10-K

                                  United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 10-K
(Mark One)
[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
    1934 For the fiscal year ended December 31, 2001
                                       Or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 For the transition period from ______________ to _____________.

                        Commission File Number: 000-26727

                          BioMarin Pharmaceutical Inc.
        (Exact name of small business issuer as specified in its charter)

      Delaware                                          68-0397820
 (State of other jurisdiction of           (I.R.S. Employer Identification No.)
 Incorporation or organization)

371 Bel Marin Keys Blvd., #210, Novato, California                    94949
(Address of principal executive offices)                            (Zip Code)

                  Registrant's telephone number: (415) 884-6700


        Securities registered pursuant to Section 12(b) of the Act: None
              Securities registered under Section 12(g) of the Act:
                          Common Stock, $.001 par value
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
     -----        ----

Indicate by check mark if disclosure  of  delinquent  filers in response to Item
405 of Regulation  S-K is not contained in this form, and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. __

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant as of March 15, 2002 was $392,122,171. The number of shares of common
stock, $0.001 par value, outstanding on March 15, 2002 was 52,447,402.

The documents incorporated by reference are as follows:

Portions  of  the  Registrant's  Proxy  Statement  for  the  Annual  Meeting  of
Stockholders  to be held May 29, 2002 are  incorporated  by reference  into Part
III.




                          BIOMARIN PHARMACEUTICAL INC.

                                     Part I

                           FORWARD LOOKING STATEMENTS

This Form 10-K contains "forward-looking statements" as defined under securities
laws. Many of these  statements can be identified by the use of terminology such
as "believes,"  "expects,"  "anticipates,"  "plans," "may," "will,"  "projects,"
"continues,"   "estimates,"   "potential,"   "opportunity"   and  so  on.  These
forward-looking  statements may be found in the " Factors That May Affect Future
Results," "Description of Business," and other sections of this Annual Report on
Form 10-K. Our actual results or experience could differ  significantly from the
forward-looking  statements.  Factors  that could cause or  contribute  to these
differences include those discussed in "Factors That May Affect Future Results,"
as well as those  discussed  elsewhere in this Form 10-K.  You should  carefully
consider that information before you make an investment decision.

You should not place undue reliance on these statements,  which speak only as of
the date that they were made. These cautionary  statements  should be considered
in connection  with any written or oral  forward-looking  statements that we may
issue in the future.  We do not undertake any obligation to release publicly any
revisions to these forward-looking  statements after completion of the filing of
this Form 10-K to  reflect  later  events or  circumstances  or to  reflect  the
occurrence of unanticipated events.

Item 1.   Description of Business

Overview

We develop  enzyme  therapies to treat  serious,  life-threatening  diseases and
conditions.  We leverage  our  expertise  in enzyme  biology to develop  product
candidates  for the treatment of genetic  diseases,  including MPS I, MPS VI and
PKU, as well as other critical care  situations such as  cardiovascular  surgery
and serious burns. Our product  candidates address markets for which no products
are currently  available or where current  products  have been  associated  with
major   deficiencies.   We  focus  on  conditions  with   well-defined   patient
populations, including genetic diseases, which require chronic therapy.

Our lead product candidate,  Aldurazyme(TM),  which recently completed a Phase 3
trial, is being developed for the treatment of  Mucopolysaccharidosis  I (MPS I)
disease. MPS I is a debilitating and life-threatening  genetic disease caused by
the deficiency of (alpha)-L-iduronidase, an enzyme responsible for breaking down
certain  carbohydrates.  MPS I is a progressive  disease that afflicts  patients
from birth and frequently leads to severe disability and early death.  There are
currently  no drugs on the market for the  treatment  of MPS I.  Aldurazyme  has
received  both fast  track  designation  from the  United  States  Food and Drug
Administration  (FDA) and orphan drug  designation for the treatment of MPS I in
the United States and in the European Union. The impact of these designations is
discussed in the "Government Regulation" section, which begins on page 6. We are
developing  Aldurazyme  through a joint  venture  with Genzyme  Corporation.  In
collaboration  with Genzyme,  we completed a double-blinded,  placebo-controlled
Phase 3 clinical  trial of  Aldurazyme  in August 2001.  On November 2, 2001, we
announced  positive results from this trial. On April 1, 2002, we announced that
together with our joint venture  partner,  Genzyme,  we have filed with European
regulatory  authorities  for approval to market  Aldurazyme.  Our joint  venture
submitted a Marketing Authorization  Application (MAA) to the European Medicines
Evaluation  Agency  (European  Union)(or  EMEA) on March 1,  2002.  The EMEA has
accepted  our MAA and  validated  that it is complete  and ready for  scientific
review.  Accordingly,  the EMEA's Committee for Proprietary  Medicinal  Products
(CPMP)  will now  evaluate  the  application  to  determine  whether  to approve
Aldurazyme  for the  treatment of MPS I in all 15 member  states of the European
Union.  Norway  and  Iceland  also  participate  in the CPMP but have a seperate
approval  process.  In the United  States,  we along with  Genzyme  have been in
discussions with the FDA regarding the filing of a Biologics License Application
(BLA). We plan to initiate the BLA filing as soon as possible.

We are developing our second product candidate,  Neutralase(TM), for reversal of
anticoagulation by heparin in patients  undergoing Coronary Artery Bypass Graft,
or CABG,  surgery and angioplasty.  We acquired rights to Neutralase through our
acquisition of the pharmaceutical assets of IBEX Technologies Inc. in the fourth
quarter  of 2001.  Heparin  is a  carbohydrate  drug  commonly  used to  prevent
coagulation,   or  blood  clotting,  during  certain  types  of  major  surgery.
Neutralase is a  carbohydrate-modifying  enzyme that cleaves  heparin,  allowing
coagulation  of blood and aiding  patient  recovery  following  CABG surgery and
angioplasty.  Based on data from previous trials,  we plan to initiate a Phase 3
trial in CABG surgery in 2002.

In addition to Aldurazyme and Neutralase,  we are developing other  enzyme-based
therapeutics for the treatment of a variety of diseases and conditions. In 2001,
we announced a Phase 1 trial of AryplaseTM  (formerly  referred to as rhASB) for
the treatment of MPS VI, another seriously  debilitating genetic disease.  Based
on data  from  this  previous  trial,  we plan to  initiate  a Phase 2 trial  of
Aryplase in early 2002. We are also developing VibrilaseTM (formerly referred to
as Vibriolysin  Topical),  a topical  enzyme product for use in removing  burned
skin tissue in preparation  for skin grafting or other  therapy.  We initiated a
Phase 1  clinical  trial of Vibrilase  in the  United  Kingdom in the fourth
quarter  of 2001,  and  expect to begin a Phase 2  clinical  trial in either the
United States or the United  Kingdom  following  the  completion of this Phase 1
trial.  In addition,  we are pursuing  preclinical  development  of other enzyme
product candidates for genetic and other diseases.

                                       1


Recent Developments

On April 1, 2002, we announced  that  together  with our joint venture  partner,
Genzyme,  we have filed with  European  regulatory  authorities  for approval to
market  Aldurazyme.  Our joint venture  submitted an MAA to the EMEA on March 1,
2002.  The EMEA has accepted our MAA and validated that it is complete and ready
for  scientific  review.  Accordingly,  the  EMEA's  Committee  for  Proprietary
Medicinal Products (CPMP) will now evaluate the application to determine whether
to approve  Aldurazyme for the treatment of MPS I in all 15 member states of the
European  Union.  Norway and  Iceland  also  participate  in the CPMP but have a
seperate approval process. In the United States, we along with Genzyme have been
in  discussions  with the FDA regarding the filing of a BLA. We plan to initiate
the BLA filing as soon as possible.

On March 21, 2002, we acquired Synapse Technologies Inc. Synapse owns the rights
to certain patented and proprietary  technology  which,  based on the results of
preclinical  trials, has the potential to deliver  therapeutic enzymes and other
drugs  across  the  blood-brain  barrier  by  means of  traditional  intravenous
injections.  Under  the  terms  of  the  agreement,  we  purchased  100%  of the
outstanding shares of Synapse for approximately $10.2 million payable in 885,242
shares of our common stock. We also may make future contingent payments of up to
approximately $6 million.  These payments are payable in cash or stock, at our
option.

On February 25, 2002, we decided to close the analytics product catalog business
of our  wholly-owned  subsidiary,  Glyko,  Inc. The majority of the Glyko,  Inc.
employees  will be  incorporated  into  our  pharmaceutical  business  and  such
employees will continue to provide necessary  analytic and diagnostic support to
our therapeutic products. Certain operating assets of Glyko, Inc. may be offered
for sale.

On February 7, 2002, we announced that we had reached a definitive  agreement to
acquire all of the  outstanding  capital stock of Glyko  Biomedical  Ltd. (GBL).
GBL's  principal  asset is its 22% ownership  interest in our common stock.  GBL
owns  approximately  11.4 million shares of our common stock. Under the terms of
the acquisition agreement,  GBL's common shareholders will receive approximately
11.4 million shares of our common stock in exchange for all of GBL's outstanding
common stock.  There will be no net effect on the number of shares of our common
stock outstanding,  as we plan to retire the existing shares of our common stock
currently held by GBL upon closing.

On December 12, 2001, we completed a public offering of our common stock. In the
offering,  we  sold  8,050,000  shares,  including  1,050,000  shares  to  cover
underwriters' over-allotments,  at a price to the public of $12.00 per share, or
a total offering price of $96.6  million.  The net proceeds,  after expenses and
underwriting  discounts,  were approximately $90.4 million. We intend to use the
net proceeds from this sale of shares for:

         o the development and commercialization of our lead product candidate,
           Aldurazyme;
         o additional clinical trials and manufacturing of Neutralase;
         o preclinical studies and clinical trials for our other product
           candidates;
         o potential licenses and other acquisitions of complementary
           technologies and products;
         o general corporate purposes; and
         o working capital.

On November 2, 2001, we along with Genzyme,  announced  positive  results from a
preliminary  analysis of data from the Phase 3 clinical  trial of Aldurazyme for
the treatment of MPS I. Patients were  evaluated at defined  intervals to assess
progress in meeting two primary endpoints.  The preliminary data analysis showed
a  statistically  significant  increase  in  pulmonary  capacity  (p=0.028)  and
demonstrated a positive trend in endurance as measured by a six-minute walk test
(p=0.066).  Among other endpoints measured in the trial, the main findings of an
earlier open-label study of Aldurazyme were confirmed: a reduction in liver size
and a  reduction  in  excretion  of  urinary  glycosaminoglycans,  or GAGs,  the
carbohydrate  substances  that  accumulate  in patients with MPS I. Based on the
strength of the trial's results,  we, along with Genzyme,  have met jointly with
U.S. and  European  regulatory  authorities  to discuss  applications  to market
Aldurazyme.  Based on these discussions, the MAA has been submitted to the EMEA.
We plan to file the BLA with the FDA as soon as possible.

On October 31, 2001, we acquired the pharmaceutical  assets of IBEX Technologies
Inc. and its  subsidiaries.  The product  candidates  and  technologies  that we
gained in this transaction, primarily the Neutralase and Phenylase programs, are
complementary to our existing product portfolio and core competencies. Under the
terms of the agreements,  we acquired these assets in exchange for consideration
of $10.4  million,  with $8.4 million  payable in shares of our common stock and
$2.0 million  payable in cash. In addition,  we agreed to make  contingent  cash
payments  of up to  approximately  $9.5  million  to IBEX upon FDA  approval  of
products acquired from IBEX.

                                       2


     Aldurazyme

Our lead product candidate,  Aldurazyme, is being developed for the treatment of
MPS  I.   MPS  I  is  a   genetic   disease   caused   by  the   deficiency   of
(alpha)-L-iduronidase.  Patients with MPS I have multiple  debilitating symptoms
resulting from the buildup of carbohydrate  residues in all tissues in the body.
These symptoms  include delayed  physical  growth,  enlarged livers and spleens,
skeletal and joint  deformities,  airway  obstruction,  heart  disease,  reduced
endurance and pulmonary function impaired hearing and vision, and in some cases,
delayed mental development. Most patients with MPS I will die from complications
associated with the disease as children or teenagers. About 3,400 individuals in
developed  countries have MPS I, including  about 1,000 in the United States and
Canada.

There are  currently no approved  drugs for the  treatment of MPS I. Bone marrow
transplantation  has been used to treat severely  affected  patients,  generally
under the age of two,  with  limited  success.  Bone marrow  transplantation  is
associated  with high  morbidity  and  mortality  rates as well as with problems
inherent  in the  procedure  itself,  including  graft vs. host  disease,  graft
rejection,  and  donor  availability,  which  severely  limit  its  utility  and
application.

Aldurazyme is a specific form of recombinant  human  (alpha)-L-iduronidase  that
replaces a genetic deficiency of  (alpha)-L-iduronidase  in MPS I patients, thus
reduces or eliminates the build-up of certain  carbohydrates in the lysosomes of
cells.  By  eliminating  this  carbohydrate  build-up,  Aldurazyme  is  able  to
significantly  reduce the physical symptoms  experienced by these patients.  The
Phase 1 trial  results  of  this  product  candidate  reported  no  neutralizing
antibodies,   indicating  its  applicability  for  chronic  administration.   In
collaboration   with  Genzyme,   we  completed  a  45-patient,   double-blinded,
placebo-controlled  Phase 3 clinical  trial of Aldurazyme in August 2001,  which
was  conducted  at five  sites in the U.S.,  Europe  and  Canada.  All  patients
completed the trial and elected to receive Aldurazyme in an open label extension
study.  On November 2, 2001, we announced  positive  results from this trial. We
intend to continue the  development  of this drug and recently filed an MAA with
the EMEA. We plan to file a BLA with the FDA as soon as possible.

Aldurazyme has received fast track designation from the FDA for the treatment of
MPS I. The FDA has granted Aldurazyme orphan drug designation, which will result
in exclusive rights to market Aldurazyme to treat MPS I for seven years from the
date of FDA approval if  Aldurazyme  is the first  product to be approved by the
FDA for the  treatment  of MPS I.  In  addition,  the  European  Commission  has
designated Aldurazyme for the treatment of MPS I as an orphan medicinal product,
giving the potential for market exclusivity in Europe for 10 years. In September
1998, we formed a 50/50 joint venture with Genzyme for the worldwide development
and  commercialization  of  Aldurazyme.  Genzyme is  responsible  for regulatory
submissions  in  international  markets and marketing,  distribution,  sales and
obtaining  reimbursement for Aldurazyme  worldwide.  We are responsible for U.S.
regulatory    submissions   and   the   development   and    manufacturing    of
(alpha)-L-iduronidase.

     Neutralase

We are developing  Neutralase for the reversal of  anticoagulation by heparin in
patients   undergoing  Coronary  Artery  Bypass  Graft,  or  CABG,  surgery  and
angioplasty.  Patients  undergoing CABG surgery and angioplasty are treated with
heparin to prevent coagulation during surgery.  Once the procedure is completed,
anticoagulant  reversal agents are administered to prevent  excessive  bleeding.
Currently, protamine is the only product commercially available for the reversal
of heparin  anticoagulation.  In medical studies,  protamine has been associated
with  adverse  side  effects,  such  as  abnormal  changes  in  blood  pressure,
depression  of  heart  function  and  acute  allergic   reactions.   There  were
approximately 571,000 CABG procedures and 1,069,000  angioplasties in the United
States in 1999 (as  published by the American  Heart  Association  in their 2002
Heart and Stroke Statistical Update) that could have potentially  benefited from
heparin reversal.  We believe that an additional  substantial market opportunity
exists in Europe and the rest of the world.

We believe  Neutralase  has the  potential  to reverse  heparin  anticoagulation
without many of the serious side effects  associated with protamine.  Neutralase
is a  carbohydrate-modifying  enzyme that  breaks down  heparin in a manner that
inactivates heparin's anticoagulation effect and restores the normal coagulation
of blood.  Neutralase  has the potential for use as a reversal agent for heparin
anticoagulation  in open-heart  surgery such as CABG procedures,  interventional
cardiology procedures such as angioplasty, and in other procedures where heparin
or heparin-like anticoagulants are used, such as in hip and knee surgeries.

Data from  Phase 1 and Phase 2  clinical  trials  suggest  that  Neutralase  can
reverse  heparin  anticoagulation  without the adverse changes in blood pressure
associated  with  protamine  usage.  Building on the work  undertaken so far, we
intend  to  initiate  a Phase 3 trial for CABG in 2002,  followed  by a Phase 2B
trial for angioplasty.

                                       3


     Other Product Development Programs

     Aryplase

We  are  developing   recombinant,   human   N-acetylgalactosamine   4-sulfatase
(Aryplase) for the treatment of MPS VI, a debilitating  genetic  disease similar
to MPS I. Aryplase has received fast track  designation  from the FDA as well as
orphan drug  designation for the treatment of MPS VI in the United States and in
the European Union.  Based on clinical data to date, we plan to initiate a Phase
2 trial of Aryplase early in 2002.

     Vibrilase

We are developing  Vibrilase for use in removing  burned skin in preparation for
skin grafting or other  therapy.  In the fourth  quarter of 2001, we initiated a
Phase 1 clinical  trial of this  product  candidate in the United  Kingdom,  and
expect to begin a Phase 2  clinical  trial in either  the  United  States or the
United Kingdom following the completion of this Phase 1 trial.

     Phenylase

We are  developing  Phenylase  as an  oral  enzyme  therapy  for  patients  with
phenylketonuria  (PKU) a  genetic  disease  in which  the body  cannot  properly
metabolize the amino acid phenylalanine.  If left untreated,  elevated levels of
phenylalanine lead to brain damage and severe mental  retardation.  Phenylase is
currently in preclinical development.


BioMarin's Strategy

Our  strategy is to develop  therapeutic  enzyme  products to treat a variety of
diseases and conditions. The principal elements of this strategy are to:

     Develop and successfully commercialize our lead product candidates

We are  seeking  to  develop  and  globally  commercialize  Aldurazyme  for  the
treatment  of MPS I,  Neutralase  for the  reversal of  anticoagulation  agents,
Aryplase for MPS VI, and Vibrilase for serious burns,  each of which is in human
clinical  testing.  With regard to Aldurazyme,in  concert with our joint venture
partner,  Genzyme, we are developing strategies for the effective launch of this
product. We believe we will benefit from Genzyme's marketing organization, which
has extensive  worldwide  experience  marketing  drugs to  well-defined  patient
populations with chronic genetic diseases.

     Continue to build a diversified portfolio of product candidates

In addition to the  products  in human  clinical  testing  noted  above,  we are
conducting research on other enzyme products,  including those intended to treat
phenylketonuria  (Phenylase),  ischemia (Extravase), and diseases in which it is
necessary to treat the brain (Synapse.)

     Target underserved markets

We intend to continue to target market opportunities where there is little or no
competition,  such as the markets  for MPS I and MPS VI. We also target  markets
where we believe that our technology will enable us to become a market leader in
a relatively short time period, such as the market for Neutralase.  Our strategy
is to avoid situations where market  differentiation  is a function of marketing
strength and not technical expertise.

     Seek to license or acquire complementary products and technologies

We  intend to  supplement  our  internal  drug  discovery  efforts  through  the
acquisition of products and  technologies  that  complement our general  product
development  strategy.  Two examples of this are our recent  acquisition  of the
pharmaceutical  assets of IBEX  Technologies,  which added  three  complementary
product candidates to our portfolio and our acquisition of Synapse Technologies,
Inc., which added  technology  intended to enable certain drug products to cross
the blood-brain-barrier by means of traditional intravenous injection. We intend
to continue to identify,  evaluate and pursue the  licensing or  acquisition  of
other strategically valuable products and organizations.

     Leverage our core competencies

We  believe  that  we  have   significant   expertise  in  enzyme   biology  and
manipulation,  which  we have  used  to  establish  a  strong  platform  for the
development of  enzyme-related  pharmaceutical  products.  We intend to leverage
these competencies to develop high-value products for markets with unmet medical
needs. When strategically  advantageous,  we may seek partnerships with industry
leaders for the further advancement of our product candidates.

                                       4


Manufacturing

The drug  candidates  we are currently  developing  require the  manufacture  of
recombinant enzymes. For our genetic disease programs,  we expect to manufacture
the bulk  enzymes.  We believe  that we will be able to  manufacture  sufficient
quantities  of our  genetic  disease  drug  products  for  clinical  trials  and
commercial sales in part because relatively low doses are required for treatment
and because the targeted patient populations are small. In general, we expect to
contract  with outside  service  providers for certain  manufacturing  services,
including  final product fill and finish  operations and bulk enzyme  production
for clinical and early commercial  production where the production  requirements
exceed our manufacturing capacity.

In the first  quarter of 2000, we began  production  of Aldurazyme  for clinical
requirements  including the Phase 3 clinical trial and other  clinical  studies.
The bulk  production  is being  done in our  Galli  Drive  (Novato,  California)
manufacturing facility.  Following the recently completed expansion,  Galli is a
51,800 square foot cGMP production  facility  including  support areas,  housing
utilities,  laboratories and administrative  functions. We expect to support the
commercial  launch of Aldurazyme from this facility.  Vialing and packaging will
be performed using either our joint venture partner or contract manufacturers.

In 2000, the manufacturing  facilities in Novato were inspected and subsequently
licensed by the State of California  Food and Drug Branch for the  production of
clinical trial material. These facilities will be inspected by the FDA and other
regulatory agencies in connection with the BLA and other marketing applications.
These facilities, and those of any third-party manufacturers, will be subject to
periodic inspections  confirming  compliance with applicable law. Our facilities
must be cGMP certified before we can manufacture our drugs for commercial sales.
Failure to comply with these  requirements  could  result in the shutdown of our
facilities, fines or other penalties.

Sales and Marketing

We  have  no  experience  marketing  or  selling  pharmaceutical   products.  To
commercially  market our products  once the necessary  regulatory  approvals are
obtained, we must either develop our own sales and marketing force or enter into
arrangements with third parties.

We  established a joint venture with Genzyme for the worldwide  development  and
commercialization  of  Aldurazyme  for the  treatment  of MPS I. Under the joint
venture,  Genzyme will be  responsible  for marketing,  distribution,  sales and
obtaining reimbursement of Aldurazyme worldwide.

In the  future,  we may  develop  the  capability  to  market  and sell our drug
products that are targeted at small or concentrated patient populations. In many
cases, we believe that these patient populations are typically well-informed and
well-connected to the medical community.  Often family/patient  groups suffering
from niche diseases are capable users of the Internet to share  experiences  and
gather  information.  We believe  that  direct  marketing  to these  families or
patients  would  be  effective.   We  may  also  market  our  products   through
distributors or other collaborators, particularly for those products targeted at
larger  patient  populations  or  for  countries  where  the  development  of an
infrastructure is not economically attractive.

Patents and Proprietary Rights

Our success depends in part on our ability to:

         o     Obtain patents

         o     Protect trade secrets

         o     Operate without infringing the proprietary rights of others

         o     Prevent others from infringing on our proprietary rights

We may obtain licenses to patents and patent applications from others.

We have  thirteen  patent  applications  presently  pending in the United States
Patent and Trademark Office. We have filed six foreign counterpart  applications
and expect to file a foreign counterpart to one of the other pending U.S. patent
applications at the proper time.

Glyko,  Inc.  owns twelve  issued U.S.  patents.  In addition,  Glyko,  Inc. has
licensed four U.S. patents and their foreign counterparts from AstroMed Ltd. and
its  successor  Astroscan  Ltd.  on  an  exclusive,   worldwide,  perpetual  and
royalty-free basis. Glyko, Inc. has also licensed six U.S. patents from Glycomed
Incorporated on an exclusive, worldwide, perpetual and royalty-free basis. These
patents are all related to Glyko, Inc.'s products and services.

                                       5


Government Regulation

Food  and  Drug  Administration  Modernization  Act of  1997.  The Food and Drug
Administration  Modernization  Act of 1997 was enacted,  in part,  to ensure the
availability  of safe and  effective  drugs,  biologics  and medical  devices by
expediting  the FDA review  process  for new  products.  The  Modernization  Act
establishes  a  statutory  program  for the  approval  of fast  track  products,
including  biologics.  The fast track  provisions  essentially  codify the FDA's
accelerated approval  regulations for drugs and biologics.  A fast track product
is defined as a new drug or biologic  intended for the treatment of a serious or
life-threatening  condition  that  demonstrates  the  potential to address unmet
medical needs for this condition. Under the fast track program, the sponsor of a
new drug or biologic  may request  the FDA  designate  the drug or biologic as a
fast track product at any time during the clinical  development  of the product.
The  Modernization  Act  specifies  that the FDA must  determine  if the product
qualifies for fast track designation  within 60 days of receipt of the sponsor's
request.

Approval of a license  application  for a fast track  product can be based on an
effect on a clinical  endpoint or on a  surrogate  endpoint  that is  reasonably
likely to predict clinical benefit. Approval of a license application for a fast
track product based on a surrogate endpoint may be subject to:

        o     Post-approval studies to validate the surrogate endpoint or
              confirm the effect on the clinical endpoint

        o     Prior review of all promotional materials

If a  preliminary  review of the  clinical  data  suggests  that the  product is
effective,  the FDA may initiate review of sections of a license application for
a fast track product before the application is complete.  This rolling review is
available  if the  applicant  provides a schedule  for  submission  of remaining
information and pays applicable user fees. However, the time period specified in
the Prescription Drug User Fees Act, which governs the time period goals the FDA
has  committed  to  reviewing  a license  application,  does not begin until the
complete application is submitted.

In September  1998, the FDA  designated  Aldurazyme a fast track product for the
more severe  forms of MPS I. In June 2000,  the FDA  designated  Aryplase a fast
track  product  for the  treatment  of MPS VI. We cannot  predict  the  ultimate
impact,  if any, of the fast track  process on the timing or  likelihood  of FDA
approval of Aldurazyme, Aryplase or any of our other potential products.

Orphan Drug  Designation.  In September  1997,  Aldurazyme  received orphan drug
designation  from the FDA.  In  February  1999,  Aryplase  received  orphan drug
designation from the FDA. Orphan drug designation is granted by the FDA to drugs
intended to treat a rare disease or condition, which for this program is defined
as having a  prevalence  less than  200,000  individuals  in the United  States.
Orphan drug designation must be requested before  submitting a biologics license
application.  After the FDA grants orphan drug designation, the generic identity
of the therapeutic agent and its potential orphan use are disclosed  publicly by
the FDA. A similar  system for orphan drug  designation  exists in the  European
Community. Both Aldurazyme and Aryplase received designation as orphan medicinal
products by the European Commission in February 2001.

Orphan drug  designation  does not shorten the  regulatory  review and  approval
process  for an orphan  drug,  nor does it give that drug any  advantage  in the
regulatory  review  and  approval  process.  If an orphan  drug  later  receives
approval  for  the  indication  for  which  it  has  designation,  the  relevant
regulatory  authority may not approve any other  applications to market the same
drug for the same indication,  except in very limited  circumstances,  for seven
years in the U.S. and ten years in Europe. Although obtaining approval to market
a  product  with  orphan  drug  exclusivity  may be  advantageous,  we cannot be
certain:

        o     that we will be the first to obtain approval for any drug for
              which we obtain orphan drug designation,
        o     that orphan drug designation will result in any commercial
              advantage or reduce competition, nor
        o     that the limited exceptions to this exclusivity will not be
              invoked by the relevant regulatory authority.

Competition

The biopharmaceutical  industry is rapidly evolving and highly competitive.  The
following is a summary  competitive  analysis for known competitive  threats for
each of our major biopharmaceutical product programs:

Aldurazyme  for MPS I. On  November  21,  2000 and May 29,  2001,  respectively,
Transkaryotic   Therapies,   Inc.  (TKTX)  announced  that  two  US  patents  on
(alpha)-L-iduronidase   had  been  issued  and  that  these   patents  had  been
exclusively  licensed to TKTX. We have  examined the patents,  the patent files,
the prior art and other information. We believe that the patents may not survive
a challenge.  However,  the processes of patent law are uncertain and any patent
proceeding is subject to multiple unanticipated  outcomes. We believe that it is
in the  best  interests  of  our  joint  venture  with  Genzyme  to  pursue  the
development  of  Aldurazyme  with  commercial  diligence,  concurrent  with  our
challenge of the  patents,  in order to gain  marketing  approvals as rapidly as
possible  and to provide  MPS I patients  with the  benefits of  Aldurazyme.  If
either or both of the  patents  are  deemed  (or  ruled) to be valid,  the joint
venture  will need to reach an  accommodation  with the holder of the license to
the patent.

                                       6


These patents do not affect our ability to market Aldurazyme in Europe or Japan,
both major pharmaceutical  markets. A patent making the same claims was rejected
by the European Community and cannot be refiled.

A small private company announced that it has novel enzymatic technology to make
enzymes with proper glycosylation and phosphorylation.  Since that announcement,
that company has been acquired by our joint venture partner,  Genzyme.  Pursuant
to our joint venture  agreement with Genzyme,  both Genzyme and our Company must
mutually agree on any  technological  developments  relating to Aldurazyme.  The
proper  carbohydrate  and  phosphate  structural  elements  of  the  enzyme  are
essential  to  facilitate  uptake of the enzyme by the  patient's  cells to have
efficient enzyme replacement  therapy.  Our preclinical  analysis indicates that
Aldurazyme  is  highly  efficient  in  being  taken up by  cells  during  enzyme
replacement  therapy  as a  result  of the  proper  mannose-6-phosphate  ligands
(glycosylation  and   phosphorylation)  on  the  enzyme.  We  do  not  have  any
comparative data to assess directly the relative potential therapeutic qualities
of Aldurazyme and the other enzyme.

Neutralase for  anticoagulation  reversal.  Currently protamine sulfate (US) and
protamine  chloride  (EU)  are  the  only  products  used  to  reverse  heparin.
Neutralase,  if  approved,  would have to compete  with  protamine in the market
place.   Protamine  is  relatively   inexpensive;   for  Neutralase  to  achieve
significant market share, clinical data will be needed to demonstrate advantages
in safety or efficacy  or both for the  reversal  of  heparin.  We believe  that
Neutralase has superior characteristics but cannot predict that clinical studies
will  demonstrate  this  superiority.   Other  than  protamine,   there  are  no
significant competitive drugs in clinical trials for the reversal of heparin.

An alternative  source of competition  comes from  substitutes for heparin,  and
hence reducing the need for  Neutralase.  The Medicines  Company has an approved
drug  AngiomaxTM  (hirudin) that is a substitute for heparin in angioplasty  and
potentially other  indications.  We cannot predict how much this competitor will
reduce  the  potential  market  size of  Neutralase  for  angioplasty  or  other
indications.  One additional source of competition comes from changes in medical
practice  that may decrease the use of  procedures  that require  heparin and so
Neutralase.  Off-pump  coronary artery bypass surgery has increased in frequency
and the amount of heparin used is less, though heparin is still used.  Increased
off-pump  CABG could  reduce the use of  heparin  to some  degree and  therefore
decrease  the  market for  Neutralase.  Other  unpredictable  changes in medical
practice or other non-heparin-like anticoagulants could occur or be approved and
potentially reduce the market for Neutralase.  At this time, we do not foresee a
large competitive challenge to heparin or the need for heparin reversal.

Aryplase  for  MPS VI.  We know of no  active  competitive  program  for  enzyme
replacement therapy for MPS VI that has entered clinical trials.

Gene therapy is a potential  competitive threat to enzyme replacement  therapies
for both MPS I and MPS VI. We know of no competitive  program using gene therapy
for the treatment of either MPS I or MPS VI that has entered clinical trials.

Vibrilase for debridement of serious burns. Other enzymatic products exist which
might be possibly  used for the  debridement  of serious  second or third degree
burns.  Those  products in their  current form have not captured any  meaningful
share of the debridement function in the treatment of burn patients.  We know of
no clinical  program of a new enzymatic  product for the  debridement of serious
burns.  The  primary   competition  for  Vibrilase   continues  to  be  surgical
debridement.

See "Factors that May Affect Future Results--If we fail to compete successfully,
our revenues and operating results will be adversely affected."

Employees

As of  March  15,  2002,  we had 216  full-time  employees,  111 of whom  are in
operations,  80 of whom are in research  and  development  and 25 of whom are in
administration.

We consider our employee  relations to be good. Our employees are not covered by
a collective  bargaining agreement.  We have not experienced  employment related
work stoppages. We cannot assure you that we will be able to continue attracting
qualified personnel in sufficient numbers to meet our needs.

                                       7


                     FACTORS THAT MAY AFFECT FUTURE RESULTS

An investment in our common stock  involves a high degree of risk. We operate in
a dynamic  and  rapidly  changing  industry  that  involves  numerous  risks and
uncertainties. The risks and uncertainties described below are not the only ones
we face. Other risks and uncertainties, including those that we do not currently
consider material,  may impair our business. If any of the risks discussed below
actually occur, our business,  financial  condition,  operating  results or cash
flows could be materially adversely affected. This could cause the trading price
of our common stock to decline, and you may lose all or part of your investment.

If we continue to incur operating  losses for a period longer than  anticipated,
we may be unable to continue our  operations at planned  levels and be forced to
reduce or discontinue operations.

We are in an early stage of development and have operated at a net loss since we
were  formed.  Since we began  operations  in March 1997,  we have been  engaged
primarily in research and development. We have no sales revenues from any of our
product  candidates.  As of December 31, 2001, we had an accumulated  deficit of
approximately $148.1 million. We expect to continue to operate at a net loss for
the  foreseeable  future.  Our future  profitability  depends  on our  receiving
regulatory  approval of our product  candidates and our ability to  successfully
manufacture and market any approved  drugs,  either by ourselves or jointly with
others.  The extent of our future  losses  and the timing of  profitability  are
highly  uncertain.  If we fail to become  profitable  or are  unable to  sustain
profitability  on a  continuing  basis,  then we may be unable to  continue  our
operations.

If we fail to obtain the capital  necessary to fund our  operations,  we will be
unable to complete our product development programs.

In the  future,  we may need to raise  substantial  additional  capital  to fund
operations.  We cannot be certain  that any  financing  will be  available  when
needed. If we fail to raise additional  financing as we need it, we will have to
delay or terminate some or all of our product development programs.

We expect to continue to spend substantial amounts of capital for our operations
for the foreseeable  future.  The amount of capital we will need depends on many
factors, including:

        . the progress, timing and scope of our preclinical studies and clinical
          trials;

        . the time and cost necessary to obtain regulatory approvals;

        . the time and cost necessary to develop commercial manufacturing
          processes,  including quality systems and to build or acquire
          manufacturing capabilities;

        . the time and cost necessary to respond to technological and market
          developments; and

        . any changes made or new developments in our existing collaborative,
          licensing and other commercial relationships or any new collaborative,
          licensing and other commercial relationships that we may establish.

Moreover,   our  fixed  expenses  such  as  rent,  license  payments  and  other
contractual  commitments are substantial and will increase in the future.  These
fixed expenses will increase because we may enter into:

        . additional leases for new facilities and capital equipment;

        . additional licenses and collaborative agreements;

        . additional contracts for consulting, maintenance and administrative
          services; and

        . additional contracts for product manufacturing.

We believe that our cash, cash equivalents and short term investment  securities
balances  at December  31, 2001 will be  sufficient  to meet our  operating  and
capital  requirements through 2003. These estimates are based on assumptions and
estimates,  which may prove to be wrong.  As a result,  we may need or choose to
obtain additional financing during that time.

If we fail to obtain regulatory approval to commercially manufacture or sell any
of our future drug  products,  or if  approval is delayed,  we will be unable to
generate revenue from the sale of our products and our operating results will be
adversely affected.

We must obtain regulatory approval before marketing or selling our drug products
in the U.S.  and in  foreign  jurisdictions.  In the U.S.,  we must  obtain  FDA
approval for each drug that we intend to commercialize. The FDA approval process
is typically  lengthy and  expensive,  and approval is never  certain.  Products
distributed  abroad are also subject to foreign government  regulation.  None of
our drug products has received regulatory  approval to be commercially  marketed
and sold. If we fail to obtain regulatory approval,  we will be unable to market
and  sell  our  drug  products.  Because  of  the  risks  and  uncertainties  in
biopharmaceutical  development,  our drug  products  could take a  significantly
longer  time to gain  regulatory  approval  than we  expect  or may  never  gain
approval. If regulatory approval is delayed, our management's  credibility,  the
value of our company and our operating results will be adversely affected.

                                       8


To obtain regulatory  approval to market our products,  preclinical  studies and
costly and  lengthy  clinical  trials will be  required,  and the results of the
studies and trials are highly uncertain.

As part of the regulatory approval process, we must conduct, at our own expense,
preclinical  studies in the laboratory on animals and clinical  trials on humans
for each drug product.  We expect the number of preclinical studies and clinical
trials that the regulatory  authorities  will require will vary depending on the
drug product,  the disease or condition  the drug is being  developed to address
and  regulations  applicable  to the  particular  drug.  We may need to  perform
multiple  preclinical studies using various doses and formulations before we can
begin clinical trials, which could result in delays in our ability to market any
of our drug  products.  Furthermore,  even if we  obtain  favorable  results  in
preclinical  studies on  animals,  the  results  in humans may be  significantly
different.

After we have conducted preclinical studies in animals, we must demonstrate that
our drug products are safe and  efficacious for use on the target human patients
in  order to  receive  regulatory  approval  for  commercial  sale.  Adverse  or
inconclusive  clinical results would stop us from filing for regulatory approval
of our drug products.  Additional factors that can cause delay or termination of
our clinical trials include:

        . slow or insufficient patient enrollment;

        . slow recruitment of, and completion of necessary institutional
          approvals at clinical sites;

        . longer treatment time required to demonstrate efficacy;

        . lack of sufficient supplies of the product candidate;

        . adverse medical events or side effects in treated patients;

        . lack of effectiveness of the product candidate being tested; and

        . regulatory requests for additional clinical trials.

Typically,  if a drug product is intended to treat a chronic disease,  as is the
case with most of the product candidates we are developing,  safety and efficacy
data must be gathered over an extended period of time,  which can range from six
months to three years or more.

In May 2001, we completed a 24-month patient evaluation for the initial clinical
trial of our lead drug product,  Aldurazyme,  for the treatment of MPS I. Two of
the  original  ten  patients  enrolled in this trial died in 2000.  One of these
patients  received 103 weeks of Aldurazyme  treatment and the other  received 37
weeks of treatment.  One of the original  forty-five  patients who completed the
Phase 3 clinical trial died after 16 weeks of the Phase 3 extension  study.  One
patient  treated  under a  single-patient  use  protocol  died after 31 weeks of
Aldurazyme   treatment.   Based  on  medical  data   collected   from   clinical
investigative  sites,  none of these cases  directly  implicated  treatment with
Aldurazyme as the cause of death. If cases of patient complications or death are
ultimately  attributed to Aldurazyme,  our chances of commercializing  this drug
would be seriously compromised.

The fast track designation for our product candidates may not actually lead to a
faster review process.

Although  Aldurazyme  and Aryplase  have obtained  fast track  designations,  we
cannot  guarantee a faster  review  process or faster  approval  compared to the
normal FDA procedures.

We will not be able to sell our products if we fail to comply with manufacturing
regulations.

Before we can begin  commercial  manufacture  of our  products,  we must  obtain
regulatory  approval of our  manufacturing  facility and  process.  In addition,
manufacture  of our drug  products  must  comply  with the  FDA's  current  Good
Manufacturing   Practices   regulations,   commonly  known  as  cGMP.  The  cGMP
regulations  govern quality control and  documentation  policies and procedures.
Our manufacturing  facilities are continuously subject to inspection by the FDA,
the State of California  and foreign  regulatory  authorities,  before and after
product approval. Our Galli Drive and our Bel Marin Keys Boulevard manufacturing
facilities  have been  inspected  and  licensed by the State of  California  for
clinical pharmaceutical  manufacture.  We cannot guarantee that these facilities
will pass federal or international  regulatory  inspection.  We cannot guarantee
that we, or any potential third party manufacturer of our drug products, will be
able to comply with cGMP regulations.

We must pass Federal,  state and European  regulatory  inspections,  and we must
manufacture process  qualification  batches to final  specifications  under cGMP
controls for each of our drug products before the marketing  applications can be
approved.   Although  we  have  completed  process   qualification  batches  for
Aldurazyme,  these batches may be rejected by the regulatory authorities, and we
may be unable to  manufacture  the process  qualification  batches for our other
products or pass the inspections in a timely manner, if at all.

                                       9


If we fail to obtain  orphan  drug  exclusivity  for some of our  products,  our
competitors may sell products to treat the same conditions and our revenues will
be reduced.

As part of our  business  strategy,  we intend to develop some drugs that may be
eligible  for FDA and  European  Community  orphan drug  designation.  Under the
Orphan  Drug Act,  the FDA may  designate a product as an orphan drug if it is a
drug  intended  to treat a rare  disease  or  condition,  defined  as a  patient
population  of less than  200,000 in the United  States.  The company that first
obtains FDA  approval  for a  designated  orphan  drug for a given rare  disease
receives marketing exclusivity for use of that drug for the stated condition for
a period of seven years.  However,  different drugs can be approved for the same
condition.  Similar  regulations are available in the European  Community with a
ten-year period of market exclusivity.

Because  the  extent and scope of patent  protection  for our drug  products  is
limited, orphan drug designation is particularly important for our products that
are eligible  for orphan drug  designation.  We plan to rely on the  exclusivity
period under the orphan drug designation to maintain a competitive  position. If
we do not obtain orphan drug  exclusivity  for our drug  products,  which do not
have patent protection, our competitors may then sell the same drug to treat the
same condition.

Even though we have obtained orphan drug  designation for certain of our product
candidates and even if we obtain orphan drug  designation  for other products we
develop,  we cannot  guarantee  that we will be the  first to  obtain  marketing
approval  for  any  orphan  indication  or,  if we do,  that  exclusivity  would
effectively  protect  the product  from  competition.  Orphan  drug  designation
neither  shortens the development  time or regulatory  review time of a drug nor
gives the drug any advantage in the regulatory review or approval process.

Because the target patient  populations  for some of our products are small,  we
must achieve significant market share and obtain high per patient prices for our
products to achieve profitability.

Two of our lead drug candidates,  Aldurazyme and Aryplase,  target diseases with
small  patient  populations.  As  a  result,  our  per-patient  prices  must  be
relatively  high  in  order  to  recover  our  development   costs  and  achieve
profitability.  Aldurazyme  targets  patients  with MPS I and  Aryplase  targets
patients with MPS VI. We estimate that there are  approximately  3,400  patients
with MPS I and 1,100  patients  with MPS VI in the developed  world.  We believe
that we will need to market  worldwide to achieve  significant  market share. In
addition,  we are developing other drug candidates to treat conditions,  such as
other genetic diseases and serious burn wounds, with small patient  populations.
We cannot be certain that we will be able to obtain  sufficient market share for
our drug  products at a price high  enough to justify  our  product  development
efforts.

If we fail to obtain an adequate level of reimbursement for our drug products by
third-party  payers,  there  would be no  commercially  viable  markets  for our
products.

The  course  of  treatment  for  patients  with MPS I using  Aldurazyme  and for
patients  with MPS VI using  Aryplase  is expected  to be  expensive.  We expect
patients  to need  treatment  throughout  their  lifetimes.  We expect that most
families  of  patients  will  not  be  capable  of  paying  for  this  treatment
themselves.  There  will be no  commercially  viable  market for  Aldurazyme  or
Aryplase without reimbursement from third-party payers.

Third-party  payers,  such  as  government  or  private  health  care  insurers,
carefully  review  and  increasingly  challenge  the prices  charged  for drugs.
Reimbursement  rates from private  companies vary  depending on the  third-party
payer,  the  insurance  plan  and  other  factors.   Reimbursement   systems  in
international   markets  vary  significantly  by  country  and  by  region,  and
reimbursement  approvals  must be obtained  on a  country-by-country  basis.  We
cannot be certain that  third-party  payers will pay for the costs of our drugs.
Even if we are able to obtain  reimbursement from third-party  payers, we cannot
be certain  that  reimbursement  rates will be enough to allow us to profit from
sales of our drugs or to justify our product development expenses.

We currently have no expertise obtaining reimbursement. We expect to rely on the
expertise of our joint venture partner Genzyme to obtain  reimbursement  for the
costs of Aldurazyme.  We cannot predict what the reimbursement rates will be. In
addition,  we will need to develop our own  reimbursement  expertise  for future
drug candidates  unless we enter into  collaborations  with other companies with
the necessary expertise.

We expect that, in the future,  reimbursement  will be  increasingly  restricted
both in the United States and  internationally.  The  escalating  cost of health
care has led to increased  pressure on the health care industry to reduce costs.
Governmental  and private  third-party  payers have proposed health care reforms
and cost reductions. A number of federal and state proposals to control the cost
of health  care,  including  the cost of drug  treatments  have been made in the
United States.  In some foreign  markets,  the  government  controls the pricing
which would affect the profitability of drugs.  Current  government  regulations
and  possible  future  legislation  regarding  health care may affect our future
revenues  from  sales of our drugs and may  adversely  affect our  business  and
prospects.

If we are unable to protect our  proprietary  technology,  we may not be able to
compete as effectively.

Where  appropriate,  we  seek  patent  protection  for  certain  aspects  of our
technology.  Patent  protection  may not be available for some of the enzymes we
are  developing.  If we must spend  significant  time and money  protecting  our
patents,  designing around patents held by others or licensing,  for large fees,
patents or other proprietary  rights held by others,  our business and financial
prospects may be harmed.

The patent  positions of biotechnology  products are complex and uncertain.  The
scope and extent of patent  protection for some of our products are particularly
uncertain  because key  information on some of the enzymes we are developing has
existed in the public domain for many years.  Other  parties have  published the
structure of the enzymes,  the methods for purifying or producing the enzymes or
the methods of treatment. The composition and genetic sequences of animal and/or
human versions of many of our enzymes have been published and are believed to be
in the public domain. The composition and genetic sequences of other MPS enzymes
that we intend to develop as products have also been  published.  Publication of
this  information may prevent us from obtaining  composition-of-matter  patents,
which are generally believed to offer the strongest patent  protection.  For
enzymes with no prospect of broad composition-of-matter  patents, other forms of
patent  protection  or orphan  drug  status may  provide  us with a  competitive
advantage.  As a result of these  uncertainties,  investors  should  not rely on
patents as a means of protecting our product candidates, including Aldurazyme.

                                       10


We own or license  patents  and patent  applications  to certain of our  product
candidates.  However,  these patents and patent  applications  do not ensure the
protection of our intellectual property for a number of other reasons, including
the following:

        . We do not know whether our patent applications will result in issued
          patents. For example, we may not have developed a method for treating
          a disease before others developed similar methods.

        . Competitors may interfere with our patent process in a variety of
          ways. Competitors may claim that they invented the claimed invention
          prior to us. Competitors may also claim that we are infringing on
          their patents and therefore cannot practice our technology as claimed
          under our patent. Competitors may also contest our patents by showing
          the patent examiner that the invention was not original, was not novel
          or was obvious. In litigation, a competitor could claim that our
          issued patents are not valid for a number of reasons. If a court
          agrees, we would lose that patent. As a company, we have no meaningful
          experience with competitors interfering with our patents or patent
          applications.

