UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended September
30, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-21994
GLYKO BIOMEDICAL LTD.
(Exact name of small business issuer as specified in its charter)
Canada 68-0230537
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11 Pimentel Court, Novato, California
94949 (address of principal executive
offices)
(415) 382-6653
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes ____ No_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 21,543,044 common shares outstanding
as of October 31, 1997.
<PAGE>
GLYKO BIOMEDICAL LTD.
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited).
Consolidated Balance Sheets as of
September 30, 1997 and December 31, 1996............................3
Consolidated Statements of Operations for the three
and nine month periods ended September 30, 1997 and 1996............4
Consolidated Statements of Cash Flows for the nine
month periods ended September 30, 1997, and 1996....................5
Notes to Consolidated Financial Statements..........................6
ITEM 2.
Management's Discussion and Analysis
or Plan of Operation................................................9
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings...........................................15
ITEM 2. Changes in Securities.......................................15
ITEM 3. Defaults upon Senior Securities.............................15
ITEM 4. Submission of Matters to a Vote of Security Holders ........15
ITEM 5. Other Information...........................................15
ITEM 6. Exhibits and Reports on Form 8-K............................15
Signature.............................................................16
2
<PAGE>
PART I.
ITEM 1. Financial Statements
GLYKO BIOMEDICAL LTD.
CONSOLIDATED BALANCE SHEETS
(unaudited, in U.S. dollars)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
--------------------------- ----------------------------
<S> <C> <C>
Assets
Current assets:
Cash $ 600,241 $ 210,992
Trade receivables 233,836 156,176
Inventories 93,534 68,452
Other current assets 23,364 26,025
--------------------------- ----------------------------
Total current assets 950,975 461,645
Property, plant and equipment, net 170,353 108,045
Other assets 2,206 2,200
--------------------------- ----------------------------
Total assets $ 1,123,534 $ 571,890
=========================== ============================
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable $ 102,770 $ 174,732
Accrued liabilities 146,776 204,504
Deferred rent and related costs 300,805 269,718
Bridge loan from BioMarin Pharmaceutical,
Inc. stock subscribers 880,000 -
Payable to stockholder 219,811 219,811
--------------------------- ----------------------------
Total current liabilities 1,650,162 868,765
--------------------------- ----------------------------
Total liabilities 1,650,162 868,765
Stockholders' equity (deficit):
Common stock, no par value, unlimited shares
authorized, 21,543,044 and 17,243,044 shares
issued and outstanding at September 30, 1997 and
December 31, 1996, respectively 13,140,556 12,203,065
Common stock warrants 929,585 433,897
Accumulated deficit (14,596,769) (12,933,837)
--------------------------- ----------------------------
Total stockholders' equity (deficit) (526,628) (296,875)
--------------------------- ----------------------------
Total liabilities and stockholders' equity
(deficit) $ 1,123,534 $ 571,890
=========================== ============================
</TABLE>
See accompanying notes
3
<PAGE>
GLYKO BIOMEDICAL LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in U.S. dollars)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended
September 30,
-------------------------------------------------------------------------------------
1997 1996 1997 1996
------------------ ------------------- ------------------- ----------------------
<S> <C> <C> <C> <C>
Revenues:
Sales of products and services $ 393,689 $ 293,253 $ 910,969 $ 946,183
Other revenues 78,712 4,980 706,847 54,810
------------------ ------------------- ------------------- ----------------------
Total revenues: 472,401 298,233 1,617,816 1,000,993
Expenses:
Cost of products and services 123,897 118,647 383,072 377,466
Research and development 681,479 261,744 1,938,196 806,558
Selling, general and administrative 345,643 488,695 989,389 1,212,401
------------------ ------------------- ------------------- ----------------------
Total expenses: 1,151,019 869,086 3,310,657 2,396,425
------------------ ------------------- ------------------- ----------------------
Loss from operations (678,618) (570,853) (1,692,841) (1,395,432)
Interest income 5,890 7,790 13,889 15,229
Other income 1,084 6,951 16,020 20,080
------------------ ------------------- ------------------- ----------------------
Net loss $ (671,644) $ (556,112) $ (1,662,932) $ (1,360,123)
================== =================== =================== ======================
Net loss per common share $ (0.03) $ (0.03) $ (0.08) $ (0.09)
================== =================== =================== ======================
Weighted average number of shares
used in computing per share amounts 21,533,488 17,243,044 20,182,303 15,661,431
================== =================== =================== ======================
</TABLE>
See accompanying notes
4
<PAGE>
GLYKO BIOMEDICAL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in U.S. dollars)
<TABLE>
<CAPTION>
Nine months ended September 30,
----------------------------------------
1997 1996
------------------ -----------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,662,932) $ (1,360,123)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 44,735 46,299
Change in assets and liabilities:
Trade receivables (77,660) 226,318
Inventories (25,082) 14,326
Other assets 2,655 (5,311)
Accounts payable (71,962) 48,764
Accrued liabilities (57,728) (16,601)
Deferred revenue - (117,820)
Deferred rent and related costs 31,087 105,713
------------------ -----------------
Total adjustments (153,955) 301,688
------------------ -----------------
Net cash used in operating activities (1,816,887) (1,058,435)
Cash flows from investing activities:
Purchases of property and equipment (107,043) (61,060)
------------------ -----------------
Net cash used in investing activities (107,043) (61,060)
Cash flows from financing activities:
Repayments on capital lease obligation - (14,016)
Bridge loan from BioMarin Pharmaceutical, Inc.
common stock subscribers 880,000 -
Proceeds from the issuance of common stock and warrants 1,458,686 1,077,138
Offering costs (25,507) (22,617)
------------------ -----------------
Net cash provided by financing activities 2,313,179 1,040,505
------------------ -----------------
Net increase (decrease) in cash 389,249 (78,990)
Cash and cash equivalents, beginning of period 210,992 620,720
------------------ -----------------
Cash and cash equivalents, end of period $ 600,241 $ 541,730
================== =================
Supplemental disclosure of non-cash financing activities:
Common stock and common stock warrants issued
in exchange for financing services $ 131,894 $ 129,539
</TABLE>
See accompanying notes
5
<PAGE>
GLYKO BIOMEDICAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements and related footnotes
have been prepared in conformity with U.S. generally accepted accounting
principles using U.S. dollars. The consolidated financial statements
include the accounts of Glyko Biomedical Ltd. and its wholly owned
subsidiaries, Glyko, Inc. and BioMarin Pharmaceutical, Inc. (together
referred to as the Company). All significant intercompany accounts and
transactions have been eliminated. Subsequent to September 30, 1997,
BioMarin Pharmaceutical, Inc. (BioMarin) raised additional funds through an
issuance of BioMarin common stock resulting in a reduction of ownership by
Glyko Biomedical Ltd. of BioMarin to approximately 60% (see Note 3). The
balance sheets as of September 30, 1997 and December 31, 1996 and the
related statements of operations and cash flows for the periods ended
September 30, 1997 and 1996 are unaudited but have been prepared on
substantially the same basis as the annual audited financial statements.
Certain reclassifications have been made to the consolidated financial
statements in the prior periods to conform to classifications used in the
current period. In the opinion of management, the unaudited consolidated
financial statements reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the
consolidated financial position, results of operations and cash flows for
those periods presented. The unaudited results for the period ended
September 30, 1997 are not necessarily indicative of results to be expected
for the entire year.
The Company's Report of Independent Public Accountants for the year ended
December 31, 1996 indicates that there is substantial doubt about the
Company's ability to continue as a going concern, reflecting both the
necessity and the uncertainty of future funding. Such funding may come
individually or collectively from stock issuances, licensing and marketing
agreements or by collaborative research agreements with strategic partners.
No assurance can be given that additional financing will be available or,
if available, that it will be on terms acceptable to the Company or its
stockholders. If adequate funding is not obtained, operations may be
adversely affected. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company will delay or
eliminate expenditures in respect of certain products under development
such as additional analytical kits and diagnostic tests in the event
sufficient funding is unavailable. As a result of additional funding
obtained in the third and fourth quarters of 1997 by BioMarin
Pharmaceutical, Inc., as discussed in Note 3, management believes that
BioMarin's available cash will allow BioMarin to fund planned operations
through the second quarter of 1998. Due to increased revenues and decreased
expenditures for Glyko, Inc. during 1997, management believes that Glyko,
Inc.'s available cash will allow it to fund planned operations through the
end of 1998.
The accompanying financial statements should be read in conjunction with
the Company's annual report on form 10-KSB for the fiscal year ended
December 31, 1996.
Product Sales
The Company recognizes product revenues and related cost of sales upon
shipment of products. Service revenues are recognized upon completion of
services as evidenced by the transmission of reports to customers. Other
revenues, principally licensing and distribution fees, are recognized upon
completion of applicable contractual obligations.
Net Loss per Common and Common Equivalent Share
Net loss per common and common equivalent share is computed using the
weighted average number of common shares outstanding during each period
presented. Common equivalent shares from stock options and warrants are
excluded from the computation if their effect is anti-dilutive.
In 1997, the Company will report its loss per common and common equivalent
share based upon the recently issued Statement of Financial Accounting
Standards No. 128 (SFAS No. 128), "Earnings per Share". The pro forma
effect of this accounting change on the nine months ended September 30 is:
1997 1996
---- ----
Primary EPS as reported $ (0.08) $ (0.09)
Pro forma effect of SFAS No. 128 0.00 0.00
--------- ---------
Basic EPS pro forma $ (0.08) $ (0.09)
======== ========
Fully Diluted EPS as reported $ (0.08) $ (0.09)
Pro forma effect of SFAS No. 128 0.00 0.00
-------- ---------
Diluted EPS pro forma $ (0.08) $ (0.09)
======== ========
6
<PAGE>
GLYKO BIOMEDICAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Termination of Millipore Marketing Agreement
Through 1993 and the first quarter of 1994 the Company sold its products
both directly to end users and through Millipore Corporation, ("Millipore")
for resale. During this time Millipore held marketing rights to Glyko
products under the terms of a distribution agreement between Millipore and
the Company. Late in 1993 Millipore announced their intention to exit the
bioscience business and in April 1994 Millipore and the Company agreed to
terminate their distribution agreement. Millipore has granted the Company
all marketing rights to Glyko analytic products and has waived its option
to purchase the Company's analytic business. In turn, Millipore will
receive 500,000 shares of Glyko Biomedical Ltd. common stock, subject to
Canadian regulatory approval. In the third quarter of 1994, the Company
recorded a charge to operations of $219,811 for costs related to the
termination of the Agreement. This amount represents the estimated fair
market value of stock to be issued as a result of the termination of the
Agreement. The Toronto Stock Exchange has turned down the issuance of the
500,000 shares because the transaction is not considered arms length. The
Toronto Stock Exchange requires that an independent valuation be performed
in order to reconsider the issuance of these shares. No such valuation has
been performed to date.
