Exhibit 10.1

EXECUTION VERSION

 

FORM OF

CONTINGENT VALUE RIGHTS AGREEMENT

BETWEEN

BIOMARIN PHARMACEUTICAL INC.,

BIOMARIN FALCONS B.V.

and

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

AS RIGHTS AGENT

Dated as of January 14, 2015

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TABLE OF CONTENTS

 

        Page   

ARTICLE 1            DEFINITIONS

     1   

Section 1.1

  

Definitions

     1   

ARTICLE 2            CONTINGENT VALUE RIGHTS

     4   

Section 2.1

  

Holders of CVRs; Appointment of Rights Agent

     4   

Section 2.2

  

Nontransferable

     5   

Section 2.3

  

No Certificate; Registration; Registration of Transfer; Change of Address

     5   

Section 2.4

  

Payment Procedures

     5   

Section 2.5

  

No Voting, Dividends or Interest; No Equity or Ownership Interest

     7   

Section 2.6

  

Ability to Abandon CVR

     7   

ARTICLE 3             THE RIGHTS AGENT

     8   

Section 3.1

  

Certain Duties and Responsibilities

     8   

Section 3.2

  

Certain Rights of Rights Agent

     8   

Section 3.3

  

Resignation and Removal; Appointment of Successor

     10   

Section 3.4

  

Acceptance of Appointment by Successor

     11   

ARTICLE 4             COVENANTS

     11   

Section 4.1

  

List of Holders

     11   

Section 4.2

  

Efforts

     11   

Section 4.3

  

Guarantee

     11   

Section 4.4

  

Fundamental Transactions

     12   

ARTICLE 5            AMENDMENTS

     12   

Section 5.1

  

Amendments Without Consent of Holders or Rights Agent

     12   

Section 5.2

  

Amendments with Consent of Holders

     13   

Section 5.3

  

Effect of Amendments

     13   

ARTICLE 6             MISCELLANEOUS

     13   

Section 6.1

  

Notices to Rights Agent, Parent and Buyer

     13   

Section 6.2

  

Notice to Holders

     14   

Section 6.3

  

Entire Agreement

     14   

Section 6.4

  

Successors and Assigns

     14   

Section 6.5

  

Benefits of Agreement; Action by Majority of Holders

     15   

 

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TABLE OF CONTENTS

(continued)

          Page  

Section 6.6

  

Governing Law

     15   

Section 6.7

  

Jurisdiction

     15   

Section 6.8

  

WAIVER OF JURY TRIAL

     16   

Section 6.9

  

Severability Clause

     16   

Section 6.10

  

Counterparts; Effectiveness

     16   

Section 6.11

  

Termination

     16   

Section 6.12

  

Force Majeure

     17   

Section 6.13

  

Construction

     17   

 

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FORM OF

CONTINGENT VALUE RIGHTS AGREEMENT

THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of January 14, 2015 (this
“Agreement”), is entered into by and between BioMarin Pharmaceutical Inc., a
Delaware corporation (“Parent”), BioMarin Falcons B.V., a private company with
limited liability organized under the laws of The Netherlands and a wholly owned
indirect subsidiary of Parent (“Buyer”), and American Stock Transfer & Trust
Company, LLC, a New York limited liability trust company, as Rights Agent.

PREAMBLE

WHEREAS, Prosensa Holding N.V., a public limited liability company (naamloze
vennootschap) organized under the laws of The Netherlands (the “Company”),
Parent, and Buyer, have entered into a Purchase Agreement, dated as of
November 23, 2014 (the “Purchase Agreement”), pursuant to which Buyer will
commence a tender offer to purchase any and all of the outstanding ordinary
shares, par value €0.01 per share of the Company (collectively, the “Shares”);

WHEREAS, pursuant to the Purchase Agreement, and in accordance with the terms
and conditions thereof, Buyer has agreed to provide, or to designate one of its
Affiliates to provide, Holders (as defined below) contingent value rights
representing the right to receive the Milestone Payments (as defined below)
contingent upon the achievement of the Milestones (as defined below) during the
Milestone Period (as defined below); and

WHEREAS, pursuant to this Agreement, the maximum potential amount payable per
CVR (as defined below) is $2.07, without interest.

NOW, THEREFORE, in consideration of the premises and the consummation of the
transactions referred to above, it is mutually covenanted and agreed, for the
proportionate benefit of all Holders, as follows:

ARTICLE 1

DEFINITIONS

Section 1.1        Definitions.

Capitalized terms used but not otherwise defined herein have the meanings
ascribed thereto in the Purchase Agreement. The following terms have the
meanings ascribed to them as follows:

“Assignee” has the meaning set forth in Section 6.4.

        “Carve-Out Transaction” means any transaction (including a sale of
assets, merger, sale of stock or other equity interests, or exclusive licensing
transaction), other than a Change of Control, pursuant to which any Intellectual
Property or Material Contracts necessary for the production, development or sale
of the Product held or owned by the Buyer or the Company, as applicable,
immediately after the Closing are, directly or indirectly sold, exclusively
licensed or otherwise transferred to or acquired by, directly or indirectly, a
Person other than Parent or any of its Subsidiaries.