        . Enforcing patents is expensive and may absorb significant time of our
          management. Management would spend less time and resources on
          developing products, which could increase our research and development
          expense and delay product programs.

        . Receipt of a patent may not provide much practical protection. If we
          receive a patent with a narrow scope, then it will be easier for
          competitors to design products that do not infringe on our patent.

In addition, competitors also seek patent protection for their technology. There
are many patents in our field of technology,  and we cannot guarantee that we do
not infringe on those patents or that we will not infringe on patents granted in
the future.  If a patent holder believes our product  infringes on their patent,
the patent holder may sue us even if we have received patent  protection for our
technology.  If someone  else claims we infringe on their  technology,  we would
face a number of issues, including the following:

        . Defending a lawsuit takes significant time and can be very expensive.

        . If the court decides that our product infringes on the competitor's
          patent, we may have to pay substantial damages for past infringement.

        . The court may prohibit us from selling or licensing the product unless
          the patent holder licenses the patent to us. The patent holder is not
          required to grant us a license. If a license is available, we may have
          to pay substantial royalties or grant crosslicenses to our patents.

        . Redesigning our product so it does not infringe may not be possible
          or could require substantial funds and time.

It is also unclear  whether our trade  secrets will provide  useful  protection.
While we use reasonable  efforts to protect our trade secrets,  our employees or
consultants  may  unintentionally  or  willfully  disclose  our  information  to
competitors. Enforcing a claim that someone else illegally obtained and is using
our trade secrets, like patent litigation,  is expensive and time consuming, and
the outcome is unpredictable.  In addition, courts outside the United States are
sometimes  less  willing  to  protect  trade  secrets.   Our   competitors   may
independently develop equivalent knowledge, methods and know-how.

We may  also  support  and  collaborate  in  research  conducted  by  government
organizations  or by  universities.  We cannot guarantee that we will be able to
acquire  any  exclusive  rights to  technology  or products  derived  from these
collaborations.  If we do not  obtain  required  licenses  or  rights,  we could
encounter delays in product  development while we attempt to design around other
patents or even be prohibited from developing, manufacturing or selling products
requiring these licenses. There is also a risk that disputes may arise as to the
rights to technology or products developed in collaboration with other parties.

The United States Patent and Trademark  Office  recently issued two patents that
relate to  (alpha)-L-iduronidase.  If we are not able to successfully  challenge
these patents, we may be prevented from producing Aldurazyme unless and until we
obtain a license.

The United States Patent and Trademark  Office  recently issued two patents that
include  composition  of  matter  and  method  of  use  claims  for  recombinant
(alpha)-L-iduronidase.   Our  lead  drug  product,   Aldurazyme,   is  based  on
recombinant (alpha)-L-iduronidase.  We believe that these patents are invalid on
a number  of  grounds.  A  corresponding  patent  application  was  filed in the
European   Patent  Office   claiming   composition  of  matter  for  recombinant
(alpha)-L-iduronidase,  and it was  rejected  over prior art and  withdrawn  and
cannot be re-filed.  Nonetheless, under U.S. law, issued patents are entitled to
a  presumption  of  validity,  and our  challenges  to the U.S.  patents  may be
unsuccessful.  Even if we are successful,  challenging  the U.S.  patents may be
expensive,  require our management to devote significant time to this effort and
may delay commercialization of Aldurazyme in the United States.

                                       11


The patent  holder has granted an  exclusive  license for  products  relating to
these  patents  to one of our  competitors.  If we are  unable  to  successfully
challenge  the  patents,  we may be unable to produce  Aldurazyme  in the United
States unless we can obtain a sublicense from the current licensee.  The current
licensee  is not  required  to  grant us a  license  and  even if a  license  is
available,  we may have to pay substantial  license fees,  which could adversely
affect our business and operating results.

If our joint  venture  with  Genzyme  were  terminated,  we could be barred from
commercializing  Aldurazyme or our ability to commercialize  Aldurazyme would be
delayed or diminished.

We are relying on Genzyme to apply the  expertise it has  developed  through the
launch and sale of other  enzyme-based  products to the marketing of our initial
drug product,  Aldurazyme. We have no experience selling, marketing or obtaining
reimbursement for pharmaceutical products. In addition, without Genzyme we would
be required to pursue  foreign  regulatory  approvals.  We have no experience in
seeking foreign regulatory approvals.

We cannot  guarantee  that  Genzyme  will  devote  the  resources  necessary  to
successfully  market  Aldurazyme.  In addition,  either party may  terminate the
joint venture for specified reasons, including if the other party is in material
breach of the  agreement or has  experienced a change of control or has declared
bankruptcy  and  also is in  breach  of the  agreement.  Either  party  may also
terminate the  agreement  upon  one-year  prior  written  notice for any reason.
Furthermore,  we may terminate the joint venture if Genzyme fails to fulfill its
contractual  obligation to pay us $12.1 million in cash upon the approval of the
BLA for Aldurazyme.

If the joint venture is terminated for breach, the non-breaching  party would be
granted,   exclusively,  all  of  the  rights  to  Aldurazyme  and  any  related
intellectual property and regulatory approvals and would be obligated to buy out
the breaching  party's  interest in the joint  venture.  If we are the breaching
party,  we would  lose our rights to  Aldurazyme  and the  related  intellectual
property and regulatory  approvals.  If the joint venture is terminated  without
cause,  the  non-terminating  party would have the option,  exercisable  for one
year,  to buy out the  terminating  party's  interest  in the joint  venture and
obtain all rights to Aldurazyme exclusively.  In the event of termination of the
buy out option without exercise by the non-terminating party as described above,
all right and title to Aldurazyme is to be sold to the highest bidder,  with the
proceeds to be split equally between Genzyme and us.

If the joint venture is  terminated  by either party because the other  declared
bankruptcy and is also in breach of the agreement,  the terminating  party would
be  obligated  to buy out the other and would  obtain all  rights to  Aldurazyme
exclusively.  If the joint  venture is  terminated  by a party because the other
party  experienced a change of control,  the terminating  party shall notify the
other party, the offeree, of its intent to buy out the offeree's interest in the
joint  venture  for a  stated  amount  set  by  the  terminating  party  at  its
discretion.  The offeree must then either  accept this offer or agree to buy the
terminating party's interest in the joint venture on those same terms. The party
who buys out the other would then have exclusive rights to Aldurazyme.

If we were obligated,  or given the option, to buy out Genzyme's interest in the
joint  venture,  and  gain  exclusive  rights  to  Aldurazyme,  we may not  have
sufficient  funds to do so and we may not be able to obtain the  financing to do
so.  If we fail to buy out  Genzyme's  interest  we may be held in breach of the
agreement  and may lose any claim to the rights to  Aldurazyme  and the  related
intellectual  property and regulatory  approvals.  We would then  effectively be
prohibited from developing and commercializing the product.

Termination  of the joint  venture in which we retain  the rights to  Aldurazyme
could  cause us  significant  delays in  product  launch in the  United  States,
difficulties  in obtaining  third-party  reimbursement  and delays or failure to
obtain  foreign  regulatory  approval,  any of which could hurt our business and
results of operations.  Since Genzyme funds 50% of the joint venture's operating
expenses, the termination of the joint venture would double our financial burden
and reduce the funds available to us for other product programs.

If we are unable to manufacture  our drug products in sufficient  quantities and
at  acceptable  cost,  we may be unable to meet demand for our products and lose
potential revenues or have reduced margins.

Although we have successfully manufactured Aldurazyme at commercial scale within
our cost parameters, we cannot guarantee that we will be able to manufacture any
other drug product successfully with a commercially viable process or at a scale
large enough to support  their  respective  commercial  markets or at acceptable
margins.

Our  manufacturing  processes  may  not  meet  initial  expectations  and we may
encounter  problems with any of the following  measurements of performance if we
attempt to increase the scale or size or improve the commercial viability of our
manufacturing processes:

        . design, construction and qualification of manufacturing facilities
          that meet regulatory requirements;

        . schedule;

        . reproducibility;

        . production yields;

        . purity;

        . costs;

                                       12


        . quality control and assurance systems;

        . shortages of qualified personnel; and

        . compliance with regulatory requirements.

Improvements in manufacturing  processes typically are very difficult to achieve
and are often very  expensive.  We cannot know with  certainty how long it might
take to make  improvements if it becomes  necessary to do so. If we contract for
manufacturing  services with an unproven  process,  our contractor is subject to
the same uncertainties, high standards and regulatory controls.

The  availability  of suitable  contract  manufacturing  at scheduled or optimum
times is not  certain.  The  cost of  contract  manufacturing  is  greater  than
internal  manufacturing  and therefore our  manufacturing  processes  must be of
higher productivity to yield equivalent margins.

The manufacture of Neutralase  involves the fermentation of a bacterial species.
We have never used a  bacterial  production  process for the  production  of any
commercial product.  IBEX Technologies Inc., from which we acquired  Neutralase,
had contracted  with a third party for the manufacture of the Neutralase used in
prior clinical trials.

We have built-out  approximately 51,800 square feet at our Novato facilities for
manufacturing  capability for Aldurazyme and Aryplase  including related quality
control laboratories,  materials  capabilities,  and support areas. We expect to
add additional  capabilities in stages over time, which could create  additional
operational complexity and challenges.  We expect that the manufacturing process
of all of our new drug products, including Aryplase and Neutralase, will require
significant  time and resources before we can begin to manufacture them (or have
them  manufactured by third parties) in commercial  quantity at acceptable cost.
Even if we can  establish  the  necessary  capacity,  we cannot be certain  that
manufacturing  costs will be  commercially  reasonable,  especially  if contract
manufacturing is employed or if third-party reimbursement is substantially lower
than expected.

In  order to  achieve  our  product  cost  targets,  we must  develop  efficient
manufacturing processes either by:

        . improving the product yield from our current cell lines, colonies of
          cells which have a common genetic makeup;

        . improving the manufacturing processes licensed from others; or

        . developing more efficient, lower cost recombinant cell lines and
          production processes.

A recombinant cell line is a cell line with foreign DNA inserted that is used to
produce an enzyme or other  protein that it would not have  otherwise  produced.
The  development of a stable,  high production cell line for any given enzyme is
difficult, expensive and unpredictable and may not result in adequate yields. In
addition, the development of protein purification processes is difficult and may
not produce the high purity required with acceptable  yield and costs or may not
result in  adequate  shelf-lives  of the final  products.  If we are not able to
develop  efficient  manufacturing  processes,  the  investment in  manufacturing
capacity sufficient to satisfy market demand will be much greater and will place
heavy  financial  demands upon us. If we do not achieve our  manufacturing  cost
targets,  we will have lower  margins and reduced  profitability  in  commercial
production and larger losses in manufacturing start-up phases.

If we are unable to create marketing and  distribution  capabilities or to enter
into  agreements  with third parties to do so, our ability to generate  revenues
will be diminished.

If we  cannot  increase  capabilities  either  by  developing  our own sales and
marketing  organization or by entering into  agreements  with others,  we may be
unable to successfully  sell our products.  If we are unable to effectively sell
our drug products, our ability to generate revenues will be diminished.

Under our joint venture with Genzyme,  Genzyme is responsible  for marketing and
distributing  Aldurazyme.  We cannot guarantee that we will be able to establish
sales and  distribution  capabilities  or that the  joint  venture,  any  future
collaborators or we will successfully sell any of our drug products.

With our  acquisition  of  Neutralase  from IBEX  Technologies  Inc., we have an
enzyme product that has a significantly larger potential patient population than
Aldurazyme  and  Aryplase  and will be  marketed  and sold to  different  target
audiences with different therapeutic and financial  requirements and needs. As a
result,  we  will  be  competing  with  other   pharmaceutical   companies  with
experienced  and  well-funded  sales and marketing  operations  targeting  these
specific physician and institutional audiences. We may not be able to create our
own sales and  marketing  force or of a size that would allow us to compete with
these  other  companies.  If we elect to enter into  third-party  marketing  and
distribution  agreements in order to sell into these markets, we may not be able
to enter into these  agreements  on  acceptable  terms,  if at all. If we cannot
compete  effectively in these specific physician and institutional  markets,  it
would adversely affect sales of Neutralase.

                                       13


If we fail to compete  successfully,  our revenues and operating results will be
adversely affected.

Our  competitors  may develop,  manufacture  and market  products  that are more
effective or less expensive than ours. They may also obtain regulatory approvals
for their products faster than we can obtain them, including those products with
orphan drug  designation,  or commercialize  their products before we do. If our
competitors  successfully  commercialize  a  product  that  treats a given  rare
genetic disease before we do, we will effectively be precluded from developing a
product  to treat that  disease  because  the  patient  populations  of the rare
genetic  diseases are so small. If our competitor gets orphan drug  exclusivity,
we could be precluded from marketing our version for seven years in the U.S. and
ten years in the European  Union.  However,  different drugs can be approved for
the same condition.  These  companies also compete with us to attract  qualified
personnel  and  organizations   for   acquisitions,   joint  ventures  or  other
collaborations.   They  also  compete  with  us  to  attract  academic  research
institutions  as  partners  and  to  license  these  institutions'   proprietary
technology.  If our competitors  successfully enter into partnering arrangements
or license  agreements  with  academic  research  institutions,  we will then be
precluded  from  pursuing  those  specific  opportunities.  Since  each of these
opportunities  is  unique,  we may not be able  to  find a  substitute.  Several
pharmaceutical and biotechnology  companies have already established  themselves
in the field of  enzyme  therapeutics,  including  Genzyme,  our  joint  venture
partner. These companies have already begun many drug development programs, some
of which  may  target  diseases  that we are also  targeting,  and have  already
entered into  partnering  and  licensing  arrangements  with  academic  research
institutions, reducing the pool of available opportunities.

Universities and public and private research  institutions are also competitors.
While  these   organizations   primarily  have  educational  or  basic  research
objectives,  they may develop proprietary technology and acquire patents that we
may need for the  development of our drug  products.  We will attempt to license
this proprietary technology,  if available.  These licenses may not be available
to us on acceptable  terms, if at all. We also directly compete with a number of
these organizations to recruit personnel, especially scientists and technicians.

If we do not achieve milestones as expected, our stock price may decline.

For planning  purposes,  we estimate the timing of the accomplishment of various
scientific,  clinical, regulatory and other milestones, such as the commencement
or completion of scientific  studies and clinical  trials and the  submission of
regulatory  filings.  These  estimates,  some  of  which  are  included  in this
prospectus,  are based on a variety of  assumptions.  The actual timing of these
milestones can vary  dramatically  compared to our estimates,  in many cases for
reasons beyond our control.

If we fail to manage  our growth or fail to recruit  and retain  personnel,  our
product development programs may be delayed.

Our rapid growth has strained our managerial,  operational,  financial and other
resources.  We expect  this growth to  continue.  We have  entered  into a joint
venture with Genzyme.  If we receive FDA and/or foreign  government  approval to
market  Aldurazyme,  the joint  venture  will be required  to devote  additional
resources to support the commercialization of Aldurazyme.

To manage expansion effectively,  we need to continue to develop and improve our
research and development  capabilities,  manufacturing  and quality  capacities,
sales and marketing  capabilities and financial and administrative  systems.  We
cannot guarantee that our staff,  financial  resources,  systems,  procedures or
controls will be adequate to support our operations or that our management  will
be able to manage successfully future market  opportunities or our relationships
with customers and other third parties.

Our future growth and success depend on our ability to recruit,  retain,  manage
and motivate our employees. The loss of key scientific, technical and managerial
personnel may delay or otherwise harm our product development programs. Any harm
to our research and development programs would harm our business and prospects.

Because of the specialized  scientific and managerial nature of our business, we
rely  heavily  on our  ability  to  attract  and  retain  qualified  scientific,
technical and managerial personnel. In particular, the loss of Fredric D. Price,
our Chairman and Chief Executive  Officer,  or Emil D. Kakkis,  M.D., Ph.D., our
Senior Vice President of Scientific Affairs or Christopher M. Starr,  Ph.D., our
Senior Vice President for Research and  Development,  could be detrimental to us
if we cannot recruit suitable  replacements in a timely manner. While Mr. Price,
Dr. Kakkis and Dr. Starr are parties to employment agreements with us, we cannot
guarantee  that they will remain  employed  with us in the future.  In addition,
these  agreements  do not restrict  their ability to compete with us after their
employment  is  terminated.  The  competition  for  qualified  personnel  in the
biopharmaceutical  field is intense.  We cannot be certain that we will continue
to attract and retain qualified  personnel  necessary for the development of our
business.

If we fail  to  effectively  integrate  the  recently  acquired  Neutralase  and
Phenylase programs and those acquired from Synapse  Technologies,  Inc. into our
current  operations,  the efficient execution of these product programs could be
delayed and our  operating  and  research  and  development  expenditures  could
increase beyond anticipated levels.

Our recent  acquisition  of assets from IBEX  Technologies  Inc.,  including the
Neutralase and Phenylase product programs and from Synapse  Technologies,  Inc.,
will need to be  integrated  with our  current  operations.  This  will  include
several  technical  and  administrative   challenges,   including  managing  the
information transfer,  integrating certain of our former technical staff members
at Ibex and Synapse  into our research and  development  structure  and managing
multiple  operations  in  different  countries.  If we do  not  accomplish  this
integration  effectively,  our programs  could be delayed and our  operating and
research and development  expenditures could increase beyond anticipated levels.
Additionally,  the integration  could require a significant time commitment from
our senior management.

Changes in methods of treatment of disease could reduce demand for our products.

Even if our drug products are approved, doctors must use treatments that require
using those products. If doctors elect a different course of treatment from that
which includes our drug products, this decision would reduce demand for our drug
products.

                                       14


Examples  include the potential use in the future of effective  gene therapy for
the treatment of genetic diseases.  The use of gene therapy could  theoretically
reduce or  eliminate  the use of enzyme  replacement  therapy  in MPS  diseases.
Sometimes,  this change in treatment method can be caused by the introduction of
other  companies'  products or the  development of new  technologies or surgical
procedures  which may not directly  compete with ours, but which have the effect
of changing how doctors  decide to treat a disease.  For example,  Neutralase is
being  developed  for heparin  reversal  in CABG  surgery.  It is possible  that
alternative  non-surgical  methods of treating heart disease could be developed.
If so, then the demand for Neutralase would likely decrease.

If product liability lawsuits are successfully  brought against us, we may incur
substantial liabilities.

We are exposed to the potential product liability risks inherent in the testing,
manufacturing and marketing of human  pharmaceuticals.  The BioMarin/Genzyme LLC
maintains product liability insurance for our clinical trials of Aldurazyme.  We
have obtained  insurance  against  product  liability  lawsuits for the clinical
trials for Aryplase  and  Vibrilase.  We may be subject to claims in  connection
with our current  clinical  trials for  Aldurazyme,  Aryplase and  Vibrilase for
which the joint venture's or our insurance coverages are not adequate. We cannot
be certain that if Aldurazyme,  Aryplase or Vibrilase receives FDA approval, the
product  liability  insurance  the  joint  venture  or we will need to obtain in
connection with the commercial  sales of Aldurazyme,  Aryplase or Vibrilase will
be available in  meaningful  amounts or at a reasonable  cost.  In addition,  we
cannot be certain that we can successfully  defend any product liability lawsuit
brought  against us. If we are the  subject of a  successful  product  liability
claim which exceeds the limits of any insurance  coverage we may obtain,  we may
incur  substantial  liabilities  which would  adversely  affect our earnings and
financial condition.

Our stock price may be volatile,  and an investment in our stock could suffer a
decline in value.

Our  valuation  and stock price since the beginning of trading after our initial
public  offering  have had no meaningful  relationship  to current or historical
earnings,  asset values, book value or many other criteria based on conventional
measures of stock value. The market price of our common stock will fluctuate due
to factors including:

        . progress of Aldurazyme, Neutralase, Aryplase and our other lead drug
          products through the regulatory process, especially regulatory actions
          in the United States related to Aldurazyme;

        . results of clinical trials, announcements of technological innovations
          or new products by us or our competitors;

        . government  regulatory  action  affecting  our drug products or our
          competitors'  drug products in both the United States and foreign
          countries;

        . developments or disputes concerning patent or proprietary rights;

        . general market conditions and fluctuations for the emerging growth and
          biopharmaceutical market sectors;

        . economic conditions in the United States or abroad;

        . actual or anticipated fluctuations in our operating results;

        . broad  market  fluctuations  in the United  States or in  Europe,
          which may cause the  market  price of our  common  stock to fluctuate;
          and

        . changes in company assessments or financial estimates by securities
          analysts

In addition, the value of our common stock may fluctuate because it is listed on
both the Nasdaq National Market and the Swiss Exchange's SWX New Market. Listing
on both exchanges may increase stock price volatility due to:

        . trading in different time zones;

        . different ability to buy or sell our stock;

        . different market conditions in different capital markets; and

        . different trading volume.

In the past,  following  periods of large price  declines  in the public  market
price of a company's  securities,  securities class action  litigation has often
been  initiated  against that  company.  Litigation of this type could result in
substantial costs and diversion of management's  attention and resources,  which
would hurt our business.  Any adverse  determination  in  litigation  could also
subject us to significant liabilities.

                                       15


If our officers,  directors and largest stockholder elect to act together,  they
may be able to  control  our  management  and  operations,  acting in their best
interests and not necessarily those of other stockholders.

Our directors and officers control  approximately 28% of the outstanding  shares
of our  common  stock.  Glyko  Biomedical  Ltd.  owns  approximately  22% of the
outstanding  shares of our capital  stock.  The  president  and chief  executive
officer of Glyko  Biomedical and a significant  shareholder of Glyko  Biomedical
serve as two of our directors.  As a result, due to their concentration of stock
ownership,  directors and officers, if they act together, may be able to control
our  management  and  operations,  and  may be able to  prevail  on all  matters
requiring a stockholder vote including:

        . The election of all directors;

        . The amendment of charter documents or the approval of a merger, sale
          of assets or other major corporate transactions; and

        . The defeat of any non-negotiated takeover attempt that might otherwise
          benefit the public stockholders.

Anti-takeover  provisions in our charter  documents  and under  Delaware law may
make an  acquisition  of us, which may be beneficial to our  stockholders,  more
difficult.

We are incorporated in Delaware.  Certain  anti-takeover  provisions of Delaware
law and our  charter  documents  as  currently  in  effect  may make a change in
control of our  company  more  difficult,  even if a change in control  would be
beneficial to the stockholders.  Our anti-takeover provisions include provisions
in the certificate of incorporation  providing that  stockholders'  meetings may
only be called by the board of directors and a provision in the bylaws providing
that the stockholders may not take action by written consent.  Additionally, our
board of  directors  has the  authority to issue  1,000,000  shares of preferred
stock and to determine  the terms of those  shares of stock  without any further
action by the  stockholders.  The  rights of  holders  of our  common  stock are
subject to the rights of the holders of any preferred  stock that may be issued.
The issuance of preferred  stock could make it more  difficult for a third party
to  acquire a  majority  of our  outstanding  voting  stock.  Delaware  law also
prohibits  corporations from engaging in a business combination with any holders
of 15% or more of their  capital  stock  until the holder has held the stock for
three years unless, among other  possibilities,  the board of directors approves
the  transaction.  Our board of directors  may use these  provisions  to prevent
changes in the management  and control of our company.  Also,  under  applicable
Delaware law, our board of directors may adopt additional anti-takeover measures
in the future.

                                       16


Item 2.   Properties

We are currently  leasing a total of seven buildings.  Five of our buildings are
located  in  Novato,  California,  each  within  a  half-mile  radius.  The five
buildings, each named for the streets on which they are located, are:

         o     Bel Marin Keys facility

         o     Galli Drive facility

         o     Pimentel Court facility

         o     79 Digital Drive facility

         o     95 Digital Drive facility

The sixth  building is located in Torrance,  California  and is currently  being
subleased  until the lease  expires in August  2002.  The  seventh  building  is
located in Montreal,  Ontario, Canada, which we sublease from IBEX Technologies,
Inc.  for our  research  and  development  efforts  relating to  Neutralase  and
Phenylase. The Montreal sublease expires in October 2002.

The  Bel  Marin  Keys  facility  houses  administrative  staff  and  a  clinical
production  laboratory.  It consists of  approximately  13,400 square feet.  The
lease  expires  in May  2004.  We have an  option  to  extend  the lease for one
additional three-year period.

The Galli Drive facility consists of approximately  69,800 rentable square feet.
It currently houses research and development laboratories, storage and warehouse
functions,  administrative  offices, and our Aldurazyme  manufacturing facility.
The lease expires in August 2010 and has the option to extend for two additional
five-year periods.

The Pimentel Court facility,  with approximately  11,500 square feet, houses the
manufacturing,  research and administrative  operations of Glyko, Inc. The lease
expires in April 2003 and has options for two 2-year extensions.

Our  79  Digital  Drive  facility  leased   commencing  in  late  2001  provides
warehousing support for our entire organization. Its primary focus is to provide
controlled  access  warehousing and the required  segregation and testing of all
cGMP raw materials used in our manufacturing operations. In addition, 79 Digital
serves  as the  primary  shipping,  receiving  and  storage  point for all other
materials used throughout our entire organization.

The 95 Digital Drive facility,  34,000 rentable square feet, is planned to house
research  and  process  development  functions.  The  building  shell  has  been
completed.  Development of internal  laboratory  space is on hold until at least
2002. When fully developed, it will consist of approximately 42,000 square feet.
The lease expires in November 2009.

Our  administrative  office  space is expected  to be adequate  until the end of
2002,  at  which  time  we may  add  additional  office  space.  We may  need to
supplement our production  facilities'  capacity if the market penetration rates
are such that the output  from our  facilities  would be less than the  markets'
demands.  Based on the timelines for Neutralase  and Vibrilase,  we will have to
develop,  purchase  from  third  parties,  or enter into  agreements  with third
parties for contact  manufacturing for these products for production of clinical
materials,  beginning  in  2002.  We plan  to use  contract  manufacturing  when
appropriate  to provide  product for both clinical and  commercial  requirements
until such time as we believe  it  prudent  to  develop  in-house  manufacturing
capability.

Item 3.  Legal Proceedings

We have no material legal proceedings pending.

Item 4.  Submission of Matters to a Vote of Security-Holders

No matters were  submitted to a vote of our security  holders during the quarter
ended December 31, 2001.

                                       17


                                     Part II

Item 5.  Market For Common Equity and Related Stockholder Matters

As of July 1999, our common stock has been listed on the Nasdaq  National Market
and the Swiss New Market SWX under the symbol "BMRN".  The following  table sets
forth the high and low sales prices for our common stock for the periods  noted,
as reported by Nasdaq National Market.

                                                                Prices
  Year                        Period                     High             Low



  2000                     First Quarter                $41.25          $11.00
  2000                    Second Quarter                $30.38          $16.00
  2000                     Third Quarter                $21.86          $15.75
  2000                    Fourth Quarter                $18.50          $15.75
  2001                     First Quarter                $13.25           $6.56
  2001                    Second Quarter                $13.29           $7.50
  2001                     Third Quarter                $13.74           $8.07
  2001                    Fourth Quarter                $14.40           $8.65


On March 15, 2002,  the last reported sale price on the Nasdaq  National  Market
for our common  stock was $10.55.  We have never paid any cash  dividends on our
common stock and we do not anticipate  paying cash dividends in the  foreseeable
future.

Holders

As of March 15, 2002, there were 80 holders of record of 52,447,402  outstanding
shares of our  common  stock.  Additionally,  on such date  options  to  acquire
7,573,124  shares of our common stock and warrants to acquire  752,427 shares of
our common stock were outstanding.

Unregistered Securities

On  October  31,  2001,  we  issued  814,647  shares  of  common  stock  to IBEX
Technologies Inc. and its subsidiaries as partial consideration for our purchase
of  the  intellectual  property  and  other  assets  associated  with  the  IBEX
therapeutic  enzyme drug products  (including  Neutralase and Phenylase).  These
shares were issued  pursuant to an exemption  from  registration  under  Section
4(2), of the Securities Act of 1933. These shares were appropriately legended to
indicate  that  the  shares  may  not be  resold  unless  registered  under  the
Securities Act or an exemption  from  registration  is available.  We have since
registered these shares for resale through a registration statement on Form S-3.

                                       18


Item 6.  Selected consolidated financial data (in thousands, except per share
         data)

The selected consolidated  financial data set forth below contain only a portion
of our financial  statement  information and should be read in conjunction  with
the  Consolidated  Financial  Statements  of BioMarin  Pharmaceutical  Inc.  and
related Notes and "Management's  Discussion and Analysis of Financial  Condition
and  Results of  Operations"  included  elsewhere  herein.  All  financial  data
presented in thousands, except per share data.

We derived the  statement of operations  data for the interim  period from March
21, 1997 through  December 31, 1997 and the years ended December 31, 1998, 1999,
2000 and 2001 and balance sheet data as of December 31, 1997,  1998,  1999, 2000
and  2001  from  audited  financial  statements.   Historical  results  are  not
necessarily indicative of results that we may expect in the future.

                                                                                                   

                                                    Period from
                                                   March 21, 1997
                                                   (inception) to
                                                    December 31,                     Year ended December 31,
                                                ----------------------------------------------------------------------------
Consolidated statements
of operations data:                                      1997              1998         1999          2000          2001
- ----------------------------------------------- ----------------------------------------------------------------------------
                                                                          (in thousands, except for per share data)

Revenues                                                  $    --         $    854      $ 5,300      $ 9,714      $ 11,699
   Operating costs and expenses:

    Research and development                                1,914           10,288       26,341       34,459        45,283
    General and administrative                                914            3,146        4,757        6,507         6,718
    In-process research and development                                                                             11,647
    Facility closure                                           --               --           --        4,423
                                                           ------           ------       ------       ------       -------
        Total operating costs and expenses                  2,828           13,434       31,098       45,389        63,648
                                                           ------           ------       ------       ------       -------
Loss from operations                                       (2,828)         (12,580)     (25,798)     (35,675)      (51,949)
Interest income                                                65              685        1,832        2,979         1,871
Interest expense                                               --               --         (732)          (7)          (17)
Equity in loss of joint venture                                --              (47)      (1,673)      (2,912)       (7,333)
                                                           ------           ------       ------       ------       -------
Net loss continuing operations                             (2,763)         (11,942)     (26,371)     (35,615)      (57,428)
Loss from discontinued operations                               -             (372)      (1,701)      (1,749)       (2,266)
Loss from disposal of discontinued operations                   -                -            -            -        (7,912)
                                                           ------           ------      -------       ------       -------
Net loss                                                  $(2,763)        $(12,314)    $(28,072)    $(37,364)     $(67,606)
                                                           ======           ======      =======       ======       =======


Net loss per share, basic and diluted
   Loss from continued operations                          $(0.34)          $(0.53)      $(0.88)      $(0.99)       $(1.40)
                                                           ======           ======       ======       =======       =======
   Loss from discontinued operations                        $   -           $(0.02)      $(0.06)      $(0.05)      $ (0.06)
                                                           ======           ======       ======       =======       =======
   Loss on disposal of discontinued operations              $   -           $    -       $    -       $    -       $ (0.19)
                                                           ======           ======       ======       =======       =======
   Net loss                                                $(0.34)          $(0.55)      $(0.94)      $(1.04)      $ (1.65)
                                                           ======           ======       ======       =======       =======

Weighted average common shares outstanding                  8,136           22,488       29,944       35,859        41,083
                                                           ======           ======       ======       =======       =======

                                                                                   December 31,
                                                  -------------------- -----------------------------------------------------
Consolidated                                                1997            1998         1999          2000         2001
balance sheet data:
- ------------------------------------------------- -------------------- ------------ ------------ ------------ --------------

Cash, cash equivalents and short-term                     $6,888          $11,389      $62,986       $40,201       $131,097
investments
Total current assets                                       7,507           12,819       66,422        44,541        136,783
Total assets                                               7,653           31,510      103,549        76,933        171,811
Long-term liabilities                                         --              110           85            56          3,961
Total stockholders' equity                                 7,380           29,394       98,377        69,994        159,548
- ---------------------------




See notes to our consolidated financial statements  incorporated by reference in
this  prospectus  for a  description  of  the  number  of  shares  used  in  the
computation of the net loss per common share.

                                       19


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations


The following  discussion  of the financial  condition and results of operations
should be read in conjunction  with our  consolidated  financial  statements and
their notes appearing elsewhere in this document.

Overview

We develop  enzyme  therapies to treat  serious,  life-threatening  diseases and
conditions.  We leverage  our  expertise  in enzyme  biology to develop  product
candidates  for the treatment of genetic  diseases,  including MPS I, MPS VI and
PKU, as well as other critical care  situations such as  cardiovascular  surgery
and serious burns. Our product  candidates address markets for which no products
are currently  available or where current  products  have been  associated  with
major   deficiencies.   We  focus  on  conditions  with   well-defined   patient
populations, including genetic diseases, which require chronic therapy.

Our lead  product  candidate,  Aldurazyme,  which  recently  completed a Phase 3
trial, is being developed for the treatment of  Mucopolysaccharidosis  I (MPS I)
disease.  We are  developing  our  second  product  candidate,  Neutralase,  for
reversal of  anticoagulation by heparin in patients  undergoing  Coronary Artery
Bypass Graft, or CABG,  surgery and  angioplasty.  In addition to Aldurazyme and
Neutralase,  we are developing other enzyme-based therapeutics for the treatment
of a  variety  of  diseases  and  conditions.  These  include  Aryplase  for the
treatment of MPS VI,  Vibrilase,  a topical  enzyme  product for use in removing
burned skin tissue in preparation for skin grafting or other therapy,  and other
enzyme product candidates,  currently in preclinical development for genetic and
other diseases.

Results of Operations

In  February  2002,  we decided to close the  carbohydrate  analytical  business
portion of our wholly  owned  subsidiary,  Glyko,  Inc.,  which  provided all of
Glyko,  Inc.'s revenues.  The decision to close Glyko,  Inc. has resulted in the
operations  of Glyko Inc.  being  classified as  discontinued  operations in our
consolidated  financial  statements  and,  accordingly,  we have  segregated the
assets  and  liabilities  of the  discontinued  operations  in our  consolidated
balance sheets.  In addition,  we have  segregated the operating  results in our
consolidated  statements  of  operations  and have  segregated  cash  flows from
discontinued operations in our consolidated statements of cash flows.

Years Ended December 31, 2001 and 2000

For the years ended December 31, 2001 and 2000,  revenues were $11.7 million and
$9.7  million,  respectively.  Revenues from our joint venture with Genzyme were
$11.3  million and $9.7 million,  and other  revenues were $0.4 million and zero
representing  grant  revenues  for the years ended  December  31, 2001 and 2000,
respectively.  The increase in joint venture  revenues in 2001 was primarily the
result of increased manufacturing  activities in support of our Phase 3 clinical
trial and our  Phase 1 and  Phase 3  extension  studies,  increased  regulatory,
clinical and plant and process  validation efforts in preparation for a BLA that
will be filed as soon as possible.

Research and development  expenses increased to $45.3 million in 2001 from $34.5
million in 2000.  The major  factors in the growth of research  and  development
expenses include  increased  expenses in support of the Aldurazyme joint venture
with Genzyme, especially manufacturing, regulatory and clinical requirements, of
manufacturing and clinical requirements to support our Phase 1 clinical trial of
Aryplase,  of the  contract  manufacturing  requirements  to support our Phase 1
clinical trial of Vibrilase and the increased  manufacturing and research staff,
including the scientific staff we assumed in Montreal, Canada in our purchase of
the  therapeutic  assets of IBEX  Technologies,  Inc.  and its  subsidiaries  in
October  2001,  to support our product  programs.  We  anticipate  research  and
development  expenditures  to increase in the future in order to further develop
our drug product candidates.

General and administrative  expenses increased to $6.7 million in 2001 from $6.5
million in 2000.  This increase was primarily due to the costs  incurred in 2001
in legal and other fees  associated  with the  potential  purchase of all of the
outstanding  capital stock of Glyko  Biomedical  Ltd. by us (in exchange for our
common  stock)  anticipated  to close in the second  quarter of 2002,  increased
staffing in finance,  business development,  information systems and purchasing,
partially  offset by savings due to the  elimination  of the President  position
from our executive team. We anticipate general and  administrative  expenditures
to increase in the future relating to the increased  headcount and facilities to
support the growth of our Company.

In-process research and development  represents all of the purchase price of our
acquisition of the IBEX therapeutic assets in October 2001 plus related expenses
totaling $11.7 million. On October 31, 2001, we purchased from IBEX Technologies
Inc. and its subsidiaries the intellectual  property and other assets associated
with the  IBEX  therapeutic  enzyme  drug  products  (including  Neutralase  and
Phenylase) for $10.4 million,  consisting of $2 million in cash and $8.4 million
in our common stock at $10.218 per share (814,647  shares).  In connection  with
the  purchase  of the IBEX  therapeutic  assets,  we issued  options to purchase
43,861  shares  of our  common  stock.  These  options  were  valued  using  the
Black-Scholes  option pricing model and the resulting  valuation of $291,000 was
included as additional  purchase price.  The purchase  agreement  includes up to
approximately $9.5 million in contingency  payments upon regulatory  approval of
Neutralase  and  Phenylase,  provided that approval  occurs prior to October 31,
2006.

                                 20


Facility closure in 2000, represents a charge of $4.4 million for the closure of
our  Carson  Street  clinical  manufacturing   facility.  The  charge  primarily
consisted  of  impairment  reserves for  leasehold  improvements  and  equipment
located in the Carson Street facility.

Interest  income  decreased  by $1.1  million to $1.9  million in 2001 from $3.0
million in 2000  primarily due to the decrease in cash  available for investment
through  most of the 2001 (as our  significant  follow-on  offering  occurred in
December  2001) and the  decrease  in interest  rates  available  on  short-term
investments.

Interest expense for 2001 and 2000 were  immaterial.  We expect interest expense
to increase in future years due to an equipment  loan  executed for $5.5 million
in December 2001.

Our equity in the loss of our joint  venture  with  Genzyme was $7.3 million for
2001  compared  to $2.9  million  for 2000,  as the joint  venture  conducted  a
multi-site,  placebo-controlled  Phase 3  clinical  trial of 45  patients  which
commenced in December 2000 and continued extension studies of the original Phase
1 clinical trial and the Phase 3 clinical trial of Aldurazyme.

Net loss from  continuing  operations was $57.4 million ($1.40 per share,  basic
and diluted) and $35.6 million ($0.99 per share, basic and diluted) for 2001 and
2000, respectively.

Loss from discontinued operations relating to the Glyko, Inc. analytics business
increased by $0.6  million to $2.3  million in 2001  compared to $1.7 million in
2000 due to the increased  sales and  production  staff in 2001 in an attempt to
grow the core analytics business.

Loss from disposal of discontinued operations represents the Glyko, Inc. closure
expense of $7.9 million in 2001  consisting  primarily of an impairment  reserve
against the unamortized  balance of goodwill and other intangible assets related
to the initial  acquisition  of Glyko,  Inc.  The  majority  of the Glyko,  Inc.
employees  will be  incorporated  into  our  business  and such  employees  will
continue to provide necessary  analytic and diagnostic  support to the Company's
therapeutic products.

Net loss was $67.6  million  ($1.65  per  share,  basic and  diluted)  and $37.4
million ($1.04 per share, basic and diluted) for 2001 and 2000, respectively.

Years Ended December 31, 2000 and 1999

For the years ended  December 31, 2000 and 1999,  revenues were $9.7 million and
$5.3  million,  respectively  representing  revenues from our joint venture with
Genzyme. The increase in joint venture revenues in 2000 was primarily the result
of increased  manufacturing  activities as we began enzyme production in our new
Galli Drive manufacturing facility in Novato, California.

Research and development  expenses increased to $34.5 million in 2000 from $26.3
million in 1999.  Increased  expenses in support of the Aldurazyme joint venture
with Genzyme, especially manufacturing requirements, and of the Aryplase program
were the major factors in the growth of research and development expenses.

General and administrative  expenses increased to $6.5 million in 2000 from $4.8
million in 1999.  This  increase was  partially due to tthe increase in staffing
and facilities in 2000.

In the first  quarter  of 2000,  we  recorded a charge of $4.4  million  for the
closure of our Carson Street clinical  manufacturing  facility. The facility was
no longer required for the production of Aldurazyme,  the initial purpose of the
plant,  after a decision by the  BioMarin/Genzyme  LLC joint  venture to use our
Galli Drive facility for the manufacture of bulk Aldurazyme both for the Phase 3
trial and for the commercial  launch of  Aldurazyme.  This decision was based in
part on FDA guidance to use an improved production process,  which was installed
in the Galli facility,  for the clinical  trial,  for the BLA submission and for
the  commercial  production.  The majority of our technical  staff at the Carson
Street facility transferred to the Galli Drive facility in Novato, California in
May 2000. The charge  primarily  consisted of impairment  reserves for leasehold
improvements and equipment located in the Carson Street facility.

Interest  income  increased  to $3.0  million in 2000 from $1.8  million in 1999
primarily  due to increased  cash  reserves  resulting  from our initial  public
offering  (concurrent  with an  investment  by  Genzyme)  in July 1999 and funds
received from exercise of stock options and warrants.

                                       21


Interest  expense  decreased by $0.7 million in 2000 compared to 1999 due to the
interest  accrued  in 1999 from  April  through  July on our  convertible  notes
payable which,  along with the accrued interest  converted into our common stock
issued to note holders concurrent with our initial public offering.

Our equity in the loss of our joint  venture  with  Genzyme was $2.9 million for
2000  compared to $1.7  million for 1999,  as the joint  venture  continued  the
original clinical trial of Aldurazyme and began a Phase 3 clinical trial.

Net loss from  continuing  operations was $35.6 million ($0.99 per share,  basic
and diluted) and $26.4 million ($0.88 per share, basic and diluted) for 2000 and
1999, respectively.

Loss  from   discontinued   operations  was  $1.7  million  for  2000  and  1999
representing the Glyko, Inc. analytics business.

The net loss was $37.4  million  ($1.04 per share,  basic and diluted) and $28.1
million ($.94 per share, basic and diluted) for 2000 and 1999, respectively.

Liquidity and Capital Resources

We have  financed our  operations  since our inception by the issuance of common
stock and convertible notes, equipment financing and the related interest income
earned on cash balances available for short-term investment. Since inception, we
have raised  aggregate  net  proceeds of  approximately  $286  million.  We were
initially  funded by an  investment  from GBL. We have since  raised  additional
capital from the sale of our common  stock in both public and private  offerings
and the sale of our other  securities,  all of which have since  converted  into
common stock.

Our combined cash, cash  equivalents and short-term  investments  totaled $131.1
million at December 31, 2001 an increase of $90.9  million from $40.2 million at
December 31, 2000.  The primary uses of cash during the year ended  December 31,
2001 were to finance  operations,  fund the joint  venture,  purchase  leasehold
improvements  and equipment  and purchase the  therapeutic  assets of IBEX.  The
primary sources of cash during the year were:

 o the issuance of common stock in a follow-on offering in December 2001 netting
   us approximately $90.4 million;
 o the issuance of common stock in a private placement in May 2001 netting us
   approximately $41.6 million;
 o the issuance of common stock to Acqua Wellington and its affiliates during
   2001 pursuant to our agreement with Acqua Wellington, including their
   participation in our private placement, netting us, in the aggregate,
   approximately $14.2 million;
 o equipment financing of $5.5 million; and
 o the issuance of common stock pursuant to the exercise of stock options under
   the 1997 Stock Plan and the 1998 Director Plan and pursuant to our Employee
   Stock Purchase Plan, the aggregate exercise price of which totaled
   approximately $1.6 million.

For the year ended December 31, 2001, operations used $23.1 million, we invested
$18.2  million  in the  joint  venture  (which  was  consumed  in joint  venture
operations),  we purchased $17.8 million of leasehold improvements and equipment
and we purchased the therapeutic assets of IBEX in exchange for our common stock
plus $3 million in cash and out of pocket expenses.

From our inception  through  December 31, 2001, we have purchased  approximately
$51.1  million of  leasehold  improvements  and  equipment.  We expect  that our
investment in leasehold  improvements and equipment will increase  significantly
during the next two years because we will provide facilities and equipment for a
larger staff and increase manufacturing capacity.

We have  made and plan to make  substantial  commitments  to  capital  projects,
including  developing new research and development  facilities and expanding our
administrative and support offices.

In September 1998, we established a joint venture with Genzyme for the worldwide
development and  commercialization  of Aldurazyme for the treatment of MPS I. We
share expenses and profits from the joint venture equally with Genzyme.  Genzyme
has committed to pay us an additional $12.1 million upon approval of the BLA for
Aldurazyme.

On May 16, 2001, we sold 4,763,712 shares of our common stock at $9.45 per share
and, for no additional  consideration,  issued  three-year  warrants to purchase
714,554  shares of common  stock at an  exercise  price of $13.10  per share and
received net proceeds of approximately  $41.6 million.  Also, on May 17, 2001, a
fund managed by Acqua  Wellington  purchased  105,821 shares of common stock and
received  warrants to purchase  15,873  shares of common stock on the same price
and  terms  as the May  16,  2001  transaction;  we  received  net  proceeds  of
approximately $1 million.

In August  2001,  we signed an amended  agreement  with Acqua  Wellington  North
American  Equities Fund Ltd. (Acqua  Wellington) for an equity investment in us.
The  agreement  allows for the  purchase of up to $27.7  million  (approximately
2,500,000 shares). Under the terms of the agreement,  we will have the option to
request that Acqua  Wellington  invest in us through sales of registered  common
stock at a small  discount  to market  price.  The  maximum  amount  that we may
request to be bought in any one month is dependent  upon the market price of the
stock (or an amount that can be mutually  agreed-upon  by both  parties)  and is
referred  to as the "Draw Down  Amount."  Subject to certain  conditions,  Acqua
Wellington  is obligated to purchase this amount if requested to do so by us. In
addition,  we may, at our discretion,  grant a "Call Option" to Acqua Wellington
for an  additional  investment  in an amount up to the "Draw Down Amount"  which
Acqua  Wellington  may or  may  not  choose  to  exercise.  During  2001,  Acqua
Wellington  purchased  1,344,194  shares for $13.5 million ($13.2 million net of
issuance costs). Under this agreement,  Acqua Wellington may also purchase stock
and receive similar terms of any other equity financing by us.

                                       22


On December 13, 2001,  we  completed a follow-on  public  offering of our common
stock. In the offering, we sold 8,050,000 shares,  including 1,050,000 shares to
cover  over-allotments,  at a price to the public of $12.00  per share.  The net
proceeds to us were approximately $90.4 million.

