EXHIBIT 2.1
THIS SHARE EXCHANGE AGREEMENT made as of the 15th day of September,
1998.
B E T W E E N:
GLYKO BIOMEDICAL LTD.,
a corporation incorporated under the laws of Canada,
(hereinafter called the "Vendor")
OF THE FIRST PART;
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BIOMARIN PHARMACEUTICAL INC.,
a corporation incorporated under the laws of the State of
Delaware,
(hereinafter called the "Purchaser")
OF THE SECOND PART.
WHEREAS the Vendor is the sole stockholder of Glyko, Inc., a Delaware
corporation, and desires to sell and to cause to be sold, and the Purchaser
desires to purchase from the Vendor all of the issued and outstanding shares of
capital stock of Glyko, Inc., upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH in consideration of the mutual
covenants and agreements herein contained, and other good and valuable
consideration, Vendor and Purchaser represent, warrant, covenant and agree as
follows:
1. INTERPRETATION
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1.1 Defined Terms. Where used herein or in any amendments hereto, the
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following terms shall have the following meanings:
"AGREEMENT" means this Share Exchange Agreement, all Schedules attached
hereto and all amendments made hereto or thereto by written agreement
signed by each of Vendor and Purchaser;
"BIOMARIN SHARES" means 2,259,039 shares of Purchaser's Common Stock to be
issued in the name of Vendor as partial payment of the Purchase Price
pursuant to Section 2.2 hereof;
"BUSINESS DAY" means any day, which is not a Saturday, Sunday or a
statutory holiday in the Province of Ontario or the State of California;
"CLOSING" means the consummation of the Transaction as herein contemplated;
"CLOSING DATE" means October 7, 1998, or such other date as may be mutually
agreed upon by the parties hereto in writing for the closing of the
transactions contemplated by this Agreement;
"EFFECTIVE DATE" means September 15, 1998;
"EMPLOYEE OPTIONS" means the options to purchase a total of 585,969 shares
of Common Stock of the Vendor which are held by certain employees of Glyko,
Inc., which options shall be assumed by Purchaser and converted into
options to purchase 255,540 shares of Common Stock of Purchaser as
enumerated in Schedule "A" attached hereto;
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"ENCUMBRANCES" means any and all claims, liens, security interests,
mortgages, pledges, pre-emptive rights, charges, options, equity interests,
encumbrances, proxies, voting agreements, voting trusts or other interests
of any nature or kind whatsoever, howsoever created;
"GLYKO SHARES" means 3,882 shares of Common Stock and 2,000 shares of
Preferred Stock of Glyko, Inc., representing all of the issued and
outstanding capital stock of Glyko, Inc. as of the Closing Date;
"INTELLECTUAL PROPERTY" means all patents, patent applications and other
patent rights, trade secrets, copyrights and other proprietary rights as
listed on Schedule "B" hereto;
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"PERSON" includes an individual, partnership, association, unincorporated
organization, trust, corporation and a natural person acting in such
person's individual capacity or in such person's capacity as trustee,
executor, administrator, agent or other legal representative;
"PURCHASE PRICE" has the meaning attributed thereto in Section 2.2 hereof;
"TECHNOLOGY" means all know-how, processes, formulae, concepts, ideas,
data, technical and non-technical data and information, testing results,
descriptions, technologies, procedures, articles of manufacture,
compositions of matter (including pharmaceutical, chemical, biological,
genetic and biochemical compositions), designs, inventions, discoveries,
documents and works of authorship, whether or not patentable or patented,
now owned or licensed by Glyko, Inc.;
"TIME OF CLOSING" means 10:00 a.m. (San Francisco time) on the Closing
Date; and
"TRANSACTION" means the sale by the Vendor and the purchase by the
Purchaser of the Glyko Shares as contemplated herein.
1.2 Currency. Unless otherwise expressly provided, all dollar amounts referred
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to in this Agreement are in U.S. funds.
1.3 Gender and Number. Except where the context otherwise indicates, words
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importing the singular number only shall include the plural, and vice versa, and
words
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importing the masculine gender shall include the feminine and neutral genders,
and vice versa.
1.4 Division and Headings. The division of this Agreement into Articles and
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sections and the insertion of headings are for the convenience of reference only
and shall not affect the construction or interpretation of this Agreement . The
terms "this Agreement", "hereof", "hereunder", "hereto", "herein" and similar
expressions refer to this Agreement and not to any particular Article, section
or other portion of this Agreement and include any amendment hereto. Unless
something in the subject matter or context is inconsistent therewith, references
herein to Articles and sections are to Articles and sections of this Agreement.
1.5 To the knowledge of. The term "to the knowledge of" the appropriate party
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as used herein means to the knowledge of the current officers of the appropriate
party without any special inquiry or investigation whatsoever.
2. AGREEMENT TO EXCHANGE
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2.1 Transfer. Subject to the terms and conditions hereof, on the Closing Date
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at the Time of Closing, the Vendor shall deliver to the Purchaser certificates
representing the Glyko Shares together with such executed documentation as is
necessary and appropriate to effect the transfer of ownership of the Glyko
Shares from Vendor to Purchaser in exchange for good and valuable consideration
enumerated in Section 2.2 below.
2.2 Payment of Purchase Price. The purchase price for the Glyko Shares shall
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be equal to the sum of $14,500,500 (the "Purchase Price"). The Purchase Price
shall be paid and satisfied by Purchaser as follows: (i) the assumption by the
Purchaser of responsibility for the Employee Options as discussed in Section 2.3
below and as set forth on Schedule A attached hereto, having an aggregate value
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as enumerated therein, (ii) the delivery to the Vendor of a certificate
representing the BioMarin Shares issued in the name of Vendor, such BioMarin
Shares valued at $6.00 per share and (iii) a cash payment of $500.
2.3 Assumption of Stock Options. At the Effective Date, certain Employee
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Options outstanding under the Vendor's Share Option Plan - 1994 (the "Option
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Plan"), or otherwise, shall be assumed by Purchaser as follows:
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(i) At the Effective Date, certain Employee Options listed on Schedule A
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attached hereto, whether vested or unvested, shall be, in connection with the
Transaction, assumed by Purchaser. Each Employee Option so assumed by Purchaser
under this Agreement shall continue to have, and be subject to, the same terms
and conditions set forth in the Option Plan, except that: (A) each Employee
Option shall be exercisable for that number of whole shares of Common Stock of
Purchaser equal to the product of the number of shares of Common Stock of Vendor
that were issuable upon exercise of such Employee Option immediately prior to
the Effective Date multiplied by the Conversion Ratio, as defined in
subparagraph (ii) below, rounded down to the nearest whole number of shares of
Common Stock of Purchaser and (B) the per share exercise price for the shares of
Common Stock of Purchaser issuable upon exercise of such assumed Employee Option
shall be equal to the quotient determined by dividing the exercise price per
share of Common Stock of Vendor at which such Employee Option was exercisable
immediately prior to the Effective Date by the Conversion Ratio, rounded up to
the nearest whole cent; and
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(ii) For the purposes of this Section 2.3, the Conversion Ratio shall be
equal to the quotient of the fair market value of a share of Common Stock of
Vendor (converted to U.S. dollars), $2.61659, divided by the current fair market
value of a share of Common Stock of Purchaser, $6.00, which quotient is equal to
.436098.
It is the intention of the parties that the Employee Options assumed by
Purchaser qualify following the Effective Date as incentive stock options as
defined in Section 422 of the Code to the extent that the Employee Options
qualified as incentive stock options immediately prior to the Effective Date.
Promptly following the Effective Date, Purchaser will issue to each holder
of an outstanding Employee Option a document evidencing the foregoing assumption
of such Employee Option by Purchaser.
2.4 Closing. The Closing shall occur at the Time of Closing on the Closing
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Date at the offices of the Vendor, or at such other place or other time and date
as the Purchaser and the Vendor may agree.
Any document or instrument to be delivered by either party hereto at the
Closing shall be tabled at the Closing at the place of closing referred to above
by the party which is to deliver such document or instrument and any document or
instrument so tabled by a party hereto shall:
(a) be deemed to have been delivered by such party for the purposes of
this Agreement;
(b) be held in escrow by counsel for such party to be dealt with in
accordance with subparagraphs (c) and (d) below;
(c) be delivered to the party to which it is to be delivered pursuant to
the terms hereof, if all documents or instruments which are to be
delivered at the Closing are tabled in accordance with this section at
the Closing; and
(d) be delivered to, or in accordance with the directions of, the party
which tabled it, if subparagraph (c) does not apply.
3. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
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Except as set forth in the disclosure schedule attached hereto as Schedule
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"C," the Vendor hereby represents and warrants to the Purchaser as follows as of
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the date hereof and acknowledges and confirms that the Purchaser is relying upon
such representations and warranties in connection with the transactions
contemplated hereby:
(a) Attached hereto as Schedule "D" are Glyko, Inc.'s unaudited balance
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sheet as of June 30, 1998 and the related unaudited statements of
income and cash flow for the six (6) month period ended June 30, 1998
(collectively, the "Financials"). The Financials are correct in all
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material respects and have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently
applied on a basis consistent throughout the periods indicated and
consistent with each other (except that the Financials do not contain
footnotes and other
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presentation items that may be required by GAAP). The Financials
present fairly the financial condition, operating results and cash
flows of Glyko, Inc. as of the dates and during the periods indicated
therein, subject to normal year-end adjustments, which normal year-end
adjustments have not been material in amount or significance in any
individual case or in the aggregate in prior years. Glyko, Inc.'s
unaudited balance sheet as of June 30, 1998, is referred to
hereinafter as the "Current Balance Sheet."
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(b) Glyko, Inc. has no liability, indebtedness, obligation, expense,
claim, deficiency, guaranty or endorsement of any type, whether
accrued, absolute, contingent, matured, unmatured or other (whether or
not required to be reflected in financial statements in accordance
with GAAP), which individually or in the aggregate (i) has not been
reflected in the Current Balance Sheet, or (ii) has not arisen in the
ordinary course of business consistent with past practices since June
30, 1998, in either case which amounts do not exceed $50,000 in the
aggregate.
(c) Since June 30, 1998, there has not been, occurred or arisen any:
(i) transaction by Glyko, Inc. except in the ordinary course of
business as conducted on that date and consistent with past
practices;
(ii) amendments or changes to the Certificate of Incorporation or
Bylaws of Glyko, Inc.;
(iii) capital expenditure or commitment by Glyko, Inc. exceeding
$25,000 individually or $50,000 in the aggregate;
(iv) destruction of, damage to or loss of any material assets,
material business or material customer of Glyko, Inc. (whether
or not covered by insurance);
(v) claim of wrongful discharge or other unlawful labor practice or
action;
(vi) change in accounting methods or practices (including any change
in depreciation or amortization policies or rates) by Glyko,
Inc. other than required by GAAP;
(vii) revaluation by Glyko, Inc. of any of its assets which, in the
aggregate, changed such value by an amount exceeding $5,000,
either individually or in the aggregate;
(viii) declaration, setting aside or payment of a dividend or other
distribution (whether in cash, stock or property) in respect of
any capital stock of Glyko, Inc., or any split, combination or
reclassification in respect of any shares of capital stock of
Glyko, Inc., or any issuance or authorization of any issuance
of any other securities in respect of, in lieu of or in
substitution for shares of capital stock of Glyko, Inc., or any
direct or indirect repurchase, redemption, or other acquisition
by Glyko, Inc. of any shares of capital stock of Glyko, Inc.
(or options, warrants or other rights convertible into,
exercisable or exchangeable therefor), except in
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accordance with the agreements evidencing option grants by
Glyko, Inc.;
(ix) except in the ordinary course of its business as conducted on
June 30, 1998, increase in the salary or other compensation
payable or to become payable by Glyko, Inc. to any of its
officers, directors, employees or advisors, or the declaration,
payment or commitment or obligation of any kind for the
payment, by Glyko, Inc., of a bonus or other additional salary
or compensation to any such person;
(x) agreement, contract, covenant, instrument, lease, license or
commitment to which Glyko, Inc. is a party or by which it or
any of its assets (including but not limited to the
Intellectual Property and intangible assets) are bound or any
termination, extension, amendment or modification the terms of
any agreement, contract, covenant, instrument, lease, license
or commitment to which Glyko, Inc. is a party or by which it or
any of its assets are bound;
(xi) sale, lease, license or other disposition of any of the
material assets or properties of Glyko, Inc. or any creation of
any security interest in such assets or properties;
(xii) loan by Glyko, Inc. to any person or entity, incurring by
Glyko, Inc. of any indebtedness, guaranteeing by Glyko, Inc. of
any indebtedness, issuance or sale of any debt securities of
Glyko, Inc. or guaranteeing of any debt securities of others,
except for advances to employees for travel and business
expenses in the ordinary course of business consistent with
past practices;
(xiii) waiver or release of any right or claim of Glyko, Inc.,
including any write-off or other compromise of any account
receivable of Glyko, Inc. which, in the aggregate, had a value
of at least $5,000;
(xiv) written notice received by Vendor or Glyko, Inc. of the
commencement or threat of any lawsuit, proceeding or other
investigation against Glyko, Inc. or its affairs, or, to the
knowledge of Vendor, the commencement, notice or threat of any
lawsuit or proceeding or other investigation against Glyko,
Inc. or its affairs;
(xv) written notice received by Vendor or Glyko, Inc. of any claim
or potential claim of ownership by any person other than Glyko,
Inc. of the Intellectual Property or of infringement by Glyko,
Inc. of any other person's intellectual property or, to the
knowledge of Vendor, notice of such in any other form other
than written documentation;
(xvi) issuance or sale, or contract to issue or sell, by Glyko, Inc.
of any shares of capital stock of Glyko, Inc. or securities
convertible into, or exercisable or exchangeable for, shares of
capital stock of Glyko, Inc., or any securities, warrants,
options or rights to purchase any of the foregoing;
(xvii) (i) sale or license of any of the Intellectual Property or
entering into of any agreement with respect to the Intellectual
Property with any person or entity or with respect to the
intellectual property of any person or entity, or (ii) purchase
or license of any of the Intellectual Property or entering into
of any agreement with respect to the intellectual property of
any
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person or entity, or (iii) change in pricing or royalties set
or charged by Glyko, Inc. to its customers or licensees or in
pricing or royalties set or charged by persons who have
licensed any of the Intellectual Property to Glyko, Inc.;
(xviii)any event or condition of any character that has had or is
reasonably likely to have a material adverse effect on Glyko,
Inc.; or
(xix) agreement by Glyko, Inc. or any officer or employees thereof to
do any of the things described in the preceding clauses (i)
through (xviii)
(d) Neither the execution and delivery of this Agreement by the Vendor nor
the consummation of the transactions herein contemplated will conflict
with or result in:
(i) a violation, contravention or breach by the Vendor or Glyko,
Inc. of any of the terms, conditions or provisions of any
agreement or instrument to which the Vendor or Glyko, Inc. is a
party, or by which the Vendor or Glyko, Inc. is bound or
constitute a default by the Vendor or Glyko, Inc. thereunder,
or under any statute, regulation, judgment, decree or law by
which the Vendor or Glyko, Inc. is subject or bound, or result
in the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the Glyko
Shares or any of the Intellectual Property; or
(ii) a violation by the Vendor or Glyko, Inc. of any law or
regulation or any applicable order of any court, arbitrator or
governmental authority having jurisdiction over the Vendor or
Glyko, Inc. , or require the Vendor or Glyko, Inc., prior to
the Closing or as a condition precedent thereof, to make any
governmental or regulatory filings, obtain any consent,
authorization, approval, clearance or other action by any
Person, or await the expiration of any applicable waiting
period.
