Exhibit 10.4
[SmallCaps Online LLC Letterhead]
November 20, 2000
BioMarin Pharmaceutical Inc.
371 Bel Marin Keys Blvd
Suits 210
Novato, CA 94949
Attention: Fredric D. Price
Title: Chairman & Chief Executive Officer
Dear Sirs:
The purpose of this letter is to confirm the appointment of SmallCaps
Online LLC ("SmallCaps" or the "Advisor") upon the terms and conditions set
forth herein as financial consultant and advisor to BioMarin Pharmaceutical Inc.
("the Company") in connection with a potential direct investment into the
Company. In this capacity SmallCaps will assist the Company by undertaking
certain activities, to the extent that such activities are required by the
status of a project, including the following:
1) Confer with appropriate Company management to discuss and help the
Company formulate an appropriate strategy, familiarization of product and
technology, milestones, etc. as such relates to a capital fundraising
transaction;
2) Advise the Company with respect to financing strategy;
3) Assist in such other capacity as may be reasonably requested by the
Company to effect to the foregoing.
Either the Company or SmallCaps may designate entities with which the
Company wishes SmallCaps to approach or negotiate an behalf of the Company;
provided that, the Company shall approve all such entities in advance in its
sole and absolute discretion. Any entity that the Company has provided SmallCaps
with specific written approval to approach or negotiate with is referred to in
this letter as a "Designated Candidate". In the event a Transaction, as defined
hereafter, is completed with any Designated Candidate, the Company will pay
SmallCaps a success fee of 5.25% of the Aggregate Value of the Transaction,
payable fully or partially in cash or the Company's common stock, at SmallCaps'
election.
For the purposes of this letter, the term "Aggregate Value" shall mean the
total amount of cash and the fair market value of all other property paid or
payable to the Company. In addition, Aggregate Value shall include the net
amount of any debt and/or contingent liability repaid or assumed by a purchaser
from the Company.
For purposes of this letter, a "Transaction" shall mean any transaction or
series or combination of transactions, other than in the ordinary course of
trade or business, whereby, directly or indirectly, a significant portion of the
capital stock of the Company or all or substantially all of its assets are
transferred to an unaffiliated third party for consideration, including without
limitation, a sale or exchange of capital stock or assets, a lease of assets
with or without a purchase option. a merger or consolidation, a tender or
exchange offer, a leveraged buy-out, or any similar transaction. It is expressly
understood that the term "Transaction" does not include (i) the Company entering
it to or forming a partnership, joint venture, collaboration, license agreement
or similar transaction for purposes of developing, manufacturing,
commercializing, selling or similar activities with respect to any current or
proposed product or technology; (ii) any transaction whatsoever with Acqua
Wellington North America Equities Fund, LTD., Glyko Biomedical Ltd. or any
affiliate of the foregoing entities; or (iii) any underwritten public offering.
In addition to any fees payable to SmallCaps under the terms of this
letter, the Company agrees to reimburse the Advisor, upon a monthly basis, for
its reasonable out-of-pocket expenses incurred in connection with the Advisor's
activities under this letter provided that, BioMarin shall have no obligation to
reimburse SmallCaps unless SmallCaps provides the Company with an estimate of
such out-of-pocket expenses, and the Company approves such expenses in advance.
The Company agrees to indemnify SmallCaps and each of its respective
affiliates and their respective directors, officers, employees, agents and
controlling persons (each such person being an "Indemnified Party") from and
against any and all losses, claims, damages and liabilities, joint or several,
to which such Indemnified Party may become subject under any applicable federal
or state law, or otherwise, related to or arising out of any transaction
contemplated by this letter or the engagement of the Advisor pursuant to, and
the performance by the Advisor of the services contemplated by, this letter and
will reimburse any Indemnified Party for all expenses (including counsel fees
and expenses, whether incurred in connection with third party claims or direct
claims against the Company) as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party. The Company will not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage, liability
or expense is found in a final judgment by a court of competent jurisdiction to
have resulted primarily from the Advisor's bad faith or gross negligence.
If a Transaction is consummated by the Company within one year from the
date of termination of this agreement with any Designated Candidate, as
2
determined in accordance with the above procedures, the Company agrees to pay
the Advisor a Transaction fee determined as provided in the foregoing
paragraphs.
The Advisor's engagement hereunder may be terminated by either the Company
or the Advisor at any time upon thirty days written notice to that effect to the
other party, it being understood that the provisions relating to the payment of
fees, expenses and indemnification as required hereunder will survive any such
termination.
This agreement shall be construed and interpreted in accordance with the
laws of the State of New York.
If the foregoing is in accordance with your understanding, please confirm
acceptance by signing and returning to us the duplicate of this letter attached
herewith.
SMALLCAPS ONLINE LLC
By: /s/ Jeffrey B. Davis
---------------------------
Name: Jeffrey B. Davis
Title: President
BIOMARIN PHARMACEUTICAL INC.
