of or in connection
with this Agreement. Specifically, the Issuer agrees to reimburse the
Escrow Agent for, and to indemnify and hold harmless the Escrow Agent from,
against and with respect to, any and all loss, liability, damage, claim or
expense that the Escrow Agent may suffer or incur in connection with
agreeing to these Escrow Instructions and the performance of its
obligations hereunder or otherwise in connection therewith, except to the
extent such loss, liability, damage, claim or expense arises from the gross
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negligence or willful misconduct of the Escrow Agent. The Escrow Agent
shall be reimbursed for the reasonable cost of all legal fees and costs
incurred by it in acting as the Escrow Agent hereunder.
6. REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE ESCROW AGENT. Each of
the Issuer and the Escrow Agent warrants to and agrees with the Escrow
Agent that, unless otherwise expressly set forth in this Agreement, there
is no security interest in the Deposits or any part thereof; no financing
statement under the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether specifically or
generally) the Deposits or any part thereof; and the Escrow Agent shall
have no responsibility at any time to ascertain whether or not any security
interest exists in the Deposits or any part thereof or to file any
financing statement under the Uniform Commercial Code with respect to the
Deposits or any part thereof.
7. ESCROW AGENT'S COMPLIANCE WITH COURT ORDERS, ETC. If any property subject
hereto is at any time attached, garnished or levied upon under any court
order, or in case the payment, assignment, transfer, conveyance or delivery
of any such property shall be stayed or enjoined by any court order or in
case any order, writ, judgment or decree shall be made or entered by any
court affecting such property, or any part hereof, then in any of such
events, the Escrow Agent is authorized to rely upon and comply with any
such order, writ, judgment or decree about which it is advised by legal
counsel of its own choosing is binding upon it, and if it complies with any
such order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or to any other person, firm or corporation by reason of
such compliance, even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
8. RESIGNATION OF ESCROW AGENt.
8.1 The Escrow Agent may resign by giving ten days written notice to the
Issuer by certified mail, return receipt requested, sent to the
undersigned at their respective addresses herein set forth; and
thereafter, shall deliver all remaining deposits in the Escrow Account
to a successor escrow agent acceptable to all other parties hereto,
which acceptance shall be evidenced by the joint written and signed
order of the undersigned. If no such order is received by the Escrow
Agent within thirty days after mailing such notice, it is
unconditionally and irrevocably authorized and empowered to send any
and all items deposited hereunder by registered mail to the respective
depositors thereof.
8.2 The Escrow Agent and any successor escrow agent may at any time resign
as such by delivering the Deposits to either i) any successor escrow
agent designated in writing by the parties hereto or ii) any court
having competent jurisdiction. Upon its resignation and delivery of
the Deposits, the Escrow Agent shall be discharged of, and from, any
and all further obligations arising in connection with the escrow
contemplated by these Escrow Instructions.
9. DUTIES. The duties of the Escrow Agent are only as herein specifically
provided, and are purely ministerial in nature. The Escrow Agent shall
neither be responsible for or under, nor chargeable with any knowledge of,
the terms and conditions of any other agreement, instrument or document in
connection herewith except as required to act in respect of the Deposits
only as provided in these Escrow Instructions. These Escrow Instructions
set forth all the obligations of the Escrow Agent with respect to any and
all matters pertinent to the escrow contemplated hereunder and no
additional obligations of the Escrow Agent shall be implied from the terms
hereof or any other agreement or instrument. The Escrow Agent shall incur
no liability in connection with the discharge of its obligations hereunder
or otherwise in connection therewith, except such liability as may arise
from gross negligence or willful misconduct of the Escrow Agent.
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10. ADVICE OF COUNSEL. The Escrow Agent may consult with counsel of its choice,
and shall not be liable for any action taken or omitted to be taken by the
Escrow Agent in accordance with the advise of such counsel.
11. NO ORAL NOTIFICATION. The Escrow Agent shall not be bound by any
modification, cancellation or rescission of these Escrow Instructions
unless in writing and signed by the Escrow Agent and the Issuer.
12. SUPPLEMENTAL INSTRUCTIONS. The Escrow Agent requires any further
instruments or instructions to effectuate these Escrow Instructions or
obligations in respect hereof, the necessary parties hereto shall join in
furnishing the same.
13. RIGHT TO REPRESENT OTHER PARTIES. The Escrow Agent shall have the right to
represent any party hereto in any dispute between the parties hereto with
respect to the Deposits or otherwise.
14. Binding Effect. These Escrow Instructions shall inure to the benefit of,
and be binding upon, the parties hereto and their respective successors and
assigns. Nothing contained herein, express or implied, shall give to
anyone, other than the parties hereto and their respective permitted
successors and assigns, any benefit, or any legal or equitable right,
remedy or claim, under or in respect of this Agreement or the escrow
contemplated hereby.
15. COUNTERPARTS. These Escrow Instructions may be executed in counterparts,
each of which shall constitute an integral original part of one and the
same original instrument.
16. SURVIVAL OF RIGHTS. The rights of the Escrow Agent contained herein,
including without limitation the right to indemnification, shall survive
the resignation of the Escrow Agent and the termination of the escrow
contemplated hereunder.