(e) The Glyko Shares are duly and validly created, authorized and issued
and are fully paid and non-assessable.
(f) No Person has any agreement or option or any right or privilege
(whether pre-emptive or contractual) which is or is capable of
becoming an agreement or option for the purchase from the Vendor of
any of the Glyko Shares or any of the Intellectual Property.
(g) Glyko, Inc. is not a party to nor is it bound by:
(i) any written employment or consulting agreement, contract or
commitment with an employee or individual consultant or
salesperson or consulting or sales agreement, contract or
commitment with a firm or other organization, or employee
benefit plan, option plan or option agreement;
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(ii) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation rights plan or stock purchase
plan, any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated
by this Agreement (for the purposes of this Section 3(g)(ii),
such agreement or plan shall include any agreement or plan of
Vendor being assumed by Purchaser pursuant to Section 2.2(i)
hereof);
(iii) any fidelity or surety bond or completion bond;
(iv) any lease of real or personal property having a value in excess
of $25,000 individually or $50,000 in the aggregate;
(v) any agreement, contract or commitment containing any covenant
limiting the freedom of Glyko, Inc. to engage in any line of
business or to compete with any person,
(vi) any agreement, contract or commitment relating to capital
expenditures and involving future payments in excess of $25,000
individually or $50,000 in the aggregate;
(vii) any agreement, contract or commitment relating to the
disposition or acquisition of assets or any interest in any
business enterprise outside the ordinary course of Glyko,
Inc.'s business;
(viii) any mortgages, indentures, loans or credit agreements, security
agreements or other agreements or instruments relating to the
borrowing of money or extension of credit;
(ix) any purchase order or contract for the purchase of materials
involving in excess of $25,000 individually or $50,000 in the
aggregate;
(x) any construction contracts in excess of $10,000 individually or
$20,000 in the aggregate;
(xi) any dealer, distribution, joint marketing or development
agreement;
(xii) any sales representative, original equipment manufacturer,
value added remarketer, reseller or independent vendor or other
agreement for use or distribution of Glyko, Inc.'s products,
technology or services; or
(xiii) any other agreement, contract or commitment that involves
$25,000 individually or $50,000 in the aggregate or more and is
not cancelable without penalty within thirty (30) days.
(h) Glyko, Inc. is in compliance with and has not breached, violated or
defaulted under, or received notice that it has breached, violated or
defaulted under, any of the terms or conditions of any material
agreement, contract, covenant, instrument, lease, license or
commitment to which
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Glyko, Inc. is a party or by which it is bound (collectively a
"Contract"), nor is Glyko, Inc. aware of any event that would
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constitute such a breach, violation or default with the lapse of time,
giving of notice or both. Each Contract is in full force and effect
and Glyko, Inc. is not subject to any default thereunder, nor to the
knowledge of Glyko, Inc. is any party obligated to Glyko, Inc.
pursuant to any such Contract subject to any default thereunder.
Following the Closing Date, Glyko, Inc. will be permitted to exercise
all of Glyko, Inc.'s rights under the Contracts without the payment of
any additional amounts or consideration other than ongoing fees,
royalties or payments which Glyko, Inc. would otherwise be required to
pay had the transactions contemplated by this Agreement not occurred.
(i) The Vendor has all necessary power, authority and capacity to enter
into this Agreement and all other agreements and instruments to be
executed by it as contemplated by this Agreement and to carry out its
obligations under this Agreement and such other agreements and
instruments. The execution and delivery of this Agreement and such
other agreements and instruments and the consummation of the
transactions contemplated hereby and such other agreements and
instruments have been duly authorized by all necessary corporate
action on the part of the Vendor.
(j) This Agreement constitutes a valid and binding obligation of the
Vendor enforceable against the Vendor in accordance with its terms
subject, however, to limitations with respect to enforcement imposed
by law in connection with bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights generally and to the extent
that equitable remedies such as specific performance and injunctions
are only available in the discretion of the court from which they are
sought.
(k) The Vendor is the record and beneficial owner of the Glyko Shares and
has good and marketable title thereto free and clear of any
Encumbrances. The Vendor has the exclusive right and full power to
transfer the Glyko Shares to the Purchaser as herein contemplated free
and clear of any Encumbrances.
(l) Intellectual Property:
(i) Glyko, Inc. owns all right, title and interest in and to the
Intellectual Property with good and marketable title thereto,
free and clear of all Encumbrances;
(ii) Glyko, Inc. is entitled to make use of or otherwise exploit the
Intellectual Property (including without limitation the right
to derivatives and improvements thereto) without payment of any
royalty or other amounts;
(iii) Glyko, Inc. is under no obligation to obtain any approval or
consent for use of or other exploitation (including without
limitation enforcement, assignment, license, sublicense or
other transfer) of the Intellectual Property; (iv) no charge,
complaint action, suit, proceeding, hearing, investigation,
claim or demand is pending or threatened which challenges the
legality, validity, enforceability, use or ownership by Glyko,
Inc. of any of the Intellectual Property;
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(iv) no charge, complaint action, suit, proceeding, hearing,
investigation, claim or demand is pending or threatened which
challenges the legality, validity, enforceability, use or
ownership by Glyko, Inc. of any of the Intellectual Property;
(v) the Intellectual Property represents all intellectual property
rights (including without limitation patents, patent
applications, trademarks, trademark applications, service
marks, service ▇▇▇▇ applications, trade names, copyrights,
manufacturing process, trade secrets) which are reasonably
necessary or material to the conduct of Glyko, Inc.'s business
as presently conducted;
(vi) neither the Intellectual Property , the Technology nor the use
or exploitation thereof would infringe any patent, copyright,
trade secret or other proprietary right owned or controlled by
Vendor and no basis for such claim exists and neither Vendor
nor Glyko, Inc. has received notice, written or otherwise, of
such a claim of infringement by any third party;
(vii) the Intellectual Property is not subject to any outstanding
judgment, order decree, stipulation, injunction or charge nor
the subject matter or any charge, complaint, action, suit,
proceeding of any Federal, state, local or foreign jurisdiction
or before any arbitrator;
(viii) Glyko, Inc. has not given or otherwise communicated to any
entity any notice, charge, claim or assertion of any present,
impending or threatened infringement by such other entity of
any of the Intellectual Property;
(ix) Glyko, Inc. has taken all steps that are reasonably required to
protect Glyko, Inc.'s rights in confidential information and
trade secrets of Glyko, Inc. or provided by any other entity to
Glyko, Inc. Without limiting the foregoing, Glyko, Inc. has,
and enforces, a policy requiring each employee, consultant and
contractor to execute proprietary information, confidentiality
and assignment agreements in Glyko, Inc.'s standard forms, and
all current and former employees, consultants and contractors
of Glyko, Inc. have executed such an agreement. A copy of such
agreement has been provided to counsel for Purchaser; and
(x) the Intellectual Property has not been licensed to or licensed
from any third party or the Vendor.
(m) To the knowledge of the Vendor, there is not pending, threatened or
contemplated, any suit, action, legal proceeding, litigation or
governmental investigation of any sort relating to Glyko, Inc., the
Glyko Shares, the Intellectual Property or the Transaction, nor is
there any present state of facts or circumstances which can be
reasonably anticipated to be a basis for any such suit, action, legal
proceeding, litigation or governmental investigation nor is there
presently outstanding against Glyko, Inc., any judgment, decree,
injunction, rule or order of any court, governmental department,
commission, agency, instrumentality, or arbitrator, to which the
Vendor or Glyko, Inc. is a party or to which the property of the
Vendor or Glyko, Inc. is subject that would result individually or in
the aggregate in
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any material adverse change in the operation, business, condition,
income or future prospects of the Vendor or Glyko, Inc.
(n) No order ceasing or suspending trading in securities of Glyko, Inc. or
prohibiting the sale of securities by Glyko, Inc. has been issued and
no proceedings for this purpose have been instituted, or are pending,
or, to the knowledge of the Vendor, are contemplated or threatened.
(o) Glyko, Inc. has not, directly or indirectly, declared or paid any
dividend or declared or made any other distribution on any of its
shares or securities or, directly or indirectly, redeemed, purchased
or otherwise acquired any of its shares or securities or agreed to do
any of the foregoing.
(p) The Vendor has not entered into any agreement that would entitle any
person to any valid claim against the Purchaser for a broker's
commission, finder's fee, or any like payment in respect of the sale
of the Glyko Shares or the purchase of the BioMarin Shares or any
other matters contemplated by this Agreement.
(q) Glyko, Inc. has not received any notices of violation with respect to,
any foreign, federal, state or local statute, law or regulation,
including without limitation environmental laws and regulations and,
to the knowledge of Vendor, Glyko, Inc. has complied with and is not
in violation of any of the foregoing.
(r) None of the foregoing representations and warranties knowingly
contains any untrue statement of material fact or knowingly omits to
state any material fact necessary to make any such representation or
warranty not misleading to a prospective purchaser of the Glyko Shares
seeking full information as to the Glyko Shares and the Intellectual
Property.
(s) Vendor has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
purchase of the BioMarin Shares pursuant to this Agreement and of
protecting the Vendor's interests in connection herewith. Vendor has
the ability to bear the economic risk of the investment, including
complete loss of the investment.
(t) Vendor is acquiring the BioMarin Shares for investment for its own
account, not as a nominee or agent, and not with a view to, or for
resale in connection with, any distribution thereof, and Vendor has no
present intention of selling, granting any participation in, or
otherwise distributing the same. Vendor understands that the BioMarin
Shares have not been registered under the Securities Act of 1933, as
amended (the "Securities Act") but have been issued pursuant to a
specific exemption from the registration provisions of the Securities
Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of Vendor's representations as
expressed herein.
(u) Vendor understands that the BioMarin Shares are characterized as
"restricted securities" under U.S. federal securities laws inasmuch as
they are being acquired from Purchaser in a transaction not involving
a public offering and that under such laws and applicable regulations
the BioMarin Shares may be resold without registration under the
Securities Act only in
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certain limited circumstances. Vendor acknowledges that the BioMarin
Shares must be held indefinitely unless subsequently registered under
the Securities Act or an exemption from such registration is
available. Vendor is aware of the provisions of Rule 144 promulgated
under the Securities Act which permits limited resale of shares
purchased in a private placement subject to the satisfaction of
certain conditions.
(v) Vendor understands that the BioMarin Shares may be subject to a lock-
up period of up to 180 days following the effective date a
Registration Statement filed under the Securities Act, pursuant to
Section 7 of the Amended and Restated Registration Rights Agreement
attached hereto as Schedule "E".
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(w) Vendor understands that no public market now exists for the Common
Stock of Purchaser or for any other securities issued by Purchaser and
that there is no assurance that a public market will ever exist for
the BioMarin Shares.
(x) Without in any way limiting the representations set forth above,
Vendor further agrees not to make any offer or sale of all or any
portion of the BioMarin Shares within the United States or to a U.S.
resident unless and until;
(i) There is then in effect a Registration Statement under the
Securities Act covering such proposed offer or sale and such
offer or sale is made in accordance with such Registration
Statement; or
(ii) Vendor shall have notified Purchaser of the proposed offer or
sale and shall have furnished Purchaser with a detailed
statement of the circumstances surrounding the proposed
disposition, and if reasonably requested by the Purchaser,
Vendor shall have furnished Purchaser with an opinion of
counsel, reasonably satisfactory to Purchaser, that such offer
or sale is exempt from the registration requirements under the
Securities Act.
(y) The certificate representing the BioMarin Shares, and any securities
issued in respect thereof or exchange therefor shall bear legends
substantially in the following forms (in addition to any legend
required under applicable state securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE CORPORATION
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING
THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. COPIES OF THE
AGREEMENTS COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY
THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY
-12-
OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP
PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE OF A REGISTRATION
STATEMENT OF THE COMPANY FILED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED
AT THE PRINCIPAL OFFICE OF THE CORPORATION. SUCH LOCKUP PERIOD IS
BINDING ON TRANSFEREES OF THESE SECURITIES."
(z) Vendor presently does and will as of the Closing Date qualify as an
"accredited investor" within the meaning of Rule 501(a) promulgated
under the Securities Act and meets the relevant criteria indicated on
its completed and signed copy of the Accredited Investor Questionnaire
attached hereto as Schedule "F".
