Document:

Letter Agreement

 EXHIBIT 10.1 
  

					
	 	  	 	  	Global Private Client Group
	 	  	 	  	Merrill Lynch Business Financial Services Inc.
	 	  	 	  	15 Exchange Place, 4th Floor
	 

	  	 	  	Jersey City, NJ 07302
	  	 	  	  
 T: 201-593-7948

	  	 	  	F: 201-593-7871
	  	 	  	 
	 	  	 	  	Pauline Roh
	 	  	 	  	Vice President
	 	  	 	  	  
 As of November 30, 2005

  
 Exactech, Inc. 
 2320 NorthWest 66th Court 
 Gainesville, FL 32653 
  
 LETTER AGREEMENT 
  

	 	Re:	WCMA Loan and Security Agreement No. 2BN-07R53 dated as of June 25, 2004 

  
 Gentlemen: 
  
 This Letter Agreement given by Merrill Lynch Business Financial Services Inc. (“MLBFS”), and agreed and accepted by Exactech, Inc. (the
“Customer”) memorializes certain modifications to a certain WCMA Loan and Security Agreement No. 2BN-07R53, by and between Customer and MLBFS dated as of June 25, 2004 (the “Loan Agreement”). 
  
 Accordingly, for good and valuable consideration (the receipt and sufficiency
being hereby acknowledged), the parties hereto acknowledge and agree, that subject to the satisfaction of the conditions to effectiveness set forth below and, in any event, further subject to the terms and agreements of this Letter Agreement, the
Loan Agreement shall be modified as follows: 
  
 Definitions 
  
 Unless otherwise
defined herein, capitalized terms used in this Letter Agreement shall have the meanings set forth in the Loan Agreement. 
  
 Increase of Line of Credit 
  
 The WCMA Line of Credit provided to Exactech, Inc. pursuant to the Loan Agreement is hereby increased to $24,000,000. As a result of and to give effect to
said increase, the defined term “Maximum WCMA Line of Credit” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
  
 ““Maximum WCMA Line of Credit” shall mean $24,000,000.00 or
the Available Borrowing Base, when applicable pursuant to Section 2.3.” 

 Amendments to Loan Agreement 
  
 1. The definition of “Applicable Margin” contained in
Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
  
 ““Applicable Margin” shall mean initially 200 basis points (2.00%) per annum until such time as Customer has provided to MLBFS the
financial statements and compliance certificates required pursuant to Section 3.2(a)(ii) of this Loan Agreement for the fiscal quarter ending December 31, 2005, at which time the Applicable Margin shall be determined in accordance with the
pricing grid set forth below based on the ratio of Funded Debt to EBITDA (determined in accordance with this Loan Agreement) calculated based upon the financial information reported in the most recently received financial statement required pursuant
to Section 3.2(a)(i) or (ii) of this Loan Agreement, as the case may be: 
  

					
	 Tier Level

	  	 Funded Debt to EBITDA

	  	 Applicable Margin

			
	 IV
	  	 If ratio is greater than or equal to 2.00
	  	 237.5 basis points(2.375%)

			
	 III
	  	 If ratio is less than 2.00 but greater than or equal to 1.50
	  	 200.0 basis points(2.000%)

			
	 II
	  	 If ratio is less than 1.50 but greater than or equal to 1.00
	  	 175.0 basis points (1.750%)

			
	 I
	  	 If ratio is less than 1.00
	  	 150 basis points (1.500%)

  
 The Applicable Margin
shall be adjusted quarterly and said adjustment shall take effect five (5) Business Days after receipt of the financial statements required pursuant to Section 3.2(a)(i) or (ii) of this Loan Agreement, as the case may be. The
foregoing notwithstanding, the Applicable Margin shall be equal to the Default Rate upon the occurrence and during the continuance of any Default under this Loan Agreement or any Loan Document.” 
  
 2. There shall be inserted a new definition of “Asset Disposition”
in Section 1.1 of the Loan Agreement, which shall read as follows: 
  
 ““Asset Disposition” shall mean any sale, lease, license, transfer, assignment or other consensual disposition by any Credit Party of any asset, but excluding dispositions permitted under
Section 3.4(d) hereof.” 
  
 3. The definition of
“Borrowing Base” contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
  
 ““Borrowing Base” shall mean, on any date, the sum of (i) 80% of Eligible Accounts and (ii) the lesser of (a) 50% of
Eligible Inventory (excluding surgical instrumentation held as inventory as included on Customer’s books and records) 

  

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or (b) $17,000,000; less in all cases (i) any reserves imposed by MLBFS from to time in its reasonable discretion and (ii) the maximum amount
of Customer’s obligations under that certain Guaranty (the “Guaranty”) dated of even date herewith, made by Customer in favor of MLBFS, guarantying certain obligations owing to MLBFS by Altiva Corporation (said maximum amount
currently being $4,500,000, to be increased to $6,000,000 beginning July 1, 2006).” 
  
 4. The definition of “Collateral” contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
  
 “Collateral” shall mean the Note, dated October 29, 2003,
made by Altiva Corporation in favor of Customer in the amount of up to $5,000,000, the WCMA Account, all Accounts, Chattel Paper, Contract Rights, Inventory, all Trademarks, Patents, Copyrights and all other intellectual property, Equipment, General
Intangibles, Deposit Accounts, Documents, Instruments, Investment Property and Financial Assets of Customer, howsoever arising, whether now owned or existing or hereafter acquired or arising, and wherever located; together with all parts thereof
(including spare parts), all accessories and accessions thereto, all books and records (including computer records) directly related thereto, all proceeds thereof (including, without limitation, proceeds in the form of Accounts and insurance
proceeds), and the collateral described in Section 3.6 (b) hereof; provided that Collateral shall be limited to the above items of personal property and shall not include any interest in real property of the Borrower or any buildings,
structures and improvements now and hereinafter located on such real property, or the fixtures attached thereto, including, without limitation, any gas, steam, electric, water and other heating, cooking, refrigerating, plumbing, ventilating,
irrigating and power extensions, appliances, fixtures and appurtenances, including air-conditioning ducts, machinery and equipment (for the avoidance of doubt, any such machinery and equipment that do not constitute fixtures shall be included in the
Collateral), which are now or may hereinafter pertain to or be used with, in or on the real property, though they be either detached or detachable. 
  
 5. The definition of “Eligible Consigned Inventory” contained in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and
any and all references to such definition in the Loan Agreement shall also be deleted. 
  
 6. The definition of “Initial Maturity Date” contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
  
 ““Initial Maturity Date” shall mean the first date upon which
the WCMA Line of Credit will expire (subject to renewal in accordance with the terms hereof); to wit: June 30, 2008.” 
  

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 7. There shall be inserted a new definition of “Net Cash Proceeds” in Section 1.1 of the
Loan Agreement, which shall read as follows: 
  
 ““Net
Cash Proceeds” means, with respect to any transaction or event, an amount equal to the cash proceeds received by any Credit Party from or in respect of such transaction or event (including proceeds of any non-cash proceeds of such transaction),
less (i) any out-of-pocket expenses paid to a Person that are reasonably incurred by such Credit Party in connection therewith and (ii) in the case of an Asset Disposition, the amount of any Indebtedness secured by a Lien on the related
asset and discharged from the proceeds of such Asset Disposition and any taxes paid or reasonably estimated by the applicable Credit Party to be payable by such Person in respect of such Asset Disposition (provided, that if the actual amount of
taxes paid is less than the estimated amount, the difference shall immediately constitute Net Cash Proceeds).” 
  
 8. The definition of “Permitted Liens” contained in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to
read as follows: 
  
 ““Permitted Liens” shall mean
(i) Liens created by or otherwise existing, under or in connection with this Loan Agreement or the other Loan Documents in favor of MLBFS; (ii) Liens securing indebtedness and Capital Leases (and refinancings thereof) to the extent
permitted under Section 3.3(m)(c) hereof; (iii) Liens for taxes, assessments, charges or other governmental levies not yet due or as to which the period of grace (not to exceed 60 days), if any, related thereto has not expired or which are
being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of Customer, if required by and in conformity with GAAP; (iv) carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings;
(v) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements;
(vi) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, utilities, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (vii) any extension, renewal or replacement (or successive extensions, renewals or replacements) , in whole or in part, of any Lien referred to in the foregoing clauses; provided that such extension, renewal or
replacement Lien shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced (plus improvements on such property); (viii) Liens existing as of November 30, 2005 and set forth on
SCHEDULE 1.1(a); provided that, without the prior written consent of MLBFS, no such Lien shall at any time be extended to cover property or assets other than the property or assets subject thereto as of November 30, 2005;
(ix) judgment Liens in existence for less than 45 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with
responsible insurance companies and which do not otherwise result in an Event of Default; and (x) easements, rights-of-way, zoning restrictions, minor defects or 

  

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irregularities in title and other similar encumbrances not interfering in any material respect with the value for the property or use of the property to
which such Lien is attached.” 
  
 9. Section 2.2(l)(i)
of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
  
 “(l) Line Fees. (i) In consideration of the extension of the WCMA Line of Credit by MLBFS to Customer during the period from November 30, 2005 to the Initial Maturity Date, Customer has paid or
shall pay the Line Fee to MLBFS (provided that the Line Fee (A) for the period from November 30, 2005 to June 30, 2006 shall equal $8,750 and shall be due and payable on November 30, 2005 and (B) the Line Fee for the period
from June 30, 2006 to the Initial Maturity Date shall be due and payable in advance on June 30, 2006, and each June 30 thereafter. If the Line Fee has not heretofore been paid by Customer, Customer hereby authorizes MLBFS, at its
option, to either cause the Line Fee to be paid on November 30, 2005 with a WCMA Loan, or invoice Customer for such Line Fee (in which event Customer shall pay said fee within 5 Business Days after receipt of such invoice). No delay in the
Activation Date, howsoever caused, shall entitle Customer to any rebate or reduction in the Line Fee or to any extension of the Initial Maturity Date.” 
  
 10. Section 2.3 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 
  
 “2.3 APPLICABILITY OF BORROWING BASE. If and only if, at any
time during which any Obligations under the Loan Agreement are outstanding, the ratio of Funded Debt to EBITDA is greater than or equal to 1.75 as measured in the immediately preceding fiscal quarter or if total Funded Debt owed to MLBFS, including
all Obligations outstanding under this Loan Agreement and the Guaranty, is greater than $20,000,000, then the availability of credit under this Agreement shall be subject to the amount of the Available Borrowing Base, and, in such case in no event
shall the sum of (without duplication) the WCMA Loan Balance exceed the Available Borrowing Base. At all times during which the Available Borrowing Base is applicable to the WCMA Line of Credit pursuant to this Section 2.3, Customer shall
furnish to MLBFS a Borrowing Base Certificate (duly completed and executed by Customer) within 15 days after the end of each fiscal month, together with accounts receivable aging reports, inventory reports and such other supporting documentation as
MLBFS may reasonably request.” 
  