During  December  2001, we entered into three separate  agreements  with General
Electric Capital Corporation for secured loans totaling $5.5 million.  The notes
bear  interest  (ranging  from  9.1%  to  9.31%)  and  are  secured  by  certain
manufacturing and laboratory equipment.  Additionally,  one of the agreements is
subject to a covenant that requires us to maintain a minimum  unrestricted  cash
balance of $25  million.  Should the  unrestricted  cash  balance fall below $25
million,  the note is  subject to  prepayment,  including  prepayment  penalties
ranging from 1% to 4%.

The net proceeds from any sales of our common stock or equipment  financing will
be used to fund  operating  costs,  capital  expenditures  and  working  capital
requirements, which may include costs associated with our lead clinical programs
including  Aldurazyme for MPS I, Neutralase for heparin  reversal,  Aryplase for
MPS VI and Vibrilase for burn wounds. In addition, net proceeds may also be used
for  research  and  development  of other  pipeline  products,  building  of our
supporting infrastructure, and other general corporate purposes.

We expect our current funds to last through 2003.

We do not expect to generate  positive cash flow from  operations at least until
2004  because  we expect to  increase  operational  expenses  and  manufacturing
investment  for the joint  venture  and to  increase  research  and  development
activities, including:

   .   Preclinical studies and clinical trials

   .   Process development, including quality systems for product manufacture

   .   Regulatory processes in the United States and international jurisdictions

   .   Clinical and commercial scale manufacturing capabilities

   .   Expansion of sales and marketing activities

Until we can generate  sufficient levels of cash from our operations,  we expect
to continue our operations  through the  expenditure  of our current cash,  cash
equivalents and short-term  investments  and possibly  supplement our cash, cash
equivalents and short-term investments through:

   .   The sale of equity securities;

   .   Equipment-based financing; and

   .   Collaborative agreements with corporate partners.

We anticipate a need for additional  financing to fund the future  operations of
our business,  including the  commercialization  of our drug products  currently
under  development.  We cannot  assure  you that  additional  financing  will be
obtained or, if obtained,  will be available on reasonable  terms or in a timely
manner.

Our future capital requirements will depend on many factors, including, but not
limited to:

   .   The progress, timing and scope of our preclinical studies and clinical
       trials

   .   The time and cost necessary to obtain regulatory approvals

   .   The time and cost necessary to develop commercial manufacturing
       processes, including quality systems and to build or acquire
       manufacturing capabilities

                                       23


   .   The time and cost necessary to respond to technological and market
       developments

   .   Any changes made or new developments in our existing collaborative,
       licensing and other commercial relationships or any new collaborative,
       licensing and other commercial relationships that we may establish

We plan to  continue  our policy of  investing  available  funds in  government,
investment grade and interest-bearing securities. We do not invest in derivative
financial instruments, as defined by Statement of Financial Accounting Standards
No. 119.

New Accounting Pronouncements

SFAS No. 141
On June 29,  2001,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  of  Financial   Accounting   Standards   (SFAS)  No.  141,   Business
Combinations, and SFAS No. 142, Goodwill and Intangible Assets. Major provisions
of these Statements are as follows:  all business  combinations  initiated after
June 30, 2001 must use the  purchase  method of  accounting;  intangible  assets
acquired in a business  combination  must be recorded  separately;  all acquired
goodwill must be assigned to reporting units for purposes of impairment  testing
and segment reporting; effective January 1, 2002, goodwill and intangible assets
with  indefinite  lives will not be amortized but will be tested for  impairment
annually using a fair value approach;  other intangible  assets will continue to
be valued and amortized  over their  estimated  lives;  in-process  research and
development  acquired in business  combinations  will continue to be written off
immediately.  We do not expect this  standard  to have a material  impact on our
consolidated financial position or results of operations.

SFAS No. 143
In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations."  We do not expect this  standard to have a material  impact on our
consolidated financial position or results of operations.

SFAS No. 144
In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of  Long-Lived  Assets."  SFAS No. 144  broadens  the  presentation  of
discontinued  operations to include more transactions and eliminates the need to
accrue for future  operating  losses.  Additionally,  SFAS No. 144 prohibits the
retroactive  classification of assets as held for sale and requires revisions to
the depreciable lives of long-lived assets to be abandoned. SFAS No. 144 will be
effective  January  1, 2002 for us. We do not  expect  this  standard  to have a
material impact on our consolidated financial position or results of operations.

Critical Accounting Policies

Investment in BioMarin/Genzyme  LLC and Related  Revenue--Under the terms of our
joint venture agreement with Genzyme, Genzyme and we have each agreed to provide
50 percent of the funding for the joint venture.  All research and  development,
sales and marketing,  and other activities performed by Genzyme and us on behalf
of the joint  venture  are billed to the joint  venture at cost.  Any profits or
losses of the joint venture are shared  equally by the two parties.  We provided
$39.3 million in funding to the joint venture from  inception  through  December
31, 2001.

During the years ended  December  31, 1999,  2000,  2001 and for the period from
March 21, 1997 (inception)  through December 31, 2001, we incurred  expenses and
billed  $10.6  million,   $19.4  million,   $22.6  million  and  $54.4  million,
respectively, for services provided to the joint venture under our Agreement. Of
these  amounts,  $5.3 million,  $9.7 million,  $11.3 million and $27.2  million,
respectively,  or 50 percent,  was recognized as revenue in accordance  with our
policy of recognizing  revenue to the extent that research and development costs
billed to the joint  venture have been funded by Genzyme.  At December 31, 2000,
and 2001, we had  receivables  of $1.8 million and $3.1  million,  respectively,
related to these billings.

We account for our  investment  in the joint  venture  using the equity  method.
Accordingly,  we record a reduction in our  investment  in the joint venture for
our 50 percent  share of the loss of the joint  venture.  The  percentage of the
costs  incurred by us and billed to the joint  venture that are funded by us (50
percent),  is  recorded  as a credit  to our  equity  in the  loss of the  joint
venture.

Discontinued  Operations - The decision to close Glyko, Inc. has resulted in the
operations  of Glyko Inc.  being  classified as  discontinued  operations in our
consolidated  financial  statements  and,  accordingly,  we have  segregated the
assets  and  liabilities  of the  discontinued  operations  in our  consolidated
balance sheets as of December 31, 2000 and 2001. In addition, we have segregated
the operating results in our consolidated statements of operations for the years
ended  December 31,  1999,  2000 and 2001 and for the period from March 21, 1997
(inception)  to  December  31,  2001;  and  have   segregated  cash  flows  from
discontinued  operations  in our  consolidated  statements of cash flows for the
same periods.  The notes to our consolidated  financial  statements  reflect the
classification of Glyko Inc. operations as discontinued operations.

The loss on disposal of  discontinued  operations  included in our  consolidated
statement of operations  reflects certain  adjustments  required at December 31,
2001 primarily to record an impairment reserve against the unamortized  goodwill
related to Glyko, Inc. of approximately $7.8 million.

                                       24


Goodwill and Other  Intangible  Assets--In  connection  with the  acquisition of
Glyko, Inc. in 1998, we recorded intangible assets of $11.7 million.  Additional
intangible  assets of $891,000 were recorded in connection  with the acquisition
by Glyko,  Inc. of the key assets of the bio-chemical  research reagent division
of Oxford  GlycoSciences Plc. (OGS), a company not related to Glyko, Inc. During
2000,  we revised our  estimate of the useful  life of these  intangible  assets
downward to 7 years; the effect of this change increased amortization expense in
2000. We recorded an impairment reserve against the unamortized  balance of $7.8
million at December 31, 2001 as a result of our decision to close the business.

Impairment of  Long-Lived  Assets--We  regularly  review  long-lived  assets and
identifiable  intangibles  whenever  events or  circumstances  indicate that the
carrying  amount of such assets may not be fully  recoverable.  We evaluate  the
recoverability  of  long-lived  assets by measuring  the carrying  amount of the
assets  against the estimated  undiscounted  future cash flows  associated  with
them. At the time such evaluations  indicate that the future  undiscounted  cash
flows of certain  long-lived  assets are not  sufficient to recover the carrying
value of such assets, the assets are adjusted to their fair values.

Income taxes - We record a valuation allowance to reduce our deferred tax assets
to the amount  that is more  likely  than not to be  realized.  For all  periods
presented,  we have recorded a full valuation allowance against our net deferred
tax asset.  While we have  considered  future taxable income and ongoing prudent
and feasible tax planning  strategies  in assessing  the need for the  valuation
allowance,  in the event we were to  determine  that we would be able to realize
our deferred tax assets in the future in excess of our net recorded  amount,  an
adjustment  to the deferred tax asset would  increase  income in the period such
determination was made.

                                       25


Item 7A.    Quantitative and Qualitative Disclosure about Market Risk.

Our exposure to market risk for changes in interest  rates relates  primarily to
our investment portfolio.  By policy, we place our investments with highly rated
credit  issuers and limit the amount of credit  exposure  to any one issuer.  As
stated  in our  policy,  we  seek  to  improve  the  safety  and  likelihood  of
preservation of our invested funds by limiting  default risk and market risk. We
have no investments  denominated in foreign country currencies and therefore are
not subject to foreign exchange risk.

We mitigate  default risk by investing in high credit quality  securities and by
positioning our portfolio to respond appropriately to a significant reduction in
a credit rating of any investment  issuer or guarantor.  The portfolio  includes
only  marketable  securities  with active  secondary or resale markets to ensure
portfolio liquidity.

The table below presents the carrying value for our  investment  portfolio.  The
carrying value approximates fair value at December 31, 2001.

Investment portfolio:
                                                  Carrying value
                                                 (in $ thousands)

Cash and cash equivalents......................  $ 12,528
Short-term investments.........................   118,569*
                                                 --------
Total..........................................  $131,097
                                                 ========

* 19% invested in A1/P1 rated commercial paper and 81% in United States agency
securities.

Item 8.           Financial Statements and Supplementary Data

The information required to be filed in this item appears on pages F1 to F19 and
is incorporated herein by reference.

Item 9.           Changes in and Disagreements With Accountants on Accounting
                  and Financial Disclosure.


Not applicable.

                                       26


                                    Part III

Item 10. Directors, Executive Officers, Promoters and Control Persons

   We incorporate information regarding our directors and executive officers
   into this section by reference from sections captioned "Election of
   Directors" and "Executive Officers" in the proxy statement for our 2002
   annual meeting of stockholders.

Item 11.  Executive Compensation

   We incorporate information regarding our directors and executive officers
   into this section by reference from the section captioned "Executive
   Compensation" in the proxy statement for our 2002 annual meeting of
   stockholders.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

   We incorporate information regarding our directors and executive officers
   into this section by reference from the section captioned "Security Ownership
   of Certain Beneficial Owners" in the proxy statement for our 2002 annual
   meeting of stockholders.

Item 13.  Certain Relationships and Related Transactions

   We incorporate information regarding our directors and executive officers
   into this section by reference from the section captioned "Interest of
   Insiders in Material Transactions" in the proxy statement for our 2002 annual
   meeting of stockholders.

                                     Part IV

Item 14.  Exhibits, List and Reports on Form 8-K

(a) Documents are filed as exhibits to this report as enumerated in the Index to
    Exhibits hereto, Part V Item I.

(b) Reports on Form 8-K


On  October  10,  2001,  we filed a  Current  Report on Form 8-K  regarding  the
announcement of our definitive agreement with IBEX Technologies Inc. relating to
the acquisition of the rights to all IBEX pharmaceutical assets.

On  October  26,  2001,  we filed a  Current  Report on Form 8-K  regarding  the
announcement of our financial results for the quarter ended September 30, 2001.

On November 2, 2001, we filed a Current Report on Form 8-K regarding the results
of our Phase III trial of Aldurazyme for the treatment of MPS I.

On  November  2,  2001,  we filed a  Current  Report on Form 8-K  regarding  the
completion of our acquisition of the rights to all of the pharmaceutical  assets
of IBEX  Technologies  Inc.  This Current  Report was  subsequently  amended and
restated on November 14, 2001 and again on January 15, 2002.

On  December  17,  2001,  we filed a Current  Report on Form 8-K  regarding  the
announcement of the completion of our public offering of 8,050,000 shares of our
common stock.

                                       27

                                     Part V


            
Item 1.
- -------------- -----------------------------------------------------------------------------------------------
EXHIBIT                                           DESCRIPTION OF DOCUMENT
NUMBER
- -------------- -----------------------------------------------------------------------------------------------
2.1**          Canadian Asset Purchase Agreement dated October 9, 2001 by and among the Company, BioMarin
               Pharmaceutical Nova Scotia Company, IBEX Technologies Inc., IBEX Pharmaceutical Inc., IBEX
               Technologies LLC, IBEX Technologies Corp. and Technologies IBEX R&D Inc., previously filed
               with the Commission on December 26, 2001 as Exhibit 10.1 to the Registrant's Registration
               Statement on Form S-3 (Registration No. 333-72866), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
2.2**          United States Asset Purchase Agreement dated October 9, 2001 by and among the Company,
               BioMarin Enzymes Inc., IBEX Technologies Inc., IBEX Pharmaceutical Inc., IBEX Technologies
               LLC, IBEX Technologies Corp. and Technologies IBEX R&D Inc., previously filed with the
               Commission on November 6, 2001 as Exhibit 10.2 to the Registrant's Registration Statement on
               Form S-3 (Registration No. 333-72866), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
2.3            Amendment to Canadian Asset Purchase Agreement dated October 31, 2001 by and among the
               Company, BioMarin Pharmaceutical Nova Scotia Company, IBEX Technologies Inc., IBEX
               Pharmaceutical Inc., IBEX Technologies LLC, IBEX Technologies Corp. and Technologies IBEX R&D
               Inc., previously filed with the Commission on November 6, 2001 as Exhibit 10.3 to the
               Registrant's Registration Statement on Form S-3 (Registration No. 333-72866), which is
               incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
2.4            Amendment to United States Asset Purchase Agreement dated October 31, 2001 by and among the
               Company, BioMarin Enzymes Inc., IBEX Technologies Inc., IBEX Pharmaceutical Inc., IBEX
               Technologies LLC, IBEX Technologies Corp. and Technologies IBEX R&D Inc., and IBEX
               Technologies Delaware Corp., previously filed with the Commission on November 6, 2001 as
               Exhibit 10.4 to the Registrant's Registration Statement on Form S-3 (Registration No.
               333-72866), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
2.5*           Acquisition Agreement for a Plan of Arrangement by and among the Company, BioMarin
               Acquisition (Nova Scotia) Company, and Glyko Biomedical Ltd., dated February 6, 2002.
- -------------- -----------------------------------------------------------------------------------------------
3.1            Amended and Restated Certificate of Incorporation of BioMarin Pharmaceutical Inc., a Delaware
               Corporation, previously filed with the Commission on July 6, 1999 as Exhibit 3.1 to the
               Company's Amendment No. 2 to Registration Statement on Form S-1 (Registration No. 333-77701),
               which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
3.2*           Amended and Restated Bylaws of BioMarin Pharmaceutical Inc., a Delaware corporation.
- -------------- -----------------------------------------------------------------------------------------------
10.1           Form of Indemnification Agreement for Directors and Officers, previously filed with the
               Commission on May 4, 1999 as Exhibit 10.1 to the Company's Registration Statement on Form S-1
               (Registration No. 333-77701), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.2           1997 Stock Plan, as amended on December 22, 1998, and forms of agreements, previously filed
               with the Commission on May 4, 1999 as Exhibit 10.2 to the Company's Registration Statement on
               Form S-1 (Registration No. 333-77701), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.3           1998 Director Option Plan and forms of agreements thereunder, previously filed with the
               Commission on May 4, 1999 as Exhibit 10.3 to the Company's Registration Statement on Form S-1
               (Registration No. 333-77701), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.4           1998 Employee Stock Purchase Plan and forms of
               agreements thereunder, previously filed with the Commission on
               May 4, 1999 as Exhibit 10.4 to the Company's Registration
               Statement on Form S-1 (Registration No. 333-77701), which is
               incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.5           Form of Amended and Restated Registration Rights Agreement by and among the Company and the
               investors named therein, previously filed with the Commission on May 4, 1999 as Exhibit 4.1
               to the Company's Registration Statement on Form S-1 (Registration No. 333-77701), which is
               incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.6           Amended and Restated Founder's Stock Purchase Agreement with Grant W. Denison, Jr. dated as
               of October 1, 1997 with exhibits, previously filed with the Commission on May 4, 1999 as
               Exhibit 10.6 to the Company's Registration Statement on Form S-1 (Registration No.
               333-77701), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.7           Amended and Restated Founder's Stock Purchase
               Agreement with Dr. Christopher M. Starr dated as of October 1,
               1997 with exhibits, previously filed with the Commission on May
               4, 1999 as Exhibit 10.7 to the Company's Registration Statement
               on Form S-1 (Registration No. 333-77701), which is incorporated
               herein by reference.
- -------------- -----------------------------------------------------------------------------------------------

                                       28

- -------------- -----------------------------------------------------------------------------------------------
10.8           Employment Agreement with Fredric D. Price dated December 22, 2000, previously filed with the
               Commission on January 11, 2001 as Exhibit 10.1 to the Company's Amendment No. 1 to
               Registration Statement on Form S-3 (Registration No. 333-48800), which is incorporated herein
               by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.9           Employment Agreement with Dr. Christopher M. Starr dated June 26, 1997, as amended,
               previously filed with the Commission on May 4, 1999 as Exhibit 10.10 to the Company's
               Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein
               by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.10          Employment Agreement with Stuart J. Swiedler, M.D., Ph.D., dated May 29, 1998, as amended,
               previously filed with the Commission on May 4, 1999 as Exhibit 10.12 to the Company's
               Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein
               by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.11          Employment Agreement with Emil Kakkis, M.D., Ph.D., dated June 30, 1998, as amended,
               previously filed with the Commission on May 4, 1999 as Exhibit 10.13 to the Company's
               Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein
               by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.12          Employment Agreement between Brian K. Brandley, Ph.D. and Glyko, Inc. dated February 22,
               1998, as amended, previously filed with the Commission on May 4, 1999 as Exhibit 10.14 to the
               Company's Registration Statement on Form S-1 (Registration No. 333-77701), which is
               incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.13          Employment Agreement with Robert Baffi dated April 20,
               2000, previously filed with the Commission on March 20, 2001 as
               Exhibit 10.29 to the Company's Annual Report on Form 10-K, which
               is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.14**        License Agreement with W.R. Grace & Co. effective January 1, 2001, previously filed with the
               Commission on May 10, 2001 as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q,
               which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.15**        Grant Terms and Conditions Agreement with Harbor-UCLA
               Research and Education Institute dated April 1, 1997, as amended,
               previously filed with the Commission July 21, 1999 as Exhibit
               10.17 to the Company's Amendment No. 3 to Registration Statement
               on Form S-1 (Registration No. 333-77701), which is incorporated
               herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.16**        License Agreement with Women's and Children's Hospital, Adelaide, Australia dated August 14,
               1998, previously filed with the Commission July 21, 1999 as Exhibit 10.18 to the Company's
               Amendment No. 3 to Registration Statement on Form S-1 (Registration No. 333-77701), which is
               incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.17          Lease Agreement dated May 18, 1998 for 371 Bel Marin Keys Boulevard, as amended, previously
               filed with the Commission on May 4, 1999 as Exhibit 10.19 to the Company's Registration
               Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.18*         Amendment To Lease Agreement dated October 3, 2000 for 371 Bel Marin Keys Boulevard.
- -------------- -----------------------------------------------------------------------------------------------
10.19          Standard NNN Lease dated June 25, 1998 for 46 Galli Drive, previously filed with the
               Commission on May 4, 1999 as Exhibit 10.20 to the Company's Registration Statement on Form
               S-1 (Registration No. 333-77701), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.20*         First Amendment to Lease dated April 14, 2000 for 46 Galli Drive.
- -------------- -----------------------------------------------------------------------------------------------
10.21          Standard Industrial Commercial Single-Tenant Lease
               dated May 29, 1998 for 95 Digital Drive (formerly referred to as
               110 Digital Drive), as amended, previously filed with the
               Commission on May 4, 1999 as Exhibit 10.21 to the Company's
               Registration Statement on Form S-1 (Registration No. 333-77701),
               which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.22*         Agreement of Sublease dated July 27, 2001 for 79 Digital Drive.
- -------------- -----------------------------------------------------------------------------------------------
10.23          Collaboration Agreement with Genzyme Corporation dated September 4, 1998, previously filed
               with the Commission on July 21, 1999 as Exhibit 10.24 to the Company's Amendment No. 3 to
               Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein
               by reference.
- -------------- -----------------------------------------------------------------------------------------------

                                       29


- -------------- -----------------------------------------------------------------------------------------------
10.24          Operating Agreement with Genzyme Corporation, previously filed with the Commission on July
               21, 1999 as Exhibit 10.30 to the Company's Amendment No. 2 to Registration Statement on Form
               S-1 (Registration No. 333-77701), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.25          Common Stock Purchase Agreement between the Company. and Acqua Wellington North American
               Equities Fund, Ltd. dated January 26, 2001, previously filed with the Commission on January
               29, 2002 as Exhibit 10.2 to the Company's Amendment No. 2 to Registration Statement on Form
               S-3 (Registration No. 333-48800), which is incorporated herein by reference.
- -------------- -----------------------------------------------------------------------------------------------
10.26*         Second Amended and Restated Agreement for Plan of Arrangement by and among the Company,
               BioMarin Delivery Canada Inc. and Synapse Technologies Inc., dated February 4, 2002.
- -------------- -----------------------------------------------------------------------------------------------
21.1*          List of Subsidiaries.
- -------------- -----------------------------------------------------------------------------------------------
23.1*          Consent of Independent Public Accountants.
- -------------- -----------------------------------------------------------------------------------------------
24.1*          Power of Attorney (Included in Signature Page)
- -------------- -----------------------------------------------------------------------------------------------
99.1*          Letter from the Company to the SEC pursuant to Temporary Note 3T
- -------------- -----------------------------------------------------------------------------------------------




*      Filed herewith

**    This exhibit has been granted confidential treatment

                                       30


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act
of 1934, the registrant caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                BioMarin Pharmaceutical Inc.

Dated:   March 25, 2002                    By:  /s/ Fredric D. Price
- ----------------------------------              ----------------------------
                                                Fredric D. Price
                                                Chairman, Chief Executive
                                                Officer and Director


                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below constitutes and appoints Fredric D. Price, his attorney-in-fact,  with the
power of substitution, for him in any and all capacities, to sign any amendments
to the Report on Form 10-K and to file the same, with exhibits thereto and other
documents in connection therewith,  with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in  fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

     In  accordance  with the Exchange Act of 1934,  this report has been signed
below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated.

       Signature                         Title                       Date

/s/ Fredric D. Price                                            March 25, 2002
- -----------------------------------                             --------------
Fredric D. Price                    Chairman, Chief Executive
                                    Officer and Director
                                    (Principal Executive Officer)

/s/ Kim R. Tsuchimoto-Evans                                     March 25, 2002
- -----------------------------------                             --------------
Kim R. Tsuchimoto-Evans             Vice President, Controller
                                   (Principal Accounting Officer)

/s/  Grant W. Denison, Jr.                                      March 25, 2002
- -----------------------------------                             --------------
Grant W. Denison, Jr.               Director

/s/ Phyllis I. Gardner, M.D.                                    March 25, 2002
- -----------------------------------                             --------------
Phyllis I. Gardner, M.D.            Director

/s/ Erich Sager                                                 March 25, 2002
- -----------------------------------                             --------------
Erich Sager                         Director

/s/ Gwynn R. Williams                                           March 25, 2002
- -----------------------------------                             --------------
Gwynn R. Williams                   Director

                                       31


                          INDEX TO FINANCIAL STATEMENTS

BioMarin Pharmaceutical Inc. Financial Statements

Report of Independent Public Accountants                     F1
Consolidated Balance Sheets                                  F2
Consolidated Statements of Operations                        F3
Consolidated Statements of Changes in Stockholders' Equity   F4
Consolidated Statements of Cash Flows                        F7
Notes to Consolidated Financial Statements                   F8


                                       32


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of
BioMarin Pharmaceutical Inc.:

We have  audited  the  accompanying  consolidated  balance  sheets  of  BioMarin
Pharmaceutical  Inc.  (a  Delaware  corporation  in the  development  stage) and
Subsidiaries  as of  December  31, 2000 and 2001,  and the related  consolidated
statements of operations,  changes in stockholders'  equity,  and cash flows for
the years ended December 31, 1999,  2000, and 2001 and for the period from March
21, 1997  (inception) to December 31, 2001.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of BioMarin  Pharmaceutical  Inc.
and  Subsidiaries  as of  December  31,  2000 and 2001 and the  results of their
operations and their cash flows for the years ended December 31, 1999, 2000, and
2001 and for the period from March 21, 1997  (inception) to December 31, 2001 in
conformity with accounting principles generally accepted in the United States.

                                    /s/ Arthur Andersen LLP


San Francisco, California
February 21, 2002

                                       F1



                           BioMarin Pharmaceutical Inc. and Subsidiaries
                                   (a development-stage company)

                    Consolidated Balance Sheets as of December 31, 2000 and 2001

                        (In thousands, except for share and per share data)
                                                                          
                                                                         December 31,
                                                          -------------------------------------------
                                                                       2000                  2001
                                                          --------------------- ---------------------
Assets
Current assets:
 Cash and cash equivalents                                 $          16,530     $         12,528
 Short-term investments                                               23,671              118,569
 Due from BioMarin/Genzyme LLC                                         1,799                3,096
 Current assets of discontinued operations
  of Glyko, Inc.                                                         918                  668
 Other current assets                                                  1,623                1,922
                                                          --------------------- ---------------------
  Total current assets                                                44,541              136,783
Property and equipment, net                                           20,715               32,560
Investment in BioMarin/Genzyme LLC                                     1,482                1,145
Note receivable from officer                                              -                   889
Non-current assets of discontinued operations
 of Glyko, Inc.                                                        9,862                   -
Deposits                                                                 333                  434
                                                          --------------------- ---------------------
  Total assets                                             $          76,933     $        171,811
                                                          ===================== =====================

Liabilities and Stockholders' Equity
Current liabilities:
 Accounts payable                                          $           4,647     $          4,284
 Accrued liabilities                                                   1,951                2,198
 Current liabilities of discontinued operations
  of Glyko, Inc.                                                         258                  229
 Current portion of capital lease obligations                             -                    66
 Short term portion of notes payable                                      27                1,525
                                                          --------------------- ---------------------
  Total current liabilities                                            6,883                8,302
Long-term liabilities:
 Long term portion of notes payable                                       56                3,864
 Long term portion of capital lease obligations                           -                    97
                                                          --------------------- ---------------------
  Total liabilities                                                    6,939               12,263
                                                          --------------------- ---------------------

Commitments and Contingencies (note 8)
Stockholders' equity:
 Common stock, $0.001 par value: 75,000,000 shares
  authorized, 36,921,966 and 52,402,355 shares
  issued and outstanding at December 31, 2000
  and 2001, respectively                                                  37                   52
 Additional paid-in capital                                          153,940              305,230
 Warrants                                                                 -                 5,134
 Deferred compensation                                                (1,530)                (699)
 Notes receivable from stockholders                                   (1,940)              (2,037)
 Foreign currency translation adjustment                                  -                   (13)
 Deficit accumulated during the development stage                    (80,513)            (148,119)
                                                          -------------------------------------------
  Total stockholders' equity                                          69,994              159,548
                                                          -------------------------------------------
  Total liabilities and stockholders' equity               $          76,933     $        171,811
                                                          ===========================================

                  The accompanying notes are an integral part of these statements.




                                       F2


                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)
                    Consolidated Statements of Operations for
            the Years Ended December 31, 1999, 2000 and 2001 and for
         the Period from March 21, 1997 (inception) to December 31, 2001

                      (In thousands, except per share data)


                                                                                                       Period from
                                                                                                     March 21, 1997
                                                                      December 31,                   (inception) to
                                                    ------------------------------------------------   December 31,
                                                          1999            2000             2001            2001
                                                    ---------------  --------------   --------------  -------------
                                                                                          
Revenues:
      BioMarin/Genzyme LLC                                    5,300            9,714           11,330       27,198
      Other revenues                                              -                -              369          369
                                                     ---------------  --------------   --------------  -------------
           Total revenues                                     5,300            9,714           11,699       27,567
                                                     ---------------  --------------   --------------  -------------
Operating costs and expenses:
      Research and development                               26,341           34,459           45,283      118,283
      General and administrative                              4,757            6,507            6,718       22,044
      In-process research and development                         -                -           11,647       11,647
      Facility closure                                            -            4,423                -        4,423
                                                     ---------------  --------------   --------------  --------------
           Total operating costs and expenses                31,098           45,389           63,648      156,397
                                                     ---------------  --------------   --------------  --------------
           Loss from operations                             (25,798)         (35,675)         (51,949)    (128,830)

Interest income                                               1,832            2,979            1,871        7,432
Interest expense                                               (732)              (7)             (17)        (756)
Equity in loss of BioMarin/Genzyme LLC                       (1,673)          (2,912)          (7,333)     (11,965)
                                                     ---------------  --------------   --------------  ---------------

           Net loss from continuing operations              (26,371)         (35,615)         (57,428)    (134,119)
Loss from discontinued operations                            (1,701)          (1,749)          (2,266)      (6,088)
Loss from disposal of discontinued operations                      -               -           (7,912)      (7,912)
                                                     ---------------  --------------   --------------  ---------------

           Net loss                                     $  (28,072)      $  (37,364)      $  (67,606)   $ (148,119)
                                                     ===============  ==============   ==============  ===============

Net loss per share, basic and diluted
      Loss from continuing operations                    $   (0.88)       $   (0.99)       $   (1.40)    $   (4.72)
                                                     ===============  ==============   ==============  ===============
      Loss from discontinuing operations                 $   (0.06)       $   (0.05)       $   (0.06)    $   (0.22)
                                                     ===============  ==============   ==============  ===============
      Loss on disposal of discontinued operations        $        -         $     -        $   (0.19)    $   (0.28)
                                                     ===============  ==============   ==============  ===============
      Net loss                                           $   (0.94)       $   (1.04)       $   (1.65)    $   (5.22)
                                                     ===============  ==============   ==============  ===============

Weighted average common shares outstanding                  29,944           35,859           41,083        28,391
                                                     ===============  ==============   ==============  ===============


         The accompanying notes are an integral part of these statements.



                                       F3



                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development stage company)
       Consolidated Statements of Changes in Stockholders' Equity for the
                  Years ended December 31, 1999, 2000 and 2001

                      (In thousands, except per share data)



                                                                                                           Deficit
                                                                                          Note    Foreign  Accumulated
                                                      Additional                      Receivable  Currency During         Total
                                         Common Stock   Paid-in   Warrants Deferred      from     Trans-   Development Stockholders'
                                        Shares Amount  Capital    Amount    Comp.     Stockholder lation   Stage       Equity
                                        ------ ------ ----------  -------  --------- ------------ -------- ----------- -------------
                                                                                            
Balance at January 1, 2001              36,947    $37   $153,940       -    $(1,530)    $ (1,940)   $   -   $ (80,513)  $    69,994
 Issuance of common stock under ESPP
 on April 30 and October 31, 2001 at
 $9.22 and $9.51 per share,
 respectively                               35      -        288       -          -            -        -           -           288

 Issuance of 1,345 shares of common stock
 to Acqua Wellington for cash in five
 transactions priced from $9.60 to $10.16
 per share net of issuance costs         1,344      1     13,163       -          -            -        -           -        13,164

 Issuance of 4,870 shares of common stock
 and warrants to purchase 753 shares of
 common stock on May 16 and 17, 2001 at
 $9.45 per share, net of issuance costs  4,870      5     37,507   5,134          -            -        -           -        42,646

 Issuance of 814 shares of common stock
 on October 31, 2001 at $10.218 per share
 to purchase certain therapeutic assets
 of IBEX                                   814      1      8,323       -          -            -        -           -         8,324

 Issuance of stock options on October 31,
 2001 in connection with the IBEX
 acquisition                                 -      -        291       -          -            -        -           -           291

 Issuance of 8,050 shares of common stock
 on December 13, 2001 in a public offering
 at $12 per share net of issuance costs  8,050      8     90,363       -          -            -        -           -        90,371

Exercise of common stock options           342      -      1,258       -          -            -        -           -         1,258

Interest accrued on notes receivable         -      -         97       -          -          (97)       -           -             -

Foreign currency translation                 -      -          -       -          -            -      (13)          -           (13)

Amortization of deferred compensation        -      -          -       -        831            -        -           -           831

Net loss                                     -      -          -       -          -            -        -     (67,606)      (67,606)
                                        ------  ------   --------  ------  --------    --------- -------    ----------     ---------
Balance at December 31, 2001            52,402   $ 52   $305,230  $5,134      $(699)     $(2,037)   $ (13)  $(148,119)     $159,548
                                        ======  ======   ========  ======  ========    ========= =======    ==========     =========

                                                    The accompanying notes are an integral part of these statements.


                                       F4



                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development stage company)
       Consolidated Statements of Changes in Stockholders' Equity for the
                  Years ended December 31, 1999, 2000 and 2001

                      (In thousands, except per share data)



                                                                                                                   Deficit
                                                                                               Note              Accumulated
                                                     Additional                          Receivable   Foreign      During    Total
                                      Common Stock    Paid-in      Warrants     Deferred   from       Currency   Development  SH's
                                     Shares   Amount  Capital   Shares  Amount   Comp.  Stockholder  Translation    Stage    Equity
                                     ------   ------  -------   ------  ------  ------  ------------ ----------- ----------- ------
                                                                                               
Balance at January 1, 2000           34,832    $35   $146,592   802    $128    $(2,591)  $ (2,638)  $        -    (43,149)   $98,377
 Issuance of common stock on April 30,
  2000 pursuant to the Employee Stock
  Purchase Plan at $11.05 per share      18      -        199     -       -          -          -             -         -       199

 Issuance of common stock on October 31,
  2000 pursuant to the Employee Stock
  Purchase Plan at $11.05 per share      10      -        115     -       -          -           -            -         -       115

 Exercise of common stock options     1,301       1     5,674     -      -          -           -           -          -      5,675

 Exercise of common stock warrants      802       1       929  (802)  (128)         -           -           -          -        802

 Common stock surrendered by stockholders
  for payment of principal and interest (41)      -      (170)     -      -          -         170           -          -         -

 Repayment of notes from stockholders     -       -         -      -      -          -         804           -          -       804

 Interest on notes receivable             -       -       276      -      -          -        (276)          -          -         -

 Amortization of deferred compensation    -       -         -      -      -        1,386       -             -          -     1,386

 Deferred compensation related to stock and
  option issuances, net of terminations  25       -       325      -      -         (325)     -              -          -         -

Net loss                                  -       -         -      -      -            -      -              -    (37,364)  (37,364)
                                      ------   ------  --------   ------ ------   --------   ---------  --------- ---------  -------
Balance at December 31, 2000          36,947   $ 37    $153,940      -    $ -     $(1,530)   $(1,940)   $    -   $(80,513)  $69,994
                                      ======   ====== =========  ====== ======   =========  =========  =========  =========  =======

                                                    The accompanying notes are an integral part of these statements.


                                       F5


                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development stage company)

       Consolidated Statements of Changes in Stockholders' Equity for the
                  Years ended December 31, 1999, 2000 and 2001

                      (In thousands, except per share data)


                                                                                                                 Deficit
                                                                                                    Notes       Accumulated
                                                              Additional                           Receivable    During       Total
                                           Common   Stock      Paid-in      Warrants     Deferred    from      Development     SH's
                                           Shares   Amount     Capital   Shares   Amount   Comp.  Stockholders    Stage      Equity
                                           ------   ------     -------   ------   ------  ------  ------------  -------     --------

                                                                                                
Balance, January 1, 1999...............    26,176     $ 26     $ 50,058    802    $ 128   $(3,253)   $(2,488)   $(15,077)  $ 29,394
 Issuance of common  stock on July 23,
  1999, in an initial  public  offering
  (IPO) for cash at $13.00 per share
  (net of issuance costs of $7) ........    4,500        4       51,805     --       --        --         --          --     51,809

 Issuance of common stock on July 23,
  1999 to Genzyme Corporation in a
  private placement concurrent with the
  IPO for cash at $13.00 per share.....       769        1        9,999     --       --        --         --          --     10,000

 Issuance  of  common  stock  on July  23,
  1999  concurrent  with the IPO upon con-
  version of promissory  notes plus accrued
  interest of $720 at $10.00 pershare
  (net of issuance costs of $1).......      2,672        3       25,612     --       --        --         --          --     25,615

 Issuance of common  stock on August  3,
  1999 and  August  25,  1999 from the over-
  allotment exercise by underwriters at
  $13.00 per share (net of issuance costs
  of $1)........................              675        1        8,141     --       --        --         --          --      8,142

 Exercise of common stock options.......       40       --          148     --       --        --         --          --        148

 Interest on notes receivable from
  stockholders..........................       --       --          150     --       --        --       (150)         --         --

 Deferred compensation related to stock
  options..............................        --       --          679     --       --      (679)        --          --         --
 Amortization of deferred compensation.        --       --           --     --       --     1,341         --          --      1,341
 Net loss...............................       --       --           --     --       --        --         --     (28,072)   (28,072)
                                           ------   ------     -------   ------   ------  ------  ------------  -------     --------
Balance, December 31, 1999..............   34,832     $ 35     $146,592    802    $ 128   $(2,591)   $(2,638)   $(43,149)   $ 98,377
                                           ======   ======    =========  ======  ======   =========  =========  =========   ========

                                   The accompanying notes are an integral part of these statements.


                                       F6



                                     BioMarin Pharmaceutical Inc. and Subsidiaries
                                              (a development-stage company)
                                          Consolidated Statements of Cash Flows
                                 the Years Ended December 31, 1999, 2000 and 2001 and for
                             the Period from March 21, 1997 (inception) to December 31, 2001

                                                      (In thousands)



                                                                                                        Period from March 21,
                                                                        December 31,                    1997 (inception) to
                                                         --------------------------------------------    December 31,
                                                              1999           2000          2001              2001
                                                         ------------------------------------------------------------------
Cash flows from operating activities:
                                                                                            
Net loss from continuing operations                     $  (26,371)    $ (35,615)     $  (57,428)       $   (134,119)
 Adjustments to reconcile net loss to net
  cash used in operating activities:
  In-process research and development                            -             -          11,647              11,647
  Facility closure                                               -          3,791              -               3,791
  Depreciation                                               4,074          4,347          6,173              14,907
  Amortization of deferred compensation                      1,341          1,386            831               3,761
  Loss from bioMarin/Genzyme LLC                             6,973         12,635         18,509              38,164

 Changes in operating assets and liabilities:
  Due from BioMarin/Genzyme LLC                               (861)          (519)        (1,297)             (3,096)
  Other current assets                                         383           (720)          (299)             (1,266)
  Note receivable from officer                                   -              -           (889)               (889)
  Deposits                                                     (72)          (182)          (101)               (434)
  Accounts Payable                                           1,754          1,552           (363)              4,383
  Accrued liabilities                                        1,326            148            247               2,519
                                                         ------------------------------------------------------------------
  Net cash used in continuing operations                   (11,453)       (13,177)       (22,970)            (60,632)
  Net cash provided by (used in) discontinued operations    (1,487)           444            (95)                749
                                                         ------------------------------------------------------------------
Cash flows from investing activities:
 Purchase of property and equipment                        (22,944)        (3,760)       (17,812)            (51,051)
 Investment in BioMarin/Genzyme LLC                         (6,709)       (13,696)       (18,172)            (39,309)
 Purchase of IBEX therapeutic assets                             -              -         (3,032)             (3,032)
 Purchase (sale) of short-term investments                 (37,597)        15,902        (94,898)           (118,569)
                                                         ------------------------------------------------------------------
  Net cash used in continuing operations                   (67,250)        (1,554)      (133,914)           (211,961)
  Net cash used in discontinued operations                  (1,500)          (163)             -              (1,663)
                                                         ------------------------------------------------------------------
    Net cash used in investing activities                  (68,750)        (1,717)      (133,914)           (213,624)
                                                         ------------------------------------------------------------------
Cash flows from financing activities:
 Net proceeds from sale of common stock, net                69,951              -        133,017             232,823
 Proceeds from issuance of convertible notes                25,615              -              -              25,615
 Net proceeds from Acqua Wellington agreement                    -              -         13,163              13,163
 Proceeds from exercise of common
 stock options and warrants                                    148          6,477          1,258               7,695
 Net proceeds from notes payable                                 -              -          5,505               5,639
 Repayment of notes payable                                    (24)           (28)          (198)               (250)
 Repayment of capital lease obligations                          -              -            (43)                (43)
 Receipts from notes receivable from stockholders                -            804              -                 804
 Issuance of common stock for ESPP, and other                    -            314            288                 602
                                                         ------------------------------------------------------------------
      Net cash provided by financing activities             95,690          7,567        152,990             286,048
                                                         ------------------------------------------------------------------
Effect of foreign currency translation on cash                   -              -            (13)                (13)
                                                         ------------------------------------------------------------------
      Net increase (decrease) in cash                       14,000         (6,883)        (4,002)             12,528

Cash and cash equivalents:
 Beginning of period                                         9,413         23,413         16,530                   -
                                                         ------------------------------------------------------------------
 End of period                                            $ 23,413        $16,530        $12,528             $12,528
                                                         ==================================================================


The accompanying notes are an integral part of these statements.

                                       F7



                  BioMarin Pharmaceutical Inc. and Subsidiaries
                          (a development-stage company)

                   Notes to Consolidated Financial Statements


1.   NATURE OF OPERATIONS AND BUSINESS RISKS:

BioMarin  Pharmaceutical  Inc. (the Company or BioMarin) is a  biopharmaceutical
company  specializing  in the development of enzyme  therapies for  debilitating
life-threatening  chronic  genetic  diseases and other diseases and  conditions.
Since March 21, 1997 (inception),  the Company has devoted  substantially all of
its  efforts to  research  and  development  activities,  including  preclinical
studies and clinical  trials,  the  establishment  of  laboratory,  clinical and
commercial  manufacturing  facilities,   clinical  manufacturing,   and  related
administrative activities.

The Company was  incorporated  on October 25, 1996 in the state of Delaware  and
first began business on March 21, 1997 (inception) as a wholly-owned  subsidiary
of Glyko  Biomedical  Ltd.  (GBL).  Subsequently,  BioMarin  has issued stock to
outside  investors in a series of transactions,  resulting in GBL's ownership of
BioMarin's  outstanding common stock being reduced to 22 percent at December 31,
2001.

On October 7, 1998, the Company acquired Glyko, Inc., a wholly-owned  subsidiary
of GBL, in a transaction valued at $14.5 million.  The transaction was accounted
for as a purchase and resulted in Glyko, Inc. becoming a wholly-owned subsidiary
of the  Company.  Glyko,  Inc.  provides  products  and  services  that  perform
sophisticated  carbohydrate  analysis for research  institutions  and commercial
laboratories.

In February  2002,  the  Company  decided to close the  carbohydrate  analytical
business  portion of Glyko,  Inc. which provided all of Glyko,  Inc.'s revenues.
Accordingly,  the Company recorded a Glyko, Inc. closure expense of $7.9 million
in the  2001  consolidated  statements  of  operations.  This  charge  consisted
primarily of an impairment  reserve against the unamortized  balance of goodwill
and other  intangible  assets  related to the  acquisition  of Glyko,  Inc.  The
majority of the Glyko,  Inc.  employees will be  incorporated  into the BioMarin
business and such  employees  will  continue to provide  necessary  analytic and
diagnostic support to the Company's therapeutic products.

The net  loss of  Glyko,  Inc.'s  operations  is  included  in the  accompanying
consolidated  statements  of operations  as loss from  discontinued  operations.
Revenues from Glyko,  Inc. for the years ended December 31, 1999,  2000 and 2001
and the period from March 21, 1997  (inception)  to December  31, 2001 were $1.7
million, $2.6 million, $2.7 million and $7.4 million respectively.

In September 2001, the Company formed BioMarin  Enzymes,  Inc. as a wholly-owned
subsidiary  incorporated  in Delaware  and BioMarin  Pharmaceutical  Nova Scotia
Company, an unlimited liability company formed in Nova Scotia and a wholly-owned
subsidiary of BioMarin  Enzymes,  Inc. Both entities were formed to purchase the
therapeutic assets of IBEX Technologies Inc. and its subsidiaries on October 31,
2001.

On October 31, 2001,  the Company  purchased from IBEX  Technologies  Inc. (TSE:
IBT) and its subsidiaries the intellectual  property and other assets associated
with the IBEX  therapeutic  enzyme drug  products  (including  NeutralaseTM  and
PhenylaseTM)  for  $10.4  million,  consisting  of $2  million  in cash and $8.4
million in BioMarin common stock at $10.218 per share (814,647 shares). See also
Note 3.

Through  December  31,  2001,  the Company  had  accumulated  losses  during its
development  stage of  approximately  $148.1  million.  Based on current  plans,
management  expects to incur further  losses at least  through 2003.  Management
believes that the Company's  cash, cash  equivalents  and short-term  investment
balances  at  December  31,  2001  will  be  sufficient  to meet  the  Company's
obligations through the end of 2003.

                                       F8



Business Risks - The Company is exposed to the following risks:

o         There can be no assurance that the Company's  research and development
          efforts will be successfully  completed or that its product candidates
          will be shown to be safe and effective.

o         Certain  of the  Company's  product  candidates  rely  on  proprietary
          technology  and  patents  owned  by  certain  universities  and  other
          institutions and licensed to BioMarin. These universities also provide
          research and development  services.  Cessation of  relationships  with
          these  universities  could  significantly  affect the Company's future
          operations.

o         In order to grow significantly, the Company must expand its efforts to
          develop new products in pharmaceutical applications.  The Company will
          also need to enhance manufacturing capabilities,  to develop marketing
          capabilities,  and/or enter into collaborative arrangements with third
          parties having the capacity for such manufacturing or marketing.

o         There can be no assurance that any of the Company's  current or future
          product  candidates  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,  gain  reasonable  reimbursement  levels,  or  be  successfully
          marketed.

In addition, the Company is subject to a number of risks, including the need for
additional  financing,  dependence on key personnel,  small patient populations,
patent protection, significant competition from larger organizations, dependence
on  corporate   partners  and  collaborators,   and  expected   restrictions  on
reimbursement, as well as other changes in the healthcare industry.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of  Presentation--These  consolidated  financial  statements  include  the
accounts of BioMarin and its wholly-owned  subsidiaries:  Glyko, Inc.,  BioMarin
Enzymes, Inc., BioMarin Nova Scotia and BioMarin Genetics,  Inc. All significant
intercompany transactions have been eliminated.

Discontinued  Operations--The  decision to close Glyko, Inc. has resulted in the
operations  of Glyko Inc.  being  classified as  discontinued  operations in the
accompanying consolidated financial statements and, accordingly, the Company has
segregated  the assets and  liabilities  of the  discontinued  operations in the
accompanying  consolidated  balance  sheets as of December 31, 2000 and 2001. In
addition,  the Company has segregated the operating  results in the accompanying
consolidated  statements  of operations  for the years ended  December 31, 1999,
2000 and 2001 and for the period from March 21, 1997 (inception) to December 31,
2001;  and  has  segregated  cash  flows  from  discontinued  operations  in the
accompanying  consolidated  statements of cash flows for the same  periods.  The
notes  to  the  accompanying   consolidated  financial  statements  reflect  the
classification of Glyko Inc. operations as discontinued operations.