3. Private Equity Placement Offerings
During the second quarter of 1995, the Company closed a private equity
placement offering (the Q295 Financing). Investors participating in the
Q295 Financing purchased approximately 4.786 million units which each
consisted of one share of common stock and one five year warrant to
purchase one share of common stock. The Company issued units in exchange
for cash, and also in exchange for the settlement of certain outstanding
liabilities. The units were priced at Cdn.$0.80 with an exercise price on
the warrant of Cdn.$0.90. The Company established a balance sheet value for
the common stock warrants by subtracting the discounted fair market value
for one share of the Company's common stock from the price of one unit. The
common stock warrants expire in 2000. The Q295 Financing raised
approximately $2.78 million, consisting of approximately $2.36 million in
cash and $420,000 for the settlement of a stockholder/director bridge loan
and certain other liabilities.
During the second quarter of 1996, the Company closed a second private
equity placement offering (the Q296 Financing). Investors participating in
the Q296 Financing purchased 2.5 million units each consisting of one share
of common stock and one half of a two year warrant. One warrant is required
to purchase one share of common stock. The units were priced at Cdn.$0.60
with an exercise price on the warrant of Cdn.$0.80. The Q296 Financing
raised approximately $1.077 million. An additional 175,000 units and
250,000 warrants valued at approximately $130,000 were distributed to
brokers in exchange for services rendered in connection with the Q296
Financing. The Company utilized the Black-Scholes model to value all the
warrants issued in the Q296 Financing at approximately $156,000.
On March 21, 1997, the Company closed a Cdn.$2.0 million financing (the
Q197 Financing) to fund the start-up of BioMarin Pharmaceutical, Inc. which
was formed to develop the Company's pharmaceutical products. As a result of
this financing, the Company issued 4.0 million units at Cdn.$0.50 per unit,
each unit consisting of one common share and one common share purchase
warrant. Each warrant can be exercised for one share of common stock at
Cdn.$1.00 per share, expiring on March 21, 1999. An additional 280,000
units and 280,000 warrants valued at approximately $131,000 were
distributed to the brokers in exchange for services rendered in connection
with the Q197 Financing. The Company utilized the Black-Scholes model to
value all the warrants issued in the Q197 Financing at approximately
$496,000.
During the third quarter of 1997, BioMarin raised $880,000 in bridge loans
which were converted subsequent to September 30, 1997, to Common Stock
under a financing pursuant to which BioMarin raised $3,740,000 (including
such $880,000) from outside investors in exchange for 4,039,000 shares
(including shares issued to the placement agent for the financing). In
addition, in October, 1997, BioMarin issued 2,500,000 shares of Common
Stock to three executive officers of BioMarin, two of whom are also
executive officers of Glyko Biomedical Ltd. for an aggregate of $2,500,000
in notes due on October 1, 2000. As a result of such share issuances, Glyko
Biomedical Ltd.'s ownership in BioMarin was reduced to 59.45% of BioMarin's
outstanding Common Stock. Future fundraising efforts of BioMarin could
result in a further reduction of Glyko Biomedical Ltd.'s ownership
percentage.
7
<PAGE>
GLYKO BIOMEDICAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Commitments
The Company has entered into a licensing agreement whereby it has agreed
to issue 100,000 shares of the Company's common stock upon receipt of a
milestone payment of $150,000. The excess of the milestone payment over
the fair value of the shares issued will be recorded as revenue. These
shares were not issued as of September 30, 1997.
BioMarin has agreed to fund research and development activities at various
research facilities. Funding is expected to be $1,459,000 through the end
of 1997 and $506,000 in 1998. The contracts can be terminated through
90-days written notice by either party.
8
<PAGE>
ITEM 2.
GLYKO BIOMEDICAL LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This report contains certain forward looking statements which involve
risks and uncertainties, including statements regarding the Company's
strategy, financial performance and revenue sources. The Company's
actual results could differ materially from the results anticipated in
these forward looking statements as a result of certain factors set
forth under "Risk Factors" and elsewhere in this report.
Overview:
Glyko Biomedical Ltd. is a Canadian holding company that owns all of the capital
stock of Glyko, Inc. and BioMarin Pharmaceutical, Inc. (together referred to as
the Company). Glyko, Inc. and BioMarin Pharmaceutical, Inc. (BioMarin) are
operating companies based in California. The following discussion and the
accompanying consolidated financial statements include the accounts of Glyko
Biomedical Ltd.,Glyko, Inc., and BioMarin presented on a consolidated basis.
Numerical references in the following discussion are rounded to the nearest
thousand. Since its inception in October 1990, the Company has engaged in
research and development of new techniques to analyze and manipulate
carbohydrates for research, diagnostic and pharmaceutical purposes. The Company
has developed a line of analytic instrumentation laboratory products that
include an imaging system, analysis software and chemical analysis kits. The
Company is continuing to develop additional chemical kits for use with the
imaging system, and is also developing a line of carbohydrate diagnostic
products. In March, 1997, the Company raised Cdn.$2.0 million to fund the
start-up of BioMarin Pharmaceutical, Inc. which was formed to develop the
Company's pharmaceutical products. The Company has incurred a net loss in each
period since its inception and expects to continue to incur losses at least
through 1997. For the period from its inception to September 30, 1997, the
Company has incurred cumulative losses of $14,597,000.
During the third quarter of 1997, BioMarin raised $880,000 in bridge loans which
were converted subsequent to September 30, 1997, to Common Stock under a
$3,740,000 private placement financing. As a result of the financing ,and the
issuance of 2,500,000 shares of Common Stock to three of BioMarin's executive
officers (two of whom are also executive officers of Glyko Biomedical Ltd.),
BioMarin issued 4,039,000 shares of Common Stock to persons and entities other
than Glyko Biomedical Ltd. Such stock issuances resulted in a reduction of Glyko
Biomedical Ltd.'s ownership of BioMarin to approximately 60% (see Note 3 of
accompanying Notes to Consolidated Financial Statements). Future fundraising
efforts of BioMarin could result in a further reduction of Glyko Biomedical
Ltd.'s ownership percentage. Should Glyko Biomedical Ltd.'s ownership percentage
of BioMarin's outstanding Capital Stock fall below 50%, Glyko Biomedical Ltd.
may, dependent on certain other criteria including but not limited to the
management and control of BioMarin, report BioMarin's financial activity based
on the equity method of accounting.
BioMarin and Glyko Biomedical Ltd. have entered into a License Agreement dated
June 26, 1997, pursuant to which Glyko Biomedical Ltd. granted BioMarin an
exclusive, worldwide, perpetual, irrevocable, royalty-free right and license to
all current and future worldwide patents, trade secrets, copyrights and other
proprietary rights to all know-how, processes,formulae, concepts, data and other
such intellectual property, whether patented or not, owned or licensed by Glyko
Biomedical Ltd. and its subsidiaries as of the date of the License Agreement.
Under the same License Agreement, BioMarin granted Glyko Biomedical Ltd. a
cross-license, similar in scope, to all improvements BioMarin may make upon the
licensed intellectual property. As consideration for this license, BioMarin
granted Glyko Biomedical Ltd. 7,000,000 shares of BioMarin common stock.
The Three Month Periods Ended September 30, 1997 and 1996
Revenue for the third quarter of 1997 was $472,000 and consisted of sales of
products and services of $393,000 and other revenues representing development
fees of $25,000 and grant revenues of $54,000. Sales of products and services
consisted of sales of chemical analysis kits, fees for custom and contract
analytical services and sales of imaging systems. Revenue for the third quarter
of 1996 was $298,000 and consisted of sales of products and services of $293,000
and other revenues of $5,000. The increase in product revenues in the third
quarter of 1997 compared to the same period in 1996 was due principally to
increased unit volume.
Cost of products and services in the third quarter of 1997 was $124,000 or 31%
of sales of products and services compared to $119,000 or 40% of sales of
products and services for the same period in 1996. Increased unit volume of
products were the primary reason for the increase in cost of products and
services; however, the reduction in the cost as a percentage of sales is due to
an adjustment for prior periods which reduced cost of sales in the third quarter
of 1997 and due to an increase in sales prices in July, 1997.
9
<PAGE>
Research and development expenses were $681,000 for the third quarter of 1997
compared to $262,000 for the same period in 1996. Research expenses related to
the development of BioMarin's pharmaceutical products of $551,000 were primarily
responsible for the significant increase in overall expense. The Company
anticipates that future BioMarin research and development expenditures will be
funded by future 1997 BioMarin financings.
Selling, general and administrative expenses were $346,000 in the third quarter
of 1997, compared to $489,000 for the same period in 1996, a decrease of
$143,000. The decrease is primarily due to the cut-back in administrative staff
in October, 1996 and due to a reduction in rent expense resulting from the
Company's relocation to smaller and more appropriately sized facilities.