------------
(aa) Immediately following the Closing, Vendor will not own any material
asset other than 10,917,091 shares of Common Stock of Purchaser. For
avoidance of any doubt, immediately following the Closing Vendor will
not own any right, title or other interest in or to any intellectual
property rights (including without limitation domestic and foreign
patents, patent applications, trademarks (other than "Glyko BioMedical
Limited"), trade ▇▇▇▇ applications, trade names (other than "Glyko
BioMedical Limited"), copyrights or trade secrets).
(bb) All inter-company debt and equity accounts between Vendor and Glyko,
Inc., have been settled on or before the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
Except as set forth in the disclosure schedule attached hereto as Schedule
--------
G, the Purchaser hereby represents and warrants to the Vendor as follows as of
-
the date hereof and acknowledges and confirms that the Vendor is relying upon
such representations and warranties in connection with the transactions
contemplated hereby:
(a) Attached hereto as Schedule "H" are Purchaser's unaudited balance
-----------
sheet as of June 30, 1998 and the related unaudited statements of
income and cash flow for the six (6) month period ended June 30, 1998
(collectively, the "Financials"). The Financials are correct in all
----------
material respects and have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently
applied on a basis consistent throughout the periods indicated and
consistent with each other (except that the Financials do not contain
footnotes and other presentation items that may be required by GAAP).
The Financials present fairly the financial condition, operating
results and cash flows of Purchaser as of the dates and during the
periods indicated therein, subject to normal year-end adjustments,
which normal year-end adjustments have not been material in amount or
significance in any individual case or in the aggregate in prior
years. Purchaser's unaudited
-13-
balance sheet as of June 30, 1998, is referred to hereinafter as the
"Current Balance Sheet."
---------------------
(b) Glyko, Inc. has no liability, indebtedness, obligation, expense,
claim, deficiency, guaranty or endorsement of any type, whether
accrued, absolute, contingent, matured, unmatured or other (whether or
not required to be reflected in financial statements in accordance
with GAAP), which individually or in the aggregate (i) has not been
reflected in the Current Balance Sheet, or (ii) has not arisen in the
ordinary course of business consistent with past practices since June
30, 1998, in either case which amounts do not exceed $50,000 in the
aggregate.
(c) Since June 30, 1998, there has not been, occurred or arisen any:
(i) transaction by Purchaser except in the ordinary course of
business as conducted on that date and consistent with past
practices;
(ii) amendments or changes to the Certificate of Incorporation or
Bylaws of Purchaser;
(iii) capital expenditure or commitment by Purchaser exceeding
$25,000 individually or $50,000 in the aggregate;
(iv) destruction of, damage to or loss of any material assets,
material business or material customer of Purchaser (whether or
not covered by insurance);
(v) claim of wrongful discharge or other unlawful labor practice or
action;
(vi) change in accounting methods or practices (including any change
in depreciation or amortization policies or rates) by Purchaser
other than required by GAAP;
(vii) revaluation by Purchaser of any of its assets which, in the
aggregate, changed such value by at least $5,000;
(viii) declaration, setting aside or payment of a dividend or other
distribution (whether in cash, stock or property) in respect of
any capital stock of Purchaser, or any split, combination or
reclassification in respect of any shares of capital stock of
Purchaser, or any issuance or authorization of any issuance of
any other securities in respect of, in lieu of or in
substitution for shares of capital stock of Purchaser, or any
direct or indirect repurchase, redemption, or other acquisition
by Purchaser of any shares of capital stock of Purchaser (or
options, warrants or other rights convertible into, exercisable
or exchangeable therefor), except in accordance with the
agreements evidencing option grants by Purchaser;
(ix) except in the ordinary course of its business as conducted on
June 30, 1998, increase in the salary or other compensation
payable or to become payable by Purchaser to any of its
officers, directors, employees or advisors, or the declaration,
payment or commitment
-14-
or obligation of any kind for the payment, by Purchaser, of a
bonus or other additional salary or compensation to any such
person;
(x) agreement, contract, covenant, instrument, lease, license or
commitment to which Purchaser is a party or by which it or any
of its assets (including but not limited to the intellectual
property of Purchaser and intangible assets) are bound or any
termination, extension, amendment or modification the terms of
any agreement, contract, covenant, instrument, lease, license
or commitment to which Purchaser is a party or by which it or
any of its assets are bound;
(xi) sale, lease, license or other disposition of any of the
material assets or properties of Purchaser or any creation of
any security interest in such assets or properties;
(xii) loan by Purchaser to any person or entity, incurring by
Purchaser of any indebtedness, guaranteeing by Purchaser of any
indebtedness, issuance or sale of any debt securities of
Purchaser or guaranteeing of any debt securities of others,
except for advances to employees for travel and business
expenses in the ordinary course of business consistent with
past practices;
(xiii) waiver or release of any right or claim of Purchaser, including
any write-off or other compromise of any account receivable of
Purchaser which, in the aggregate, had a value of a least
$5,000;
(xiv) written notice of the commencement or threat of any lawsuit,
proceeding or other investigation against Purchaser or its
affairs, or, to the knowledge of Purchaser, the commencement,
notice or threat of any lawsuit or proceeding or other
investigation against Purchaser or its affairs;
(xv) written notice of any claim or potential claim of ownership by
any person other than Purchaser of the intellectual property of
Purchaser or of infringement by Purchaser of any other person's
intellectual property or, to the knowledge of Purchaser, notice
of such in any other form other than written documentation;
(xvi) issuance or sale, or contract to issue or sell, by Purchaser of
any shares of capital stock of Purchaser or securities
convertible into, or exercisable or exchangeable for, shares of
capital stock of Purchaser, or any securities, warrants,
options or rights to purchase any of the foregoing;
(xvii) (i) sale or license of any of the intellectual property of
Purchaser or entering into of any agreement with respect to the
intellectual property of Purchaser with any person or entity or
with respect to the intellectual property of any person or
entity, or (ii) purchase or license of any of the intellectual
property of Purchaser or entering into of any agreement with
respect to the intellectual property of any person or entity,
or (iii) change in pricing or
-15-
royalties set or charged by Purchaser to its customers or
licensees or in pricing or royalties set or charged by persons
who have licensed any of the intellectual property of Purchaser
to Purchaser;
(xviii)any event or condition of any character that has had or is
reasonably likely to have a material adverse effect on
Purchaser; or
(xix) agreement by Purchaser or any officer or employees thereof to
do any of the things described in the preceding clauses (i)
through (xviii).
(d) Purchaser is not a party to nor is it bound by:
(i) any written employment or consulting agreement, contract or
commitment with an employee or individual consultant or
salesperson or consulting or sales agreement, contract or
commitment with a firm or other organization, or employee
benefit plan, option plan or option agreement;
(ii) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation rights plan or stock purchase
plan, any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated
by this Agreement;
(iii) any fidelity or surety bond or completion bond;
(iv) any lease of real or personal property having a value in excess
of $25,000 individually or $50,000 in the aggregate;
(v) any agreement, contract or commitment containing any covenant
limiting the freedom of Purchaser to engage in any line of
business or to compete with any person,
(vi) any agreement, contract or commitment relating to capital
expenditures and involving future payments in excess of $25,000
individually or $50,000 in the aggregate;
(vii) any agreement, contract or commitment relating to the
disposition or acquisition of assets or any interest in any
business enterprise outside the ordinary course of Purchaser's
business;
(viii) any mortgages, indentures, loans or credit agreements, security
agreements or other agreements or instruments relating to the
borrowing of money or extension of credit;
(ix) any purchase order or contract for the purchase of materials
involving in excess of $25,000 individually or $50,000 in the
aggregate;
(x) any construction contracts in excess of $10,000 individually or
$20,000 in the aggregate;
-16-
(xi) any dealer, distribution, joint marketing or development
agreement;
(xii) any sales representative, original equipment manufacturer,
value added remarketer, reseller or independent vendor or other
agreement for use or distribution of Purchaser's products,
technology or services; or
(xiii) any other agreement, contract or commitment that involves
$25,000 individually or $50,000 in the aggregate or more and is
not cancelable without penalty within thirty (30) days.
(e) Purchaser is in compliance with and has not breached, violated or
defaulted under, or received notice that it has breached, violated or
defaulted under, any of the terms or conditions of any material
agreement, contract, covenant, instrument, lease, license or
commitment to which Purchaser is a party or by which it is bound
(collectively a "Purchaser Contract"), nor is Purchaser aware of any
------------------
event that would constitute such a breach, violation or default with
the lapse of time, giving of notice or both. Each Purchaser Contract
is in full force and effect and Purchaser is not subject to any
default thereunder, nor to the knowledge of Purchaser is any party
obligated to Purchaser pursuant to any such Purchaser Contract subject
to any default thereunder. Following the Closing Date, Purchaser will
be permitted to exercise all of Purchaser's rights under the Purchaser
Contracts without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which
Purchaser would otherwise be required to pay had the transactions
contemplated by this Agreement not occurred.
(f) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on behalf of the Purchaser and this
Agreement has been duly executed and delivered by the Purchaser and is
a valid and binding obligation of the Purchaser.
(g) At the Time of Closing the BioMarin Shares will be duly and validly
created, authorized and issued as fully paid and non-assessable
shares, and the shares of Common Stock of Purchaser issuable upon
exercise of the options set forth on Schedule A shall, upon exercise
----------
in accordance with their terms, be duly and validly created,
authorized and issued as fully paid and non-assessable shares.
(h) Neither the execution and delivery of this Agreement by the Purchaser
nor the consummation of the transactions contemplated hereby will
conflict with or result in or create a state of facts which after
notice or lapse of time or delay or both, will conflict with or result
in:
(i) a violation, contravention or breach by the Purchaser of any of
the terms, conditions or provisions of the Restated Certificate
of Incorporation, Bylaws or resolutions of the Purchaser or of
any agreement or instrument to which the Purchaser is a party
or by which it is bound or constitute a default of the
Purchaser thereunder, or of any statute, regulation, judgment,
decree or law by which the Purchaser or the assets of the
Purchaser are subject
-17-
or bound, or result in the creation or imposition of any
Encumbrance upon any of the BioMarin Shares; or
(ii) a violation by the Purchaser of any law or regulation or any
applicable order of any court, arbitrator or governmental
authority having jurisdiction over the Purchaser, or require
the Purchaser, prior to the Closing or as a condition precedent
thereof, to make any governmental or regulatory filings, obtain
any consent, authorization, approval, clearance or other action
by any Person or await the expiration of any applicable waiting
period.
(i) The authorized capital stock of the Purchaser consists of 30, 000,000
shares of Common Stock. Immediately prior to the Closing, 23,916,483
shares of Common Stock are issued and outstanding, all of which have
been duly authorized and validly issued, are fully paid and
nonassessable. Warrants to purchase 801,500 shares of Common Stock are
currently outstanding. Immediately prior to the Closing, the Board of
Directors has approved the grant of options to purchase a total of
2,304,120 shares of Common Stock to outside consultants, directors and
employees. There are no other options, warrants, conversion
privileges, pre-emptive rights (other than the pre-emptive rights
agreement between Glyko Biomedical Ltd. and the Purchaser dated June
27, 1997, the pre-emptive rights agreement between BB BioVentures L.P.
and the Purchaser dated December 30, 1997, and the pre-emptive rights
agreement between Genzyme Corporation and the Purchaser dated
September 4, 1998) presently outstanding to purchase or otherwise
acquire any capital stock or other securities of the Company;
(j) To the knowledge of the Purchaser, there is not pending, threatened or
contemplated, any suit, action, legal proceeding, litigation or
governmental investigation of any sort relating to the Purchaser or
the BioMarin Shares, nor is there any present state of facts or
circumstances which can be reasonably anticipated to be a basis for
any such suit, action, legal proceeding, litigation or governmental
investigation nor is there presently outstanding against the
Purchaser, any judgment, decree, injunction, rule or order of any
court, governmental department, commission, agency, instrumentality,
or arbitrator, to which the Purchaser is a party or to which the
property of the Purchaser is subject that would result individually or
in the aggregate in any material adverse change in the operation,
business, condition, income or future prospects of the Purchaser.
(k) No order ceasing or suspending trading in securities of the Purchaser
or prohibiting the sale of securities by the Purchaser has been issued
and no proceedings for this purpose have been instituted, or are
pending, or, to the knowledge of the Purchaser, are contemplated or
threatened.
(l) Neither the Restated Certificate of Incorporation or Bylaws of the
Purchaser nor any agreement, mortgage, note, debenture, indenture or
other instrument or document to which the Purchaser is a party,
contain any restriction upon or impediment to the declaration or
payment of dividends by the directors of the Purchaser or the payment
of dividends by the Purchaser to the holders of the BioMarin Shares.
-18-
(m) Upon execution of the Amended and Restated Registration Rights
Agreement, attached hereto as Schedule "E," Vendor shall have
-----------
registration rights with regard to the BioMarin Shares, as enumerated
therein.
(n) The Purchaser has not entered into any agreement that would entitle
any person to any valid claim against the Vendor for a broker's
commission, finder's fee, or any like payment in respect of the
purchase of the Glyko Shares or the sale of the BioMarin Shares or any
other matters contemplated by this Agreement.
(o) Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
purchase of the Glyko Shares pursuant to this Agreement and of
protecting the Purchaser's interests in connection herewith. Purchaser
has the ability to bear the economic risk of the investment, including
complete loss of the investment.
(p) Purchaser is acquiring the Glyko Shares for investment for its own
account, not as a nominee or agent, and not with a view to, or for
resale in connection with, any distribution thereof, and Purchaser has
no present intention of selling, granting any participation in, or
otherwise distributing the same. Purchaser understands that the Glyko
Shares have not been registered under the Securities Act of 1933, as
amended (the "Securities Act") but have been issued pursuant to a
specific exemption from the registration provisions of the Securities
Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of Purchaser 's representations
as expressed herein.
