EXHIBIT 10.6
BIOMARIN PHARMACEUTICAL INC.
AMENDED AND RESTATED FOUNDER'S STOCK PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made between Xxxxx X. Xxxxxxx Xx. (the
"Purchaser") and BIOMARIN PHARMACEUTICAL INC. (the "Company") as of October 1,
1997.
WHEREAS the Purchaser is an employee of the Company, and the Purchaser's
continued participation is considered by the Company to be important for the
Company's continued growth; and
WHEREAS the Company granted the Purchaser the right to purchase one million
three hundred thousand(1,300,000) shares of the Company's common stock (the
"Shares");
NOW THEREFORE, the parties agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser and
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the Purchaser hereby agrees to purchase the Shares at a price of $1.00 per Share
on the terms and conditions contained herein, for an aggregate purchase price of
$1,300,000.00.
2. Payment of Purchase Price. The aggregate purchase price for the
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Shares may be paid by delivery to the Company at the time of execution of this
Agreement of cash, a check, promissory note (in the form attached hereto as
Exhibit A), or some combination thereof.
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3. Repurchase Option and Sale Rights.
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(a) Company's Repurchase Option. In the event the Purchaser ceases to
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be an employee for any or no reason (including death or disability) before all
of the Shares are released from the Company's Repurchase Option (see Section 4),
the Company shall, upon the date of such termination (as reasonably fixed and
determined by the Company) have the right, but not the obligation (except as
provided in Section 3(b) below) (the "Repurchase Option"), for a period of sixty
(60) days from such date, to repurchase up to that number of shares which
constitute the Unreleased Shares (as defined in Section 4) at the original
purchase price per share, plus any interest paid to the Company by the Purchaser
with respect to the Shares (the "Repurchase Price"). The Repurchase Option shall
be exercised by the Company by delivering written notice to the Purchaser or the
Purchaser's executor (with a copy to the Escrow Holder) AND, at the Company's
option, (i) by delivering to the Purchaser or the Purchaser's executor a check
in the amount of the aggregate Repurchase Price, or (ii) by canceling an amount
of the Purchaser's indebtedness to the Company equal to the aggregate Repurchase
Price, or (iii) by a combination of (i) and (ii) so that the combined payment
and cancellation of indebtedness equals the -aggregate Repurchase Price. Upon
delivery of such notice and the payment of the aggregate Repurchase Price, the
Company shall become the legal and beneficial owner of the Shares being
repurchased and all rights and interests therein or relating thereto, and the
Company shall have the right to retain and transfer to its own name the number
of Shares being repurchased by the Company.
(b) Purchaser's Sale Rights. In the event the Purchaser's employment
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is terminated by the Company for any or no reason (including death or
disability), the Purchaser shall, upon the date of such termination (as
reasonably fixed and determined by the Company) have the right, but not the
obligation (the "Sale Right"), for a period of sixty (60) days from such date,
to sell to the Company, and the Company shall have the obligation to purchase
from the Purchaser, the Shares at the lower of the original purchase price per
share or the then current market value per share, plus any interest paid to the
Company by the Purchaser with respect to the Shares (the "Sale Price"). The Sale
Right may be exercised by the Purchaser by delivering written notice to the
Company (with a copy to the Escrow Holder). At the Company's option, it shall
pay the Sale Price to the Purchaser (i) by delivering to the Purchaser or the
Purchaser's executor a check in the amount of the aggregate Sale Price, or (ii)
by canceling an amount of the Purchaser's indebtedness to the Company equal to
the aggregate Sale Price, or (iii) by a combination of (i) and (ii) so that the
combined payment and cancellation of indebtedness equals the aggregate Sale
Price. Upon delivery of such notice and the payment of the aggregate Sale Price,
the Company shall become the legal and beneficial owner of the Shares being
purchased and all rights and interests therein or relating thereto, and the
Company shall have the right to retain and transfer to its own name the number
of Shares being purchased by the Company.