The Nine Month Periods Ended September 30, 1997 and 1996
Revenue for the first nine months of 1997 was $1,618,000 and consisted of sales
of products and services of $911,000 and other revenues representing
development, technology and licensing fees of $625,000 and grant revenues of
$82,000. Sales of products and services consisted of sales of chemical analysis
kits, fees for custom analytical services and sales of imaging systems. Revenue
for the first nine months of 1996 was $1,001,000 and consisted of sales of
products and services of $946,000 and other revenues (primarily grant fees and
equipment rental revenues) of $55,000. The decline in product revenues in the
first nine months of 1997 compared to the same period in 1996 was due
principally to the relocation of the Company's California facilities in February
which caused approximately eight weeks of delays in fulfilling orders. The
increase in other revenues for the first nine months of 1997 compared to the
same period last year was due to new development, technology and licensing
agreements negotiated in 1997.
Cost of products and services in the first nine months of 1997 was $383,000 or
42% of sales of products and services compared to $377,000 or 40% of sales of
products and services for the same period in 1996. Increased custom service
revenue with lower profit margins was the primary reason for the increase in
cost of products and services.
Research and development expenses were $1,938,000 for the first nine months of
1997 compared to $807,000 for the same period in 1996. Research expenses related
to the development of BioMarin's pharmaceutical products of $1,469,000 were
primarily responsible for the significant increase in overall expense. The
Company anticipates that future BioMarin research and development expenditures
will be funded by future 1997 BioMarin financings.
Selling, general and administrative expenses were $989,000 in the first nine
months of 1997, compared to $1,212,000 for the same period in 1996, a decrease
of $223,000. The decrease is mainly due to the cut-back in staff in October 1996
and the reduction in rent expense due to the Company's relocation of its
facilities in February, 1997.
Liquidity and Capital Resources
During the second quarter of 1995, the Company closed a private equity placement
offering (the Q295 Financing). Investors participating in the Q295 Financing
purchased approximately 4.786 million "units" that consisted of one share of
common stock and one five year warrant to purchase one share of common stock.
The Company issued units in exchange for cash, and also in exchange for the
settlement of certain outstanding liabilities. The units were priced at
Cdn.$0.80 with an exercise price on the warrant of Cdn.$0.90. The Q295 Financing
raised approximately $2.78 million, consisting of approximately $2.36 million in
cash and $420,000 for the settlement of a stockholder/director bridge loan and
other liabilities.
During the second quarter of 1996, the Company closed a second private equity
placement offering (the Q296 Financing). Investors participating in the Q296
Financing purchased 2.5 million units each consisting of one share of common
stock and one half of a two year warrant. One warrant is required to purchase
one share of common stock. The units were priced at Cdn.$0.60 with an exercise
price on the warrant of Cdn.$0.80. The Q296 Financing raised approximately
$1.077 million. An additional 175,000 units and 250,000 warrants valued together
at approximately $130,000 were distributed to brokers in exchange for services
rendered in connection with the Q296 Financing. The Company utilized the
Black-Scholes model to value all the warrants issued in the Q296 Financing at
approximately $156,000.
On March 21, 1997, the Company closed a Cdn.$2.0 million financing (the
Q197 Financing) to fund the start-up of BioMarin Pharmaceutical, Inc. which was
formed to develop the Company's pharmaceutical products. As a result of this
financing, the Company issued 4.0 million units at Cdn.$0.50 per unit, each unit
consisting of one common share and one common share purchase warrant. Each
warrant can be exercised for one share of common stock at Cdn.$1.00 per share,
expiring on March 21, 1999. An additional 280,000 units and 280,000 warrants
valued together at approximately $131,000 were distributed to the brokers in
exchange for services rendered in connection with the Q197 Financing. The
Company utilized the Black-Scholes model to value all the warrants issued in the
Q197 Financing at approximately $496,000.
10
<PAGE>
The Company's net cash position increased by $389,000 in the first nine months
of 1997. Net cash proceeds of $1.424 million from the Q197 Financing, $880,000
received in bridge loans which were converted to common shares under a Q497 $3.0
million BioMarin Financing in which 2,911,500 shares of common stock were issued
and $9,000 received in the exercise of stock options for the purchase of 20,000
shares of common stock were offset by cash used in operating activities of
$1.817 million. Cash used in operating activities in the first nine months of
1997 reflected the operating loss of $1,663,000 plus the payment of accrued
liabilities, the reduction of accounts payable, the increase of accounts
receivable and inventories partially offset by a deferral of payments for rent
and related costs. Capital expenditures for the first nine months of 1997 were
$107,000.
As a result of additional funding obtained in the third and
fourth quarters of 1997 by BioMarin Pharmaceutical, Inc., management believes
that BioMarin's available cash will allow BioMarin to fund planned operations
through the second quarter of 1998. Due to increased revenues and decreased
expenditures for Glyko, Inc. during 1997, management believes that Glyko, Inc.'s
available cash will allow it to fund planned operations through the end of 1998.
To maintain liquidity beyond the second quarter of 1998, BioMarin will have to;
raise additional capital, reduce expenses considerably, generate significant
revenues, or realize some combination of the above. To maintain liquidity beyond
the end of 1998, Glyko, Inc. will have to; reduce expenses considerably,
increase sales significantly, or realize some combination of the above. There
can be no assurance that the BioMarin nor Glyko, Inc. will be successful in
maintaining liquidity. Management may consider selling certain assets or
technology rights to raise additional capital. The Company will continue to seek
additional funding through various means including but not limited to stock
issuances, licensing and marketing agreements and collaborative research
agreements with strategic partners. However, there can be no assurance that such
agreements will be reached and that additional funding will be obtained. See
"Risk Factors - Future Capital Requirements."
In 1997, management expects spending to increase due to the research and program
expenses of BioMarin. It is anticipated that these expenditures will be funded
by subsequent 1997 BioMarin financings. The Company is not committed to make any
significant capital expenditures.
11
<PAGE>
RISK FACTORS
Future Capital Requirements - Uncertainty of Future Funding
The Company's Report of Independent Public Accountants for the year ended
December 31, 1996 indicates that there is substantial doubt about the Company's
ability to continue as a going concern reflecting both the necessity and the
uncertainty of future funding. Such funding may come individually or
collectively from stock issuances, licensing and marketing agreements or by
collaborative research agreements with strategic partners. No assurance can be
given that additional financing will be available or, if available, that it will
be on terms acceptable to the Company or its stockholders. If adequate funding
is not obtained, operations may be adversely affected. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
The Company will delay or eliminate expenditures in respect of certain products
under development such as additional analytical kits and diagnostic tests in the
event sufficient funding is unavailable. As a result of additional funding
obtained in the third and fourth quarters of 1997 by BioMarin Pharmaceutical,
Inc., management believes that BioMarin's available cash will allow BioMarin to
fund planned operations through the second quarter of 1998. Due to increased
revenues and decreased expenditures for Glyko, Inc. during 1997, management
believes that Glyko, Inc.'s available cash will allow it to fund planned
operations through the end of 1998. See "Management's Discussion or Plan of
Operation - Liquidity and Capital Resources".
History of Operating Losses - Uncertainty of Future Profitability
The Company commenced its research activities in December 1990 and first
recorded revenues in December 1992. The Company has not yet made a net annual
operating profit. There is no assurance that sales will increase in future
quarters. The accumulated deficit as of September 30, 1997 was approximately
$14.6 million. The Company anticipates that operating losses may continue. See
"Management's Discussion and Analysis or Plan of Operation."
Diagnostic Products - No Prior Commercial Manufacturing or Marketing
In 1996 the Company began marketing its first diagnostic product, the Urinary
Carbohydrate Analysis Kit. In order to manufacture its diagnostic products in
commercial quantities and to market products effectively, the Company will need
to expand its production and marketing efforts and/or establish arrangements
with third parties having the capacity for such manufacturing or marketing.
Anticipated operating revenues and cash resources will not be sufficient to
expand manufacturing and increase marketing efforts for diagnostic products
currently under development. There can be no assurance that the Company will be
able to successfully market or manufacture its diagnostic products. To the
extent that the Company arranges with third parties to manufacture or market any
diagnostic products, the commercial success of such products may depend upon the
efforts of those third parties.
Early Stage of Diagnostic Product Development
Only one of the Company's diagnostic products has been approved for commercial
sale, the Urinary Carbohydrate Analysis Kit. Potential products currently under
development by the Company will require significant additional development, and
some must undergo several phases of clinical testing and will likely require
significant further investment prior to their final commercialization. See
"Uncertainty of Regulatory Approval." Anticipated operating revenues and cash
resources will not be sufficient to facilitate significant further development
of diagnostic products. There can be no assurance that any of the Company's
products under development, either now or in the future, will be successfully
developed, prove to be effective in clinical trials, receive required regulatory
approvals, be capable of being produced in commercial quantities at reasonable
costs, or be successfully marketed.
Early Stage of Pharmaceutical Product Development
Potential products currently under development by the Company will require
significant additional development, and some must undergo several phases of
clinical testing and will likely require significant further investment prior to
their final commercialization. See "Uncertainty of Regulatory Approval."
Anticipated operating revenues and cash resources will not be sufficient to
facilitate significant further development of diagnostic products. There can be
no assurance that any of the Company's products under development, either now or
in the future, will be successfully developed, prove to be effective in clinical
trials, receive required regulatory approvals, be capable of being produced in
commercial quantities at reasonable costs, or be successfully marketed.
12
<PAGE>
Technology and Competition
The primary competitive factors in biotechnology are the ability to create and
maintain scientifically advanced technology, to attract and maintain personnel,
and to have available adequate financial resources to maintain the Company
through its research, development and commercialization of technology stages.
The technology on which the Company's business is based uses proven laboratory
methods of electrophoresis and bioseparation. Nevertheless there is a technical
risk associated with reducing-to-practice the basic technology for new
applications. There is no assurance that the Company will be able to develop an
economical or practical way to separate human materials for clinical diagnosis,
or that it will be able to devise specific reagents required to obtain a needed
reaction. Other companies may develop basic carbohydrate technology which
directly competes for the carbohydrate diagnostic market. Furthermore,
conventional diagnostic technology (such as enzyme or radioactive immunoassay)
may accomplish new breakthroughs in analyzing carbohydrates (which so far has
been difficult). Additionally, other newer technologies such as nucleic acid
hybridization may become competitive and erode the Company's potential shares of
diagnostic markets.