(q) Purchaser understands that the Glyko Shares are characterized as
"restricted securities" under U.S. federal securities laws and that
under such laws and applicable regulations the Glyko Shares may be
resold without registration under the Securities Act only in certain
limited circumstances. Purchaser acknowledges that the Glyko Shares
must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available.
Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions.
(r) Purchaser understands that no public market now exists for the Common
Stock of Glyko, Inc. or for any other securities issued by Glyko, Inc.
and that there is no assurance that a public market will ever exist
for the Glyko Shares.
(s) Without in any way limiting the representations set forth above,
Purchaser further agrees not to make any offer or sale of all or any
portion of the Glyko Shares within the United States or to a U.S.
resident unless and until;
(i) There is then in effect a Registration Statement under the
Securities Act covering such proposed offer or sale and such
offer or sale is made in accordance with such Registration
Statement; or
-19-
(ii) Purchaser shall have notified Glyko, Inc. of the proposed offer
or sale and shall have furnished Glyko, Inc. with a detailed
statement of the circumstances surrounding the proposed
disposition, and if reasonably requested by the Glyko, Inc.,
Purchaser shall have furnished Glyko, Inc. with an opinion of
counsel, reasonably satisfactory to Glyko, Inc., that such
offer or sale is exempt from the registration requirements
under the Securities Act.
(t) Purchaser presently does and will as of the Closing Date qualify as an
"accredited investor" within the meaning of Rule 501(a) promulgated
under the Securities Act and meets the relevant criteria indicated on
its completed and signed copy of the Accredited Investor Questionnaire
attached hereto as Schedule "F".
------------
(u) None of the foregoing representations and warranties knowingly
contains any untrue statement of material fact or knowingly omits to
state any material fact necessary to make any such representation or
warranty not misleading to a prospective purchaser of the BioMarin
Shares seeking full information as to the BioMarin Shares.
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
-----------------------------------------------
All obligations of the Purchaser under this Agreement, including but not
limited to those to purchase the Glyko Shares, to assume the Employee Options
and to sell to Vendor the BioMarin Shares, are subject to the fulfillment prior
to or at the Closing of each of the following conditions:
(a) Purchaser shall have received from Vendor a certificate, dated as of
the Closing Date, signed by the President of Vendor, stating that the
representations and warranties made by the Vendor in or under this
Agreement are true in all material respects on and as of the date of
the Closing and that, on or prior to the Closing, Vendor has complied
with all covenants and agreements herein agreed to be performed or
caused to be performed by it on or prior to the Closing Date.
(b) On or before the Closing Date there shall have been obtained from all
appropriate Federal, provincial, state, municipal, foreign or other
governmental or administrative bodies all such approvals and consents,
if any, in form and terms satisfactory to the Purchaser, as may be
required in order to permit the change of ownership of the Glyko
Shares.
(c) On or before the Closing Date the Vendor and Glyko, Inc. shall have
settled all inter-company debt and equity accounts.
(d) Purchaser shall have received from Vendor a copy of this Agreement
duly executed on behalf of Vendor with all schedules attached thereto
completed to the mutual satisfaction of Purchaser and Vendor.
(e) Purchaser shall have received from Vendor an executed copy of the
Amended and Restated Registration Rights Agreement attached hereto as
Schedule "E."
-------------
-20-
(f) Purchaser shall have received from counsel to Vendor an executed legal
opinion in a form reasonably satisfactory to Purchaser.
(g) Vendor shall have delivered, subject to the provisions of Section 2.4
hereof, the Glyko Shares together with such executed documentation as
is necessary and appropriate to the effect the transfer of ownership
of the Glyko Shares from Vendor to Purchaser.
In case any of the foregoing conditions cannot be fulfilled on or before
the Closing Date to the satisfaction of the Purchaser, the Purchaser may rescind
this Agreement by notice to the Vendor and in such event each of the Purchaser
and the Vendor shall be released from all obligations hereunder; provided,
however, that any such conditions may be waived in whole or in part by the
Purchaser without prejudice to its rights of rescission in the event of the non-
fulfillment of any other condition or conditions, and that the closing of the
Transaction as contemplated by this Agreement shall be deemed to be a waiver of
any unfulfilled conditions.
6. CONDITIONS PRECEDENT TO THE VENDOR'S OBLIGATIONS
------------------------------------------------
All obligations of the Vendor under this Agreement, including but not
limited to those to sell the Glyko Shares to Purchaser and to purchase the
BioMarin Shares, are subject to the fulfillment prior to or at the Closing of
each of the following conditions:
(a) Vendor shall have received from Purchaser a certificate dated as of
the Closing Date, signed by the Chief Executive Officer of Purchaser,
stating that the representations and warranties of the Purchaser under
this Agreement are true in all material respects on and as of the date
of such Closing and that, on or prior to the Closing, the Purchaser
has complied with all covenants and agreements herein agreed to be
performed or caused to be performed by it on or prior to the Closing
Date.
(b) No action shall have been taken by any court or governmental body
prohibiting or making illegal the execution and delivery of this
Agreement, or any transaction contemplated by this Agreement. No
action, suit or proceeding shall have been instituted and be
continuing by any Person to restrain, modify or prevent the
consummation of the transactions contemplated by this Agreement, or to
seek damages against the Purchaser in connection with such
Transaction, or that has been or is reasonably likely to have a
material adverse affect on the ability of any party hereto to fully
consummate the transactions contemplated by this Agreement.
(c) The Purchaser shall have delivered to Vendor, subject to the
provisions of Section 2.4 hereof, releases of the Employee Options
executed by the subject optionees, in form reasonably satisfactory to
the Vendor.
(d) Purchaser shall have delivered, subject to the provisions of Section
2.4 hereof, a certificate representing the BioMarin Shares registered
in the name of the Vendor bearing restrictive legends as provided for
in Section 3(z).
(e) On or before the Closing Date the Vendor and Glyko, Inc. shall have
settled all inter-company debt and equity accounts.
-21-
(f) Vendor shall have received from counsel to Purchaser an executed legal
opinion in a form reasonably satisfactory to Vendor.
(g) Vendor shall have received from Purchaser a copy of this Agreement
duly executed on behalf of Purchaser with all schedules attached
thereto completed to the mutual satisfaction of Purchaser and Vendor.
(h) Vendor shall have received from Purchaser $500 in cash pursuant to
Section 2.2 hereof.
(i) Vendor shall have received from Purchaser an executed copy of the
Amended and Restated Registration Rights Agreement attached hereto as
Schedule "E."
-------------
In case any of the foregoing conditions cannot be fulfilled on or before
the Closing Date to the satisfaction of the Vendor, the Vendor may rescind this
Agreement by notice to Purchaser and in such event each of the Vendor and the
Purchaser shall be released from all obligations hereunder; provided, however,
that any such conditions may be waived in whole or in part by the Vendor without
prejudice to its rights or rescission in the event of the non-fulfillment of any
other condition or conditions and that the Closing shall be deemed to be a
waiver of any unfulfilled conditions.
7. NATURE OF REPRESENTATIONS AND WARRANTIES
----------------------------------------
(a) Regardless of any investigation at any time made by or on behalf of
any party hereto or of any information any party may have in respect
thereof, all representations and warranties made hereunder shall
survive the Closing for a period of 24 months following the Closing
Date.
(b) This Agreement, and the documents specifically referred to herein or
executed and delivered concurrently herewith or at the Closing
constitute the entire agreement, understanding, representations and
warranties of the parties hereto and supersede any prior agreement,
understanding, representation, warranty or documents relating to the
subject matter of this Agreement.
8. NOTICES
-------
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given, if delivered in person,
telegraphed, or mailed by certified registered mail, postage prepaid:
-22-
(a) If to the Vendor, addressed as follows:
Glyko Biomedical Limited
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
Suite ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) If to the Purchaser, addressed as follows:
BioMarin Pharmaceutical Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as the party to be notified shall have furnished to the
other party in writing. Any notice given in accordance with the foregoing shall
be deemed to have been given when delivered in person or on the next business
day following the date on which it shall have been telegraphed or mailed.
9. AMENDMENTS
----------
This Agreement may be amended or modified only by a written instrument
executed by the parties affected thereby, or by their respective successors and
permitted assigns.
-23-
10. GENERAL
-------
(a) This Agreement:
(i) shall be construed and enforced in accordance with the laws of
the Province of Ontario; and
(ii) shall enure to the benefit of and be binding upon the Purchaser
and the Vendor and their respective executors, administrators,
legal representatives, successors and permitted assigns,
nothing in this Agreement, express or implied, being intended
to confer upon any other person any rights or remedies
hereunder.
(b) Time shall be of the essence hereof.
(c) Each of the parties hereto covenants and agrees that at any time and
from time to time after the Closing Date such party will, upon the
request of the other party, do, execute, acknowledge and deliver all
such further acts, documents and assurances as may be reasonably
required for the better carrying out of the terms of this Agreement
and to consummate the transactions contemplated hereby.
(d) This Agreement may be executed in one or more counterparts, each of
which so executed shall constitute an original and all of which
together shall constitute one and the same agreement.
(e) Each of the parties hereto shall pay their respective legal and
accounting costs and expenses incurred in connection with the
preparation, execution and delivery of this Agreement and all
documents and instruments executed pursuant hereto and any other costs
and expenses whatsoever and howsoever incurred in connection with the
completion of the transactions contemplated hereby.
(f) The parties hereto agree to file in a timely manner all forms required
to be filed after the Closing Date by applicable law and by the
regulations and policies of all applicable securities regulatory
authorities in connection with the transactions contemplated hereby.
(g) Neither this Agreement nor any right or obligation hereunder shall be
assignable by any party hereto without the prior written consent of
the other parties hereto, which consent may be arbitrarily withheld.
-24-
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement as of the day and date first above written.
GLYKO BIOMEDICAL LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇,
President
BIOMARIN PHARMACEUTICAL INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Chief Executive Officer
[SIGNATURE PAGE TO AGREEMENT REGARDING SALE OF CAPITAL STOCK OF GLYKO, INC.]