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“Change of Control” means (a) a sale or other disposition of all or
substantially all of the assets of Parent on a consolidated basis (other than to
any Subsidiary (direct or indirect) of Parent and other than a transaction in
which the holders of the outstanding voting securities of Parent immediately
prior to such transaction(s) (taken in the aggregate) receive as a distribution
with respect to securities of Parent more than 50% of the total combined voting
power of all outstanding voting securities of the acquiring entity or a parent
or holding company of the acquiring entity immediately after such
transaction(s), or (b) a merger, consolidation, reorganization, recapitalization
or similar transaction involving Parent except where the holders of the
outstanding voting securities of Parent immediately prior to such merger or
consolidation (taken in the aggregate) possess beneficial ownership of 50% or
more of the total combined voting power of all outstanding voting securities of
Parent, the surviving entity, the acquiring entity or a parent or holding
company of the acquiring entity, immediately after such merger, consolidation,
reorganization, recapitalization or similar transaction.

“CVR” means the right of Holders to receive the Milestone Payments, pursuant to
the Purchase Agreement and this Agreement.

“CVR Register” has the meaning set forth in Section 2.3(b).

“Diligent Efforts” means carrying out those obligations and tasks that comprise
a level of effort and expenditure of resources that is consistent with
commercially reasonable practices normally and typically devoted by Parent in
connection with the development and commercialization of a product owned or
controlled by Parent which is, at the time of measurement of the level of effort
and expenditure of resources, similarly situated (including with respect to
market potential and sales potential), and at a stage of development or
commercialization similar, to the Product, based on conditions then prevailing
and reasonably expected to occur and reasonably taking into account, without
limitation, issues of safety and efficacy, anticipated pricing and reimbursement
rates, costs, labeling, pricing reimbursement, the competitiveness of
alternative products in the marketplace, the patent and other proprietary
position of the Product and such other competitive products (including
applicable intellectual property rights), the likelihood of and requirements for
regulatory approval and other relevant scientific, technical, legal and
commercial factors. For the avoidance of doubt, a failure to achieve a Milestone
in and of itself may be consistent with Diligent Efforts.

“EU Milestone” will be deemed to occur upon Buyer’s or its Affiliates’ (or their
respective successors or assigns) receipt of approval (whether full,
accelerated, conditional or otherwise) by the European Commission of a
“marketing authorisation application” in the European Union, through the
centralized procedure, for the Product, which authorization grants Buyer or its
Affiliates (or their respective successors or assigns) the right to market and
sell the Product in the European Union in accordance with Applicable Law for the
treatment of duchenne muscular dystrophy, including subject to any applicable
label restrictions. For the avoidance of doubt, the EU Milestone does not refer
to approval in one or more individual countries of the European Union or to a
positive opinion by the European Medicines Agency Committee for Medicinal
Products for human use.

 

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“EU Milestone Achievement Certificate” has the meaning set forth in Section
2.4(b).

“EU Milestone Payment” means, per CVR, an amount in cash equal to $2.07, without
interest.

“EU Milestone Period” means the period commencing as of the date of this
Agreement and ending at 11:59 p.m., New York City time, on February 15, 2017.

“Guaranteed Obligations” has the meaning set forth in Section 4.3.

“Holder” means, at the relevant time, a Person in whose name a CVR is registered
in the CVR Register.

“Loss” has the meaning set forth in Section 3.2(g).

“Majority of Holders” means any record Holder or Holders of more than 50% of the
outstanding CVRs, as set forth on the CVR Register.

“Milestones” means the EU Milestone and the US Milestone.

“Milestone Non-Achievement Certificate” has the meaning set forth in Section
2.4(c).

“Milestone Payment” means each of the EU Milestone Payment and the US Milestone
Payment.

“Milestone Payment Date” means the date that is 15 Business Days following
achievement of a Milestone.

“Milestone Period” means the EU Milestone Period and the US Milestone Period, as
applicable.

“Notice” has the meaning set forth in Section 6.1.

“Officer’s Certificate” means a certificate (i) signed by an authorized officer
of Parent, in his or her capacity as such, and (ii) delivered to the Rights
Agent.

“Permitted Transfer” means a Transfer of one or more CVRs (i) upon death by will
or intestacy; (ii) by instrument to an inter vivos or testamentary trust in
which the CVRs are to be passed to beneficiaries upon the death of the trustee;
(iii) made pursuant to a court order; (iv) made by operation of law (including a
consolidation or merger) or without consideration in connection with the
dissolution, liquidation or termination of any corporation, limited liability
company, partnership or other entity; (v) in the case of CVRs payable to a
nominee, from a nominee to a beneficial owner (and, if applicable, through an
intermediary) or from such nominee to another nominee for the same beneficial
owner, in each case as allowable by The Depository Trust Company (“DTC”);
(vi) to Parent, Buyer or their Affiliates; or (vii) as provided in Section 2.6.

 

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“Product” means drisapersen.

“Rights Agent” means the Rights Agent named in the first paragraph of this
Agreement, until a successor Rights Agent will have become such pursuant to the
applicable provisions of this Agreement, and thereafter “Rights Agent” will mean
such successor Rights Agent.

“Transfer” means transfer, pledge, hypothecation, encumbrance, assignment or
other disposition (whether by sale, merger, consolidation, liquidation,
dissolution, dividend, distribution or otherwise), the offer to make such a
transfer or other disposition, and each Contract, arrangement or understanding,
whether or not in writing, to effect any of the foregoing.