Competition in bioinstrumentation is intense. Many companies, universities, and
research organizations are engaged in the research and development of products
in the areas being developed by the Company. Many of these have financial,
technical, manufacturing and marketing resources greater than those of the
Company. Several major research instrument companies have undertaken recently to
establish capabilities in carbohydrate technology and may apply such technology
for essentially the same purpose as the Company. As a result, carbohydrate
technology will become an area of more intense competition. In order to compete
successfully, the Company must expand its efforts to develop new products and
uses for its current products in research and diagnosis. There can be no
assurance that the Company will be able to do so effectively.
Patents and Proprietary Technology
The Company's success will depend in part on its ability to obtain patents,
protect trade secrets and not infringe the patents of others. The Company has
been issued patents as well as filed applications for U.S. and foreign patents
and has exclusive licenses to patents or patent applications of others. The
Company intends in the future to apply for patents in various jurisdictions for
inventions forming part of its technology. No assurance can be given that patent
applications will result in the issue of patents or that, if issued, patents
obtained by the Company will confer on the Company a preferred position with
respect to the technology or products claimed.
There can be no assurance that others will not independently develop products
similar to the Company's, duplicate the Company's products or design around the
Company's patents. In addition the Company may be required to obtain licenses to
others' patents. No assurance can be given that such licenses can be obtained on
terms acceptable to the Company. These factors could cause the Company to
encounter delays in product market introductions or adversely affect the
Company's development or sale of products requiring licenses from third parties.
The Company's products and technologies could be subject to claims of
infringement by others. Patent conflicts and litigation can be expensive, and
could have a material adverse effect on the Company's results of operations.
Product Liability and Lack of Insurance
The Company is subject to the risk of exposure to product liability claims in
the event that the use of its technology results in adverse effects during
testing or commercial sale. The Company currently does not maintain product
liability insurance. There can be no assurance that the Company will be able to
obtain product liability insurance coverage at economically reasonable rates, or
that such insurance will provide adequate coverage against all possible claims.
Uncertainty of Regulatory Approval
The Company's diagnostics products will require regulatory approval by
government agencies. This includes pre-clinical and clinical testing and
approval processes in the U.S. and other countries. Compliance can take several
13
<PAGE>
years and require substantial expenditures. There can be no assurance that
difficulties or excessive costs will not be encountered by the Company in this
process or that required approvals will be obtained. The Company will not be
able to market its diagnostic products until required approvals have been
obtained.
Dependence on Key Personnel
The Company's success will depend in large part upon its ability to attract and
retain highly qualified scientific and management personnel. The Company faces
competition for such personnel from other companies, academic institutions,
government entities and other organizations. The Company depends on its key
management, including John Klock and Christopher Starr, and the departure of
either person could have a material adverse effect on the Company. Pursuant to
employment contracts signed effective July 1, 1997, 30% of Dr. Klock's and Dr.
Starr's time will be committed to Glyko, Inc. and 70% will be committed to
BioMarin. Dr.'s Klock and Starr have also purchased 800,000 and 400,000 shares,
respectively, of BioMarin's Common Stock.
14
<PAGE>
PART II.
ITEM 1. Legal Proceedings. None.
ITEM 2. Changes in Securities: None.
ITEM 3. Defaults upon Senior Securities. None.
ITEM 4. Submission of Matters to a Vote of Security Holders None.
ITEM 5. Other Information. None.
ITEM 6. Exhibits and Reports on Form 8-K. None.
(a) The following documents are filed as part of this report
Exhibit 3.1, Restated Certificate of Incorporate
of BioMarin Pharmaceutical, Inc.
Exhibit 3.2, Bylaws of BioMarin Pharmaceutical, Inc.
Exhibit 10, License Agreement between Glyko Biomedical Ltd.
and BioMarin Pharmaceutical, Inc.
Exhibit 27, Financial Data Schedule.
(b) Reports on Form 8K
No reports were filed on Form 8-K during the three months ended
September 30, 1997.
15
<PAGE>
SIGNATURE
September 30, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Glyko Biomedical Ltd.
Date: November 14 , 1997 By: /s/ John C. Klock
--------------------------------- ------------------
John C. Klock, M.D.
President and Chief
Executive Officer
16
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Location in Form 10-QSB
<S> <C> <C> <C>
3.1 Restated Certificate of Incorporation of BioMarin
Pharmaceutical, Inc. Page 18
3.2 Bylaws of BioMarin Pharmaceutical, Inc. Page 22
10 License Agreement between Glyko Biomedical Ltd. Page 47
and BioMarin Pharmaceutical, Inc.
27 Financial Data Schedule
</TABLE>
17
-1-
::ODMA\PCDOCS\SQL2\356639\1
RESTATED CERTIFICATE OF INCORPORATION
OF
BIOMARIN PHARMACEUTICAL INC.
BioMarin Pharmaceutical Inc., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as follows:
A. The name of the Corporation is BioMarin Pharmaceutical Inc. The
Corporation was originally incorporated under the same name and the original
Certificate of incorporation of the Corporation was filed with the Delaware
Secretary of State on October 25, 1996.
B. Pursuant to Sections 241 and 245 of the General Corporation Law of
the State of Delaware, this Restated Certificate of Incorporation restates and
amends the provisions of the Certificate of Incorporation of this Corporation.
C. The Corporation has not received any payment for any of its stock
and does not have any shares issued or outstanding and consequently does not
have any stockholders.
D. The Restated Certificate of Incorporation which follows has been
duly adopted by resolutions adopted by the Board of Directors of the Corporation
in accordance with the provisions of Section 241(b) of the General Corporation
Law of the State of Delaware.
E. The text of the Certificate of Incorporation is hereby amended and
restated in its entirety to read as follows:
ARTICLE I.
The name of the corporation (the "Corporation") is BioMarin
Pharmaceutical Inc.
ARTICLE II.
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, Delaware 19801. The name of its registered agent at such
address is The Corporation Trust Company.
<PAGE>
ARTICLE III.
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
law of Delaware.
ARTICLE IV.
The Corporation is authorized to issue one class of stock to be
designated as "Common Stock." The number of shares of Common Stock which the
corporation is authorized to issue is Thirty Million (30,000,000) shares, par
value $0.001 per share (the "Common Stock"). The shares of Common Stock may be
issued from time to time for such consideration as the Board of Directors may
determine. Each holder of shares of Common Stock shall be entitled to one vote
for each share of Common Stock held of record on all matters on which the
holders of Common Stock are entitled to vote.
ARTICLE V.
The Corporation reserves the right to amend, alter, change, or repeal
any provisions contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon the
stockholders herein are granted subject to this right.
ARTICLE VI.
The Corporation is to have perpetual existence.
ARTICLE VII.
1. Limitation of Liability. To the fullest extent permitted by the
General Corporation Law of the State of Delaware as the same exists or as may
hereafter be amended, a director of the Corporation shall not be personally
liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director.
2. Indemnification. The corporation shall indemnify to the fullest
extent permitted by law any person made or threatened to be made a party to an
action or proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that such person or his or her testator or intestate is or
was a director, officer or employee of the Corporation, or any predecessor of
the corporation, or serves or served at any other enterprise as a director,
officer or employee at the request of the Corporation or any predecessor to the
Corporation.
<PAGE>
3. Amendments. Neither any amendment nor repeal of this Article VII,
nor the adoption of any provision of the Corporation's Certificate of
Incorporation inconsistent with this Article VII, shall eliminate or reduce the
effect of this Article VII, in respect of any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article VIII, would accrue
or arise, prior to such amendment, repeal, or adoption of an inconsistent
provision.
ARTICLE VIII.
Elections of Directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.
ARTICLE IX.
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
ARTICLE X.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside of the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE XI.
The name and mailing address of the incorporator are:
Francis S. Currie, Esq.
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
* * *
<PAGE>
F. We declare under penalty of perjury under the laws of the State of
Delaware that the matters set forth in the foregoing certificate are true and
correct of our own knowledge.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by John C. Klock, its President and Secretary, this 18th day of April,
1997.
/s/ John C. Klock
John C. Klock, President and Secretary
BYLAWS
OF
BIOMARIN PHARMACEUTICAL INC.
