Piper Jaffrey, Inc. v. Marrone Bio Innovations, Inc. ( 2018 )


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  •              IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
    PIPER JAFFRAY, INC.            )
    a Delaware Corporation,        )
    )
    Plaintiff,         )
    ) C.A. No. N18C-04-021 EMD CCLD
    )
    v.                             )
    )
    )
    MARRONE BIO INNOVATIONS, INC., )
    a Delaware Corporation,        )
    )
    Defendant. )
    Submitted: August 17, 2018
    Decided: November 28, 2018
    Upon Defendant’s Motion to Dismiss,
    DENIED.
    Eric Lopez Schnabel, Esquire, Alessandra Glorioso, Esquire, Dorsey & Whitney
    (Delaware) LLP, Wilmington, Delaware, Thomas P. Swigert, Esquire, Of Counsel (pro hac vice),
    Phil Steger, Esquire, Of Counsel (pro hac vice), Dorsey & Whitney LLP, Minneapolis, MN,
    Attorneys for Plaintiff Piper Jaffray, Inc.
    Elena C. Norman, Esquire, Benjamin M. Potts, Esquire, Young Conaway Stargatt &
    Taylor, LLP, Wilmington, Delaware, Judson E. Lobdell, Esquire, Of Counsel (pro hac vice),
    Morrison & Foerster LLP, San Francisco, CA, Attorneys for Defendants Marrone Bio Innovations,
    Inc.
    DAVIS, J.
    I.      INTRODUCTION
    This is a breach of contract action assigned to the Complex Commercial Litigation
    Division of the Court. Plaintiff Piper Jaffray Inc., an investment banking firm (“Piper Jaffray”),
    has brought suit against Defendant Marrone Bio Innovations, Inc. (“Marrone Bio”) for payment
    of a Transaction Fee (defined below). Piper Jaffray contends that it is owed the Transaction Fee
    under the terms of an engagement letter, dated January 7, 2017, as amended (the “Engagement
    Letter”),1 in connection with a private placement that Marrone Bio completed on February 6,
    2018.
    On April 3, 2018, Piper Jaffray brought this cause of action against Marrone Bio for
    breach of contract seeking damages in excess of $2 million dollars. On May 24, 2018, Marrone
    Bio filed a Motion to Dismiss for failure to state a claim pursuant to Superior Court Rule
    12(b)(6) (the “Motion to Dismiss”). For the following reasons set forth below, the Court
    DENIES the Motion to Dismiss.
    II.      FACTUAL BACKGROUND2
    A.       Parties, Jurisdiction and Choice of Law
    Piper Jaffray is an international investment bank and asset management firm. Piper
    Jaffray is incorporated in the State of Delaware.3 Its principal place of business is in
    Minneapolis, Minnesota.4
    Marrone Bio is a Delaware corporation with its principal place of business in Davis,
    California.5 Marrone Bio produces bio-based pest management and plant health products for
    agricultural and water markets in both the U.S. and internationally.6 It is publicly traded on
    NASDAQ.7
    1
    The parties amended the Engagement Letter on February 15, 2017 and June 29, 2017, respectively.
    2
    While the vast majority of the facts have been taken directly from the Complaint (“Compl.”), certain facts have
    been clarified from a review of Marrone Bio’s public filings, which were incorporated by reference into the
    Complaint.
    3
    Compl. ¶ 1.
    4
    Id.
    5
    Compl. ¶ 2
    6
    Id.
    7
    Id.
    2
    The Engagement Letter provides that it “will be governed by and construed in accordance
    with the laws of Delaware, without regard to [Delaware’s] conflict of law principles.”8 In
    addition, the parties have waived their right to a jury trial in connection with any disputes arising
    out of the Engagement Letter.9
    B.       Engagement of Piper Jaffray and NSC
    Marrone Bio completed its initial public offering in August of 2013.10 Marrone Bio
    completed a secondary offering in June 2014 based on Marrone Bio’s performance in 2013 and
    the first quarter of 2014.11 After the secondary offering, the FBI and the SEC began an
    investigation of Marrone Bio’s financials and its executives for securities fraud.12 In addition,
    stockholders filed a related stockholder class action lawsuit.13 In 2016, Marrone Bio paid a
    $1.75 million fine to the SEC and settled the class action suit for $12 million.14 As a result of the
    foregoing, Marrone Bio’s ability to continue as a going concern was in jeopardy and it was in
    need of additional financing.15
    On January 7, 2017, Piper Jaffray and Marrone Bio entered into the Engagement Letter
    under which Piper Jaffray agreed to provide investment banking services to Marrone Bio to
    facilitate a transaction for the benefit of Marrone Bio.16 These services included, among other
    things, (i) assessing Marrone Bio’s business operations, (ii) identifying and contacting potential
    purchasers, (iii) preparing a memorandum regarding Marrone Bio’s operations and financials to
    present to potential purchasers, (iv) analyzing proposals received from potential purchasers and
    8
    Compl. Ex. A.