-25-
2.1
SCHEDULE "A"
EMPLOYEE OPTIONS
----------------
SCHEDULE "A"
EMPLOYEE OPTIONS
----------------
Equivalent
Number of Number of
Vendor's Purchaser's
Shares Exercise Shares
Subject to Price Subject to Exercise Price
Name of Optionee Options Per Share Value Options Per Share Value
-------------------------- ----------- ----------- ----------- ----------- -------------- -----------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,915 0.83 3,417.02 835 1.91 3,417.02
▇▇▇▇▇▇ ▇▇▇▇ 12,500 2.60 249.68 5,451 5.95 249.68
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 150,000 2.30 47,937.60 65,415 5.27 47,937.60
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 3,010 0.83 5,370.88 1,313 1.91 5,370.88
▇▇▇▇▇ ▇▇▇▇▇▇▇ 180 0.67 351.14 78 1.53 351.14
▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,657 0.63 9,239.88 2,031 1.45 9,239.88
▇▇▇▇▇ ▇▇▇▇▇▇▇ 7,040 0.83 12,561.78 3,070 1.91 12,561.78
▇▇▇▇▇▇ ▇▇▇▇▇▇ 18,000 0.70 34,515.07 7,850 1.60 34,515.07
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,450 0.83 2,587.30 632 1.91 2,587.30
▇▇▇▇▇▇ ▇▇▇▇▇▇ 18,000 0.43 39,308.83 7,850 0.99 39,308.83
▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,670 0.83 6,548.54 1,600 1.91 6,548.54
▇▇▇▇▇ ▇▇▇▇ 21,175 0.40 46,947.39 9,234 0.92 46,947.39
▇▇▇▇▇ ▇▇▇▇ 54,701 0.40 121,278.35 23,855 0.92 121,278.35
▇▇▇▇▇ ▇▇▇▇ 64,740 0.43 141,380.77 28,233 0.99 141,380.77
▇▇▇▇▇ ▇▇▇▇ 11,290 0.83 20,145.24 4,924 1.91 20,145.24
▇▇▇▇▇▇▇ ▇▇▇▇▇ 730 0.83 1,302.57 318 1.91 1,302.57
▇▇▇▇▇▇ ▇▇▇▇▇ 8,638 0.63 17,138.52 3,767 1.45 17,138.52
▇▇▇▇▇▇ ▇▇▇▇▇ 2,978 0.40 6,602.57 1,299 0.92 6,602.57
▇▇▇▇▇▇ ▇▇▇▇▇ 9,027 0.40 20,013.89 3,937 0.92 20,013.89
▇▇▇▇▇▇ ▇▇▇▇▇ 11,890 0.43 25,965.67 5,185 0.99 25,965.67
▇▇▇▇▇▇ ▇▇▇▇ 18,000 0.42 39,548.52 7,850 0.96 39,548.52
▇▇▇▇▇▇ ▇▇▇▇ 895 0.63 1,775.76 390 1.45 1,775.76
▇▇▇▇▇▇ ▇▇▇▇ 2,529 0.40 5,607.08 1,103 0.92 5,607.08
▇▇▇▇▇▇ ▇▇▇▇ 7,188 0.40 15,936.62 3,135 0.92 15,936.62
▇▇▇▇▇▇ ▇▇▇▇ 12,590 0.43 27,494.34 5,490 0.99 27,494.34
▇▇▇▇▇▇ ▇▇▇▇ 5,340 0.83 9,528.40 2,329 1.91 9,528.40
Power ▇▇▇▇▇▇ 2,405 0.83 4,291.35 1,049 1.91 4,291.35
▇▇▇▇▇ ▇▇▇▇▇ 14,300 0.40 31,704.73 6,236 0.92 31,704.73
▇▇▇▇▇ ▇▇▇▇▇ 30,784 0.40 68,251.64 13,425 0.92 68,251.64
▇▇▇▇▇ ▇▇▇▇▇ 40,350 0.43 88,117.30 17,597 0.99 88,117.30
▇▇▇▇▇ ▇▇▇▇▇ 6,920 0.83 12,347.66 3,018 1.91 12,347.66
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 4,376 0.63 8,682.35 1,908 1.45 8,682.35
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 9,880 0.83 17,629.32 4,309 1.91 17,629.32
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ 19,271 0.43 42,084.47 8,404 0.99 42,084.47
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ 5,550 0.83 9,903.11 2,420 1.91 9,903.11
----------- ----------- ----------- -----------
TOTAL 585,969 $945,765.32 255,540 $945,765.32
=========== =========== =========== ===========
SCHEDULE "B"
INTELLECTUAL PROPERTY
---------------------
Patent.xls
P&E NO. TITLE OF PATENT DESIGNATION DATE STATUS OTHER
8133-0003-002 LUCIFER YELLOW GLYK 20010 UK ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ LUCIFER YELLOW PCT ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ LUCIFER YELLOW GLYK 20010 US ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS 2D UK/EPO ISSUED EP 0494178
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS Germany/EPO ISSUED EP 0494178
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS France/EPO ISSUED EP 0494178
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS 2D JPN ABANDONED 2-512920/1990
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS 2D EPC ISSUED EP 0494178 90913718.4
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS PCT GB90-01448 In Net Stage WO91/05256
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS GLYK 20030 ISSUED US 5,340,453
▇▇▇▇-▇▇▇▇-▇▇▇ FACE DIAGNOSIS JPN 6-May-92 FILED JPN 4-512002
▇▇▇▇-▇▇▇▇-▇▇▇ FACE DIAGNOSIS EPC In Regional Phase 92912616.7
▇▇▇▇-▇▇▇▇-▇▇▇ FACE DIAGNOSIS PCT PCT US92-03740 WO92/19975
8133-0006-999 FACE DIAGNOSIS GLYK 20060 584 ISSUED 5,205,917
▇▇▇▇-▇▇▇▇-▇▇▇ FACE DIAGNOSIS KIT CIP OF 584 27-Mar-91 08/052,785
▇▇▇▇-▇▇▇▇-▇▇▇ FACE DIAGNOSIS 2AA CIP OF 785 ISSUED US 5,472,582 80.089.694
▇▇▇▇-▇▇▇▇-▇▇▇ FADA US 30-Aug-91 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ FADA PCT 28-Aug-92 ABANDONED WO9305076
▇▇▇▇-▇▇▇▇-▇▇▇ FADA CIP OF 196 31-Aug-92 07,938,832
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS-BLOTTING (AS) GBR 27-Sep-89 ABANDONED 89/21818.4
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS-BLOTTING (AS) JPN 26-Mar-92 JPN 2-513143, Abandon PUB #5-503146
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS-BLOTTING (AS) EPC 20-Sep-90 To Abandon 90914072.5
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS-BLOTTING (AS) PCT 20-Sep-90 PCT/UB90/01449 WO91/105265
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS-BLOTTING (AS) GLYK 20080 27-Sep-89 ISSUED US 5.316,638 FILED 90914072.5
▇▇▇▇-▇▇▇▇-▇▇▇ FACE TDM EPC 20-Nov-92 92-925368.0. abandoned EP 0641438
▇▇▇▇-▇▇▇▇-▇▇▇ FACE TDM PCT 20-Nov-92 To Abandon PCT/US92/10061
▇▇▇▇-▇▇▇▇-▇▇▇ FACE TDM US 21-Nov-91 726 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ FACE CLONING ASSAY GLYK 20130 27-Mar-91 ISSUED US 5,258,295
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS 2D GLYCOMED PCT 21-Nov-90 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS 2D GLYCOMED GLYK 20150 16-Feb-90 ISSUED US 4,975,165
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS 2D GLYCOMED ISSUED US 3,094,740
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS BLOTTING (GLYCOMED) EPC 21-Nov-90 ABANDONED 91/901355.7
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS BLOTTING (GLYCOMED) PCT 21-Nov-90 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS BLOTTING (GLYCOMED) GLYK 20160 16-Feb-90 ISSUED US 5,019,231
8133-0017-999 ANTS BLOTTING (GLYCOMED) 27-Sep-90 ISSUED US 5,094,731 431 CIP
▇▇▇▇-▇▇▇▇-▇▇▇ ANSA TAG (GLYCOMED) PCT 16-Feb-90 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ ANSA TAG (GLYCOMED) US ISSUED US 5,035,786 043 CIP
▇▇▇▇-▇▇▇▇-▇▇▇ ANSA TAG (GLYCOMED) CIP 043 31-Aug-92 ISSUED US 5,087,337 441 CIP
▇▇▇▇-▇▇▇▇-▇▇▇ FACE SYNTHESIS PCT 5-Oct-93 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ FACE SYNTHESIS GLYK 201NG 30-Oct-92 ISSUED US 5,308,460
▇▇▇▇-▇▇▇▇-▇▇▇ CARBOHYDRATE SEQUENCING GBR ▇▇▇▇▇▇▇▇▇ ISSUED GB2215836
▇▇▇▇-▇▇▇▇-▇▇▇ CARBOHYDRATE SEQUENCING JPN To Be Abandoned JP 505094/1988
▇▇▇▇-▇▇▇▇-▇▇▇ CARBOHYDRATE SEQUENCING EPC 20-Jun-88 ABANDONED EP 88905402.9
▇▇▇▇-▇▇▇▇-▇▇▇ CARBOHYDRATE SEQUENCING PCT 20JUN88 PCT ▇▇▇▇▇▇▇▇▇ WO ??/10422
▇▇▇▇-▇▇▇▇-▇▇▇ CARBOHYDRATE SEQUENCING GLYK 20200 14-Feb-89 ISSUED US 5,104,508
▇▇▇▇-▇▇▇▇-▇▇▇ CCD DETECTION GBR GB 8513538 ISSUED UK 2,175,690 JP 124625/1986
▇▇▇▇-▇▇▇▇-▇▇▇ CCD DETECTION EPC ISSUED EP 0.214,713 22.175.690
▇▇▇▇-▇▇▇▇-▇▇▇ CCD DETECTION 6-Jun-88 ISSUED US 4,874,492
▇▇▇▇-▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ COMP TRAINING EPC 21-Mar-95 To Abandon 94915861.2
Page 1
Patent.xls
▇▇▇▇-▇▇▇▇-▇▇▇ METHODS COMP TREATING PCT 23-Apr-93 pctus9404464 wo94/25061
8133-0023-999 METHODS COMP TREATING US CIP OF 782U 23-Apr-93 ABANDONED US052,782
▇▇▇▇-▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ GELS PCT 9-Sep-94 ABANDONED WO 95-07458 G UK
▇▇▇▇-▇▇▇▇-▇▇▇ PRECAST GELS US 9-Sep-93 ISSUED US 5,718,508
▇▇▇▇-▇▇▇▇-▇▇▇ AFFINITY-BASED-ASSAY US FILED 1/28/93 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇ US CIP ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ FACE(TM) GBR SER # 1.461.597
▇▇▇▇-▇▇▇▇-▇▇▇ FACE(TM) GER 24-Feb-92 SER # 2009970
▇▇▇▇-▇▇▇▇-▇▇▇ FACE(TM) FR 4-Nov-91 SER # 1,662,472
▇▇▇▇-▇▇▇▇-▇▇▇ FACE(TM) JPN 23-Apr-91 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ FACE(TM) US 22-Dec-92 SER # 1,742,047
▇▇▇▇-▇▇▇▇-▇▇▇ GILYKO INC(TM) GBR 28-May-92 SER # 1,429,250
▇▇▇▇-▇▇▇▇-▇▇▇ GILYKO(TM) GBR 24-Jun-94 SER # 1,429,251
▇▇▇▇-▇▇▇▇-▇▇▇ GILYKO(TM) JPN 3-41441 Rejected
▇▇▇▇-▇▇▇▇-▇▇▇ COMPUTER CODE (C) US COPYRIGHTED
▇▇▇▇-▇▇▇▇-▇▇▇ LUCIFER YELLOW Jpn ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ LUCIFER YELLOW EPC ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ LUCIFER YELLOW PCI ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ 2-AMINOACRIDONE (COMBO) GBR ISSUED ▇▇▇▇▇▇▇▇▇ GB 91/27091.8
▇▇▇▇-▇▇▇▇-▇▇▇ 2-AMINOACRIDONE (COMBO) JPN 24-Aug-92 ABANDONED JPN not 8:24:92
▇▇▇▇-▇▇▇▇-▇▇▇ 2-AMINOACRIDONE (COMBO) EPC 19-Dec-91 ABANDONED 92907009.2
▇▇▇▇-▇▇▇▇-▇▇▇ 2-AMINOACRIDONE (COMBO) PCT 19-Dec-91 PCT us9109727 WO 92/11531 aband
▇▇▇▇-▇▇▇▇-▇▇▇ 2-AMINOACRIDONE 2-DEPHOR GBR 9104412.3 ABANDONED
P&E NO. TITLE OF PATENT DESIGNATION DATE STATUS OTHER
▇▇▇▇-▇▇▇▇-▇▇▇ ANTS-QUENCHING GLYK 20140 26-Jun-90 ABANDONED
▇▇▇▇-▇▇▇▇-▇▇▇ CCD IMAGER GLYK 20240 14-Sep-94 Abandon for 0054 06/306,068
▇▇▇▇-▇▇▇▇-▇▇▇ FACE TDM US FWC7726 16-Jun-94 623 Abandoned
▇▇▇▇-▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ 18-Aug-94 ISSUED US5591839
▇▇▇▇-▇▇▇▇-▇▇▇ FACE DIAGNOSIS FACE DX CZE 7-Oct-94 06/320,282 Abandoned 1/17/96
▇▇▇▇-▇▇▇▇-▇▇▇ METHODS-COMP TREATING US FWC of 782 ABANDONED 06/406,414
▇▇▇▇-▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ GELS cip of 957 file024 ISSUED US5660702
▇▇▇▇-▇▇▇▇-▇▇▇ FACE TDM CIP of 623 file045 17-Aug-95 ABANDONED 08/516,120
▇▇▇▇-▇▇▇▇-▇▇▇ CCD IMAGER CIP of 068 6-Mar-96 ISSUED US5672881 08/612,195
▇▇▇▇-▇▇▇▇-▇▇▇ CS Marker US 13-Sep-98 D6713,403 ALLOWED
▇▇▇▇-▇▇▇▇-▇▇▇
Page 2
SCHEDULE "C"
VENDOR'S DISCLOSURE SCHEDULE
----------------------------
3. Representations and Warranties of the Vendor
-----------------------------------------------
Disclosure Schedule
Schedule C
Exceptions
3. (c) (iii) Physical separation of a laboratory, previously shared by
Glyko, Inc. and BioMarin, has made continued sharing of equipment
unfeasible. Glyko, Inc. will spend up to $100,000 to replace certain
shared equipment. The only single item above $25,000 (at $55,000) is a
Pharmacia AKTA System for the; separation and purification of
proteins.
3. (c) (xv) Oxford GlycoSystems has notified Glyko, Inc. that it believes
Glyko, Inc. is infringing on a patent for a recombinant method of
manufacture of PNGase F. Glyko, Inc. believes that the patent is not
enforceable and, in any case, can manufacture the enzyme by
alternative means. Glyko, Inc. has not yet decided on the best course
of action to respond to this infringement claim.
3. (g) (i) In the ordinary course of business, Glyko, Inc. uses offer
letters, which outline certain terms and conditions of employment, to
extend employment offers to potential new employees and requires new
employees to sign confidentiality agreements. Glyko, Inc. provides an
employee benefits plan which includes radical and dental insurance
along with other benefits. Glyko, Inc. believes its benefits plans are
competitive with other plans for companies of similar size and
situation. Glyko, Inc. used the Glyko Biomedical, Ltd. option plan.
Glyko, Inc. sponsors a 401 (k) plan. Glyko, Inc. currently has one
active consultant, ▇▇▇▇▇ ▇▇▇▇▇▇▇, who writes software to improve the
diagnosis of certain lysosomal storage diseases. In addition, Glyko,
Inc. has a consultant, ▇▇▇▇▇ ▇▇▇▇▇▇, who is part time and
intermittent, for various laboratory services. Glyko, Inc. uses ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (dba Axon Consulting) from time to time for business
relationships in Japan and ▇▇▇▇▇▇ ▇▇▇▇▇▇ for various scientific
consulting.
3. (g) (iii) Glyko, Inc. has the required employee fidelity bond for the
401 (k) plan.
3. (g) (iv) Glyko, Inc. leases the ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ building and
subleases part of the building to two other parties, including
BioMarin.
3. (g) (v) Glyko, Inc. has an exclusive distribution agreement with
Toyobo as to a defined Territory (Japan).
3. (g) (vi) See 3. (c) (iii) above.
3. (g) (viii) Glyko, Inc. has provided a letter of credit in lieu of a
deposit for the ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ lease.
1
3. Representations and Warranties of the Vendor
-----------------------------------------------
Disclosure Schedule
Schedule C
Exceptions
3. (g) (ix) In the ordinary course of business, Glyko, Inc. incurs accounts
payable which are currently in line with its prior experience. Accounts
payable, which include payables for services and materials, were $43,424 at
June 30, 1998.
3. (g) (xi) In the ordinary course of business, Glyko, Inc. has distribution and
supply, agreements with Toyobo, Bio-Rad, ▇▇▇▇▇▇▇, CN Bioscience, Sigma,
Seikagaku America, Dextra, Gradipore, Amersham Pharmacia Biotech, and Control
Technico Y. It also has letter agreements for non-exclusive distribution with
Analytik und Biotechnologie, MC Medical, Finnzymes, Van Der ▇▇▇▇▇▇, Top Bio
Co. It has a development agreement with Array Medical. It has a service
contract with Vascular Therapeutics.
3. (g) (xii) See 3. (g) (xi) above.
3. (1) (ii) Glyko, Inc. will continue to pay royalties to Stanford University
for products made under its license to certain Stanford patents until
approximately year-end 1998. Glyko, Inc. licensed certain know-how (and any
new joint technology developed) as part of its License and Development
Agreement with Array Medical, Inc. It has licensed certain imager, FACE, and
kit technology on a non-exclusive basis to Bio-Rad.