(c) Whenever the Company shall have the right or the obligation to
repurchase or purchase Shares hereunder, the Company may designate and assign
one or more employees, officers, directors or shareholders of the Company or
other persons or organizations to exercise all or a part of the Company's
purchase rights or obligations under this Agreement and purchase all or a part
of such Shares. If the fair market value of the Shares to be purchased on the
date of such designation or assignment (the "FMV") exceeds the aggregate
Repurchase Price or Sale Price, as the case may be, of such Shares, then each
such designee or assignee shall pay the Company cash equal to the difference
between the FMV and the aggregate Repurchase Price or Sale Price, as the case
may be, of such Shares.
4. Release of Shares From Repurchase Option.
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(a) Thirty-five percent (35%) of the Shares shall not be subject to
the Repurchase Option, fifteen percent (15%) of the Shares shall be released
from the Repurchase Option at the end of the first year of employment, and 1/24
of the remaining 50% of the Shares shall be released from the Repurchase Option
at the end of each month after one year from the date of grant, provided that
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the Purchaser does not cease to be an employee prior to the date of any such
release.
(b) Immediately prior to a Change of Control (as defined below),
fifty percent (50%) of the Shares that have not been released from the
Repurchase Option, as of such time, shall be released from the Repurchase
Option. The remaining Shares that have not yet been released from the Repurchase
Option shall be released from the Repurchase Option pursuant to Section 4(a).
For purposes of this Agreement, a "Change of Control" means the happening
of any of the following:
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(i) When any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than the Company, a subsidiary of the Company or a Company employee
benefit plan, including any trustee of such plan acting as trustee, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or
(ii) The effective date of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the shareholders of the Company approve an agreement for
the sale or disposition by the Company of all or substantially all the Company's
assets.
(c) Any of the Shares that have not yet been released from the
Repurchase Option are referred to herein as "Unreleased Shares."
(d) The Shares that have been released from the Repurchase Option
shall be delivered to the Purchaser at the Purchaser's request (see Section 6).
(e) Shares released from the Company's Repurchase Option remain
subject to the Company's Right of First Refusal described in Section 7.
5. Restriction on Transfer. Except for the escrow described in Section 6
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or the transfer of the Shares to the Company or its assignees contemplated by
this Agreement, none of the Shares or any beneficial interest therein shall be
transferred, encumbered or otherwise disposed of in any way until such Shares
are released from the Company's Repurchase Option in accordance with the
provisions of this Agreement, other than by will or the laws of descent and
distribution.
6. Escrow of Shares.
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(a) To ensure the availability for delivery of the Purchaser's
Unreleased Shares upon repurchase by the Company pursuant to the Repurchase
Option, the Purchaser shall, upon execution of this Agreement, deliver and
deposit with an escrow holder designated by the Company (the "Escrow Holder")
the share certificates representing the Unreleased Shares, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit B. The
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Unreleased Shares and stock assignment shall be held by the Escrow Holder,
pursuant to the Joint Escrow Instructions of the Company and Purchaser attached
hereto as Exhibit C, until such time as the Company's Repurchase Option expires.
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As a further condition to the Company's obligations under this Agreement, the
Company may require the spouse of
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Purchaser, if any, to execute and deliver to the Company the Consent of Spouse
attached hereto as Exhibit D.
(b) The Escrow Holder shall not be liable for any act it may do or
omit to do with respect to holding the Unreleased Shares in escrow while acting
in good faith and in the exercise of its judgment.
(c) If the Company or any assignee exercises the Repurchase Option
hereunder, the Escrow Holder, upon receipt of written notice of such exercise
from the proposed transferee, shall take all steps necessary to accomplish such
transfer.
(d) When the Repurchase Option has been exercised or expires
unexercised or a portion of the Shares has been released from the Repurchase
Option, upon request the Escrow Holder shall promptly cause a new certificate to
be issued for the released Shares and shall deliver the certificate to the
Company or the Purchaser, as the case may be.
(e) Subject to the terms hereof, the Purchaser shall have all the
rights of a stockholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and to
receive any cash dividends declared thereon. If, from time to time during the
term of the Repurchase Option, there is (i) any stock dividend, stock split or
other change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of the Purchaser's ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and included thereafter as
"Shares" for purposes of this Agreement and the Repurchase Option.