    9
    Id.
    10
    Compl. ¶ 7.
    11
    Id.
    12
    Compl. ¶ ¶ 7, 8.
    13
    Id.
    14
    Compl. ¶ 8.
    15
    Compl. ¶ ¶ 8, 9.
    16
    Compl. ¶ ¶ 10, 11.
    3
    (v) assisting in negotiations with potential purchasers.17 In exchange for Piper Jaffray’s services,
    Marrone Bio agreed to pay Piper Jaffray: (a) a retainer in the amount of $150,000 (to be credited
    against any Transaction Fee described below); (b) reasonable out-of-pocket expenses not to
    exceed $50,000; (c) a fairness opinion fee, if requested; and (d) a Transaction Fee upon
    consummation of a transaction.18
    After the engagement, Piper Jaffray performed substantial work in 2017 at Marrone Bio’s
    request.19 Piper Jaffray (i) prepared detailed analysis and valuations of Marrone Bio (including
    an analysis of whether Marrone Bio should remain a public company), (ii) prepared and
    presented strategic alternatives for financing to Marrone Bio’s Board of Directors and its
    executives, (iii) identified and negotiated with potential purchasers of Marrone Bio, (iv)
    coordinated due diligence with prospective purchasers, and (v) advised Marrone Bio and its
    Board of Directors throughout the process.20 Piper Jaffray’s efforts resulted in the execution of
    thirteen non-disclosure agreements and written proposals from two potential strategic buyers.21
    In August 2017, Marrone Bio engaged an additional financial advisor, National Securities
    Corporation (NSC”), to assist Marrone Bio with identifying potential transactions.22 At that
    time, the retention of Piper Jaffray remained in effect.23
    17
    Compl. ¶ 11.
    18
    Compl. ¶ 12.
    19
    Compl. ¶ 17.
    20
    Id.
    21
    Id.
    22
    Compl. ¶ 18.
    23
    Id. The retention of Piper Jaffray by the Company was a non-exclusive engagement. In that regard, the Engagement
    Letter specifically provides that “[t]he Company may engage one or more other financial advisors, in addition to us
    [Piper Jaffray], to act as co-advisor, as deemed necessary by the Company, it being understood that any such retention
    of another financial advisor shall not affect our rights hereunder (including with respect to its entitlement to a
    Transaction Fee) or the Company’s obligations hereunder.” Engagement Letter @ 4. (Exhibit A to the Compl.)
    4
    C.       Marrone Bio Obtains Bridge Financing and Subsequently Consummates a
    Private Placement
    After the engagement of NSC, Marrone Bio began discussions with a group of investors
    led by Dwight Anderson, the principal of Ospraie Ag Sciences LLC (“Ospraie”).24 On October
    12, 2017, a member of Marrone Bio’s Board of Directors sent an email to Tom Halverson, the
    lead banker from Piper Jaffray on the Marrone Bio engagement that provided:
    Pam sent you a voicemail regarding a $1 million bridge loan from Ospraie.
    That is correct. However, I would not communicate that to Valagro [a
    strategic buyer] until we see a firm term sheet which we should get today.
    Leaves all options open in my opinion.25
    In an 8-K filed on October 18, 2017, Marrone Bio announced that it had entered into a
    bridge loan with Mr. Anderson on October 12, 2017, the terms of which provided for a $1
    million unsecured promissory note with a three-year term at an interest rate of 1% per annum
    through December 31, 2017 (the “Bridge Loan”).26 The terms of the Bridge Loan also granted
    Mr. Anderson the option to convert any or all of the outstanding principal and interest on the
    Bridge Loan into Marrone Bio common stock.27 Shortly thereafter, on October 24, 2017,
    Marrone Bio publicly announced in an 8-K that it had amended the Bridge Loan on October 23,
    2017 to increase the loan amount up to $6 million.28 The other terms of the Bridge Loan
    remained the same.29
    24
    Compl. ¶ 19.