By: /s/ Fredric D. Price
-------------------------
Name: Fredric D. Price
Title: Chairman & Chief Executive Officer
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Designated Candidate List
AIM Global Healthcare - Michael Yellin
Amerindo - Dr. Selena Chaisson
Ascend Capital - Malcolm Fairberin
BayStar Capital - Sherrill Lybrook
BioAsia Investments - Frank Kung
BioCom Investments - Mony Ben Dor
Blumberg Capital Management - Laurence Blumberg
Brown Simpson Asset Management - Mitch Kaye
CARE Capital - David R. Ramsay
Chelsey Capital - Erik Franklin
DCF Capital - Watt Boone
Deerfield - Jackie Siegal, Bill Slattery
DNB Capital - David Baker
Dresdner RCM - Dennis Heinke
Emerging Growth Management - Marc Pentopoulos
First New York Securities - Joe Edelman
Firsthand Funds - Christine Duzmal
Forstmann Asset Management - Tony Forstmann
Franklin Resources - Evan McCulloch/Paul Walker
HealthCo Partners - Herriot Tabuteau
Integral Capital - Lynda Candler
Kaufmann Fund - Mary Ann Gray
Knowlton Brothers - Bill Sheeline
Merlin BioMed - Stu Weisbrod
Moore Capital - Joanne Soja
Murphy Investment - Lissa Morgenthaler
Muzinich & Co. - Ken Sorensen
Narragansett Asset Management - Matthew G. Cohen
Oracle Partners - Dr. Rosemary Mazanet
OrbiMed Advisors - Michael Sheffery
Orbitex Management - Tim Bepler
Palladin Group - Ira Liederman
Perseus-Soros - Dennis J. Purcell
Pequot Capital - Doug Foster
RAM Capital - Steve Saltzstein
Spear, Leeds & Kellogg - Elemer Piros
State of Wisconsin - Mark Traster
Trinity Capital - Gene Jung
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Exhibit 10.5
[SMALLCAPS ONLINE GROUP LLC LETTERHEAD]
January 16, 2001
BioMarin Pharmaceutical Inc.
371 Bel Marin Keys Boulevard
Novato, CA 94949
Attention: Fredric D. Price
Title: Chairman & CEO
Dear Sirs:
The purpose of this letter is to confirm the appointment of SmallCaps
Online Group LLC ("SmallCaps" or the "Advisor") upon the terms and conditions
set forth herein as financial consultant and advisor to BioMarin Pharmaceutical
Inc. ("the Company") in connection with the Company's general financial advisory
and investor relations needs. In this connection, SmallCaps, in its capacity as
financial advisor, will assist the Company by undertaking certain activities, at
the request of the Company and to the extent that such activities are required
by the status of a project, including the following,
1) Meet with appropriate Company management to discuss
and help the Company formulate an appropriate strategy,
familiarization of product and technology, milestones, etc.;
2) Advise the Company with respect to developing, and
assist with implementing, an Internet/New Media strategy for
communicating the Company's investment message to individual
investors and new media;
3) Advise the Company with respect to Investor relations
activities as it pertains to the Internet, including
development of presentation materials and communication with
investment managers, brokers and analysts who are SmallCaps
contacts;
4) Advise the Company with respect to financial and
investor relations, including development of presentation
materials, introduction to and scheduling of meetings with
investment managers and brokers, and analysis of ownership;
5) Assist in such other capacity as may be reasonably
requested by the Company to effect the foregoing.
It is the practice of SmallCaps to provide financial advice with respect to
corporate finance and investor relations partially on a retainer basis for a
period of 6 (six) months. Our retainer for services to be rendered hereunder is
$6,000 per month, payable at the beginning of each month, and 10,000 five-year
warrants (or options) (with cashless exercise provisions and in a form
reasonably satisfactory to SmallCaps) to purchase the Company's registered
common stock at the closing price on the day immediately preceding the date
hereof.
In the event that SmallCaps acts as placement agent for a financing that
takes place during the 6 month term of the engagement, the $36,000 in fees
contemplated to be paid as part of this engagement will be credited against
(will reduce the amount of) the placement fee that SmallCaps would earn as part
of such fee as placement agent. However, the 10,000 warrants (or options) would
not be credited against any such placement fee).
In addition to any fees payable to SmallCaps under the terms of this
letter, the Company agrees to reimburse the Advisor, upon a monthly basis, for
its out-of-pocket expenses incurred in connection with the Advisor's activities
under this letter. Advisor's fees in excess of $1000 per occurrence will be
approved in advance by the company.
The Company agrees to indemnify SmallCaps and each of its respective
affiliates and their respective directors, officers, employees, agents and
controlling persons (each such person being an "Indemnified Party") from and
against any and all losses, claims, damages and liabilities, joint or several,
to which such Indemnified Party may become subject under any applicable federal
or state law, or otherwise, related to or arising out of any transaction
contemplated by this letter or the engagement of the Advisor pursuant to, and
the performance by the Advisor of the services contemplated by, this letter and
will reimburse any Indemnified Party for all expenses (including counsel fees
and expenses, whether incurred in connection with third party claims or direct
claims against the Company) as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party. The Company will not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage, liability
or expense is found in a final judgment by a court of competent jurisdiction to
have resulted primarily from the Advisor's bad faith or gross negligence.
The Advisor's engagement hereunder may be terminated by either the Company
or the Advisor upon the first day of any month upon thirty days written notice
to that effect to the other party, it being understood that the provisions
relating to the payment of fees, expenses and indemnification will survive any
such termination.
This agreement shall be construed and interpreted in accordance with the
laws of the State of New York.
If the foregoing is in accordance with your understanding, please confirm
acceptance by signing and returning to us the duplicate of this letter attached
herewith.
SMALLCAPS ONLINE GROUP LLC
By: /s/Steve H. Rouhandeh
--------------------------------------------------
Name: Steve H. Rouhandeh
Title: Chairman
BIOMARIN PHARMACEUTICAL INC.
By: /s/Fredreic D. Price
--------------------------------------------------
Name: Fredric D. Price
Title: Chairman & CEO