 11. There shall be added a
new Section 2.4 in Article II – THE WCMA LINE OF CREDIT within the Loan Agreement, which shall read as follows: 
  
 “2.4 MANDATORY PREPAYMENTS. There shall become due and payable and Customer shall prepay the outstanding Obligations under this Loan Agreement
in the following amounts (such amounts serving to permanently reduce the Maximum WCMA Line of Credit unless otherwise waived by MLBFS in writing) at the following times: (i) upon the occurrence of an Event of Loss, 
  

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any proceeds received as a result thereof shall be applied in accordance the provisions of Section 3.4(i) hereof, (ii) upon the receipt by any
Credit Party of the proceeds from the issuance and sale of any debt or equity securities or proceeds of the issuance of equity securities to Customer or any wholly owned subsidiary (excluding the proceeds of any stock options issued in the ordinary
course of business exercised by employees of the Customer or any wholly owned subsidiary), an amount equal to one hundred percent (100%) of the Net Cash Proceeds of such issuance and sale, and (iii) upon receipt by any Credit Party of the
proceeds of any Asset Disposition, an amount equal to one hundred percent (100%) of the Net Cash Proceeds of such Asset Disposition; provided, that no prepayment shall be required pursuant to this Section 2.4(iii) unless and until
the aggregate Net Cash Proceeds received during any fiscal year from Asset Dispositions exceeds $250,000 (in which case all Net Cash Proceeds in excess of such amount shall be used to make prepayments pursuant to this Section 2.4(iii)), and
provided, that, so long as no Default or Event of Default has occurred and is continuing, the recipient of such Net Cash Proceeds may reinvest the amount of such Net Cash Proceeds within sixty (60) days, in replacement fixed assets of a
kind then used or usable in the business of such Credit Party. If the applicable Credit Party does not intend to so reinvest such Net Cash Proceeds, or if the time period set forth in the immediately preceding sentence expires without such Credit
Party having reinvested such Net Cash Proceeds, Borrower shall prepay the outstanding Obligations under the Loan Agreement in an amount equal to such Net Cash Proceeds.” 
  
 12. Section 3.3(h) of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 

 
 “(h) Acquisition Of Assets Or Stock Of Any Other Entity.
Customer shall not, without the prior written consent of MLBFS, directly or indirectly acquire substantially all of the assets or at least a majority of the stock of any other entity. Notwithstanding the foregoing, provided no Default exists or
would result from such an acquisition and the resultant consolidated ratio of Funded Debt to EBITDA is less than 2.00 on a pro forma basis, MLBFS’ consent shall not be required for the acquisition by Customer of assets of any other entity for
the amount that is less than $3,000,000 in any single transaction or $9,000,000 for all transactions on an aggregate combined basis during any fiscal year by Customer.” 
  
 13. Section 3.3(k) of the Loan Agreement is hereby amended and restated in its entirety to read as follows: 

 
 “(k) Funded Debt To EBITDA Ratio. Customer shall at all times
maintain a ratio of Funded Debt to EBITDA in such amounts and during such time periods as set forth in the following table (determined no less frequently than quarterly on a trailing twelve month basis): 
  

			
	 Time Period

	  	 Funded Debt to EBITDA

	 From November 30, 2005 through and including December 30, 2006
	  	 Not greater than 2.50

		
	 From December 31, 2006 through and including December 30, 2007
	  	 Not greater than 2.25

		
	 December 31, 2007 and thereafter
	  	 Not greater than 2.00”

  

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 14. Section 3.3(m) of the Loan Agreement is hereby amended and restated in its entirety to read as
follows: 
  
 “(m) Limitation on Indebtedness. Except
upon the prior written consent of MLBFS, Customer shall not contract, create, incur, assume or permit to exist any Indebtedness at any time, except: (a) Indebtedness arising or existing under this Loan Agreement, the MLBFS Line of Credit, and
other Loan Documents or any other Obligation from time to time owing to MLBFS; (b) Indebtedness of Customer existing as of November 30, 2005 specified in SCHEDULE 3.3(i) hereto and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as of the date of such renewal, refinancing or extension; and (c) Indebtedness of Customer incurred after November 30, 2005 consisting of Capital Leases or Indebtedness
incurred to provide all or a portion of the purchase price or cost of construction of an asset provided that (i) such Indebtedness when incurred shall not exceed the purchase price or cost of construction of such new asset; (ii) no such
Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing; and (iii) the aggregate amount of all such Indebtedness shall not exceed $250,000 at any time
outstanding.” 
  
 15. Section 3.3(o) of the Loan
Agreement is hereby amended and restated in its entirety to read as follows: 
  
 “(o) Corporate Guarantors. Customer shall cause any existing or hereafter created (i) parent holding companies, (ii) direct or indirect wholly owned domestic subsidiaries and (iii) foreign
subsidiaries having greater than $2,000,000 in annual revenue or $1,000,000 in total assets (each a “Foreign Subsidiary”) to guarantee Customer’s obligations hereunder and execute a guaranty agreement and other documents in form and
substance reasonably acceptable to MLBFS. At its option, MLBFS may accept a pledge of 66 2/3% of the outstanding common equity interest of a Foreign Subsidiary in lieu of a guaranty agreeemnt from such Foreign Subsidiary. Any entities in existence
as of November 30, 2005 meeting the characteristics set forth in items (i), (ii) and (iii) above are set forth in Schedule 3.3(o) hereto.” 
  

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 16. Section 3.3(p) of the Loan Agreement is hereby amended and restated in its entirety to read as
follows: 
  
 “(p) Notice of Altiva Share Purchase.
Upon thirty (30) day prior written notice to MLBFS, Customer shall obtain the written consent of MLBFS to Customer’s exercise of the Buyout Option pursuant to rights granted under the Securities Purchase Agreement.” 
  
 17. There shall be added a new subsection (r) to Section 3.3 in
Article III – GENERAL PROVISIONS within the Loan Agreement, which shall read as follows: 
  
 “(r) Prepayments Restricted. Customer shall not directly or indirectly (a) declare, pay, make or set aside any amount for payment in respect of Funded Debt not owed to MLBFS, except for regularly
scheduled payments of principal and interest (but no voluntary prepayments) in respect of such Funded Debt made in full compliance with the applicable loan agreement or (b) amend or otherwise modify the terms of any loan agreement if the effect
of such amendment or modification is to (i) change the timing of payment of such Indebtedness; (ii) change the dates upon which payments of principal or interest are due on, or the principal amount of, such Indebtedness; (iii) change
any event of default or add or make more restrictive any covenant with respect to such Indebtedness; (iv) change the prepayment provisions of such Indebtedness or any of the defined terms related thereto; or (v) change or amend any other
term if such change or amendment would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in a manner adverse to Customer, any subsidiaries, or MLBFS. Customer shall, prior to
entering into any such amendment or modification, deliver to MLBFS reasonably in advance of the execution thereof, any final or execution form copy thereof and, if approval of MLBFS is required by the terms of the Loan Agreement prior to the taking
of any such action, Customer agrees not to take, nor permit any of its subsidiaries to take, any such action with respect to any such items without obtaining such approval from MLBFS.” 
  
 18. The Borrowing Base Certificate referenced in the Loan Agreement shall be
deemed to be a reference to the Borrowing Base Certificate attached hereto as Exhibit A. 
  
 19. The Certificate of Compliance referenced in the Loan Agreement shall be deemed to be a reference to the Certificate of Compliance attached hereto as
Exhibit B. 
  
 20. The exhibit listing locations of
Tangible Collateral referenced in the Loan Agreement shall be deemed to be a reference to such exhibit attached hereto as Exhibit C. 
  
 21. The Schedule 1.1(a) referenced in the Loan Agreement shall be deemed to be a reference to Schedule 1.1(a) attached hereto. 
  
 22. The Schedule 3.3(i) referenced in the Loan Agreement shall be deemed to
be a reference to Schedule 3.3(i) attached hereto. 
  

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 Affirmations 
  
 1. The Customer acknowledges and agrees that its obligations under the Loan Agreement and the other Loan Documents remain
valid and binding obligations enforceable against it in accordance with the terms thereof, and that there are no claims, set-offs or defenses to the satisfaction thereof. 
  
 2. The Customer acknowledges and agrees that the security interests and other liens granted to MLBFS in the Collateral are
and remain valid and first priority liens on the assets subject thereto (other than Permitted Liens), and the Intercreditor Agreement by and between MLBFS and the Customer dated as of June 25, 2004 remains a valid and binding obligation
enforceable against it in accordance with the terms thereof. The Customer further represents and warrants that there are no claims, set-offs or defenses to exercise of any rights or remedies available to MLBFS as creditor in realizing upon such
assets under the terms and conditions of the Loan Agreement and the other Loan Documents, as the case may be. 
  
 3. The Customer acknowledges and agrees that, notwithstanding this Amendment, the Customer continues to unconditionally guaranty the WCMA Line of Credit
No. 2BN-07A10 from MLBFS to Altiva Corporation (the “Altiva Line of Credit”) pursuant to the terms and conditions of the Unconditional Guaranty dated as of June 25, 2004. The Customer further acknowledges the Altiva Line of
Credit has been amended as of the date hereof to, inter alia, increase the Maximum WCMA Line of Credit (as defined in the Altiva Line of Credit) to $4,500,000 as of the date hereof through June 30, 2006, and $6,000,000.00
commencing July 1, 2006. 
  
 4. The Customer hereby
acknowledges and agrees that all loans between MLBFS and Customer will be cross-collateralized and cross-defaulted with any loans between MLBFS and Guarantors, and the Loan Agreement will be further cross defaulted with all of Borrower’s and
Guarantor’s other loans and material agreements in excess of $250,000.00. 
  
 Waiver of Claims and Defenses; Release 
  
 1. The Customer further acknowledges and represents that it does not have any claim, counterclaim, cause of action or defense of any kind by way of set-off or otherwise to the payment and satisfaction in full of its
obligations under the Loan Documents. The foregoing notwithstanding, to the extent that any such claim or defense may or does exist, the Customer hereby waive and release any and all such claims, counterclaims, causes of action and defenses.

  
 2. The Customer further waives and releases and affirmatively
agrees not to allege or otherwise pursue, in any manner, any and all defenses, affirmative defenses, counterclaims, claims, causes of action, set-offs or other rights that it may have to contest: (i) any provisions of the Loan Documents;
(ii) the rights of MLBFS to all issues, profits, products and proceeds of the Collateral as set forth in any of the Loan Documents; (iii) the liens for the benefit of MLBFS in any property (whether real or personal, tangible or intangible)
right or other interest, now or hereafter arising in connection with the Collateral as set forth in the Loan Documents; and (iv) any and all acts or 

  

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omissions of MLBFS in the administration of the Loan Documents or otherwise; and fully and forever releases and discharges MLBFS from any and all claims or
liability of any kind or nature with respect to the foregoing. 
  