17. AMENDMENTS. The Escrow Agent's duties and responsibilities shall be limited
to those expressly set forth in this Agreement and shall not be subject to,
nor obliged to recognize, any other agreement between, or direction or
instruction of, any or all of the parties hereto unless reference thereto
is made herein; provided, however, with the Escrow Agent's written consent,
this Agreement may be amended at any time or times by an instrument in
writing signed by all of the undersigned.
18. GOVERNING LAW; WAIVER OF TRIAL BY JURY. This Agreement shall be construed,
enforced and administered in accordance with the laws of Oregon applicable
to contracts made and to be performed in that State. All actions against
the Escrow Agent arising under or relating to this agreement shall be
brought against the Escrow Agent exclusively in the appropriate court in
Multnomah County, State of Oregon. TO THE FULL EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THESE ESCROW INSTRUCTIONS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO, THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE ESCROW AGENT ENTERING INTO THIS
AGREEMENT.
19. EFFECTIVENESS. This Agreement shall not become effective (and the Escrow
Agent shall have no responsibility hereunder except to return the property
deposited in the Escrow Account to the bidders) until the Escrow Agent
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shall have received a certificate as to the names and specimen signatures
of the Issuer and shall have advised the Issuer in writing that the same
are in form and substance satisfactory to the Escrow Agent.
20. TERMINATION. This agreement shall terminate upon completion of the
obligations provided in either paragraphs 2.1 or 2.2 hereof or as otherwise
provided by written instruction from the Issuer to the Escrow Agent.
21. NOTICES.
21.1 Any notice required or permitted to be given hereunder shall be
effective when delivered by messenger, or dispatched by certified
mail, return receipt requested, cable or telex, to the respective
party at its address specified below, namely: if to the Escrow Agent,
addressed to it at ▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇; if to American Pacific Bank, addressed
to it at ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇; and if to the Issuer at ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇, or to such other address as
such party may have furnished in writing to each of the other parties
hereto.
21.2 Notices to or from the Escrow Agent hereunder shall be in writing and
shall not be deemed to be given until actually received by the Escrow
Agent or by the person to whom it was mailed, respectively. Whenever
under the terms hereof the time for giving notice or performing an act
falls upon a Saturday, Sunday or bank holiday, such time shall be
extended to the Escrow Agent's next business day.
22. APPLICABILITY OF RULE 15C2-4. Notwithstanding anything herein to the
contrary, all of the obligations and duties of the parties hereto shall be
subject to and consistent with Rule 15c2-4 under the Securities and
Exchange Act of 1934.
Parties to the Escrow
BIOQUEST INTERNATIONAL, INC.
By: ____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and CEO
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: ____________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
DEPOSITORY FUNCTION ACCEPTED
THE AMERICAN PACIFIC BANK
By: ____________________________
Authorized Officer
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Exhibit A
______________, 2001
Bidder Address_____
_____________________
_____________________
Re: BioQuest International, Inc. ("Issuer")
Dear Bidder:
This letter is to acknowledge receipt of your bid for ________ shares
of Issuer at $____ per share (with aggregate deposits of $______________) which
are being held in the Issuer's Escrow Agent in the manner described in the
Issuer's Prospectus until termination of the offering. If you have any questions
concerning your bid, please call us at ( ) ____ - _______.
BIOQUEST INTERNATIONAL, INC.
By: ____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and CEO
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Exhibit B
Escrow Agent Fees and Expenses
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Exhibit C
[BioQuest Stationary]
_______, 2001
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇, President and CEO
American Pacific Bank
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Re: BioQuest International, Inc. ("Issuer") Depository Agreement
Dear ▇▇. ▇▇▇▇:
We request that American Pacific Bank (the "Depository") act as the depository
for the referenced Dutch Auction. Although the Depository will act as the
Issuer's and Escrow Agent's depository, the Depository will not be responsible
for the investment of the escrowed funds during the escrow period or for
calculating each investor's share of interest earned on such funds and/or shares
allocated to bidders. We would then request that the Depository provide the
following services which we understand would be handled through the Trust
Custody Division which works directly with TransferOnline, Inc.
These services are:
1. Checks shall be delivered by bidders to the Escrow Agent, then listed and
forwarded to the Depository along with copies of listed bidders, which
shall also be delivered to the Issuer.
2. Upon receipt, the Depository will verify and deposit the checks in the
Escrow Account and determine the availability of funds of the checks so
deposited.
3. After it has been determined that the funds are "good," the Depository will
notify the Issuer for instructions regarding investment. The Trust Custody
Division of the Bank will execute the transactions for the Escrow Account
based on the Issuer's instructions. The Trust Custody Division will
confirm, if requested, securities held by the Depository for the Escrow
Account based upon the daily written instructions from the Escrow Agent.
4. Consistent with Section 2.4 and 2.5 of the Escrow Agreement between Issuer
and Escrow Agent (which Agreement is hereby incorporated by reference), the
Depository will draw checks for the amounts to be paid to the bidders and
send them to the Issuer for signature and distribution promptly after the
Dutch Auction's final prospectus is cleared by the SEC pursuant to Issuer's
associated Post-Effective Amendment.
For the above mentioned services, the Issuer will pay to the Depository the fees
outlined in Attachment A, Depository Fee Schedule. We acknowledge that any fees
due Depository for their services will be paid directly to American Pacific
Bank.
BIOQUEST INTERNATIONAL, INC.
By: _________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and CEO
cc: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Attachment A
Depository Fee Schedule
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