“US Milestone” will be deemed to occur upon Buyer’s or its Affiliates’ (or their
respective successors or assigns) receipt of approval (whether full,
accelerated, conditional or otherwise) by the United States Food and Drug
Administration of a “new drug application”, which approval grants Buyer or its
Affiliates (or their respective successors or assigns) the right to market and
sell the Product in the United States in accordance with Applicable Law for the
treatment of duchenne muscular dystrophy, including subject to any applicable
label restrictions.

“US Milestone Achievement Certificate” has the meaning set forth in Section
2.4(a).

“US Milestone Payment” means, per CVR, an amount in cash equal to $2.07, without
interest.

“US Milestone Period” means the period commencing as of the date of this
Agreement and ending at 11:59 p.m., New York City time, on May 15, 2016.

ARTICLE 2

CONTINGENT VALUE RIGHTS

Section 2.1        Holders of CVRs; Appointment of Rights Agent.

(a)    As provided in the Purchase Agreement, each Holder will be entitled to
one CVR for (i) each Share that is validly accepted for payment, and paid for,
pursuant to Section 2.01(d) of the Purchase Agreement or pursuant to any
Subsequent Offering Period, (ii) each Share underlying a Company Option that is
cancelled pursuant to Section 2.03(a) or Section 2.03(b) of the Purchase
Agreement, (iii) each Company Restricted Share that is validly tendered and
accepted for payment and paid for pursuant to Section 2.03(c) of the Purchase
Agreement and (iv) each Share (including Company Restricted Share) converted,
cancelled or otherwise entitled to receive a CVR pursuant to Section 2.04(f) or
2.07 of the Purchase Agreement.

(b)    Buyer hereby appoints the Rights Agent to act as rights agent for Buyer
in accordance with the terms and conditions set forth in this Agreement, and the
Rights Agent hereby accepts such appointment.

 

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Section 2.2        Nontransferable.

A Holder may not at any time Transfer a CVR, other than pursuant to a Permitted
Transfer. Any attempted Transfer that is not a Permitted Transfer, in whole or
in part, will be void ab initio and of no effect.

Section 2.3        No Certificate; Registration; Registration of Transfer;
Change of Address.

(a)    CVRs will not be evidenced by a certificate or other instrument.

(b)    The Rights Agent will maintain an up-to-date register (the “CVR
Register”) for the purposes of (i) identifying the Holders of CVRs and
(ii) registering CVRs and Permitted Transfers thereof. The CVR Register will
show one position for Cede & Co. representing all the Shares held by DTC on
behalf of the beneficial street holders of the Shares that were tendered by such
holders in the Offer and accepted for payment or held by such holders as of
immediately prior to the Second Step Distribution. The Rights Agent will have no
responsibility whatsoever directly to the street holders with respect to
Transfers of CVRs.

(c)    Subject to the restriction on transferability set forth in Section 2.2,
every request made to Transfer a CVR must be in writing and accompanied by a
written instrument of Transfer and other requested documentation in form
reasonably satisfactory to the Rights Agent, duly executed by the Holder or
Holders thereof, or by the duly appointed legal representative, personal
representative or survivor of such Holder or Holders, setting forth in
reasonable detail the circumstances relating to the Transfer. Upon receipt of
such written notice, the Rights Agent will, subject to its reasonable
determination that the Transfer instrument is in proper form and the Transfer is
a Permitted Transfer and otherwise complies with the other terms and conditions
of this Agreement, register the Transfer of the applicable CVRs in the CVR
Register. All Transfers of CVRs registered in the CVR Register will be the valid
obligations of Buyer, evidencing the same right, and entitling the transferee to
the same benefits and rights under this Agreement, as those held by the
transferor. Any Transfer of CVRs will be without charge (other than the cost of
any transfer tax) to the applicable Holder.

(d)    A Holder may make a written request to the Rights Agent to change such
Holder’s address of record in the CVR Register. Such written request must be
duly executed by such Holder. Upon receipt of such written notice, the Rights
Agent will promptly record the change of address in the CVR Register.

Section 2.4        Payment Procedures.

(a)    If the US Milestone occurs at any time prior to the expiration of the
U.S. Milestone Period, then, on or prior to the Milestone Payment Date relating
thereto, Buyer will deliver to the Rights Agent (i) a certificate (the “US
Milestone Achievement Certificate”) certifying the date of the satisfaction of
the US Milestone and that the Holders are entitled to receive the US Milestone
Payment and (ii) a wire transfer of immediately available funds to an account
designated by the Rights Agent, in the aggregate amount equal to the number of
CVRs (as reflected in the CVR Register) then outstanding multiplied by the
amount of the US Milestone Payment. After receipt of the wire transfer described
in the foregoing sentence, the Rights Agent will promptly (and in any event,
within 10 Business Days) pay, by check mailed,

 

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first-class postage prepaid, to the address of each holder set forth in the CVR
Register or by other method of delivery as specified by the applicable Holder in
writing to the Rights Agent, an amount in cash equal to the number of CVRs
registered to such Holder in the CVR Register multiplied by the US Milestone
Payment. For the avoidance of doubt, each of the requirements of the US
Milestone must be fully satisfied for the US Milestone to be considered to be
attained, and the Holders will not be entitled to, and Parent and Buyer will not
be liable for, any US Milestone Payments in the event of any partial
satisfaction of the US Milestone.