7. Company's Right of First Refusal. Before any Shares that are held by
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Purchaser or any transferee (either being sometimes referred to herein as the
"Holder") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignees(s) shall have a right of first
refusal to purchase the Shares (the "Right of First Refusal") on the terms and
conditions set forth below.
(a) Notice of Proposed Transfer. The Holder shall deliver to the
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Company a written notice (the "Notice") stating: (i) the Holder's bona fide
intention to sell or otherwise transfer such Shares; (ii) the name of each
proposed purchaser or other transferee (the "Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares
at the Offered Price to the Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty
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(30) days after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.
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(c) Purchase Price. The purchase price (the "Purchase Price") for the
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Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the
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option of the Company or its assignee(s), in cash, by check, by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of purchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(e) Holder's Right to Transfer. If all of the Shares proposed in the
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Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price or at a higher price, provided that such sale or other transfer is
consummated within one hundred twenty (120) days after the date of the Notice
and provided further that any such sale or other transfer is effected in
accordance with any applicable securities laws and the Proposed Transferee
agrees in writing that the provisions of this Agreement shall continue to apply
to the Shares in the hands of such Proposed Transferee. If the Shares described
in the Notice are not trans ferred to the Proposed Transferee within such
period, a new Notice shall be given to the Company, and the Company and/or its
assignees shall again be offered the Right of First Refusal before any Shares
held by the Holder may be sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the contrary
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contained in this Section notwithstanding, the transfer of any or all of the
Shares during the Purchaser's lifetime or on the Purchaser's death by will or
intestacy to the Purchaser's immediate family or a trust for the benefit of the
Purchaser's immediate family shall be exempt from the provisions of this
Section, provided that the Purchaser notifies the Company in writing within
thirty (30) days of said transfer. "Immediate Family" as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Agreement, and there shall be
no further transfer of such Shares except in accordance with the terms of this
Section.
(g) Termination of Right of First Refusal. The Right of First Refusal
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shall terminate as to any Shares upon the date of the first sale of common stock
of the Company to the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act").
8. Legends; Investment Intent.
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(a) The share certificate evidencing the Shares, if any, issued
hereunder shall be endorsed with the following legends, or legends substantially
equivalent thereto (in addition to any legend required under applicable state
securities laws):
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE ACT AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE
ACT OR, IN THE OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER, A
RIGHT OF REPURCHASE AND A RIGHT OF FIRST REFUSAL AS
SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND
THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.
(b) Market Standoff. Purchaser hereby agrees that, if so requested
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by the Company or any representative of the underwriters in connection with any
registration of the offering of any securities of the Company under the Act,
Purchaser shall not sell or otherwise transfer any Shares or other securities of
the Company during such period as the Company and the representatives of the
underwriters may request (not to exceed 180 days) following the effective date
of any registration statement of the company filed under the Act for an
underwritten public offering.
(c) Refusal to Transfer. The Company (i) shall not be required to
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transfer on its books, or may issue appropriate "stop transfer" instructions to
its transfer agents, if any, with respect to any Shares that have been sold or
otherwise transferred in violation of any of the provisions of this Agreement,
and (ii) the Company shall not be required to treat as owner of such Shares or
to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Shares shall have been so transferred.
(d) Investment Intent. Purchaser shall, if required by the Company,
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concurrently with the execution of this Agreement, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
F.
8. Adjustment for Stock Split. All references to the number of Shares
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and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
9. Tax Consequences. The Purchaser has reviewed with the Purchaser's own
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tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contem plated by this Agreement. The Purchaser
is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Purchaser understands that the
Purchaser
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(and not the Company) shall be responsible for the Purchaser's own tax liability
that may arise as a result of the transactions contemplated by this Agreement.