3. (1) (x) See 3. (1) (ii) and 3. (g) (xi) above.
3. (m) See 3. (c) (xv) above.
2
SCHEDULE "D"
GLYKO, INC.'S FINANCIALS
------------------------
GLYKO, INC.
BALANCE SHEETS
(unaudited, in U.S. dollars)
June 30, December 31,
1998 1997
------------ --------------
Assets
Current assets:
Cash $ 719,980 $ 528,280
Trade receivables 99,674 141,743
Due from related parties 83,318 86,425
Inventories 74,365 95,210
Other current assets 25,681 15,179
------------ --------------
Total current assets 1,003,018 866,837
Property, plant and equipment, net 102,157 118,910
------------ --------------
Other assets 2,205 2,205
Total assets $ 1,107,380 $ 987,952
============= ==============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 43,424 $ 20,380
Accrued liabilities 84,309 86,979
Deferred rent 14,077 10,675
Deferred revenue 4,575 7,418
Due to related parties, current maturities 582,275 526,858
------------- --------------
Total current liabilities 728,660 652,310
Due to related parties, less current maturities 3,651,979 3,651,979
------------- --------------
Total liabilities 4,380,639 4,304,289
Stockholders' deficit:
Common stock, no par value, unlimited shares
authorized, 5,882 and 5,882 shares
issued and outstanding at June 30, 1998 and
December 31, 1997, respectively 3,581,572 3,581,572
Additional Paid In Capital 5,417,491 5,417,491
Accumulated deficit (12,272,322) (12,315,400)
------------- --------------
Total stockholders' deficit (3,273,259) (3,316,337)
------------- --------------
Total liabilities and stockholders' deficit $ 1,107,380 $ 987,952
============= ==============
The accompanying notes are an integral part of these statements.
GLYKO, INC.
STATEMENTS OF OPERATIONS
(unaudited, in U.S. dollars)
Six months ended June 30,
------------------------------------------
1998 1997
------------------ -----------------
Revenues:
Sales of products and services $ 541,152 $ 517,280
Other revenues 204,345 628,135
------------------ -----------------
Total revenues: 745,497 1,145,415
Expenses:
Cost of products and services 179,890 259,175
Research and development 346,377 338,844
Selling, general and administrative 359,040 353,520
Other (165,880) -
------------------ -----------------
Total expenses: 719,427 951,539
------------------ -----------------
Income from operations 26,070 193,876
Interest income 17,008 5,110
Other income - 14,097
------------------ -----------------
Net income $ 43,078 $ 213,083
================== =================
Net income per common share, basic and diluted $ 7.32 $ 36.23
================== =================
Weighted average number of shares
used in computing per share amounts 5,882 5,882
================== =================
The accompanying notes are an integral part of these statements.
F.4
GLYKO, INC.
STATEMENTS OF CASH FLOWS
(unaudited, in U.S. dollars)
Six months ended June 30,
------------------------------------------
1998 1997
------------------ -----------------
Cash flows from operating activities:
Net income $ 43,078 $ 213,083
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 23,702 28,471
Gain on settlement of claim (165,880)
Change in assets and liabilities:
Trade receivables 42,069 3,432
Inventories 20,846 (7,341)
Due from related parties 3,107 86,549
Other assets (10,502) (10,361)
Accounts payable 23,044 (93,417)
Accrued liabilities (2,670) (104,550)
Payable to related parties 221,296 158,446
Deferred revenue (6,100) -
Deferred rent and related costs 6,659 -
------------------ -----------------
Total adjustments 155,571 61,229
------------------ -----------------
Net cash provided by operating activities 198,649 274,312
Cash flows from investing activities:
Purchases of property and equipment (6,949) (66,906)
------------------ -----------------
Net cash used in investing activities (6,949) (66,906)
------------------ -----------------
Net increase (decrease) in cash 191,700 207,406
Cash and cash equivalents, beginning of period 528,280 210,992
------------------ -----------------
Cash and cash equivalents, end of period $ 719,980 $ 418,398
================== =================
The accompanying notes are an integral part of these statements.
F.6
SCHEDULE "E"
AMENDED AND RESTATED
--------------------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT is entered into as
of September ,1998, by and among BIOMARIN PHARMACEUTICAL INC., a Delaware
corporation (the "Corporation"), and the individuals and entities listed on
Schedule A hereto (the "Holders").
RECITALS:
In connection with the sale and issue of the shares of Common Stock, the
Corporation and certain Holders entered into a Registration Rights Agreement,
some of which are dated October 1, 1997, and others of which are dated October
16, 1997 (the "Original Rights Agreement"), pursuant to which the Corporation
granted certain registration and information rights such Holders.
This Amended and Restated Registration Rights Agreement, which amends and
restates the Original Rights Agreement in its entirety, has been previously
entered into in connection with the sale and issuance of shares of Common Stock
to other investors who purchased shares of Common Stock pursuant to Subscription
Agreements (the "Subscription Agreements"), which sales closed on October 1,
1997, October 16, 1997, December 30, 1997, June 30, 1998, July 14, 1998, August
3, 1998 and September 4, 1998.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein the parties hereby agree as follows:
1. Definition. As used herein, the following terms shall have the following
------------
respective meanings:
(a) "Commission" shall mean the Securities and Exchange Commission or
----------
any other Federal agency at the time administering the Securities Act
(b) "Holders" shall mean and include any person or persons to whom
-------
Registrable Securities (as defined herein) were originally issued or qualifying
transferees under Section 10 hereof who hold Registrable Securities,
(c) The terms "register," "registered" and "registration" refer to a
---------- ------------
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
2
(d) "Registrable Securities" means: (i) shares of the Corporation's
----------------------
Common Stock issued pursuant to a Subscription Agreement, (ii) any Common Stock
of the Corporation issued as (or issuable upon the conversion or exercise of any
warrant, right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the shares
referred to in (i) above, excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which the rights under this
Agreement are not assigned, and (iii) shares of stock owned by parties as to
which the Corporation has granted registration rights pursuant to Section 12.
(e) "Registration Expenses" shall mean all expenses incurred by the
---------------------
Corporation in complying with Sections 2 and 3 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Corporation, reasonable
fees and disbursements of one counsel for all Holders, blue sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Corporation which shall be paid in any event by the Corporation).
(f) "Securities Act" shall mean the Securities Act of 1933, as
--------------
amended, or any similar federal statute and the roles and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(g) "Selling Expenses" shall mean all underwriting fees, discounts,
----------------
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and all fees and disbursements of counsel for any
Holder, other than the fees and disbursements for one counsel acting on behalf
of all Holders with respect to any registration effected pursuant to the terms
of Sections 2 or 3 hereof.
2. Registration Rights.
--------------------
A. Corporation Registration.
-------------------------
(a) Notice of Registration to Holders. If at any time or from time to
-----------------------------------
time, the Corporation shall determine to register any of its securities, either
for its own account or the account of a security holder or holders, other than:
(i) a registration relating solely to employee benefit plans, or (ii) a
registration relating solely to a Commission Rule 145 transaction, the
Corporation will:
(i) promptly give to each Holder written notice thereof, and
(ii) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within 15 days after receipt of such written notice from the
Corporation, by any Holder or Holders.
(b) Underwriting. If the registration of which the Corporation gives
--------------
notice is for a registered public offering involving an underwriting, the
Corporation shall so advise the Holders as a part of the written notice given
pursuant to Section 2(a)(i). In such event the right of any Holder to
registration pursuant to this Section 2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Corporation) enter into an underwriting agreement in,
3
customary form, with the underwriter selected for such underwriting by the
Corporation. Notwithstanding any other provision of this Section 2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The Corporation
shall so advise all Holders distributing their securities through such
underwriting, and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders requesting registration, in proportion, as nearly as practicable, to the
respective amounts of securities held by all such Holders entitled to inclusion
in such registration at the time of filing of the registration statement. No
securities other than Registrable Securities (other than those to be sold for
the account of the Corporation) may be included in such registration unless all
Registrable Securities requested for inclusion shall have first been included.
If any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Corporation and the
managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration, but if the registration
is the first offering by the Corporation to the general public of its securities
for its own account, then the securities so excluded or withdrawn shall not be
transferred in a public distribution prior to one hundred and eighty (180) days
after the effective date of the registration statement relating thereto.
B. Demand Registration.
--------------------
(a) If, at any time after the earlier off (x) December 1, 2000 or (y)
the date six (6) months after the effective date of the first registration
statement for a public offering of securities of the Corporation, the
Corporation should receive from a Holder or Holders ("Initiating Holders") a
written request that the Corporation effect a registration statement under the
Securities Act with respect to at least thirty percent (30%) of the outstanding
Registrable Securities, then the Corporation shall:
(i) within ten (10) days of the receipt thereof, give written
notice of such request to all Holders; and
(ii) use its best efforts to effect such registration as soon as
practicable and in any event to file within sixty (60) days of the receipt of
such request a registration statement under the Securities Act coveting all the
Registrable Securities that the Holders request in writing to be registered
within ten (10) days of receipt of the Corporation's written notice under clause
(i) and to use its best efforts to have such registration statement become
effective.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Corporation as a part of their request made pursuant to subsection
2B(a) and the Corporation shall include such information in the written notice
referred to in subsection 2B(a)(i). The underwriter will be selected by the
Corporation and shall be reasonably acceptable to a majority in interest of the
Initiating Holders. In such event, the right of any Holder to include
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall (together with the Corporation as
provided in subsection 5(e)) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting.
Notwithstanding any other provision of this Section 2B, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so
4
advise all Holders of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated among all Holders
thereof, including the Initiating Holders, in proportion (as nearly as
practicable) to the amount of Registrable Securities owned by each such Holder;
provided, however, that the number of shares of Registrable Securities to be
included in such underwriting shall not be reduced unless all other securities
are first entirely excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Corporation shall furnish to
the Initiating Holders a certificate signed by the Chairman or President of the
Corporation stating that, in the good faith judgment of the Board of Directors
of the Corporation, it would be seriously detrimental to the Corporation and its
shareholders for a registration statement to be filed on or before the date
filing would be required, and it is therefore essential to defer the filing of
such registration statement, the Corporation shall have the right to defer such
filing for a period of not more than one hundred twenty (120) days after receipt
of the request of the Initiating Holders; provided, however, that the
Corporation may not utilize this right more than once in any twelve-month
period.
(d) The Corporation shall not be obligated to effect, or to take any
action to effect, any registration pursuant to this Section 2B after the
Corporation has effected one registration on Form S-1 or a successor form
pursuant to this Section 2B and such registration statement has been declared or
ordered effective and the sales of Registrable Securities under such
registration statement have closed.
(e) No demand right under this Section 2B shall be construed to limit
any registration required under Section 2A or Section 3 hereof.
3. Registration on Form S-3.
-------------------------
(a) In addition to the rights set forth in Sections 2A and 2B, if
Holders request that the Corporation file a registration statement on Form S-3
(or any successor to Form S-3) for a public offering of shares of Registrable
Securities the reasonably anticipated aggregate price to the public of which
would equal at least $2,500,000 (the "S-3 Initiating Holders"), and the
Corporation is a registrant entitled to use Form S-3 to register such shares for
such an offering, the Corporation shall, within ten (10) days thereafter, give
written notice of the proposed registration, and any related qualification or
compliance, to all other Holders and shall use its best efforts to cause such
shares, together with all or such portion of the Registrable Securities of any
other Holder or Holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such written notice from
the Corporation, to be registered for the offering as soon as practicable on
Form S-3 (or any successor form to Form S-3). The Corporation shall include in
the registration statement a description of the manner of intended sale or
distribution requested by each such Holder. The number of shares of Registrable
Securities that may be included on the Form S-3 shall be allocated among all
Holders requesting registration in proportion to the respective amounts of
Registrable Securities entitled to inclusion in such registration at the time of
filing the registration statement.
(b) Notwithstanding the foregoing, the Corporation shall not be
obligated to take any action pursuant to this Section 3: (i) in any particular
jurisdiction in which the Corporation would be required to execute a general
consent to service of process in effecting such registration, qualification or
compliance unless the Corporation is already subject to service in such
jurisdiction and except as may be required by the Securities Act; (ii) if the
Corporation, within ten (10) days of the receipt of the request of the S-3
Initiating Holders, gives notice of its bona fide intention to effect
5
the filing of a registration statement with the Commission within ninety (90)
days of receipt of such request (other than with respect to a registration
statement relating to a Rule 145 transaction, an offering solely to employees,
or any other registration which is not appropriate for the registration of
Registrable Securities); or (iii) during the period starting with the date of
filing of, and ending on a date which is six (6) months following the effective
date of, a registration statement described in (ii) above, or filed pursuant to
this Section 3(b) or Section 2A or 2B hereof, provided that the Corporation is
actively employing in good faith all reasonable efforts to cause the
registration statement referred to in (ii) or (iii), respectively, to become
effective and provided, further, that no other person or entity could require
the Corporation to file a registration statement in such period.
(c) Subject to the foregoing clauses, the Corporation shall file a
registration statement on Form S-3 coveting the Registrable Securities so
requested to be registered as soon as practicable after receipt of the request
of the S-3 Initiating Holders; provided, however, that if the Corporation shall
furnish to such S-3 Initiating Holders a certificate signed by the Chairman or
President of the Corporation stating that in the good faith judgment of the
Board of Directors of the Corporation, it would be seriously detrimental to the
Corporation and its shareholders for such registration statement to be filed on
or before the date filing would be required, and it is therefore essential to
defer the filing of such registration statement, the Corporation shall have the
right to defer such filing for a period of not more than 120 days after receipt
of the request of the S-3 Initiating Holders provided that the Corporation may
not utilize this right more than once in any 12-month period.
(d) Underwriting.
-------------
If the S-3 Initiating Holders intend to distribute the
Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Corporation as a part of their request made pursuant to Section 3(a)
and the Corporation shall include such information in the written notice
referred to in that Section. In such event, the Corporation (together with all
S-3 Initiating Holders proposing to distribute their securities through such
underwriting) shall enter into an underwriting agreement in customary form with
the managing underwriter selected for such underwriting by a majority in
interest of the S-3 Initiating Holders requesting such underwriting.