(b)    If the EU Milestone occurs at any time prior to the expiration of the EU
Milestone Period, then, on or prior to the Milestone Payment Date relating
thereto, Buyer will deliver to the Rights Agent (i) a certificate (the “EU
Milestone Achievement Certificate”) certifying the date of the satisfaction of
the EU Milestone and that the Holders are entitled to receive the EU Milestone
Payment and (ii) a wire transfer of immediately available funds to an account
designated by the Rights Agent, in the aggregate amount equal to the number of
CVRs then outstanding (as reflected on the CVR Register) multiplied by the
amount of the EU Milestone Payment. After receipt of the wire transfer described
in the foregoing sentence, the Rights Agent will promptly (and in any event,
within 10 Business Days) pay, by check mailed, first-class postage prepaid, to
the address of each Holder set forth in the CVR Register or by other method of
delivery as specified by the applicable Holder in writing to the Rights Agent,
an amount in cash equal to the number of CVRs registered to such Holder in the
CVR Register multiplied by the EU Milestone Payment. For the avoidance of doubt,
each of the requirements of the EU Milestone must be fully satisfied for the EU
Milestone to be considered to be attained, and the Holders will not be entitled
to, and Parent and Buyer will not be liable for, any EU Milestone Payments in
the event of any partial satisfaction of the EU Milestone.

(c)    If a Milestone is not attained at any time prior to the expiration of the
applicable Milestone Period, then on or before the date that is 10 Business Days
after the end of such Milestone Period, Buyer will deliver to the Rights Agent
an Officer’s Certificate (the “Milestone Non-Achievement Certificate”)
certifying that the applicable Milestone has not occurred and that Buyer has
complied in all material respects with its obligations under this Agreement. The
Rights Agent will promptly (and in any event, within 10 Business Days after
receipt) deliver a copy of such Milestone Non-Achievement Certificate to the
Holders. The Rights Agent will deliver to Buyer a certificate certifying the
date of delivery of such certificate to the Holders.

(d)    If the Rights Agent does not receive from the Majority of Holders a
written objection to a Milestone Non-Achievement Certificate within 30 Business
Days after the date of delivery of such Milestone Non-Achievement Certificate by
the Rights Agent to the Holders, the Holders will be deemed to have accepted
such Milestone Non-Achievement Certificate, and Parent, Buyer and their
Affiliates will have no further obligation with respect to the applicable
Milestone Payment.

(e)    Except to the extent any portion of any Milestone Payment is required to
be treated as imputed interest pursuant to Applicable Law, the Holders and the
parties hereto agree to treat the CVRs and all Milestone Payments for all Tax
purposes as additional consideration for the Shares, Company Options and Company
Restricted Shares pursuant to the Purchase Agreement, and none of the Holders
and the parties hereto will take any position to the contrary on any Tax Return
or for other Tax purposes except as required by Applicable Law.

 

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(f)    Parent, Buyer and the Rights Agent will be entitled to deduct and
withhold, or cause to be deducted and withheld, from any Milestone Payment
otherwise payable pursuant to this Agreement, such amounts as it is required to
deduct and withhold with respect to the making of such payment under any
provision of Applicable Law relating to Taxes, including with respect to
Milestone Payments that relate to Company Options cancelled pursuant to
Section 2.03(a) of the Purchase Agreement or a Reorganization. To the extent
that amounts are so deducted and withheld, such deducted and withheld amounts
will be treated for all purposes of this Agreement as having been paid to the
Holder in respect of which such deduction and withholding was made. Prior to
making any such Tax deductions or withholdings or causing any such Tax
deductions or withholdings to be made with respect to any Holder, the Rights
Agent will, to the extent practicable, provide notice to the Holder of such
potential Tax deduction or withholding and a reasonable opportunity for the
Holder to provide any necessary Tax forms (including an IRS Form W-9 or an
applicable IRS Form W-8) in order to avoid or reduce such withholding amounts;
provided that the time period for payment of a Milestone Payment by the Rights
Agent set forth in Section 2.4(a) or Section 2.4(b) will be extended by a period
equal to any delay caused by the Holder providing such forms, provided, further,
that in no event shall such period be extended for more than 10 days, unless
otherwise requested by the Holder for the purpose of delivering such forms and
agreed to by the Rights Agent.

(g)    Any portion of a Milestone Payment that remains undistributed to the
Holders six months after the Milestone Payment Date will be delivered by the
Rights Agent to Buyer, and any Holder will thereafter look only to Buyer for
payment of such Milestone Payment.

(h)    If any Milestone Payment (or portion thereof) remains unclaimed by a
Holder two years after the Milestone Payment Date (or immediately prior to such
earlier date on which such Milestone Payment would otherwise escheat to or
become the property of any Governmental Entity), such Milestone Payment (or
portion thereof) will, to the extent permitted by Applicable Law, become the
property of Buyer, free and clear of all claims or interest of any Person
previously entitled thereto. Neither Buyer nor the Rights Agent will be liable
to any Person in respect of a Milestone Payment delivered to a public official
pursuant to any applicable abandoned property, escheat or similar legal
requirement under Applicable Law.

Section 2.5        No Voting, Dividends or Interest; No Equity or Ownership
Interest.

(a)    CVRs will not have any voting or dividend rights, and interest will not
accrue on any amounts payable in respect of CVRs.

(b)    CVRs will not represent any equity or ownership interest in Parent,
Buyer, any constituent company to the Reorganization or any of their respective
Affiliates.

Section 2.6        Ability to Abandon CVR.

A Holder may at any time, at such Holder’s option, abandon all of such Holder’s
remaining rights in a CVR by transferring such CVR to Buyer without
consideration therefor, and such rights will be cancelled. Nothing in this
Agreement is intended to prohibit Parent, Buyer or its Affiliates from offering
to acquire or acquiring CVRs, in private transactions or otherwise, for
consideration in its sole discretion.