The Purchaser understands that Section 83 of the Internal Revenue Code of 1986,
as amended (the "Code"), taxes as ordinary income the difference between the
purchase price for the Shares and the Fair Market Value of the Shares as of the
date any restrictions on the Shares lapse. In this context, "restriction"
includes the right of the Company to buy back the Shares pursuant to the
Repurchase Option. The Purchaser understands that the Purchaser may elect to be
taxed at the time the Shares are purchased rather than when and as the
Repurchase Option expires by filing an election under Section 83(b) of the Code
with the IRS within 30 days from the date of purchase. The form for making this
election is attached as Exhibit E hereto.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF
THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON
THE PURCHASER'S BEHALF.
10. General Provisions.
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(a) Choice of Law; Entire Agreement. This Agreement shall be governed
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by the internal substantive laws, but not the choice of law rules, of
California. This Agreement represents the entire agreement between the parties
with respect to the purchase of the Shares by the Purchaser.
(b) Notices. Any notice, demand or request required or permitted to
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be given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth below or such
other address as a party may request by notifying the other in writing:
BIOMARIN PHARMACEUTICAL INC.
00 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Any notice to the Escrow Holder shall be sent to the Company's address
with a copy to the other party hereto.
(c) Successors. The rights of the Company under this Agreement shall
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be transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of the Purchaser
under this Agreement may only be assigned with the prior written consent of the
Company.
(d) Waiver. Either party's failure to enforce any provision of this
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Agreement shall not in any way be construed as a waiver of any such provision,
nor prevent that party from thereafter enforcing any other provision of this
Agreement. The rights granted both parties hereunder are
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cumulative and shall not constitute a waiver of either party's right to assert
any other legal remedy available to it.
(e) Further Documents. The Purchaser agrees upon request to execute
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any further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement, including (but not limited to) Exhibits A
through F to this Agreement.
(f) Severability. Should any provision of this Agreement be found to
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be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.
(g) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE
AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR PURCHASING
SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN EMPLOYEE FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND
SHALL NOT INTERFERE WITH PURCHASER'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
PURCHASER'S RELATIONSHIP AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT CAUSE.
By Purchaser's signature below, Purchaser represents that he or she is
familiar with the terms of this Agreement, and hereby accepts this Agreement
subject to all of the terms and provisions thereof. Purchaser has read this
Agreement in its entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Agreement and fully understands all provisions
of this Agreement. Purchaser agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions arising
under this Agreement. Purchaser further agrees to notify the Company upon any
change in the residence indicated in Section 11.
DATED: October 1, 1997
PURCHASER: BIOMARIN PHARMACEUTICAL INC.
/s/Xxxxx X. Xxxxxxx, Xx. /s/ Xxxx Xxxxx
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Xxxxx X. Xxxxxxx Xx. By: Xxxx Xxxxx, President,
Chief Financial Officer and Secretary
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EXHIBIT A
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NOTE
$1,300,000.00 Novato, California
October 1, 1997
FOR VALUE RECEIVED, Xxxxx X. Xxxxxxx Xx. promises to pay to BIOMARIN
PHARMACEUTICAL INC., a Delaware corporation (the "Company"), or order, the
principal sum of one million three hundred thousand dollars ($1,300,000.00),
together with interest on the unpaid principal hereof from the date hereof at
the rate of six percent (6%) per annum, compounded semiannually.
Principal and interest shall be due and payable on October 1, 2000.
Payment of principal and interest shall be made in lawful money of the United
States of America. Payment will be applied first towards unpaid interest and
then towards unpaid principal. The undersigned may at any time prepay all or
any portion of the principal or interest owing hereunder.
This Note is subject to the terms of the Founder's Stock Purchase
Agreement, dated as of October 1, 1997. This Note is secured in part by a
pledge of the Company's Common Stock under the terms of a Security Agreement of
even date herewith and is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the undersigned,
and shall not be required to proceed against the collateral securing this Note
in the event of default. The holder of this Note hereby waives presentment,
notice of non-payment, notice of dishonor, protest, demand and diligence.
In the event the undersigned shall cease to be an employee, director or
consultant of the Company for any reason, or the undersigned shall be in default
under the terms of the Security Agreement attached hereto as Exhibit A-1, this
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Note shall be automatically accelerated, and the whole unpaid balance on this
Note of principal and accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
____________________________
Xxxxx X. Xxxxxxx Xx.