The loss on disposal of  discontinued  operations  included in the  accompanying
consolidated  statement of operations reflects certain  adjustments  required at
December  31,  2001  primarily  to  record an  impairment  reserve  against  the
unamortized goodwill related to Glyko, Inc. of approximately $7.8 million.

Concentration of Credit Risk--Financial instruments that may potentially subject
the Company to  concentration  of credit risk consist  principally of cash, cash
equivalents,  and  short-term  investments.  All  cash,  cash  equivalents,  and
short-term  investments are placed in financial  institutions with strong credit
ratings, which minimizes the risk of loss due to nonpayment. The Company has not
experienced any losses due to credit  impairment or other factors related to its
financial instruments.

Use of  Estimates--The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles  requires  management to make certain
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities, disclosure of contingent assets and liabilities at the dates of the
financial  statements,  and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Cash and Cash  Equivalents--For  the consolidated  statements of cash flows, the
Company treats liquid  investments  with original  maturities of less than three
months when purchased as cash and cash equivalents.

Short-Term   Investments--The   Company  records  its  investments  as  held-to-
maturity. These investments are recorded at amortized cost at December 31, 2001.
These securities are comprised mainly of Federal Agency investments,  commercial
paper and bank certificates of deposit.

                                       F9

Investment in BioMarin/Genzyme  LLC and Related Revenue - Under the terms of the
Company's  joint venture  agreement  with Genzyme (see note 10), the Company and
Genzyme  have each  agreed to provide 50  percent of the  funding  for the joint
venture. All research and development, sales and marketing, and other activities
performed  by Genzyme and the Company on behalf of the joint  venture are billed
to the joint  venture at cost.  Any  profits or losses of the joint  venture are
shared equally by the two parties. BioMarin provided $39.3 million in funding to
the joint venture from inception through December 31, 2001.

During the years ended  December  31, 1999,  2000,  2001 and for the period from
March 21, 1997  (inception)  through  December  31, 2001,  the Company  incurred
expenses  and billed  $10.6  million,  $19.4  million,  $22.6  million and $54.4
million,  respectively,  for services  provided to the joint  venture  under the
Agreement. Of these amounts, $5.3 million, $9.7 million, $11.3 million and $27.2
million,  respectively,  or 50 percent,  was recognized as revenue in accordance
with the Company's policy of recognizing revenue to the extent that research and
development  costs billed to the joint  venture have been funded by Genzyme.  At
December 31, 2000,  and 2001,  the Company had  receivables  of $1.8 million and
$3.1 million, respectively, related to these billings.

The Company  accounts for its  investment  in the joint venture using the equity
method.  Accordingly,  the Company  records a reduction in its investment in the
joint  venture for its 50 percent  share of the loss of the joint  venture.  The
percentage of the costs  incurred by the Company and billed to the joint venture
that are funded by the  Company  (50  percent),  is  recorded as a credit to the
Company's equity in the loss of the joint venture.


The following table  summarizes the components of the Company's  recorded equity
in loss of BioMarin/Genzyme LLC (in thousands):
                                                                           
                                                                                          March 21, 1997
                                                                                          (inception) to
                                                       Years ended December 31,         December 31, 2001
                                                  ------------------------------------ ---------------------
                                                  ---------- ------------ ------------
                                                    1999        2000         2001
                                                  ---------- ------------ ------------

50 percent of joint venture net loss              $(6,973)   $(12,643)    $(18,663)            $(39,163)
50 percent of services billed by the
 Company to joint venture                           5,300       9,731       11,330               27,198
                                                  ---------- ------------ ------------ ---------------------
                                                  $(1,673)   $ (2,912)   $  (7,333)            $(11,965)
                                                  ========== ============ ============ =====================




At December 31, 2001 the summarized  assets and liabilities of the joint venture
and its results of operations from inception to December 31, 2001 are as follows
(in thousands):


         Assets                         $  7,628
                                        ========

         Liabilities                    $  5,338
         Net equity                        2,290
                                        --------
                                        $  7,628
                                        ========

         Cumulative net loss            $ 77,918
                                        ========


Property and  Equipment--Property and equipment are stated at cost. Depreciation
is computed using the  straight-line  method over the related  estimated  useful
lives. Significant additions and improvements are capitalized, while repairs and
maintenance are charged to expense as incurred.

As of December 31, 2000 and 2001, property and equipment consisted of the
following (in thousands):

                                                                 
                                                 December 31,
                                        -------------------------------
Category                                     2000           2001           Estimated Useful Lives
- ------------------------------------    --------------- ---------------   ------------------------
Computer hardware and software                 $   678         $ 1,532           3 years
Office furniture and equipment                   1,056           1,557           5 years
Manufacturing/Laboratory Equipment               9,323          11,769           5 years
Leasehold improvements                          16,685          30,886    Shorter of life of asset
                                                                                or lease term
Construction in progress                         1,048           1,064
                                        -------------------------------
                                                28,790          46,808
Less:  Accumulated depreciation                 (8,075)        (14,248)
                                        -------------------------------
Total property and equipment, net              $20,715         $32,560
                                        ===============================




Depreciation  expense for the years ended  December 31, 1999,  2000 and 2001 and
for the period  March 21, 1997  (inception)  to December  31,  2001,  was,  $4.1
million, $4.3 million, $6.2 million and $14.9 million, respectively.

                                       F10

Goodwill and Other  Intangible  Assets--In  connection  with the  acquisition of
Glyko,  Inc. in 1998, the Company recorded  intangible  assets of $11.7 million.
Additional  intangible  assets of $891,000 were recorded in connection  with the
acquisition  by  Glyko,  Inc.  of the key  assets of the  bio-chemical  research
reagent  division of Oxford  GlycoSciences  Plc. (OGS), a company not related to
Glyko,  Inc. During 2000, the Company revised its estimate of the useful life of
these intangible assets downward to 7 years; the effect of this change increased
amortization  expense in 2000.  As indicated in Note 1, the Company  recorded an
impairment  reserve against the unamortized  balance of $7.8 million at December
31, 2001 as a result of the Company's decision to close the business.

Impairment of Long-Lived Assets--The Company regularly reviews long-lived assets
and identifiable  intangibles whenever events or circumstances indicate that the
carrying  amount  of such  assets  may not be  fully  recoverable.  The  Company
evaluates  the  recoverability  of  long-lived  assets by measuring the carrying
amount of the  assets  against  the  estimated  undiscounted  future  cash flows
associated  with them.  At the time such  evaluations  indicate  that the future
undiscounted  cash flows of certain  long-lived  assets  are not  sufficient  to
recover the carrying value of such assets, the assets are adjusted to their fair
values.

Accrued  Liabilities--As  of  December  31, 2000 and 2001,  accrued  liabilities
consisted of the following:


                                           December 31,
                                   -----------------------------
                                        2000           2001
                                   -------------- --------------
Vacation                            $      365     $      602
Construction in progress                   225             -
ESPP/401K                                  167            528
Other                                    1,194          1,068
                                   -------------- --------------
              Total                 $    1,951     $    2,198
                                   ============== ==============


Revenue  Recognition--Revenue from the joint venture is recognized to the extent
that  research and  development  costs billed by the Company have been funded by
Genzyme.

Research and Development--Research and development expenses include the expenses
associated  with contract  research and  development  provided by third parties,
research and development provided in connection with the joint venture including
manufacturing,   clinical  and  regulatory  costs,  and  internal  research  and
development costs. All research and development costs are expensed as incurred.

Net Income  (Loss) per  Share--Net  income  (loss)  per share is  calculated  by
dividing net income (loss) by the weighted  average  common  shares  outstanding
during the period.  Diluted net income per share is  calculated  by dividing net
income by the weighted  average common shares  outstanding and potential  common
shares  during the period.  Potential  common  shares  include  dilutive  shares
issuable upon the exercise of outstanding  common stock options,  warrants,  and
contingent  issuances  of common  stock.  For  periods in which the  Company has
losses (all periods  presented),  such potential common shares are excluded from
the computation of diluted net loss per share, as their effect is antidilutive.

Potentially dilutive securities include (in thousands):




                                                       December 31,
                                          --------------------------------------
                                               1999        2000         2001
                                          ------------ ------------ ------------
Options to purchase common stock                5,450        5,539        7,767
Warrants to purchase common stock                 802           -           753
                                          ------------ ------------ ------------
     Total                                      6,252        5,539        8,520
                                          ============ ============ ============


Segment  Reporting--The  Company  operates in two  segments.  The  Analytic  and
Diagnostic  segment  represents the operations of Glyko,  Inc. which involve the
manufacture  and sale of analytic and diagnostic  products (See Note 1 regarding
closure of Glyko, Inc. and the associated  discontinued  operations  treatment).
The Pharmaceutical  segment  represents the research and development  activities
related  to  the  development  and   commercialization  of  carbohydrate  enzyme
therapeutics. Management of the Company has concluded that the operations of the
Analytic  and  Diagnostic  segment  are  immaterial  to  the  Company's  overall
activities and, thus, disclosure of segment information is not required.

                                       F11

Recent  Accounting  Pronouncements--On  June 29, 2001, the Financial  Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 141,  Business  Combinations,  and SFAS No.  142,  Goodwill  and  Intangible
Assets.  Major  provisions  of these  Statements  are as follows:  all  business
combinations  initiated  after  June 30,  2001 must use the  purchase  method of
accounting;  intangible  assets  acquired  in a  business  combination  must  be
recorded  separately;  all acquired goodwill must be assigned to reporting units
for purposes of impairment testing and segment  reporting;  effective January 1,
2002, goodwill and intangible assets with indefinite lives will not be amortized
but will be tested for impairment  annually using a fair value  approach;  other
intangible  assets will continue to be valued and amortized over their estimated
lives;  in-process  research and development  acquired in business  combinations
will  continue to be written off  immediately.  Management  does not expect this
standard  to have a  material  impact on the  Company's  consolidated  financial
position or results of operations.

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations." Management does not expect this standard to have a material impact
on the Company's consolidated financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of  Long-Lived  Assets."  SFAS No. 144  broadens  the  presentation  of
discontinued  operations to include more transactions and eliminates the need to
accrue for future  operating  losses.  Additionally,  SFAS No. 144 prohibits the
retroactive  classification of assets as held for sale and requires revisions to
the depreciable lives of long-lived assets to be abandoned. SFAS No. 144 will be
effective  January 1, 2002 for the  Company.  Management  does not  expect  this
standard  to have a  material  impact on the  Company's  consolidated  financial
position or results of operations.

Reclassifications--Certain  items  in  the  prior  year  consolidated  financial
statements have been reclassified to conform to the current year presentation.


3.       PURCHASE OF IBEX THERAPEUTIC ASSETS

On October 31, 2001,  the Company  purchased from IBEX  Technologies  Inc. (TSE:
IBT) and its subsidiaries the intellectual  property and other assets associated
with the  IBEX  therapeutic  enzyme  drug  products  (including  Neutralase  and
Phenylase) for $10.4 million,  consisting of $2 million in cash and $8.4 million
in BioMarin  common  stock at $10.218  dollars per share  (814,647  shares).  In
connection  with the purchase of IBEX,  the Company  issued  options to purchase
43,861 shares of the Company's common stock. These options were valued using the
Black-Scholes  option pricing model and the resulting  valuation of $291,000 was
included as additional  purchase price.  The purchase  agreement  includes up to
approximately $9.5 million in contingency  payments upon regulatory  approval of
Neutralase  and  Phenylase,  provided that approval  occurs prior to October 31,
2006.

The transaction did not meet the criteria of a business  combination as outlined
in EITF 98-3 "Determining Whether a Nonmonetary  Transaction Involves Receipt of
Productive  Assets or of a Business" as, upon  acquisition,  the assets acquired
did not have any significant business outputs.  Accordingly, all of the purchase
price plus related expenses  totaling $11.7 million was attributed to in-process
research  and  development  and was  expensed in the  accompanying  consolidated
statements of operations.

The following  unaudited pro forma summary financial  information (in thousands,
except  for  per  share  information)   displays  the  consolidated  results  of
operations  of the  Company  as if the  acquisition  of the  assets  of IBEX had
occurred on January 1, 2000 and was carried forward  through  December 31, 2001.
Preparation of the pro forma summary information was based on assumptions deemed
appropriate  by the  Company.  The  pro  forma  information  is not  necessarily
indicative of the results that actually  would have occurred if the  acquisition
had been  consummated  on January 1, 2000 nor does it purport to  represent  the
future financial position of operations for future periods:

                                                    Year ended December 31
                                                     2000             2001
                                               ---------------- ---------------
Revenues                                             $ 9,731         $ 11,699
Operating expenses                                   (59,163)         (53,457)
                                               ---------------- ---------------
Loss from continuing operations                      (49,372)         (47,237)

Net loss                                             (50,956)         (57,282)

Net loss per share (basic and diluted)                $(1.39)          $(1.37)

Weighted average common shares outstanding
(basic and diluted)                                   36,674           41,898



4.   STOCKHOLDERS' EQUITY:

Common Stock and Warrants--The  Company closed a number of private placements in
1997 and 1998. In  connection  with these  placements,  an entity with which the
former chief executive officer and chairman of the board is affiliated (see Note
7) was issued a total of 899,500  shares  (valued at $1.4  million) and warrants
(valued at $0.1  million)  to purchase an  additional  801,500  shares of common
stock at an  exercise  price of $1 per  share.  These  issuances  were  made for
brokerage  services  rendered  in  connection  with  these  placements  and were
accounted  for as a cost of raising  capital.  The  warrants  were  exercised in
August 2000.

                                       F12

In July 1999,  the Company  completed its initial  public  offering  raising net
proceeds (including the exercise of the over-allotment) of $60 million.

On May 16, 2001, the Company sold 4,763,712  shares of common stock at $9.45 per
share and,  for no  additional  consideration,  issued  three-year  warrants  to
purchase 714,554 shares of common stock at an exercise price of $13.10 per share
and  received  net  proceeds of $41.6  million.  Also,  on May 17,  2001, a fund
managed  by Acqua  Wellington  purchased  105,821  shares  of  common  stock and
received  warrants to purchase  15,873  shares of common stock on the same price
and terms as the May 16, 2001 transaction;  the Company received net proceeds of
$1 million.  The Company  allocated a portion of the proceeds to warrants in the
consolidated  balance sheet based on the  estimated  fair value of the warrants.
The fair value of the warrants was  calculated  using the  Black-Scholes  option
pricing model.

In August 2001,  the Company signed an amended  agreement with Acqua  Wellington
North American Equities Fund Ltd. (Acqua Wellington) for an equity investment in
the  Company.  The  agreement  allows for the  purchase  of up to $27.7  million
(approximately  2,500,000 shares). Under the terms of the agreement, the Company
will have the option to  request  that Acqua  Wellington  invest in the  Company
through  sales of registered  common stock at a small  discount to market price.
The maximum amount that the Company may request to be bought in any one month is
dependent  upon the market price of the stock (or an amount that can be mutually
agreed-upon  by both  parties)  and is  referred  to as the "Draw Down  Amount."
Subject to certain  conditions,  Acqua  Wellington is obligated to purchase this
amount if requested to do so by the  Company.  In addition,  the Company may, at
its  discretion,  grant a "Call  Option" to Acqua  Wellington  for an additional
investment in an amount up to the "Draw Down Amount" which Acqua  Wellington may
or may not choose to exercise. During 2001, Acqua Wellington purchased 1,344,194
shares for $13.5  million  ($13.2  million  net of issuance  costs).  Under this
agreement, Acqua Wellington may also purchase stock and receive similar terms of
any other equity financing by the Company.

On December 13, 2001, the Company  completed a follow-on  public offering of its
common stock.  In the offering,  the Company sold  8,050,000  shares,  including
1,050,000  shares to cover  over-allotments,  at a price to the public of $12.00
per share. The net proceeds to the Company were approximately $90.4 million.

Notes  Receivable  from  Stockholders--These  originated  from the October  1997
issuance of 2.5 million shares of Founders' Stock to three  officers.  The notes
carried an interest rate of 6%; since this was less than the then-market rate of
9%, an interest  discount  and related  deferred  compensation  of $200,000  was
recorded.  The deferred  compensation was recognized as an expense over the term
of the notes.

The  notes  were  originally  due on  March  31,  2001  and are  secured  by the
underlying stock. The notes contained  buy-back and vesting  provisions.  Two of
the three executives have left the Company.  For the first officer,  the Company
repurchased  33,334 of his shares at his original purchase price and reduced his
note balance by the same amount.  This officer repaid the remaining  balance and
interest in 2000.  The second and third officers have not yet fully repaid their
loans but repayment is expected in 2002 including interest that is continuing to
be accrued.

The notes are classified in the  accompanying  consolidated  balance sheets as a
reduction of stockholders' equity.

Deferred Compensation--In  connection with certain stock option and stock grants
to  employees  from 1998 to 2000,  the Company  recorded  deferred  compensation
totaling  $4.2 million,  which is being  amortized  over the  estimated  service
periods of the grantees.  Amortization expense recognized during the years ended
December  31,  1999,  2000,  and 2001 was $1.3  million,  $1.4  million and $0.8
million, respectively.

5.   STOCK OPTION PLANS:

The Board of Directors and stockholders have approved two plans:

o         The 1997 Stock Plan (the 1997  Plan)  provides  for the grant of stock
          options  and the  issuance  of common  stock to  employees,  officers,
          directors and consultants.  As of December 31, 2001,  9,172,451 shares
          were reserved for issuance under the 1997 Plan.

o         The 1998  Director  Option Plan (the Director  Plan)  provides for the
          grant  of  stock   options  and  the   issuance  of  common  stock  to
          non-employee  directors.  As of December 31, 2001, options to purchase
          185,000 shares were outstanding and options to purchase 500,000 shares
          were authorized by the Director Plan.

Options  currently  outstanding  under the 1997 Plan and 1998 Director Plan (the
Plans) generally have vesting  schedules of up to four years.  Options terminate
from  5-10  years  from  the  date of  grant  or 90 days  after  termination  of
employment.

                                       F13

The  Company  accounts  for  option  grants  in  accordance  with  APB  25.  Had
compensation cost for option grants to employees under the Plans been determined
consistent  with the fair value  provisions  of SFAS No. 123,  the effect on the
Company's net loss would have been as follows:


                                                                         
                                                                                      Period from
                                                                                     March 21, 1997
                                                  Years ended December 31,           (Inception) to
                                        --------------------------------------------  December 31,
                                             1999           2000           2001            2001
                                        -------------- -------------- -------------- --------------
Net loss as reported                     $  (28,072)    $  (37,364)    $  (67,606)    $  (148,119)
Pro forma effect of SFAS No. 123             (1,074)        (5,412)       (13,875)        (20,544)
                                        -------------- -------------- -------------- --------------
Pro forma net loss                       $  (29,146)    $  (42,776)    $  (81,481)    $  (168,663)
                                        ============== ============== ============== ==============
Net loss per common share as reported    $    (0.94)    $    (1.04)    $    (1.65)    $     (5.22)
                                        ============== ============== ============== ==============
Pro forma loss per common share          $    (0.97)    $    (1.19)    $    (1.98)    $     (5.94)
                                        ============== ============== ============== ==============




A summary of the status of the Company's Plans is as follows:

                                                                         
                                                         Weighted
                                                         Average      Exercisable    Weighted Average
                                                         Exercise      at End of      Fair Value of
                                       Option Shares      Price           Year       Options Granted
                                       -------------  -------------  -------------   ----------------
Outstanding at March 21, 1997                    -
                                       -------------
     Granted                                297,000       $1.00                            $0.22
                                       -------------
Outstanding at December 31, 1997            297,000        1.00          232,000
                                                                     =============
     Granted                              2,507,660        4.18                            $2.40
     Exercised                              (1,973)        1.00
     Canceled                               (1,447)        1.00
                                       -------------
Outstanding at December 31, 1998          2,801,240        3.85          761,609
                                                                     =============
     Granted                              2,877,430       11.35                            $8.80
     Exercised                             (40,148)        3.69
     Canceled                             (188,536)        9.28
                                       -------------
Outstanding at December 31, 1999          5,449,986        7.59        1,922,041
                                       =============                 =============
       Granted                            1,881,310       15.83                           $13.27
       Exercised                         (1,300,532)       4.36
       Canceled                            (491,506)      11.70
                                       -------------
Outstanding at December 31, 2000          5,539,258       10.92        2,067,302
                                       =============                 =============
       Granted                            2,844,206       10.80                            $8.22
       Exercised                           (343,560)       3.72
       Canceled                            (273,226)      14.21
                                     ---------------
Outstanding at December 31, 2001          7,766,678       11.18        3,682,150
                                     ===============                 =============




There were 1,048,661 and 219,560 options available for grant under the Plans at
December 31, 2000 and 2001, respectively.

                                       F14

As of December 31, 2001,  the  options  outstanding  consisted of the
following:

                                                                           
                       Options Outstanding                                     Options Exercisable
- -------------------------------------------------------------------  ---------------------------------------
                                                          Weighted
                                                           Average    Weighted Average         Weighted
 Range of Exercise    Number of Options    Contractual    Exercise    Number of Options    Average Exercise
       Prices            Outstanding           Life        Price        Exercisable              Price
- -------------------  -------------------  -------------  ----------  -------------------  ------------------
   $0.00 to $3.50             103,523            0.7        $1.07             103,523            $1.07

   $3.50 to $7.00           1,699,903            4.0        $5.35           1,376,818            $5.24

  $7.01 to $10.50           1,644,037            8.9        $9.43             539,178            $9.45

 $10.51 to $14.00           3,030,947            7.1       $12.60           1,026,982           $12.68

 $14.01 to $17.50             691,394            4.6       $15.83             358,365           $15.81

 $17.51 to $21.00             265,874            6.5       $19.40             132,621           $19.66

 $21.01 to $24.50             220,000            8.1       $21.63              93,541           $21.96

 $24.51 to $28.00              96,000            3.2       $25.88              43,935           $25.90

 $28.00 to $31.50              15,000            3.2       $31.25               7,187           $31.25

                     -------------------                             -------------------
                            7,766,678                                       3,682,150
                     ===================                             ===================



The following  summarizes  the  assumptions  used to determine the fair value of
each option using the Black-Scholes option pricing model:

                                                                      
                                                          Dividend
Dates of Grant                           Interest Rate      Yield        Life     Volatility
- --------------------------------------  ---------------  ----------- -----------  -----------

Inception to July 22, 1999  (pre-IPO)     4.6% to 5.7%       0.00%    4 years           0%
July 22, 1999 to December 31, 1999        5.8% to 6.1%       0.00%    4 years          39%
January 1, 2000 to December 31, 2000      4.6% to 6.8%       0.00%    4 years         105%
January 1, 2001 to December 31, 2001      3.9% to 4.9%       0.00%    4 years          76%




6.       NOTE PAYABLE:

During  December 2001, the Company  entered into three separate  agreements with
General  Electric  Capital  Corporation for secured loans totaling $5.5 million.
The notes bear interest  (ranging from 9.1% to 9.31%) and are secured by certain
manufacturing  and  laboratory   equipment  not  purchased  with  the  proceeds.
Additionally,  one of the  agreements is subject to a covenant that requires the
Company to maintain a minimum  unrestricted cash balance of $25 million.  Should
the  unrestricted  cash balance  fall below $25 million,  the note is subject to
prepayment, including prepayment penalties ranging from 1 percent to 4 percent.

Principal  payments due on notes payable subsequent to December 31, 2001, are as
follows (in thousands):

        2002                      $      1,525
        2003                             1,803
        2004                             1,948
        2005                               113
                                 ----------------
                                  $      5,389
                                 ================

7.   INCOME TAXES:

The Company  utilizes the asset and liability  method of  accounting  for income
taxes. Under this method,  deferred taxes are determined based on the difference
between the financial  statement and tax bases of assets and  liabilities  using
tax rates  expected  to be in effect in the years in which the  differences  are
expected to reverse.

The  Company's  primary  temporary  differences  relate  to items  expensed  for
financial  reporting  purposes  but not  currently  deductible  for  income  tax
purposes, consisting primarily of depreciable lives for property and equipment.

                                       F15

As of December 31, 2001,  net operating  loss  carryforwards  are  approximately
$120.6 million and $57.6 million for federal and California income tax purposes,
respectively.  These net  operating  loss  carryforwards  include net  operating
losses of $12.6  million  for  federal  purposes  related to Glyko,  Inc.  These
federal  and state  carryforwards  expire  beginning  in the year 2011 and 2004,
respectively.

The Company also has research and development credits available to reduce future
federal and  California  income  taxes of  approximately  $3.2  million and $3.1
million,  respectively,  at December 31, 2001.  These  credits  include  credits
related to Glyko,  Inc.  of  approximately  $0.7  million  and $0.4  million for
federal  and  California  purposes,   respectively.   These  federal  and  state
carryforwards expire beginning in 2012 and 2013, respectively.

The Company also has orphan drug  credits  available  to reduce  future  federal
income taxes, if any, of approximately $13.6 million at December 31, 2001.

The Tax Reform Act of 1986 contains  provisions that may limit the net operating
loss carryforwards and research and development  credits available to be used in
any given year should certain events occur,  including sale of equity securities
and other changes in ownership.  The acquisition of Glyko,  Inc. and the related
issuance of stock represented a change of ownership under these provisions. As a
result of this and the proposed  exiting of the Glyko business,  there can be no
assurance  that  the  Company  will  be  able  to  utilize  net  operating  loss
carryforwards and credits before expiration.

The Company has a cumulative net operating loss  carryforward  since  inception,
resulting in net deferred tax assets of approximately $61.5 million. A valuation
allowance  has been placed on the net  deferred  tax assets to reduce them to an
assumed net realizable value of zero.

8.   COMMITMENTS AND CONTINGENCIES:

Lease  Commitments--The  Company  leases  office  space and research and testing
laboratory space in various  facilities under operating  agreements  expiring at
various dates through 2010.  Future  minimum lease  payments for the years ended
December 31 are as follows (in thousands):

            2002.................       $   2,548
            2003.................           2,566
            2004.................           2,392
            2005.................           2,093
            2006.................           1,924
            Thereafter...........           5,715
                                        ----------
                      Total......       $  17,238
                                        ==========

Rent expense for the years ended  December 31, 1999,  2000 and 2001, and for the
period from March 21, 1997 (inception),  to December 31, 2001, was $1.1 million,
$1.5 million, $2.2 million and $5.2 million, respectively.

Research  and  Development  Funding and  Technology  Licenses--The  Company uses
experts and  laboratories  at  universities  and other  institutions  to perform
research and development activities. Funding commitments as of December 31, 2001
to these institutions for future years are as follows (in thousands):

            2002..................          $   652
            2003..................              330
            2004..................              255
            2005..................              255
            2006..................              255
                                          ---------
                      Total.......          $ 1,747
                                          =========

The Company has also licensed technology from certain institutions, for which it
is  required  to pay a royalty  upon  future  sales,  subject to certain  annual
minimums. As of December 31, 2001, such minimum commitments were $255,000.

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 AldurazymeTM,
AryplaseTM  or  VibrilaseTM   results  in  adverse  effects  during  testing  or
commercial  sale.  BioMarin/Genzyme  LLC (the LLC) and the Company carry product
liability  insurance to cover the clinical trials of Aldurazyme (by the LLC) and
Aryplase and  Vibrilase  (by the  Company).  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.  To date,  there have not been any such
claims.

                                       F16

9.   RELATED-PARTY TRANSACTIONS:

On April 13,  1999,  the  Company  entered  into a  convertible  note  financing
agreement  in the amount of $26.0  million.  Of this amount GBL  purchased  $4.3
million worth of such notes and LaMont Asset  Management SA (LAM) purchased $9.7
million. A director of the Company is also the chairman of LAM. The Company also
entered into an agency  agreement  with LAM pursuant to which the Company agreed
to pay LAM a five percent cash  commission on sales to certain note  purchasers.
On July 23, 1999,  concurrent with the Company's IPO, the Company's  convertible
notes payable  (including accrued interest) were converted into 2,672,020 shares
of the Company's common stock at $10 per share.  GBL's $4.3 million  convertible
note plus  interest  was  converted  to 441,911  shares  and LAM's $9.7  million
convertible note plus interest was converted to 996,869 shares.

In April  2001,  the  Company  loaned a Company  officer  $860,000 to purchase a
property  and  received a  promissory  note  secured by the  property.  The note
matures on October 31, 2004  (subject to various  conditions  in the  employment
agreement) and bears interest at the Federal  mid-term rate (3.9% as of December
31, 2001).

Due to the terms of the  collaborative  agreement with Genzyme  outlined in Note
10,  Genzyme is  considered to be a related  party.  See also Notes 1 and 10 for
Genzyme related-party transactions.

10.   COLLABORATIVE AGREEMENTS:

Genzyme--In  1998,  the Company  entered  into an agreement  (the  Collaboration
Agreement) with Genzyme to establish a joint venture  (BioMarin/Genzyme LLC) for
the worldwide development and commercialization of Aldurazyme to treat MPS I. In
conjunction with the formation of the joint venture,  the Company  established a
wholly-owned  subsidiary,  BioMarin Genetics,  Inc. The Company has a 49 percent
interest in the joint venture, BioMarin Genetics, Inc. has a 1 percent interest,
and Genzyme has the remaining 50 percent interest.

Under the Collaboration  Agreement, the Company and Genzyme are each required to
make capital contributions to the joint venture in an amount equal to 50 percent
of costs and expenses associated with the development and  commercialization  of
Aldurazyme.  The  parties  also  agree to share the  profits  equally  from such
commercialization.  In  addition,  Genzyme  purchased  1,333,333  shares  of the
Company's  common stock at $6 per share in a private  placement  for proceeds of
$8.0 million and,  concurrent  with the IPO,  purchased  an  additional  769,230
shares of the Company's  common stock at the IPO price for an  additional  $10.0
million.  Genzyme has also agreed to pay the Company  $12.1 million in cash upon
FDA approval of the biologics license application for Aldurazyme.

Other   Agreements--The   Company  is  engaged  in  research   and   development
collaborations with various academic  institutions,  commercial research groups,
and other  entities.  The  agreements  provide for  sponsorship  of research and
development  by the Company and may also provide for  exclusive  royalty-bearing
intellectual property licenses or rights of first negotiation regarding licenses
to intellectual property development under the collaborations.  Typically, these
agreements are terminable for cause by either party upon 90 days written notice.

11.   COMPENSATION PLANS:

Employment  Agreements--The  Company has entered into employment agreements with
eight officers. Seven of these agreements can be terminated without cause by the
Company upon six months prior notice,  or by the officer upon three months prior
written notice to the Company. The employment agreement with the Company's Chief
Executive  Officer (CEO) shall be renewed  after three years for one  additional
three-year  period  unless  either  party gives nine months  notice prior to the
expiration of the initial three-year period. The annual salaries committed under
these employment agreements total approximately $2.0 million. In addition, three
of the  agreements  provide for the payment of an annual cash bonus of up to 100
percent of the base annual  salary of the three senior  officers  based upon the
Company's  market  capitalization  through June 30, 2000.  Bonuses for the three
senior  officers (two of whom are no longer with the company)  totaled  $294,000
and $0 in 2000 and 2001, respectively.  The bonuses for the CEO totaled $279,000
in 2001.

401(k)  Plan--The  Company sponsors the BioMarin  Retirement  Savings Plan. Most
employees  (Participants)  are eligible to  participate  following  the start of
their employment,  on the earlier of the next occurring January 1, April 1, July
1 or October 1.  Participants  may  contribute up to 20 percent of their current
compensation  to the  401(k)  Plan or an amount up to a  statutorily  prescribed
annual  limit.  The  Company  pays the direct  expenses  of the 401(k)  Plan and
matches 50% of the first 2% contributed to the employee accounts.  The Company's
matching contribution vests over four years from employment commencement and was
$0, $30,000,  $90,000 and $123,000 for the years ended December 31, 1999,  2000,
2001 and for the period from March 21, 1997  (inception)  through  December  31,
2001, respectively.

                                       F17


1998 Employee  Stock  Purchase Plan (1998  Purchase  Plan) -- A total of 250,000
shares of Company  common stock has been  reserved  for issuance  under the 1998
Purchase Plan,  plus annual  increases equal to the lesser of 0.5 percent of the
outstanding capital stock,  200,000 shares, or a lesser amount set by the Board.
As of December 31, 2001,  63,083 shares have been issued under the 1998 Purchase
Plan.

12.   SUPPLEMENTAL CASH FLOW INFORMATION

The following non-cash transactions took place in the periods presented
(in thousands):

                                                                                     

                                                                                                 Period from March
                                                                                                     21, 1997
                                                              Year Ended December 31,              (Inception) to
                                                     ------------------------------------------     December 31,
                                                          1999          2000          2001              2001
                                                     -------------- ------------ --------------  ------------------
Common stock issued upon conversion of
   convertible notes plus interest                      $25,615     $         -  $        -      $        25,615

Common stock issued in exchange for notes                     -               -           -               20,500

Common stock and common stock warrants
    issued in exchange for brokerage services                 -               -           -                1,518

Common stock surrendered by stockholders'
    for payment of principle and interest                     -             170           -                  170

Compensation in the form of common stock
    and common stock options                                  -               -           -                   18

Issuance of common stock to acquire the
therapeutic   assets of IBEX at $10.218 per share             -               -       8,324                8,324

Fair value of common stock options issued in
connection with IBEX acquisition                              -               -         291                  291

Fair value of restricted stock grant issued
pursuant to an employment contract                            -             313           -                  313

Borrowings under capital lease arrangements                   -               -         206                  206




13.   SUBSEQUENT EVENTS (unaudited)

In December  2001,  the  Company  signed a  definitive  agreement  with  Synapse
Technologies  Inc. (a  privately  held  Canadian  company) to acquire all of its
outstanding  capital stock for  approximately  $10.2  million in Company  common
stock plus future contingent  milestone  payments totaling $6 million payable in
cash or  common  stock at the  Company's  discretion.  The  Company  will  issue
approximately  885,000 shares of common stock for the purchase.  The acquisition
will be recorded  upon  closing in the first  quarter of 2002 using the purchase
method of accounting. All of the purchase price along with related expenses will
be expensed as in-process research and development costs.

In February 2002,  the Company signed a definitive  agreement to purchase all of
the  outstanding  capital stock of Glyko  Biomedical  Ltd.  (GBL).  Upon closing
(anticipated to be in the second quarter of 2002) GBL shareholders  will receive
11,367,617  shares of Company  common stock in exchange for their GBL stock.  In
turn,  the Company  will retire the  existing  11,367,617  shares of  restricted
common stock of the Company  currently  held by GBL. There will be no net effect
on the common stock outstanding. It is anticipated that $2.1 million of expenses
will be incurred and expensed as  reorganization  costs for this  transaction in
2002.  Approximately $400,000 of transaction costs were incurred and expensed in
2001.


14.  QUARTERLY CONSOLIDATED FINANCIAL DATA (unaudited)

The Company's  quarterly  operating  results have fluctuated in the past and may
continue to do so in the future as a result of a number of  factors,  including,
but not limited to, the  completion of  development  projects and  variations in
levels of production.

The Company's common stock has been traded on the Nasdaq Stock Market since July
22, 1999.  There were 82 common  stockholders of record at December 31, 2001. No
dividends have ever been paid by the Company.

                                       F18

                                                                         

                                                                Quarter Ended
                                        -------------------------------------------------------------------
                                         March 31,   June 30,      September 30,     December 31,
2001                                                  (In thousands, except per share data)
Total revenue                            $  2,690    $  3,012      $     3,101       $   2,896
Loss from continuing operations            (9,083)    (11,331)         (10,642)        (26,372)
Loss from discontinued operations            (617)       (638)            (373)           (638)
Loss from disposal of Glyko, Inc.               -           -                -          (7,912)
Net loss                                   (9,700)    (11,969)         (11,015)        (34,922)
Net loss per share, basic and diluted       (0.26)      (0.30)           (0.26)          (0.77)
Common stock price per share:
  High                                   $ 12.063    $ 13.210      $    13.610       $  14.160
  Low                                       7.313       7.500            9.120           9.400


                                                                Quarter Ended
                                        -------------------------------------------------------------------
                                         March 31,   June 30,      September 30,     December 31,
2000                                                  (In thousands, except per share data)
Total revenue                            $  2,791    $  2,258      $    1,950        $   2,715
Loss from continuing operations           (11,202)     (6,854)         (7,731)          (9,828)
Loss from discontinued operations            (534)       (232)           (417)            (566)
Net loss                                  (11,736)     (7,086)         (8,148)         (10,394)
Net loss per share, basic and diluted       (0.34)      (0.20)          (0.23)           (0.28)
Common stock price per share:
  High                                   $ 38.750    $ 27.750      $   21.750        $  17.625
  Low                                      12.750      16.750          16.375            7.156



                                       F19

EX-2

                                                                     EXHIBIT 2.5



                 ACQUISITION AGREEMENT FOR A PLAN OF ARRANGEMENT

                                  BY AND AMONG

                          BIOMARIN PHARMACEUTICAL INC.,

                   BIOMARIN ACQUISITION (NOVA SCOTIA) COMPANY,

                                       AND

                              GLYKO BIOMEDICAL LTD.



                          Dated as of February 6, 2002








                                TABLE OF CONTENTS


ARTICLE 1....................................................................2
THE PLAN OF ARRANGEMENT......................................................2
  1.1   IMPLEMENTATION STEPS BY GLYKO........................................2
  1.2   IMPLEMENTATION STEPS BY BIOMARIN AND BIOMARIN NOVA SCOTIA............2
  1.3   INTERIM ORDER........................................................3
  1.4   EFFECT OF THE ARRANGEMENT............................................3
  1.5   EFFECT ON CAPITAL STOCK..............................................3
  1.6   DISSENTING SHARES....................................................4
  1.7   SURRENDER OF CERTIFICATES............................................5
  1.8   NO FURTHER OWNERSHIP RIGHTS IN GLYKO COMMON SHARES...................6
  1.9   LOST, STOLEN OR DESTROYED CERTIFICATES...............................6
  1.10  TAX CONSEQUENCES.....................................................6
  1.11  CLOSING..............................................................6
ARTICLE 2....................................................................7
REPRESENTATIONS AND WARRANTIES OF GLYKO......................................7
  2.1   ORGANIZATION, STANDING AND POWER; SUBSIDIARIES.......................7
  2.2   ARTICLES OF INCORPORATION AND BYLAWS.................................8
  2.3   SHARE CAPITAL........................................................8
  2.4   AUTHORITY; BINDING NATURE OF AGREEMENT...............................9
  2.5   NO CONFLICT; REQUIRED FILINGS AND CONSENTS...........................9
  2.6   COMPLIANCE; PERMITS.................................................10
  2.7   CANADIAN SECURITIES FILINGS; FINANCIAL STATEMENTS...................11
  2.8   NO UNDISCLOSED LIABILITIES..........................................11
  2.9   ABSENCE OF CERTAIN CHANGES OR EVENTS................................12
  2.10  LEGAL PROCEEDINGS; ORDERS...........................................12
  2.11  EMPLOYEE BENEFIT PLANS..............................................13
  2.12  LABOR MATTERS.......................................................13
  2.13  RESTRICTIONS ON BUSINESS ACTIVITIES.................................13
  2.14  TITLE TO PROPERTY...................................................13
  2.15  TAXES...............................................................13
  2.16  ENVIRONMENTAL MATTERS...............................................14
  2.17  BROKERS.............................................................15
  2.18  INTELLECTUAL PROPERTY...............................................15
  2.19  CONTRACTS...........................................................15
  2.20  INSURANCE...........................................................15
  2.21  OPINION OF FINANCIAL ADVISOR........................................15
  2.22  BOARD APPROVAL......................................................16
  2.23  VOTE REQUIRED.......................................................16
  2.24  MINUTE BOOKS........................................................16
  2.25  INDEMNIFICATION OBLIGATIONS.........................................16
  2.26  CHANGE OF CONTROL PAYMENTS..........................................16
  2.27  INTERESTED PARTY TRANSACTIONS.......................................16
ARTICLE 3...................................................................17
REPRESENTATIONS AND WARRANTIES OF BIOMARIN AND..............................17
  3.1   ORGANIZATION, STANDING AND POWER....................................17
  3.2   ARTICLES OF INCORPORATION AND BYLAWS................................17
  3.3   SHARE CAPITAL.......................................................17
  3.4   SUBSIDIARIES........................................................18
  3.5   OWNERSHIP OF SECURITIES.............................................18



                                                                               2





  3.6   NO CONFLICT; REQUIRED FILINGS AND CONSENTS..........................18
  3.7   AUTHORITY; BINDING NATURE OF AGREEMENT..............................19
  3.8   SEC FILINGS; FINANCIAL STATEMENTS...................................19
  3.9   NO UNDISCLOSED LIABILITIES..........................................20
  3.10  VALID ISSUANCE......................................................20
  3.11  LISTING.............................................................20
  3.12  LEGAL PROCEEDINGS; ORDERS...........................................20
  3.13  ABSENCE OF CERTAIN CHANGES AND EVENTS...............................21
  3.14  ENVIRONMENTAL MATTERS...............................................21
  3.15  COMPLIANCE; PERMITS.................................................21
  3.16  TAXES...............................................................22
  3.17  CONTRACTS...........................................................23
  3.18  VOTE REQUIRED.......................................................23
  3.19  BROKERS.............................................................23
  3.20  INTELLECTUAL PROPERTY...............................................23
  2.21  OPINION OF FINANCIAL ADVISOR........................................24
  3.22  BOARD APPROVAL......................................................24
ARTICLE 4...................................................................24
CONDUCT PRIOR TO THE EFFECTIVE TIME.........................................24
  4.1   ACCESS AND INVESTIGATION............................................24
  4.2   OPERATION OF GLYKO'S BUSINESS.......................................24
ARTICLE 5...................................................................26
GLYKO SHAREHOLDER APPROVAL AND BIOMARIN STOCKHOLDER APPROVAL................26
  5.1   JOINT PROXY CIRCULAR; BOARD RECOMMENDATIONS; OTHER FILINGS..........26
  5.2   MEETING OF GLYKO SHAREHOLDERS.......................................27
  5.3   MEETING OF BIOMARIN STOCKHOLDERS....................................29
ARTICLE 6...................................................................29
ADDITIONAL AGREEMENTS.......................................................29
  6.1   CONFIDENTIALITY; ACCESS TO INFORMATION..............................29
  6.2   NO SOLICITATION.....................................................29
  6.3   PUBLIC DISCLOSURE...................................................30
  6.4   REASONABLE EFFORTS..................................................30
  6.5   NOTIFICATION........................................................31
  6.6   THIRD PARTY CONSENTS................................................32
  6.7   NASDAQ AND SWX SWISS EXCHANGE LISTING...............................32
  6.8   GLYKO AFFILIATE AGREEMENT...........................................32
  6.9   LISTING OF GLYKO COMMON SHARES......................................32
  6.10  INDEMNIFICATION OF DIRECTORS AND OFFICERS...........................32
  6.11  STOCK OPTIONS.......................................................33
ARTICLE 7...................................................................34
CONDITIONS TO THE ARRANGEMENT...............................................34
  7.1   CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE ARRANGEMENT...34
  7.2   ADDITIONAL CONDITIONS TO OBLIGATIONS OF GLYKO.......................36
  7.3   ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF BIOMARIN................36
ARTICLE 8...................................................................37
TERMINATION, AMENDMENT AND WAIVER...........................................37
  8.1   TERMINATION.........................................................37
  8.2   NOTICE OF TERMINATION; EFFECT OF TERMINATION........................39
  8.3   FEES AND EXPENSES...................................................39
  8.4   AMENDMENT...........................................................40
  8.5   EXTENSION; WAIVER...................................................40



                                                                               3





ARTICLE 9...................................................................40
GENERAL PROVISIONS..........................................................40
  9.1   NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.......................41
  9.2   NOTICES.............................................................41
  9.3   INTERPRETATION......................................................42
  9.4   COUNTERPARTS........................................................42
  9.5   ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES.........................42
  9.6   SEVERABILITY........................................................43
  9.7   GOVERNING LAW.......................................................43
  9.8   RULES OF CONSTRUCTION...............................................43
  9.9   ASSIGNMENT..........................................................43
  9.10  WAIVER OF JURY TRIAL................................................44
  9.11  CURRENCY............................................................44
  9.12  GLYKO DISCLOSURE LETTER.............................................44
  9.13  BIOMARIN DISCLOSURE LETTER..........................................44
  9.14  ATTORNEYS' FEES.....................................................44
ARTICLE 10..................................................................44
ADDITIONAL DEFINITIONS......................................................44
  10.1  ADDITIONAL DEFINITIONS..............................................44


                                INDEX OF EXHIBITS

            Exhibit A  Form of Arrangement Resolution
            Exhibit B  Plan of Arrangement
            Exhibit C  Appropriate Regulatory Approvals
            Exhibit D  Form of Legal Opinion of BioMarin U.S. Counsel
            Exhibit E  Form  of  Legal  Opinion  of  BioMarin  Canadian Counsel
            Exhibit F  Form of Legal Opinion of Glyko U.S. Counsel
            Exhibit G  Form of Legal Opinion of Glyko Canadian Counsel



                                                                               4




                 ACQUISITION AGREEMENT FOR A PLAN OF ARRANGEMENT


      This ACQUISITION AGREEMENT FOR A PLAN OF ARRANGEMENT (this "Agreement") is
made and entered into as of February 6, 2002, among BIOMARIN PHARMACEUTICAL INC.
("BioMarin"),  a  corporation  existing  under  the laws of  Delaware,  BIOMARIN
ACQUISITION (NOVA SCOTIA) COMPANY, an unlimited liability company existing under
the  Companies  Act (Nova  Scotia)  and a wholly  owned  Subsidiary  of BioMarin
("BioMarin Nova Scotia") and GLYKO BIOMEDICAL LTD., a corporation existing under
the laws of Canada ("Glyko").


                                    RECITALS

      A. Upon the terms and subject to the  conditions of this  Agreement and in
accordance  with the  Canada  Business  Corporations  Act (the  "CBCA")  and the
Company Act (British  Columbia) (the "BC Act"),  BioMarin,  BioMarin Nova Scotia
and Glyko intend to enter into a business combination  transaction by way of the
Arrangement whereby:

            (i)   Glyko shall be continued (the "Continuance") under the laws of
                  British Columbia; and

            (ii)  each  outstanding  Glyko  Common  Share  that is not held by a
                  holder  who  has  exercised  its  Dissenters'  Rights  and  is
                  ultimately  entitled  to be paid the fair  value of its  Glyko
                  Common Shares shall be exchanged for 0.3309 shares of BioMarin
                  Common Stock.

