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Exhibit 1.1
Reedland Capital Partners
An Institutional Division of
Financial West Group
Member NASD/SIPC
August 15, 2001
Mr. Frederic Price
Chief Executive Officer
BioMarin Pharmaceutical Inc.
371 Bel Marin Keys Boulevard, Suite 210
Novato, CA 94949
Re: Engagement of Reedland Capital Partners, an Institutional Division of
Financial West Group ("Reedland") as Placement Agent for BioMarin
Pharmaceutical Inc. (the "Company")
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Dear Mr. Price:
This letter (this "Engagement Letter") will confirm our agreement with the
Company with respect to the engagement of Reedland as the Company's placement
agent in connection with the placement of the Company's common stock to Acqua
Wellington North American Equities Fund, Ltd. (collectively with its affiliated
funds, the "Investor"), as more fully described herein. Reedland hereby agrees,
on a best efforts basis and subject to the satisfactory completion of our
continuing due diligence, to place up to Twenty-seven Million Seven Hundred
Thousand Dollars ($27,700,000) of the Company's authorized but unissued common
stock (the "Common Stock" or "Common Shares") with the Investor, as more
particularly set forth below.
The Common Stock will be offered and sold on such terms as the Company and the
Investor may agree upon in the Purchase Agreement, dated as of August 15, 2001,
and the offering and sale of such Common Stock shall be registered under the
Securities Act of 1933, as amended, pursuant to a registration statement on Form
S-3 filed with the Securities and Exchange Commission (the "Registration
Statement"). Reedland will use no offering materials other than the Company's
publicly filed reports and the Registration Statement, including any preliminary
prospectus or prospectus contained therein or an prospectus supplement thereto,
or any amendment or supplement to the Registration Statement, as the Company
will have approved prior to their use. The parties hereto agree that the Common
Shares will be offered and sold by the Company in compliance with all applicable
federal and state securities laws and regulations. The placement of the Common
Stock by Reedland to the Investor as contemplated hereby may be referred to
herein as the "Offering".
The term of Reedland's engagement (the "Engagement Period") as placement agent
for the offer and sale of the Common Stock to the Investor will commence on the
date of actual receipt by Reedland of an executed copy of this Engagement Letter
from the Company and, unless extended pursuant to the further written agreement
of the parties, will expire upon the earlier of (i) fourteen (14) months
following the execution of this
BioMarin Pharmaceutical Inc. Page 2
Friday, August 10, 2001
Engagement Letter by the Company, or (ii) the date that the Offering is
terminated by the Company or the Investor. To the extent the Company so
requests, Reedland will assist with each closing of the purchase of the Common
Stock under the Offering. There may be multiple closings of the Offering during
the Engagement Period.
Upon the date of each settlement of the purchase of the Common Shares, the
Company hereby agrees to pay Reedland a commission equal to the product of (A)
the dollar amount purchased by the Investor on such settlement date under the
Purchase Agreement, multiplied by (B) twenty percent (20%) of the difference
between one (1) minus the "Draw Down Discount Percentage" for such settlement.
Such cash commission(s) shall be payable out of escrow to Reedland at the
direction of the Company via wire transfer in accordance with the wiring
instructions annexed hereto as Attachment B.
This Engagement Letter is for the confidential use of the Company and Reedland
only, and may not be disclosed by the Company or by Reedland (in whole or in
part) for any reason to any person other than their respective Board of
Directors, executive management or its independent attorneys, accountants or
financial advisors, and then only on a confidential basis in connection with the
proposed Offering, except where disclosure is required by applicable law, stock
exchange rule or regulation, or is previously agreed to in writing to by the
Company and Reedland. The parties hereto acknowledge and agree that,
notwithstanding the preceding sentence, the arrangement contemplated hereby will
be disclosed by the Company in the Registration Statement and this Engagement
Letter will be filed as an exhibit thereto. The terms of this Engagement Letter
will be governed by and interpreted in accordance with the laws of the State of
California, and any disputes arising hereunder will be adjudicated in federal or
state court situated therein and, if applicable in connection with the
indemnification provisions set forth in Attachment A of this Engagement Letter,
subject to arbitration in San Francisco, California. The Company and Reedland
hereby irrevocably agrees to submit to such venue in the State of California. To
the extent any dispute arises between the parties hereto regarding any of the
subject matter hereof, the prevailing party in any action or proceeding brought
in connection therewith will be entitled to reasonable attorneys' fees and costs
from the losing party.