<PAGE>
Table of Contents
Page
ARTICLE I - CORPORATE OFFICES 1
1.1 REGISTERED OFFICE 1
1.2 OTHER OFFICES 1
ARTICLE II - MEETINGS OF STOCKHOLDERS 1
2.1 PLACE OF MEETINGS 1
2.2 ANNUAL MEETING 1
2.3 SPECIAL MEETING 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS 2
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE 2
2.6 QUORUM 2
2.7 ADJOURNED MEETING; NOTICE 2
2.8 VOTING 3
2.9 WAIVER OF NOTICE 3
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING 3
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS 4
2.12 PROXIES 4
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE 5
ARTICLE III - DIRECTORS 5
3.1 POWERS 5
3.2 NUMBER OF DIRECTORS 5
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS 6
3.4 RESIGNATION AND VACANCIES 6
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE 7
3.6 FIRST MEETINGS 7
3.7 REGULAR MEETINGS 7
3.8 SPECIAL MEETINGS; NOTICE 7
3.9 QUORUM 8
3.10 WAIVER OF NOTICE 8
3.11 ADJOURNED MEETING; NOTICE 8
3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING 8
3.13 FEES AND COMPENSATION OF DIRECTORS 9
3.14 APPROVAL OF LOANS TO OFFICERS 9
3.15 REMOVAL OF DIRECTORS 9
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE IV - COMMITTEES 9
4.1 COMMITTEES OF DIRECTORS 9
4.2 COMMITTEE MINUTES 10
4.3 MEETINGS AND ACTION OF COMMITTEES 10
ARTICLE V - OFFICERS 11
5.1 OFFICERS 11
5.2 ELECTION OF OFFICERS 11
5.3 SUBORDINATE OFFICERS 11
5.4 REMOVAL AND RESIGNATION OF OFFICERS11
5.5 VACANCIES IN OFFICES 11
5.6 CHAIRMAN OF THE BOARD 12
5.7 PRESIDENT 12
5.8 VICE PRESIDENT 12
5.9 SECRETARY 12
5.10 TREASURER 13
5.11 ASSISTANT SECRETARY 13
5.12 ASSISTANT TREASURER 13
5.13 AUTHORITY AND DUTIES OF OFFICERS 14
ARTICLE VI - INDEMNITY 14
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS 14
6.2 INDEMNIFICATION OF OTHERS 14
6.3 INSURANCE 14
ARTICLE VII - RECORDS AND REPORTS 15
7.1 MAINTENANCE AND INSPECTION OF RECORDS 15
7.2 INSPECTION BY DIRECTORS 15
7.3 ANNUAL STATEMENT TO STOCKHOLDERS 16
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS 16
ARTICLE VIII - GENERAL MATTERS 16
8.1 CHECKS 16
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS 16
<PAGE>
TABLE OF CONTENTS
(continued)
Page
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES 17
8.4 SPECIAL DESIGNATION ON CERTIFICATES17
8.5 LOST CERTIFICATES 17
8.6 CONSTRUCTION; DEFINITIONS 18
8.7 DIVIDENDS 18
8.8 FISCAL YEAR 18
8.9 SEAL 18
8.10 TRANSFER OF STOCK 18
8.11 STOCK TRANSFER AGREEMENTS 19
8.12 REGISTERED STOCKHOLDERS 19
ARTICLE IX - AMENDMENTS 19
ARTICLE X - DISSOLUTION 19
ARTICLE XI - CUSTODIAN 20
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES 20
11.2 DUTIES OF CUSTODIAN 21
::ODMA\PCDOCS\SQL2\275987\1
<PAGE>
BYLAWS
OF
BIOMARIN PHARMACEUTICAL INC.
ARTICLE 1.
CORPORATE OFFICES
1.1. REGISTERED OFFICE
The registered office of the corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The name of the registered
agent of the corporation at such location is The Corporation Trust Company.
1.2. OTHER OFFICES
The board of directors may at any time establish other offices at any
place or places where the corporation is qualified to do business.
ARTICLE 2.
MEETINGS OF STOCKHOLDERS
2.1. PLACE OF MEETINGS
Meetings of stockholders shall be held at any place, within or outside
the State of Delaware, designated by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the registered
office of the corporation.
2.2. ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date
and at a time designated by the board of directors. In the absence of such
designation, the annual meeting of stockholders shall be held on the third
Wednesday of June in each year at 10 a.m.. However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and place on the next
succeeding full business day. At the meeting, directors shall be elected and any
other proper business may be transacted.
<PAGE>
2.3. SPECIAL MEETING
A Special meeting of the Stockholders may be called, at any time for
any purpose or purposes, by the Board of Directors or by such person or persons
as may be authorized by the Certificate of Incorporation or the Bylaws.
2.4. NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings with stockholders shall be in writing and shall
be sent or otherwise given in accordance with Section 2.5 of these bylaws not
less than ten (10) nor more than sixty (60) days before the date of the meeting
to each stockholder entitled to vote at such meeting. The notice shall specify
the place, date, and hour of the meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called.
2.5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the corporation. An
affidavit of the secretary or an assistant secretary or of the transfer agent of
the corporation that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.
2.6. QUORUM
The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum is not present or represented at any
meeting of the stockholders, then the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum is present or represented. At such adjourned meeting at
which a quorum is present or represented, any business may be transacted that
might have been transacted at the meeting as originally noticed.
2.7. ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting the corporation may transact any business
that might have been transacted at the original meeting. If the adjournment is
for more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
<PAGE>
2.8. VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.11 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners
of stock and to voting trusts and other voting agreements).
Except as provided in the last paragraph of this Section 2.8, or as may
be otherwise provided in the certificate of incorporation, each stockholder
shall be entitled to one vote for each share of capital stock held by such
stockholder.
At a stockholders' meeting at which directors are to be elected, or at
elections held under special circumstances, a stockholder shall be entitled to
cumulate votes (i.e., cast for any candidate a number of votes greater than the
number of votes which such stockholder normally is entitled to cast). Each
holder of stock, or of any class or classes or of a series or series thereof,
who elects to cumulate votes shall be entitled to as many votes as equals the
number of votes which (absent this provision as to cumulative voting) he would
be entitled to cast for the election of directors with respect to his shares of
stock multiplied by the number of directors to be elected by him, and he may
cast all of such votes for a single director or may distribute them among the
number to be voted for, or for any two or more of them, as he may see fit.
2.9. WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these bylaws.
2.10. STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise provided in the certificate of incorporation, any
action required by this chapter to be taken at any annual or special meeting of
stockholders of a corporation, or any action that may be taken at any annual or
special meeting of such stockholders, may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
<PAGE>
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the General
Corporation Law of Delaware if such action had been voted on by stockholders at
a meeting thereof, then the certificate filed under such section shall state, in
lieu of any statement required by such section concerning any vote of
stockholders, that written notice and written consent have been given as
provided in Section 228 of the General Corporation Law of Delaware.
2.11.RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.
If the board of directors does not so fix a record date:
2.11.1. The record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held.
2.11.2. The record date for determining stockholders entitled
to express consent to corporate action in writing without a meeting, when no
prior action by the board of directors is necessary, shall be the day on which
the first written consent is expressed.
2.11.3. The record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
2.12. PROXIES
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by a written proxy, signed by
the stockholder and filed with the secretary of the corporation, but no such
proxy shall be voted or acted upon after three (3) years from its date, unless
the proxy provides for a longer period. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the stockholder or the
stockholder's attorney-in-fact. The revocability of a proxy that states on its
face that it is irrevocable shall be governed by the provisions of Section
212(c) of the General Corporation Law of Delaware.
<PAGE>
2.13. LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
ARTICLE 3.
DIRECTORS
3.1. POWERS
Subject to the provisions of the General Corporation Law of Delaware
and any limitations in the certificate of incorporation or these bylaws relating
to action required to be approved by the stockholders or by the outstanding
shares, the business and affairs of the corporation shall be managed and all
corporate powers shall be exercised by or under the direction of the board of
directors.
3.2. NUMBER OF DIRECTORS
The authorized number of directors shall be three (3). This
number may be changed by a duly adopted amendment to the certificate of
incorporation or by an amendment to this bylaw adopted by the vote or written
consent of the holders of a majority of the stock issued and outstanding and
entitled to vote or by resolution of a majority of the board of directors.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
<PAGE>
3.3. ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting. Directors need not be stockholders unless so required by the
certificate of incorporation or these bylaws, wherein other qualifications for
directors may be prescribed. Each director, including a director elected to fill
a vacancy, shall hold office until his successor is elected and qualified or
until his earlier resignation or removal.
Elections of directors need not be by written ballot.
3.4. RESIGNATION AND VACANCIES
Any director may resign at any time upon written notice to the
corporation. When one or more directors so resigns and the resignation is
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office as
provided in this section in the filling of other vacancies.
Unless otherwise provided in the certificate of incorporation or these
bylaws:
3.4.1. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
3.4.2. Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the certificate of incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by a majority of the directors
elected by such class or classes or series thereof then in office, or by a sole
remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten (10) percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as aforesaid,
which election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.
<PAGE>
3.5. PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The board of directors of the corporation may hold meetings, both
regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or
these bylaws, members of the board of directors, or any committee designated by
the board of directors, may participate in a meeting of the board of directors,
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
3.6. FIRST MEETINGS
The first meeting of each newly elected board of directors shall be
held at such time and place as shall be fixed by the vote of the stockholders at
the annual meeting and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present. In the event of the failure of the stockholders to fix the
time or place of such first meeting of the newly elected board of directors, or
in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
board of directors, or as shall be specified in a written waiver signed by all
of the directors.
3.7. REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice
at such time and at such place as shall from time to time be determined by the
board.
3.8. SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two (2) directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. If the notice is mailed, it
shall be deposited in the United States mail at least four (4) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or by telegram or by facsimile, it shall be delivered personally or by
telephone or to the telegraph company at least one (1) hour before the time of
the holding of the meeting. Any oral notice given personally or by telephone may
be communicated either to the director or to a person at the office of the
director who the person giving the notice has reason to believe will promptly
communicate it to the director. The notice need not specify the purpose or the
place of the meeting, if the meeting is to be held at the principal executive
office of the corporation.
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3.9. QUORUM
At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation. If a quorum is not present at any meeting of the board of
directors, then the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is present.
3.10. WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the directors, or members of a committee of directors, need be specified in
any written waiver of notice unless so required by the certificate of
incorporation or these bylaws.
3.11. ADJOURNED MEETING; NOTICE
If a quorum is not present at any meeting of the board of directors,
then the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum is
present.
3.12. BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation or
these bylaws, any action required or permitted to be taken at any meeting of the
board of directors, or of any committee thereof, may be taken without a meeting
if all members of the board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the board or committee.
<PAGE>
3.13. FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or
these bylaws, the board of directors shall have the authority to fix the
compensation of directors.
3.14. APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.15. REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the certificate of
incorporation or by these bylaws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.
ARTICLE 4.
COMMITTEES
4.1. COMMITTEES OF DIRECTORS
The board of directors may, by resolution passed by a majority of the
whole board, designate one or more committees, with each committee to consist of
one or more of the directors of the corporation. The board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of the
board of directors or in the bylaws of the corporation, shall have and may
exercise all the powers and authority of the board of directors in the
management of the business and affairs of the corporation, and may authorize the
seal of the corporation to be affixed to all papers that may require it; but no
such committee shall have the power or authority to (i) amend the certificate of
incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the board of directors as provided in Section 151(a) of the General
Corporation Law of Delaware, fix any of the preferences or rights of such shares
<PAGE>
relating to dividends, redemption, dissolution, any distribution of assets of
the corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation), (ii) adopt an agreement of
merger or consolidation under Sections 251 or 252 of the General Corporation Law
of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, (iv)
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution, or (v) amend the bylaws of the corporation; and, unless the
board resolution establishing the committee, the bylaws or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.