      B. The Board of  Directors  of Glyko has (i)  received an opinion  from TD
Securities  Inc.  (the  "Financial  Advisor")  dated  the date  hereof  that the
consideration to be received by Glyko shareholders under the Arrangement is fair
to the  shareholders  of Glyko from a financial  point of view;  (ii) determined
that the Arrangement is fair to Glyko  shareholders and in the best interests of
Glyko; (iii) unanimously approved this Agreement,  the Arrangement and the other
transactions  contemplated by this  Agreement;  and (iv) determined to recommend
that the shareholders of Glyko approve the Arrangement.

      C. The Board of Directors  of each of BioMarin  and  BioMarin  Nova Scotia
have  unanimously  approved  this  Agreement,  the  Arrangement  and  the  other
transactions  contemplated  by this  Agreement  and the  Board of  Directors  of
BioMarin has determined to recommend that holders of BioMarin  Common Stock vote
in favour of the  Arrangement  including,  without  limitation,  the issuance of
BioMarin Common Stock in connection with the Arrangement.

      D. Concurrently  with the execution of this Agreement,  and as a condition
and inducement to BioMarin's  willingness to enter into this Agreement,  certain
shareholders  of Glyko are entering into  shareholder  support  agreements  (the
"Glyko Shareholder Support Agreements").







      E. As a condition and  inducement to BioMarin's  willingness to enter into
this  Agreement,  certain  affiliates  of Glyko will enter into Glyko  affiliate
agreements (the "Glyko Affiliate Agreements").

      F. The parties  intend,  by executing this  Agreement,  to adopt a plan of
reorganization  within the meaning of Section 368 of the United States  Internal
Revenue Code of 1986, as amended (the "United States Code").

      G. Capitalized terms used herein, if not otherwise defined, shall have the
meanings given to them in Article 10 below.

      NOW,   THEREFORE,   in  consideration  of  the  covenants,   promises  and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,  the parties agree
as follows:


                                    ARTICLE 1

                             THE PLAN OF ARRANGEMENT

      1.1 Implementation Steps by Glyko Glyko covenants in favor of BioMarin and
BioMarin Nova Scotia that Glyko shall:

            (a) as soon as reasonably practicable,  apply in a manner acceptable
to BioMarin under Section 192 of the CBCA for the Interim Order,  and thereafter
proceed with and diligently pursue the obtaining of the Interim Order;

            (b) convene and hold the Glyko Shareholders  Meeting for the purpose
of considering  the Continuance  Resolution and the Arrangement  Resolution (and
for any other proper purpose as may be set out in the notice for such meeting);

            (c) subject to obtaining such shareholder approval as is required by
the CBCA and the Interim Order,  diligently  pursue the application to the Court
for the Final Order;

            (d) subject to  obtaining  the Final Order and the  satisfaction  or
waiver of the other conditions herein contained in favor of Glyko, file with the
Director  Articles of Arrangement and such other documents as may be required in
connection therewith under the CBCA to give effect to the Arrangement; and

            (e) subject to obtaining such shareholder approval as is required by
the  CBCA,  file with the  Registrar  Articles  of  Continuance  and such  other
documents as may be required under the BC Act and the CBCA to give effect to the
Continuance.

      1.2  Implementation  Steps by BioMarin and BioMarin Nova Scotia.  BioMarin
and BioMarin Nova Scotia,  as  appropriate,  jointly and  severally  covenant in
favor of Glyko that BioMarin  shall  convene and hold the BioMarin  Stockholders
Meeting for the purpose of considering



                                        2




the approval of the Arrangement including,  without limitation,  the issuance of
BioMarin Common Stock in connection with the Arrangement.

      1.3   Interim Order. The notice of motion for the application referred to
in Section 1.1(a) shall request that the Interim Order provide:

            (a) for the class or  classes  of  Persons  to whom  notice is to be
provided in respect of the  Arrangement and the Glyko  Shareholders  Meeting and
for the manner in which such notice is to be provided;

            (b) that the  requisite  shareholder  approval  for the  Arrangement
Resolution  shall  be  662/3  percent  of the  votes  cast  on  the  Arrangement
Resolution  by holders of Glyko Common  Shares  present in Person or by proxy at
the Glyko Shareholders Meeting;

            (c)  that,  in all  other  respects,  the  terms,  restrictions  and
conditions of the bylaws and articles of Glyko,  including  quorum  requirements
and all other matters, shall apply in respect of the Glyko Shareholders Meeting;
and

            (d) for the grant of the Dissenters' Rights.

      1.4 Effect of the  Arrangement.  At the Effective  Time, the effect of the
Arrangement  shall be as provided in this  Agreement and the Plan of Arrangement
and the applicable provisions of the CBCA.

      1.5   Effect on Capital Stock. Subject to the terms and conditions of this
Agreement and the Plan of Arrangement, by virtue of the Arrangement, the
following events or transactions shall occur:

            (a) Exchange of Glyko Common Shares.  Each Glyko Common Share issued
and outstanding  immediately  prior to the  Implementation  Time, other than any
Dissenting  Shares (as defined in and to the extent provided in Section 1.6(a)),
will be automatically  exchanged (subject to Section 1.5(d)) such that the Glyko
Common  Shares will be  transferred  to BioMarin Nova Scotia in exchange for the
delivery by BioMarin  Nova Scotia of that portion of a share of BioMarin  Common
Stock equal to the  Exchange  Ratio.  In no event will  BioMarin  Nova Scotia be
required  to  transfer to holders of Glyko  Common  Shares more than  11,367,617
shares of  BioMarin  Common  Stock in  connection  with the  rights of  exchange
provided for pursuant to this Agreement.  If any Glyko Common Shares outstanding
immediately  prior to the  Implementation  Time are unvested or are subject to a
repurchase  option,  risk of forfeiture or other  condition under any applicable
restricted  shares purchase  agreement or other  agreement with Glyko,  then the
BioMarin  Common Stock  delivered to holders of Glyko Common  Shares in exchange
for such Glyko  Common  Shares  will also be  unvested  and  subject to the same
repurchase option,  risk of forfeiture or other condition,  and the certificates
representing   such  BioMarin  Common  Stock  may  accordingly  be  marked  with
appropriate legends. Glyko shall take all action that may be necessary to ensure
that, from and after the Implementation  Time,  BioMarin Nova Scotia is entitled
to  exercise  any such  repurchase  option or other  right set forth in any such
restricted shares purchase agreement or other agreement.



                                        3




            (b) Stock Options.  Each Option to purchase Glyko Common Shares then
outstanding  under the  Stock  Option  Plan  shall be  replaced  by an Option to
purchase BioMarin Common Stock in accordance with Section 6.11 hereof.

            (c)  Adjustments  to Exchange  Ratio.  The  Exchange  Ratio shall be
adjusted to reflect  appropriately the effect of any stock split,  reverse stock
split,  stock  dividend  (including any dividend or  distribution  of securities
convertible  into BioMarin Common Stock or Glyko Common  Shares),  extraordinary
cash dividends, reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to BioMarin Common Stock or
Glyko  Common  Shares  occurring  on or after the date  hereof  and prior to the
Effective Time.

            (d)  Fractional  Shares.  No fraction of a share of BioMarin  Common
Stock  will be issued by virtue of the  Arrangement,  but in lieu  thereof  each
holder of Glyko Common Shares who would otherwise be entitled to a fraction of a
share of BioMarin  Common  Stock (after  aggregating  all  fractional  shares of
BioMarin  Common Stock that  otherwise  would be received by such holder) shall,
upon  surrender of such  holder's  Certificates(s)  receive from  BioMarin  Nova
Scotia an amount of cash (rounded to the nearest whole cent),  without interest,
equal to the product of (i) such fraction, and (ii) the average closing price of
one share of  BioMarin  Common  Stock for the twenty  (20) most recent days that
BioMarin  Common Stock has traded ending on the second  trading day  immediately
prior  to the  Effective  Date,  as  reported  on  the  Nasdaq  National  Market
("Nasdaq").

      1.6   Dissenting Shares.


            (a) Notwithstanding any provision of this Agreement to the contrary,
the shares of any holder of Glyko Common  Shares who has demanded and  perfected
appraisal  and dissent  rights  ("Dissenters'  Rights") in respect of such Glyko
Common Shares in  accordance  with the Interim Order and the CBCA and who, as of
the Effective  Time,  has not  effectively  withdrawn or lost such appraisal and
dissent rights ("Dissenting Shares"), shall not be converted into or represent a
right to receive  BioMarin  Common Stock pursuant to Section 1.5, but the holder
thereof  shall only be  entitled  to such  rights as are  granted by the Interim
Order or the CBCA, as the case may be.

            (b)  Notwithstanding the provisions of subsection (a), if any holder
of Glyko Common Shares who demands appraisal of such shares under the CBCA shall
effectively  withdraw  (or  otherwise  by law not be  entitled  to) the right to
appraisal,  then,  as of the later of the Effective  Time and the  occurrence of
such event,  such  holder's  shares shall  automatically  be  exchanged  for and
represent  only the right to receive  BioMarin  Common Stock,  without  interest
thereon, upon surrender of the certificate representing such shares.

            (c) Glyko  shall  give  BioMarin  (i) prompt  notice of any  written
demands for appraisal of any Glyko Common  Shares,  withdrawals of such demands,
and any other instruments  served pursuant to the Interim Order and the CBCA and
received by Glyko which  relate to any such  demand for  appraisal  and (ii) the
opportunity to participate in all substantial negotiations and proceedings which
take place prior to the Effective Time with respect to demands for appraisal and
dissent under the CBCA.  Glyko shall not,  except with the prior written consent
of BioMarin (not to be unreasonably  withheld or delayed),  voluntarily make any
payment  with respect to any demands for  appraisal  of Glyko  Common  Shares or
offer to settle or settle any such demands.



                                        4





            (d) Any payments made to holders of Glyko Common Shares  pursuant to
Section 1.6(a) shall be made solely from the assets of Glyko.

      1.7   Surrender of Certificates.


            (a)  Depositary.  BioMarin  shall  select  a bank or  trust  company
reasonably acceptable to Glyko to act as the depositary (the "Depositary").

            (b) BioMarin to Provide  BioMarin  Common Stock.  Promptly after the
Effective  Time,  BioMarin shall cause BioMarin Nova Scotia to make available to
the  Depositary,  for exchange in  accordance  with this Article I, the BioMarin
Common Stock issuable  pursuant to Section 1.5 in exchange for outstanding Glyko
Common  Shares,  and  cash  in an  amount  sufficient  for  payment  in  lieu of
fractional shares pursuant to Section 1.5(d).

            (c) Exchange  Procedures.  Promptly after the Effective  Time,  each
holder of record (as of the  Effective  Time) of a certificate  or  certificates
(the "Certificates"),  which immediately prior to the Effective Time represented
outstanding Glyko Common Shares, shall be required to send to the Depositary (i)
a duly  completed and validly  executed  letter of transmittal in customary form
(which shall specify that delivery shall be effected, and risk of loss and title
to the  Certificates  shall pass, only upon delivery of the  Certificates to the
Depositary  and shall contain such other  provisions as BioMarin may  reasonably
specify)  and  (ii)  instructions  for use in  effecting  the  surrender  of the
Certificates in exchange for  certificates  representing  BioMarin Common Stock,
and cash in lieu of any  fractional  shares  pursuant  to Section  1.5(d).  Upon
surrender of  Certificates  for  cancellation to the Depositary or to such other
agent or agents as may be appointed by  BioMarin,  together  with such letter of
transmittal,  duly  completed  and  validly  executed  in  accordance  with  the
instructions  thereto,  the  holders of such  Certificates  shall be entitled to
receive  in  exchange  therefor  certificates  representing  the number of whole
shares of  BioMarin  Common  Stock into which  their  Glyko  Common  Shares were
exchanged at the  Effective  Time,  together  with payment in lieu of fractional
shares which such holders have the right to receive  pursuant to Section 1.5(d),
and the  Certificates  so  surrendered  shall  forthwith be cancelled.  Until so
surrendered,  outstanding  Certificates  will  be  deemed  from  and  after  the
Effective  Time,  for all  corporate  purposes,  subject to Section  1.5(d),  to
evidence only the right to receive upon such surrender a certificate  evidencing
the number of whole shares of BioMarin Common Stock into which such Glyko Common
Shares are entitled to be  exchanged  and the right to receive an amount in cash
in lieu of the  issuance of any  fractional  shares in  accordance  with Section
1.5(d).

            (d) Required  Withholding.  Each of the  Depositary,  BioMarin  Nova
Scotia and Glyko shall be entitled to deduct and withhold from any consideration
payable or  otherwise  deliverable  pursuant to this  Agreement to any holder or
former  holder of Glyko Common Shares such amounts as may be required by law (as
advised  by outside  tax  counsel  for  BioMarin)  to be  deducted  or  withheld
therefrom under the United States Code, the Income Tax Act (Canada) or under any
provision of United States or Canadian  federal,  state,  provincial,  regional,
local or foreign tax law or under any other applicable legal requirement. To the
extent such amounts are so deducted or withheld and remitted to the  appropriate
taxing  authority in  accordance  with  applicable  law,  such amounts  shall be
treated for all purposes  under this Agreement as having been paid to the Person
to



                                        5




whom such amounts  would  otherwise  have been paid,  provided  that such person
shall be provided with a receipt  evidencing  remittance of such withheld amount
to the appropriate taxing authority.

            (e) No Liability.  Notwithstanding  anything to the contrary in this
Section 1.7, none of the Depositary,  BioMarin,  BioMarin Nova Scotia,  Glyko or
any party hereto shall be liable to a holder of shares of BioMarin  Common Stock
or Glyko  Common  Shares  for any  amount  properly  paid to a  public  official
pursuant to any applicable abandoned property, escheat or similar law.

      1.8 No Further  Ownership  Rights in Glyko  Common  Shares.  All shares of
BioMarin Common Stock issued in accordance with the terms hereof  (including any
cash paid in respect thereof pursuant to Section 1.5(d)) shall be deemed to have
been issued in full  satisfaction of all rights  pertaining to such Glyko Common
Shares,   and,   following  the  Effective  Time,  there  shall  be  no  further
registration  of transfers on the records of Glyko of Glyko Common  Shares which
were  outstanding  immediately  prior  to the  Effective  Time.  If,  after  the
Effective Time,  Certificates are presented to Glyko for any reason,  they shall
be cancelled and exchanged as provided in this Article 1.

      1.9  Lost,  Stolen  or  Destroyed  Certificates.  In the  event  that  any
Certificates  shall have been lost,  stolen or destroyed,  the Depositary  shall
issue in exchange  for such lost,  stolen or  destroyed  Certificates,  upon the
making  of an  affidavit  of  that  fact  by the  holder  thereof,  certificates
representing  the  BioMarin  Common  Stock  into which the Glyko  Common  Shares
represented by such  Certificates  were  exchanged  pursuant to Section 1.5, and
cash for  fractional  shares,  if any,  as may be  required  pursuant to Section
1.5(d); provided,  however, that Glyko and BioMarin may, in their discretion and
as a  condition  precedent  to the  issuance of such  certificates  representing
BioMarin  Common  Stock and cash,  require  the  owner of such  lost,  stolen or
destroyed  Certificates  to  deliver  a bond in such sum as  either  of them may
reasonably  direct  as  indemnity  against  any claim  that may be made  against
BioMarin or Glyko or the Depositary with respect to the Certificates  alleged to
have been lost, stolen or destroyed.

      1.10 Tax  Consequences.  It is  intended  by the  parties  hereto that the
Arrangement shall constitute a reorganization  within the meaning of Section 368
of the United States Code. The parties hereto adopt this Agreement as a "plan of
reorganization"  within the meaning of Sections  1.3682(g)  and 1.3683(a) of the
United States Treasury Regulations.

      1.11 Closing.  The closing of the Arrangement (the "Closing")  (other than
obtaining  the Final Order and the filing with the  Director of the  Articles of
Arrangement)  shall take place at the offices of Cassels Brock & Blackwell  LLP,
at a time and date to be specified by the parties,  which shall be no later than
the second  business day after the  satisfaction or waiver of the conditions set
forth in Article 7, or at such other  time,  date and  location  as the  parties
hereto agree in writing (the "Closing Date").



                                        6




                                    ARTICLE 2

                     REPRESENTATIONS AND WARRANTIES OF GLYKO

      As of the date  hereof,  Glyko  represents  and  warrants to BioMarin  and
BioMarin Nova Scotia as follows,  subject to such exceptions as are specifically
disclosed in the disclosure  letter prepared by Glyko and delivered to BioMarin,
which disclosure  letter shall provide an exception to or otherwise  qualify the
representations  or  warranties  of  Glyko  specifically  referred  to  in  such
disclosure  letter  (the  "Glyko  Disclosure  Letter"),  and  acknowledges  that
BioMarin and  BioMarin  Nova Scotia are relying  upon such  representations  and
warranties in connection with the matters contemplated by this Agreement:

      2.1   Organization, Standing and Power; Subsidiaries.


            (a) Glyko  does not have any  Subsidiaries  and  Glyko  does not own
capital  stock of, or any equity  interest  of any  nature in, any other  Entity
other than BioMarin.  Glyko is a corporation  validly existing under the laws of
the jurisdiction of its incorporation and has all necessary  corporate power and
authority:  (i) to conduct its  business in the manner in which its  business is
currently being conducted; (ii) to own and use its assets in the manner in which
its assets are currently  owned and used;  and (iii) to perform its  obligations
under all Contracts by which it is bound.

            (b) Glyko has not  agreed  to, is not  obligated  to make and is not
bound by any Contract  under which it may become  obligated to make,  any future
investment  in or  capital  contribution  to any  other  Entity.  Glyko is not a
general  partner of, and is not  otherwise  liable for any of the debts or other
obligations of, any general  partnership,  limited  partnership or other Entity.
Glyko does not directly or indirectly  own any equity or similar  interest in or
any interest convertible, exchangeable or exercisable for, any equity or similar
interest in, any Entity.

            (c) Glyko is in possession of all Approvals  necessary to own, lease
and operate the properties it purports to own,  operate or lease and to carry on
its business as it is now being conducted, except where the failure to have such
Approvals would not,  individually or in the aggregate,  have a Material Adverse
Effect on Glyko.

            (d) Glyko's  sole  undertaking  is the holding of shares of BioMarin
Common Stock. Glyko is qualified to do business as a foreign  corporation and is
in good standing in the State California.

            (e) Glyko:  (i) is not subject to tax or filing  requirements  under
the United  States  Code or any state tax  legislation  of the United  States of
America  except in the State of  California;  (ii) is not  required  to make any
filings under the United States Code or any state tax legislation, except in the
State of  California;  (iii) does not have any employees in the United States of
America;  and (iv) does not otherwise  carry on business in a manner which would
make it subject to any requirements of United States laws except in the State of
California  insofar as any labor matters,  ERISA matters or matters  relating to
the United States Code or state tax legislation are concerned.



                                        7




      2.2 Articles of Incorporation and Bylaws.  Glyko has previously  furnished
to BioMarin a complete  and correct copy of its  Articles of  Incorporation  and
Bylaws as amended to date (together, the "Glyko Charter Documents").  Such Glyko
Charter Documents are in full force and effect. Glyko is not in violation of any
of the provisions of the Glyko Charter Documents.

      2.3   Share Capital.


            (a) The authorized  capital of Glyko consists of an unlimited number
of Glyko  Common  Shares.  At the  close of  business  on  February  5, 2002 (i)
34,352,823  Glyko Common  Shares were issued and  outstanding,  all of which are
validly issued, fully paid and nonassessable and (ii) 81,397 Glyko Common Shares
were reserved for issuance upon the exercise of outstanding  options to purchase
Glyko Common  Shares  under the Stock  Option  Plan.  Except as disclosed in the
Glyko Disclosure Letter,  there is no Glyko Contract relating to any Glyko Stock
Option or to the voting of, or restricting any Person from purchasing,  selling,
pledging or otherwise disposing of (or granting any Option or similar right with
respect  to), or  granting  any  Options or other  rights to acquire,  any Glyko
Common  Shares.  Glyko has made  available  to BioMarin an accurate and complete
copy of the Stock Option Plan.  All  outstanding  Glyko Stock  Options have been
issued and granted in compliance  with all applicable  securities laws and other
applicable Legal Requirements.

            (b)  Except  as  disclosed  in the  Glyko  Disclosure  Letter  or as
described  in  the  immediately  preceding  paragraph,  there  are  no  options,
warrants,  conversion  privileges or other rights,  agreements,  arrangements or
commitments  (preemptive,  contingent or otherwise) obligating Glyko to issue or
sell Glyko Common Shares or other securities or securities or obligations of any
kind  convertible  into or  exchangeable  for directly or  indirectly  any Glyko
Common  Shares  or  other  securities,   nor  is  there  outstanding  any  stock
appreciation rights, phantom equity or similar rights, agreements,  arrangements
or  commitments  based upon the book  value,  income or any other  attribute  of
Glyko.  There  are no  outstanding  bonds,  debentures  or  other  evidences  of
indebtedness  of Glyko having the right to vote (or that are  convertible for or
exercisable  into  securities  having the right to vote) with the holders of the
Glyko  Common  Shares  on  any  matter.  There  are no  outstanding  contractual
obligations  of Glyko to  repurchase,  redeem or  otherwise  acquire  any of its
outstanding securities. No holder of securities issued by Glyko has any right to
compel Glyko to register or otherwise qualify such securities for public sale in
Canada or the United States.

            (c) Glyko owns free and clear of all  Encumbrances  (except  for any
restrictions on resale under applicable  securities  laws) 11,367,617  shares of
BioMarin  Common  Stock with good and  marketable  title  thereto.  There are no
subscriptions,  options, calls, warrants,  similar ownership interests,  rights,
commitments   or  agreements   of  any  character   (whether  or  not  currently
exercisable) to which Glyko is a party or by which it is bound  obligating Glyko
to deliver or sell,  or cause to be  delivered  or sold,  any shares of BioMarin
Common  Stock or  obligating  Glyko to  grant,  extend,  or enter  into any such
subscription,  options,  warrant,  call,  right,  commitment or agreement and to
Glyko's Knowledge there is no condition or circumstance that may give rise to or
provide a basis for the  assertion  of a claim by any Person to the effect  that
such Person is  entitled  to acquire or receive  any shares of  BioMarin  Common
Stock held by Glyko.  There is no voting  trust,  proxy,  or other  agreement or
understanding  to which Glyko is a party or by which it is bound with respect to
any share of BioMarin Common Stock.



                                        8




            (d)  Glyko  has  received  a report  dated  January  21,  2002  from
Independent  Investor  Communications  Corporation  (a copy of  which  has  been
provided to BioMarin ) disclosing  that Persons who are resident in the Province
of Ontario do not  beneficially own more than two (2) percent of the outstanding
Glyko Common Shares. To Glyko's Knowledge, there are no Persons who are resident
in the Province of Ontario who  beneficially  own Glyko Common  Shares which are
held by  registered  holders or nominees who are not resident in the Province of
Ontario.

      2.4  Authority;  Binding  Nature of  Agreement.  Glyko  has the  requisite
corporate  power and  authority  to execute and deliver  this  Agreement  and to
perform its obligations  hereunder and,  subject to obtaining the Required Glyko
Shareholder Vote and the approval of the Court to the Arrangement, to consummate
the  transactions  contemplated  hereby.  The  execution  and  delivery  of this
Agreement  by  Glyko  and  the   consummation  by  Glyko  of  the   transactions
contemplated  hereby  have been duly and  validly  authorized  by all  necessary
corporate action on the part of Glyko and no other corporate  proceedings on the
part of Glyko are necessary to authorize  this  Agreement or to  consummate  the
transactions  contemplated  hereby  (other than all  proceedings  related to the
approval and adoption of this Agreement and the  Continuance and the Arrangement
by the Required Glyko  Shareholder Vote and Court approval of the  Arrangement).
This  Agreement  has been duly and validly  executed and delivered by Glyko and,
assuming the due authorization,  execution and delivery by BioMarin and BioMarin
Nova Scotia,  constitutes a legal and binding  obligation of Glyko,  enforceable
against  Glyko in  accordance  with its  terms  subject  to (i) laws of  general
application  relating to bankruptcy,  insolvency and the relief of debtors,  and
(ii) rules of law governing  specific  performance,  injunctive relief and other
equitable remedies.

      2.5   No Conflict; Required Filings and Consents.


            (a)  Neither (1) the  execution,  delivery  or  performance  of this
Agreement or any of the other agreements  referred to in this Agreement to which
Glyko will be a party, nor (2) the consummation of the Arrangement or any of the
other transactions  contemplated by this Agreement, will (with or without notice
or lapse of time):

                   (i) contravene, conflict with or result in a violation of (A)
any of the  provisions of the Glyko  Charter  Documents,  or (B) any  resolution
adopted by the  shareholders,  the Board of  Directors  or any  committee of the
Board of Directors of Glyko;

                   (ii)  contravene,  conflict  with or result in a violation of
any applicable Legal  Requirement or any order,  writ,  injunction,  judgment or
decree to which Glyko, or any of the assets owned or used by Glyko is subject;

                   (iii)other than as  contemplated  under this Agreement or the
Arrangement (including, without limitation, the exercise of Dissenters' Rights),
contravene,  conflict with or result in a violation or breach of, or result in a
default under, any provision of any Glyko Contract, or give any Person the right
to (A) declare a default or exercise any remedy  under any such Glyko  Contract,
(B) accelerate the maturity or  performance of any such Glyko  Contract,  or (C)
cancel, terminate or modify any term of such Glyko Contract;



                                        9




                   (iv) result in the imposition or creation of any  Encumbrance
upon or with respect to any asset owned or used by Glyko;

                   (v) give rise to any right of termination or  acceleration of
indebtedness,  or cause any third  party  indebtedness  to become due before its
stated maturity or cause any available credit to cease to be available; or

                   (vi) result in any payment (including severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any director
or  employee of Glyko  other than as a  shareholder  of Glyko or holder of Glyko
Stock Options under the terms of the Arrangement.

            (b) The execution and delivery of this  Agreement by Glyko does not,
and the performance of this Agreement by Glyko shall not, require any Consent or
any filing with or notification to, any court or Governmental  Body except:  (i)
approval  by  the  Court  of the  Plan  of  Arrangement;  (ii)  the  Appropriate
Regulatory  Approvals;  and (iii) such other  filings,  registrations,  permits,
authorizations, consents or approvals that if not obtained, made or given, could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse  Effect  on  Glyko,  or  prevent  consummation  of the  transactions  or
otherwise prevent Glyko from performing its obligations under this Agreement.

             (c)  Glyko  (i)  does  not  hold  $15  million  or more of  assets,
excluding the shares of BioMarin Common Stock held by Glyko and other investment
assets,  located in the United States and (ii) did not make sales in or into the
United States of $25 million or more in its last completed fiscal year.

      2.6   Compliance; Permits.


            (a) Except as could not  reasonably  be  expected to have a Material
Adverse  Effect  on Glyko,  Glyko is not in  conflict  with,  or in  default  or
violation  of,  (i)  any  Legal   Requirement  or  Government  or   Governmental
Authorization  applicable  to Glyko  or by which  its  properties  are  bound or
affected, or (ii) any Contract,  Governmental  Authorization or other instrument
or obligation to which Glyko is a party or by which Glyko or its  properties are
bound or  affected.  To Glyko's  Knowledge,  no  investigation  or review by any
Governmental  Body  is  pending  or,  threatened  against  Glyko,  nor  has  any
Governmental  Body  indicated to Glyko an  intention to conduct the same.  Since
June 30, 2000, Glyko has not received any notice or other communication from any
Governmental Body or other Person regarding any actual or possible violation of,
or failure to comply with, any Legal Requirement  except as could not reasonably
be expected to have a Material Adverse Effect on Glyko.

            (b) Glyko holds all Governmental  Authorizations necessary to enable
Glyko to  conduct  its  businesses  in the  manner  in which  such  business  is
currently being  conducted,  except where the failure to hold such  Governmental
Authorizations  has not had and  would  not  reasonably  be  expected  to have a
Material Adverse Effect on Glyko. All such Governmental Authorizations are valid
and in full force and  effect.  Glyko is, and since June 30,  2000 has been,  in
substantial  compliance  with the terms and  requirements  of such  Governmental
Authorizations, except where the



                                       10




failure to be in compliance with the terms and requirements of such Governmental
Authorizations  has not had and  could  not  reasonably  be  expected  to have a
Material  Adverse Effect on Glyko.  Since June 30, 2000,  Glyko has not received
any notice or other  communication  from any Governmental Body regarding (i) any
actual  or  possible  violation  of or  failure  to  comply  with  any  term  or
requirement of any material  Governmental  Authorization,  or (ii) any actual or
possible  revocation,  withdrawal,  suspension,  cancellation,   termination  or
modification of any material Governmental Authorization.

      2.7   Canadian Securities Filings; Financial Statements.


            (a) Glyko has made  available  to  BioMarin  (including  through the
SEDAR System of the Canadian securities administrators) an accurate and complete
copy of each Glyko  Regulatory  Report  filed by Glyko since  December 31, 1998,
which  include all the Glyko  Regulatory  Reports  required to be filed by Glyko
since  June 30,  2000 and,  prior to the  Effective  Time,  Glyko will have made
available  to  BioMarin  (including  through  the SEDAR  System of the  Canadian
securities  administrators)  with accurate and complete copies of any additional
Glyko  Regulatory  Reports filed hereafter by Glyko prior to the Effective Time.
Since September 30, 2001, Glyko has not filed any  confidential  material change
report under any Canadian  Securities  Legislation or with any stock exchange or
other  selfregulatory  authority which at the date hereof remains  confidential.
The Glyko Regulatory  Reports filed since June 30, 2000 (including the financial
statements  contained  therein) (i) were  prepared in  accordance  with the then
existing requirements of Canadian Securities Legislation,  the TSE and the CBCA,
as the case may be; and (ii) did not at the time they were filed (and if amended
or superseded by a filing prior to the date of this  Agreement  then on the date
of such filing) contain any untrue statement of a material fact or omit to state
a material fact required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

            (b) Each set of financial statements  (including,  in each case, any
related notes thereto) contained in Glyko Regulatory Reports and Glyko's audited
financial  statements as at and for the year ended December 31, 2000 and Glyko's
unaudited financial statements as at and for the period ended September 30, 2001
(the "Glyko  Interim  Financial  Statements")  comply as to form in all material
respects with the published rules and regulations of the OSC applicable  thereto
and were prepared in accordance with Canadian GAAP applied on a consistent basis
throughout  the periods  involved  (subject,  in the case of  unaudited  interim
financial statements, to the absence of note disclosure and yearend adjustments)
and each fairly  presents the  financial  position of Glyko at the dates thereof
and the results of its operations and cash flows for the periods indicated.

            (c) Glyko is a "reporting issuer" or its equivalent for the purposes
of Canadian  Securities  Legislation  in  Ontario,  British  Columbia,  Alberta,
Manitoba, Saskatchewan, Nova Scotia and New Brunswick and is not in violation of
any requirement under Canadian Securities Legislation.

      2.8 No  Undisclosed  Liabilities.  Glyko  does not  have  any  liabilities
(absolute,  accrued,  contingent  or  otherwise)  of a  nature  required  to  be
disclosed on a balance sheet or in the related notes to the financial statements
prepared in accordance with Canadian GAAP except:  (a) liabilities  provided for
in the Glyko Interim  Financial  Statements;  (b) normal and  recurring  current
liabilities



                                       11




incurred  since  the  date of the  Glyko  Interim  Financial  Statements  in the
ordinary course of business and consistent with past practices;  (c) liabilities
incurred in connection with the  Arrangement;  or (d) as could not reasonably be
expected to have a Material Adverse Effect on Glyko.

      2.9   Absence of Certain Changes or Events.  Since December 31, 2000:


            (a) there has not been any Material Adverse Effect relating to
Glyko;

            (b)  Glyko  has not (i)  declared,  accrued,  set  aside or paid any
dividend  or made any other  distribution  in  respect  of any shares of capital
stock or (ii)  repurchased,  redeemed  or  otherwise  reacquired  any  shares of
capital stock or other securities;

            (c)  Glyko  has not  sold,  issued or  granted,  or  authorized  the
issuance of: (i) any capital  stock or other  security  (except for Glyko Common
Shares  issued upon the valid  exercise of  outstanding  Glyko Stock  Options in
accordance with the terms of the Stock Option Plan); (ii) any Option, warrant or
right to acquire any capital stock or any other security  except for Glyko Stock
Options;  or (iii)  any  instrument  convertible  into or  exchangeable  for any
capital stock or other security;

            (d) there has been no amendment to the Glyko Charter Documents,  and
Glyko  has  not  effected  or  been  a  party  to  any  merger,   consolidation,
amalgamation,   share   exchange,   business   combination,    recapitalization,
reclassification  of shares,  stock split,  division or  subdivision  of shares,
reverse stock split, consolidation of shares or similar transaction;

            (e) Glyko has not received any  Acquisition  Proposal other than the
Acquisition Proposal set forth herein; and

            (f) Glyko has conducted its business only in the ordinary  course of
business   consistent  with  past  practice   (except  in  connection  with  the
transactions contemplated by this Agreement).

      2.10  Legal Proceedings; Orders.


            (a) There is no pending Legal  Proceeding,  and to Glyko's Knowledge
no Person has  threatened  to commence any Legal  Proceeding  (i) that  involves
Glyko or any of the assets  owned or used by Glyko,  except as  disclosed in the
Glyko Disclosure Letter or (ii) that challenges,  or that may have the effect of
preventing,   delaying,  making  illegal  or  otherwise  interfering  with,  the
Arrangement or any of the other transactions  contemplated by this Agreement. To
Glyko's  Knowledge,  no event  has  occurred,  and no  claim,  dispute  or other
condition or  circumstance  exists,  that could  reasonably be expected to, give
rise to or serve as a basis for the commencement of any such Legal Proceeding.

            (b) There is no material order, writ, injunction, judgment or decree
to which  Glyko,  or any of the assets  owned or used by Glyko,  is subject.  To
Glyko's  Knowledge,  no  officer or  director  of Glyko is subject to any order,
writ,  injunction,  judgment or decree that  prohibits  such officer or director
from engaging in or continuing any conduct, activity or practice relating to the
business of Glyko.



                                       12




      2.11 Employee  Benefit Plans.  Other than the Stock Option Plan, Glyko has
no employee benefit,  health,  welfare,  supplemental employment benefit, bonus,
pension,  profit  sharing,  deferred  compensation,  stock  compensation,  stock
purchase,   retirement,   hospitalization  insurance,  medical,  dental,  legal,
disability and similar plans or arrangements  or practices  applicable to any of
Glyko's current or former employees, officers, directors or consultants.

      2.12  Labor  Matters.  There are no  material  controversies,  complaints,
claims,   labor  disputes  or  grievances  pending  or,  to  Glyko's  Knowledge,
threatened,  between Glyko and any of its current or former employees, officers,
directors  or  consultants.  Glyko is not a party to any  collective  bargaining
agreement or other labor union  contract or employee  association  applicable to
Persons employed by Glyko.  Glyko is in material  compliance with all applicable
Legal  Requirements  relating to  employment,  employment  practices,  terms and
conditions of employment and wages.

      2.13  Restrictions  on  Business   Activities.   There  is  no  agreement,
commitment, judgment, injunction, order or decree binding upon Glyko or to which
Glyko is a party which has or could reasonably be expected to have the effect of
prohibiting  or  materially  impairing  any  business  practice  of  Glyko,  any
acquisition  of  property  by  Glyko  or the  conduct  of  business  by Glyko as
currently conducted.

      2.14 Title to Property.  Glyko owns, and has good and marketable title to,
all assets  reflected on the Glyko  Interim  Financial  Statements.  All of said
assets are owned by Glyko free and clear of any Encumbrances, except for (a) any
lien for  current  taxes not yet due and  payable  and (b) in  respect of assets
other than shares of BioMarin Common Stock,  minor liens that have arisen in the
ordinary  course of business.  Glyko is not a party to or otherwise bound by any
lease  pursuant to which Glyko  leases  from  others  material  real or personal
property.

      2.15  Taxes

            (a) Glyko has timely filed all Returns relating to Taxes required to
be  filed by Glyko  with any  Governmental  Body,  and such  Returns  have  been
completed in accordance with Legal Requirements.

            (b) As of the  Effective  Time,  except  as  disclosed  in the Glyko
Disclosure Letter,  Glyko (i) will have paid within the time required by law, or
accrued  all Taxes it is  required  by law to pay or  accrue  and (ii) will have
withheld  from each  payment  made to its past or present  employees,  officers,
directors and independent  contractors,  creditors,  shareholders or other third
parties all Taxes and other material  deductions  required by law to be withheld
and have,  within the time required by law,  paid such  withheld  amounts to the
proper Governmental Bodies.

            (c) Except as disclosed in the Glyko  Disclosure  Letter,  Glyko has
not been  delinquent  in the payment of any Tax nor is there any Tax  deficiency
outstanding,  nor to Glyko's Knowledge,  proposed or assessed against Glyko, nor
has Glyko  executed any waiver of any statute of limitations on or extensions of
the period for the  assessment or  collection  of any Tax.  There are no matters
relating to Taxes under discussion between any Governmental Body and Glyko.



                                       13




            (d) To  Glyko's  Knowledge,  no audit or  other  examination  of any
Return of Glyko is  currently in  progress,  nor has Glyko been  notified of any
request  for such an audit or other  examination,  nor is any  taxing  authority
asserting, or threatening to assert against Glyko any claim for Taxes.

            (e) There  are no  Encumbrances  of any sort on the  assets of Glyko
relating to or  attributable to Taxes except for liens for Taxes not yet due and
payable.

            (f) Glyko is not a party to a tax  sharing or  allocation  agreement
and is not liable for the Taxes of any other Person,  whether as a transferee or
successor or by contract or  otherwise,  nor does Glyko owe any amount under any
such agreement.

            (g) Except as disclosed in the Glyko Disclosure  Letter,  to Glyko's
Knowledge,  no  adjustment  relating  to any  Returns  filed by  Glyko  has been
proposed in writing,  formally or informally, by any Government Body to Glyko or
any Representative.

            (h) Glyko does not have any liability for any unpaid Taxes which has
not been accrued for or reserved on the Glyko balance sheet dated  September 30,
2001  in  accordance  with  Canadian  GAAP,   whether  asserted  or  unasserted,
contingent or otherwise, other than any liability for unpaid Taxes that may have
accrued since September 30, 2001 and that are not yet payable.

            (i)  Since  June 30,  2000,  to  Glyko's  Knowledge,  Glyko  has not
deducted  any amounts in  computing  its income in a taxation  year which may be
included in a subsequent  taxation  year under  Section 78 of the Income Tax Act
(Canada).

            (j) Since June 30, 2000,  to Glyko's  Knowledge,  Glyko has not made
any material Tax election.

      2.16  Environmental  Matters.  All operations of Glyko are being conducted
and, to Glyko's Knowledge have been conducted,  in material  compliance with all
Environmental Laws. Glyko is not subject to:

            (a) any  governmental  or  regulatory  remedial  or control  action,
proceeding,  application,  order or directive  which  relates to  environmental,
health  or  safety  matters  or  any  investigation  or  evaluation   concerning
environmental, health or safety matters; or

            (b) (i) any  demand or notice  with  respect  to the  breach  of, or
liability under, any Environmental Laws and (ii) to Glyko's Knowledge, there are
no facts or  circumstances  that could  reasonably  be expected to result in any
such action,  proceeding,  application,  order, directive,  demand, or notice to
which it would be subject which in any case could reasonably be expected to have
a Material Adverse Effect on Glyko.

      2.17 Brokers. Except for TD Securities Inc., no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Arrangement or any of the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Glyko. Glyko has furnished to BioMarin accurate and complete copies of all
agreements under which any such fees, commissions or other amounts have been
paid or may


                                       14




become  payable  and all  indemnification  and other  agreements  related to the
engagement of TD Securities Inc.

      2.18  Intellectual  Property Glyko does not own and is not licensed to use
any Intellectual Property. There is no Intellectual Property that is required to
be used by Glyko in carrying on its business as presently conducted.

      2.19  Contracts.


            (a) Other than this Agreement,  in connection with the  Arrangement,
or as disclosed in the Glyko Disclosure Letter,  there is no Glyko Contract that
constitutes a Material Contract.

            (b) (i) Glyko has not violated or breached, or committed any default
under,  any Glyko Contract,  except for  violations,  breaches and defaults that
have not had and would not  reasonably  be expected  to have a Material  Adverse
Effect on Glyko;  and, to Glyko's  Knowledge,  no other  Person has  violated or
breached,  or  committed  any  default  under,  any Glyko  Contract,  except for
violations,  breaches or defaults that have not had and would not  reasonably be
expected  to have a  Material  Adverse  Effect on Glyko;  and (ii) other than in
respect of the exercise of Dissenters'  Rights, to Glyko's  Knowledge,  no event
has occurred,  and no  circumstance or condition  exists,  that (with or without
notice or lapse of time) will, or could reasonably be expected to, (A) result in
a violation or breach of any of the provisions of any Glyko  Contract,  (B) give
any Person the right to declare a default or exercise any remedy under any Glyko
Contract,  (C)  give  any  Person  the  right  to  accelerate  the  maturity  or
performance of any Glyko  Contract,  or (D) give any Person the right to cancel,
terminate or modify any Glyko  Contract,  except in each such case for defaults,
acceleration  rights,  termination rights and other rights that have not had and
would not reasonably be expected to have a Material Adverse Effect on Glyko.

      2.20 Insurance.  Other than directors' and officers'  insurance  issued by
American Home Assurance  Company,  Glyko has no material  insurance  policies or
material  self  insurance  programs and  arrangements  relating to the business,
assets  and  operations  of Glyko.  Such  insurance  policy is in full force and
effect.  Since  December  31, 2000,  Glyko has not  received any written  notice
regarding any actual:  (a) cancellation or invalidation of any insurance policy;
(b)  refusal of any  coverage  or  rejection  of any  material  claim  under any
insurance  policy;  or (c) except as disclosed in the Glyko  Disclosure  Letter,
material  adjustment  in the amount of the premiums  payable with respect to any
insurance policy.

      2.21  Opinion of  Financial  Advisor.  The Board of Directors of Glyko has
received the opinion of TD Securities Inc.,  financial  advisor to Glyko,  dated
the  date  of  this  Agreement,  to  the  effect  that,  as of  such  date,  the
consideration  to be received by  shareholders of Glyko under the Arrangement is
fair to the  shareholders  of Glyko from a  financial  point of view (the "Glyko
Opinion").  Glyko will furnish an accurate and complete  copy of said opinion to
BioMarin for informational purposes only after receipt thereof by Glyko.

      2.22  Board  Approval. The Board of  Directors of Glyko (at a meeting duly
called and held) has (a) determined (pursuant to a unanimous vote of all members
of the  Board  of  Directors  of



                                       15




Glyko entitled to vote thereon) that the Arrangement and the other  transactions
contemplated by this Agreement are fair to shareholders of Glyko and in the best
interests of Glyko and (b)  determined  as of the date hereof to recommend  that
the holders of Glyko Common Shares vote in favor of the Arrangement.

      2.23  Vote  Required.  Subject  to the  terms of the  Interim  Order,  the
Required Glyko  Shareholder Vote is the only vote of the holders of any class or
series  of  shares  of  Glyko  necessary  to  approve  the  Arrangement  and the
transactions contemplated thereby.

      2.24 Minute Books. The minute books of Glyko made available to counsel for
BioMarin  are the  complete  minute  books of Glyko and,  to Glyko's  Knowledge,
contain  the  accurate  text of all  resolutions  passed  by  Glyko's  Board  of
Directors  (or  committees  thereof) and  shareholders  either at meetings or by
written consent.

      2.25  Indemnification  Obligations.  There are no actions,  proceedings or
other events pending or, to Glyko's  Knowledge,  threatened against any officer,
director or agent or former officer, director,  employee or agent of Glyko which
would give rise to any  indemnification  obligation  of Glyko to its  current or
former  officers,  directors,  employees  or  agents  under  the  Glyko  Charter
Documents  or any  agreement  between  Glyko  and any of its  current  or former
officers, directors, employees or agents.

      2.26  Change  of  Control  Payments.   Other  than  as  a  result  of  the
acceleration  of vesting of Glyko Stock Options in accordance  with their terms,
there are no amounts  that may  become  payable  in cash or  otherwise  (whether
currently  or in  the  future)  to  current  or  former  consultants,  officers,
directors  or  employees  of  Glyko  as a result  of or in  connection  with the
Arrangement.

      2.27  Interested  Party  Transactions.   Except  in  connection  with  the
transactions  contemplated by this Agreement and the Arrangement,  no officer or
director of Glyko (nor any  ancestor,  sibling,  descendant  or spouse of any of
such Person,  or any trust,  partnership or corporation in which any such Person
has an economic interest), has, directly or indirectly, a beneficial interest in
any Glyko Contract.  Except as disclosed in the Glyko Disclosure  Letter,  there
are no  receivables  of Glyko  owing by any past or present  director,  officer,
employee of, consultant to Glyko (or any ancestor, sibling, descendant or spouse
of any such Persons,  or any trust,  partnership  or corporation in which any of
such Persons has an economic interest),  other than advances in the ordinary and
usual course of business for  reimbursable  business  expenses (as determined in
accordance  with  Glyko's  established  employee   reimbursement   policies  and
consistent with past practice).  None of Glyko's  shareholders has agreed to, or
assumed,  any  obligation  or duty to guaranty or otherwise  assume or incur any
obligation or liability of Glyko.


                                    ARTICLE 3

                 REPRESENTATIONS AND WARRANTIES OF BIOMARIN AND
                              BIOMARIN NOVA SCOTIA

      As of the date  hereof,  BioMarin  and  BioMarin  Nova Scotia  jointly and
severally represent and warrant to Glyko as follows,  subject to such exceptions
as are specifically  disclosed in the



                                       16




disclosure letter prepared by BioMarin and delivered to Glyko,  which disclosure
letter shall provide an exception to or otherwise qualify the representations or
warranties of BioMarin  specifically  referred to in such disclosure letter (the
"BioMarin Disclosure Letter"),  and acknowledges that Glyko is relying upon such
representations  and warranties in connection  with the matters  contemplated by
this Agreement:

      3.1   Organization, Standing and Power.


            (a) Each of  BioMarin  and  BioMarin  Nova  Scotia is a  corporation
validly existing under the laws of its jurisdiction of incorporation and has all
necessary  corporate  power and  authority:  (i) to conduct its  business in the
manner in which its business is currently being  conducted;  (ii) to own and use
its assets in the manner in which its assets are currently  owned and used;  and
(iii) to perform its obligations under all Contracts by which it is bound.

            (b) Each of BioMarin and BioMarin  Nova Scotia is in  possession  of
all Approvals  necessary to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being conducted,
except where the failure to have such Approvals  would not,  individually  or in
the aggregate,  have a Material  Adverse  Effect on either  BioMarin or BioMarin
Nova Scotia.