EXHIBIT B
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SECURITY AGREEMENT
This Security Agreement is made as of October 1, 1997 between BIOMARIN
PHARMACEUTICAL INC., a Delaware corporation ("Pledgee"), and Xxxxx X. Xxxxxxx
Xx. ("Pledgor").
Recitals
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Pursuant to Pledgor's election to purchase shares under the Founder's Stock
Purchase Agreement dated October 1, 1997 (the "Purchase Agreement"), between
Pledgor and Pledgee, and Pledgor's election under the terms of the Purchase
Agreement to pay for such shares with his promissory note (the "Note"), Pledgor
has purchased 1,300,000 shares of Pledgee's Common Stock (the "Shares") at a
price of $1.00 per share, for a total purchase price of $1,300,000.00.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration of
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the transfer of the Shares to Pledgor under the Purchase Agreement, Pledgor,
pursuant to the California Commercial Code, hereby pledges all of such Shares
(herein sometimes referred to as the "Collateral") represented by certificate
number ______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Secretary of Pledgee ("Pledgeholder"),
who shall hold said certificate subject to the terms and conditions of this
Security Agreement.
The pledged stock (together with an executed blank stock assignment for use
in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Purchase
Agreement, and the Pledge holder shall not encumber or dispose of such Shares
except in accordance with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to enter
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into this Security Agreement, Pledgor represents and covenants to Pledgee, its
successors and assigns, as follows:
a. Payment of Indebtedness. Pledgor will pay the principal sum of
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the Note secured hereby, together with interest thereon, at the time and in the
manner provided in the Note.
b. Encumbrances. The Shares are free of all other encumbrances,
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defenses and liens, and Pledgor will not further encumber the Shares without the
prior written consent of Pledgee.
c. Margin Regulations. In the event that Pledgee's Common Stock is
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now or later becomes margin-listed by the Federal Reserve Board and Pledgee is
classified as a "lender" within the
meaning of the regulations under Part 207 of Title 12 of the Code of Federal
Regulations ("Regulation G"), Pledgor agrees to cooperate with Pledgee in making
any amendments to the Note or providing any additional collateral as may be
necessary to comply with such regulations.
3. Voting Rights. During the term of this pledge and so long as all
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payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. Stock Adjustments. In the event that during the term of the pledge
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any stock dividend, reclassification, readjustment or other changes are declared
or made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Security Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Pledgeholder shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this
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pledge, subscription options or other rights or options shall be issued in
connection with the pledged Shares, such rights and options shall be the
property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held under
the terms of this Security Agreement in the same manner as the Shares pledged.
6. Default. Pledgor shall be deemed to be in default of the Note and of
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this Security Agreement in the event:
a. Payment of principal or interest on the Note shall be delinquent
for a period of 10 days or more;
b. Pledgor fails to perform any of the covenants set forth in the
Purchase Agreement or contained in this Security Agreement for a period of 10
days after written notice thereof from Pledgee; or
c. Pledgor ceases to be an employee, director or consultant of the
Company.
In the case of an event of Default, as set forth above, the principal and
all accrued interest under the Note shall become immediately due and payable in
full. Pledgee shall thereafter be entitled to pursue its remedies under the
California Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules under
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Regulation G, there shall be released from this pledge a portion of the pledged
Shares held by Pledgeholder hereunder upon payments of the principal of the
Note. The number of the pledged Shares which shall be released shall be that
number of full Shares which bears the same proportion to the initial number of
Shares pledged hereunder as the payment of principal bears to the initial full
principal amount of the Note.
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8. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
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withdraw, pledge, substitute or otherwise dispose of all or any part of the
Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of the Shares shall continue until the
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payment of all indebtedness secured hereby, at which time the remaining pledged
stock shall be promptly delivered to Pledgor, subject to the provisions for
prior release of a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
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proceeding is instituted by or against it, or if a receiver is appointed for the
property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due and
payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
----------------------
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
-----------------------------------
the enforceability or invalidity of any provision or provisions of this Security
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
---------------------
terms of this Security Agreement shall be binding on their respective successors
and assigns, and that the term "Pledgor" and the term "Pledgee" as used herein
shall be deemed to include, for all purposes, the respective designees,
successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
-------------
governed under the internal substantive laws, but not the choice of law rules,
of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"PLEDGOR" ______________________________________
Signature
Xxxxx X. Xxxxxxx Xx.