 

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ARTICLE 3

THE RIGHTS AGENT

Section 3.1        Certain Duties and Responsibilities.

(a)    The Rights Agent will not have any liability for any actions taken or not
taken in connection with this Agreement, except to the extent such liability
arises as a result of the willful misconduct, bad faith or gross negligence of
the Rights Agent or breach by the Rights Agent of this Agreement.

(b)    Only the Majority of Holders may direct the Rights Agent to act on behalf
of the Holders in enforcing any of their rights hereunder. The Rights Agent will
be under no obligation to institute any claim, action, suit, audit,
investigation or proceeding, or to take any other action likely to result in the
incurrence of material expenses by the Rights Agent, unless the Majority of
Holders (on behalf of the Holders) will furnish the Rights Agent with reasonable
security and indemnity for any costs and expenses that may be incurred. All
rights of action under this Agreement may be enforced by the Rights Agent, any
claim, action, suit, audit, investigation or proceeding instituted by the Rights
Agent will be brought in its name as the Rights Agent and any recovery in
connection therewith will be for the proportionate benefit of all the Holders,
as their respective rights or interests may appear on the CVR Register.

Section 3.2        Certain Rights of Rights Agent.

(a)    The Rights Agent undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement, and no implied covenants or
obligations will be read into this Agreement against the Rights Agent.

(b)    The Rights Agent may rely and will be protected by Buyer in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order or other paper or
document believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties.

(c)    Whenever the Rights Agent deems it desirable that a matter be proved or
established prior to taking or omitting any action hereunder, the Rights Agent
may, in the absence of bad faith, gross negligence or willful misconduct on its
part, (i) rely upon an Officer’s Certificate, which Officer’s Certificate shall
be full authorization and protection to the Rights Agent and (ii) incur no
liability and be held harmless by Buyer for or in respect of any action taken or
omitted to be taken by it under the provisions of this Agreement in reliance
upon such Officer’s Certificate.

(d)    The Rights Agent may engage and consult with counsel of its selection,
and the written advice or opinion of such counsel will, in the absence of bad
faith, gross negligence or willful misconduct on the part of the Rights Agent,
be full and complete authorization and protection in respect of any action taken
or not taken by the Rights Agent hereunder in good faith and in reliance
thereon.

 

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(e)    Any permissive rights of the Rights Agent hereunder will not be construed
as a duty.

(f)    The Rights Agent will not be required to give any note or surety in
respect of the execution of its powers or otherwise under this Agreement.

(g)    Buyer agrees to indemnify the Rights Agent for, and to hold the Rights
Agent harmless from and against, any loss, liability, damage or expense (each, a
“Loss”) suffered or incurred by the Rights Agent and arising out of or in
connection with Rights Agent’s performance of its obligations under this
Agreement, including the reasonable costs and expenses of defending the Rights
Agent against any claims, charges, demands, actions or suits arising out of or
in connection with such performance, except to the extent such Loss has been
determined by a court of competent jurisdiction to have resulted from the Rights
Agent’s gross negligence, bad faith or willful misconduct or breach of this
Agreement. Buyer’s obligations under this Section 3.2(g) to indemnify the Rights
Agent will survive the resignation or removal of any Rights Agent and the
termination of this Agreement.

(h)    In addition to the indemnification provided under Section 3.2(g), Buyer
agrees (i) to pay the fees of the Rights Agent in connection with the Rights
Agent’s performance of its obligations hereunder, as agreed upon in writing by
the Rights Agent and Buyer on or prior to the date of this Agreement, and
(ii) to reimburse the Rights Agent promptly upon demand for all reasonable and
documented out-of-pocket expenses, including all Taxes (other than income,
receipt, franchise or similar Taxes) and governmental charges, incurred by the
Rights Agent in the performance of its obligations under this Agreement, except
that Buyer will have no obligation to pay the fees of the Rights Agent or
reimburse the Rights Agent in connection with any lawsuit initiated by the
Rights Agent on behalf of itself or the Holders, except in the case of any suit
enforcing the provisions of Section 2.4(a) and/or Section 2.4(b), if Buyer is
found by a court of competent jurisdiction to be liable to the Rights Agent or
the Holders, as applicable in such suit (and for the avoidance of doubt, to the
extent that the Majority of Holders have furnished the Rights Agent reasonable
security and indemnity related to such suit, Buyer shall reimburse such Holders
for the cost of such security and indemnity).

(i)    No provision of this Agreement will require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if there are
reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.

(j)    The Rights Agent will not be deemed to have knowledge of any event of
which it was supposed to receive notice thereof hereunder, and the Rights Agent
shall be fully protected and will not incur any liability for failing to take
action in connection therewith, in each case, unless and until it has received
such notice in writing.

 

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(k)    The Rights Agent and any shareholder, affiliate, director, officer or
employee of the Rights Agent may buy, sell or deal in any securities of Parent,
Buyer or the Company or become peculiarly interested in any transaction in which
Parent, Buyer or the Company may be interested, or contract with or lend money
to Parent, Buyer or the Company or otherwise act as fully and freely as though
it were not the Rights Agent under this Agreement. Nothing herein will preclude
the Rights Agent from acting in any other capacity for Parent, Buyer or the
Company or for any other Person.