    25
    Compl. ¶ 20.
    26
    Compl. ¶ 21. Beginning on January 1, 2018, the promissory note would bear an interest rate of 10% per annum.
    27
    Id.
    28
    Compl. ¶ 22.
    29
    Id.
    5
    On the day the 8-K was filed, Marrone Bio gave Piper Jaffray notice of its election to
    terminate the Engagement Letter.30 In accordance with the 10-day notice requirement set forth
    in the Engagement Letter, the effective date of termination was November 3, 2017.31
    On December 18, 2017, Marrone Bio announced through another 8-K that it had entered
    into a securities purchase agreement (the “Purchase Agreement”) with a group of investors led
    by Ospraie.32 Under the Purchase Agreement, the investors agreed to purchase an aggregate of
    44,00,001 units (the “Units”), with each Unit purchased by Ospraie consisting of one share of
    Marrone Bio common stock and one warrant to purchase one share of Marrone Bio common
    stock and each Unit purchased by the other investors consisting of one share of Marrone Bio
    common stock and one warrant to purchase 0.8 shares of Marrone Bio common stock.33 The
    aggregate purchase price under the Purchase Agreement was $30 million.34 The Purchase
    Agreement provided that the aggregate purchase price was inclusive of funds being advanced by
    Mr. Anderson under the Bridge Loan. The 8-K further explained that, concurrent with entry into
    the Purchase Agreement,35 Marrone Bio had amended certain debt obligations with two other of
    its creditors (not Ospraie) pursuant to which the creditors would also convert $45 million in
    aggregate principal amount of debt into shares of Marrone Bio common stock conditioned upon
    the closing of the Purchase Agreement.36
    30
    Compl. ¶ 23.
    31
    Id.
    32
    Compl. ¶ 24.
    33
    Id.
    34
    Id.
    35
    Id. The 8-k explained that Anderson had already funded $3.5 million under the “Ospraie Note,” which together
    with the additional $2.5 million he had yet to fund would convert into Units at closing.
    36
    Id.
    6
    On December 20, 2017, Piper Jaffray advised Marrone Bio that the series of related
    transactions announced by Marrone Bio constituted a Transaction under the Engagement Letter
    and, as a result, Piper Jaffray was entitled to a Transaction Fee upon closing.37
    On December 22, 2017, Marrone Bio and Mr. Anderson entered into another amendment
    to the Bridge Loan on largely the same terms as the initial Bridge Loan, except that Mr.
    Anderson was now taking a security interest in Marrone Bio’s property.38 On January 3, 2018,
    Marrone Bio filed a definitive proxy statement with the SEC seeking, among other things,
    stockholder approval of the issuance of Marrone Bio’s common stock and warrants to purchase
    common stock in connection with the private placement and debt refinancings. The total number
    of shares of Marrone Bio common stock issued at closing was 71,012,286, which represented
    approximately 69% of Marrone Bio’s total issued and outstanding shares.39 On February 6,
    2018, Marrone Bio announced that it had closed the transaction with Ospraie.40
    D.        Specific Terms of the Engagement Letter at Issue
    As previous noted, the sole issue before the Court is whether the private placement
    consummated by Marrone Bio in February 2018 constitutes a Transaction under the Engagement
    Letter. If it does, Piper Jaffray contends it is entitled to the Transaction Fee. As such, the
    dispute turns on the facts of this case and the interpretation of the defined terms “Transaction”
    and “Transaction Fee” as set forth in the Engagement Letter.
    Under the terms of the Engagement Letter, “Transaction” means:
    any transaction or series or combination of related transactions whereby,
    directly or indirectly, by merger, plan of exchange, sale, consolidation,
    recapitalization or otherwise 50% or more of the Company’s capital stock
    (based on shares outstanding), or all or substantially all of the assets of the
    37
    Compl. ¶ 25.
    38
    Compl. ¶ 26.
    39
    Compl. ¶ 27.
    40
    Compl. ¶ 28.