 Conditions to Effectiveness 
  
 The
agreement of MLBFS to modify the Loan Documents set forth above, in each case as set forth herein, is subject to the condition precedent that, on or before the date hereof, Customer has satisfied the conditions set forth in the commitment letter
dated September 21, 2005 including, but not limited to, the following, each in form and substance satisfactory to MLBFS: 
  

	 	(a)	a waiver by SunTrust Bank, a Florida banking corporation (“SunTrust”), of the compliance by the Customer with the provisions of Section 8(a) of a Credit Agreement
dated as of November 1, 1997 by and between the Customer and SunTrust with respect to the increase in the WCMA Line of Credit and the increase of the Altiva Line of Credit contemplated herein; 

  

	 	(b)	the adoption by the Board of the Directors of the Customer of a resolution authorizing the increased borrowing under the Loan Agreement, as amended hereby, in an amount not to
exceed $24,000,000, and authorizing the appropriate officers of the Customer to negotiate, execute and deliver this Amendment; 

  

	 	(c)	the payment by the Customer and receipt by MLBFS of (i) an amendment fee of $15,000 and (ii) an initial Line Fee of $8,750; 

  

	 	(d)	the completion by Customer of a Borrowing Base Certificate dated September 30, 2005 and submission of same to MLBFS; 

  

	 	(e)	the receipt and satisfactory review of an evaluation and appraisal audit of the Customer’s inventory by an independent third party consultant; 

  

	 	(f)	the review and approval of the most recent Suntrust and Compass Bank loan documents; 

  

	 	(g)	the receipt of Collateral Removal Agreements with landlords of locations of Tangible Collateral, as applicable; 

  

	 	(h)	the receipt of consents by SunTrust, as mortgagee, for removal of collateral, as applicable; 

  

	 	(i)	the receipt of an assignment of the Distribution Agreement between the Customer and Waldemar Link GMBH & Co. KG (“Link”) dated as of March 1, 2005 in favor
of MLBFS dated the date hereof; 

  

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	 	(j)	After accounting for this Letter Agreement and all other Funded Debt, Customer shall have excess availability under the WCMA Line of Credit of not less than $3,000,000 at closing;

  

	 	(k)	the receipt of evidence of sufficient insurance in accordance with the terms of the Loan Agreement, and at the option of MLBFS, the review of same by a independent insurance
consultant; 

  

	 	(l)	this Amendment duly executed and delivered by the Customer; and 

  

	 	(m)	the fees and expenses to outside counsel to MLBFS for services rendered in connection with the transaction described herein. 

  
 Full Force and Effect 
  
 By the execution and delivery of this Letter Agreement, the Customer agrees
that all the Loan Documents are and shall continue to be in full force and effect, as amended hereby and each is hereby ratified and confirmed in all respects except that after giving effect to this Letter Agreement all references in the Loan
Agreement to “this Agreement,” “hereto,” “hereof,” “hereunder” or words of like import referring to the Loan Agreement, shall mean the said Loan Agreement, as amended hereby; and all references in the other
Loan Documents to the Loan Agreement shall mean the Loan Agreement as amended hereby. This Amendment is given as a modification to the obligations of the Customer under the Loan Documents and not as a novation or extinguishment thereof. 

 
 Representations and Warranties 
  
 In order to induce MLBFS to enter into this Letter Agreement, the Customer
makes the following representations and warranties to MLBFS, which shall survive the execution and delivery hereof: 
  
 (i) The execution and delivery of this Letter Agreement has been authorized by all necessary corporate action required on its part, this Letter Agreement
has been duly executed and delivered by it, and this Letter Agreement and the Loan Documents, as amended hereby, constitutes the legal, valid and binding obligations of it enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, moratorium laws from time to time in effect and general principles of equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law); 
  
 (ii) No Event of Default has occurred
and is continuing under the Loan Agreement, and no event has occurred which, with notice, lapse of time or both, would constitute such an Event of Default; and 
  

(iii) The representations and warranties set forth in the Loan Agreement and the other Loan Documents are true and correct as of the date hereof in all
material respects. 
  

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 Miscellaneous 
  
 This Letter Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an
original, and all which when taken together shall constitute one and the same agreement. 
  
 This Letter Agreement, including the validity thereof and the rights and obligations of the parties hereunder, shall be construed in accordance with and governed by the laws of the State of Illinois. 
  
 Please acknowledge your acceptance of the foregoing provisions by signing
where indicated below. This Letter Agreement constitutes a Loan Document under the Loan Agreement, and failure to adhere to the terms herein will constitute an Event Default thereunder. 
  
 All other terms and conditions of the Loan Agreement remain in full force and effect. 
  

			
	Merrill Lynch Business Financial Services Inc.
		
	 By:
	 	 /s/ Pauline Roh

	 Name:
	 	Pauline Roh
	 Title:
	 	Vice President

  
 Agreed and Accepted to by:

  

			
	Exactech, Inc.
		
	By:	 	 /s/ Joel C. Phillips

	 	 	Joel C. Phillips,
	 	 	Chief Financial Officer

  

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 EXHIBIT A 
  
 BORROWING BASE CERTIFICATE 
 WCMA LOAN AND SECURITY AGREEMENT NO. 2BN-07R53 
  
 ATTACHED TO AND HEREBY MADE A PART OF WCMA LOAN AND SECURITY AGREEMENT NO. 2BN-07R53 DATED AS OF JUNE 25, 2004 BETWEEN MLBFS AND EXACTECH, INC., AS AMENDED.

  

	To:	Merrill Lynch Business Financial Services Inc. (“MLBFS”) 

	    	222 North LaSalle Street, 17th Floor

	  	Chicago, IL 60601 

  
 The undersigned, on behalf of Exactech, Inc. (“Customer”), hereby certifies to MLBFS that: (i) he/she is an officer authorized to execute and deliver this certificate on behalf of Customer, and is
familiar with the business and financial condition of the Customer; (ii) the financial statements delivered with this Certificate fairly present in all material respects the results of operations and financial condition of Customer; and
(iii) to the best of my knowledge and belief, after reasonable investigation, each of the following statements is true and correct as of the date hereof: (a) no Event of Default (as defined in the Loan Agreement), or event which with the
giving of notice, passage of time, or both, would constitute and Event of Default, has occurred or is continuing, (b) no material adverse change in the financial condition of Customer has occurred or is continuing, and (c) the attached
annexations, which are hereby incorporated herein by reference, are accurate, true and correct, and do not fail to state any material fact known (or should have been known) to Customer which would, but for the lapse of time, make any such statement
or calculation false in any respect. 
  
 Customer represents and warrants that the
foregoing information is accurate and complete as of the first date above written. 
  
 Customer has caused this Borrowing Base Certificate to be executed and delivered by its officer in charge of financial matters. 
  

			
	 EXACTECH, INC.

		
	 By:
	 	  

	  
  

	 Name:

	  

	 Title

	  

	 Date

  
 INSTRUCTIONS: AS REQUIRED
PURSUANT TO SECTION 2.3 OF THE LOAN AGREEMENT (TO WHICH THIS ORIGINAL FORM OF BORROWING BASE CERTIFICATE IS ATTACHED AS EXHIBIT A), THIS BORROWING CERTIFICATE AND THE ATTACHED ANNEXATIONS MUST BE COMPLETED BY YOU WITHIN 15 DAYS AFTER THE CLOSE OF
EACH FISCAL MONTH. MLBFS EXPECTS YOU TO MAKE COPIES OF THIS ORIGINAL FORM OF BORROWING BASE CERTIFICATE AND SEND THEM TO MLBFS WITHOUT NOTIFICATION OR REMINDER. ADDITIONAL COPIES WILL BE PROVIDED TO YOU UPON REQUEST. 
  

 A-2 

 BORROWING BASE CERTIFICATE 
 WCMA LOAN AND SECURITY AGREEMENT NO. 2BN-07R53 
 Exactech, Inc. 
  

					
	 Borrowing Base Certificate, as of:
	  	 	[insert date	]
		
	 A. COMPUTATION OF TOTAL BORROWING BASE (in dollars)
	  	 	 	 
	 1) ELIGIBLE ACCOUNTS
	  	 	 	 
	 (a) Total Accounts
	  	 	 	 
	 (b) Less Accounts more than 60 days past due
	  	 	 	 
	 (c) Less Accounts due from international parties
	  	 	 	 
	 (d) Less other Accounts that are not Eligible Accounts*
	  	 	 	 
	 	  	
	
	

	 2) TOTAL ELIGIBLE ACCOUNTS
	  	$	—  	 
	 3) 80% of Total Eligible Accounts
	  	$	—  	 
		
	 4) ELIGIBLE INVENTORY
	  	 	 	 
	 (a) Total Inventory
	  	 	 	 
	 (b) Less Raw Materials & WIP
	  	 	 	 
	 (c) Less Surgical Instrumentation
	  	 	 	 
	 (d) Less other Inventory that is not Eligible Inventory*
	  	 	 	 
	 	  	
	
	

	 5) TOTAL ELIGIBLE INVENTORY
	  	$	—  	 
	 6) 50% of Total Eligible Inventory
	  	$	—  	 
	 7) Lesser of A6 and $17,000,000
	  	$	—  	 
	 	  	
	
	

	 8) TOTAL BORROWING BASE (Sum of A3 and A7)
	  	$	—  	 
	 (* See limitations in definition of “Eligible Accounts” and “Eligible Inventory” set forth in Loan
Agreement.)
	  	 	 	 
		
	 B. AVAILABLE BORROWING BASE
	  	 	 	 
	 1) Total Borrowing Base (A8)
	  	$	—  	 
	 2) Less maximum amount of Customer’s obligations under Altiva Guaranty*
	  	$	4,500,000	 
	 3) Borrowing Base, net (B1 less B2)
	  	$	(4,500,000	)
	 4) Maximum WCMA Line of Credit Amount
	  	$	24,000,000	 
	 5) Available Borrowing Base (lesser of B3 and B4)
	  	$	(4,500,000	)
	 (* $6,000,000 at 7/1/06 and thereafter)
	  	 	 	 
		
	 C. BORROWING AVAILABILITY
	  	 	 	 
	 1) Available Borrowing Base (B5)
	  	$	(4,500,000	)
	 2) Less outstanding Principal Balance of Revolving Loans
	  	$	—  	 
	 	  	
	
	

	 4) Borrowing Availability* (C1 less C2)
	  	$	(4,500,000	)
	 (* If this results in a negative number, this is the amount Customer must prepay.)
	  	 	 	 

  

 A-2 

 

 
  
 EXHIBIT B 
  
 COMPLIANCE CERTIFICATE – WCMA LOAN AND SECURITY AGREEMENT NO. 2BN-07R53

 ATTACHED TO AND HEREBY MADE A PART OF THIS WCMA LOAN AND SECURITY AGREEMENT NO. 2BN-07R53 DATED AS OF JUNE 25, 2004 BETWEEN MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC. AND EXACTECH, INC., AS AMENDED. 
  

	To:	Merrill Lynch Business Financial Services Inc. (“MLBFS”) 

	    	222 North LaSalle Street 

	    	17th Floor 

	    	Chicago, IL 60601 

  
 The undersigned, on behalf of EXACTECH, INC. (“Customer”), hereby certifies to MLBFS that: (i) he/she is an officer authorized to execute and deliver this certificate on behalf of Customer and is
familiar with the business and financial condition of Customer; (ii) the financial statements delivered with this Certificate fairly present in all material respects the results of operations and financial condition of Customer; and
(iii) to the best of my knowledge and belief, after reasonable investigation, each of the following statements is true and correct as of the date hereof: (a) no Event of Default, or event which with the giving of notice, passage of time,
or both, would constitute and Event of Default, has occurred or is continuing, (b) no material adverse change in the financial condition of Customer has occurred or is continuing since the date of the financing statements attached hereto, and
(c) the attached annexations, which are hereby incorporated herein by reference, are accurate, true and correct, and do not fail to state any material fact known (or should have been known) to Customer that would, but for the lapse of time,
make any such statement or calculation false in any respect. 
  
 The Funded Debt
of EBITDA Ratio for the period covered by this certificate, as demonstrated by the calculations required by Section 3.3(k) attached hereto, is              to 1.0. As a result
of the foregoing, Tier Level              of the pricing grid, duplicated below, is the applicable Tier Level for purposes of determining the Applicable Margin. 
  