Address: ______________________________________
______________________________________
"PLEDGEE" BIOMARIN PHARMACEUTICAL INC.,
a Delaware corporation
______________________________________
______________________________________
Xxxx Xxxxx
______________________________________
President, Chief Financial Officer and
Secretary
"PLEDGEHOLDER" ______________________________________
Secretary of
BIOMARIN PHARMACEUTICAL INC.
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, Xxxxx X. Xxxxxxx Xx., hereby sell, assign and
transfer unto __________________________________________________ (__________)
shares of the Common Stock of ____________________standing in my name of the
books of said corporation represented by Certificate No. _____ herewith and do
hereby irrevocably constitute and appoint
to transfer the said stock on the
---------------------------------
books of the within named corporation with full power of substitution in the
----------------------------------------------------------------------------
premises.
---------
This Stock Assignment may be used only in accordance with the Founders
Stock Purchase Agreement (the "Agreement") between________________________ and
the undersigned dated ______________, 19__.
Dated: _______________, 19__
Signature:______________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise the
Repurchase Option, as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
EXHIBIT C
---------
JOINT ESCROW INSTRUCTIONS
-------------------------
October 1, 1997
Corporate Secretary
BIOMARIN PHARMACEUTICAL INC.
00 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Dear Sir or Madam:
As Escrow Agent for both BIOMARIN PHARMACEUTICAL INC., a Delaware
corporation (the "Company"), and the undersigned purchaser of stock of the
Company (the "Purchaser"), you are hereby authorized and directed to hold the
documents delivered to you pursuant to the terms of that certain Founders Stock
Purchase Agreement ("Agreement") between the Company and the undersigned, in
accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company (referred
to collectively as the "Company") exercises the Company's Repurchase Option set
forth in the Agreement, the Company shall give to Purchaser and you a written
notice specifying the number of shares of stock to be purchased, the purchase
price, and the time for a closing hereunder at the principal office of the
Company. Purchaser and the Company hereby irrevocably authorize and direct you
to close the transac tion contemplated by such notice in accordance with the
terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's Repurchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's Repurchase Option has been exercised, you
shall deliver to Purchaser a certificate or
certificates representing so many shares of stock as are not then subject to the
Company's Repurchase Option. Within 90 days after Purchaser ceases to be an
employee, you shall deliver to Purchaser a certificate or certificates
representing the aggregate number of shares held or issued pursuant to the
Agreement and not purchased by the Company or its assignees pursuant to exercise
of the Company's Repurchase Option.
5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties.
You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in
good faith, and any act done or omitted by you pursuant to the advice of your
own attorneys shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In case you obey or comply with any such order, judgment or decree, you shall
not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if you
shall cease to be an officer or agent of the Company or if you shall resign by
written notice to each party. In the event of any such termination, the Company
shall appoint a successor Escrow Agent.
-2-
13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the securities held
by you hereunder, you are authorized and directed to retain in your possession
without liability to anyone all or any part of said securities until such
disputes shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.
COMPANY: BIOMARIN PHARMACEUTICAL INC.
00 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
PURCHASER:
____________________________
____________________________
ESCROW AGENT: Corporate Secretary
BIOMARIN PHARMACEUTICAL INC.
00 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
16. By signing these Joint Escrow Instructions, you become a party hereto
only for the purpose of said Joint Escrow Instructions; you do not become a
party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.
-3-
18. These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the internal substantive laws, but not the
choice of law rules, of California.
Very truly yours,
BIOMARIN PHARMACEUTICAL INC.
________________________________________________
Xxxx Xxxxx
President, Chief Financial Officer and Secretary
PURCHASER:
________________________________________________
Xxxxx X. Xxxxxxx Xx.