4.2. COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.
4.3. MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these bylaws, Section
3.5 (place of meetings and meetings by telephone), Section 3.7 (regular
meetings), Section 3.8 (special meetings and notice), Section 3.9 (quorum),
Section 3.10 (waiver of notice), Section 3.11 (adjournment and notice of
adjournment), and Section 3.12 (action without a meeting), with such changes in
the context of those bylaws as are necessary to substitute the committee and its
members for the board of directors and its members; provided, however, that the
time of regular meetings of committees may also be called by resolution of the
board of directors and that notice of special meetings of committees shall also
be given to all alternate members, who shall have the right to attend all
meetings of the committee. The board of directors may adopt rules for the
government of any committee not inconsistent with the provisions of these
bylaws.
<PAGE>
ARTICLE 5.
OFFICERS
5.1. OFFICERS
The officers of the corporation shall be a president, one or more vice
presidents, a secretary, and a treasurer. The corporation may also have, at the
discretion of the board of directors, a chairman of the board, one or more
assistant vice presidents, assistant secretaries, assistant treasurers, and any
such other officers as may be appointed in accordance with the provisions of
Section 5.3 of these bylaws. Any number of offices may be held by the same
person.
5.2. ELECTION OF OFFICERS
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Sections 5.3 or 5.5 of these
bylaws, shall be chosen by the board of directors, subject to the rights, if
any, of an officer under any contract of employment.
5.3. SUBORDINATE OFFICERS
The board of directors may appoint, or empower the president to
appoint, such other officers and agents as the business of the corporation may
require, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these bylaws or as the board of
directors may from time to time determine.
5.4. REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5. VACANCIES IN OFFICES
Any vacancy occurring in any office of the corporation shall be filled
by the board of directors.
<PAGE>
5.6. CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these bylaws. If there is no
president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.7 of these bylaws.
5.7. PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction, and control of the business and the officers of the corporation. He
shall preside at all meetings of the shareholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors. He shall have the general powers and duties of management usually
vested in the office of president of a corporation and shall have such other
powers and duties as may be prescribed by the board of directors or these
bylaws.
5.8. VICE PRESIDENT
In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or, if not
ranked, a vice president designated by the board of directors, shall perform all
the duties of the president and when so acting shall have all the powers of, and
be subject to all the restrictions upon, the president. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the board of directors, these bylaws,
the president or the chairman of the board.
5.9. SECRETARY
The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of
directors, committees of directors, and shareholders. The minutes shall show the
time and place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register, showing the names of
all shareholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares, and the number
and date of cancellation of every certificate surrendered for cancellation.
<PAGE>
The secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the board of directors required to be given by law or
by these bylaws. He shall keep the seal of the corporation, if one be adopted,
in safe custody and shall have such other powers and perform such other duties
as may be prescribed by the board of directors or by these bylaws.
5.10. TREASURER
The treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct books and records of accounts of the properties
and business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings,
and shares. The books of account shall at all reasonable times be open to
inspection by any director.
The treasurer shall deposit all money and other valuables in the name
and to the credit of the corporation with such depositaries as may be designated
by the board of directors. He shall disburse the funds of the corporation as may
be ordered by the board of directors, shall render to the president and
directors, whenever they request it, an account of all of his transactions as
treasurer and of the financial condition of the corporation, and shall have such
other powers and perform such other duties as may be prescribed by the board of
directors or these bylaws.
5.11. ASSISTANT SECRETARY
The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.
5.12. ASSISTANT TREASURER
The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the treasurer or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.
<PAGE>
5.13. AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from time
to time by the board of directors or the stockholders.
ARTICLE 6.
INDEMNITY
6.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the maximum extent and in the manner
permitted by the General Corporation Law of Delaware, indemnify each of its
directors and officers against expenses (including attorneys' fees), judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding, arising by reason of the fact that such person
is or was an agent of the corporation. For purposes of this Section 6.1, a
"director" or "officer" of the corporation includes any person (i) who is or was
a director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was a
director or officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
6.2. INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the extent and in the manner
permitted by the General Corporation Law of Delaware, to indemnify each of its
employees and agents (other than directors and officers) against expenses
(including attorneys' fees), judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with any proceeding, arising by
reason of the fact that such person is or was an agent of the corporation. For
purposes of this Section 6.2, an "employee" or "agent" of the corporation (other
than a director or officer) includes any person (i) who is or was an employee or
agent of the corporation, (ii) who is or was serving at the request of the
corporation as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was an employee or agent of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.
6.3. INSURANCE
The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the provisions of the General Corporation Law of Delaware.
<PAGE>
ARTICLE 7.
RECORDS AND REPORTS
7.1. MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive office or at
such place or places as designated by the board of directors, keep a record of
its shareholders listing their names and addresses and the number and class of
shares held by each shareholder, a copy of these bylaws as amended to date,
accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
7.2. INSPECTION BY DIRECTORS
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.
<PAGE>
7.3. ANNUAL STATEMENT TO STOCKHOLDERS
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.
7.4. REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, the president, any vice president, the
treasurer, the secretary or assistant secretary of this corporation, or any
other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority granted
herein may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
ARTICLE 8.
GENERAL MATTERS
8.1. CHECKS
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.2. EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
The board of directors, except as otherwise provided in these bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
<PAGE>
8.3. STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of a corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairman or vice-chairman of
the board of directors, or the president or vice-president, and by the treasurer
or an assistant treasurer, or the secretary or an assistant secretary of such
corporation representing the number of shares registered in certificate form.
Any or all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate has ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of issue.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.4. SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
8.5. LOST CERTIFICATES
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time. The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate
<PAGE>
theretofore issued by it, alleged to have been lost, stolen or destroyed, and
the corporation may require the owner of the lost, stolen or destroyed
certificate, or his legal representative, to give the corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate or uncertificated shares.
8.6. CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number includes
the singular, and the term "person" includes both a corporation and a natural
person.
8.7. DIVIDENDS
The directors of the corporation, subject to any restrictions contained
in the certificate of incorporation, may declare and pay dividends upon the
shares of its capital stock pursuant to the General Corporation Law of Delaware.
Dividends may be paid in cash, in property, or in shares of the corporation's
capital stock.
The directors of the corporation may set apart out of any of the funds
of the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
corporation, and meeting contingencies.
8.8. FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.
8.9. SEAL
The corporation shall adopt a corporate seal, which may be altered at
pleasure, and use the same by causing it or a facsimile thereof, to be impressed
or affixed or in any other manner reproduced.
8.10. TRANSFER OF STOCK
Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction in its books.
<PAGE>
8.11. STOCK TRANSFER AGREEMENTS
The corporation shall have power to enter into and perform any
agreement with any number of shareholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the General Corporation Law of Delaware.
8.12. REGISTERED STOCKHOLDERS
The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE 9.
AMENDMENTS
The original or other bylaws of the corporation may be adopted, amended
or repealed by the stockholders entitled to vote; provided, however, that the
corporation may, in its certificate of incorporation, confer the power to adopt,
amend or repeal bylaws upon the directors. The fact that such power has been so
conferred upon the directors shall not divest the stockholders of the power, nor
limit their power to adopt, amend or repeal bylaws.
ARTICLE 10.
DISSOLUTION
If it should be deemed advisable in the judgment of the board of
directors of the corporation that the corporation should be dissolved, the
board, after the adoption of a resolution to that effect by a majority of the
whole board at any meeting called for that purpose, shall cause notice to be
mailed to each stockholder entitled to vote thereon of the adoption of the
resolution and of a meeting of stockholders to take action upon the resolution.
At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the outstanding stock of the corporation entitled
to vote thereon votes for the proposed dissolution, then a certificate stating
that the dissolution has been authorized in accordance with the provisions of
Section 275 of the General
<PAGE>
Corporation Law of Delaware and setting forth the names and residences of the
directors and officers shall be executed, acknowledged, and filed and shall
become effective in accordance with Section 103 of the General Corporation Law
of Delaware. Upon such certificate's becoming effective in accordance with
Section 103 of the General Corporation Law of Delaware, the corporation shall be
dissolved.
Whenever all the stockholders entitled to vote on a dissolution consent
in writing, either in person or by duly authorized attorney, to a dissolution,
no meeting of directors or stockholders shall be necessary. The consent shall be
filed and shall become effective in accordance with Section 103 of the General
Corporation Law of Delaware. Upon such consent's becoming effective in
accordance with Section 103 of the General Corporation Law of Delaware, the
corporation shall be dissolved. If the consent is signed by an attorney, then
the original power of attorney or a photocopy thereof shall be attached to and
filed with the consent. The consent filed with the Secretary of State shall have
attached to it the affidavit of the secretary or some other officer of the
corporation stating that the consent has been signed by or on behalf of all the
stockholders entitled to vote on a dissolution; in addition, there shall be
attached to the consent a certification by the secretary or some other officer
of the corporation setting forth the names and residences of the directors and
officers of the corporation.
ARTICLE 11.
CUSTODIAN
11.1. APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
The Court of Chancery, upon application of any stockholder, may appoint
one or more persons to be custodians and, if the corporation is insolvent, to be
receivers, of and for the corporation when:
11.1.1. at any meeting held for the election of directors the
stockholders are so divided that they have failed to elect successors to
directors whose terms have expired or would have expired upon qualification of
their successors; or
11.1.2. the business of the corporation is suffering or is
threatened with irreparable injury because the directors are so divided
respecting the management of the affairs of the corporation that the required
vote for action by the board of directors cannot be obtained and the
stockholders are unable to terminate this division; or
11.1.3. the corporation has abandoned its business and has
failed within a reasonable time to take steps to dissolve, liquidate or
distribute its assets.
