EXHIBIT 10.17
BioQuest International, Inc./ THE AMERICAN PACIFIC BANK
Dutch Auction Escrow Agreement
AGREEMENT made as of the __ day of August, 2001, by and between The American
Pacific Bank (the "Escrow Agent") and BioQuest International, Inc. (the
"Issuer").
1. Property Deposited in Escrow. The Issuer shall establish an escrow account
with American Pacific Bank in its capacity as Escrow Agent 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 and 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 xxx.xxxxxxxxxxx.xxx 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 for the 1,000,000
share all-or-nothing offering, shares will be allocated at that dollar
bid price on a pro rata 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 Servicing Agent) or direct United States Government
obligations which can be readily liquidated on twenty-four hours
notice so that 100% of the Deposits so deposited can, if necessary, be
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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 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.
2.9.1The 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.
2.9.2The 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.
2.9.3The Escrow Agent may delegate to TransferOnline, Inc., Servicing
Agent to the Escrow Agent and Issuer, certain of its
administrative functions relating to investors and associated
reporting and communications activities, including those
contained in Exhibit C to this Escrow Agreement. In no case may
those delegated functions be deemed to constitute custody and
control of investor funds.
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
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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
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 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
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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.
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. This Agreement 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. This Agreement 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
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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
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.
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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 000 X.X. Xxxxx Xxxxxx - Xxxxx 000, Xxxxxxxx, Xxxxxx
00000, Attn: Xxxxx X. Xxxx; if to the Servicing Agent, addressed to it
at 000 X.X. Xxxx Xxxxxx - Xxxxx 000, Xxxxxxxx, Xxxxxx 00000, Attn:
Xxxx Xxxxxxxxxx; and if to the Issuer, addressed to it at X.X. Xxx 00,
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000, Attn: Xxxx Xxxxx, 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.
Parties to the Escrow
BIOQUEST INTERNATIONAL, INC.
By: ____________________________
Xxxxx X. Xxxxx, Chairman and CEO
THE AMERICAN PACIFIC BANK
By: __________________________________
Authorized Officer
SERVICING AGENT FUNCTION ACCEPTED
TRANSFERONLINE, INC.
By: __________________________
Xxxx Xxxxxxxxxx, President
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Exhibit A
______________, 2001
Bidder Address
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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
September ___, 2001 Prospectus until termination of the offering. If you have
any questions concerning your bid, please call us at ( ) ____ - _______.
BIOQUEST INTERNATIONAL, INC.
By: ____________________________
Xxxxx X. Xxxxx, Chairman and CEO
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Exhibit B
Escrow Agent Fees and Expenses
[To be provided]
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Exhibit C
[BioQuest Stationary]
August ___, 2001
Xxxx Xxxxxxxxxx, President
TransferOnline, Inc.
000 X.X. Xxxx Xxxxxx - Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Re: BioQuest International, Inc. ("Issuer") Servicing Agent Agreement
Dear Xx. Xxxxxxxxxx:
We request that TransferOnline, Inc. act as the Servicing Agent for the
referenced Dutch Auction. Although you will act as the Issuer's and Escrow
Agent's Servicing Agent, you will not be responsible for the investment of the
escrowed funds during the escrow period or for calculating shares allocated to
bidders. We would then request that you provide the following services which we
understand would be handled through American Pacific Bank's Trust Custody
Division with which you will be working directly.
These services including:
1. Checks shall be delivered by bidders to the Escrow Agent, then listed and
forwarded, along with copies of listed bidders, to both the Servicing Agent
and the Issuer.
2. Upon receipt, the Escrow Agent will deposit the checks in the Escrow
Account and determine the availability of funds of the checks so deposited
and the Servicing Agent will so verify based on statements provided by the
Escrow Agent.
3. After it has been determined that the funds are "good," the Servicing Agent
will notify the Issuer and request instructions regarding investment. The
Trust Custody Division of the Escrow Agent 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
Servicing Agent for the Escrow Account based upon any written instructions
from the Escrow Agent.
4. Servicing Agent will be referred and handle all incoming shareholder
questions with regard to the escrow component of the bidding process.
5. 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
Servicing Agent will coordinate having the Escrow Agent 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.
6. Servicing Agent will act in an administrative capacity in all matters
relating to investors and associated reporting and communications
activities.
7. Servicing Agent will provide supplemental, administrative services to the
Escrow Agent as requested or instructed by the Escrow Agent.
8. The Servicing Agent will act in an administrative capacity in all matters
relating to investors and associated reporting and communications
activities. At no time will the Servicing Agent act in any capacity which
would give it custody or control of investor funds received by the Escrow
Agent as outline in the Escrow Agreement.
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For the above mentioned services, the Issuer will pay to the Servicing Agent the
fees outlined in Attachment A, Servicing Agent Fee Schedule. We acknowledge that
any fees due Servicing Agent for their services will be paid directly to
TransferOnline, Inc..
BIOQUEST INTERNATIONAL, INC.
By: ____________________________
Xxxxx X. Xxxxx, Chairman and CEO
cc: Xxxxx X. Xxxx, American Pacific Bank
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Attachment A
Servicing Agent Fee Schedule
[To be provided]
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