            (c) Each of BioMarin and BioMarin  Nova Scotia is duly  qualified to
do business as a foreign corporation, and is in good standing, under the laws of
all jurisdictions  where the nature of its business requires such  qualification
and where the failure to be so qualified would have a Material Adverse Effect on
BioMarin.

            (d)  BioMarin  Nova Scotia was formed on February 6, 2002 solely for
the purpose of engaging in the transactions  contemplated hereby, has engaged in
no  other  business   activities  and  has  conducted  its  operations  only  as
contemplated hereby.

      3.2  Articles  of  Incorporation  and  Bylaws.   BioMarin  has  previously
furnished to Glyko a complete and correct copy of its Articles of  Incorporation
and Bylaws as amended to date (together, the "BioMarin Charter Documents"). Such
BioMarin  Charter  Documents  are in full force and  effect.  BioMarin is not in
violation of any of the provisions of the BioMarin Charter Documents.

      3.3 Share  Capital.  The  authorized  capital of BioMarin  consists of (i)
1,000,000  shares of  preferred  stock,  par value  $0.001 per  share;  and (ii)
75,000,000 shares of BioMarin Common Stock. At the close of business on February
5, 2002 (i) 7,765,076 shares of BioMarin Common Stock were reserved for issuance
upon the exercise of outstanding options to purchase BioMarin Common Stock under
all  stock  option  or other  incentive  plans;  and (ii)  52,432,167  shares of
BioMarin  Common  Stock were  issued and  outstanding,  all of which are validly
issued,  fully  paid and  nonassessable  and no shares of  preferred  stock were
issued and outstanding.  As of the date of this Agreement,  the number of shares
of BioMarin  Common Stock which have been  reserved  for issuance in  connection
with options,  warrants,  conversion  privileges  or other  rights,  agreements,
arrangements  or  other  commitments  obligating  BioMarin  to issue or sell any
shares of BioMarin Common Stock or securities or obligations convertible into or
exchangeable  for any  shares of  BioMarin  Common  Stock is as set forth in the
BioMarin Disclosure Letter.



                                       17




      3.4  Subsidiaries.  Each Subsidiary of BioMarin is a corporation,  limited
liability company or unlimited liability company duly incorporated or organized,
and validly  existing under the laws of its  jurisdiction  of  incorporation  or
organization  and has all  necessary  corporate,  limited  liability  company or
unlimited  liability  company,  as the case may be, power and authority:  (a) to
conduct its  business in the manner in which its  business  is  currently  being
conducted;  (b) to own and use its  assets in the manner in which its assets are
currently owned and used; and (c) to perform its obligations under all Contracts
by which it is bound.  Each  Subsidiary  of  BioMarin  is duly  qualified  to do
business  as a foreign  corporation,  unlimited  liability  company  or  limited
liability  company under the laws of all  jurisdictions  where the nature of its
business  requires such  qualification  and where the failure to be so qualified
would have a Material Adverse Effect on BioMarin.

      3.5  Ownership  of  Securities.  Other than as  disclosed  in the BioMarin
Disclosure  Letter,  BioMarin is the  beneficial  owner of all of the issued and
outstanding  shares or other interests of each of its Subsidiaries with good and
marketable  title thereto,  free and clear of all  Encumbrances  (except for any
restrictions on resale under applicable securities laws).

      3.6   No Conflict; Required Filings and Consents

            (a) Neither (1) the execution and delivery of this  Agreement or any
of the other  agreements  referred to in this Agreement by BioMarin and BioMarin
NovaScotia nor (2) the  consummation by BioMarin and BioMarin Nova Scotia of the
Arrangement or any of the transactions contemplated hereby or thereby will (with
or without notice or lapse of time):

                   (i)  contravene,  conflict  with or result  in any  breach or
violation  of  (A)  any  provision  of the  BioMarin  Charter  Documents  or the
certificate  of  incorporation  or bylaws  of  BioMarin  Nova  Scotia or (B) any
resolution adopted by the shareholders,  the Board of Directors or any committee
of the Board of Directors of BioMarin or BioMarin Nova Scotia;

                   (ii)  contravene,  conflict  with or result in a violation of
any applicable Legal  Requirement or any order,  writ,  injunction,  judgment or
decree to which BioMarin or BioMarin Nova Scotia,  or any of the assets owned or
used by BioMarin,  is subject,  except in each case as would not have a Material
Adverse Effect on BioMarin;

                   (iii) contravene, conflict with or result in a violation or
breach of, or result in a default under, any provision of any Contract to which
BioMarin or any of its Subsidiaries is a party or by which BioMarin or any of
its Subsidiaries is otherwise bound, or give any Person the right to (A) declare
a default or exercise any remedy under any such BioMarin Contract, (B)
accelerate the maturity or performance of any such BioMarin Contract, or (C)
cancel, terminate or modify any term of such BioMarin Contract, in each case
which could reasonably be expected to have a Material Adverse Effect on
BioMarin;

                   (iv) result  in  the   imposition   or   creation   of  any
Encumbrance upon or with respect to any asset owned or used by BioMarin; or



                                       18




                   (v) give rise to any right of termination or  acceleration of
indebtedness,  or cause any third  party  indebtedness  to become due before its
stated maturity or cause any available credit to cease to be available;

            (b) The  execution  and  delivery of this  Agreement by BioMarin and
BioMarin Nova Scotia does not, and the performance of this Agreement by BioMarin
and BioMarin  Nova Scotia  shall not,  require any Consent or any filing with or
notification  to, any  Governmental  Body except:  (i)  applicable  filings with
Nasdaq; (ii) the Appropriate Regulatory Approvals; and (iii) such other filings,
negotiations,  permits,  authorizations,  consents  or  approvals  that  if  not
obtained, made or given, could not, individually or in the aggregate, reasonably
be  expected  to  have  a  Material  Adverse  Effect  on  BioMarin,  or  prevent
consummation of the  transactions or otherwise  prevent BioMarin from performing
its obligations under this Agreement.

      3.7  Authority;  Binding  Nature of Agreement.  BioMarin and BioMarin Nova
Scotia  have the  requisite  corporate  power and  authority  to  perform  their
obligations   hereunder  and,   subject  to  obtaining  the  Required   BioMarin
Stockholder  Vote, to  consummate  the  transactions  contemplated  hereby.  The
execution  and delivery of this  Agreement by each of BioMarin and BioMarin Nova
Scotia and the  consummation of the transactions  contemplated  hereby have been
duly and validly  authorized by all necessary action on the part of BioMarin and
BioMarin  Nova Scotia and their  respective  Boards of Directors  and no further
corporate  proceedings  on the part of either of these  companies is required to
authorize this Agreement or the transactions  contemplated hereby other than the
Required  BioMarin  Stockholder  Vote.  This Agreement has been duly and validly
executed and delivered by BioMarin and BioMarin Nova Scotia,  and,  assuming the
due  authorization,  execution  and delivery by Glyko,  constitutes  a legal and
binding  obligation  of BioMarin and BioMarin Nova Scotia,  enforceable  against
each of them in  accordance  with its  terms,  subject  to (i)  laws of  general
application  relating to bankruptcy,  insolvency and the relief of debtors,  and
(ii) rules of law governing  specific  performance,  injunctive relief and other
equitable remedies.

      3.8   SEC Filings; Financial Statements.


            (a)  BioMarin  has  filed  with  the SEC and has  delivered  or made
available  to Glyko  (including  through  the SEC  EDGAR  system)  accurate  and
complete  copies  (excluding  copies of exhibits not  available  through the SEC
EDGAR System) of all documents,  including each report,  registration  statement
and  definitive  proxy  statement  required to be filed by BioMarin with the SEC
since  January 1, 2000 (the  "BioMarin  SEC  Documents").  As of the time it was
filed with the SEC (or, if amended or  superseded  by a filing prior to the date
of this  Agreement,  then on the date of such filing):  (i) each of the BioMarin
SEC Documents complied in all material respects with the applicable requirements
of the United  States  1933 Act or the United  States  1934 Act (as the case may
be);  and (ii) none of the  BioMarin  SEC  Documents  (including  the  financial
statements  contained therein) contained any untrue statement of a material fact
or omitted to state a material fact  required to be stated  therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

            (b) Each set of financial statements  (including,  in each case, any
related  notes  thereto)  contained in BioMarin  SEC  Documents  and  BioMarin's
audited  financial  statements as at and for the periods ended through  December
31, 2000 and BioMarin's  unaudited financial statements



                                       19




as at and for the period ended through September 30, 2001 (the "BioMarin Interim
Financial  Statements")  comply  as to form in all  material  respects  with the
published rules and regulations of the SEC applicable  thereto and were prepared
in  accordance  with U.S.  GAAP applied on a  consistent  basis  throughout  the
periods  involved   (subject,   in  the  case  of  unaudited  interim  financial
statements, to the absence of note disclosure and year end adjustments) and each
fairly presents the financial  position of BioMarin at the dates thereof and the
results of its operations and cash flows for the periods indicated.

       3.9 No  Undisclosed  Liabilities.  Except as  disclosed  in the  BioMarin
Disclosure Letter,  BioMarin does not have any liabilities  (absolute,  accrued,
contingent or otherwise) of a nature required to be disclosed on a balance sheet
or in the related notes to the financial  statements prepared in accordance with
U.S. GAAP except: (a) liabilities provided for in the BioMarin Interim Financial
Statements;   (b)  normal  and  recurring  current  liabilities  incurred  since
September 30, 2001 in the ordinary  course of business and consistent  with past
practices;  (c) liabilities incurred in connection with the Arrangement;  or (d)
as could  not  reasonably  be  expected  to have a  Material  Adverse  Effect on
BioMarin.

      3.10 Valid  Issuance.  The  BioMarin  Common  Stock to be issued under the
Arrangement  will,  when  issued  in  accordance  with  the  provisions  of this
Agreement in all cases, be validly issued,  fully paid and nonassessable and not
subject  to any  preemptive  rights or  similar  contractual  rights  granted by
BioMarin.

      3.11  Listing.  The  BioMarin  Common  Stock is listed on Nasdaq and the
SWX Swiss Exchange.

      3.12  Legal Proceedings; Orders.


            (a)  There  is  no  pending  Legal  Proceeding,  and  to  BioMarin's
Knowledge no Person has  threatened  to commence any Legal  Proceeding  (i) that
involves  BioMarin  or any of the assets  owned or used by  BioMarin,  except as
disclosed in the BioMarin Disclosure Letter or (ii) that challenges, or that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with, the  Arrangement  or any of the other  transactions  contemplated  by this
Agreement. To BioMarin's Knowledge, no event has occurred, and no claim, dispute
or other condition or circumstance exists, that could reasonably be expected to,
give  rise  to or  serve  as a basis  for the  commencement  of any  such  Legal
Proceeding.

            (b) There is no material order, writ, injunction, judgment or decree
to which BioMarin,  or any of the assets owned or used by BioMarin,  is subject.
To BioMarin's  Knowledge,  no officer of BioMarin is subject to any order, writ,
injunction,  judgment or decree that  prohibits such officer from engaging in or
continuing  any  conduct,  activity  or  practice  relating  to the  business of
BioMarin.

       3.13  Absence of Certain  Changes and Events  Except as  disclosed in the
BioMarin  Disclosure Letter and BioMarin SEC Documents filed during the calendar
year 2001,  since  December 31, 2000 BioMarin has conducted its business only in
the ordinary course and there has



                                       20




not been any  event,  change  or  effect  that  has had or could  reasonably  be
expected to have a Material Adverse Effect relating to BioMarin.

       3.14  Environmental   Matters.  All  operations  of  BioMarin  are  being
conducted and, to BioMarin's Knowledge, have been conducted in compliance in all
material respects with all  Environmental  Laws. Except as BioMarin has publicly
disclosed in the BioMarin SEC Documents, BioMarin is not subject to:

            (a) any  governmental  or  regulatory  remedial  or control  action,
proceeding,  application,  order or directive  which  relates to  environmental,
health  or  safety  matters  or  any  investigation  or  evaluation   concerning
environmental, health or safety matters; or

            (b) (i) any  demand or notice  with  respect  to the  breach  of, or
liability under, any Environmental Laws and, (ii) to BioMarin's Knowledge, there
are no facts or circumstances that could reasonably be expected to result in any
such action,  proceeding,  application,  order, directive,  demand, or notice to
which it would be subject which in any case would have a Material Adverse Effect
on BioMarin.

      3.15  Compliance; Permits

            (a) Except as could not  reasonably  be  expected to have a Material
Adverse  Effect on BioMarin,  BioMarin is not in conflict with, or in default or
violation of, (i) any Legal Requirement or Governmental Authorization applicable
to  BioMarin  or by which  its  properties  is bound  or  affected,  or (ii) any
Contract,  to which BioMarin is a party,  except for any conflicts,  defaults or
violations that  (individually  or in the aggregate) could not cause BioMarin to
lose any material  benefit or incur any  material  liability.  Since  January 1,
2000,  BioMarin  has not  received  any notice or other  communication  from any
Governmental Body or other Person regarding any actual or possible violation of,
or failure to comply with, any Legal Requirement  except as could not reasonably
be expected to have a Material Adverse Effect on BioMarin.

            (b) Except as  disclosed in the  BioMarin  SEC  Documents,  BioMarin
holds all  Governmental  Authorizations  necessary to enable BioMarin to conduct
its business in the manner in which such business is currently being  conducted,
except where the failure to hold such  Governmental  Authorizations  has not had
and would not  reasonably  be  expected  to have a  Material  Adverse  Effect on
BioMarin.  All such Governmental  Authorizations are valid and in full force and
effect.  BioMarin is, and at all times has been, in substantial  compliance with
the terms and requirements of such Governmental Authorizations, except where the
failure to be in compliance with the terms and requirements of such Governmental
Authorizations  has not had and  would  not  reasonably  be  expected  to have a
Material  Adverse  Effect on BioMarin.  Since January 1, 2000,  BioMarin has not
received any notice or other  communication from any Governmental Body regarding
(i) any actual or  possible  violation  of or failure to comply with any term or
requirement of any material  Governmental  Authorization,  or (ii) any actual or
possible  revocation,  withdrawal,  suspension,  cancellation,   termination  or
modification of any material Governmental Authorization.



                                       21




      3.16  Taxes.


            (a) BioMarin has timely filed all Returns relating to Taxes required
to be filed by BioMarin with any  Governmental  Body, and such Returns have been
completed in accordance with Legal Requirements.

            (b) BioMarin as of the Effective  Time (i) will have paid within the
time  required  by law,  or accrued  all Taxes it is  required  by law to pay or
accrue and (ii) will have withheld from each payment made to its past or present
employees,   officers,   directors  and  independent   contractors,   creditors,
stockholders  or other  third  parties all Taxes and other  material  deductions
required by law to be withheld and have,  within the time  required by law, paid
such withheld amounts to the proper Governmental Bodies.

            (c) BioMarin has not been  delinquent  in the payment of any Tax nor
is there any Tax deficiency outstanding,  proposed or assessed against BioMarin,
nor has  BioMarin  executed  any  waiver of any  statute  of  limitations  on or
extensions of the period for the  assessment or collection of any Tax. There are
no matters  relating to Taxes under discussion  between any Governmental  Bodies
and BioMarin.

            (d) To BioMarin's  Knowledge,  no audit or other  examination of any
Return of BioMarin is currently in progress,  nor has BioMarin  been notified of
any request for such an audit or other examination,  nor is any taxing authority
asserting or threatening to assert against BioMarin any claim for Taxes.

            (e) BioMarin  does not have any liability for any unpaid Taxes which
has not been  accrued  for or  reserved  on the  BioMarin  balance  sheet  dated
September 30, 2001 in accordance with U.S. GAAP, whether asserted or unasserted,
contingent or otherwise, other than any liability for unpaid Taxes that may have
accrued since September 30, 2001 and that are not yet payable.

            (f) To  BioMarin's  Knowledge,  the  BioMarin  Common  Stock  issued
pursuant to the Arrangement will not constitute a "participating  interest" in a
"foreign  investment entity" (as such terms are defined in the draft legislation
to amend the Income Tax Act (Canada)  released on August 2, 2001) at the time of
issuance. Based on its current business plan, BioMarin expects that the BioMarin
Common Stock  issued  pursuant to the  Arrangement  will not  constitute  in the
future a  "participating  interest"  in a  "foreign  investment  entity"  (as so
defined).

            (g)  Other  than   liabilities   incurred  in  connection  with  the
Arrangement,  BioMarin  Nova Scotia does not have  material  liabilities  of any
kind, including, without limitation, liabilities for Taxes.

            (h) BioMarin Nova Scotia has been and will be at all times, from the
date of its formation  through and including the Effective Date and at all other
relevant times,  treated as a "disregarded  entity" within the meaning of United
States Treasury  Regulation  Section  301.77013(2)(C)  for United States federal
income tax purposes.

      3.17  Contracts.  (a) BioMarin has not violated or breached,  or committed
any default under, any BioMarin  Contract,  except for violations,  breaches and
defaults  that have not had and  would  not



                                       22




reasonably be expected to have a Material  Adverse  Effect on BioMarin;  and, to
BioMarin's Knowledge, no other Person has violated or breached, or committed any
default  under,  any  BioMarin  Contract,  except for  violations,  breaches  or
defaults  that have not had and  would  not  reasonably  be  expected  to have a
Material Adverse Effect on BioMarin;  and (b) to BioMarin's Knowledge,  no event
has occurred,  and no  circumstance or condition  exists,  that (with or without
notice or lapse of time) will, or could reasonably be expected to, (i) result in
a violation or breach of any of the  provisions of any BioMarin  Contract,  (ii)
give any Person the right to declare a default or exercise  any remedy under any
BioMarin Contract, (iii) give any Person the right to accelerate the maturity or
performance  of any  BioMarin  Contract,  or (iv) give any  Person  the right to
cancel, terminate or modify any BioMarin Contract,  except in each such case for
defaults, acceleration rights, termination rights and other rights that have not
had and would not  reasonably be expected to have a Material  Adverse  Effect on
BioMarin.

      3.18 Vote Required.  The Required  BioMarin  Stockholder  Vote is the only
vote of the holders of any class or series of  BioMarin's  shares  necessary  to
approve the transactions contemplated hereby.

      3.19 Brokers.  Except for UBS Warburg LLC, no broker, finder or investment
banker is entitled to any  brokerage,  finder's  or other fee or  commission  in
connection with the Arrangement or any of the other transactions contemplated by
this  Agreement  based  upon  arrangements  made by or on  behalf  of  BioMarin.
BioMarin has furnished to Glyko  accurate and complete  copies of all agreements
under which any such fees,  commissions  or other  amounts have been paid or may
become  payable  and all  indemnification  and other  agreements  related to the
engagement of UBS Warburg LLC.

      3.20 Intellectual Property. Except as disclosed in the BioMarin Disclosure
Letter or the BioMarin SEC Documents:

            (a) To BioMarin's  Knowledge,  BioMarin owns or possesses sufficient
legal  rights  to all  Intellectual  Property  used in  BioMarin's  business  as
currently conducted and material thereto;

            (b) to BioMarin's Knowledge,  the BioMarin Intellectual Property and
the conduct of the business of BioMarin do not infringe upon,  violate or breach
the Intellectual Property rights of any other Person;

            (c)   to BioMarin's Knowledge,  no Person is infringing any of the
BioMarin Intellectual Property; and

            (d)  BioMarin   has  not  received  any  written   notice  or  claim
challenging  BioMarin  respecting  the  validity  of, use of or ownership of the
BioMarin Intellectual Property, and to BioMarin's Knowledge,  there are no facts
upon which such a challenge could be made which could  reasonably be expected to
have a Material Adverse Effect on BioMarin.

      3.21 Opinion of Financial Advisor.  The Board of Directors of BioMarin has
received the opinion of UBS Warburg LLC,  financial  advisor to BioMarin,  dated
the date of this  Agreement,  to the effect that, as of such date,  the Exchange
Ratio  is fair to  BioMarin  from a  financial  point  of  view



                                       23




(the "BioMarin Opinion"). BioMarin will furnish an accurate and complete copy of
said opinion to Glyko solely for informational  purposes after receipt therof by
BioMarin.

      3.22 Board Approval. The Board of Directors of BioMarin (at a meeting duly
called and held) has (a) determined (pursuant to a unanimous vote of all members
of the  Board of  Directors  of  BioMarin  entitled  to vote  thereon)  that the
issuance of BioMarin  Common Stock in connection with the Arrangement is fair to
shareholders  of  BioMarin  and  in the  best  interests  of  BioMarin  and  (b)
determined  as of the date  hereof to  recommend  that the  holders of  BioMarin
Common  Stock  vote in  favor  of the  issuance  of  BioMarin  Common  Stock  in
connection with the Arrangement.


                                    ARTICLE 4

                       CONDUCT PRIOR TO THE EFFECTIVE TIME

      4.1 Access  and  Investigation.  During  the period  from the date of this
Agreement through the Effective Time (the "PreClosing Period"), Glyko shall: (a)
provide BioMarin and BioMarin's  Representatives  with reasonable  access during
normal business hours to Glyko's Representatives,  personnel and to all existing
books,  records,  Tax Returns,  work papers and other  documents and information
relating to Glyko; and (b) provide BioMarin and BioMarin's  Representatives with
such copies of the existing books,  records, Tax Returns,  work papers and other
documents and information relating to Glyko, and with such additional financial,
operating  and other data and  information  regarding  Glyko,  as  BioMarin  may
reasonably request at BioMarin's expense.

      4.2   Operation of Glyko's Business.


            (a)  During the  PreClosing  Period:  (i) Glyko  shall  conduct  its
business and operations (A) in the ordinary  course and in accordance  with past
practices  based on Glyko's  operating  history  since June 30,  2000 and (B) in
compliance with all applicable  Legal  Requirements  and the requirements of all
Glyko  Contracts that  constitute  Material  Contracts (ii) Glyko shall preserve
intact its current  business  organization,  keep  available the services of its
current  officers and other  employees  and maintain its  relations and goodwill
with all Persons having business relationships with Glyko; (iii) Glyko shall (to
the extent  requested  by BioMarin)  cause its  officers to report  regularly to
BioMarin  concerning  the  status of  Glyko's  business;  and (iv)  Glyko  shall
maintain  its books of account  and records in the usual,  regular and  ordinary
manner, in accordance with Canadian GAAP applied on a consistent basis.

            (b) During the PreClosing  Period,  Glyko shall not except: (1) with
the prior written consent of BioMarin not to be unreasonably  withheld; (2) with
respect to any matters  disclosed in the Glyko  Disclosure  Letter;  or (3) with
respect  to  any  matter  expressly   contemplated  by  this  Agreement  or  the
Arrangement:

                  (i) declare, accrue, set aside or pay any dividend or make any
other  distribution  in respect of any shares of capital  stock,  or repurchase,
redeem or otherwise reacquire any shares of capital stock or other securities;



                                       24




                  (ii) sell, issue,  grant or authorize the issuance or grant of
(A) any capital stock or other security,  (B) any Option, call, warrant or right
to  acquire  any  capital  stock  or  other  security,  or  (C)  any  instrument
convertible into or exchangeable for any capital stock or other security (except
that Glyko may issue Glyko Common Shares upon the valid  exercise of Glyko Stock
Options outstanding as of the date of this Agreement);

                  (iii) amend or waive any of its rights  under,  or  accelerate
the vesting under,  any provision of the Stock Option Plan, or otherwise  modify
any of the terms of any  outstanding  Option,  warrant or other  security or any
related Contract other than as contemplated in Section 6.11;

                  (iv)  amend or permit the  adoption  of any  amendment  to the
Glyko  Charter   Documents,   or  effect  or  become  a  party  to  any  merger,
consolidation,    amalgamation,    share   exchange,    business    combination,
recapitalization,   reclassification  of  shares,   stock  split,   division  or
subdivision of shares,  reverse stock split,  consolidation of shares or similar
transaction;

                  (v)   form any Subsidiary or acquire any equity  interest or
other interest in any other Entity;

                  (vi)  make capital expenditures above $25,000 in aggregate;

                  (vii)  enter  into or become  bound  by, or permit  any of the
assets owned or used by it to become bound by, any Material  Contract,  or amend
or  terminate,  or waive or exercise any  material  right or remedy  under,  any
Material Contract, other than in the ordinary course of business consistent with
past practices;

                  (viii) acquire, lease or license any right or other asset from
any other Person or sell or otherwise dispose of, or lease or license, any right
or other asset to any other Person, or waive or relinquish any material right;

                  (ix)  lend money to any Person,  or incur or  guarantee  any
indebtedness;

                  (x) establish,  adopt or amend any employee  benefit plan, pay
any bonus,  make any severance  payment or benefit or make any  profitsharing or
similar  payment to, or increase the amount of the wages,  salary,  commissions,
fringe benefits or other  compensation  or  remuneration  payable to, any of its
directors, officers or employees;

                  (xi)  hire any employee;

                  (xii) change  any  of  its   personnel   policies  or  other
business  policies,  or  any  of  its  methods  of  accounting  or  accounting
practices in any respect;

                  (xiii)      make any Tax election;

                  (xiv) commence or settle any Legal Proceeding;



                                       25




                  (xv) enter  into any  material  transaction  or take any other
material  action outside the ordinary  course of business or  inconsistent  with
past practices based on Glyko's operating history since June 30, 2000; or

                  (xvi) agree or commit to take any of the actions  described in
clauses "(i)" through "(xv)" of this Section 4.2(b).


                                    ARTICLE 5

          GLYKO SHAREHOLDER APPROVAL AND BIOMARIN STOCKHOLDER APPROVAL

      5.1   Joint Proxy Circular; Board Recommendations; Other Filings

            (a)  As  promptly  as  practicable   after  the  execution  of  this
Agreement,  BioMarin  and Glyko will prepare the Joint Proxy  Circular.  Each of
BioMarin  and  Glyko  shall  provide  promptly  to the  other  such  information
concerning  its business and financial  and other affairs as, in the  reasonable
judgment of the requesting party or its counsel,  may be required or appropriate
for inclusion in the Joint Proxy  Circular,  or in any amendments or supplements
thereto,  and to cause its counsel and  auditors to  cooperate  with the other's
counsel and auditors in the preparation of the Joint Proxy Circular.  Glyko will
afford  BioMarin an  opportunity  to review all materials to be submitted to the
Court, and shall make all such changes as are reasonably  requested by BioMarin.
Glyko will respond to any comments of the Court with the assistance of BioMarin,
and will use its  commercially  reasonable  efforts  to have the  Interim  Order
issued as promptly as practicable after such filing.  Each of Glyko and BioMarin
will cause the Joint  Proxy  Circular  to be mailed to its  shareholders  at the
earliest practicable time after the Interim Order has been granted by the Court.
As promptly as practicable  after the date of this Agreement,  each of Glyko and
BioMarin  will  prepare  and file any other  filings  required to be filed by it
pursuant to the requirements of the CBCA, the Interim Order, Canadian Securities
Legislation,  the TSE and any  other  Canadian,  United  States  or  other  laws
relating to the Arrangement and the transactions  contemplated by this Agreement
(the "Other Filings"). Each of Glyko and BioMarin will notify the other promptly
upon the  receipt  of any  comments  from the  Court or its  staff or any  other
government  officials  and of any request by the Court or its staff or any other
government  officials for  amendments or supplements to the Joint Proxy Circular
or any Other Filing or for additional information and will supply the other with
copies of all correspondence  between such party or any of its  Representatives,
on the one hand, and the Court or its staff or any other  government  officials,
on the other hand, with respect to the Joint Proxy Circular,  the Arrangement or
any Other Filing. Each of Glyko and BioMarin will cause all documents that it is
responsible for filing with the Court or other regulatory authorities under this
Section  5.1(a)  to  comply  in  all  material   respects  with  all  applicable
requirements  of law and  the  rules  and  regulations  promulgated  thereunder.
Whenever  any event  occurs which is required to be set forth in an amendment or
supplement to the Joint Proxy  Circular or any Other Filing,  Glyko or BioMarin,
as the case may be,  will  promptly  inform  the  other of such  occurrence  and
cooperate  in  filing  with the  Court  or its  staff  or any  other  government
officials,  and/or mailing to shareholders of Glyko and BioMarin, such amendment
or supplement.



                                       26




            (b) Each of Glyko and  BioMarin  shall  ensure that the  information
supplied by it in writing for  inclusion  in the Joint Proxy  Circular  does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated  therein or  necessary  to make the  statements  contained
therein not misleading in light of the circumstances in which they are made.

            (c) Subject to Section 5.2(c), the Joint Proxy Circular will include
(i)  the   recommendation  of  the  Board  of  Directors  of  Glyko  that  Glyko
shareholders  vote in favor of approval of the Continuance and the  Arrangement,
(ii) the Glyko Opinion referred to in Section 2.21, (iii) the  recommendation of
the Board of Directors of BioMarin that BioMarin's stockholders vote in favor of
the  Arrangement  including,  without  limitation,  the issuance of the BioMarin
Common Stock in connection with the  Arrangement  and (iv) the BioMarin  Opinion
referred to in Section 3.21.

            (d) As soon as  practicable  after the execution of this  Agreement,
BioMarin shall prepare,  with the  cooperation of Glyko,  applications  and will
file such  applications  with the  Commissions  and  exercise  its  commercially
reasonable  efforts to cause the  Commissions to grant the Securities  Exemption
Orders.  BioMarin and Glyko shall each use  commercially  reasonable  efforts to
cause such  applications to comply with the requirements of Canadian  Securities
Legislation.  Each of BioMarin and Glyko agrees to provide promptly to the other
such information  concerning its business and financial and other affairs as, in
the reasonable judgment of the requesting party or its counsel,  may be required
or  appropriate  for  inclusion in such  applications,  or in any  amendments or
supplements thereto, and to cause its counsel and auditors to cooperate with the
other's counsel and auditors in the preparation of such application.  Glyko will
promptly advise  BioMarin,  and BioMarin will promptly advise Glyko, in writing,
if at any time prior to the Effective Time either Glyko or BioMarin shall obtain
knowledge of any facts that might make it necessary or  appropriate  to amend or
supplement  the  applications  in  order  to make the  statements  contained  or
incorporated  by reference  therein not misleading or to comply with  applicable
law.

      5.2   Meeting of Glyko Shareholders.


            (a)  Promptly  after the date  hereof,  Glyko  will take all  action
pursuant to the requirements of the CBCA, the Interim Order, Canadian Securities
Legislation  (and all  other  applicable  securities  laws),  the TSE and  Glyko
Charter  Documents  to  convene  the Glyko  Shareholders  Meeting  to be held as
promptly  as  practicable,  and in any  event  Glyko  will use its  commercially
reasonable  efforts to convene  such meeting not later than May 31, 2002 for the
purpose of voting upon the Continuance and the  Arrangement.  Glyko shall ensure
that the Glyko  Shareholders  Meeting is  called,  noticed,  convened,  held and
conducted,  and  that  all  proxies  solicited  in  connection  with  the  Glyko
Shareholders  Meeting are solicited,  in compliance  with all  applicable  Legal
Requirements (including the Interim Order and Glyko Charter Documents).  Glyko's
obligation  to call,  give notice of,  convene  and hold the Glyko  Shareholders
Meeting in accordance with this Section 5.2(a) shall not be limited or otherwise
affected by the  commencement,  disclosure,  announcement  or  submission of any
Superior  Offer  or  other  Acquisition  Proposal.   Subject  to  any  withheld,
withdrawn, amended or modified recommendation of the Glyko Board of Directors in
accordance  with  Section  5.2(c),  Glyko will use its  commercially  reasonable
efforts to solicit from its shareholders proxies in favor of the approval of the
Arrangement.   Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement,  Glyko may adjourn or postpone the Glyko Shareholders  Meeting to the
extent  necessary to ensure that any  necessary  supplement  or amendment to the
Joint



                                       27




Proxy Circular is provided to Glyko's  shareholders  in advance of a vote on the
Continuance  or the  Arrangement  or,  if as of the time  for  which  the  Glyko
Shareholders  Meeting is  originally  scheduled (as set forth in the Joint Proxy
Circular)  there are  insufficient  Glyko Common Shares  represented  (either in
Person or by proxy) to constitute a quorum  necessary to conduct the business of
the Glyko Shareholders Meeting.

            (b) Subject to Section  5.2(c),  neither the Board of  Directors  of
Glyko nor any committee thereof shall withhold,  withdraw,  amend or modify in a
manner  adverse to  BioMarin,  the  recommendation  of the Board of Directors of
Glyko  that  Glyko's  shareholders  vote in favor of and adopt and  approve  the
Arrangement and the Continuance.

            (c) Nothing in this  Agreement  shall prevent the Board of Directors
of Glyko from:  (i) complying  with Section 99 of the  Securities  Act (Ontario)
with  regard  to any  Acquisition  Transaction  or making  any other  disclosure
required  by  applicable  law  so  long  as  any  such  disclosure  rejects  any
Acquisition  Transaction and reaffirms its  recommendation  of the  transactions
contemplated by this Agreement, or taking any other action to the extent ordered
or  otherwise  mandated  by  any  court  of  competent  jurisdiction;   or  (ii)
withholding,  withdrawing,  amending or modifying its recommendation in favor of
the  Arrangement if: (A) a Superior Offer is made to Glyko and is not withdrawn;
(B) neither Glyko nor any of its Representatives  shall have violated any of the
restrictions  set forth in Section 6.2 (a);  (C) the Board of Directors of Glyko
concludes in good faith, after  consultation with its outside counsel,  that, in
light  of  such  Superior  Offer,  the  withholding,  withdrawal,  amendment  or
modification  of such  recommendation  is  required  in order  for the  Board of
Directors of Glyko to comply with its  fiduciary  obligations  under  applicable
law; and (D) Glyko's Board of Directors  does not withdraw,  amend or modify its
recommendation  in favor of the  Arrangement  for at least 72 hours  after Glyko
provides  BioMarin with the name of the Person making such Superior  Offer and a
copy of such  Superior  Offer.  Nothing  contained in this Section  5.2(c) shall
limit  Glyko's  obligation to call,  give notice of,  convene and hold the Glyko
Shareholders  Meeting  (regardless of whether the recommendation of the Board of
Directors of Glyko shall have been withdrawn, amended or modified).

            (d) During the 72-hour period referred to in Section  5.2(c)(ii)(D),
Glyko  acknowledges  that  BioMarin  shall  have  the  opportunity,  but not the
obligation,  to offer to amend the terms of this Agreement and the  Arrangement.
The Glyko  Board of  Directors  will  review any offer by  BioMarin to amend the
terms of this  Agreement in good faith in order to determine,  in its discretion
in the exercise of its fiduciary obligations,  whether BioMarin's offer to amend
the  terms of this  Agreement  upon  acceptance  by Glyko  would  result  in the
Superior  Offer  continuing  to be a  Superior  Offer.  If the  Glyko  Board  of
Directors  determines  that the Superior  Offer is no longer a Superior Offer in
light of BioMarin's amended offer, the parties hereto will enter into an amended
agreement reflecting BioMarin's amended offer.

       5.3 Meeting of BioMarin  Stockholders.  Promptly  after the date  hereof,
BioMarin  will take all action  pursuant  to the  requirements  of the  Delaware
General  Corporation Law, the United States 1933 Act, the United States 1934 Act
(and all other  applicable  securities  laws),  Nasdaq,  SWX Swiss  Exchange and
BioMarin Charter  Documents to convene the BioMarin  Stockholders  Meeting to be
held  as  promptly  as  practicable,  and in any  event  BioMarin  will  use its
commercially  reasonable  efforts to convene such meeting not later than May 31,
2002 for the purpose of



                                       28




considering the approval of the Arrangement including,  without limitation,  the
issuance of the BioMarin Common Stock in connection with the Arrangement.


                                    ARTICLE 6

                              ADDITIONAL AGREEMENTS

      6.1   Confidentiality; Access to Information.


            (a) The parties  acknowledge that Glyko and BioMarin have previously
executed a Mutual Confidentiality  Agreement,  dated as of January 10, 2002 (the
"Confidentiality  Agreement"),   which  Confidentiality  Agreement  (other  than
Sections 10, 11 and 12 thereof which shall  terminate and be of no further force
or effect) will continue in full force and effect in accordance  with its terms.
In the event of an  inconsistency  in the terms and conditions of this Agreement
and the terms and  conditions of the  Confidentiality  Agreement,  the terms and
conditions of this Agreement shall prevail.

            (b) Each of  Glyko  and  BioMarin  will  afford  the  other  and its
respective auditors,  counsel and other Representatives reasonable access during
normal business hours, upon reasonable notice, to the properties, books, records
and  personnel  of Glyko and BioMarin  during the period prior to the  Effective
Time to obtain all information  concerning the business of Glyko or BioMarin, as
may be reasonably requested.  Notwithstanding the foregoing,  BioMarin shall not
be  obligated  to provide  Glyko and its  Representatives  with any  information
relating  to  product  development  efforts,  clinical  results  and  scientific
information.  No information  or knowledge  obtained by BioMarin or Glyko in any
investigation  pursuant  to this  Section 6.1 will affect or be deemed to modify
any  representation  or  warranty  contained  herein  or the  conditions  to the
obligations of the parties to consummate the Arrangement.

      6.2   No Solicitation.


            (a) Glyko shall not directly or indirectly,  and shall not authorize
or permit any  Representative  of Glyko  directly or indirectly to: (i) solicit,
initiate,  knowingly encourage or induce the making,  submission or announcement
of any Acquisition Proposal; (ii) furnish any confidential information regarding
Glyko  to any  Person  in  connection  with  or in  response  to an  Acquisition
Proposal;  (iii)  engage in  discussions  or  negotiations  with any Person with
respect to any  Acquisition  Proposal;  (iv)  approve,  endorse or recommend any
Acquisition Proposal; or (v) enter into any letter of intent or similar document
or  any  Contract   contemplating  or  otherwise  relating  to  any  Acquisition
Transaction;  provided,  however, that prior to the adoption and approval of the
Arrangement   by  the   Required   Glyko   Shareholder   Vote,   Glyko  and  its
Representatives  shall not be prohibited by (and shall not be considered to have
violated)  this  Section  6.2(a)  from  (A)  furnishing  nonpublic   information
regarding  Glyko to any Person in response to an  Acquisition  Proposal  that is
submitted by such Person (and not withdrawn),  or (B) entering into  discussions
with any Person in response to an Acquisition Proposal that is submitted by such
Person (and not withdrawn), if (1) in the case of clause (A) above, the Board of
Directors of Glyko has first made a good faith determination that the furnishing
of such nonpublic information to such Person is reasonably likely to lead to the



                                       29




submission  of a Superior  Offer from such  Person,  (2)  neither  Glyko nor any
Representative of Glyko shall have violated any of the restrictions set forth in
this  Section  6.2(a),  (3) the Board of  Directors  of Glyko  concludes in good
faith,  based upon the advice of its outside legal counsel,  that the failure to
take such action is inconsistent with its fiduciary obligations under applicable
law, (4) prior to furnishing any such nonpublic information to, or entering into
discussions  with,  such  Person,  Glyko gives  BioMarin  written  notice of the
identity  of  such  Person  and  of  Glyko's   intention  to  furnish  nonpublic
information to, or enter into discussions with, such Person,  and Glyko receives
from such  Person an executed  confidentiality  agreement  containing  customary
limitations  on the  use  and  disclosure  of all  nonpublic  written  and  oral
information  furnished  to such  Person by or on  behalf of Glyko and  following
which,  Glyko keeps  BioMarin  fully  informed with respect to the status of any
such Acquisition Proposal and any modification or proposed modification thereto,
and (5) prior to furnishing any such nonpublic information to such Person, Glyko
furnishes such  nonpublic  information to BioMarin (to the extent such nonpublic
information has not been previously furnished by Glyko to BioMarin).

            (b) Glyko shall  immediately  cease and cause to be  terminated  any
existing  discussions  between (i) Glyko and any of its Representatives and (ii)
any other Person that relate to any Acquisition Proposal.

      6.3 Public  Disclosure.  BioMarin  and Glyko will consult with each other,
and to the  extent  practicable,  agree,  before  issuing  any press  release or
otherwise  making any public  statement with respect to the  Arrangement or this
Agreement and will not issue any such press release  announcing  this  Agreement
and the transactions contemplated hereby or make any such public statement prior
to such consultation,  except as may be required by law or any listing agreement
with a national securities exchange.

      6.4 Reasonable  Efforts.  Upon the terms and subject to the conditions set
forth in this  Agreement,  each of the  parties  agrees to use all  commercially
reasonable  efforts to take,  or cause to be taken,  all actions,  and to do, or
cause to be done,  and to assist and cooperate  with the other parties in doing,
all things necessary,  proper or advisable to consummate and make effective,  in
the  most  expeditious  manner  practicable,   the  Arrangement  and  the  other
transactions  contemplated  by  this  Agreement,  including  using  commercially
reasonable efforts to accomplish the following: (a) the taking of all reasonable
acts  necessary to cause the  conditions  precedent set forth in Article 7 to be
satisfied;  (b) the obtaining of the  Appropriate  Regulatory  Approvals and all
other necessary actions, waivers, consents, approvals, orders and authorizations
from  Governmental  Bodies  and  the  making  of  all  necessary  registrations,
declarations and filings (including registrations, declarations and filings with
Governmental  Bodies,  if any) and the taking of all reasonable  steps as may be
necessary to avoid any suit, claim,  action,  investigation or proceeding by any
Governmental Body; (c) the obtaining of all consents,  approvals or waivers from
third  parties  required as a result of the  transactions  contemplated  in this
Agreement;  (d) the defending of any suits, claims,  actions,  investigations or
proceedings,  whether judicial or administrative,  challenging this Agreement or
the consummation of the transactions  contemplated hereby,  including seeking to
have any stay or  temporary  restraining  order  entered  by any  court or other
Governmental  Body  vacated or  reversed;  (e) the  execution or delivery of any
additional  instruments  reasonably  necessary to  consummate  the  transactions
contemplated by, and to fully carry out the purposes of, this Agreement; and (f)
the



                                       30




preparation of the Joint Proxy Circular and the calling and holding of the Glyko
Shareholders Meeting and the BioMarin Stockholders Meeting.

       6.5  Notification.


            (a) Glyko  shall give  prompt  notice to BioMarin in writing of: (i)
the discovery of any event,  condition,  fact or  circumstance  that occurred or
existed on or prior to the date of this Agreement and that caused or constitutes
a material  inaccuracy in any  representation  or warranty made by Glyko in this
Agreement;  (ii) any event, condition,  fact or circumstance that occurs, arises
or exists after the date of this  Agreement and that would cause or constitute a
material  inaccuracy  in any  representation  or warranty  made by Glyko in this
Agreement if (A) such representation or warranty had been made as of the time of
the  occurrence,  existence  or  discovery  of such  event,  condition,  fact or
circumstance,  or (B) such event, condition,  fact or circumstance had occurred,
arisen or  existed on or prior to the date of this  Agreement;  (iii) any event,
condition,  fact or circumstance  that would, or would be likely to, result in a
material  breach of any covenant or  obligation  of Glyko or that would make the
timely  satisfaction  of any of the conditions set forth in Article 7 impossible
or unlikely or that has had or could  reasonably  be expected to have a Material
Adverse Effect on Glyko;  or (iv) any failure of Glyko to comply with or satisfy
in any material respect any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement,  in each case, such that the conditions
set forth in Section  7.3(a) or 7.3(b) would not be satisfied.  No  notification
given to  BioMarin  pursuant to this  Section  6.5(a)  shall limit or  otherwise
affect any of the representations, warranties, covenants or obligations of Glyko
contained  in this  Agreement  or any right or remedy of BioMarin  with  respect
thereto.

            (b)  BioMarin  shall give prompt  notice to Glyko in writing of: (i)
the discovery of any event,  condition,  fact or  circumstance  that occurred or
existed on or prior to the date of this Agreement and that caused or constitutes
a material  inaccuracy  in any  representation  or warranty  made by BioMarin or
BioMarin  Nova  Scotia in this  Agreement;  (ii) any event,  condition,  fact or
circumstance that occurs,  arises or exists after the date of this Agreement and
that would cause or constitute a material  inaccuracy in any  representation  or
warranty made by BioMarin or BioMarin Nova Scotia in this  Agreement if (A) such
representation  or  warranty  had been  made as of the  time of the  occurrence,
existence or discovery of such event,  condition,  fact or circumstance,  or (B)
such event, condition,  fact or circumstance had occurred,  arisen or existed on
or prior to the date of this  Agreement;  (iii) any  event,  condition,  fact or
circumstance  that would,  or would be likely to, result in a material breach of
any  covenant or  obligation  of BioMarin or BioMarin  Nova Scotia or that would
make the timely  satisfaction  of any of the  conditions  set forth in Article 7
impossible or unlikely or that has had or could reasonably be expected to have a
Material Adverse Effect on BioMarin; or (iv) any failure of BioMarin or BioMarin
Nova Scotia to comply  with or satisfy in any  material  respect  any  covenant,
condition  or  agreement  to be  complied  with or  satisfied  by it under  this
Agreement, in each case, such that the conditions set forth in Section 7.2(a) or
7.2(b) would not be satisfied.  No notification  given to Glyko pursuant to this
Section  6.5(b)  shall  limit or  otherwise  affect any of the  representations,
warranties,  covenants  or  obligations  of BioMarin  and  BioMarin  Nova Scotia
contained  in this  Agreement  or any  right or  remedy  of Glyko  with  respect
thereto.

      6.6  Third  Party  Consents.  As soon as  practicable  following  the date
hereof,  BioMarin and Glyko will each use its commercially reasonable efforts to
obtain  any  consents,  waivers  and



                                       31




approvals  under  its or any of its or its  Subsidiaries'  respective  Contracts
required to be obtained in connection with the  consummation of the transactions
contemplated hereby.

      6.7  Nasdaq  and  SWX  Swiss  Exchange  Listing.  BioMarin  agrees  to use
commercially reasonable efforts to cause the listing on Nasdaq and the SWX Swiss
Exchange of the shares of BioMarin  Common Stock issuable in connection with the
Arrangement  with effect as and from the Effective  Date, in the case of Nasdaq,
and as soon as practicable thereafter, in the case of the SWX Swiss Exchange.

      6.8 Glyko Affiliate  Agreement.  Set forth in Glyko Disclosure Letter is a
list of those  Persons who may be deemed to be, in Glyko's  reasonable  judgment
(which shall be concurred  with by  BioMarin),  affiliates  of Glyko (other than
BioMarin)  within the meaning of Rule 145  promulgated  under the United  States
1933 Act (each,  a "Glyko  Affiliate").  Glyko will provide  BioMarin  with such
information  and  documents  as BioMarin  reasonably  requests  for  purposes of
reviewing such list.  Each Glyko  Affiliate  Agreement will be in full force and
effect as of the Effective Time.  BioMarin will be entitled to place appropriate
legends on the certificates  evidencing any BioMarin Common Stock to be received
by any Glyko  Affiliate  pursuant to the terms of this  Agreement,  and to issue
appropriate  stop transfer  instructions  to the transfer agent for the BioMarin
Common Stock, consistent with the terms of any Glyko Affiliate Agreement.