(l)    The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorney or agents.

Section 3.3        Resignation and Removal; Appointment of Successor.

(a)    The Rights Agent may resign at any time by giving written notice to
Buyer, specifying a date when such resignation will take effect, which notice
will be given at least 60 days prior to the date so specified (or, if earlier,
the appointment of the successor Rights Agent).

(b)    Buyer will have the right to remove the Rights Agent at any time by a
written notice to the Rights Agent, specifying a date when such removal will
take effect. Notice of such removal will be given by Buyer to the Rights Agent,
which notice will be given at least 60 days prior to the date so specified (or,
if earlier, the appointment of the successor Rights Agent).

(c)    If the Rights Agent resigns, is removed or become incapable of acting,
Buyer will promptly appoint a qualified successor Rights Agent. Notwithstanding
the foregoing, if Buyer fails to make such appointment within a period of 60
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent, then the incumbent Rights Agent may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. The successor
Rights Agent so appointed will, upon its acceptance of such appointment in
accordance with this Section 3.3(c) and Section 3.4, become the Rights Agent for
all purposes hereunder.

(d)    Buyer will give notice of each resignation or removal of the Rights Agent
and each appointment of a successor Rights Agent in accordance with Section 6.2.
Each notice will include the name and address of the successor Rights Agent. If
Buyer fails to send such notice within 10 Business Days after acceptance of
appointment by a successor Rights Agent, the successor Rights Agent will cause
the notice to be mailed at the expense of Buyer.

(e)    Notwithstanding anything to the contrary in this Section 3.3, unless
consented to in writing by the Majority of Holders, Buyer will not appoint as a
successor Rights Agent any Person that is not a stock transfer agent of national
reputation or the corporate trust department of a commercial bank.

(f)    The Rights Agent will cooperate with Buyer and any successor Rights Agent
in connection with the transition of the duties and responsibilities of the
Rights Agent to the successor Rights Agent, including transferring the CVR
Register to the successor Rights Agent.

 

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Section 3.4        Acceptance of Appointment by Successor.

Every successor Rights Agent appointed hereunder will, at or prior to such
appointment, execute, acknowledge and deliver to Buyer and to the retiring
Rights Agent an instrument accepting such appointment and a counterpart of this
Agreement, and such successor Rights Agent, without any further act, deed or
conveyance, will become vested with all the rights, powers, trusts and duties of
the Rights Agent; provided that upon the request of Buyer or the successor
Rights Agent, such resigning or removed Rights Agent will execute and deliver an
instrument transferring to such successor Rights Agent all the rights, powers
and trusts of such resigning or removed Rights Agent.

ARTICLE 4

COVENANTS

Section 4.1        List of Holders.

Buyer will furnish or cause to be furnished to the Rights Agent, in such form as
Buyer receives from the Company’s transfer agent (or other agent performing
similar services for the Company), the names and addresses of the Holders within
15 Business Days following the Closing Date.

Section 4.2        Efforts.

During the US Milestone Period, Buyer (and its successors and assigns) will, and
will cause its (and their) Affiliates to, use Diligent Efforts to achieve the US
Milestone prior to the end of the US Milestone Period, and during the EU
Milestone Period, Buyer (and its successors and assigns) will, and will cause
its (and their) Affiliates to, use Diligent Efforts to achieve the EU Milestone
prior to the end of the EU Milestone Period.

Section 4.3        Guarantee.

Parent, intending to be legally bound, hereby absolutely, irrevocably and
unconditionally guarantees the due and punctual payment and performance of
(a) Buyer’s obligations under this Agreement, including to pay the US Milestone
Payment and EU Milestone Payment when as and if such payments become due, and
(b) Buyer’s liability and obligations (including for breach and for the
aggregate amounts of the US Milestone Payment and EU Milestone Payment when, as
and if due to Holders) under this Agreement (collectively, the “Guaranteed
Obligations”). Parent acknowledges and agrees that such guarantee shall be a
guarantee of performance and not of collection and shall not be conditioned or
contingent upon pursuit of any remedies against Buyer. If Buyer shall default in
the due and punctual performance of the Guaranteed Obligations, Parent will
forthwith perform or cause to be performed such Guaranteed Obligations at its
sole cost and expense. This guarantee may not be revoked or terminated and shall
remain in full force and effect without interruption and shall be binding on
Parent and its successors and assigns until the Guaranteed Obligations have been
satisfied in full.

 

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Section 4.4        Fundamental Transactions.

In the event that Parent or Buyer desires to consummate a Change of Control or
Carve-Out Transaction while either of the US Milestone and/or the EU Milestone
has not been attained but remains eligible to be attained, Parent will cause the
Person acquiring Parent (or acquiring substantially all of its assets ) with
respect to a Change of Control or the Person acquiring the subject Intellectual
Property or Material Contracts with respect to a Carve-Out Transaction to assume
Parent’s and Buyer’s (as applicable, depending upon the structure of the Change
of Control or Carve-Out Transaction) obligations, duties and covenants under
this Agreement. No later than the consummation of any Change of Control or
Carve-Out Transaction, Parent shall deliver to the Rights Agent an Officer’s
Certificate, stating that such Change of Control or Carve-Out Transaction
complies with this Section 4.4 and that all conditions precedent herein provided
for relating to such transaction have been complied with.

ARTICLE 5

AMENDMENTS

Section 5.1        Amendments Without Consent of Holders or Rights Agent.