					
	 Tier Level

	  	 Funded Debt to EBITDA

	  	 Applicable Margin

			
	 IV
	  	 If ratio is greater than or equal to 2.00
	  	 237.5 basis points (2.375%)

			
	 III
	  	 If ratio is less than 2.00 but greater than or equal to 1.50
	  	 200.0 basis points (2.000%)

			
	 II
	  	 If ratio is less than 1.50 but greater than or equal to 1.00
	  	 175.0 basis points (1.750%)

			
	 I
	  	 If ratio is less than 1.00
	  	 150 basis points (1.500%)

  

	
	 Date:

	
	  

	Signature
	  

	Printed Name
	  

	Title

  
 INSTRUCTIONS: IN ACCORDANCE WITH
THE TERMS OF THE LOAN AGREEMENT (TO WHICH THIS ORIGINAL FORM OF COMPLIANCE CERTIFICATE IS ATTACHED AS EXHIBIT B), THIS COMPLIANCE CERTIFICATE AND THE ATTACHED ANNEXATIONS MUST BE COMPLETED BY YOU WITHIN 45 DAYS AFTER THE CLOSE OF EACH FISCAL
QUARTER. MLBFS EXPECTS YOU TO MAKE COPIES OF THIS ORIGINAL FORM OF COMPLIANCE CERTIFICATE AND SEND THEM QUARTERLY TO MLBFS WITHOUT NOTIFICATION OR REMINDER. ADDITIONAL COPIES WILL BE PROVIDED TO YOU UPON REQUEST. 
  

 B-1 

 RATIO OF FUNDED DEBT TO EBITDA ANNEX 
 TO COMPLIANCE CERTIFICATE 
 (Exhibit B to Loan Agreement) 
  
 Customer shall at all times maintain a ratio of Funded Debt to EBITDA (as each term is
defined in the Loan Agreement) of not greater than 2.50 to 1.00, stepping down to 2.25x at FYE2006, and to 2.00x at FYE 2007 and thereafter determined no less frequently than quarterly on a trailing twelve month basis. 
  

					
	 (a)    Funded Debt
  
	 	 	 	 
	 (i) indebtedness from letters of credit and guarantees
	 	$	                        	 
		
	 (ii) all other indebtedness for borrowed money (w/o duplication)
	 	$	                        	 
		
	 (iii) excluding subordinated indebtedness
	 	$	(                        	)
		
	 TOTAL FUNDED DEBT (=)
	 	$	                        	 
		
	 (b)    EBITDA
  
	 	 	 	 
	 consolidated earnings
	 	$	                        	 
	 taxes (+)
	 	$	                         	 
	 interest (+)
	 	$	                         	 
	 depreciation (+)
	 	$	                         	 
	 amortization (+)
	 	$	                         	 
	 non-recurring items (+/-)
	 	$	(                        	)
	 TOTAL EBITDA (=)
	 	$	                         	 

  
 Ratio
of Funded Debt to EBITDA (a/b)              to 1.00 
  
 In Compliance?    Yes / No 
  

 B-2 

 FIXED CHARGE COVERAGE RATIO ANNEX 
 TO COMPLIANCE CERTIFICATE 
 (Exhibit B to Loan Agreement) 
  
 Customer shall at all times maintain a Fixed Charge Coverage Ratio (as defined in Loan
Agreement) of not less than 1.30 to 1.00 determined no less frequently than quarterly on a trailing twelve month basis. 
  

					
	 (a)    EBITDA
	  	 	 	 
		
	 consolidated earnings
	  	$	                        	 
	 taxes (+)
	  	$	                        	 
	 interest (+)
	  	$	                        	 
	 depreciation (+)
	  	$	                        	 
	 amortization (+)
	  	$	                        	 
	 non-recurring items (+/-)
	  	$	(                        	)
	 internally financed capital expenditures (-)
	  	$	(                        	)
	 TOTAL EBITDA (=)
	  	$	                        	 
		
	 (a)    Fixed Charges
	  	 	 	 
		
	 principal and interest
	  	$	                        	 
	 rents under capital leases (+)
	  	$	                        	 
	 div./distr. to owners (+)
	  	$	                        	 
	 taxes paid in cash (+)
	  	$	                        	 
	 TOTAL FIXED CHARGES (=)
	  	$	                        	 

  

	Fixed	Charge Coverage Ratio (a/b)              to 1.00 

  
 In Compliance?    Yes / No 
  

 B-3 

 EXHIBIT C 
  
 ATTACHED TO AND HEREBY MADE A PART OF WCMA LOAN AND SECURITY AGREEMENT NO. 2BN-07R53 BETWEEN MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. AND EXACTECH, INC., AS
AMENDED. 
  
 Additional Locations of Tangible Collateral: 

 
 2243 NW 66th Ct 
 Gainesville, FL 32653 
  
 2320 NW 66th Court

 Gainesville, FL 32653 
  
 2402 NW 66th Court

 Gainesville, FL 32653 
  
 2411 NW 66th Court

 Gainesville, FL 32653 
  
 445 Northern Boulevard 
 Great Neck, NY 11021

  
 300 Roundhill Drive 
 Rockaway, NJ 07866 

 Schedule 1.1(a) – Permitted Liens 
  

											
	 Lienholder/Secured Party

	  	Date Lien
Filed

	  	Office

	  	UCC File #

	  	Other
Information

	 	Collateral

	 Merrill Lynch Business Financial Services, Inc.
	  	6/27/95	  	Florida
Secured
Transaction
Registry
– Florida
Secretary
of State	  	950000128621	  	Amendment
filed on
8/3/98
(File #980000171898)
and
Continuation
statement
filed
on
3/10/00
(file #200000059077)
and
another
Continuation
statement
filed on
12/29/04
(file #200408621972)	 	All Personal
Property
	 SunTrust Bank, North Central Florida
	  	11/18/97	  	Florida
Secured
Transaction
Registry
– Florida
Secretary
of State	  	970000260452	  	Continuation
statement
filed on
9/25/02
(File #200202248303)
and
Amendment
filed on
10/25/02
(File #200202485038)	 	All Personal
Property
and Real
Property
constituting
the
Customer’s
orthopedic
implant
manufacturing
facility
	 Compass Bank
	  	4/12/04	  	Florida
Secured
Transaction
Registry
– Florida
Secretary
of State	  	200406619644	  	 	 	Specified
items of
equipment
	 Compass Bank
	  	7/17/03	  	Florida
Secured
Transaction
Registry
– Florida
Secretary
of State	  	200304477441	  	 	 	Specified
items of
equipment
	 Compass Bank
	  	3/17/03	  	Florida
Secured
Transaction
Registry
– Florida
Secretary
of State	  	200303497112	  	 	 	All equipment
	 Compass Bank
	  	9/29/05	  	TBA	  	TBA	  	TBA	 	Specified
items of
equipment
	 SunTrust Bank, North Central Florida
	  	11/25/97	  	Alachua
County,
Florida
Official
Records	  	Bk 2141 Pg.
2036	  	Continuation
statement
filed on
9/24/02
(Bk 2521
Pg. 1168)	 	All Personal
Property
and Real
Property
constituting
the
Customer’s
orthopedic
implant
manufacturing
facility
	 SunTrust Bank, North Central Florida
	  	11/18/97	  	Alachua
County,
Florida
Official
Records	  	Bk 2140 Pg.
1902	  	Continuation
statement
filed on
9/24/02
(Bk 2521
Pg. 1170)	 	All Personal
Property
and Real
Property
constituting
the
Customer’s
orthopedic
implant
manufacturing
facility
	 SunTrust Bank, North Central Florida
	  	10/13/05	  	TBA	  	TBA	  	TBA	 	All Personal
Property
and Real
Property
constituting
the
Customer’s
orthopedic
implant
manufacturing
facility

  
 Liens
held by lessors to leased premises listed on Exhibit 1 to the Loan Agreement. 

 SCHEDULE 3.3(m) – Permitted Indebtedness 
  
 Loan from SunTrust Bank in a principal amount equal to $4.2 million for use in completing
expansion of Customer’s plant and office complex. Matures on September 20, 2012. 
  
 Loan from SunTrust Bank in a principal amount equal to $4.0 million for use in completing expansion of Customer’s plant and office complex. Matures on October 18, 2015. 
  
 Loans from Compass Bank to finance the purchase of certain items of equipment for
Customer’s facility expansion – current balance in an aggregate amount equal to $1.581 million. Matures on February 24, 2009. 
  
 Loans from Compass Bank to finance the purchase of certain items of equipment for Customer’s facility expansion – current balance in an aggregate amount equal
to $1.017 million. Matures on October 1, 2011. 
  
 Industrial revenue bond
with SunTrust Bank for use in construction of Customer’s current facility. Balance due under the bond as of November 25, 2005 was $2.4 million. Matures on November 1, 2017. 

 SCHEDULE 3.3(O) – SUBSIDIARIES 
  

	(i)	Parent holding companies: None 

  

	(ii)	Direct or indirect wholly owned domestic subsidiaries: None 

  

	(iii)	Foreign subsidiaries having greater than $2,000,000 in annual revenue or $1,000,000 in total assets: NoneBioMarin Pharmaceutical Inc. Nonqualified Deferred Compensation Plan

 Exhibit 10.1 
  
 BIOMARIN PHARMACEUTICAL INC. 
 NONQUALIFIED DEFERRED COMPENSATION PLAN 

 BIOMARIN PHARMACEUTICAL INC. 
 NONQUALIFIED DEFERRED COMPENSATION PLAN 
  
 RECITALS 
  
 This BioMarin Pharmaceutical Inc. Nonqualified Deferred Compensation Plan is adopted by BioMarin Pharmaceutical Inc. effective as of December 1, 2005, or if later, such date the Plan (as defined herein) is approved by BioMarin
Pharmaceutical Board of Directors. The Plan has been adopted primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees of the Company and its related entities. This Plan shall also
be available to non-employee members of the Board of Directors. Accordingly, it is intended that this Plan be exempt from the requirements of Parts II, III and IV of Title I of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), pursuant to Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. This Plan is intended to be an unfunded, nonqualified deferred compensation plan. Plan participants shall have the status of unsecured creditors of BioMarin
Pharmaceutical with respect to the payment of Plan benefits. Furthermore, this Plan is intended to meet the requirements of section 409A of the Code (as defined herein) and any regulations promulgated pursuant to section 409A. 
  

	1.	DEFINITIONS. 

  

	 	1.1.	“Account” means the book entry account(s) established under the Plan for each Participant’s Compensation Deferrals, Discretionary Employer Contributions and
any contribution credits and deemed income, gains and losses credited thereto or debited therefrom. Account balances shall be reduced by any distributions made to the Participant or the Participant’s Beneficiary(ies) therefrom and any charges
that may be imposed on such Account(s) pursuant to the terms of the Plan. Separate Subaccounts may be established to which shall be credited a Participant’s Compensation Deferrals for each separate Plan Year, the Discretionary Employer
Contributions, if any, and the gains and losses with respect thereto. Where Subaccounts have been established, Account shall refer to all of the Participants’ Subaccounts, collectively, as the context may require. 

  

	 	1.2.	“Beneficiary” means any person or persons so designated in accordance with the provisions of Section 7.1. 

  

	 	1.3.	“Board” means the Board of Directors of the Company. If one or more committees have been appointed by the Board to determine eligibility under the Plan,
Discretionary Employer Contributions to be made to the Plan, or to exercise any other Company discretion with respect to such Plan, “Board” also means such committee(s). 