      6.9  Listing  of  Glyko  Common  Shares.   Glyko  shall  use  commercially
reasonable  efforts to ensure that the Glyko Common  Shares remain listed on the
TSE up until and including the Effective Time.

      6.10  Indemnification of Directors and Officers.


            (a) From and after the Effective Date,  BioMarin will cause Glyko to
fulfill and honor in all respects the  obligations of Glyko (or any  predecessor
corporation) pursuant to (i) each indemnification  agreement currently in effect
between  Glyko and each  person who is or was a director or officer of Glyko (or
any  predecessor  corporation)  prior to the  Effective  Date (the  "Indemnified
Parties")  and  (ii) any  indemnification  provision  under  the  Glyko  Charter
Documents as in effect on the date hereof.  The  Articles of  Incorporation  and
Bylaws  of Glyko  will  contain  provisions  with  respect  to  exculpation  and
indemnification  that are at least as  favorable to the  Indemnified  Parties as
those  contained  in Glyko  Charter  Documents  as in effect on the date hereof,
which  provisions  will not be amended,  repealed or  otherwise  modified  for a
period  of six (6)  years  from the  Effective  Date in any  manner  that  would
adversely  affect  the  rights   thereunder  of  any  Indemnified  Party  or  of
individuals  who,  immediately  prior to the Effective  Date,  were employees or
agents of Glyko, unless such modification is required by law.

            (b) For a period of six (6) years after the Effective Date, BioMarin
will  maintain or cause Glyko to  maintain in effect,  to the extent  available,
directors'  and officers'  liability  insurance  covering  those persons who are
currently covered by Glyko's directors' and officers' liability insurance policy
on terms equivalent in all material  respects to those applicable to the current
directors  and  officers  of Glyko;  provided,  however,  that in no event  will
BioMarin or Glyko be required to expend an annual  premium for such  coverage in
excess of 150  percent of the amount of the last  annual  premium  paid by Glyko
prior to the date of this  Agreement for such  coverage and



                                       32




provided,  further,  that if the  annual  premium  payable  for  such  insurance
coverage  exceeds  such amount,  BioMarin  shall be obligated to obtain a policy
with the greatest  coverage  available for an annual  premium not exceeding such
amount.  The  obligations  of  BioMarin  under  this  Section  6.10 shall not be
terminated or modified in such a manner as to adversely  affect any  Indemnified
Party without the consent of such  Indemnified  Party (it being expressly agreed
that the Indemnified  Parties shall be third party beneficiaries of this Section
6.10).

      6.11  Stock Options.


            (a)  Pursuant to the Plan of  Arrangement,  each Glyko Stock  Option
outstanding  immediately before the Implementation Time shall be exchanged for a
stock option (a  "Replacement  Option") of BioMarin  granted in accordance  with
BioMarin's 1997 Stock Plan, as amended on December 22, 1998 (a copy of which has
been  made  available  for  Glyko's  review).  In  accordance  with  the Plan of
Arrangement:  (i) the number of shares of BioMarin  Common Stock subject to each
Replacement  Option shall be equal to the number of Glyko Common Shares  subject
to the corresponding  Glyko Stock Option immediately prior to the Implementation
Time multiplied by the Exchange Ratio, rounding down to the nearest whole share;
(ii) the per  share  exercise  price  under  each  Replacement  Option  shall be
adjusted by dividing the U.S. Dollar  Equivalent  (calculated on the date of the
Implementation  Time) of the per share  exercise  price under the  corresponding
Glyko Stock  Option by the Exchange  Ratio and rounding up to the nearest  cent;
and (iii) any  restriction  on the exercise of any such Glyko Stock Option shall
continue  in full  force and effect and the term and  vesting  schedule  of such
Glyko Stock Option shall otherwise remain unchanged,  except for such changes as
are triggered by the Plan of Arrangement.

            (b) Glyko  shall take all action  that may be  necessary  (under the
Stock Option Plan and  otherwise) to effectuate  the  provisions of this Section
6.11 and to ensure that,  from and after the  Effective  Time,  holders of Glyko
Stock Options have no rights with respect thereto other than those  specifically
provided in this Section 6.11.

            (c)  The  BioMarin  Common  Stock  issuable  upon  exercise  of  the
Replacement  Options will be registered on a  registration  statement on Form S8
under the United States 1933 Act on the Effective Date.

      6.12  Treatment as a  Reorganization  for U.S. Tax  Purposes.  Bio Marin
represents, warrants and covenants:

      (a)  BioMarin  has not taken (and does not  intend to take),  and does not
intend to cause Glyko to take, any action that reasonably  would be expected (i)
to cause the  Arrangement  to fail to qualify as a  "reorganization"  within the
meaning of Section  368(a) of the United  States  Code or (ii) to cause Glyko to
not be considered a corporation for United States federal income tax purposes.

      (b)  Each  of  BioMarin  and  Glyko  shall  report  the   Arrangement   as
"reorganization"  within the  meaning of 368(a) of the  United  States  Code for
United  States  federal  income  tax  purposes  and comply  with any  applicable
reporting requirements.



                                       33




      (c) Upon  request of any former  holder of Glyko Common  Shares,  BioMarin
shall  provide  (or cause Glyko to  provide)  such  holder with any  information
necessary for such holder to comply with any United  States Tax filings  related
to such holder's ownership or disposition of Glyko Common Shares.

      (d)  After the  Effective  Time,  BioMarin  shall  cause  Glyko to pay any
amounts owed in respect of Dissenting  Shares out of Glyko's own funds. No funds
will be supplied for that purpose (directly or indirectly) by BioMarin, nor will
BioMarin (directly or indirectly) reimburse Glyko for any payments in respect of
such Dissenting Shares.

      (e) The  Arrangement  is not part of the same plan pursuant to which Glyko
transferred  its assets to BioMarin on October 7, 1998 in exchange  for BioMarin
Common Stock and cash.

      (f) Other than payments in respect to  Dissenting  Shares and cash paid in
lieu of fractional  shares,  BioMarin will acquire Glyko Common Shares solely in
exchange for BioMarin voting stock.  For purposes of this Section  6.12(f),  (i)
Glyko Common Shares  redeemed for cash or other  property  furnished by BioMarin
will be considered as acquired by BioMarin; (ii) any payments made to holders of
Glyko Common  Shares in respect of  Dissenting  Shares shall be made solely from
Glyko's own funds; and (iii) the payment of cash in lieu of fractional shares is
solely for the purpose of avoiding the expense and  inconvenience to BioMarin of
issuing  fractional  shares  and does not  represent  separately  bargained  for
consideration.  Further,  for United  States  federal  income tax  purposes,  no
liabilities  of Glyko or the holders of Glyko  Common  Shares will be assumed by
BioMarin.


                                    ARTICLE 7

                          CONDITIONS TO THE ARRANGEMENT

      7.1 Conditions to Obligations of Each Party to Effect the Arrangement. The
respective obligations of each party to this Agreement to effect the Arrangement
shall be  subject to the  satisfaction  at or prior to the  Closing  Date of the
following conditions:

            (a) Glyko Shareholder Approval.  The Continuance and the Arrangement
shall have been duly approved by the Required  Glyko  Shareholder  Vote,  and in
accordance  with any additional  conditions  which may be imposed by the Interim
Order and which are satisfactory to Glyko.

            (b)  BioMarin  Stockholder  Approval.   The  Arrangement  including,
without limitation, the issuance of the BioMarin Common Stock in connection with
the  Arrangement,  shall  have  been  duly  approved  by the  Required  BioMarin
Stockholder Vote.

            (c) Court  Orders.  The Interim Order and the Final Order shall each
have been obtained in form and on terms  satisfactory to BioMarin and Glyko, and
shall not have  been set  aside or  modified  in a manner  unacceptable  to such
parties on appeal or  otherwise;  and upon receipt of the Interim  Order and the
Final Order,  no shares of BioMarin  Common Stock to be issued at the



                                       34




Effective Time will require registration  pursuant to the United States 1933 Act
and such shares will be exempt from registration pursuant to Section 3(a)(10) of
the United States 1933 Act.

            (d) No Order;  HSR Act.  No  Governmental  Body shall have  enacted,
issued,  promulgated,   enforced  or  entered  any  statute,  rule,  regulation,
executive  order,   decree,   injunction  or  other  order  (whether  temporary,
preliminary  or  permanent)  which is in  effect  and  which  has the  effect of
restraining or prohibiting consummation of the transactions contemplated by this
Agreement.  All waiting  periods,  if any, under the HSR Act and the Competition
Act (Canada) relating to the transactions  contemplated hereby will have expired
or terminated  early or all  antitrust  approvals  under  Canadian or other laws
required  to be  obtained  prior  to the  Arrangement  in  connection  with  the
transactions contemplated hereby shall have been obtained.

            (e)   Nasdaq  Listing.  The  BioMarin  Common  Stock  issuable  in
connection  with the  Arrangement  shall have been  authorized  for listing on
Nasdaq.

            (f)   Securities   Exemption  Orders.  The  Securities   Exemption
Orders shall have been obtained and be in form and substance  satisfactory  to
BioMarin and Glyko, acting reasonably.

            (g) No  Governmental  Litigation.  There  shall  not be  pending  or
threatened any Legal Proceeding in which a Governmental Body is or is threatened
to become a party or is otherwise involved, and neither BioMarin nor Glyko shall
have  received  any  communication  from any  Governmental  Body in  which  such
Governmental  Body indicates the possibility of commencing any Legal  Proceeding
or taking any other action:  (i)  challenging or seeking to restrain or prohibit
the   consummation  of  the  Arrangement  or  any  of  the  other   transactions
contemplated by this Agreement;  (ii) relating to the Arrangement and seeking to
obtain from BioMarin or any of its Subsidiaries,  or Glyko, any damages or other
relief that may be material to BioMarin;  (iii)  seeking to prohibit or limit in
any material respect  BioMarin's ability to vote, receive dividends with respect
to or otherwise exercise ownership rights with respect to the stock of Glyko; or
(iv) which would  materially  and  adversely  affect the right of BioMarin or of
Glyko to own the assets or operate the business of Glyko.

            (h) Approvals.  All Appropriate  Regulatory Approvals required under
this Agreement shall have been obtained (all of which shall be in full force and
effect),  except where the failure to obtain any Appropriate Regulatory Approval
would not prevent  consummation of the  Arrangement or otherwise  prevent any of
the parties  hereto from  performing  their  respective  obligations  under this
Agreement, or could not reasonably be expected to have a Material Adverse Effect
on BioMarin or Glyko.

      7.2 Additional Conditions to Obligations of Glyko. The obligation of Glyko
to consummate and effect the Arrangement shall be subject to the satisfaction at
or prior to the Closing Date of each of the following  conditions,  any of which
may be waived in writing, exclusively by Glyko:

            (a) Representations and Warranties. Each representation and warranty
of BioMarin and BioMarin Nova Scotia  contained in this Agreement (i) shall have
been true and correct in all material  respects as of the date of this Agreement
and (ii) shall be true and  correct in all  material  respects  on and as of the
Closing  Date with the same  force and  effect  as if made on the



                                       35




Closing Date except for (A) changes contemplated by this Agreement and (B) those
representations  and  warranties  which address  matters only as of a particular
date (which  representations  shall have been true and  correct  (subject to the
qualifications  as set forth in the preceding  clause (A)) as of such particular
date (it being understood that, for purposes of determining the accuracy of such
representations  and warranties,  any  representations and warranties subject to
"materiality" or "Material Adverse Effect"  qualifiers shall be true and correct
in all  respects,  and any  minor  update  of or  modification  to the  BioMarin
Disclosure  Letter  made or  purported  to have been made after the date of this
Agreement shall be disregarded).

            (b) Agreements and Covenants. BioMarin and BioMarin Nova Scotia each
shall have  performed or complied in all material  respects with all  agreements
and covenants  required by this Agreement to be performed or complied with by it
on or prior to the Closing Date.

            (c)   No Material  Adverse  Change.  There shall have  occurred no
Material  Adverse  Change  with  respect  to  BioMarin  since the date of this
Agreement.

            (d) Certificate. Glyko shall have received a certificate executed on
behalf of BioMarin by its Chief Executive Officer confirming that the conditions
set forth in Sections 7.2(a), (b) and (c) have been duly satisfied.

            (e) Legal  Opinions.  Glyko  shall have  received  (i) an opinion of
United States counsel to BioMarin, in form and substance reasonably satisfactory
to Glyko,  with respect to the matters set forth in Exhibit D to this  Agreement
and (ii) an  opinion of  Canadian  counsel to  BioMarin,  in form and  substance
satisfactory  to Glyko,  with  respect to the  matters set forth in Exhibit E to
this Agreement.

      7.3 Additional Conditions to the Obligations of BioMarin.  The obligations
of BioMarin to  consummate  and effect the  Arrangement  shall be subject to the
satisfaction  at or  prior  to  the  Closing  Date  of  each  of  the  following
conditions, any of which may be waived in writing, exclusively by BioMarin:

            (a) Representations and Warranties. Each representation and warranty
of Glyko contained in this Agreement (i) shall have been true and correct in all
material  respects as of the date of this  Agreement  and (ii) shall be true and
correct in all  material  respects on and as of the  Closing  Date with the same
force and effect as if made on and as of the Closing Date except (A) for changes
contemplated by this Agreement and (B) for those  representations and warranties
which address matters only as of a particular date (which  representations shall
have been true and correct  (subject to the  qualifications  as set forth in the
preceding clause (A)) as of such particular date) (it being understood that, for
purposes of determining the accuracy of such representations and warranties, any
representations  and warranties  subject to "materiality"  or "Material  Adverse
Effect"  qualifiers  shall be true and correct in all material  respects and any
minor update of or modification to the Glyko Disclosure Letter made or purported
to have been made after the date of this Agreement shall be disregarded).



                                       36




            (b) Agreements and Covenants. Glyko shall have performed or complied
in all material  respects with all  agreements  and  covenants  required by this
Agreement  to be  performed  or  complied  with by it at or prior to the Closing
Date.

            (c)  Dissenters.  Holders  of no more  than one (1)  percent  in the
aggregate of the issued and outstanding Glyko Common Shares shall have exercised
(and  not  withdrawn  such  exercise)  Dissenters'  Rights  in  respect  of  the
Arrangement or the Continuance.

            (d)   No Material  Adverse  Change.  There shall have  occurred no
Material  Adverse  Change  with  respect  to  Glyko  since  the  date  of this
Agreement.

            (e)   Certificates   and   Resignations.   BioMarin   shall   have
received:

                  (i) a certificate  executed on behalf of Glyko by its Chairman
confirming  that the conditions set forth in Sections  7.3(a),  (b), (c) and (d)
have been duly satisfied; and

                  (ii)  the  written   resignations   of  all   directors  and
officers of Glyko, effective as of the Effective Time.

            (f) Legal  Opinion.  BioMarin  shall have received (i) an opinion of
United States counsel to Glyko, in form and substance reasonably satisfactory to
BioMarin,  with respect to the matters set forth in Exhibit F hereto and (ii) an
opinion  of  Canadian  counsel  to  Glyko,  in  form  and  substance  reasonably
satisfactory to BioMarin,  with respect to the matters set forth in Exhibit G to
this Agreement.


                                    ARTICLE 8

                        TERMINATION, AMENDMENT AND WAIVER

      8.1 Termination. This Agreement may be terminated at any time prior to the
Effective  Time,   whether  before  or  after  the  requisite  approval  of  the
shareholders of Glyko or stockholders of BioMarin:

            (a)   by mutual written  consent duly  authorized by the Boards of
Directors of BioMarin and Glyko;

            (b) by either  Glyko or BioMarin if the  Arrangement  shall not have
been consummated by June 15, 2002 for any reason;  provided,  however,  that the
right to  terminate  this  Agreement  under  this  Section  8.1(b)  shall not be
available to any party whose action or failure to act has been a principal cause
of or resulted in the failure of the Arrangement to occur on or before such date
and such action or failure to act constitutes a breach of this Agreement;

            (c) by either  Glyko or BioMarin if a  Governmental  Body shall have
issued an order,  decree or ruling or taken any other action, in any case having
the effect of permanently  restraining,  enjoining or otherwise  prohibiting the
Arrangement,   which  order,  decree,  ruling  or  other  action  is  final  and
nonappealable;



                                       37




            (d) by  either  BioMarin  or  Glyko  if (i) the  Glyko  Shareholders
Meeting  (including any adjournments or  postponements  thereof) shall have been
held and completed and Glyko's  shareholders  shall have taken a final vote on a
proposal to approve the  Continuance  and the  Arrangement,  and (ii) either the
Continuance or the  Arrangement  shall not have been approved at such meeting by
the Required  Glyko  Shareholder  Vote (and shall not have been  approved at any
adjournment or postponement thereof);

            (e) by either  BioMarin  or Glyko if (i) the  BioMarin  Stockholders
Meeting  (including any adjournments or  postponements  thereof) shall have been
held and completed and stockholders of BioMarin shall have taken a final vote on
a  proposal  to approve  the  Arrangement  including,  without  limitation,  the
issuance of BioMarin Common Stock in connection with the  Arrangement,  and (ii)
such Arrangement including,  without limitation, the issuance of BioMarin Common
Stock,  shall not have been  approved at such meeting by the  Required  BioMarin
Stockholder  Vote (and  shall  not have  been  approved  at any  adjournment  or
postponement thereof);

            (f)  by  Glyko,  upon  a  material  breach  of  any  representation,
warranty,  covenant or agreement on the part of BioMarin or BioMarin Nova Scotia
set forth in this Agreement,  or if any material  representation  or warranty of
BioMarin or BioMarin Nova Scotia shall have become  untrue,  in either case such
that the  conditions  set forth in Section 7.2(a) or Section 7.2(b) would not be
satisfied  as of the  time  of  such  breach  or as of the  time  such  material
representation  or warranty  shall have become  untrue,  provided,  that if such
inaccuracy in BioMarin's representations and warranties or breach by BioMarin is
curable by BioMarin through the exercise of its commercially reasonable efforts,
then Glyko may not terminate this Agreement under this Section 8.1(f) for thirty
(30) days after  delivery  of written  notice  from  Glyko to  BioMarin  of such
breach,  provided BioMarin continues to exercise commercially reasonable efforts
to cure such  breach  (it being  understood  that Glyko may not  terminate  this
Agreement  pursuant to this Section 8.1(f) if it shall have materially  breached
this Agreement or if such breach by BioMarin is cured during such thirty (30)day
period);

            (g) by  BioMarin,  upon a  material  breach  of any  representation,
warranty,  covenant  or  agreement  on the  part  of  Glyko  set  forth  in this
Agreement,  or if any  material  representation  or warranty of Glyko shall have
become  untrue,  in either  case such that the  conditions  set forth in Section
7.3(a) or Section 7.3(b) would not be satisfied as of the time of such breach or
as of the time such  material  representation  or  warranty  shall  have  become
untrue,  provided,  that if  such  inaccuracy  in  Glyko's  representations  and
warranties  or breach by Glyko is curable by Glyko  through the  exercise of its
commercially  reasonable efforts, then BioMarin may not terminate this Agreement
under this Section  8.1(g) for thirty (30) days after delivery of written notice
from  BioMarin to Glyko of such  breach,  provided  Glyko  continues to exercise
commercially  reasonable  efforts to cure such breach (it being  understood that
BioMarin may not terminate this Agreement  pursuant to this Section 8.1(g) if it
shall have  materially  breached  this  Agreement  or if such breach by Glyko is
cured during such 30day period); or

            (h)   by BioMarin,  upon a breach of the provisions of Section 6.2
of this Agreement.

      8.2 Notice of Termination;  Effect of Termination. Any termination of this
Agreement  under  Section  8.1 will be  effective  immediately  upon (or, if the
termination  is  pursuant  to



                                       38




Section 8.1(f) or Section 8.1(g) and the proviso  therein is applicable,  thirty
(30) days after) the delivery of written notice of the terminating  party to the
other  parties  hereto.  In the event of the  termination  of this  Agreement as
provided in Section 8.1, this  Agreement  shall be of no further force or effect
and no party shall have any further liability hereunder, except (i) as set forth
in this Section 8.2,  Section 8.3 and Article 9, each of which shall survive the
termination of this  Agreement,  and (ii) nothing herein shall relieve any party
from  liability for any  intentional  or willful  breach of this  Agreement.  No
termination  of this  Agreement  shall  affect the  obligations  of the  parties
contained in the Confidentiality Agreement, all of which obligations (other than
as set forth in Section  6.1(a)) shall survive  termination of this Agreement in
accordance with their terms.

      8.3   Fees and Expenses.


            (a)  General.  Except as set forth in this Section 8.3, all fees and
expenses  incurred  in  connection  with  this  Agreement  and the  transactions
contemplated  hereby shall be paid by the party incurring such expenses  whether
or not the Arrangement is consummated.

            (b)   Glyko Payments.


                  (i)  Glyko  shall pay to  BioMarin  in  immediately  available
funds, within two (2) business days after written demand by BioMarin,  an amount
equal to $1,000,000 (the "Termination Fee") if: (A) this Agreement is terminated
by BioMarin  pursuant to Section 8.1(g);  or (B) this Agreement is terminated by
Glyko or BioMarin  pursuant to Section  8.1(d) and (1) an  Acquisition  Proposal
shall have been  publicly  announced or otherwise  communicated  to the Board of
Directors of Glyko or shareholders of Glyko after the date of this Agreement and
prior to the Glyko  Shareholders  Meeting and (2) Glyko enters into a definitive
agreement  with  respect  to  an  Acquisition  Transaction,  or  an  Acquisition
Transaction  is otherwise  consummated  (provided  that for the purposes of this
Section 8.3 (b)(i)(B) the term "Acquisition  Transaction" shall have the meaning
ascribed to that term in Section  10.1,  except that  references to "20 percent"
therein shall be deemed to be references to "50 percent"), after the date hereof
and prior to the  expiration  of six (6) months  following  termination  of this
Agreement.

                  (ii) Glyko acknowledges that the agreements  contained in this
Section  8.3(b) are an integral part of the  transactions  contemplated  by this
Agreement,  and that,  without these  agreements,  BioMarin would not enter into
this  Agreement;  accordingly,  if Glyko  fails to pay in a  timely  manner  the
amounts  due  pursuant  to this  Section  8.3(b)  and,  in order to obtain  such
payment, BioMarin makes a claim that results in a judgment against Glyko for the
amounts  set forth in this  Section  8.3(b),  Glyko  shall pay to  BioMarin  its
reasonable  costs  and  expenses  (including   reasonable  attorneys'  fees  and
expenses) in  connection  with such suit,  together with interest on the amounts
set forth in this Section 8.3(b) at the prime rate of UBS  PaineWebber in effect
on the date such payment was required to be made.  Payment of the fees described
in this Section 8.3(b) shall not be in lieu of damages  incurred in the event of
breach of this Agreement.

            (c)   BioMarin Payments.



                   (i)  BioMarin  shall  pay to Glyko in  immediately  available
funds,  within  two (2)  business  days  after  written  demand  by  Glyko,  the
Termination Fee, if this Agreement is


                                       39




terminated by Glyko pursuant to Section 8.1(f). BioMarin may pay the Termination
Fee to Glyko  (without  demand  having been made by Glyko prior  thereto) on not
less than 10 business days' notice to Glyko.

                  (ii) BioMarin  acknowledges  that the agreements  contained in
this Section  8.3(c) are an integral part of the  transactions  contemplated  by
this Agreement,  and that, without these agreements,  Glyko would not enter into
this  Agreement;  accordingly,  if BioMarin  fails to pay in a timely manner the
amounts  due  pursuant  to this  Section  8.3(c)  and,  in order to obtain  such
payment, Glyko makes a claim that results in a judgment against BioMarin for the
amounts  set  forth in this  Section  8.3(c),  BioMarin  shall  pay to Glyko its
reasonable  costs  and  expenses  (including   reasonable  attorneys'  fees  and
expenses) in  connection  with such suit,  together with interest on the amounts
set forth in this Section 8.3(c) at the prime rate of UBS  PaineWebber in effect
on the date such payment was required to be made.  Payment of the fees described
in this Section 8.3(c) shall not be in lieu of damages  incurred in the event of
breach of this Agreement.

      8.4  Amendment.  This  Agreement  may be amended  with the approval of the
respective Boards of Directors of Glyko and BioMarin at any time (whether before
or after the  approval of the  Arrangement  by the  shareholders  of BioMarin or
Glyko);  provided,  however,  that after any such approval of the Arrangement by
the  shareholders  of BioMarin or Glyko, no amendment shall be made which by law
requires  further approval of the shareholders of BioMarin or Glyko, as the case
may be, without such further approval.  This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.

      8.5 Extension;  Waiver. At any time prior to the Effective Time, any party
hereto  may,  to the  extent  legally  permitted:  (i)  extend  the time for the
performance of any of the obligations or other acts of the other parties hereto;
(ii) waive any inaccuracies in the  representations  and warranties made to such
party contained herein or in any document  delivered  pursuant hereto; and (iii)
waive  compliance  with any of the  agreements or conditions  for the benefit of
such party contained herein.  Any agreement on the part of a party hereto to any
such  extension or waiver shall be valid only if set forth in an  instrument  in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.

                                    ARTICLE 9

                               GENERAL PROVISIONS

      9.1 NonSurvival of Representations and Warranties. The representations and
warranties  of Glyko,  BioMarin  and  BioMarin  Nova  Scotia  contained  in this
Agreement  shall terminate at the Effective Time, and only the covenants that by
their terms survive the Effective Time shall survive the Effective Time.

      9.2 Notices.  All notices and other  communications  hereunder shall be in
writing  and shall be deemed  given if  delivered  Personally  or by  commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following  addresses or telecopy  numbers (or at such other  address or telecopy
numbers for a party as shall be specified by like notice):



                                       40




            (a)   if to BioMarin to:

                  BioMarin Pharmaceutical Inc.
                  371 Bel Marin Keys Boulevard
                  Suite 210
                  Novato, California 94949

                  Attention:        Fredric Price
                                    Chairman and Chief Executive Officer

                  Telephone No.:    (415) 8846715
                  Telecopy No.:     (415) 3827889

                  with a copy to:

                  Cassels Brock & Blackwell LLP
                  Scotia Plaza, Suite 2100
                  40 King Street West
                  Toronto, Ontario M5H 3C2

                  Attention:        Mark Bennett, Esq.

                  Telephone No.:    (416) 8695407
                  Telecopy No.:     (416) 3506933

                  and to:

                      Paul, Hastings, Janofsky & Walker LLP
                  555 South Flower Street
                  23rd Floor
                  Los Angeles, California  900712371

                  Attention:        Siobhan Burke, Esq.

                  Telephone No.:    (213) 6836282
                  Telecopy No.:     (213) 6270705



                                       41




            (b)   if to Glyko, to:

                  Glyko Biomedical Ltd.
                  199 Bay Street
                  Box 25, Commerce Court West
                  Toronto, Ontario M5L 1A9

                  Attention:        Joerg Gruber
                                    Chairman

                  Telephone No.:    +44 (20) 73493101
                  Telecopy No.:     +44 (20) 73493140

                  with a copy to:

                  Blake, Cassels & Graydon LLP
                  199 Bay Street
                  Box 25, Commerce Court West
                  Toronto, Ontario M5L 1A9

                  Attention:        John A. Kolada, Esq.

                  Telephone No.:    (416) 8634171
                  Facsimile No.:    (416) 8632653

      9.3  Interpretation.  When a  reference  is  made  in  this  Agreement  to
Exhibits,  such  reference  shall  be to an  Exhibit  to this  Agreement  unless
otherwise  indicated.  When a reference  is made in this  Agreement to Sections,
such  reference  shall  be to a  Section  of this  Agreement.  Unless  otherwise
indicated the words "include", "includes" and "including" when used herein shall
be deemed in each case to be followed  by the words  "without  limitation".  The
table of contents and headings  contained in this  Agreement  are for  reference
purposes only and shall not affect in any way the meaning or  interpretation  of
this  Agreement.  When  reference is made herein to "the business of" an Entity,
such  reference  shall be deemed to  include  the  business  of all  direct  and
indirect Subsidiaries of such Entity. Reference to the Subsidiaries of an Entity
shall be deemed to include all direct and indirect Subsidiaries of such Entity.

      9.4  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and  delivered  to the other  party,  it being  understood  that all
parties need not sign the same counterpart.

      9.5 Entire Agreement;  Third Party  Beneficiaries.  This Agreement and the
documents  and  instruments  and other  agreements  among the parties  hereto as
contemplated by or referred to herein, including Glyko Disclosure Letter and the
BioMarin Disclosure Letter (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings,  both  written and oral,  among the parties  with respect to the
subject matter hereof,  it being understood that the  Confidentiality  Agreement
shall  continue in full force and



                                       42




effect until the Closing and shall  survive any  termination  of this  Agreement
(other than as set forth in Section 6.1(a));  and (b) are not intended to confer
upon any other Person any rights or remedies  hereunder except as provided under
Section 6.10.

      9.6  Severability.  In the event that any provision of this Agreement,  or
the  application  thereof,  becomes  or is  declared  by a  court  of  competent
jurisdiction  to be  illegal,  void  or  unenforceable,  the  remainder  of this
Agreement  will  continue in full force and effect and the  application  of such
provision to other Persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such  void or  unenforceable  provision  of  this  Agreement  with a  valid  and
enforceable  provision that will achieve, to the extent possible,  the economic,
business and other purposes of such void or unenforceable provision.

      9.7 Governing Law. This  Agreement  shall be governed by, and construed in
accordance with, the laws of the state of Delaware,  regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
In any action  between the parties  arising out of or relating to this Agreement
or any of the  transactions  contemplated  by this  Agreement:  (a)  each of the
parties irrevocably and unconditionally consents and submits to the nonexclusive
jurisdiction  and venue of the state and federal  courts located in the state of
California;  (b) if any such action is commenced in a state court, then, subject
to  applicable  law, no party shall  object to the removal of such action to any
federal court located in the Northern  District of California;  (c); each of the
parties  hereby waives,  and agrees not to assert in any such action,  any claim
that it is not personally  subject to the  jurisdiction of such court,  that the
action is  brought in an  inconvenient  forum or that the venue of the action is
improper; and (d) each of the parties irrevocably consents to service of process
by first class certified mail, return receipt requested, postage prepaid, to the
address at which such party is to receive notice in accordance with Section 9.2.

      9.8 Rules of  Construction.  The parties  hereto agree that they have been
represented  by counsel during the  negotiation  and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction  providing that  ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.

      9.9  Assignment.  This  Agreement  shall be  binding  upon,  and  shall be
enforceable  by and inure solely to the benefit of, the parties hereto and their
respective  successors  and assigns;  provided,  however,  that (i) neither this
Agreement nor any of Glyko's  rights  hereunder may be assigned by Glyko without
the prior written consent of BioMarin and (ii) neither this Agreement nor any of
BioMarin's  or  BioMarin  Nova  Scotia's  rights  hereunder  may be  assigned by
BioMarin or  BioMarin  Nova Scotia  without the prior  written  consent of Glyko
(other than an  assignment  to a direct or indirect  whollyowned  Subsidiary  of
BioMarin provided that such assignment shall not release BioMarin from liability
hereunder), and any attempted assignment of this Agreement or any of such rights
by Glyko or BioMarin and BioMarin Nova Scotia,  as the case may be, without such
consent or except as provided for herein shall be void and of no effect.

      9.10  WAIVER OF JURY TRIAL.  EACH OF  BIOMARIN,  BIOMARIN  NOVA SCOTIA AND
GLYKO  HEREBY  IRREVOCABLY  WAIVES  ALL  RIGHT TO  TRIAL BY JURY IN ANY  ACTION,
PROCEEDING  OR  COUNTERCLAIM  (WHETHER  BASED ON  CONTRACT,  TORT



                                       43




OR  OTHERWISE)  ARISING OUT OF OR RELATING TO THIS  AGREEMENT  OR THE ACTIONS OF
BIOMARIN,  BIOMARIN  NOVA SCOTIA AND GLYKO IN THE  NEGOTIATION,  ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.

      9.11  Currency.  Unless otherwise specified,  all sums of money referred
to in this Agreement are expressed in U.S. currency.

      9.12  Glyko  Disclosure  Letter.  The  Glyko  Disclosure  Letter  shall be
arranged in separate parts  corresponding to the numbered and lettered  sections
contained  in Article 2 and Section 6.8,  and the  information  disclosed in any
numbered or lettered  part shall be deemed to relate to and to qualify  only the
particular representation or warranty set forth in the corresponding numbered or
lettered section in Article 2 and Section 6.8, and shall not be deemed to relate
to or to qualify any other representation or warranty.

      9.13 BioMarin  Disclosure Letter. The BioMarin  Disclosure Letter shall be
arranged in separate parts  corresponding to the numbered and lettered  sections
contained  in  Article  3, and the  information  disclosed  in any  numbered  or
lettered  part shall be deemed to relate to and to qualify  only the  particular
representation or warranty set forth in the  corresponding  numbered or lettered
section in  Article  3, and shall not be deemed to relate to or to  qualify  any
other representation or warranty.

      9.14  Attorneys'  Fees.  In any action at law or suit in equity to enforce
this  Agreement  or the  rights of any of the  parties  hereunder  commenced  or
initiated after the Effective Date, the prevailing  party in such action or suit
shall be entitled to receive a reasonable  sum for its  attorneys'  fees and all
other reasonable costs and expenses incurred in such action or suit.


                                   ARTICLE 10

                             ADDITIONAL DEFINITIONS

      10.1  Additional Definitions.


            In this  Agreement,  unless there is something in the subject matter
or context inconsistent therewith,  the following terms shall have the following
meanings respectively:

      "Acquisition Proposal" means any offer, proposal or inquiry (other than an
offer or  proposal  by  BioMarin)  contemplating  or  otherwise  relating to any
Acquisition Transaction.

      "Acquisition  Transaction" means any transaction or series of transactions
involving:

            (a)  any  merger,  consolidation,   amalgamation,   share  exchange,
business combination, issuance of securities,  acquisition of securities, tender
offer,  exchange  offer or other  similar  transaction  (i) in which  Glyko is a
constituent  company,  or (ii) in which a Person or "group"  (as  defined in the
United States 1934 Act) of Persons directly or indirectly acquires beneficial or
record ownership of securities representing,  or exchangeable for or convertible
into, more than 20 percent of the outstanding  securities of any class of voting
securities of Glyko;



                                       44




            (b)   any sale, lease, exchange,  transfer,  license,  acquisition
or disposition of more than 20 percent of the assets of Glyko; or

            (c)   any liquidation or dissolution of Glyko.

      "Agreement" means this Acquisition Agreement for a Plan of Arrangement, as
it may be amended from time to time.

      "Appropriate   Regulatory  Approvals"  means  those  sanctions,   rulings,
consents, orders, exemptions,  permits and other approvals (including the lapse,
without  objection,  of a  prescribed  time under a statute or  regulation  that
states  that a  transaction  may be  implemented  if a  prescribed  time  lapses
following the giving of notice without an objection  being made) of Governmental
Bodies,  regulatory  agencies  or  selfregulatory  organizations,  as set out in
Exhibit C to this Agreement.

      "Approvals" means franchises, grants,  authorizations,  licenses, permits,
easements, consents, certificates, approvals and orders.

      "Arrangement" means a plan of arrangement under Section 192 of the CBCA on
the terms and subject to the  conditions  set out in this Agreement and the Plan
of  Arrangement,  subject  to any  amendments  or  variations  thereto  made  in
accordance with the provisions of this Agreement or made at the direction of the
Court in the Final Order.

      "Arrangement  Resolution"  means the special  resolution of the holders of
Glyko Common Shares  approving the Arrangement to be  substantially  in the form
and content of Exhibit A annexed hereto.

      "Articles of  Arrangement"  means the articles of  arrangement of Glyko in
respect of the  Arrangement,  required by the CBCA to be filed with the Director
after the Final Order is made.

      "BioMarin  Common  Stock" means the common  stock of  BioMarin,  par value
$0.001 per share.

      "BioMarin  Contract"  means any  Contract to which  BioMarin or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries is bound.

      "BioMarin  Intellectual Property" means the Intellectual Property owned by
BioMarin  used in  BioMarin's  business  as  currently  conducted  and  material
thereto.

      "BioMarin's Knowledge" means the best of the knowledge of BioMarin,  based
upon the knowledge of any of the  directors  and officers of BioMarin  after due
and reasonable inquiry of such matter.

       "BioMarin  Stockholders Meeting" means the meeting of the stockholders of
BioMarin to  consider  and approve  the  issuance  of BioMarin  Common  Stock in
connection  with the  Arrangement  and such other matters as may be necessary in
connection with the other transactions contemplated by this Agreement.



                                       45




      "Board of  Directors"  when used with respect to an Entity means the board
of directors of such Entity.

      "Canadian GAAP" means those accounting  principles generally recognized as
being accepted in Canada from time to time as set out in the handbook  published
by the Canadian Institute of Chartered Accountants.

      "Canadian  Securities  Legislation" means the statutory securities laws in
each  province of Canada  applicable  to Glyko,  together  with the  regulations
promulgated   thereunder,   together  with  the  rules,  policies,   orders  and
requirements of the securities regulatory authorities in each such province.

      "CBCA" means the Canada Business Corporations Act, as amended.

      "Commissions"  means the securities  commissions which administer Canadian
Securities Legislation.

      "Consent" means any approval, consent,  ratification,  permission, waiver,
permit or authorization (including any Governmental Authorization).

      "Continuance" means the discontinuance of Glyko under the CBCA pursuant to
Section 188 of the CBCA and the  continuance  of Glyko under the BC Act pursuant
to Section 36 of the BC Act.

      "Continuance  Resolution"  means the special  resolution of the holders of
Glyko  Common  Shares   approving  the   Continuance  in  accordance   with  the
requirements of the CBCA.

      "Contract"  means  any  written,   oral  or  other  agreement,   contract,
subcontract, lease, understanding,  instrument, note, option, warranty, purchase
order,  license,  sublicense,  insurance  policy,  benefit plan or commitment or
undertaking of any nature.

      "Court" means the Ontario Superior Court of Justice.

      "Director" means the Director or other duly authorized  person  performing
the duties as Director under the CBCA.

      "Dissenters' Rights" has the meaning ascribed thereto in section 1.6.

      "Dissenting Shares" has the meaning ascribed thereto in section 1.6.

      "Effective Date" means the date shown on the certificate of arrangement to
be issued by the Director under the CBCA giving effect to the Arrangement.

      "Effective  Time"  has  the  meaning  ascribed  thereto  in  the  Plan  of
Arrangement.

      "Encumbrance"  means any lien, pledge,  hypothecation,  charge,  mortgage,
security interest, encumbrance, claim, infringement, interference, option, right
of first refusal,  preemptive right,  community property interest or restriction
of any nature  (including  any  restriction  on the voting of any security,  any
restriction on the transfer of any security or other asset,  any  restriction on
the



                                       46




receipt of any income derived from any asset,  any restriction on the use of any
asset and any restriction on the  possession,  exercise or transfer of any other
attribute of ownership of any asset).

      "Entity"  means any  corporation  (including  any nonprofit  corporation),
general partnership,  limited partnership,  limited liability partnership, joint
venture,  estate,  trust,  company  (including  any  company  limited by shares,
limited  liability  company  or joint  stock  company),  firm,  society or other
enterprise, association, organization or other entity.

      "Environmental  Laws" means all applicable Legal Requirements  relating to
the  protection  of the  environment,  including  any  such  environmental  laws
relating to a discharge,  spill,  emission or other  release,  whether actual or
potential,  of any contaminant (as defined in the  Environmental  Protection Act
(Ontario)) and any other  applicable  legislation,  regulation or guideline,  as
well  as  any  environmental  order,  directive  or  decision  rendered  by  any
Governmental Body.

      "Exchange  Ratio" means the portion of a share of BioMarin Common Stock to
be issued in exchange  for each Glyko  Common  Share  being equal to  11,367,617
divided  by the  total  number  of  outstanding  Glyko  Common  Shares as of the
Effective Time.

      "Final Order" means the final order of the Court approving the Arrangement
as such  order may be amended  at any time  prior to the  Effective  Date or, if
appealed, then, unless such appeal is withdrawn or denied, as affirmed.

      "Glyko  Common  Shares"  means the  common  shares  of Glyko as  currently
constituted.

      "Glyko  Contract" means any Contract to which Glyko is a party or by which
Glyko is bound.

      "Glyko's  Knowledge"  means  the  actual  knowledge  (without  independent
inquiry) of the directors of Glyko.

      "Glyko Regulatory Reports" means all the filings and documents,  including
any  schedules  included  therein,  required  to be filed by Glyko  pursuant  to
Canadian Securities Legislation and the requirements of the TSE.

      "Glyko  Shareholders  Meeting"  means the meeting of the  shareholders  of
Glyko to consider the Continuance Resolution and the Arrangement Resolution.

      "Glyko Stock Option" means Options to acquire Glyko Common Shares pursuant
to the Stock Option Plan.

      "Governmental Authorization" means any: (a) permit, license,  certificate,
franchise,   permission,  variance,  clearance,   registration,   qualification,
exemption,  order, approval or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal  Requirement;  or (b) right under any Contract  with any  Governmental
Body.



                                       47




      "Governmental   Body"   means  any:   (a)   nation,   state,   provincial,
commonwealth,  province,  territory,  county,  municipality,  district  or other
jurisdiction of any nature; (b) federal,  state,  provincial,  local, municipal,
foreign  or  other  government;   or  (c)  governmental,   quasigovernmental  or
regulatory  authority  of  any  nature  (including  any  governmental  division,
department,  agency,  commission,  instrumentality,  official,  ministry,  fund,
foundation,  centre,  organization,  unit, body or Entity and any court or other
tribunal and including the SEC, OSC, TSE, SWX Swiss Exchange and Nasdaq.

      "HSR Act" means the HartScottRodino Antitrust Improvements Act of 1976, as
amended.

      "Implementation  Time" has the  meaning  ascribed  thereto  in the Plan of
Arrangement.

      "Intellectual   Property"  means  industrial  and  intellectual   property
including:

            (a) all registered or unregistered trademarks, trade names, business
names, domain names, brand names, brands,  designs,  logos,  identifying indicia
and  service   marks,   including  any  goodwill   attaching   thereto  and  all
registrations   and   applications   relating   thereto    (collectively,    the
"TradeMarks");

            (b) all  inventions,  patents,  patent rights,  patent  applications
(including  all  reissues,  divisions,  continuations,  continuationsinpart  and
extensions  of  any  patent  or  patent  application),  industrial  designs  and
applications for registration of industrial designs;

            (c) all copyrights,  registrations and applications for registration
of copyrights and works of authorship including all computer programs (including
source code), databases and related works; and

            (d) all processes,  data, trade secrets,  designs,  knowhow, product
information,  manuals,  technology,  research and development reports, technical
information,  technical assistance, design specifications, and similar materials
recording or evidencing expertise or proprietary information.

      "Interim  Order"  means the  interim  order of the Court in respect of the
Arrangement, as contemplated by Section 1.3.

      "Joint Proxy Circular" means the notice of the Glyko Shareholders' Meeting
and the notice of the BioMarin Stockholders' Meeting and accompanying management
information  circular and proxy  statement to be sent to holders of Glyko Common
Shares in  connection  with the Glyko  Shareholders'  Meeting  and to be sent to
holders of BioMarin Common Stock in connection  with the BioMarin  Stockholders'
Meeting, including all appendices thereto.

      "Legal  Proceeding"  means any action,  suit,  litigation,  arbitration or
proceeding  (including any civil,  criminal,  administrative,  investigative  or
appellate  proceeding)  before  any  court  or  other  Governmental  Body or any
arbitrator or arbitration panel.

      "Legal Requirement" means (i) any federal,  state,  provincial,  regional,
local,  municipal,  foreign or other law,  statute,  constitution,  principle of
common law,  edict,  decree,  rule,  regulation,



                                       48




ruling or requirement  issued,  enacted,  adopted,  promulgated,  implemented or
otherwise put into effect by or under the authority of any Governmental Body and
(ii) all requirements set forth in applicable Contracts.

      "License  Agreements" has the meaning ascribed thereto in the definition
of "Licensed Intellectual Property";

      "Licensed  Intellectual  Property"  means all  Intellectual  Property used
under licenses and other contracts granting a license or other right to use such
Intellectual Property ("License Agreements");

      "Material  Adverse  Effect" or  "Material  Adverse  Change",  when used in
connection  with an Entity,  means any  change,  event,  violation,  inaccuracy,
circumstance  or effect,  individually  or when  aggregated  with other changes,
events, violations, inaccuracies,  circumstances or effects (considered together
with all other matters that would constitute  exceptions to the  representations
and  warranties  set forth in this  Agreement  but for the presence of "Material
Adverse   Effect"  or  other   materiality   qualifications,   or  any   similar
qualifications,  in such  representations  and  warranties),  that  is or  could
reasonably  be expected to be materially  adverse to or have a material  adverse
effect   on  (a)   the   business,   assets   (including   intangible   assets),
capitalization,  condition,  liabilities,  financial  performance  or results of
operations  of such  Entity  and its  Subsidiaries  taken as a whole;  provided,
however,  that no Material  Adverse  Effect or Material  Adverse Change shall be
deemed to have  occurred  solely as a result  of any  change in (i) the  trading
price of BioMarin  Common Stock or Glyko Common  Shares,  respectively,  that is
unrelated  to any  change,  event  or  circumstance  materially  adverse  to the
business,  assets  (including  intangible  assets),  capitalization,  condition,
liabilities,  financial  performance  or results of  operations  of  BioMarin or
Glyko, as the case may be, (ii) Canadian GAAP or U.S. GAAP or (iii) any federal,
state, provincial,  regional,  local, municipal,  foreign or other law, statute,
constitution, principle of common law edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated,  implemented or otherwise put
into  effect  by or under  the  authority  of any  Governmental  Body or (b) the
ability of the Entity or its  Subsidiaries  to consummate the Arrangement or any
of the other  transactions  contemplated  by this Agreement or to perform any of
its obligations under this Agreement.