4. Expenses of Registration. All Registration Expenses incurred in connection
--------------------------
with any registration, qualification or compliance pursuant to Sections 2A, 2B
or 3 hereof shall be borne by the Corporation. All Selling Expenses relating to
securities registered by the Holders shall be borne by the holders of such
securities pro rata on the basis of the number of shares so registered.
5. Registration Procedures. In the case of each registration, qualification or
-------------------------
compliance requested pursuant to this Agreement, the Corporation will keep each
Holder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. Whenever required
under this Agreement to use its best efforts to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible, prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective. In addition, at its expense, the Corporation
will:
(a) Keep such registration, qualification or compliance effective and
current for a period of ninety (90) days (or such longer period as may be
necessary to accommodate the filing of amendments or supplements necessary to
comply with the Securities Act) or until the Holder or
Holders have completed the distribution described in the registration statement
relating thereto, whichever first occurs; provided, however, that such 90-day
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration at the
request of an underwriter;
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;
(c) Furnish such number of prospectuses, in conformity with the
requirements of the Securities Act, and other documents incident thereto as a
Holder from time to time may reasonably request;
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Corporation shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdiction, unless the Corporation is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement; and
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto covered
by such registration statement is required to be delivered under the Securities
Act, of the occurrence of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and promptly prepare and file such supplements
and amendments thereto as may be required under Section 5(b) on account of such
event, and use its best efforts to cause each such supplement and amendment to
become effective.
6. Indemnification.
----------------
(a) The Corporation will indemnify each Holder, each of such Holder's officers
and directors and partners, and such Holder's legal counsel and independent
accountants, and each person controlling any such persons within the meaning of
Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claim
losses, damages and liabilities (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
threatened, provided such settlement is effected with the written consent of the
Corporation (which consent shall not be unreasonably withheld), arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto. incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the
7
statements therein, not misleading, or any violation by the Corporation of any
role or regulation promulgated under the Securities Act or any state securities
laws applicable to the Corporation and relating to action or inaction by the
Corporation in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers and
directors and partners and such Holder's legal counsel and independent
accountants, and each person controlling any such persons, each such underwriter
and each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that the
Corporation will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Corporation by such Holder or underwriter for inclusion in the respective
registration statement, prospectus or offering circular.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Corporation, each of its directors
and officers and its legal counsel and independent accountants, and each
underwriter, if any, of the Corporation's securities covered by such a
registration statement, each person who controls the Corporation or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers, directors, partners, legal counsel and
independent accountants and each person controlling such Holder within the
meaning of Section 15 of the Securities Act against all expenses, claims,
losses, damages and liabilities (or actions in respect thereof), including any
of the foregoing, incurred in settlement of any litigation, commenced or
threatened, provided such settlement is effected with the written consent of the
Holder (which consent shall not be unreasonably withheld), arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Corporation, such Holders, such directors, officers, partners, legal counsel,
independent accountants, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating, preparing
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular, other document, or amendment or
supplement thereto in reliance upon and in conformity with information furnished
to the Corporation by such Holder for inclusion in the respective registration
statement, prospectus or offering circular.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld). The Indemnified Party may participate in such defense at such party's
expense; provided, however, that the Indemnifying Party shall bear the expense
of such defense of the Indemnified Party if representation of both parties by
the same counsel would be inappropriate due to actual or potential conflicts of
interest. The failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Agreement, unless such failure is prejudicial to the ability of the Indemnifying
Party to defend the action. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the
8
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party a release from all
liability in respect of such claim or litigation.
7. Lockup Agreement In consideration for the Corporation agreeing its
----------------
obligations under this Agreement, each Holder agrees, in connection with the
first registration of the Corporation's securities, upon the request of the
Corporation or the underwriters managing the underwritten offering of the
Corporation's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Corporation or such underwriters, as the case may be, for such
period of time (not to exceed one hundred and eighty (180) days) from the
effective date of such registration as the Corporation or the underwriters may
specify; provided, however, that nothing herein shall prevent any Holder that is
a partnership from making a distribution of Registrable Securities to the
partners thereof that is otherwise in compliance with applicable securities
laws.
8. Information by Holder. The Holder or Holders of Registrable Securities
---------------------
included in any registration shall furnish in writing to the Corporation such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Corporation may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Agreement.
9. Rule 144 Reporting. With a view to making available the benefits of certain
------------------
roles and regulations of the Commission which may at any time permit the sale of
securities of the Corporation to the public without registration, after such
time as a public market exists for the Common Stock of the Corporation, the
Corporation agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration under the Securities Act filed by
the Corporation for an offering of its securities to the general public; and
(b) Use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Corporation under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (at any time after it has become subject to such reporting
requirements); and
(c) So long as a Holder owns any Registrable Securities, furnish to
the Holder forthwith upon request a written statement by the Corporation as to
its compliance with the reporting requirements of said Rule 144 (at any time
after ninety (90) days following the effective date of the first registration
statement filed by the Corporation for an offering of its securities to the
general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Corporation, and such other reports and
documents of the Corporation as a Holder may reasonably request in availing
itself of any role or regulation of the Commission allowing a Holder to sell any
such securities without registration.
10. Transfer of Registration Rights. The rights to cause the Corporation to
---------------------------------
register securities granted Holders under Section 3 hereof may be assigned by
any Holder of Registrable Securities to a transferee or assignee who following
such transfer holds at least fifty percent (50%) of the Registrable Securities
initially held by such Holder, provided that the Corporation receives prior
9
written notice of each such assignment. Notwithstanding the foregoing, rights to
cause the Corporation to register securities may be assigned in connection with
the transfer or assignment of Registrable Securities, without limitation, either
during the Holder's lifetime or upon death by will or intestacy to such Holder's
other ancestors, descendants or spouse, or any custodian or trustee for the
account of a Holder or a Holder's ancestors, descendants or spouse or to any
partner of a Holder, where such Holder is a partnership, or to any parent or
subsidiary corporation or any officer, director or principal shareholder
thereof, where such Holder is a corporation. All transferees and assignees of
Registrable Securities, as a condition to the transfer of Registrable
Securities, shall covenant to be bound by the agreement set forth in Section 7.
11. Termination of Registration Rights. Securities of the Corporation held by
------------------------------------
any Holder shall cease to be Registrable Securities at such time as such Holder
may sell such Securities under Rule 144, or a successor role, in any two
successive three-month periods.
12. Limitations on Registration Rights Granted To Other Securities. The parties
----------------------------------------------------------------
hereto agree that additional holders may be added as parties to this Agreement
with respect to any or all securities of the Corporation held by them; provided,
however, that from and after the date of this Agreement, the Corporation shall
not without the prior written consent of the Holders of sixty-six percent (66%)
of the Registrable Securities then outstanding, enter into any agreement with
any holder or prospective holder of any securities of the Corporation providing
for the grant to such holder of registration rights superior to those granted
herein. Any additional parties shall execute a counterpart of this Agreement,
and upon execution by such additional parties and by the Corporation, shall be
considered Holders for all purposes of this Agreement and Schedule "A" shall be
amended accordingly.
13. Miscellaneous.
--------------
(a) Waivers and Amendments. With the written consent of the
----------------------
Corporation and the holders of at least sixty-six percent (66%) in the aggregate
of Registrable Securities then outstanding, the obligations and rights of the
Corporation and the Holders under this Agreement may be waived (either generally
or in a particular instance, either retroactively or prospectively, and either
for a specified period of time or indefinitely) or amended; provided, however,
that no such waiver or amendment shall reduce the aforesaid portion of
Registrable Securities, the holders of which are required to consent to any
waiver or amendment, without the consent of all the Holders. Upon the
effectuation of each such waiver or amendment, the Corporation shall promptly
give written notice thereof to any Holders who have not previously consented to
such waiver in writing.
(b) Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of California as such laws are applied to contracts
made and to be fully performed entirely within that state between residents of
that state.
(c) Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, permitted assigns, heirs, executors and administrators of
the parties hereto.
(d) Entire Agreement. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties with regard to the subject
matter hereof.
(e) Notices. All notices and other communications required or
-------
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery; upon confirmed transmission by telecopy or telex; or
seven (7) days following deposit with the United
10
States Post Office, by certified mail, postage prepaid, addressed (i) if to a
Holder, to such Holder's address set forth in the Subscription Agreement, or to
such other address as such Holder shall have furnished to the Corporation in
writing, or (ii) if to the Corporation, to ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or to such other address as the Corporation shall have furnished to the
Holders in writing, with a copy to the Corporation's legal counsel, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇.
(f) Severability. In case any provision of this Agreement shall be
------------
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
(g) tles and Subtitles. The titles of the sections and subsections
----------------------
oft his Agreement are for convenience of reference only and are not 1;o be
considered in construing this Agreement.
(h) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
constitute one instrument.
14. Aggregation. Shares of capital stock of the Corporation owned by
-----------
partnerships and corporations having substantially common ownership interests or
managed by the same principals and owned by individual investors affiliated with
one another may be aggregated for the purposes of circulating the aggregate
percentage of capital stock of the Corporation owned by any Holder and any
permitted transferee hereunder.
The foregoing Agreement is hereby executed as of the date set forth above.
THE CORPORATION
BIOMARIN PHARMACEUTICAL INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Chief Executive Officer
--------------------------------------
GLYKO BIOMEDICAL LTD.
By: ▇▇▇▇ ▇. ▇▇▇▇▇,
-----------------------------------------
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇, President
11
SCHEDULE A
----------
HOLDERS
Name Number of Shares
Rued, Blass & Cie 750,000
▇▇▇▇▇▇ Asset Management S.A. 400,000
Banca del Gottardo 300,000
▇▇▇▇▇ Capital Ltd. 801,500
▇▇▇▇▇ Capital Ltd. (Warrants) 801,500
Falcon Corporate Investments Ltd. 250,000
Royal Bank of Canada Trust Company (Jersey) Limited 250,000
Swiss Bank Corporation 250,000
▇▇▇▇▇▇ Asset Management S.A. 200,000
▇▇▇▇▇ & Co. 200,000
▇▇▇▇▇▇ Girschweiler 180,000
Bank ▇▇▇▇▇▇▇ & Cie 150,000
▇▇▇▇▇▇ Asset Management S.A. 50,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 10,000
▇▇▇▇ ▇. Rochester and ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ 100,000
i
Name Number of Shares
The estate of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, 250,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executor
Grosvenor Fund, L.P. 400,000
BB Biovenmres, L.P. 5,000,000
▇▇▇▇▇▇ Asset Management S.A. 25,000
Glyko Biomedical Ltd. 166,667
Clariden Biotechnology Equity Fund 67,000
Royal Bank of Canada Trust Co. (Jersey) Ltd. Nomura 333,500
Ebti: ▇▇▇▇▇▇
▇▇▇▇▇ Capital Ltd. 28,018
Belmont Capital Ltd. 3,350
BB Bioventures L.P. 381,792
MPM Bioventures Parallel Fund, L.P. 30,083
MPM Asset Management Investors 1998 L.L.C. 4,792
▇▇▇▇▇▇ Asset Management SA 375,000
Actieninvest AG 20,000
20,000
30,000
10,000
Danske & Co. 333,500
ii
Name Number of Shares
Ciran Trading Ltd. 15,000
▇▇▇▇ ▇. ▇▇▇▇▇ 16,667
▇. ▇▇▇▇▇▇▇ Train 16,667
JDS Partners 34,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 16,667
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 16,667
▇▇▇▇▇ Capital Ltd. 41,079
Belmont Capital Ltd. 22,750
Wealth Management Services Ltd. 750
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 4,167
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,500
▇▇▇▇▇▇ ▇▇▇▇▇▇ 8,333
Liechtensteinische Landesbank AG 1,500
▇▇▇▇▇ Capital Ltd. 2,053
iii
Name Number of Shares
Fondation Limbau, Vaduz 8,833
Cambrian Holdings Limited ▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,000
Argentierre Holdings Ltd 1,500
Genzyme Corporation 1,666,667
Glyko Biomedical Ltd. 2,259,039
iv
SCHEDULE "F"
ACCREDITED INVESTOR QUESTIONNAIRE
---------------------------------
Glyko BioMedical Limited, as a purchaser of 2,250,424 shares of Common
Stock (the "Securities") of BIOMARIN PHARMACEUTICAL INC. (the "Company"), has
represented in its Agreement that it is an "accredited investor" as defined in
Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act"). As part of such representation, it has indicated
below the categories enumerated in Rule 501 (a) which it satisfies.
The undersigned understands that the Company is relying on this information
in determining to sell the Securities to the undersigned in a manner exempt from
the registration requirements of the Securities Act and applicable state
securities laws.
ACCREDITED INVESTOR STATUS
Glyko BioMedical Limited represents and warrants that it is [check each
applicable item]:
________________ (i) A bank, as defined in Section 3(a)(2) of
the Securities Act, or a savings and
loan association or other institution as
defined in Section 3(a)(5)(A) of the
Securities Act. whether acting in its
individual or fiduciary capacity.
________________ (ii) A broker or dealer registered pursuant
to Section 15 of the Securities Exchange
Act of 1934, as amended.
________________ (iii) An insurance company as defined In
Section 2(13) of the Securities Act.
1
________________ (iv) An investment company registered under
the Investment Company Act of 1940 (the
"1940 Act").
________________ (v) A business development company (as
defined in Section 2(a)(48) of the 1940
Act).
________________ (vi) A private business development company
(as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940).
________________ (vii) A Small Business Investment Company
licensed by the Small Business
Administration under Section 301 (c) or
(d) of the Small Business Investment
Act of 1958.