  

	 	1.4.	 “Change Of Control” shall mean either (i) a merger, consolidation, share exchange, business combination, issuance of securities, direct or
indirect acquisition of securities, tender offer, exchange offer or other similar 

  

 1 

	 	 
transaction as a result of which the persons that beneficially owned, directly or indirectly, the shares of the Company’s voting stock immediately prior
to such transaction cease to beneficially own, directly or indirectly, shares of voting stock representing more than fifty percent (50%) of the total voting power of all outstanding classes of voting stock of the Company or the continuing or
surviving corporation if Company is not the continuing or surviving corporation in such transaction, or (ii) a sale of all or substantially all of the assets of Company. 

  

	 	1.5.	“Code” means the Internal Revenue Code of 1986 and the regulations thereunder, as amended from time to time. 

  

	 	1.6.	“Committee” means the Administrative Committee composed of such individuals as may be appointed by the Board which shall function as the administrator of the Plan.

  

	 	1.7.	“Company” means BioMarin Pharmaceutical Inc., a Delaware company, and any successor organization thereto. 

  

	 	1.8.	“Compensation” means, in the case of a Participant who is an employee of the Company such Participant’s regular cash salary and cash bonuses, and Restricted
Stock Compensation, and in the case of a Participant who is a Director of the Company, such Participant’s annual Board retainer and Board meeting fees (including Board Committee meeting fees). Compensation shall also include any
“Performance Based Compensation” as that term is defined under section 409A of the Code and any regulations thereunder. 

  

	 	1.9.	“Compensation Deferrals” means the percentage or dollar amount of an Eligible Employee’s Compensation which the Eligible Employee elects to defer pursuant to
Section 3.1. 

  

	 	1.10.	“Designation Date” means the date or dates as of which a designation of deemed investment directions by an individual pursuant to Section 4.3, or any
change in a prior designation of deemed investment directions by an individual pursuant to Section 4.3, shall become effective. The Designation Dates in any Plan Year shall be determined by the Committee. 

  

	 	1.11.	“Director” means a non-employee member of the Board of Directors. 

  

	 	1.12.	 “Disability” will be determined to exist if the Participant is, by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12 months, eligible to receive income replacement benefits for a period of not less than 3 months under any disability benefit plan for covered Employees
of the Employer, or, if the Participant does not participate in such plan, would have been eligible to receive such 

  

 2 

	 	 
benefits had the Participant participated in such plan. If the Employer does not sponsor such a plan or discontinues sponsoring such a plan, Disability shall
be determined by the Committee in its sole discretion. 

  

	 	1.13.	“Discretionary Employer Contributions” means the amount, if any, of contributions awarded to a Participant pursuant to Section 3.2.

  

	 	1.14.	“Effective Date” means the effective date of the Plan, which shall be December 1, 2005, or if later, the date the Plan is approved by the Board.

  

	 	1.15.	“Election” means the form on which a Participant (i) elects to make Compensation Deferrals pursuant to Article 3 or (ii) elects a fixed payment date
pursuant to Article 5, or (iii) elects the method by which his or her Account will be distributed pursuant to Article 6. The Election shall be in such form, including specifically by electronic means, as may be prescribed by the Committee.

  

	 	1.16.	“Eligible Employee” means, for any Plan Year (or applicable portion thereof), an employee of the Employer who is a member of the select group of management or
highly compensated employees as more particularly described in Article 2 and who has been designated by the Committee, in its sole discretion, as eligible to participate in the Plan. 

  

	 	1.17.	“Employer” means the Company and any other subsidiary of the Company that has, with the consent of the Committee, adopted this Plan for the benefit of its Eligible
Employees. 

  

	 	1.18.	“Entry Date” means the first day of any Plan Year and, as to any Eligible Employee, the date which is thirty (30) days from the date on which such Eligible
Employee is first notified by the Committee of his or her eligibility to participate in the Plan. Notwithstanding the foregoing, for any individual first designated as an Eligible Employee on or before the Effective Date, his or her Entry Date shall
be the Effective Date. 

  

	 	1.19.	“Open Enrollment Period” means such period as the Committee may specify which ends prior to the first day of each Plan Year, or, with respect to an Eligible
Employee or Director who first becomes eligible to participate in the Plan during a Plan Year, ends within thirty (30) days of becoming an Eligible Employee or Director. Notwithstanding the foregoing, the Open Enrollment Period for deferrals of
Performance Based Compensation may end no later than six (6) months prior to the end of the performance period for which services are to be rendered. 

  

	 	1.20.	“Participant” means an Eligible Employee or Director who has elected to participate in the Plan by executing and submitting an Election to the Committee. A
Participant shall also mean an Eligible Employee for whom Discretionary Employer Contributions are made, regardless of whether such Eligible Employee has executed and submitted an Election. 

  

 3 

	 	1.21.	“Plan” means this BioMarin Pharmaceutical Inc. Nonqualified Deferred Compensation Plan, as amended from time to time. 

  

	 	1.22.	“Plan Year” means the twelve (12) month period beginning on each January 1 and ending on the following December 31. 

  

	 	1.23.	“Restricted Stock Compensation,” means any restricted stock, restricted stock unit, phantom stock or similar award granted by the Employer to a Participant under
any Employer-sponsored equity compensation plan. 

  

	 	1.24.	“Retirement” means, in the case of a Participant employed by the Company, voluntary termination of employment on or after age 55 with 10 years or more of service,
and in the case of a Director, the date of voluntary termination of such person’s service as a Director. 

  

	 	1.25.	“Trust” means any trust, including a grantor trust within the meaning of subpart E, part I, subchapter J, chapter I, subtitle A of the Code, created by the Trust
agreement, to hold Compensation Deferrals and Discretionary Employer Contributions. 

  

	 	1.26.	“Trustee” means the trustee of the Trust described in Article 11. 

  

	 	1.27.	“Valuation Date” means any business day on which the New York Stock Exchange is open, or such other date that the Committee, in its sole discretion, designates as a
Valuation Date. 

  

	2.	ELIGIBILITY AND PARTICIPATION. 

  

	 	2.1.	Eligibility. Eligibility for participation in the Plan shall be limited to Directors and a select group of management or highly compensated employees of the Employer, who are
designated by the Committee, in its sole discretion, as eligible to participate in the Plan. Eligible Individuals shall be notified as to their eligibility to participate in the Plan. Participation in the Plan is voluntary, other than for
Discretionary Employer Contributions. A person shall automatically cease to be an Eligible Person at such a time as he or she is neither a member of a select group of management nor highly compensated employees of the Company nor a Director of the
Company. 

  

	 	2.2.	Commencement Of Participation. An Eligible Employee may begin participation in the Plan upon any Entry Date, subject to the execution and submission of an Election pursuant
to Article 3. In addition, participation of an Eligible Employee who has not otherwise commenced participation in the Plan, shall commence when a Discretionary Employer Contribution is made to the Account of such Eligible Employee pursuant to
the provisions of Section 3.2. 

  

 4 

	 	2.3.	Cessation Of Participation. Active participation in the Plan shall end when a Participant’s employment terminates for any reason or at such time as a Participant is
notified by the Committee pursuant to Section 2.4 that he or she is no longer eligible to participate in the Plan. Upon termination of employment or eligibility, a Participant shall remain an inactive Participant in the Plan until the
vested Account of the Participant under this Plan has been paid in full. 

  

	 	2.4.	Change Of Employment Category. During any period in which a Participant remains with the company, but ceases to be an Eligible Person, he or she shall not be eligible to make
Compensation Deferrals, or to receive Discretionary Employer Contributions hereunder. 

  

	3.	CONTRIBUTIONS AND CREDITS. 

  

	 	3.1.	Participant Contributions And Credits. 

  

	 	(a)	Time and Manner of Election. In accordance with rules established by the Committee, a Participant may elect to defer Compensation that would otherwise be paid to the
Participant, provided that such Compensation is not yet earned or payable at the time the election is made. A Participant who is a Director may elect to defer up to 100% of his or her Compensation earned during the Plan Year. Amounts so deferred
shall be considered a Participant’s “Compensation Deferrals” and shall be deducted by the Company from the Compensation of the deferring Participant and shall be credited to the Compensation Deferral Account of the deferring
Participant. Furthermore, in accordance with rules established by the Committee, a Participant may elect to defer Restricted Stock Compensation that would otherwise be payable to the Participant to the Participant’s Account. The value of the
Restricted Stock Compensation to be credited to the Participant’s Account shall be equal to fair market value of the number of shares vesting to the Participant as of the date of the shares vesting. 

  

	 	(b)	Timing of Election. The Election must be filed with the Committee during the Open Enrollment Period for the Plan Year to which such Election applies. Elections to defer
Restricted Stock Compensation must be made no later than twelve (12) months prior to the vesting of the shares and no later than thirty (30) days after the granting of the award. 

  

	 	(c)	 Irrevocable Election. The Participant’s Election with respect to his or her Compensation Deferrals is irrevocable. Unless increased, decreased or
terminated during any subsequent Open Enrollment Period, an Election shall remain in effect until so changed by the Participant during such subsequent Open Enrollment Period. A 

  

 5 

	 	 
Participant may at any time during the Plan Year terminate an election to defer and discontinue future deferrals of Compensation by providing written notice
to the Committee. Deferrals will be discontinued as soon as reasonably practicable. In such event, Compensation earned for services subsequent to such termination notice will be paid directly to the Participant and will not be subject to his or her
prior deferral election. A Participant who elects to discontinue deferrals of Compensation for a Plan Year may not recommence such deferrals until the next following Plan Year (or such later Plan Year in which he or she is again eligible to
participate), provided the Participant completes and executes the required election form. Increases or decreases in the amount of Compensation a Participant elects to defer (other than a suspension of deferrals) shall not be permitted during the
Plan Year. 

  

	 	(d)	Limitation on Compensation Deferrals. A Participant’s Compensation Deferral Elections shall be subject to the following: 

  

	 	(i)	A Participant electing to defer compensation for a given Plan Year must defer a minimum of the greater of 1% of his or her Compensation or $10,000 each Plan Year. In the event the
total amount deferred by a Participant in a Plan Year is less than the applicable minimum deferral amount, the Committee may, in its sole discretion, direct the Company to pay the amount deferred during that Plan Year to the Participant as soon as
administratively feasible after the end of the Plan Year; 

  

	 	(ii)	A Participant may elect to defer up to a maximum of one hundred percent (100%) of his or her Compensation. 

  

	 	(iii)	The Compensation Deferrals elected by the Participant shall be reduced by the amount(s), if any, which may be necessary, in the Committee’s sole and absolute discretion:
(1) to satisfy all applicable income and employment taxes withholding and FICA contributions; (2) to pay all contributions elected by the Participant pursuant to any other Company benefit plan which would require such compensation to be
taken into account under such plan; and (iii) to satisfy all garnishments or other amounts required to be withheld by applicable law or court order. 

  

	 	(e)	No Withdrawal. Except as provided in Section 5.2, amounts credited to a Participant’s Account may not be withdrawn by a Participant and shall be paid only in
accordance with the provisions of this Plan and applicable Participant Election. 

  

 6 

	 	(f)	Vesting. A Participant shall at all times be 100% vested in the amounts credited to his or her Compensation Deferral Account. 

  

	 	3.2.	Discretionary Employer Contributions And Credits. 

  

	 	(a)	Discretionary Employer Contributions. Apart from Compensation Deferral Contributions, the Board shall retain the right to make discretionary contributions for any Participant
under this Plan at the times and in the amount(s) designated by the Employer, in its sole discretion. Amounts so credited will be considered a Participant’s “Discretionary Employer Contributions.” 