    7
    Company[’s assets][sic] (based on book value) is transferred or exchanged
    by you [Marrone Bio] and/or your shareholders.41
    The term “Transaction Fee,” provides, in pertinent part, as follows:
    [i]n the event you [Marrone Bio] consummate a Transaction pursuant to a
    definitive agreement or written commitment entered into (i) during the term
    of this agreement, (ii) with (A) an Identified Party,42 (B) any other party
    with whom you have had contact regarding a Transaction during the term
    of this agreement or (C) any other party with whom the Company
    consummates a Transaction after the Company has executed a definitive
    agreement regarding a Transaction during the term of this agreement or (ii)
    during the 9-month period following the termination of this agreement, with
    an Identified Party . . . a cash fee, payable at closing of the Transaction (the
    “Transaction Fee”), equal to the greater of (x) $2.0 million or (y) an amount
    determined as follows . . . .43
    III.     STANDARD OF REVIEW
    When reviewing a Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court
    must “view the complaint in the light most favorable to the non-moving party, accepting as true
    all well pleaded allegations and drawing reasonable inferences that logically flow from them,”
    but “decline . . . to accept conclusory allegations unsupported by specific facts or to draw
    unreasonable inferences in favor of the non-moving party.”44 “Even vague allegations are
    considered well-pleaded if they give the opposing party notice of a claim.”45
    “Dismissal is warranted where the plaintiff has failed to plead facts supporting an
    element of the claim, or that under no reasonable interpretation of the facts alleged could the
    complaint state a claim for which relief might be granted.”46 But, if the Court engages the
    41
    Compl. ¶ 14. Engagement Letter @ 1.
    42
    Neither Anderson nor Ospraie are Identified Parties under the Engagement Letter.
    43
    Engagement Letter @ 2.
    44
    Price v. E.I. DuPont de Nemours & Co., 
    26 A.3d 162
    , 166 (Del. 2011).
    45
    Veney v. United Bank, 
    2017 WL 3822657
    , at *2 (Del. Super. Ct. Aug. 31, 2017).
    46
    Hedenberg v. Raber, 
    2004 WL 2191164
    , at *1 (Del. Super. Ct. Aug. 20, 2004).
    8
    standards described and finds the claimant may recover, the Court must deny the motion to
    dismiss.47
    IV.      DISCUSSION
    To prevail on a claim for breach of contract, the plaintiff must show: (1) the existence of
    a contract between the parties; (2) the defendant breached an obligation owed to plaintiff under
    the contract; and (3) the breach resulted in damages.48 Piper Jaffray and Marrone Bio do not
    dispute the existence of the Engagement Letter, but rather whether or not there has been a breach
    by Marrone Bio under that agreement.
    When reviewing contracts, courts generally give priority to the parties’ intentions
    contained in the four corners of the contract.49 “In upholding the intentions of the parties, a court
    must construe the agreement as a whole, giving effect to all provisions therein.”50 “The meaning
    inferred from a particular provision cannot control the meaning of the entire agreement if such an
    inference conflicts with the agreement’s overall scheme or plan.”51 “When construing a contract,
    and unless a contrary intent appears, [courts] will give words their ordinary meaning.”52
    Where the language of the contract is plain and unambiguous, the contract must be
    enforced as written.53 “If a writing is plain and clear on its face, i.e. its language conveys an
    unmistakable meaning, the writing itself is the sole source for gaining an understanding of
    intent.”54 The parole evidence rule bars the admission of evidence outside the contract’s four
    47
    Riverside Fund V, L.P. v. Shyamsundar, 
    2015 WL 5004924
    , at *3 (Del. Super. Ct. August 17, 2015); Spence v.
    Funk & Commc’n Consultants, Inc., 
    396 A.2d 967
    , 968 (Del. 1978).
    48
    See VLIW Tech., LLC v. Hewlett-Packard, Co., 
    840 A.2d 606
    , 612 (Del. 2003).
    49
    Paul v. Deloitte & Touche, LLP, 
    974 A.2d 140
    , 145 (Del. 2009).
    50
    E.I. du Pont de Nemours and Co., Inc. v. Shell Oil Co., 
    498 A.2d 1108
    , 1113 (1985).
    51
    Riverbend Community, LLC v. Green Stone Engr., LLC, 
    55 A.3d 330
    , 334 (Del. 2012) (citing GMG Capital, 36
    A.3d at 779).
    52
    Citadel Hldg. Corp. v. Roven, 
    603 A.2d 818
    , 824 (Del. 1992).
    53
    Lorillard Tobacco Co. v. Am. Legacy Found, 
    903 A.2d 728
    , 740 (Del. 2006).
    54
    City Investing Co. Liquidating Tr. v. Cont’l Cas. Co., 
    624 A.2d 1191
    , 1198 (Del. 1993).