During the Engagement Period and for 60 days thereafter, the Company agrees that
any reference to Reedland in any press release or other communications issued by
the Company to the public relating to the Offering will refer to Reedland as
"Reedland Capital Partners, an Institutional Division of Financial West Group".
Reedland shall not issue any press release or other public statement in
connection with the Offering or this Engagement Letter or the arrangements
contemplated hereby without the Company's prior written approval.
The Company hereby agrees that it will comply with all applicable federal and
state securities laws and regulations with respect to the Offering. Reedland
hereby agrees and represents that: (1) Reedland is an institutional division of
Financial West Group, which is a broker/dealer licensed in accordance with all
applicable laws and regulations in each jurisdiction in which Reedland intends
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Friday, August 15, 2001
to use its best efforts to place the Offering, including, without limitation, in
the States of California and New York, and payment of the commission
contemplated under this agreement will not jeopardize the Company's compliance
with applicable federal and state securities laws; (2) Reedland will not make
any representations to the Investor about the Company other than information
included in the Company's public filings or otherwise conveyed to Reedland by
the Company; (3) Reedland will not do any advertising or make any general
solicitation on behalf of the Company in connection with the Offering; (4)
Reedland will comply with all applicable federal and state securities laws and
regulations with respect to the Offering; (5) Reedland is not affiliated with
Investor or the Company; and (6) Reedland acknowledges, and agrees to keep
confidential any nonpublic material information about the Company conveyed to
Reedland by the Company (collectively the "Reedland Covenants"). In further
consideration of Reedland's placement of the Common Shares, the Company and
Reedland agree to be fully bound by all of the indemnification provisions set
forth on Attachment A, a copy of which is attached hereto and is fully
incorporated herein by this reference.
The parties acknowledge and agree that nothing contained herein shall modify or
affect the rights or obligations of the Company and the Investor under the
Purchase Agreement.
If the foregoing is acceptable, please sign and return to us a copy of this
Engagement Letter, which will represent the entire agreement between the Company
and Reedland with respect to the matters addressed herein and will supercede all
previous oral or written agreements or understandings of any nature whatsoever
between the parties. We look forward to working with you.
Sincerely,
Reedland Capital Partners BioMarin Pharmaceutical Inc.
By:____/s/____________________ By:____________________
Thomas J. Griesel Name: Raymond W. Anderson
Senior Vice President Title:Chief Operating Officer,
Chief Financial Officer,
Secretary and Vice
President Finance and
Administration
Date: August 15, 2001
BioMarin Pharmaceutical Inc. Page 4
Friday, August 15, 2001
Attachment A to Engagement Letter
Company Indemnification Provisions
BioMarin Pharmaceutical Inc. (the "Company") agrees to indemnify and hold
harmless Reedland Capital Partners, an Institutional Division of Financial West
Group ("Reedland"), and its directors, officers, and each person, if any, who
controls Reedland within the meaning of Section 15 of the Securities Act of
1933, as amended, or Section 20(a) of the Securities Exchange Act of 1934, as
amended (collectively, the "Indemnitees" and each individually an "Indemnitee"),
to the fullest extent permitted by applicable law, from and against any and all
claims, demands, causes of action, obligations, losses, damages, liabilities,
costs or expenses arising in law, equity or otherwise, of any nature whatsoever,
including without limitation, any and all legal, accounting and other
professional fees and related costs and disbursements and other costs, expenses,
or disbursements relating thereto (collectively, the "Liabilities"), directly or
indirectly , based upon or arising out of:
(a) any untrue statement or alleged untrue statement of a material fact
contained, or incorporated by reference, in the Registration Statement
of the Company (the "Registration Statement") relating to the Common
Stock being placed by Reedland with the Investor (as defined in the
Engagement Letter between Reedland and the Company to which this
Attachment A is an integral part (the "Engagement Letter")) in
connection with the Common Stock Purchase Agreement dated as of August
15, 2001, between the Company and Acqua Wellington North American
Equities Fund, Ltd., including any preliminary prospectus or
prospectus contained therein or any prospectus supplement thereto, or
any amendment or supplement to the Registration Statement; or
(b) the omission or alleged omission to state in the Registration
Statement or any document incorporated by reference in the
Registration Statement, a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Notwithstanding anything to the contrary contained herein, (a) the foregoing
indemnity shall not apply and the Company shall not be liable to the extent that
a court of competent jurisdiction shall have determined by a final judgment
(with no appeals available) that such Liability resulted directly from any such
acts or failures to act, undertaken or omitted to be taken by any Indemnitee
through its bad faith or willful misconduct, (b) the foregoing indemnity shall
not apply to any Liability to the extent arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by Reedland expressly for use in the Registration Statement, any
BioMarin Pharmaceutical Inc. Page 5
Friday, August 10, 2001
preliminary prospectus or the prospectus contained therein or any prospectus
supplement thereto (or any amendment or supplement thereto), and (c) with
respect to the Prospectus, the foregoing indemnity shall not inure to the
benefit of any Indemnitee or any such person from whom the person asserting any
Liability purchased Common Stock, if copies of the Prospectus were timely
delivered to Reedland and a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of Reedland or any such person to
such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Stock to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such Liability.