  

	 	(b)	Company Contribution Account. There shall be established and maintained a separate Company Contribution Account in the name of each Participant to which shall be credited the
amount of any Company Contributions during a plan Year and any earnings thereon, and from which shall be debited the amount of any losses thereon and the amount of any distributions made to the Participant therefrom. 

  

	 	(c)	Vesting. Amounts credited to the Company Contribution Account shall become 100% vested after the Participant has had three full Years of Service with the Company following
the Plan Year in which the Company Contribution was made, or at such other time as the Company may designate at the time the Contribution is made. Notwithstanding the preceding, if (i) the Participant dies or incurs a Disability prior to
vesting or (ii) there is a Change of Control, all amounts credited to his or her Company Contribution Account shall become 100% vested. Any Participant that experiences a severance prior to full vesting shall irrevocably forfeit the portion not
vested at the time of severance, and the amount so forfeited shall be returned to the Company. Any Participant that experiences a Retirement prior to full vesting shall, unless the Committee determines otherwise in its sole discretion (which shall
include the discretion to fully vest amounts credited to the Company Contribution Account on Retirement), irrevocably forfeit the portion not vested at the time of Retirement, and the amount so forfeited shall be returned to the Company.

  

	 	(d)	 Forfeitures for Misconduct. If a Participant separates from service with the Employer as a result of the Participant’s gross misconduct, as determined
by the Committee, or if the Participant engages in unlawful business competition with the Employer, the Participant shall forfeit all amounts allocated to his or her Discretionary Employer Contribution Account(s) under this Section 3.2
(regardless of the vesting of such amounts). Such forfeitures shall be retained by the Employer. Notwithstanding any provision of 

  

 7 

	 	 
the Plan to the contrary, this Section 3.2(d) shall only be enforceable to the extent authorized by applicable law. 

 

	4.	ALLOCATION OF FUNDS. 

  

	 	4.1.	Allocation Of Deemed Earnings Or Losses On Accounts. Subject to such limitations as may from time to time be required by law, imposed by the Committee or the Trustee or
contained elsewhere in the Plan, and subject to such operating rules and procedures as may be imposed from time to time by the Committee, prior to the date on which a direction will become effective, the Participant shall have the right to direct
the Committee as to how amounts in his or her Compensation Deferral Account shall be deemed to be invested. However, with regard to Restricted Stock Compensation the amount deferred will be deemed to be invested in Company stock and will remain in
Company stock until such amount is distributed in shares to the Participant pursuant to Section 6. The Committee may, but is not required to, invest assets held by the Company on behalf of the Participant pursuant to the deemed
investment directions the Committee has properly received from the Participant, and may utilize the Trust for the same in its discretion. 

  
 As of each Valuation Date, the Participant’s Account will be credited or debited to reflect the Participant’s deemed investments. The
Participant’s Account will be credited or debited with the increase or decrease in the realizable net asset value of the designated deemed investments, as follows. As of each Valuation Date, an amount equal to the net increase or decrease in
realizable net asset value (as determined by the Committee) of each deemed investment option within the Account since the preceding Valuation Date shall be allocated among all Participants’ Accounts deemed to be invested in that investment
option in accordance with the ratio which the portion of the Account of each Participant which is deemed to be invested within that investment option, determined as provided herein, bears to the aggregate of all amounts deemed to be invested within
that investment option. 
  

	 	4.2.	Accounting For Distributions. As of the date of any distribution hereunder, the distribution made hereunder to the Participant or his or her Beneficiary or Beneficiaries
shall be charged to such Participant’s Account. Such amounts shall be charged on a pro rata basis against the investments of the Plan in which the Participant’s Account is deemed to be invested. 

  

	 	4.3.	 Deemed Investment Directions Of Participants. Subject to such limitations as may from time to time be required by law, imposed by the Employer or the Trustee
or contained elsewhere in the Plan, and subject to such operating rules and procedures as may be imposed from time to time by the Employer, prior to and effective for each Designation Date, each 

  

 8 

	 	 
Participant may communicate to the Employer a direction (in accordance with (a), below) as to how his or her Account should be deemed to be invested among
such categories of deemed investments as may be made available by the Employer hereunder. Such direction shall designate the percentage (in any whole percent multiples) of each portion of the Participant’s Account which is requested to be
deemed to be invested in such categories of deemed investments, and shall be subject to the following rules: 

  

	 	(a)	Any initial or subsequent deemed investment direction shall be in writing, on a form supplied by and filed with the Committee, and/or, as required or permitted by the Committee,
shall be by written designation and/or electronic transmission designation. A designation shall be effective as of the Designation Date next following the date the direction is received and accepted by the Committee on which it would be reasonably
practicable for the Committee to effect the designation. The Participant may, if permitted by the Committee, make a deemed investment direction for his or her existing Account balance as of the Designation Date and a separate deemed investment
direction for contribution credits occurring after the Designation Date. 

  

	 	(b)	All amounts credited to the Participant’s Account shall be deemed to be invested in accordance with the then effective deemed investment direction, and as of the Designation
Date with respect to any new deemed investment direction, all or a portion of the Participant’s Account at that date shall be reallocated among the designated deemed investment funds according to the percentages specified in the new deemed
investment direction unless and until a subsequent deemed investment direction shall be filed and become effective. An election concerning deemed investment choices shall continue indefinitely as provided in the Participant’s most recent
Election, or other form specified by the Committee. 

  

	 	(c)	If the Employer receives an initial or revised deemed investment direction which it deems to be incomplete, unclear or improper, the Participant’s investment direction then in
effect shall remain in effect (or, in the case of a deficiency in an initial deemed investment direction, the Participant shall be deemed to have filed no deemed investment direction) until the next Designation Date, unless the Employer provides
for, and permits the application of, corrective action prior thereto. 

  

	 	(d)	 If the Employer possesses (or is deemed to possess as provided in (c), above) at any time directions as to the deemed investment of less than all of a
Participant’s Account, the Participant shall be deemed to have directed that the undesignated portion of the 

  

 9 

	 	 
Participant’s Account be deemed to be uninvested. Or, in its discretion, the Employer may direct such undesignated portion of the Account to be deemed
to be invested in a money market, fixed income or similar fund made available under the Plan as determined by the Employer. 

  

	 	(e)	Each reference in this Section to a Participant shall be deemed to include, where applicable, a reference to a Beneficiary. 

  

	5.	ENTITLEMENT TO BENEFITS. 

  

	 	5.1.	Fixed Payment Dates; Termination Of Employment. During the Open Enrollment Period of each Plan Year and on his or her Election a Participant may select a fixed payment date
for the payment of amounts (or a portion of amounts) credited to his or her vested Account during the Plan Year for which the Participant Election is effective, which will be valued and payable according to the provisions of Article 6. Such fixed
payment dates or distribution methods may be postponed to later dates so long as elections to so postpone the dates or changes the distribution methods are made by the Participant at least twelve (12) months prior to the date on which the
distribution was originally scheduled to be made, the election will not take effect until at least twelve (12) months after the date on which the election is made, and the new postponed distribution date is at least five (5) years after
the originally scheduled date. 

  
 A Participant
who selects a fixed payment date for amounts credited to his or her Account during a Plan Year shall receive payment of such vested amounts at the earlier of such fixed payment date (as postponed, if applicable) or his or her termination of
employment with the Employer. 
  
 Any fixed payment date elected
by a Participant as provided above must be a date no earlier than the January 1 of the second calendar year after the calendar year for which the election is effective. 
  
 If a Participant does not make an election as provided above for any particular amounts hereunder, and the Participant
terminates employment with the Employer for any reason, other than reaching Retirement, the Participant’s vested Account at the date of such termination shall be valued and payable in a single lump sum as soon as practicable after such
termination according to the provisions of Section 6. 
  

	 	5.2.	 Hardship Distributions. In the event of an unforeseeable emergency of the Participant, as hereinafter defined, the Participant may apply to the Committee for
the distribution of all or any part of his or her vested Account. The Committee shall consider the circumstances of each such case, and the best interests of the Participant and his or her family, and shall have the right, in its sole
discretion, if applicable, to allow such 

  

 10 

	 	 
distribution, or, if applicable, to direct a distribution of part of the amount requested, or to refuse to allow any distribution. Upon a finding of
unforeseeable emergency, the Committee shall make the appropriate distribution to the Participant from amounts under the Participant’s vested Account. In no event shall the aggregate amount of the distribution exceed either the full value of
the Participant’s vested Account or the amount determined by the Committee to be necessary to alleviate the Participant’s financial hardship (which financial hardship may be considered to include any taxes due because of the distribution
occurring because of this Section 5.2) caused by the unforeseeable emergency, and which is not reasonably available from other resources of the Participant. For purposes of this Section 5.2, the value of the
Participant’s vested Account shall be determined as of the date of the distribution. “Unforeseeable Emergency” means (a) a severe financial hardship to the Participant resulting from an illness or accident of the Participant or
of a dependent (as defined in Code section 152(a)) of the Participant, (b) loss of the Participant’s property due to casualty, or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the Participant, each as determined to exist by the Committee. A distribution may be made under this Section 5.2 only with the written consent of the Committee. 

  

	 	5.3.	Re-Employment Of Recipient. If a Participant receiving installment distributions by virtue of an entitlement due to termination of employment after reaching Retirement is
re-employed by the Employer, the remaining distributions due to the Participant shall be suspended until such time as the Participant (or his or her Beneficiary) once again becomes eligible for benefits under Section 5.1, at which time
such installment distributions shall commence, subject to the limitations and conditions contained in this Plan. 

  

	 	5.4.	 Limitation On Distributions To Covered Employees. Notwithstanding any other provision of this Plan, in the event that the Participant is a “covered
employee” as that term is defined in Section 162(m)(3) of the Code, or would be a covered employee if amounts were distributed in accordance with his or her distribution election or hardship withdrawal, the maximum amount which may be
distributed from the Participant’s Account in any Plan Year shall not exceed one million dollars ($1,000,000) less the amount of compensation paid to the Participant in such Plan Year which is not “performance-based” (as defined in
Code Section 162(m)(4)(C) ) which amount shall be reasonably determined by the Committee at the time of the proposed distribution. Any amount which is not distributed to the Participant in a Plan Year as a result of this limitation shall be
distributed to the Participant in the next Plan Year, subject to compliance with the foregoing limitations set forth in this Section 5.4. During any such delay in payment, unpaid amounts shall continue to be credited (or debited) with
deemed investment income, gains and losses under Section 4. 

  

 11 

	 	 
Notwithstanding the foregoing, distribution of a Participant’s Account shall be made without regard to the deductibility limitation of Code section
162(m) if the time for distribution is accelerated pursuant to Section 9.3 or Section 10.3. 

  

	 	5.5.	Deduction Limitation on Withdrawal and Payments. If the Employer determines in good faith that there is a reasonable likelihood that any amount paid to a Participant for a
taxable year of the Employer would not be deductible by the Employer solely by reason of the limitation under Section 162(m) of the Code, then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution
to the Participant pursuant to this Plan is deductible, the Employer may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in
accordance with Section 4. The amounts so deferred and amounts credited thereon shall be distributed to the Participant or his or her beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined
by the Employer in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Employer during which the distribution is made will not be limited by Section 162(m) of the Code, or if
earlier, the date that is twenty-four (24) months following the date on which the distribution was first distributable to the Participant pursuant to the provisions of this Plan. 

  

	6.	DISTRIBUTION OF BENEFITS. 

  

	 	6.1.	Amount. The value of the Participant’s (or his or her Beneficiary’s) distribution shall be equal to the vested value of the Participant’s Account as of the
Valuation Date or such other date as the Committee may specify, each as adjusted for Compensation Deferrals, Discretionary Employer Contributions, and/or withdrawals which have been subsequently credited thereto or made therefrom prior to the
distribution date. 

