EXHIBIT 10.18
August 24, 2001
David Chen, President
The American Pacific Bank
315 S.W. Fifth Avenue - Suite 201
Portland, Oregon 97204
Re: BioQuest Dutch Auction Audit Agreement
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We are pleased to confirm our understanding of the services we are to provide
for The American Pacific Bank in conjunction with its role as Escrow Agent for
the BioQuest International, Inc., best efforts, self-underwritten 1,000,000
share all-or-nothing Dutch Auction offering.
We will examine your responsibilities related to escrow transactions according
to the terms of the Escrow and Depository Agreements between the parties (the
"Agreements").
We will apply the agreed-upon procedures which BioQuest International (the
"Issuer") has specified, as enumerated below, to determine whether transactions
authorized and required in this Dutch Auction (the "Agreements") have been
properly recorded for use by the parties to the respective escrow agreements.
1. We will read the terms and provisions of the Escrow Agreement.
2. We will trace proceeds and disbursements recorded by The American Pacific
Bank so the escrow account bank statements, bank deposit slips and canceled
checks or copies thereof.
3. We will determine whether the transactions recorded by TransferOnline have
been executed in accordance with the terms of the Escrow Agreement.
4. We will determine whether all transactions required by the Escrow Agreement
have been executed and recorded.
5. We will read the escrow statements prepared by the Issuer to determine
whether such transactions have been accurately compiled for use by the
parties to the respective escrow agreements.
6. Most specifically, we will review the licensed Dutch Auction technology to
confirm the accuracy of the process, including the allocation of shares and
associated clearing price.
This engagement is solely to assist the Issuer with respect to each escrow
arrangement administered by the Issuer in this Dutch Auction. Our engagement to
apply agreed-upon procedures will be conducted in accordance with attestation
standards established by the American Institute of Certified Public Accountants.
The sufficiency of the procedures is solely the responsibility of those parties
specified in the Agreements. Consequently, we make no representation regarding
the sufficiency of the procedures described above either for the purpose for
which this engagement has been requested or for any other purpose. If, for any
reason, we are unable to complete the procedures, we will describe the
constrictions on the performance of the procedures in our report, or will not
issue a report, as a result of this engagement.
Because the agreed-upon procedures listed above do not constitute an
examination, we will not express an opinion on the escrow accounts or related
records. In addition, we have no obligation to perform any procedures beyond
those listed above.
We will submit a report listing the procedures performed and our findings. This
report is intended solely for the use of the Issuer and parties specified in the
raised Agreements, and should not be used by those who did not agree to the
procedures and take responsibility for the sufficiency of the procedures for
their purposes. Our report will contain a paragraph indicating that had we
performed additional procedures, other matters might have come to our attention
that would have been reported to you.
At the conclusion of our engagement, we will require a representation letter
from management that, among other things, will confirm arrangement's
responsibility for the escrow accounting records and related reports in
accordance with the terms of the respective escrow agreements.
We expect to begin the agreed-upon procedures as soon as practical when
instructed by you and issue our report no later than _____ business days after
the completion of our procedures. Our fees for these services will be billed at
our standard hourly rates plus expenses. Our fees will be due and payable in the
month following date of billing. A late payment charge of 1.5% per month (annual
rate of 18%) will be charged on any unpaid balance not resolved within 30 days
after date of billing.
The liability of DeLap White Caldwell & Croy, LLP and its partners and/or its
employees for work in this engagement, based on any legal claim or theory, is
limited to the fees that you pay us for such work.
If the foregoing is in accordance with your understanding, please sign the copy
of this letter in the space provided below and return it to us. We appreciate
this opportunity to be of service to you.
Sincerely,
DeLap White Caldwell & Croy, LLP
/s/David G. DeLap
RESPONSE:
The services described in the foregoing letter are in accordance with our
requirements, and the terms described are acceptable to us.
The American Pacific Bank
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