    9
    corners to vary or contradict the unambiguous language.55 However, “where reasonable minds
    could differ as to the contract’s meaning, a factual dispute results and the fact-finder must
    consider admissible extrinsic evidence.56
    Marrone Bio contends that the private placement does not constitute a Transaction under
    the plain meaning of the terms of the Engagement Letter. Marrone Bio argues that if the private
    placement does not constitute a Transaction then Piper Jaffray is not entitled to a Transaction
    Fee. Marrone Bio claims that the definition of Transaction under the Engagement Letter requires
    a “transfer” or “exchange” of shares of Marrone Bio and that the private placement is neither.
    According to Marrone Bio, the plain meaning of the terms “transfer” and “exchange” require that
    its shares move from one party’s possession to another party’s possession.57
    Marrone Bio provides that the private placement is an “issuance” of new shares of
    Marrone Bio, and that the failure to use that term in the Engagement Letter underscores the
    parties clear intent that Piper Jaffray was to be compensated under the Engagement Letter for
    facilitating a sale of the company, rather than the financing that occurred. Marrone Bio further
    contends that Piper Jaffray could have negotiated the definition of Transaction to include a
    financing, but it failed to do so.58
    55
    GMG Capital, 
    36 A.3d 776
     at 783.
    56
    
    Id.
    57
    Defs. Br. in Supp. of the Mot. to Dismiss the Compl. at. 11 (hereinafter “Defs Br.”); Marrone Bio cites the dictionary
    meanings of the terms “transfer” and “exchange” to supports its reading of the Engagement Letter. (See Black’s Law
    Dictionary (10th Ed.2014) (to “transfer” means to “convey or remove from one place or one person to another: to pass
    or hand over from one to another, esp. to change over the possession or control of) (emphasis added); Webster’s Third
    New International Dictionary, Unabridged (2018) (to “exchange” means “to part with, give, or transfer in
    consideration of something received as equivalent”).
    58
    See Bain Capital, Inc. v. Wesley Jessen Corp., 
    2003 WL 21129854
    , *4 (Mass. Super. Apr. 16, 2003)(discussing an
    engagement agreement in which a transaction fee would be owed “in connection with the consummation of each
    acquisition, divestiture, or financing . . . “).
    10
    Marrone Bio also claims that the Complaint should be dismissed on independent grounds
    because it fails to allege facts showing that Marrone Bio had entered into a “written
    commitment” to proceed with the private placement as of the effective date of the termination of
    the Engagement Letter—i.e., November 3, 2017 or the “Effective Date.” In support, Marrone
    Bio asserts that it cannot be reasonably inferred that a written commitment to enter into the
    private placement existed prior to the Effective Date solely on the basis of (i) the existence of the
    Bridge Loan and its terms, (ii) the language used in the Company’s public filings regarding the
    private placement, (iii) the email correspondence between the Marrone Bio Board and Piper
    Jaffray or (iv) the timing of the Company’s termination of the Engagement Letter.
    In opposing the Motion to Dismiss, Piper Jaffray argues that the private placement fits
    squarely within the definition of Transaction set forth in the Engagement Letter because (i) the
    private placement resulted in a change in control of Marrone Bio, which is the type of transaction
    that Piper Jaffray was to facilitate,59 and (ii) that the Engagement Letter intentionally uses the
    broadest possible language to describe a change in control transaction.60 Piper Jaffray goes on to
    contend that the private placement fits within any common or technical understanding of the
    word “sale,” which term was specifically used in the definition of Transaction, and is further
    supported by the language used in the Purchase Agreement.61 Piper Jaffray then claims that the
    Purchase Agreement speaks in “sale” terms with its use of the defined term “Buyer” and the
    statement that “[Marrone Bio] shall issue and sell to each Buyer, and each Buyer . . . agrees to
    purchase from the Company . . . Common Shares.”62
    59
    Pl.’s Br. in Opp. to the Mot. of Def. to Dismiss the Compl., at 1. (hereinafter “Pl’s Opp. Br.”)
    60
    Pl. Opp. Br. at 12.
    61
    Id. at 1-2.
    62
    Purchase Agreement @ 1 (Ex. A to Aff. Of Thomas P. Swigert).