  

	 	6.2.	Timing Of Distribution. Subject to the Participant having satisfied all applicable tax withholding obligations, distributions shall be paid (or, payments shall commence in
installments) as soon as practicable after the earlier of: 

  

	 	(a)	the fixed payment date designated by the Participant; or 

  

	 	(b)	the date as soon as administratively feasible following the Participant’s termination of employment with the Employer, death, or Disability. 

  

 12 

	 	6.3.	Method Of Distribution. A Participant’s Account shall be paid in one of the following methods, as specified in his or her Election: 

  

	 	(a)	as to all or any designated portion of Participant’s Account, a single lump sum payment; 

  

	 	(b)	if, and only if, the Participant’s employment was terminated as result of Retirement or within twelve (12) months after a Change of Control, and if elected by the
Participant in his or her most recent effective Election, in annual installment payments of substantially equal amounts over a period of up to fifteen (15) years; 

  

	 	(c)	a Participant may amend his or her Election so as to select installments upon termination as a result of Retirement by filing an amended Election provided, however, that such
Election to so change to installment distributions upon Retirement is made by the Participant at least twelve (12) months prior to the date of termination as a result of Retirement, the election will not take effect until at least twelve
(12) months after the date on which the election is made, and the new postponed distribution date is at least five (5) years from the original termination date as a result of Retirement; provided that, in no event shall any such
distribution date be accelerated to a date earlier than that initially selected by the Participant; and 

  

	 	(d)	the Employer (or its designee) may establish from time to time limitations on the Participant’s ability to select the time and method of payment of his Account based upon the
amount in the Participant’s Account; provided further that, unless and until changed by the Employer (or its designee), any Account that has a total vested balance of less than $5,000 at the time of distribution shall be paid in a lump sum
regardless of an election by the Participant to be paid in installments. 

  

	7.	BENEFICIARIES; PARTICIPANT DATA. 

  

	 	7.1.	Designation Of Beneficiaries. Each Participant from time to time may designate any person or persons (who may be named contingently or successively) to receive such benefits
as may be payable under the Plan upon or after the Participant’s death, and such designation may be changed from time to time by the Participant by filing a new designation. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Employer, and will be effective only when filed in writing with the Employer during the Participant’s lifetime. 

  
 In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is
no living Beneficiary validly named by the Participant, the Employer shall pay any such benefit payment to the Participant’s spouse, if then living, but otherwise to the 

  

 13 

 
Participant’s then living descendants, if any, per stirpes, but, if none, to the Participant’s estate. In determining the existence or identity of
anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Participant’s personal representative, executor or administrator. If a question arises as to the existence or identity of anyone entitled
to receive a benefit payment as aforesaid, or if a dispute arises with respect to any such payment, then, notwithstanding the foregoing, the Employer, in its sole discretion, may distribute such payment to the Participant’s estate without
liability for any tax or other consequences which might flow therefrom, or may take such other action as the Employer deems to be appropriate. 
  

	 	7.2.	Information To Be Furnished By Participants And Beneficiaries; Inability To Locate Participants Or Beneficiaries. Any communication, statement or notice addressed to a
Participant or to a Beneficiary at his or her last post office address as shown on the Employer’s records shall be binding on the Participant or Beneficiary for all purposes of the Plan. The Committee shall not be obliged to search for any
Participant or Beneficiary beyond the sending of notice to such last known address. If the Committee notifies any Participant or Beneficiary that he or she is entitled to an amount under the Plan and the Participant or Beneficiary fails to claim
such amount or make his or her location known to the Committee within three (3) years thereafter, then, except as otherwise required by law, if the location of one or more of the next of kin of the Participant is known to the Committee, the
Committee may direct distribution of such amount to any one or more or all of such next of kin, and in such proportions as the Committee determines. If the location of none of the foregoing persons can be determined, the Committee shall have the
right to direct that the amount payable shall be deemed to be a forfeiture, except that the dollar amount of the forfeiture, unadjusted for deemed gains or losses in the interim, shall be paid by the Committee if a claim for the benefit subsequently
is made by the Participant or the Beneficiary to whom it was payable. If a benefit payable to an unlocated Participant or Beneficiary is subject to escheat pursuant to applicable state law, the Committee shall not be liable to any person for any
payment made in accordance with such law. 

  

	8.	ADMINISTRATION. 

  

	 	8.1.	Committee Powers And Responsibilities. Other than the powers reserved for the Board, the Committee shall have the complete control of the administration of the Plan herein
set forth with all the powers necessary to enable it to properly carry out its duties in that respect. Not in limitation, but in amplification of the foregoing, the Committee shall have the power and authority to: 

  

	 	(a)	Construe the trust agreement to determine all questions that shall arise as to the interpretations of the Plan’s provisions including determination of which individuals are
Eligible Employees and the determination of the amounts credited to a Participant’s Account, and the appropriate timing and method of distributions. 

  

 14 

	 	(b)	Adopt such rules of procedure and regulations as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan.

  

	 	(c)	Implement the Plan in accordance with its terms and the rules and regulations adopted as above. 

  

	 	(d)	Appoint any persons or firms, or otherwise act to secure specialized advice or assistance, as it deems necessary or desirable in connection with the administration and operation of
the Plan, and the Committee shall be entitled to rely conclusively upon, and shall be fully protected in any action or omission taken by it in good faith reliance upon, the advice or opinion of such firms or persons. The Committee may authorize one
or more persons to execute any certificate or document on behalf of the Company, an Employer or the Committee, in which event any person notified by the Committee of such authorization shall be entitled to accept and conclusively rely upon any such
certificate or document executed by such person as representing action by the Committee until such notified person shall have been notified of the revocation of such authority. 

  

	 	(e)	Subject to Section 9, adopt amendments to the Plan document which are deemed necessary or desirable to facilitate administration of the Plan and/or to bring the Plan
into compliance with all applicable laws and regulations, provided that the Committee shall not have the authority to adopt any Plan amendment that will result in substantially increased costs to the Company unless such amendment is either expressly
authorized by the Board or contingent upon ratification by the Board before becoming effective. 

  

	 	(f)	Select, review and retain or change any deemed investment fund under the Plan. 

  

	 	(g)	Compile and maintain all records it determines to be necessary, appropriate or convenient in connection with the administration of the Plan. 

  

	 	(h)	Direct the investment of the assets of the Trust. 

  

 15 

	 	(i)	Review the performance of the Trustee and any other advisor or service provider to the Plan. 

  

	 	(j)	Take such other action as may be necessary or appropriate to the management and investment of the Plan assets and administration of the Plan. 

  

	 	8.2.	Uniformity Of Discretionary Acts. Whenever in the administration or operation of the Plan discretionary actions by the Employer are required or permitted, such actions shall
be consistently and uniformly applied to all persons similarly situated, and no such action shall be taken which shall discriminate in favor of any particular person or group of persons. 

  

	 	8.3.	Litigation. Except as may be otherwise required by law, in any action or judicial proceeding affecting the Plan, no Participant or Beneficiary shall be entitled to any notice
or service of process, and any final judgment entered in such action shall be binding on all persons interested in, or claiming under, the Plan. 

  

	 	8.4.	Indemnification. To the extent permitted by law, the Company shall indemnify each member of the Committee, and any other employee or member of the Board with duties under the
Plan, against losses and expenses (including any amount paid in settlement) reasonably incurred by such person in connection with any claims against such person by reason of such person’s conduct in the performance of duties under the Plan,
except in relation to matters as to which such person has acted fraudulently or in bad faith in the performance of duties. Notwithstanding the foregoing, the Company shall not indemnify any person for any expense incurred through any settlement or
compromise of any action unless the Company consents in writing to the settlement or compromise. 

  

	 	8.5.	Claims Procedure. 

  

	 	(a)	Initial Claim. A Participant or Beneficiary who believes he or she is entitled to any Benefit (a “Claimant”) under this Plan may file a claim with the Committee.
The Committee shall review the claim itself or appoint an individual or an entity to review the claim. 

  

	 	(i)	Benefit Claim. The Claimant shall be notified within ninety (90) days after the claim is filed whether the claim is allowed or denied, unless the Claimant receives
written notice from the Committee or from an appointee of the Committee before the end of the ninety (90) day period stating that special circumstances require an extension of the time for decision. Any such extension will not extend beyond one
hundred eighty (180) days after the day the claim is filed. 

  

 16 

	 	(ii)	Manner and Content of Denial of Initial Claims. If the Plan Administrator denies a claim, it must provide to the Claimant, in writing or by electronic communication:

  

	 	1.	the specific reasons for the denial; 

  

	 	2.	a reference to the Plan provision upon which the denial is based; 

  

	 	3.	a description of any additional information or material that the Claimant must provide in order to perfect the claim; 

  

	 	4.	an explanation of why such additional material or information is necessary; 

  

	 	5.	notice that the Claimant has a right to request a review of the claim denial and information on the steps to be taken if the Claimant wishes to request a review of the claim denial;
and 

  

	 	6.	a statement of the participant’s right to bring a civil action under ERISA §502(a) following a denial on review of the initial denial. 

  

	 	(b)	Review Procedures. 

  

	 	(i)	Benefit Claims. A request for review of a denied claim must be made in writing to the Committee within sixty (60) days after receiving notice of denial. The decision
upon review will be made within sixty (60) days after the Committee’s receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than one
hundred twenty (120) days after receipt of a request for review. A notice of such an extension must be provided to the Claimant within the initial sixty (60) day period and must explain the special circumstances and provide an expected
date of decision. The reviewer shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Committee. The reviewer shall take
into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the initial benefit determination. 

  

 17 

	 	(ii)	Manner and Content of Notice of Decision on Review. Upon completion of its review of an adverse initial claim determination, the Committee will give the Claimant, in writing
or by electronic notification, a notice containing: 

  

	 	1.	its decision; 

  

	 	2.	the specific reasons for the decision; 

  

	 	3.	the relevant Plan provisions on which its decision is based; 

  

	 	4.	a statement that the Claimant is entitled to receive, upon request and without charge, reasonable access to, and copies of, all documents, records and other information in the
Plan’s files which is relevant to the Claimant’s claim for benefits; 

  

	 	5.	a statement describing the Claimant’s right to bring an action for judicial review under ERISA §502(a); and 

  

	 	6.	if an internal rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination on review, a statement that a copy of the rule, guideline,
protocol or other similar criterion will be provided without charge to the Claimant upon request. 

  

	 	(c)	Calculation of Time Periods. For purposes of the time periods specified in this Section 8.5, the period of time during which a benefit determination is required
to be made begins at the time a claim is filed in accordance with the Plan procedures without regard to whether all the information necessary to make a decision accompanies the claim. If a period of time is extended due to a Claimant’s failure
to submit all information necessary, the period for making the determination shall be tolled from the date the notification is sent to the Claimant until the date the Claimant responds. 

  

	 	(d)	 Failure of Plan to Follow Procedures. If the Plan fails to follow the claims procedures required by this Section 8.5, a Claimant shall be deemed
to have exhausted the administrative remedies available under the Plan and shall be entitled to pursue any available remedy under ERISA section 502(a) on the basis that the Plan has failed to provide a reasonable claims procedure that would yield a
decision on the merits of the claim. If the Claimant fails to follow the claims procedures required by this Section 8.5, the Claimant shall not be entitled to pursue any further legal action, claim or remedy 

  

 18 

	 	 
until such time as the Claimant, to the extent applicable, exhausts the administrative remedies available under the Plan. 