(a)    Parent and Buyer, at any time or from time to time, may unilaterally
enter into one or more amendments to this Agreement for any of the following
purposes, without the consent of any of the Holders or the Rights Agent, so long
as, in the cases of clauses (ii) through (iv), such amendments do not,
individually or in the aggregate, adversely affect the interests of the Holders:

(i)    to evidence the appointment of another Person as a successor Rights Agent
and the assumption by any successor Rights Agent of the covenants and
obligations of the Rights Agent herein in accordance with the provisions hereof;

(ii)    to add to the covenants of Parent or Buyer such further covenants,
restrictions, conditions or provisions for the protection and benefit of the
Holders;

(iii)    to cure any ambiguity, to correct or supplement any provision in this
Agreement that may be defective or inconsistent with any other provision in this
Agreement, or to make any other provisions with respect to matters or questions
arising under this Agreement;

(iv)    as may be necessary or appropriate to ensure that CVRs are not subject
to registration under the 1933 Act or the 1934 Act; or

(v)    any other amendment to this Agreement that would provide any additional
rights or benefits to the Holders or that does not adversely affect the legal
rights under this Agreement of any such Holder.

Notwithstanding anything to the contrary contained herein, Parent, Buyer and the
Rights Agent may, but will not be obligated to, enter into any amendment that
adversely affects, in any material respect, the Rights Agent’s own rights,
duties, responsibilities or protections.

 

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(b)    Promptly after the execution by Parent and Buyer of any amendment
pursuant to this Section 5.1, Buyer will (or will cause the Rights Agent to)
notify the Holders in general terms of the substance of such amendment in
accordance with Section 6.2.

Section 5.2        Amendments with Consent of Holders.

(a)    In addition to any amendments to this Agreement that may be made by
Parent and Buyer without the consent of any Holder or the Rights Agent pursuant
to Section 5.1, with the consent of the Majority of Holders, Parent, Buyer and
the Rights Agent may enter into one or more amendments to this Agreement for the
purpose of adding, eliminating or changing any provisions of this Agreement,
even if such addition, elimination or change is adverse to the interests of the
Holders.

(b)    Promptly after the execution by Parent, Buyer and the Rights Agent of any
amendment pursuant to the provisions of this Section 5.2, Buyer will (or will
cause the Rights Agent to) notify the Holders in general terms of the substance
of such amendment in accordance with Section 6.2.

Section 5.3        Effect of Amendments.

Upon the execution of any amendment under this Article 5, this Agreement will be
modified in accordance therewith, such amendment will form a part of this
Agreement for all purposes and every Holder will be bound thereby.

ARTICLE 6

MISCELLANEOUS

Section 6.1        Notices to Rights Agent, Parent and Buyer.

All notices, requests and other communications (each, a “Notice”) to any party
hereunder (shall be in writing. Such Notice shall be deemed given (a) on the
date of delivery, if delivered in person or by facsimile or e-mail (upon
confirmation of receipt) prior to 5:00 p.m. in the time zone of the receiving
party or on the next Business Day, if delivered after 5:00 p.m. in the time zone
of the receiving party or (b) on the first Business Day following the date of
dispatch, if delivered by FedEx or by other internationally recognized overnight
courier service (upon proof of delivery), addressed as follows:

if to the Rights Agent, to:

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Attention: Relationship Management

with a copy, which shall not constitute notice, to:

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Attention: General Counsel

 

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if to Parent or Buyer, to:

BioMarin Pharmaceutical Inc.

105 Digital Drive

Novato, CA 94949

Attention: Chief Executive Officer

with a copy, which shall not constitute notice, to:

BioMarin Pharmaceutical Inc.

105 Digital Drive

Novato, CA 94949

Attention: General Counsel

or to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.

Section 6.2        Notice to Holders.

All Notices required to be given to the Holders will be given (unless otherwise
herein expressly provided) in writing and mailed, first-class postage prepaid,
to each Holder affected by such event, at his, her or its address set forth in
the CVR Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the sending of such Notice, if any, and will be
deemed given on the date of mailing. In any case where notice to the Holders is
given by mail, neither the failure to mail such Notice, nor any defect in any
Notice so mailed, to any particular Holder will affect the sufficiency of such
Notice with respect to other Holders.

Section 6.3        Entire Agreement.

This Agreement and the Purchase Agreement constitute the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersede all prior agreements and understandings, both written and oral, among
or between any of the parties with respect to the subject matter of this
Agreement.

Section 6.4        Successors and Assigns.

This Agreement will be binding upon, and will be enforceable by and inure solely
to the benefit of, the Holders, Parent, Buyer and the Rights Agent and their
respective successors and assigns. The Rights Agent may not assign this
Agreement without Buyer’s consent. Subject to Section 4.4 hereof, each of Parent
and Buyer may assign, in its sole discretion and without the consent of any
other party, any or all of its rights, interests and obligations hereunder to
one or more its Affiliates or a party with whom Parent is merged or
consolidated, or any entity resulting from any merger or consolidation to which
Parent shall be a party (each, an “Assignee”) and any such Assignee may
thereafter assign, in its sole discretion and without the consent of any other

 

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party, any or all of its rights, interests and obligations set forth hereunder
to one or more additional Assignees; provided, however, that in connection with
any assignment to an Assignee, Parent and Buyer shall agree to remain liable for
the performance by Parent and Buyer of their obligations hereunder (to the
extent Parent or Buyer exists following such assignment). Parent, Buyer or an
Assignee may not otherwise assign this Agreement without the prior consent of
the Majority of Holders, provided that Parent or Buyer may assign this Agreement
to an Affiliate of Parent without the prior consent of the Majority of Holders
so long as Parent and Buyer remain fully obligated for performance under this
Agreement. Any attempted assignment of this Agreement or any of such rights in
violation of this Section 6.4 will be void ab initio and of no effect.