ESCROW AGENT:
__________________________
Corporate Secretary
-4-
EXHIBIT D
---------
CONSENT OF SPOUSE
-----------------
I, ____________________, spouse of ___________________, have read and
approve the foregoing Founders Stock Purchase Agreement (the "Agreement"). In
consideration of the Company's grant to my spouse of the right to purchase
shares of BIOMARIN PHARMACEUTICAL INC., as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws or similar laws
relating to marital property in effect in the state of our residence as of the
date of the signing of the foregoing Agreement.
Dated: _______________, 19____
__________________________________
Signature of Spouse
EXHIBIT E
---------
ELECTION UNDER SECTION 83(b)
----------------------------
OF THE INTERNAL REVENUE CODE OF 1986
------------------------------------
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income
for the current taxable year the amount of any compensation taxable to taxpayer
in connection with his or her receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME: TAXPAYER: SPOUSE:
ADDRESS:
IDENTIFICATION NO.: TAXPAYER: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described as
follows: _______ shares (the "Shares") of the Common Stock of BIOMARIN
PHARMACEUTICAL INC. (the "Company").
3. The date on which the property was transferred is: ______________, 1997.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, upon certain
events. This right lapses with regard to a portion of the Shares based on
the continued performance of services by the taxpayer over time.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is:
6. The amount (if any) paid for such property is:
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
--------------------------------------------------------------------------
except with the consent of the Commissioner.
-------------------------------------------
Dated: ___________________, 1997 ____________________________________________
Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: ___________________, 19__ ____________________________________________
Spouse of Taxpayer
EXHIBIT F
---------
INVESTMENT REPRESENTATION STATEMENT
PURCHASER : Xxxxx X. Xxxxxxx Xx.
COMPANY : BIOMARIN PHARMACEUTICAL INC.
SECURITY : COMMON STOCK
AMOUNT : $1,300,000.00
DATE : October 1, 1997
In connection with the purchase of the above-listed securities (the
"Securities"), the undersigned
Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Purchaser is
acquiring these Securities for investment for Purchaser's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Act").
(b) Purchaser acknowledges and understands that the Securities constitute
"restricted securities" under the Act and have not been registered under the Act
in reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of Purchaser's investment intent as
expressed herein. In this connection, Purchaser understands that, in the view of
the Securities and Exchange Commission, the statutory basis for such exemption
may be unavailable if Purchaser's representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one (1) year
or any other fixed period in the future. Purchaser further understands that the
Securities must be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is available. Purchaser
further acknowledges and understands that the Company is under no obligation to
register the Securities. Purchaser understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, a legend prohibiting
their transfer without the consent of the Commissioner of Corporations of the
State of California and any other legend required under applicable state
securities laws.
(c) Purchaser is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time the Securities are purchased by the Purchaser, the exercise will be exempt
from registration under the Act. In the event the Company becomes subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, ninety (90) days thereafter (or such longer period as any market stand-off
agreement may require) the Securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and, in the case of
an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three (3) month
period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time
the Securities are purchased by the Purchaser, then the Securities may be resold
in certain limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than two (2) years after the later of the
date the Securities were sold by the Company or the date the Securities were
sold by an affiliate of the Company, within the meaning of Rule 144; and, in the
case of acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than three years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(d) Purchaser hereby agrees that if so requested by the Company or any
representative of the underwriters in connection with any registration of the
offering of any securities of the Company under the Act, Purchaser shall not
sell or otherwise transfer any Shares or other securities of the Company during
the 180-day period following the effective date of a registration statement of
the Company filed under the Act; provided, however, that such restriction shall
only apply to the first registration statement of the Company to become
effective under the Act which include securities to be sold on behalf of the
Company to the public in an underwritten public offering under the Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180-day period.
(e) Purchaser further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rules 144 and 701 are not
exclusive, the Staff of the Securities and Exchange Commission has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk. Purchaser understands that no assurances can be given that any such other
registration exemption will be available in such event.
___________________________
Xxxxx X. Xxxxxxx Xx.
Date: October 1, 1997
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