    11
    Piper Jaffray also contends that it has adequately alleged and pled sufficient facts, on
    information and belief, to demonstrate that Marrone Bio entered into a “written commitment”
    prior to the termination of the Engagement Letter.63 Piper Jaffray argues that, as stated in the
    Complaint, its efforts resulted in two written proposals from strategic buyers, at least one of
    which was still negotiating with the Company as of the date when Marrone Bio entered into the
    Bridge Loan with Anderson.64 Piper Jaffray points to the email from the Marrone Bio Board
    member and the reference to a “term sheet” as support for the notion that a written commitment
    existed at that time. Piper Jaffray further pleads that the day after the Bridge Loan was amended
    to increase the loan amount, Marrone Bio sent notice to Piper Jaffray that it was terminating the
    Engagement Letter. According to Piper Jaffray, this sequence of events—coupled with the
    reference to a “term sheet” and the terms of the Bridge Loan itself—support Piper Jaffray’s
    allegation that Marrone Bio had entered into a commitment with respect to the private placement
    when Marrone Bio terminated the Engagement Letter.
    In applying the applicable standard of review and drawing all reasonable references in
    favor of Piper Jaffray, the Court finds that Marrone Bio has failed to demonstrate that under no
    reasonable interpretation of the facts alleged does the Complaint fail to state a claim upon which
    relief might be granted. Piper Jaffray has alleged sufficient facts to put Marrone Bio on notice of
    its claims for breach of contract. The Court will not dismiss them at this stage of the proceedings.
    In terms of whether Marrone Bio had entered into a “written commitment” to sell itself
    prior to termination of the Engagement Letter, this Court can reasonable infer from the facts, as
    63
    McDermott v. Clondalkin Grp., Inc. 649 F. App’x 263, 267 (3d Cir. 2016) (“where it can be shown that the requisite
    factual information is peculiarly within the defendant’s knowledge or control, so long as there are no ‘boilerplate and
    conclusory allegations’ and ‘[p]laintiffs . . . accompany their legal theory with factual allegations that make their
    theoretically viable claim plausible.”)
    64
    Compl. ¶ 20 and Ex. B.
    12
    pled, that a written commitment existed as of November 3, 2017—the Effective Date. Piper
    Jaffray alleges that, on October 12, 2017, Marrone Bio entered into a $1 million Bridge Loan
    with Ospraie under terms that were well below market. Initially, the Bridge Loan was unsecured
    for a three-year term at an interest rate of 1% per annum through December 31, 2017. On
    October 23, 2017, the Bridge Loan was increased to $6 million, but all of the other terms of the
    Bridge Loan remained the same. Given the below market rate of the Bridge Loan, it is
    reasonably conceivable that the initial Bridge Loan and subsequent amendment thereto were part
    of a series of transactions which resulted in the transaction Marrone Bio ultimately consummated
    with Ospraie. For Ospraie to lend money to Marrone Bio on such terms does not, at this stage of
    the proceeding, otherwise make any logical business sense. Moreover, the Purchase Agreement
    and Marrone Bio’s public filings specifically refer to and incorporate the Bridge Loan,
    supporting the inference that the Bridge Loan was part of the Ospraie transaction.
    Given that the Bridge Loan appears to have been part of Marrone Bio’s overall
    transaction with Ospraie, the unresolved factual question remains as to whether Marrone Bio had
    a “written commitment” to enter into the Ospraie transaction prior to termination of the
    Engagement Letter. In its pleadings, Piper Jaffray references a term sheet Marrone Bio
    anticipated receiving from Ospraie on October 17, 2017. Whether that terms sheet was received
    by Marrone Bio and would constitute a “written commitment” as contemplated by the
    Engagement Letter, or whether there are other documents that would constitute such a written
    commitment remains a question of fact at this stage of the proceedings. But, in reviewing the
    Complaint in the light most favorable to Piper Jaffray, it is reasonable for the Court to infer from
    the facts pled that such a written commitment existed prior to termination of the Engagement
    Letter. Focused discovery by the parties should quickly resolve this factual issue.
    13
    In denying the Motion to Dismiss, the Court is not concluding at this stage of the
    proceedings that the terms of the Engagement Letter are ambiguous, but rather that factual
    questions remain.   The Court may ultimately determine that the transaction the Company
    entered into with Ospraie does not constitute a Transaction to which Piper Jaffray is entitled to a
    Transaction Fee under the terms of the Engagement Letter. That issue is not appropriately
    decided on a motion to dismiss. Discovery may shed considerable light on the facts in this case
    and may make a determination by the Court on summary judgment more likely.
    V.      CONCLUSION
    For the reasons set forth above, the Court DENIES the Motion to Dismiss.
    IT IS SO ORDERED
    /s/ Eric M. Davis
    Eric M. Davis, Judge
    cc:    File&ServeXpress
    14