  

	9.	AMENDMENT. 

  

	 	9.1.	Right To Amend. The Committee or the Company, by action of the Board, shall have the right to amend the Plan, at any time and with respect to any provisions hereof, and all
parties hereto or claiming any interest hereunder shall be bound by such amendment; provided, however, that no such amendment shall deprive a Participant or a Beneficiary of a right accrued hereunder prior to the date of the amendment unless such an
amendment is required by applicable law or deemed necessary to preserve the preferred tax treatment of the Plan. 

  

	 	9.2.	Amendments To Ensure Proper Characterization Of Plan. Notwithstanding the provisions of Section 9.1, the Plan may be amended by the Committee or the Company, by
action of its Board, at any time, retroactively if required, if found necessary, in the opinion of the Committee or the Board, in order to ensure that the Plan is characterized as a “top-hat” plan of deferred compensation maintained for a
select group of management or highly compensated employees as described under ERISA sections 201(2), 301(a)(3), and 401(a)(1), and to conform the Plan to the provisions and requirements of any applicable law (including specifically Section 409A
of the Code, and other applicable portions of ERISA and the Code). No such amendment shall be considered prejudicial to any interest of a Participant or a Beneficiary hereunder. 

  

	 	9.3.	Changes In Law Affecting Taxability. 

  

	 	(a)	Operation. This Section 9.3 shall become operative upon the enactment of any change in applicable statutory law or the promulgation by the Internal Revenue
Service of a final regulation or other pronouncement having the force of law, which statutory law, as changed, or final regulation or pronouncement, as promulgated, would cause any Participant to include in his or her federal gross income amounts
accrued by the Participant under the Plan on a date (an “Early Taxation Event”) prior to the date on which such amounts are made available to him or her hereunder. 

  

	 	(b)	 Affected Right or Feature Nullified. Notwithstanding any other Section of this Plan to the contrary (but subject to Section 9.3(c)), as of an
Early Taxation Event, the feature or features of this Plan that would cause the Early Taxation Event shall be null and void, to the extent, and only to the extent, required to prevent the Participant from being required to include in his or her
federal gross income amounts accrued by the Participant under the Plan prior to the date on which such amounts are made available to him 

  

 19 

	 	 
or her hereunder. If only a portion of a Participant’s Account is impacted by the change in the law, then only such portion shall be subject to this
Section 9.3, with the remainder of the Account not so affected being subject to such rights and features as if the law were not changed. If the law only impacts Participants who have a certain status with respect to the Employer, then
only such Participants shall be subject to this Section 9.3. 

  

	 	(c)	Tax Distribution. If an Early Taxation Event is earlier than the date on which the statute, regulation or pronouncement giving rise to the Early Taxation Event is enacted or
promulgated, as applicable (i.e., if the change in the law is retroactive), there shall be distributed to each Participant, as soon as practicable following such date of enactment or promulgation, the amounts that became taxable on the Early
Taxation Event. 

  

	10.	TERMINATION. 

  

	 	10.1.	Employer’s Right To Terminate Or Suspend Plan. The Employer reserves the right to terminate the Plan and/or its obligation to make further credits to Plan Accounts, by
action of its Board of Directors. The Employer also reserves the right to suspend the operation of the Plan for a fixed or indeterminate period of time, by action of its Board of Directors. 

  

	 	10.2.	Suspension Of Deferrals. In the event of a suspension of the Plan, the Employer shall continue all aspects of the Plan, other than Compensation Deferrals and Discretionary
Employer Contributions, during the period of the suspension, in which event payments hereunder will continue to be made during the period of the suspension in accordance with Sections 5 and 6. 

  

	 	10.3.	Allocation And Distribution. This Section 10.3 shall become operative on a complete termination of the Plan. The provisions of this Section 10.3 also
shall become operative in the event of a partial termination of the Plan, as determined by the Employer, but only with respect to that portion of the Plan attributable to the Participants to whom the partial termination is applicable. Upon the
effective date of any such event, notwithstanding any other provisions of the Plan, no persons who were not theretofore Participants shall be eligible to become Participants, the value of the interest of all Participants and Beneficiaries shall be
determined and, after deduction of estimated expenses in liquidating and, if applicable, paying Plan benefits, paid to them as soon as is practicable after such termination. 

  

	 	10.4.	 Successor To Employer. Any corporation or other business organization which is a successor to the Employer by reason of a consolidation, merger or purchase
of substantially all of the assets of the Employer shall have the right to become a party to the Plan by adopting the same by resolution of 

  

 20 

	 	 
the entity’s board of directors or other appropriate governing body. If, within ninety (90) days from the effective date of such consolidation,
merger or sale of assets, such new entity does not become a party hereto, as above provided, the Plan automatically shall be terminated, and the provisions of Section 10.3 shall become operative. 

  

	11.	THE TRUST. 

  

	 	11.1.	Establishment Of Trust. The Employer, in its sole and absolute discretion, may establish a Trust with a qualified trustee pursuant to such terms and conditions as are set
forth in a Trust agreement to be entered into between the Employer and such Trustee. Or, the Employer may cause to be maintained one or more separate subaccounts in an existing Trust maintained with the Trustee with respect to one or more other
plans of the Employer, which subaccount or subaccounts represent Participants’ interests in the Plan. The Employer shall have the discretion to make contributions to such Trust that correspond to credits to Participants’ Accounts and/or to
invest Trust assets in a manner that corresponds to Participants’ selected deemed investments in order to provide a source of funds with which the Employer shall pay Plan benefits as they become due. 

  
 Any amounts held in a Trust established under this Section 11.1
shall be the sole property of the Employer and will not be held as collateral security for fulfillment of the Employer’s obligation under the Plan. Any such Trust shall be intended to be treated as a “grantor trust” under the Code and
the establishment of the Trust or the utilization of any existing Trust for Plan benefits, as applicable, shall not be intended to cause any Participant to realize current income on amounts contributed thereto, and the Trust shall be so interpreted.
Any such funds will be subject to the claims of all bankruptcy or insolvency creditors of the Employer as provided in the Trust agreement, and no Participant or Beneficiary will have any vested interest or secured or preferred position with respect
to such funds or have any claims against the Employer hereunder except as a general creditor. 
  

	12.	MISCELLANEOUS. 

  

	 	12.1.	 Limitations On Liability Of Employer. Neither the establishment of the Plan nor any modification thereof, nor the creation of any account under the Plan, nor
the payment of any benefits under the Plan shall be construed as giving to any Participant or other person any legal or equitable right against the Employer, or any officer or employer thereof except as provided by law or by any Plan provision. The
Employer does not in any way guarantee any Participant’s Account from loss or depreciation, whether caused by poor investment performance of a deemed investment or the inability to realize upon an investment due to an insolvency 

  

 21 

	 	 
affecting an investment vehicle or any other reason. In no event shall the Employer, or any successor, employee, officer, director or stockholder of the
Employer, be liable to any person on account of any claim arising by reason of the provisions of the Plan or of any instrument or instruments implementing its provisions, or for the failure of any Participant, Beneficiary or other person to be
entitled to any particular tax consequences with respect to the Plan, or any credit or distribution hereunder. 

  

	 	12.2.	Construction. The Plan is intended to be and at all times shall be interpreted and administered so as to qualify as an unfunded deferred compensation plan, and no provision
of the Plan shall be interpreted so as to give any individual any right in any assets of the Employer which right is greater than the rights of a general unsecured creditor of the Employer. 

  

	 	12.3.	Spendthrift Provision. No amount payable to a Participant or a Beneficiary under the Plan will, except as otherwise specifically provided by law, be subject in any manner to
anticipation, alienation, attachment, garnishment, sale, transfer, assignment (either at law or in equity), levy, execution, pledge, encumbrance, charge or any other legal or equitable process, and any attempt to do so will be void; nor will any
benefit be in any manner liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled thereto. Further, (i) the withholding of taxes from Plan benefit payments, (ii) the recovery under the Plan of
overpayments of benefits previously made to a Participant or Beneficiary, (iii) if applicable, the transfer of benefit rights from the Plan to another plan, or (iv) the direct deposit of benefit payments to an account in a banking
institution (if not actually part of an arrangement constituting an assignment or alienation) shall not be construed as an assignment or alienation. 

  
 In the event that any Participant’s or Beneficiary’s benefits hereunder are garnished or attached by order of any
court, the Employer or Trustee may bring an action or a declaratory judgment in a court of competent jurisdiction to determine the proper recipient of the benefits to be paid under the Plan. During the pendency of said action, any benefits that
become payable shall be held as credits to the Participant’s or Beneficiary’s Account or, if the Employer or Trustee prefers, paid into the court as they become payable, to be distributed by the court to the recipient as the court deems
proper at the close of said action. 
  

	 	12.4.	 Tax Withholding. Distribution and withdrawal payments under this Plan shall be subject to all applicable withholding requirements for state and federal
income taxes and to any other federal, state or local taxes that may be applicable to such payments. The Company shall have the right, but not the obligation, to deduct from any distribution from the Plan, that amount equal to all or any part of the
federal, state, local and foreign 

  

 22 

	 	 
taxes, if any, required by law to be withheld by the Company with respect to such distributions. Alternatively or in addition, in its discretion, the Company
shall have the right to require a Participant, through payroll withholding, cash payment or otherwise, to make adequate provision for any such tax withholding obligations of the Company arising in connection with any distribution from the Plan. The
Trustee shall have no obligation to distribute amounts form the Trust until the Company’s tax withholding obligations have been satisfied by the Participant. 

  

	 	12.5.	No Employment Agreement. Nothing contained herein shall be construed as conferring upon any Participant the right to continue in the employ of the Employer as an employee.

  

	 	12.6.	Attorney’s Fees. If the Employer, the Participant, any Beneficiary, any beneficiary under an insurance policy purchased under the Trust, and/or a successor in interest
to any of the foregoing, brings legal action to enforce any of the provisions of this Plan, the prevailing party in such legal action shall be reimbursed by the other party, the prevailing party’s costs of such legal action including, without
limitation, reasonable fees of attorneys, accountants and similar advisors and expert witnesses. 

  

	 	12.7.	Governing Law. This Plan shall be construed in accordance with and governed by any applicable provisions of ERISA and the laws of the State of Delaware.

  

	 	12.8.	Entire Agreement. This Plan constitutes the entire understanding and agreement with respect to the subject matter contained herein, and there are no agreements,
understandings, restrictions, representations or warranties among any Participant and the Employer other than those as set forth or provided for herein. 

  

	 	12.9.	Severability. If any provision of this Plan is determined, by the Committee or any governmental agency or court decision, to be unenforceable or invalid under any applicable
law, such unenforceability or invalidity shall not render this Plan unenforceable or invalid as a whole, and such provision shall be changed and interpreted by the Committee, in its sole discretion, so as to best accomplish the objectives of such
unenforceable or invalid provision within the limits of applicable law or applicable court decisions. 

  
 IN WITNESS WHEREOF, this Plan has been adopted effective as of the Effective Date. 
  

									
	 	 	 	 	 BIOMARIN PHARMACEUTICAL INC.

				
	 Dated: December 1, 2005
	 	 	 	By:	 	 /s/ G. Eric Davis

	 	 	 	 	 	 	 	 	 G. Eric Davis

	 	 	 	 	 	 	 	 	 Vice President, Corporate Counsel

  

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