ENGAGEMENT AGREMEMENT BETWEEN
BIOQUEST INTERNATIONAL, INC.
AND
DUNCAN, BLUM & ASSOCIATES
<PAGE>
Duncan, Blum & Associates
Carl N. Duncan David E. Blum
5718 Tanglewood Drive 1863 Kalorama Road, N.W.
Bethesda, Maryland 20817 Washington, D.C. 20009
(301) 263-0200 (202) 232-6220
(301) 263-0300 (Fax) (202) 232-7891 (Fax)
June 8, 2000
Peter J. Ewens, President
BioQuest International, Inc.
11217 Silverleaf Drive
Fairfax Station, Virginia 22039
Re: Engagement Agreement
Dear Pete:
Thank you for asking Duncan, Blum & Associates to represent you in
conjunction with BioQuest International, Inc. ("BioQuest") as counsel in
conjunction with BioQuest's proposed initial and/or direct public offering. We
appreciate the opportunity to work with you. Because our representation
ultimately depends on a high degree of trust, it is important for both of us to
be clear about the costs of and limits upon our legal services from the outset.
For that reason and because pertinent Rules of Professional Conduct require
disclosure of the basis for our fees, in writing, this firm requires that our
clients execute an engagement agreement.
Enclosed is our proposed Attorney-Client Fee Agreement in this matter. It
is our standard form. If you have any questions regarding the agreement, please
do not hesitate to contact me.
We have attached wire instructions for your future convenience. We look
forward to the opportunity to represent you in this matter.
Sincerely,
Duncan, Blum & Associates
/S/ Carl N. Duncan
Carl N. Duncan, Managing Partner
Enclosure
CND:chs
<PAGE>
BANKING WIRE TRANSMITTAL INSTRUCTIONS
Kindly transmit payment directly via U.S. Federal Reserve Bank Wire, in
U.S. dollars, in accordance with the following instructions:
BANK: Citibank, F.S.B.
8001 Wisconsin Avenue
Bethesda, Maryland
ACCOUNT NAME: Duncan, Blum & Associates
ACCOUNT NUMBER: 17529672
ABA BANK ROUTING NUMBER: 2540-7011-6
Upon transmittal of your wire, kindly send documentation of issuance of
wire to Duncan, Blum & Associates, Bethesda, Maryland via facsimile (301)
263-0300.
<PAGE>
ATTORNEY-CLIENT FEE AGREEMENT
2. PARTIES AND EFFECTIVE DATE. THIS ATTORNEY-CLIENT FEE AGREEMENT (the
"Agreement") is entered into by and between BioQuest International, Inc.
("Client") and Duncan, Blum & Associates ("Attorneys") and takes effect on
the date executed by the final party.
3. SCOPE AND DUTIES. Client retains Attorneys to provide legal services in
connection with your proposed initial and/or direct public offering,
including a regulatory summary and necessary securities filing(s) to permit
your offering to commence in up to twenty (20) states. Attorneys shall
provide those legal services reasonably required to represent Client, and
shall keep Client informed of progress and shall promptly respond to
Client's inquiries. Attorneys' ability to effectively and efficiently
represent Client depends upon the full cooperation of Client.
4. INITIAL RETAINER. Client will deposit with Attorneys the sum of thirty-five
thousand dollars ($35,000), described in Section 4 below, in this matter to
be held in a trust account and hereby authorizes Attorneys to withdraw sums
from that account to pay for the legal services performed. In addition, you
will be forwarding the appropriate filing fees associated with the
pertinent states (approximately $1,500 per state and fees payable to the
SEC in the amount of $1,000 per $5,000,000 offered).
5. LEGAL FEES. The fee shall be capped. Specifically, Client agrees to pay a
fixed fee of thirty-five thousand dollars (exclusive of out-of-pocket
disbursements estimated at $4,000-$6,000 and the foregoing SEC and state
filing fees) plus the equity participation outlined in the following
sentence. Once the IPO/DPO is declared effective (or in the event Client
aborts the offering for reasons unrelated to Attorneys' performance),
Client will have BioQuest, in addition to the above fixed fee, issue
warrants and related terms to be negotiated once the capital structure and
associated pricing is ascertained. (See also "Costs and Expenses" below.)
The $35,000 fixed fee is due by prompt payment of the capped fee set forth
above in Section 3 above.
6. COSTS AND EXPENSES. In addition to paying legal fees, Client agrees to pay
all costs and expenses incurred by Attorneys including, but not limited to,
the following: process server, facsimile transmission, express mail and
messenger fees; court reporter fees; postage and photocopying; accountant
or other expert witness fees; long-distance telephone charges; filing fees;
any travel meals or lodging; any computerized legal database service; and
other incidental expenses incurred on Client's behalf. Attorneys shall
obtain Client's consent before retaining an outside investigator,
consultant or expert witness or incurring any extraordinary expense over
two hundred and fifty dollars ($250). Photocopying and facsimiles will be
charged to Client at cost/page ($.10 and $1.00 per page, respectively). If
Client so directs, Attorneys will charge, to the extent possible, all such
expenses directly to Client's already established commercial account
7. MONTHLY STATEMENT. Attorneys shall send to Client periodic statements, at
intervals of approximately 30-days, for any month in which services are
rendered and/or costs incurred, describing all legal services rendered and
costs and expenses incurred by Attorneys in connection with this matter,
and showing the balance of the retainer, less cost of legal services
performed. Client may request such statements at shorter intervals.
8. CONCLUSION OF SERVICES. When Attorneys' services conclude, all unpaid
charges, if any, shall become payable. After Attorneys' services conclude,
Attorneys will, upon Client's request, deliver Client's files to Client,
together with any funds or property of Client's in Attorneys' possession.
9. DISCHARGE AND WITHDRAWAL. Client may discharge Attorneys at any time.
Attorneys may withdraw with Client's consent or for good cause. Good cause
includes Client's breach of the Agreement, Client's refusal to cooperate
with Attorneys or any other fact or circumstance that renders Attorneys'
continuing representation unethical or unlawful.
10. GOVERNING LAW. The laws of Maryland govern construction and interpretation
of the Agreement.
11. COLLECTION COSTS. Billings not paid one month from the date of the invoice
will be subject to a late payment charge equal to one percent (1%) per
month of the outstanding balance. Should it become necessary for Attorneys
to enforce the terms and provisions of this Agreement, Client hereby agrees
to pay all costs of collection, including the costs of any collection
agency and reasonable attorneys' fees incurred.
12. DISCLAIMER OF GUARANTEE. Nothing in this Agreement will be construed as a
guarantee or promise about the outcome of this matter. No one can make such
a guarantee.
DUNCAN, BLUM & ASSOCIATES
Dated: June 8, 2000 By: /s/ Carl N. Duncan
----------------------
Carl N. Duncan, Managing Partner
BIOQUEST INTERNATIONAL, INC.
Dated: June 8, 2000 By: /s/ Peter J. Ewens
-----------------------
Peter J. Ewens, Chief Executive Officer