<PAGE>
11.2. DUTIES OF CUSTODIAN
The custodian shall have all the powers and title of a receiver
appointed under Section 291 of the General Corporation Law of Delaware, but the
authority of the custodian shall be to continue the business of the corporation
and not to liquidate its affairs and distribute its assets, except when the
Court of Chancery otherwise orders and except in cases arising under Sections
226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware.
CERTIFICATE OF ADOPTION OF BYLAWS
OF
BIOMARIN PHARMACEUTICAL INC.
Adoption by Incorporator
The undersigned person appointed in the Certificate of Incorporation to
act as the Incorporator of BioMarin Pharmaceutical Inc. hereby adopts the
foregoing bylaws, comprising twenty-one (21) pages, as the Bylaws of the
corporation.
Executed this 18th day of April, 1997.
/s/Frank S. Currie, Esq., Incorporator
Certificate by Secretary of Adoption by Incorporator
The undersigned hereby certifies that he is the duly elected,
qualified, and acting Secretary of BioMarin Pharmaceutical Inc. and that the
foregoing Bylaws, comprising twenty-one (21) pages, were adopted as the Bylaws
of the corporation on April 18, 1997, by the person appointed in the Certificate
of Incorporation to act as the Incorporator of the corporation.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and
affixed the corporate seal this 18th day of April, 1997.
/s/John C. Klock, Secretary
CERTIFICATE OF ADOPTION OF BYLAWS
OF
BIOMARIN PHARMACEUTICAL INC.
Certificate by Secretary of Adoption by Shareholders' Vote
The undersigned hereby certifies that he is the duly elected,
qualified, and acting Secretary of BioMarin Pharmaceutical Inc. and that the
foregoing Bylaws, comprising twenty-one (21) pages, were submitted to the
shareholders at their first meeting held on _______________, 19__, and recorded
in the minutes thereof and were ratified by the vote of shareholders entitled to
exercise the majority of the voting power of the corporation.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and
affixed the corporate seal this ____ day of ____________ 19__.
/s/John C. Klock, Secretary
gbmlic.doc
LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") is made and entered into as of June 26,
1997, by and between Glyko Biomedical Ltd, ("Glyko"), a Canadian corporation
having its offices at Cassels Brock Blackwell, 40 King Street West, 21st Floor,
Toronto, Ontario M5H 3C2, Canada existing under the laws of Canada and BioMarin
Pharmaceuticals, Inc, having offices at 11 Pimentel Court, Novato, CA 94949
existing under the laws of California ("BioMarin").
RECITALS
WHEREAS, Glyko has rights in certain technology; and
WHEREAS BioMarin desires to acquire from Glyko, and Glyko is willing to
grant to BioMarin, rights in such technology for the purpose of allowing
BioMarin to develop and market products for Therapeutic Uses (as defined below);
NOW THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Technology" shall mean all know-how, processes, formulae,
concepts, ideas, data, technical information, testing results, descriptions,
technologies, procedures, processes, articles of manufacture, compositions of
matter, designs, inventions, discoveries ,documents and works of authorship,
whether or not patentable or patented, now owned or licensed by Glyko and its
subsidiaries and affiliates, including without limitation the items described in
Exhibit A hereto.
1.2 "Therapeutic Uses" shall mean pharmaceutical entities, medical
devices, chemicals or materials for pharmaceutical use, or other chemicals which
can be used for the treatment of diseases in humans or animals, all uses other
than Diagnostic or Analytical Uses, including without limitation uses for drug
discovery and genomics.
1.3 "Diagnostic or Analytical Uses" shall mean all uses for scientific
laboratory research and all uses for diagnosis of disease in humans and animals
(but not the development of products or services to prevent and/or treat
diseases in humans or animals).
<PAGE>
1.4 "Intellectual Property Rights" shall mean all current and
future worldwide patents, patent applications and other patent
rights, trade secrets, copyrights and other proprietary
rights.
1.5 "Effective Date" shall mean the date upon which the last of the
signatures is applied to this Agreement.
2. GRANT OF RIGHTS
2.1 License. Glyko hereby grants to BioMarin an exclusive, worldwide,
perpetual, irrevocable, royalty-free right and license, with the right to grant
and authorize sublicenses, under all of Glyko's Intellectual Property Rights in
and to the Technology, including without limitation those issued patents and
pending patent applications listed in Exhibit B hereto, to make, have made, use,
offer for sale, import and sell products for Therapeutic Uses incorporating,
manufactured using, or derived from the Technology.
2.2 Patent Marking BioMarin and its sublicensees shall mark products for
Therapeutic Uses made, sold or otherwise disposed of under the license granted
in Section 2.1 with such patent and other proprietary right notices as Glyko may
provide to BioMarin from time to time.
2.3 Reservation of Rights Except to the extent expressly granted to BioMarin
herein, Glyko retains all of its right, title and interest in and to the
Technology and all Intellectual Property Rights therein and thereto. Nothing in
this Agreement shall be deemed to prevent Glyko from making, having made, using,
offering for sale, importing and/or selling any product other than products for
Therapeutic Uses.
2.4 Disclosure of Technology As soon as practicable after the Effective Date,
and on an ongoing basis thereafter, Glyko shall make the Technology available to
BioMarin.
3. CONSIDERATION
In consideration for the license granted under Section 2 and Glyko's
other obligations hereunder, BioMarin shall issue Glyko on the Effective Date,
seven million (7,000,000) fully-paid, non-assessable shares of the common stock
of BioMarin.
4. LICENSE TO IMPROVEMENTS BY BIOMARIN
BioMarin hereby grants to Glyko an exclusive, worldwide, perpetual, irrevocable,
royalty-free right and license, with the right to grant and authorize
sublicenses, under all of BioMarin's Intellectual Property Rights in and to any
and all inventions, discoveries, or developments that modify, improve upon,
extend or enhance the Technology, which are made, conceived or reduced to
practice or expression by BioMarin ("Improvements"), to make, have made, use,
offer for sale, import and sell products for Diagnostic and Analytic Uses.
<PAGE>
5. OBLIGATIONS OF BIOMARIN
BioMarin shall at all times use reasonable commercial efforts to
develop and commercialize products for Therapeutic Uses.
5. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties by Glyko Glyko represents and
warrants that (i) Glyko owns or has sufficient rights in the Intellectual
Property Rights relating to the Technology to give it the necessary power, right
and authority to enter into this Agreement and to grant the license granted
herein and to disclose the Technology to BioMarin; (ii) to the best of its
knowledge the Technology does not infringe any patent, copyright, trade secret
or other proprietary right of any third party; (iii) the Technology is free and
clear of any lien, encumbrance, security interest or restriction on transfer or
license, (iv) Glyko has not previously granted, and will not grant during the
term of this Agreement, any right license or interest in and to the Technology,
or any portion thereof for products(s) for Therapeutic Uses, which is in
conflict with the rights and licenses granted to BioMarin herein; and (v) Glyko
has no right, title or interest in any issued patents or pending patent
applications other than those set forth in Exhibit B hereto which relate to the
Technology.
6.2 Disclaimer EXCEPT FOR THE REPRESENTATIONS AND WARANTIES SETFORTH
ABOVE, GLYKO DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, STATUTORY, IN ANY
COMMUNICATION WITH BIOMARIN OR OTHERWISE, AND EXPRESSLY DISCLAIMS ANY IMPLIED
WARRANTY OF NONINFRINGEMENT, MERCHANTIBILITY OR FITNESS FOR A PARTICULAR
PURPOSE. WITHOUT LIMITING THE FOREGOING, GLYKO DISCLAIMS (i) ANY WARRANTY
REGARDING THE VALIDITY OF THE PATENTS AND PATENT APPLICATIONS LISTED IN EXHIBIT
B HERETO AND (ii) ANY WARRANTY THAT THE MANUFACTURER, USE OR SALE OF ANY
PRODUCT(S) FOR THERAPEUTIC USES WILL NOT INFRINGE ANY PATENT OR OTHER
PROPRIETARY RIGHT OF ANY THIRD PARTY.
7. PROTECTION AND ENFORCEMENT OF INTELLECTUAL PROPERTY
7.1 Maintenance of Patents Glyko shall maintain any and all issued patents
pertaining to the Technology, including without limitation those patents listed
in Exhibit B hereto. If Glyko elects not to pay any fee required to maintain any
such patent, Glyko shall so notify BioMarin at least sixty (60) days prior to
the date that such patent would no longer be effective, and BioMarin shall have
the right to pay such fee.
<PAGE>
7.2 Prosecution of Patent Applications Glyko shall have the right, at
its option and expense, to control the filing for, prosecution, issuance and
maintenance of new and existing patent applications (including without
limitation the patent applications listed in Exhibit B hereto) covering the
Technology. Glyko shall keep BioMarin reasonably informed as to the status of
all such patent applications, including without limitation (i) the scope and
content of all such patent applications and (ii) responses to official actions
of patent offices during prosecution of all such patent applications. If Glyko
elects not to pursue any patent application covering the Technology in any
country, Glyko shall so notify BioMarin at least sixty (60) days prior to the
date that such application would no longer be effective. In such case, BioMarin
shall have the right to control the filing for, prosecution, issuance and
maintenance of such application in that country at its own expense, and Glyko
shall give BioMarin all reasonably requested assistance to enable BioMarin to do
so.
7.3 Notification of Infringement Each party shall notify the other upon
such party becoming aware of any infringement by any third party or any
Intellectual Property Rights with respect to the Technology, and shall provide
the other with the available evidence, if any, of such infringement. In
addition, Glyko shall notify BioMarin in the event that Glyko becomes aware that
the Technology infringes a patent, copyright, trade secret or other proprietary
right of any third party.
7.4 Enforcement of Patent Rights If Glyko or BioMarin has actual notice
of infringement by any third party of any Intellectual Property Rights with
respect to the Technology, the respective officers of Glyko and BioMarin shall
promptly confer to determine in good faith an appropriate course of action to
enforce such Intellectual Property Rights or otherwise abate the infringement
thereof. Glyko shall have the right but not the obligation, at its own expense
and within its sole control, to take appropriate action to enforce such rights.