The Company may, at its own expense, seek reimbursement of amounts already paid
to such Indemnitee once and to the extent the relevant Liabilities are
determined in a final judgment by court of competent jurisdiction (not subject
to further appeal) to have not been indemnifiable hereunder . The Company
further agrees to reimburse each Indemnitee for any costs, expenses and/or legal
fees incurred in seeking or obtaining payments for any Liabilities indemnifiable
hereunder including, without limitation, investigation, litigation, and
enforcement and execution of a judgment, or in successfully contesting any claim
by the Company for any amounts previously paid, in a manner not inconsistent
with the terms hereof.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in final judgement by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, then
the Company, on the one hand, and the claiming Indemnitees on the other hand,
will contribute to the losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements (collectively,
the "Losses") to which such Indemnitees may be subject. Said contribution will
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Friday, August 10, 2001
be made in accordance with all relative benefits received by, and the fault of,
the Company on the one hand, and such Indemnitees on the other hand, in
connection with the statements, acts or omissions which resulted in such Losses,
together with the relevant equitable considerations and will be determined by
arbitration in San Francisco, California by an arbitrator mutually agreed upon
by the parties. Such arbitration, if any, will be conducted in accordance with
the rules of the American Arbitration Association then in effect. No person
found liable for fraudulent misrepresentation will be entitled to contribution
from any person who is not also found liable for such fraudulent
misrepresentation. Notwithstanding any of the foregoing, the Indemnitees will
not be obligated to contribute in the aggregate for all of the Losses in any
amount that exceeds the aggregate amount of fees actually received by Reedland
pursuant to the Engagement Letter.
If any action, suit, proceeding, or investigation commenced which gives rise to
a claim for indemnification and which, in any Indemnitee's reasonable judgement,
gives rise to a conflict of interest between the Company and the Indemnitees,
then the Indemnitees will have the right to retain legal counsel of their own
choice to represent and advise them, and the Company will pay the reasonable
fees, expenses and disbursements of one (1) law firm for all Indemnitees
incurred from time to time in the manner set forth above. Such law firm will, to
the extent consistent with their professional responsibilities, cooperate with
the Company and any counsel designated by the Company. The Company will not be
liable for any settlement of any claim, action, suit or proceeding effected
without its prior written consent; provided, however, that the Company will be
liable for any payment of any award or settlement of any actual, potential or
threatened claim against any Indemnitee made with the Companys prior written
consent. Neither the Company nor any affiliate thereof will, without the prior
written consent of the Indemnitee seeking indemnification, settle or compromise
any actual, potential or threatened claim for which indemnification is sought
hereunder, or permit a default or consent to the entry of any judgement in
respect thereof, unless such settlement, compromise or consent includes, as an
unconditional term thereof, the giving by the claimant to the Indemnitees of an
unconditional release from all liability in respect of such claim.
Neither termination nor completion of the engagement of Reedland pursuant to the
Engagement Letter will affect these indemnification provisions, which will
survive any such termination or completion and remain operative and in full
force and effect.
BioMarin Pharmaceutical Inc. Page 7
Friday, August 10, 2001
Attachment B to Engagement Letter
Reedland Wiring Instructions
Bank of New York
48 Wall Street, NY 10005 (800) 762-1000
ABA# 021000018
BNF - Correspondent Services Corp.
A/C #8900186968
For further Credit to: Financial West Group/UA99100