________________ (viii) An employee benefit plan within the
meaning of the Employee Retirement
Income Security Act of 1974 ("ERISA"),
if the investment decision is made by a
plan fiduciary as defined in Section
3(21) of ERISA, which is either a bank,
savings and loan association, insurance
company or registered investment
advisor, or if the employee benefit
plan has total assets in excess of
$5,000,000, or, if a self-directed
plan, with investment decisions made
solely by persons that are accredited
investors.
________________ (ix) Any plan for the benefit of employees
established and maintained by the U.S.
government, a state, its political
subdivisions, or any agency or
instrumentality of the U.S. government,
a state or its political subdivisions,
if such plan has total assets in excess
of $5,000,000.
________________ (x) An organization described in Section
501 (c)(3) of the Internal Revenue
Code, corporation, Massachusetts or
similar business trust, or partnership,
not formed for the specific purpose of
acquiring the Securities offered,
having total assets in excess of
$5,000,000.
2
________________ (xi) A director, executive officer or
general partner of the issuer of the
Securities, or any director, executive
officer, or general partner of a
general partner of the Company.
________________ (xii) A natural person whose individual net
worth, or joint net worth with that
person's spouse, at the time of his
purchase exceeds $1,000,000.
________________ (xiii) A natural person who had an individual
income in excess of $200,000 in each of
the two most recent years or a joint
income with that person's spouse in
excess of $300,000 in each of those
years, and has a reasonable expectation
of reaching the same income level in
the current year.
________________ (xiv) A trust, with total assets in excess of
$5,000,000, not formed for the specific
purpose of acquiring the Securities
offered hereby, whose purchase is
directed by a sophisticated person as
described in Rule 506(b)(2)(ii) of
Regulation D under the Securities Act.
________________ (xv) An entity in which all of the equity
owners are accredited investors.
________________ (xvi) A self-directed ▇▇▇, ▇▇▇▇▇, or similar
plan of which the individual directing
the investments qualifies as an
"accredited investor" under one or more
of items (a)-(o) above. Also check the
item(s) (a)-(o) above that applies.
As used in this questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose of
this questionnaire, the principal residence of the investor must be valued at
cost, including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, an investor should add to adjusted gross income any amount attributable
to tax exempt income received, losses claimed as a limited partner in any
limited partnership, deductions claimed for depletion,
3
contributions to an ▇▇▇ or ▇▇▇▇▇ retirement plan, alimony payments, add any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of
the ______day of September, 1998.
Name:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: ________________________
4
contributions to an ▇▇▇ or ▇▇▇▇▇ retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of
the _______ day of September, 1998.
BioMarin Pharmaceutical, Inc.
Name:
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Vice President Finance and Administration
------------------------------------------
5
SCHEDULE "G"
PURCHASER'S DISCLOSURE SCHEDULE
-------------------------------
SCHEDULE G
PURCHASER'S DISCLOSURE SCHEDULE
-------------------------------
4. REPRESENTATIONS AND WARRANTIES OF THE ,PURCHASER
------------------------------------------------
EXCEPTIONS
4. (b) BioMarin has multiple obligations which in the aggregate exceed
$50,000. These obligations are documented in the following list of
exceptions.
4. (c) (i) Although in the ordinary course of business, two notable events of
unusual size have happened since June 30, 1998. In July and August of 1998,
two portions of the second round of the private placement of common stock
were closed for a total of approximately $ 8.1 million. On September 4,
1998, BioMarin completed a joint venture agreement with Genzyme Corp. for
the development and commercialization of alpha-L-iduronidase. The Genzyme
transaction included an $8 million private placement in which Genzyme
purchased BioMarin common stock at $6.00 per share.
4. (c) (iii) BioMarin will make the following commitments:
Commitment to fund 50% of BioMarin/Genzyme LLC
Lease for ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ office space
Lease for ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ for warehouse and office space (to be
converted to manufacturing space)
Lease for ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ R&D shell space
Lease for ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ space for cGMP manufacturing and
office space
Commitment for development of Carson Sweet space for development of a
cGMP facility including related process equipment
Commitment for build-out (two phases) of office space in Bel Marin Keys
building
Commitment for modular laboratory installation in ▇▇▇▇▇ building
Commitment for development of manufacturing and process development
laboratory in ▇▇▇▇▇ building including related process equipment
Commitment for structural upgrades on shell of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Commitment for Company-wide telephone system
Commitment for Company-wide WAN-LAN computer network
License fee and other financial commitments to a medical institution
for certain intellectual property related to a genetic disease
Commitment to pay various legal and accounting fees and other expenses
related to corporate transaction, which is uncertain.
1
SCHEDULE G
PURCHASER'S DISCLOSURE SCHEDULE
-------------------------------
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
EXCEPTIONS
4. (c) (ix) Salaries for Denison, Klock, and Starr are adjusted in accordance
with a formula which is based on the BioMarin valuation. Such an adjustment
occurred as a result of the second common stock investment round completed in
August.
4. (c) (x) BioMarin entered into a joint venture with Genzyme in which certain
intellectual property, licensed from Harbor-UCLA RBI, was sublicensed to the
joint venture.
4. (c) (xii) BioMarin agreed as pan of this acquisition to provide loans to
certain employees of Glyko, Inc. (including officers of BioMarin) to
facilitate the exercise of certain stock options from the Glyko BioMedical
stock option plan.
4. (c) (xvi) BioMarin sold common stock in a private placement which had two
closings for a total of approximately $ 8.1 million in July and August.
BioMarin sold $8 million in common stock to Genzyme and is committed to sell
an additional $10 million in a private sale concurrent with the initial
public offering of BioMarin at the public offering price.
BioMarin, as part of this acquisition, will issue common stock of BioMarin to
holders of Glyko Biomedical stock options in lieu of such holders receiving
an equivalent number of Glyko Biomedical shares.
BioMarin has issued stock options to new employees as part of its ordinary
course of business.
4. (c) (xvii) See 4. (c) (x) and 4. (c) (iii) above in which BioMarin licensed
certain intellectual property for a genetic disease from a medical
institution.
4. (d) (i) In the ordinary course of business, BioMarin has employment contracts
for certain officers and uses offer letters for employees which define
certain terms and conditions of employment. BioMarin has employee benefit
plan's including medical, dental, life insurance and a 401(k) Plan. BioMarin
has consulting, (or similar) agreements with certain individuals/institutions
including: ▇▇. ▇▇▇▇ (Stanford University), Integrated Wound Management (▇▇.
▇▇▇▇▇▇), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ (a facilities construction consultant), ▇▇▇▇
▇▇▇▇ (a Regulatory/FDA, consultant), UC San Diego (▇▇. ▇▇▇▇▇▇▇▇▇▇▇), Brighams
and Womens Hospital, Boston Medical Center, M/T, The ▇▇▇▇▇▇▇ Group (marketing
and strategic consulting), ▇▇. ▇▇▇▇▇▇▇ (Washington State University), ▇▇.
▇▇▇▇▇▇ (MIT), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Axon Research), . Inveresk (Clinical
research/regulatory organization), Bradford Heedle (regulatory consultant),
Vanderbilt University and Harbor-UCLA Research and Educational
2
SCHEDULE G
----------
PURCHASER'S DISCLOSURE SCHEDULE
-------------------------------
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
EXCEPTIONS
Institute. BioMarin has a stock option plan for employees, consultants and
directors. BioMarin has multiple contracts with other business organizations
in the ordinary course of business.
4. (d) (ii) See 4. (c) (ix) above. Any increase in BioMarin valuation may
trigger an automatic increase in salary for three officers. This transaction
is not sufficient in itself to do so, but when combined with other
transactions may contribute to this salary increase.
4. (d) (iii) BioMarin carries employee fidelity insurance required for 401(k)
plan.
4. (d) (iv) See 4. (c) (ill) above.
4. (d) (v) BioMarin entered into a joint venture with Genzyme for MPS-1 which
limits BioMarin's ability to do any other therapeutic for NIPS-1 using alpha-
L-iduronidase.
4. (d) (vi) See 4. (c) (iii) above.
4. (d) (vii) Acquisition of Glyko, Inc. in this agreement. Joint venture with
Genzyme.
4. (d) (viii) Letter of credit in lieu of deposit for ▇▇▇▇▇ Drive.
4. (d) (ix) In the ordinary course of business, BioMarin purchases materials and
incurs accounts payable for the payment of such purchases. At June 30, 1998,
accounts payable for the purchase of materials and services totaled
$676,:578.
4. (d) (x) See 4. (c) (iii) above.
4. (d) (xi) The Genzyme joint venture is a joint development and
commercialization agreement.
4. (d) (xii) See 4. (d) (xi) above.
4. (d) (xiii) See 4. (c) (iii) above.
4. (i) There are two options for 35,000 shares pending which haw not been
approved, but are likely to be approved shortly after Closing of this
agreement.
3
SCHEDULE "H"
PURCHASER'S FINANCIALS
----------------------
2
BIOMARIN PHARMACEUTICAL, INC.
(a development-stage company)
BALANCE SHEETS
(in U.S. dollars)
June 30, December 31,
1998 1997
(unaudited) (audited)
------------- --------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,188,258 $ 5,987,433
Short-term investments 2,017,748 900,827
Due from Glyko, Inc. 5,772 9,135
Due from Glyko Biomedical, Ltd. 79,607 79,607
Other receivables 3,333,719 -
Prepaid expenses 903,726 539,445
Deposits 51,682 -
------------- ---------------
Total current assets 7,580,512 7,516,447
PROPERTY AND EQUIPMENT, net of accumulated depreciation
of $43,308 and $4,790 579,838 145,683
------------- ---------------
Total assets $ 8,160,350 $ 7,662,130
============= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 676,578 $ 168,062
Accrued expenses 33,476 43,395
Due to Glyko, Inc. 64,863 70,207
------------- ---------------
Total current liabilities 774,917 281,664
------------- ---------------
STOCKHOLDER EQUITY (DEFICIT):
Common stock, $0.001 par value: 30,000,000 shares authorized, 21,165,035 and
20,566,500 issued and outstanding at June 30, 1998 and December 31, 1997,
respectively 21,165 20,567
Additional paid-in capital 15,876,328 12,548,924
Warrants 128,240 128,240
Deferred compensation (178,290) (217,000)
Notes receivable from stockholders (2,451,210) (2,337,500)
Deficit accumulated during development stage (6,010,800) (2,762,765)
------------- ---------------
Total stockholders' equity 7,385,433 7,380,466
------------- ---------------
Total liabilities and stockholders' equity $ 8,160,350 $ 7,662,130
============= ===============
The accompanying notes are an integral part of these statements.
F.1
BIOMARIN PHARMACEUTICAL, INC.
(a development-stage company)
STATEMENTS OF OPERATIONS
(unaudited, in U.S. dollars)
Period from Period from
March 21, 1997 March 21, Period from
(inception), to 1997 Six months March 21, 1997
December 31, (inception), to ended June (inception), to
1997 June 30, 1997 30, 1998 June 30, 1998
----------------- ---------------- ---------------- ---------------
OPERATING COSTS AND EXPENSES:
Research and development $ 1,913,795 $ 917,873 $ 2,155,558 $ 4,069,353
General and administrative expenses 914,299 290,654 1,331,744 2,246,043
----------------- ---------------- -------------- --------------
Loss from operations (2,828,094) (1,208,527) (3,487,302) (6,315,396)
INTEREST INCOME 65,329 2,889 239,267 304,596
----------------- ---------------- -------------- ---------------
Net loss $ (2,762,765) $ (1,205,638) $ (3,248,035) $ (6,010,800)
----------------- ---------------- -------------- ---------------
NET LOSS PER SHARE, basic and diluted $ (0.34) $ (0.24) $ (0.16) $ (0.52)
================= ================ ============== ==============
WEIGHTED AVERAGE COMMON
SHARE OUTSTANDING 8,136,475 5,000,000 20,865,768 11,593,432
================= ================ ============== ==============
The accompanying notes are an integral part of these statements.
F.2
BIOMARIN PHARMACEUTICAL, INC.
(a development-stage company)
STATEMENT OF CASH FLOWS
(unaudited, in U.S. dollars)
Period from
Period from Period from March 21,
March 21, 1997 March 21, 1997 For the Six 1997
(inception), to (inception), to months Ended (inception),
December 31, June 30, June 30, June 30
1997 1997 1998 1998
------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,762,765) $ (1,205,638) $ (3,248,035) $ (6,010,800)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 4,790 461 38,517 43,307
Compensation in the form of common
stock and common stock options 18,020 - - 18,020
Changes in operating assets and liabilities:
Receivables from Glyko Biomedical, Ltd.
and Glyko, Inc. (88,742) (264,269) - (88,742)
Other receivables - - (2,354) (2,354)
Prepaid expenses (539,445) - (364,281) (903,726)
Deposits - - (51,682) (51,682)
Accounts payable 168,062 46,094 508,516 676,578
Accrued expenses 43,395 - (9,919) 33,476
Due to Glyko, Inc. 70,207 34,028 (5,344) 64,863
------------------------------------------------------------------------
Net cash used in operating activities (3,086,478) (1,389,324) (3,134,582) (6,221,060)
------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (150,473) (18,657) (472,672) (623,145)
Purchase of short-term investments (900,827) - (1,116,921) (2,017,748)
------------------------------------------------------------------------
Net cash used in investing activities (1,051,300) (18,657) (1,589,593) (2,640,893)
------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Bridge loan 880,000 - - 880,000
Accrued interest on notes receivable
from stockholders (37,500) - (75,000) (112,500)
Proceeds from sale of common stock,
net of issuance costs 9,282,711 1,500,000 - 9,282,711
------------------------------------------------------------------------
Net cash used in financing activities 10,125,211 1,500,000 (75,000) 10,050,211
------------------------------------------------------------------------
Net increase (decrease) in cash and 5,987,433 92,019 (4,799,175) 1,188,258
cash equivalents
CASH AND CASH EQUIVALENTS:
Beginning of period - - 5,987,433 -
------------------------------------------------------------------------
End of period $ 5,987,433 $ 92,019 $ 1,188,258 $ 1,188,258
========================================================================
The accompanying notes are an integral part of these statements.
F 4