If, within six (6) months after notice of infringement, Glyko has not commenced
reasonably sufficient action to enforce such Intellectual Property Rights,
BioMarin shall have the right, at its own expense, to take appropriate action to
enforce such Intellectual Property Rights and Glyko shall cooperate with
BioMarin as reasonably requested by BioMarin, including the joinder by Glyko in
such action as a party plaintiff. Each party shall retain any and all amounts
recovered in any action by it to enforce such Intellectual Property Rights.
8. CONFIDENTIALITY
8.1 Confidentiality. Each party agrees that any inventions, know-how,
ideas and other business, technical or financial information it obtains from the
other are the confidential property of the disclosing party or its licensors
("Confidential Information"). Confidential Information of Glyko shall include,
without limitation the Technology, Confidential Information of BioMarin shall
include, without limitation, the Improvements. The receiving party shall not use
or disclose the Confidential Information of the disclosing party except as
expressly permitted herein, and shall keep confidential such Confidential
Information using the same degree of care it uses to protect its own information
<PAGE>
of a similar nature, but in no event with less than reasonable care; provided
however that the foregoing restrictions shall not apply to any Confidential
Information of the disclosing party which is (i) independently developed by the
receiving party without the use of or reference to the Confidential Information
of the disclosing party, (ii) in the public domain at the time of its receipt or
thereafter becomes part of the public domain through no fault of the recipient,
(iii) received without any obligation of confidentiality from a third party
having the right to disclose such information, (iv) released from the
restrictions of this Section 8 by the express written consent of the disclosing
party or (v) required by law, statute, rule or court order to be disclosed (the
receiving party shall, however, use all reasonable efforts to obtain
confidential treatment of any such disclosure).
8.2 Permitted Disclosures Notwithstanding the provisions of Section 8.1
thereof, either party may, to the extent necessary, disclose Confidential
Information of the other party (i) for the purpose of securing safety agency
approvals and/or (ii) to exercise its rights under this Agreement, provided that
in each such instance (x) the other party shall have been notified of the
disclosure and (y) any such disclosure shall be made to third parties which
either have agreed to be bound by or are already subject to duties of non-use
and non-disclosure at least as restrictive as that set forth in Section 8.1
hereof.
8.3 Technology Each of Glyko and BioMarin agrees to use reasonable
efforts to maintain the confidentiality of the Technology.
9. PURCHASE OF GLYKO PRODUCTS AND SERVICES
BioMarin shall have the right to purchase any and all products
manufactured by Glyko (including without limitation enzymes) and services
offered by Glyko at a discount which is equal to the lowest price to its most
favored customer, subject to the reasonable availability of such products and/or
services.
10 TERM
This Agreement shall commence on the Effective Date and shall continue
in full force and effect thereafter.
LIMITATION OF LIABILITY
EXCEPT WITH RESPECT TO ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY SUCH PARTY,
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, HOWEVER CAUSED AND ON ANY THEORY
OF LIABILITY, WHETHER TORT (INCLUDING NEGLIGENCE), BREACH OF CONTRACT OR
OTHERWISE, AND WHETHER OR NOT THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGE.
<PAGE>
12 GENERAL PROVISIONS
12.1 Governing Law This Agreement shall be governed by the laws of the
state of California without reference to its conflict of laws provisions. The
parties hereby consent to the personal and exclusive jurisdiction of the state
and federal courts in Marin County California to adjudicate any dispute arising
out of this Agreement.
12.2 Modification This Agreement may be modified only by a writing
signed by both parties hereto.
12.3 Entire Agreement This Agreement (together with its Exhibits A and
B) represents the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior or contemporaneous agreements,
understandings, proposals and representations by the parties.
12.4 Assignment either party may assign or delegate its rights or
obligations under this Agreement in the case of a transfer of ownership or
control of substantially all of its assets to which this Agreement pertains. No
assignments or delegations by either party other than those set forth herein
shall be permitted, and any such attempted assignment by either party in
violation of this Section 12.4 shall be void. Subject to the foregoing, this
Agreement shall bind and inure to the benefit of the parties hereto and their
successors and assigns.
12.5 Further Assurances Each party agrees to duly execute and deliver,
or cause to be duly executed and delivered, such further instruments, and to do
and cause to be done, such further acts and things, including without limitation
the execution and filing of such additional agreements, documents and
instruments, that may be necessary or as the other party hereto may from time to
time reasonably request in connection with this agreement in order to carry out
more effectually the provisions and purposes of this Agreement, or to better
assure and confirm unto such other party its rights under this agreement.
12.6 Notices All notices under this Agreement shall be in writing and
sent by (i) certified airmail, return receipt requested, postage prepaid or (ii)
commercial courier service if properly addressed to or delivered at the
addresses of the parties set forth above, notices and other communications shall
be deemed given upon delivery or, when delivery cannot be effected due to the
actions of the addressee, upon tender. Either party may change its address by a
notice given in compliance with this section.
12.7 Severability. If any provision thereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the extent
permitted by law, (i) all other provisions thereof shall remain in full fore and
effect in such jurisdiction and the invalid , illegal or unenforceable provision
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
such provision in any other jurisdiction. To the extent permitted by applicable
law, each party hereby waives any provision of law that would render any
provision hereof prohibited or unenforceable in any respect.
<PAGE>
12.8 No Waiver. The failure or delay of either party to exercise any
right under this Agreement may not be construed as a waiver of that right, and
no waiver of any term or condition of this Agreement shall be valid or binding
on either party unless set forth in a writing signed by such party.
12.9 Counterparts. This Agreement may be executed in any number of
counterparts and when so executed and delivered shall have the same force and
effect as though all signatures appeared on one document.
IN WITNESS WHEREOF, the parties by their duly authorized
representatives have entered into this Agreement as of the Effective Date.
Glyko Biomedical Ltd: BioMarin Pharmaceuticals Inc:
By: /s/ John S. Glass By: /s/Grant W. Denison, Jr.
Name: John S. Glass Name: Grant W. Denison, Jr.
Title: Director Title: Chief Executive Officer
<PAGE>
Exhibit A
Technology
1. FACE Technology
2. All clones, vectors and probes developed by Glyko
3. All enzymes developed or offered by Glyko
4. Glyko know-how for practicing the Technology
<PAGE>
EXHIBIT B
LICENSED CURRENT PATENTS
<TABLE>
<CAPTION>
PATENT SUBJECT MATTER COUNTRY NUMBER
<S> <C> <C>
2D ANALYSIS OF CARBOHYDRATES US ALLOWED
ANTS FLUOROPHORE US ISSUED US 5,340,453
2 AMINOACRIDONE TAG US ISSUED US 5,472,582
ANTS-BLOTTING US ISSUED US 5,316,638
FACE CLONING ASSAY US ISSUED US 5,258,295
CLONED NEURAMINIDASE ENZYME US ISSUED US 5,591,839
ANTS-2D ELECTROPHORESIS US ISSUED US 4,975,165
ANTS-2D ELECTROPHORESIS US ISSUED US 5,094,740
ANTS-2D ELECTROPHORESIS EPC ALLOWED
ANTS-BLOTTING (GLYCOMED) US ISSUED US 5,019,231
ANSA FLUOROPHORE (GLYCOMED) US ISSUED US 5,094,731
ANSA FLUOROPHORE (GLYCOMED) US ISSUED US 5,035,786
ANSA FLUOROPHORE (GLYCOMED) US ISSUED US 5,087,337
FACE SYNTHESIS US ISSUED US 5,308,460
CARBOHYDRATE SEQUENCING UK ISSUED GB 2215836
CARBOHYDRATE SEQUENCING US ISSUED US 5,104,508
CCD DETECTION OF CARBOHYDRATES (ASTROSCAN) US ISSUED US 4,874,492
CCD DETECTION OF CARBOHYDRATES (ASTROSCAN) PCT ISSUED EP 0,214,713
CCD DETECTION OF CARBOHYDRATES (ASTROSCAN) US ISSUED UK 2,175,690
FLUOROPHORE 2-AMINOACRIDONE UK ISSUED GB 2,254,851
CLONED NEURAMINIDASE US ISSUED US 5,591,839
PRECAST GELS US ALLOWED
CCD IMAGER US ALLOWED
<FN>
ABBREVIATIONS:
ANSA=AMINONAPHTHALENE SULFONIC ACID
ANTS=2-AMINONAPHTHALENE TRISULFONIC ACID
CCD=CHARGE COUPLED DEVICE;
FACE=FLUOROPHORE-ASSISTED-CARBOHYDRATE ELECTROPHORESIS.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000908401
<NAME> Glyko Biomedical Ltd.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JUL-01-1997 JAN-01-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<EXCHANGE-RATE> 1 1
<CASH> 600,241 600,241
<SECURITIES> 0 0
<RECEIVABLES> 233,836 233,836
<ALLOWANCES> 0 0
<INVENTORY> 93,534 93,534
<CURRENT-ASSETS> 950,975 950,675
<PP&E> 670,559 670,559
<DEPRECIATION> (500,206) (500,206)
<TOTAL-ASSETS> 1,123,534 1,123,534
<CURRENT-LIABILITIES> 1,650,162 1,650,162
<BONDS> 0 0
0 0
0 0
<COMMON> 13,140,556 13,140,556
<OTHER-SE> (13,667,184) (13,667,184)
<TOTAL-LIABILITY-AND-EQUITY> 1,123,534 1,123,534
<SALES> 393,689 910,969
<TOTAL-REVENUES> 472,401 1,617,816
<CGS> (123,897) (383,072)
<TOTAL-COSTS> (123,897) (383,072)
<OTHER-EXPENSES> (1,027,122) (2,927,585)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (671,644) (1,662,932)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (671,644) (1,662,932)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (671,644) (1,662,932)
<EPS-PRIMARY> (0.03) (0.08)
<EPS-DILUTED> (0.03) (0.08)
</TABLE>