Section 6.5        Benefits of Agreement; Action by Majority of Holders.

Nothing in this Agreement, express or implied, will give to any Person (other
than Parent, Buyer, the Rights Agent, the Holders and their permitted successors
and assigns hereunder) any benefit or any legal or equitable right, remedy or
claim under this Agreement or under any covenant or provision herein contained,
all such covenants and provisions being for the sole benefit of Parent, Buyer,
the Rights Agent, the Holders and their permitted successors and assigns. The
Holders will have no rights hereunder except as are expressly set forth herein.
Except for the right of the Rights Agent set forth herein, the Majority of
Holders will have the sole right, on behalf of all Holders, by virtue of or
under any provision of this Agreement, to institute any action or proceeding at
law or in equity or in bankruptcy or otherwise upon or under or with respect to
this Agreement, and no individual Holder or other group of Holders will be
entitled to exercise such rights.

Section 6.6        Governing Law.

This Agreement and CVRs will be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law rules of
such state.

Section 6.7        Jurisdiction.

The parties hereto agree that any Action seeking to enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby (whether brought by any party or any of its
Affiliates or against any party or any of its Affiliates) must be brought solely
in any state court or United States federal court located in the County of New
York, New York, United States, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such Action and irrevocably waives, to the fullest
extent permitted by Applicable Law, any objection that it may now or hereafter
have to the laying of the venue of any such Action in any such court or that any
such Action brought in any such court has been brought in an inconvenient forum.
Process in any such Action may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 6.1 or Section 6.2 shall be deemed effective service of
process on such party.

 

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Section 6.8        WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATION OF THIS WAIVER, (III) EACH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 6.9        Severability Clause.

In the event that any provision of this Agreement, or the application of any
such provision to any Person or set of circumstances, is for any reason be
determined to be invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, will not be impaired or otherwise affected and
will continue to be valid and enforceable to the fullest extent permitted by
Applicable Law. Upon such a determination, the parties will negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the fullest extent possible.

Section 6.10        Counterparts; Effectiveness.

This Agreement may be signed in any number of counterparts, each of which will
be deemed an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement or any counterpart may be
executed and delivered by facsimile copies or delivered by electronic
communications by portable document format (.pdf), each of which shall be deemed
an original. This Agreement will become effective when each party hereto will
have received a counterpart hereof signed by the other party hereto. Until and
unless each party has received a counterpart hereof signed by the other party
hereto, this Agreement will have no effect and no party will have any right or
obligation hereunder (whether by virtue of any other oral or written agreement
or other communication).

Section 6.11        Termination.

This Agreement will terminate and be of no force or effect, and the parties
hereto will have no liability hereunder, upon the earlier to occur of (a) the
payment of both of the US Milestone Payment and the EU Milestone Payment and
(b) the expiration of both the US Milestone Period and the EU Milestone Period.
The termination of this Agreement will not affect or limit the right to receive
the Milestone Payments under Section 2.4 to the extent earned prior to
termination of this Agreement and the provisions applicable thereto will survive
the expiration or termination of this Agreement.

 

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Section 6.12        Force Majeure.

Notwithstanding anything to the contrary contained herein, the Rights Agent will
not be liable for any delays or failures in performance resulting from acts
beyond its reasonable control including, acts of God, terrorist acts, shortage
of supply, breakdowns or malfunctions, interruptions or malfunctions of computer
facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war or civil
unrest.

Section 6.13        Construction.

(a)    For purposes of this Agreement, whenever the context requires: singular
terms will include the plural, and vice versa; the masculine gender will include
the feminine and neuter genders; the feminine gender will include the masculine
and neuter genders; and the neuter gender will include masculine and feminine
genders.

(b)    As used in this Agreement, the words “include” and “including,” and
variations thereof, will not be deemed to be terms of limitation, but rather
will be deemed to be followed by the words “without limitation.”

(c)    The headings contained in this Agreement are for convenience of reference
only, will not be deemed to be a part of this Agreement and will not be referred
to in connection with the construction or interpretation of this Agreement.

(d)    Any reference in this Agreement to a date or time shall be deemed to be
such date or time in New York City, United States, unless otherwise specified.
The parties and the Company have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and the Company and no presumption or burden of proof shall arise
favoring or disfavoring any Person by virtue of the authorship of any provision
of this Agreement.

(e)    All financial references herein are in United States Dollars.

[Remainder of page intentionally left blank]

 

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Each of the parties has caused this Agreement to be executed on its behalf by a
duly authorized officer of it as of the day and year first above written.

 

BIOMARIN PHARMACEUTICAL INC. By:   /s/ George Eric Davis  

    Name: George Eric Davis

    Title: SVP, General Counsel

 

BIOMARIN FALCONS B.V. By:   /s/ George Eric Davis  

    Name: George Eric Davis

    Title: Managing Director

 

AMERICAN STOCK TRANSFER &

TRUST COMPANY, LLC

By:   /s/ Paula Caroppoli  

    Name: Paula Caroppoli

    Title: Senior Vice President

 

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