      "Material Contract" means and includes:

      (i)   any Contract  relating to the employment  of, or the  performance of
            services by, any employee or  consultant;  any Contract  pursuant to
            which  Glyko  is or may  become  obligated  to make  any  severance,
            termination or similar  payment to any current or former employee or
            director;  and any Contract pursuant to which Glyko is or may become
            obligated to make any bonus or similar  payment (other than payments
            in respect of salary) in excess of $25,000 to any  current or former
            employee or director;

      (ii)  any Contract which provides for indemnification of any officer,
            director, employee or agent;



                                       49




      (iii) any  Contract  imposing any  restriction  on the right or ability of
            Glyko (A) to  compete  with any other  Person,  (B) to  acquire  any
            product or other asset or any services from any other Person, (C) to
            solicit,  hire or retain any Person as an  employee,  consultant  or
            independent  contractor,  (D) to develop, sell, supply,  distribute,
            offer,  support or service  any product or any  technology  or other
            asset to or for any other  Person,  (E) to perform  services for any
            other  Person,  or (F) to  transact  business  or deal in any  other
            manner with any other Person;

      (iv)  any  Contract  (A) relating to the  acquisition,  issuance,  voting,
            registration,  sale or transfer of any securities, (B) providing any
            Person with any preemptive right,  right of participation,  right of
            maintenance or any similar right with respect to any securities,  or
            (C) providing Glyko with any right of first refusal with respect to,
            or right to purchase or otherwise acquire, any securities;

      (v)   any Contract relating to any currency hedging;

      (vi)  any Contract imposing any confidentiality obligation on Glyko;

      (vii) any Contract (A) to which any Governmental  Body is a party or under
            which any  Governmental  Body has any rights or obligations,  or (B)
            directly or indirectly  benefiting any Governmental  Body (including
            any  subcontract or other Contract  between Glyko and any contractor
            or subcontractor to any Governmental Body);

      (viii)any  Contract  requiring  that Glyko give any notice or provide  any
            information  to any Person prior to  considering  or  accepting  any
            Acquisition Proposal or similar proposal,  or prior to entering into
            any discussions, agreement, arrangement or understanding relating to
            any Acquisition Transaction or similar transaction;

      (ix)  any  Contract  that has a term of more than 60 days and that may not
            be terminated by Glyko  (without  penalty)  within 60 days after the
            delivery of a termination notice by Glyko;

      (x)   any Contract that  contemplates  or involves the payment or delivery
            of cash or other  consideration  in an  amount  or having a value in
            excess of $25,000 in the aggregate,  or contemplates or involves the
            performance  of services  having a value in excess of $25,000 in the
            aggregate;

      (xi)  any Contract  (not  otherwise  identified  in clauses  "(i)" through
            "(x)" of this sentence) that could  reasonably be expected to have a
            material effect on the business, condition, capitalization,  assets,
            liabilities,  operations or financial performance of Glyko or to any
            of the transactions contemplated by this Agreement; and

      (xii) any other Contract, if a breach of such Contract could reasonably be
            expected to have a Material Adverse Effect on Glyko.



                                       50




      "Options"  means  and  includes,   in  respect  of  a  particular  Entity,
subscriptions,   options,  calls,  warrants  and  other  rights  commitments  or
agreements of any character  (whether or not currently  exercisable)  to acquire
securities of the Entity in question.

      "OSC" means the Ontario Securities Commission.

      "Person" means any individual, Entity or Governmental Body.

      "Plan of Arrangement"  means the plan of arrangement  substantially in the
form and content of Exhibit B annexed  hereto and any  amendments  or variations
thereto made in accordance  with the provisions of this Agreement or made at the
direction of the Court in the Final Order and which are  acceptable  to BioMarin
and Glyko.

      "Registrar"  means the  Registrar of  Companies  or other duly  authorized
person performing the duties as registrar under the BC Act.

      "Representatives" means officers, directors, employees, agents, attorneys,
auditors, advisors and representatives.

      "Required  BioMarin  Stockholder  Vote" means the  affirmative  vote of at
least a majority of the votes cast by holders of the outstanding BioMarin Common
Stock voting on the  resolution to approve the  Arrangement  including,  without
limitation,  the issuance of the BioMarin  Common Stock in  connection  with the
Arrangement.

      "Required Glyko  Shareholder  Vote" means the affirmative vote of at least
66 2/3  percent of the votes cast by holders  of the  outstanding  Glyko  Common
Shares voting on the Continuance Resolution and the Arrangement Resolution.

      "Return" means any return  (including  any  information  return),  report,
statement,   declaration,   estimate,  schedule,  notice,  notification,   form,
election,  certificate or other document or information  filed with or submitted
to, or  required  to be filed with or  submitted  to, any  Governmental  Body in
connection with the determination,  assessment, collection or payment of any Tax
or in connection with the  administration,  implementation  or enforcement of or
compliance with any Legal Requirement relating to any Tax.

      "SEC" means the United States Securities and Exchange Commission.

      "Securities   Exemption   Orders"  means   discretionary   orders  of  the
Commissions  exempting the trades  contemplated by the Plan of Arrangement  from
the registration and prospectus  requirements of applicable  Canadian Securities
Legislation,  including but not limited to the  distribution  of BioMarin Common
Stock,  the  distribution  of any securities  upon the conversion or exchange of
such securities in accordance with their terms (including in connection with the
replacement  of the  Glyko  Stock  Options),  or the  resale by  holders  of any
securities  distributed  to  them  pursuant  to  the  Arrangement  or  upon  the
conversion  or exercise of any security  issued to them  pursuant to the Plan of
Arrangement, including but not limited to the resale of BioMarin Common Stock.



                                       51




      "Stock Option Plan" means the 1994 Glyko stock option plan, as amended.

      "Subsidiary"  shall mean, with respect to any nonnatural Person, any other
nonnatural  Person  in which  such  nonnatural  Person  then  owns  directly  or
indirectly  shares of capital stock possessing 50% or more of the total combined
voting power of all classes of stock of such other nonnatural Person.

      "Superior  Offer" means an unsolicited,  bona fide written offer made by a
third party (other than BioMarin or its affiliates) which, if consummated, would
result  in such  third  party  acquiring,  directly  or  indirectly,  securities
representing  more than 50 percent of the voting power of the shares of Glyko or
the resulting  Entity of such  transaction  or all or  substantially  all of the
assets of Glyko,  in each case on terms  which the Board of  Directors  of Glyko
reasonably  determines (following receipt of advice of its financial advisors of
nationally  recognized  reputation and outside counsel) to be more favourable to
Glyko's shareholders than the terms of the Arrangement.

      "Tax" or  "Taxes"  refers to any and all  federal,  provincial,  regional,
state,  municipal,  local and foreign taxes,  assessments and other governmental
charges,  tariffs,  duties  (including  customs  duties),  levies,  assessments,
deficiencies,  fees,  impositions and liabilities  relating to taxes,  including
taxes based upon or measured by gross receipts,  income, capital gains, profits,
sales, use and occupation, and value added, ad valorem, transfer, surtax, stamp,
transfer,  property,  franchise,  withholding,  payroll, recapture,  employment,
excise,  goods  and  services,   health  insurance,   use,  business,   workers'
compensation and property taxes and any related charge or amount  (including any
fine,  penalty or  interest),  imposed,  assessed or  collected  by or under the
authority of any Governmental  Body and any obligations  under any agreements or
arrangements  with any other Person with  respect to such amounts and  including
any liability for taxes of a predecessor Entity.

      "TSE" means the Toronto Stock Exchange.

      "U.S.  Dollar  Equivalent" has the meaning  ascribed thereto in the Plan
of Arrangement.

      "U.S.   GAAP"  means  United  States   generally   accepted   accounting
principles.

      "United  States 1933 Act" means the United States  Securities Act of 1933,
as amended, together with the rules and regulations promulgated thereunder.

      "United States 1934 Act" means the United States  Securities  Exchange Act
of 1934,  as  amended,  together  with the  rules  and  regulations  promulgated
thereunder.

      "United  States  Code" means the United  States  Internal  Revenue Code of
1986,  as  amended,   together  with  the  rules  and  regulations   promulgated
thereunder.



                                       52




      IN WITNESS  WHEREOF,  the parties  hereto have caused this Agreement to be
executed  by their  duly  authorized  respective  officers  as of the date first
written above.



                                    BIOMARIN PHARMACEUTICAL INC.

                                    By:    /s/ Christopher M. Starr, Ph.D.
                                    Name:  Christopher M. Starr, Ph.D.

                                    Title: Senior Vice President, R&D


                                    BIOMARIN ACQUISITION (NOVA SCOTIA)
                                     COMPANY

                                    By:    /s/ Christopher M. Starr, Ph.D.
                                    Name:  Christopher M. Starr, Ph.D.

                                    Title: President


                                    GLYKO BIOMEDICAL LTD.

                                    By:    /s/ Joerg Gruber
                                    Name:  Joerg Gruber

                                    Title: Chairman



                                       53





                    Exhibit A Form of Arrangement Resolution

                             ARRANGEMENT RESOLUTION

                    SPECIAL RESOLUTION OF THE SHAREHOLDERS OF
                              GLYKO BIOMEDICAL LTD.


BE IT RESOLVED THAT:

1. The arrangement (the "Arrangement")  under Section 192 of the Canada Business
Corporations Act ("CBCA")  involving Glyko Biomedical Ltd.  ("Glyko"),  BioMarin
Pharmaceutical Inc. ("BioMarin") and BioMarin  (Acquisition) Nova Scotia Company
("BioMarin Nova Scotia"),  as more  particularly  described and set forth in the
Management  Proxy Circular of Glyko  accompanying the notice of this meeting (as
the Arrangement may be modified or amended) is hereby  authorized,  approved and
adopted.

2. The plan of arrangement (the "Plan of Arrangement") involving Glyko, the full
text of which is set out as  Schedule  B to the  acquisition  agreement  made on
February  6,  2001  among  Glyko,   BioMarin  and  BioMarin   Nova  Scotia  (the
"Acquisition  Agreement"),  (as the Plan of Arrangement  may be or may have been
amended) is hereby approved and adopted.

3.  Notwithstanding  that this  resolution has been passed (and the  Arrangement
adopted) by the  shareholders of Glyko or that the Arrangement has been approved
by the Supreme Court of Ontario,  the  directors of Glyko are hereby  authorized
(i)  to  amend  the  Acquisition  Agreement  to  the  extent  permitted  in  the
Acquisition  Agreement  and to  amend  the  Plan of  Arrangement  to the  extent
permitted  in the  Plan of  Arrangement  and/or  (ii)  not to  proceed  with the
Arrangement  without further  approval of the shareholders of Glyko, but only if
the Acquisition Agreement is terminated in accordance with Article 8 thereof.

4. Any officer or director of Glyko is hereby authorized and directed for and on
behalf of Glyko to execute, under the seal of Glyko or otherwise, and to deliver
articles of arrangement  and such other  documents as are necessary or desirable
to the  Director  under  the  CBCA in  order  to give  effect  to the  foregoing
resolution.

5. Any officer or director of Glyko is hereby authorized and directed for and on
behalf of Glyko to execute or cause to be  executed,  under the seal of Glyko or
otherwise, and to deliver or cause to be delivered, all such other documents and
instruments  and to  perform  or cause to be  performed  all such other acts and
things as in such  person's  opinion may be  necessary or desirable to give full
effect to the foregoing  resolution  and the matters  authorized  thereby,  such
determination to be conclusively evidenced by the execution and delivery of such
document, agreement or instrument or the doing of any such act or thing.







                          Exhibit B Plan of Arrangement

                                     FORM OF
                      PLAN OF ARRANGEMENT UNDER SECTION 192
                     OF THE CANADA BUSINESS CORPORATIONS ACT

                                    ARTICLE 1
                         DEFINITIONS AND INTERPRETATION

Section 1.01  Definitions.  In this Plan of Arrangement  the following words and
phrases shall have the meanings hereinafter set forth:

(a)   "Act"  means  the  Canada  Business   Corporations   Act,   including  the
      regulations  made  thereunder,  as now in effect  and as it may be amended
      from time to time;

(b)   "Acquisition  Agreement"  means the  Acquisition  Agreement  for a Plan of
      Arrangement by and among BioMarin, BioMarin Nova Scotia and Glyko dated as
      of  February  6, 2002,  as the same may be  amended,  supplemented  and/or
      restated from time to time;

(c)   "Arrangement" means the arrangement  contemplated herein to be made on the
      terms set out in this Plan subject to any amendments or variations thereto
      made in accordance with the Acquisition  Agreement and the terms hereof or
      made at the direction of the Court in the Final Order;

(d)   "Arrangement  Resolution"  means the special  resolution in respect of the
      Arrangement to be considered and approved by Glyko Common  Shareholders at
      the  Meeting  to be  substantially  in the form and  content  of Exhibit A
      annexed to the Acquisition Agreement;

(e)   "Articles of  Arrangement"  means the articles of  arrangement of Glyko in
      respect of the Arrangement  that are required by the Act to be sent to the
      Director after the Final Order is made;

(f)   "BioMarin" means BioMarin Pharmaceutical Inc., a Delaware corporation;

(g)   "BioMarin  Common  Stock"  means the  shares  of common  stock par value
      U.S.$0.001 per share of BioMarin as currently constituted;

(h)   "BioMarin Nova Scotia" means BioMarin  Acquisition  (Nova Scotia) Company,
      an unlimited liability company  incorporated under the Companies Act (Nova
      Scotia);

(i)   "BioMarin Average Trading Price" means the average closing price of shares
      of  BioMarin  Common  Stock on Nasdaq  during a period  of 20  consecutive
      trading days ending on the second  trading day  immediately  preceding the
      Effective Date;

(j)   "Board of Directors" means the board of directors of Glyko;







(k)   "Business Day" means any day other than a Saturday, a Sunday or a day when
      banks are not open for  business in either San  Francisco,  California  or
      Toronto, Ontario;

(l)   "Canadian  Dollar  Equivalent"  means, in respect of an amount expressed
      in a  currency  other  than  Canadian  dollars  (the  "Foreign  Currency
      Amount")  at any  date  the  product  obtained  by  multiplying  (a) the
      Foreign  Currency Amount by (b) the noon spot exchange rate on such date
      for such foreign  currency  expressed in Canadian dollars as reported by
      the Bank of  Canada  or, if such spot  exchange  rate is not  available,
      such exchange rate on such date for such foreign  currency  expressed in
      Canadian  dollars  as may be  deemed  by the  Board of  Directors  to be
      appropriate for such purpose;

(m)   "Certificate  of  Arrangement"  means  the  certificate  of  arrangement
      endorsed upon the Articles of Arrangement of Glyko by the Director;

(n)   "Circular"  means the notice of the  Meeting and  accompanying  management
      information  circular,  including the schedules  attached  thereto and all
      amendments  from time to time  made  thereto,  to be sent to Glyko  Common
      Shareholders in connection with the Meeting;

(o)   "Continuance  Resolution"  means the special  resolution in respect of the
      continuance  of Glyko under the laws of British  Columbia to be considered
      and approved by Glyko Common Shareholders at the Meeting;

(p)   "Court" means the Supreme Court of Ontario;

(q)   "Depositary"  means  Computershare  Trust Company at its offices located
      in Toronto, Ontario;

(r)   "Director" means the Director  appointed  pursuant to Section 260 of the
      Act;

(s)   "Dissent  Rights"  shall have the  meaning  ascribed  thereto in Section
      3.01;

(t)   "Dissenting  Shareholder" means a Glyko Common Shareholder who dissents in
      respect  of the  Arrangement  Resolution  in  strict  compliance  with the
      Dissent Rights;

(u)   "Dissenting  Shares" means the shares of any Glyko Common  Shareholder who
      has demanded and perfected  Dissent Rights in respect of such Glyko Common
      Shares in accordance with the Interim Order and the Act and who, as of the
      Effective Time, has not effectively withdrawn or lost such Dissent Rights;

(v)   "Effective Date" means the date of the Certificate of Arrangement;

(w)   "Effective Time" means 12:01 a.m. (Eastern time) on the Effective Date;

(x)   "Exchange Ratio" means 0.3309,  subject to adjustment in accordance with
      Section 2.03;



                                       B-2




(y)   "Final Order" means the final order of the Court approving the Arrangement
      as such  order  may be  amended  by the  Court  at any  time  prior to the
      Effective Date or, if appealed,  then,  unless such appeal is withdrawn or
      denied, such order as affirmed;

(z)   "Glyko" means Glyko  Biomedical Ltd., a corporation  incorporated  under
      the Act;

(aa)  "Glyko  Common  Shareholders"  means  the  registered  holders  of Glyko
      Common Shares;

(bb)  "Glyko  Common  Shares" means the common shares in the capital of Glyko as
      constituted immediately prior to the Implementation Time;

(cc)  "Glyko  Options"  means all  unexpired  options to purchase  Glyko  Common
      Shares outstanding immediately prior to the Implementation Time;

(dd)  "Governmental Body" means any: (a) nation, state, commonwealth,  province,
      territory,  county,  municipality,  district or other  jurisdiction of any
      nature; (b) federal, state, provincial, local, municipal, foreign or other
      government; or (c) governmental, quasigovernmental or regulatory authority
      of any nature (including any governmental  division,  department,  agency,
      commission, instrumentality, official, ministry, fund, foundation, centre,
      organization, unit, body or other person and any court or other tribunal);

(ee)  "Implementation  Time" means 12:01 a.m. (Pacific time) on the date that is
      the  earlier  of (a) the date that  Glyko is  continued  under the laws of
      British Columbia,  (b) the date upon which the Board of Directors resolves
      to  implement  the  Arrangement,  which  in no  event  may be prior to the
      Effective  Date or (c) the date that is 10 days  following  the  Effective
      Date;

(ff)  "Interim  Order" means the interim  order of the Court,  as the same may
      be amended, in respect of the Arrangement;

(gg)  "Letter  of  Transmittal"  means the  Letter of  Transmittal  for use by
      Glyko Common Shareholders, in the form accompanying the Circular;

(hh)  "Meeting" means the special meeting of Glyko Common Shareholders,  and all
      adjournments and  postponements  thereof,  called and held to, among other
      things,   consider  and  approve  the   Continuance   Resolution  and  the
      Arrangement Resolution;

(ii)  "Nasdaq" means the Nasdaq National Market;

(jj)  "person"  means and includes any  individual,  corporation  (including any
      nonprofit corporation),  general partnership, limited partnership, limited
      liability  partnership,  joint venture,  estate, trust, company (including
      any company limited by shares,  limited  liability  company or joint stock
      company), firm, society or other enterprise, association, organization, or
      Governmental Body;

(kk)  "Replacement  Option" shall have the meaning ascribed thereto in Section
      2.02(c);



                                       B-3




(ll)  "this Plan", "Plan of Arrangement",  "hereof", "herein", "hereto" and like
      references mean and refer to this plan of arrangement; and

(mm)  "U.S.  Dollar  Equivalent"  means,  in respect of an amount  expressed  in
      Canadian dollars at any date, the product obtained by multiplying: (a) the
      number of Canadian  dollars,  by (b) the noon spot  exchange  rate on such
      date for such  Canadian  dollars  expressed  in United  States  dollars as
      reported  by the Bank of  Canada  or, if such  spot  exchange  rate is not
      available,  such exchange rate on such date for Canadian dollars expressed
      in United States  dollars as may be deemed by the Board of Directors to be
      appropriate for such purpose.

Words and phrases  used  herein  that are defined in the Act or the  Acquisition
Agreement  and not defined  herein shall have the same meaning  herein as in the
Act or the Acquisition  Agreement,  as applicable,  unless the context otherwise
requires.

Section 1.02 Interpretation Not Affected By Headings,  etc. The division of this
Plan  into  articles  and  sections  and  the  insertion  of  headings  are  for
convenience  of  reference  only  and  shall  not  affect  the  construction  or
interpretation hereof.

Section 1.03 Gender and Number. Unless the context requires the contrary,  words
importing  the singular  only shall  include the plural and vice versa and words
importing the use of any gender shall include all genders.

Section 1.04 Date for Any Action. In the event that the date on which any action
is required to be taken  hereunder by any of the parties is not a Business  Day,
such action shall be required to be taken on the next  succeeding day which is a
Business Day.

Section 1.05 Governing  Law. This Plan of  Arrangement  shall be governed by and
construed in accordance with the laws of the Province of Ontario and the federal
laws of Canada applicable therein.

                                    ARTICLE 2
                                   ARRANGEMENT

Section 2.01 Binding Effect.  This Plan of Arrangement will become effective at,
and be binding at and after,  the Effective Time on (i) BioMarin,  (ii) BioMarin
Nova  Scotia,  (iii)  Glyko,  (iv) all Glyko  Common  Shareholders,  and (v) all
holders of Glyko Options.

Section 2.02 Arrangement.  Beginning at the  Implementation  Time, the following
events or transactions shall occur and shall be deemed to occur in the following
sequence without any further act or formality:

(a)   each Glyko Common Share issued and  outstanding  immediately  prior to the
      Implementation   Time,   other  than  any  Dissenting   Shares,   will  be
      automatically exchanged,  subject to the provisions hereof, such that such
      Glyko  Common  Shares  will be  transferred  to  BioMarin  Nova  Scotia in
      exchange for the delivery by BioMarin Nova Scotia to the former holders of
      such Glyko  Common  Shares of that  portion of a share of BioMarin  Common
      Stock equal to



                                       B-4




      the Exchange Ratio and each Glyko Common  Shareholder  shall cease to be a
      holder of Glyko  Common  Shares and the name of each such holder  shall be
      removed from the register of Glyko  Common  Shareholders  and added to the
      register of holders of BioMarin Common Stock  (whereupon there shall be no
      Glyko Common Shareholders other than BioMarin Nova Scotia);

(b)   in the  event  of an  entitlement  to  receive  a  fraction  of a share of
      BioMarin  Common Stock,  such holder shall have the rights provided for in
      Section 4.06; and

(c)   each  Glyko  Option  shall be  exchanged  for an option (a  "Replacement
      Option") to purchase a number of shares of BioMarin  Common  Stock equal
      to the  product of the  Exchange  Ratio and the  number of Glyko  Common
      Shares issuable  pursuant to such Glyko Option,  whether  exercisable or
      unexerciseable,  immediately prior to the  Implementation  Time, rounded
      down to the nearest  whole  number of shares.  Such  Replacement  Option
      will  provide for an exercise  price per share of BioMarin  Common Stock
      equal  to the  U.S.  Dollar  Equivalent  (calculated  on the date of the
      Implementation  Time) of the per  share  exercise  price  of such  Glyko
      Option  divided by the Exchange  Ratio,  rounded up to the nearest whole
      cent.  The term and vesting  schedule of such  Replacement  Option shall
      be equivalent to those of the Glyko Option it replaces,  except for such
      changes  as are  triggered  by the  entry by  Glyko  into  this  Plan of
      Arrangement.  In such  case  any  document  or  agreement  evidencing  a
      replaced Glyko Option shall be terminated.

Subject to Section 2.03, the maximum  number of shares of BioMarin  Common Stock
issuable in  connection  with the exchange of Glyko  Common  Shares for BioMarin
Common  Stock  shall be  11,367,617  and, if the number of Glyko  Common  Shares
outstanding  at the  Implementation  Time  would  result in a greater  number of
shares of BioMarin Common Stock being issuable, then the Exchange Ratio shall be
adjusted accordingly.

Section 2.03 Adjustment to Exchange Ratio.  The Exchange Ratio shall be adjusted
to reflect  appropriately  the effect of any stock split,  reverse  stock split,
stock dividend (including any dividend or distribution of securities convertible
into  BioMarin   Common  Stock  or  Glyko  Common   Shares),   cash   dividends,
reorganization,  recapitalization, combination, exchange of shares or other like
change with respect to BioMarin  Common Stock or Glyko Common  Shares  occurring
after the date of the  Acquisition  Agreement  and  prior to the  Implementation
Time.


                                    ARTICLE 3
                                RIGHTS OF DISSENT

Section 3.01 Rights of Dissent. Glyko Common Shareholders may in connection with
the Arrangement  exercise rights of dissent with respect to such shares pursuant
to and in the  manner  set  forth in  Section  190 of the Act as the same may be
modified by the Interim Order or the Final Order (the "Dissent  Rights").  Glyko
Common Shareholders who duly exercise such Dissent Rights and who:



                                       B-5




(a)   are  ultimately  determined to be entitled to be paid fair value for their
      Glyko Common Shares shall be deemed to have  transferred such Glyko Common
      Shares to Glyko without any further act or formality and free and clear of
      all liens and  encumbrances  and such  shares  shall be  cancelled  at the
      Implementation Time; or

(b)   are ultimately  determined not to be entitled,  for any reason, to be paid
      fair  value  for  their  Glyko  Common  Shares  shall  be  deemed  to have
      participated  in the  Arrangement  on the same  basis  as a  nondissenting
      holder of Glyko Common Shares and shall receive  BioMarin  Common Stock on
      the basis determined in accordance with Section 2.02(a),

but in no case shall BioMarin,  BioMarin Nova Scotia,  Glyko or any other person
be  required  to  recognize  such  holders  as Glyko  Common  Shares  after  the
Implementation  Time, and the names of such holders of Glyko Common Shareholders
shall be deleted  from the  register  of holders of Glyko  Common  Shares at the
Implementation Time. Any Glyko Shareholders who duly exercise Dissent Rights and
who are  ultimately  determined  to be paid fair  value for their  Glyko  Common
Shares shall be paid solely from the assets of Glyko.

                                    ARTICLE 4
                        CERTIFICATE AND FRACTIONAL SHARES

Section 4.01 Issuance of  Certificates  Representing  Shares of BioMarin  Common
Stock.  Promptly after the  Implementation  Time,  BioMarin shall cause BioMarin
Nova Scotia to make available to the Depositary, for exchange in accordance with
Article 2, the BioMarin  Common Stock  issuable in accordance  with the terms of
the  Arrangement  and  cash  in an  amount  sufficient  for  payment  in lieu of
fractional  shares also in accordance  with the terms of the  Arrangement.  Upon
surrender to the Depositary for cancellation of a certificate  which immediately
prior to the Implementation Time represented Glyko Common Shares,  together with
such other  documents and  instruments as would have been required to effect the
transfer of the shares formerly  represented by such  certificate  under the Act
and the bylaws of Glyko and such additional  documents and instruments as Glyko,
BioMarin Nova Scotia and the Depositary may  reasonably  require,  the holder of
such surrendered  certificate shall be entitled to receive in exchange therefor,
and the  Depositary  shall  forthwith  deliver  to such  holder,  a  certificate
representing that number (rounded down to the nearest whole number) of shares of
BioMarin Common Stock which such holder has the right to receive  (together with
any dividends or distributions with respect thereto pursuant to Section 4.05 and
any cash in lieu of  fractional  shares of  BioMarin  Common  Stock  pursuant to
Section  4.06,  less any amounts  withheld  pursuant to Section  5.01),  and any
certificate  so  surrendered  shall  forthwith be  cancelled.  In the event of a
transfer of ownership of Glyko Common  Shares prior to the  Implementation  Time
that  is  not  registered  in the  transfer  records  of  Glyko,  a  certificate
representing  the proper number of shares of BioMarin Common Stock may be issued
to the transferee if the  certificate  representing  such Glyko Common Shares is
presented to the Depositary,  accompanied by all documents  required to evidence
and effect such  transfer.  Until  surrendered as  contemplated  by this Section
4.01,  each  certificate  which  immediately  prior to the  Implementation  Time
represented  Glyko  Common  Shares  that were  exchanged  for shares of BioMarin
Common  Stock  shall be  deemed at all times  after the  Implementation  Time to
represent  only the right to receive  upon such  surrender  (i) the  certificate
representing shares of BioMarin Common Stock as contemplated by



                                       B-6




this Section 4.01, (ii) a cash payment in lieu of any fractional BioMarin Common
Stock as contemplated  by Section 4.06 and (iii) any dividends or  distributions
with a record date after the  Implementation  Time  theretofore  paid or payable
with respect to BioMarin Common Stock as contemplated by Section 4.05.

Section  4.02  Delivery  of Letter of  Transmittal.  At the time of mailing  the
Circular or as soon as practicable after the Effective Date, Glyko shall forward
to each Glyko Common  Shareholder at the address of such holder as it appears on
the  register  maintained  by or on behalf of Glyko in respect of the holders of
Glyko Common Shares,  a copy of the Letter of Transmittal and  instructions  for
obtaining  delivery of the BioMarin  Common  Stock  issuable and payable to such
holders pursuant to the Plan.

Section 4.03 Expiration of Rights. Any certificates  formerly representing Glyko
Common Shares that,  following the Effective  Date,  are not deposited  with the
Depositary,  together with a duly executed Letter of Transmittal, and such other
documents as the Depositary deems necessary,  on or before the sixth anniversary
of the Effective Date,  shall cease to represent a right or claim of any kind or
nature and the right of the holder of such securities to receive BioMarin Common
Stock as  provided  for in the  Acquisition  Agreement,  shall be  deemed  to be
surrendered to BioMarin Nova Scotia together with all dividends or distributions
thereon held for such holder,  for no  consideration,  and such BioMarin  Common
Stock shall thereupon be cancelled and the name of the former  registered holder
shall be removed from the register of holders of BioMarin Common Stock.

Section 4.04 Entitlement to Options.  As soon as practicable after the Effective
Date,  the  holders  of  outstanding   Glyko  Options  shall  be  provided  with
documentation  evidencing  Replacement Options in accordance with the provisions
of Section 2.02(c).

Section  4.05  Distributions  with  Respect to  Unsurrendered  Certificates.  No
dividends or other distributions  declared or made after the Effective Date with
respect to BioMarin  Common  Stock with a record date after the  Effective  Date
shall be paid to the holder of any  unsurrendered  certificate which immediately
prior to the Effective  Date  represented  outstanding  Glyko Common Shares that
were  exchanged for BioMarin  Common Stock pursuant to the procedures set out in
Article 2, and no cash payment in lieu of fractional shares shall be paid to any
such holder  pursuant to Section 4.06,  unless and until the holder of record of
such  certificate  shall  surrender such  certificate in accordance with Section
4.01.  Subject to  applicable  law,  at the time of such  surrender  of any such
certificate  (or, in the case of clause (iii) below, at the appropriate  payment
date), there shall be paid to the record holder of the certificates representing
whole shares of BioMarin  Common Stock,  without  interest (i) the amount of any
cash payable in lieu of a fractional  BioMarin Common Share to which such holder
is entitled  pursuant to Section  4.06,  (ii) the amount of  dividends  or other
distributions  with a record date after the Effective Date theretofore paid with
respect to such BioMarin  Common  Stock,  and (iii) on the  appropriate  payment
date,  the amount of dividends or other  distributions  with a record date after
the  Effective  Date but prior to  surrender  and a payment date  subsequent  to
surrender payable with respect to such BioMarin Common Stock.

Section 4.06 No  Fractional  Shares.  No fraction of a share of BioMarin  Common
Stock shall be issued by virtue of the Arrangement,  no dividend, stock split or
other  change in the  capital  structure  of BioMarin  shall  relate to any such
fraction and any  fractional  interests  shall not entitle the owner  thereof to
vote or to  exercise  any  rights  as a  security  holder of  BioMarin.  In lieu
thereof, each Glyko



                                       B-7




Common  Shareholder  who would otherwise be entitled to a fraction of a share of
BioMarin  Common  Stock (after  aggregating  all  fractional  shares of BioMarin
Common  Stock that would  otherwise  be received  by such  holder)  shall,  upon
surrender of such  holder's  certificate(s)  representing  Glyko  Common  Shares
receive  from  BioMarin  Nova  Scotia an amount of cash  (rounded to the nearest
whole  cent),  without  interest,  equal to the  product  (or,  at the option of
BioMarin  Nova Scotia,  the Canadian  Dollar  Equivalent of the product) of such
fraction and the BioMarin Average Trading Price.

Section 4.07 Lost  Certificates.  In the event any certificate which immediately
prior to the  Implementation  Time represented  outstanding  Glyko Common Shares
that were  exchanged  pursuant to Section  2.02 shall have been lost,  stolen or
destroyed,  upon the making of an affidavit of that fact by the person  claiming
such certificate to be lost,  stolen or destroyed,  the Depositary will issue in
exchange  for  such  lost,   stolen  or  destroyed   certificate,   certificates
representing shares of BioMarin Common Stock (and any dividends or distributions
with  respect  thereto and any cash  pursuant to Section  4.05)  deliverable  in
respect thereof as determined in accordance with Section 2.02. When seeking such
issuance  and/or  payment  in  exchange  for  any  lost,   stolen  or  destroyed
certificate,  the person to whom  certificates  representing  shares of BioMarin
Common Stock are to be issued shall,  at the  discretion of BioMarin Nova Scotia
and  Glyko,  as a  condition  precedent  to the  issuance  thereof,  give a bond
satisfactory  to BioMarin  Nova Scotia and Glyko,  in such sum as BioMarin  Nova
Scotia and Glyko may reasonably  direct as indemnity  against any claim that may
be made against  BioMarin Nova Scotia or Glyko or the Depositary with respect to
the certificate alleged to have been lost, stolen or destroyed.

                                    ARTICLE 5
                               WITHHOLDING RIGHTS

Section 5.01  Withholding  Rights.  Each of Glyko,  BioMarin Nova Scotia and the
Depositary  shall be  entitled  to deduct and  withhold  from the  consideration
payable or otherwise  deliverable  pursuant to this Arrangement to any holder or
former  holder of Glyko Common  Shares such amount as may be required by law (as
advised  by outside  tax  counsel  for  BioMarin)  to be  deducted  or  withheld
therefrom  under the United  States Code or under any provision of United States
or Canadian  federal,  state,  provincial,  regional,  local or foreign tax law,
including  the  Income Tax Act  (Canada),  or under any other  applicable  legal
requirement.  To the extent  that  amounts are so  deducted  or  withheld,  such
amounts  shall be treated  for all  purposes  hereof as having  been paid to the
holder of the  shares in respect of which such  deduction  and  withholding  was
made, provided that such amounts are actually remitted to the appropriate taxing
authority  in  accordance  with  applicable  law and that such  holder  has been
provided forthwith with a receipt evidencing such remittance. BioMarin, BioMarin
Nova Scotia, Glyko and the Depositary are hereby authorized to sell or otherwise
dispose  of such  portion  of such  consideration  as is  necessary  to  provide
sufficient funds to BioMarin,  BioMarin Nova Scotia, Glyko or the Depositary, as
the case may be,  net of  expenses,  in order to enable  it to comply  with such
deduction or withholding  requirement and BioMarin,  BioMarin Nova Scotia, Glyko
or the  Depositary  shall give an accounting to the holder with respect  thereto
and any balance of such proceeds of sale.



                                       B-8




                                    ARTICLE 6
                                   AMENDMENTS

Section 6.01      Amendment of the Arrangement.

(a)   Glyko reserves the right to amend,  modify and/or  supplement this Plan of
      Arrangement  at any  time  and from  time to time  provided  that any such
      amendment,  modification,  or  supplement  must be  contained in a written
      document which is (i) agreed to by BioMarin and BioMarin Nova Scotia, (ii)
      filed with the Court and, if made  following the Meeting,  approved by the
      Court and (iii)  communicated  to  holders of Glyko  Common  Shares in the
      manner if and as required by the Court.

(b)   Any amendment,  modification or supplement to this Plan of Arrangement may
      be proposed by Glyko at any time prior to or at the Meeting (provided that
      BioMarin and BioMarin  Nova Scotia shall have  consented  thereto) with or
      without any other prior  notice or  communication,  and if so proposed and
      accepted  by the  persons  voting  at the  Meeting  (other  than as may be
      required  under the  Interim  Order),  shall  become  part of this Plan of
      Arrangement for all purposes.

(c)   Any  amendment,  modification  or supplement  to this Plan of  Arrangement
      which is approved by the Court  following  the Meeting  shall be effective
      only  (i) if it is  consented  to by  Glyko,  (ii) if it is  agreed  to by
      BioMarin and BioMarin Nova Scotia,  and (iii) if required by the Court, it
      is  consented to by holders of Glyko  Common  Shares  voting in the manner
      directed by the Court.

Any amendment,  modification  or supplement to this Plan of  Arrangement  may be
made following the Effective Date by Glyko, provided that (i) it is agreed to by
BioMarin and BioMarin  Nova Scotia and (ii) it concerns a matter  which,  in the
reasonable  opinion of Glyko, is of an administrative  nature required to better
give effect to the implementation of this Plan of Arrangement and is not adverse
to the financial or economic  interests of the holders of Glyko Common Shares or
Glyko Options.

                                    ARTICLE 7
                                     GENERAL

Section 7.01  Further  Assurances.  Notwithstanding  that the  transactions  and
events set out herein shall occur and be deemed to occur in the order set out in
this Plan of  Arrangement  without  any further  act or  formality,  each of the
parties to the Acquisition  Agreement shall make, do and execute, or cause to be
made, done and executed,  all such further acts, deeds,  agreements,  transfers,
assurances,  instruments  or documents as may  reasonably  be required by any of
them in order further to document or evidence any of the  transactions or events
set out herein.

Section 7.02  Paramountcy.  From and after the  Effective  Time (i) this Plan of
Arrangement  shall take  precedence  and priority  over any and all Glyko Common
Shares or Glyko Options issued or granted prior to the Effective  Time, (ii) the
rights and  obligations of the Glyko Common  Shareholders,  the holders of Glyko
Options and any trustee and transfer agent therefor, shall be solely as provided
for in this  Plan of  Arrangement,  and (iii) all  actions,  causes of  actions,
claims or



                                       B-9




proceedings (actual or contingent, and whether or not previously asserted) based
on or in any way  relating  to Glyko  Common  Shares or Glyko  Options  shall be
deemed  to have been  settled,  compromised,  released  and  determined  without
liability except as set forth herein.

Section  7.03  Continuance.   Subject  to  the  approval  of  the  Glyko  Common
Shareholders,  the  Director  and the  Registrar  under the Company Act (British
Columbia),  Glyko shall be continued under the laws of British  Columbia as soon
as is practicable following the Effective Time.



                                      B-10




                   Exhibit C Appropriate Regulatory Approvals

1.    Approval of The Toronto Stock Exchange in respect of the Arrangement.

2.    Consent  of the  Director  under the  Securities  Act  (Ontario)  to the
      Continuance.

3.    Approval of the  Registrar  under the Company Act (British  Columbia) to
      the Continuance.

4.    Approval of the Director under the Canada Business  Corporations  Act to
      the Continuance.







            Exhibit D Form of Legal Opinion of BioMarin U.S. Counsel

                 FORM OF  BIOMARIN'S  UNITED STATES LEGAL OPINION (all terms not
        otherwise defined herein shall have the meanings
              ascribed to such terms in the Acquisition Agreement)

1.  BioMarin  has been duly  incorporated  and is validly  existing  and in good
standing under the laws of the State of Delaware,  with  corporate  power to own
its property and conduct its  business as described in its most  recently  filed
annual report on Form 10K.

2.  BioMarin has all requisite  corporate  power and authority to enter into the
acquisition  agreement for plan of  arrangement  among  BioMarin,  BioMarin Nova
Scotia  and  Glyko  (the   "Agreement")   and  to  consummate  the  transactions
contemplated thereby.

3.  BioMarin has duly  executed and  delivered  the  Agreement and has taken all
necessary corporate action to authorize and approve the execution,  delivery and
performance  of  the  Agreement  by  BioMarin  and  the   consummation   of  the
transactions  contemplated  thereby and the  Agreement  constitutes  a valid and
binding  obligation of BioMarin  enforceable  against it in accordance  with its
terms.

4. The  Agreement  constitutes  a valid and binding  obligation of BioMarin Nova
Scotia enforceable against it in accordance with its terms.

5. The execution,  delivery and performance by BioMarin of the Agreement and the
consummation by BioMarin of the transactions  contemplated  thereby: (a) require
no action  by or in  respect  of, or filing  with,  any  United  States  federal
governmental body, agency or authority other than such as may have been taken by
or filed  pursuant to the Securities  Act, and the rules and  regulations of the
SEC  thereunder;  and (b) do not  contravene  or conflict  with the  articles of
incorporation or bylaws of BioMarin.

6. The  BioMarin  Common  Stock to be issued  pursuant to the  Agreement is duly
authorized and, when issued in accordance with the terms of the Agreement,  will
be validly issued as fully paid and nonassessable shares.

7. The offer and sale of the BioMarin Common Shares to be issued pursuant to the
terms of the Agreement at the Effective Time are exempt from registration  under
the United States 1933 Act pursuant to Section 3(a)(10) thereunder.







          Exhibit E Form of Legal Opinion of BioMarin Canadian Counsel

                   FORM OF  BIOMARIN'S  CANADIAN  LEGAL  OPINION  (all terms not
        otherwise  defined herein shall have the meanings ascribed to such terms
        in the Agreement for Plan of Arrangement)

1. BioMarin Nova Scotia is duly  incorporated as an unlimited  company under the
laws of the Province of Nova Scotia and has not been dissolved.

2.  BioMarin  Nova  Scotia has all  requisite  corporate  power,  authority  and
capacity to own,  lease and operate its  property  and assets and to conduct its
business  and to execute  and  deliver  the  acquisition  agreement  for plan of
arrangement among BioMarin, BioMarin Nova Scotia and Glyko (the "Agreement") and
to perform its obligations  thereunder and to consummate the Arrangement and the
other transactions contemplated by the Agreement.

3. The  execution  and delivery of the Agreement by BioMarin Nova Scotia and the
consummation of the transactions  contemplated thereby have been duly authorized
by all necessary corporate action on the part of BioMarin Nova Scotia.

4. The  Agreement  has been duly  executed and delivered by BioMarin Nova Scotia
and  constitutes  a  valid  and  binding  obligation  of  BioMarin  Nova  Scotia
enforceable against it in accordance with its terms.

5. The  execution,  delivery and  performance  of the Agreement by BioMarin Nova
Scotia,  the consummation of the transactions  contemplated  thereby by BioMarin
Nova Scotia and the  compliance  with the  provisions  thereof by BioMarin  Nova
Scotia  will not:  (i)  constitute  or result in any  violation  of the terms or
provisions  of the  organizational  documents of BioMarin  Nova Scotia;  or (ii)
contravene  any laws of the Province of Nova Scotia,  the Province of Ontario or
the federal laws of Canada applicable therein.

6. The execution,  delivery and  performance  of the Agreement by BioMarin,  the
consummation  of the  transactions  contemplated  thereby  by  BioMarin  and the
compliance with the provisions  thereof by BioMarin will not contravene any laws
of the Province of Ontario or the federal laws of Canada applicable therein.

7. No consent, approval, order or authorization of, or registration, declaration
or filing with, any court,  administrative  agency or commission or governmental
authority or instrumentality,  domestic or foreign,  which has not been obtained
or made, is required to be obtained by BioMarin  Nova Scotia in connection  with
the  execution  and  delivery  of  the  Agreement  or  the  consummation  of the
transactions contemplated thereby.

8. The authorized capital stock of BioMarin Nova Scotia consists of an unlimited
number of common  shares of which o common  shares  are  outstanding  as validly
issued, fully paid and nonassessable shares.

9.    No document is required to be filed, no proceeding is required to be taken
and no  approval,  permit,  consent,  order or  authorization  is required to be
obtained to permit the issue of the  BioMarin







Common Stock to holders of Glyko Common  Shares  resident in Canada or the first
trade of the BioMarin Common Stock received by such residents as a result of the
Arrangement,  other than filings  which have been made,  proceedings  which have
been taken or approvals,  permits,  consents, orders or authorization which have
been  obtained  (subject  to usual  qualifications  and based on the  Securities
Exemption Orders, if applicable).



                                       E-2




              Exhibit F Form of Legal Opinion of Glyko U.S. Counsel

                   FORM OF GLYKO'S  UNITED  STATES LEGAL  OPINION (all terms not
        otherwise  defined herein shall have the meanings ascribed to such terms
        in the Agreement for Plan of Arrangement)

1.    The  Agreement  constitutes  a valid  and  binding  obligation  of Glyko
enforceable against it in accordance with its terms.







            Exhibit G Form of Legal Opinion of Glyko Canadian Counsel

                     FORM OF  GLYKO'S  CANADIAN  LEGAL  OPINION  (all  terms not
        otherwise  defined herein shall have the meanings ascribed to such terms
        in the Agreement for Plan of Arrangement)


1. Glyko is a company continued under the Company Act (British  Columbia) and is
validly  existing  and in good  standing  with  respect  to the filing of annual
returns.

2.  Glyko has all  requisite  corporate  power and  capacity  to own,  lease and
operate its  property  and assets and to conduct its business and to execute and
deliver  the  acquisition  agreement  for plan of  arrangement  among  BioMarin,
BioMarin Nova Scotia and Glyko (the  "Agreement") and to perform its obligations
thereunder  and  to  consummate  the  Arrangement  and  the  other  transactions
contemplated by the Agreement.

3. The execution and delivery of the Agreement by Glyko and the  consummation by
Glyko of the Arrangement and the other transactions  contemplated thereby and by
the Agreement has been duly authorized by all necessary  corporate action on the
part of Glyko.

4. The Agreement has been duly executed and, to the extent  delivery is governed
by the laws of Ontario and Canada, delivered by Glyko.

5. The  execution,  delivery and  performance  of the  Agreement  by Glyko,  the
consummation of the Arrangement and the other  transactions  contemplated by the
Agreement by Glyko and the compliance  with the provisions  thereof by Glyko did
not and will not:  (i)  constitute  or result in any  violation  of the terms or
provisions of the articles and bylaws of Glyko;  or (ii)  contravene any laws of
the Province of Ontario or the federal laws of Canada applicable therein.

6. No consent, approval, order or authorization of, or registration, declaration
or filing with, any court,  administrative  agency or commission or governmental
authority  which has not been  obtained  or made,  is required to be obtained by
Glyko in  connection  with the  execution  and delivery of the  Agreement or the
consummation of the Arrangement and the other  transactions  contemplated by the
Agreement.

7.  Immediately  prior to the Effective  Time, the  authorized  capital stock of
Glyko  consisted  of an  unlimited  number of common  shares,  of which o common
shares were outstanding.

EX-3

                                                                     Exhibit 3.2




                           AMENDED AND RESTATED BYLAWS

                                       OF

                          BIOMARIN PHARMACEUTICAL INC.





                                   ARTICLE I

                                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 II

                            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.

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.

     Upon the effective  date of the final  prospectus  in  connection  with the
initial public offering of the Corporation's capital stock, a special meeting of
the  stockholders  may be called at any time for any  purpose or purposes by the
Chairman of the Board of Directors or by a majority of the then current  members
of the Board of Directors.

                                       1


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.

                                       2


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 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.

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.

     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.

                                       3


     Upon the effective  date of the final  prospectus  in  connection  with the
initial public offering of any of the Corporation's securities, the stockholders
of the  Corporation may not take any action by written consent without a meeting
but must take any such  action at a duly  called  annual or  special  meeting of
stockholders.

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:

     (i) ______ 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.

     (ii) _____ 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.

     (iii)  ____ The  record  date for  determining  stockholders  for any other
purpose  shall be at the close of  business  on the day on which the  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.

                                       4


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 III

                                    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 four (4). 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.

                                       5


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:

     (i) 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.

     (ii) _____  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.

                                       6


     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.


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.

                                       7


     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.

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.

                                       8


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.

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 IV

                                   COMMITTEES

     4.1 COMMITTEES OF DIRECTORS

                                       9


     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
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.

                                       10

                                   ARTICLE V

                                    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.

                                       11


5.5      VACANCIES IN OFFICES

         Any vacancy occurring in any office of the corporation shall be filled
by the board of directors.

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.

                                       12


     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.

     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.

                                       13


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 VI

                                    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.

                                       14


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.

                                  ARTICLE VII

                               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.

                                       15


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.

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 VIII

                                 GENERAL MATTERS

8.1      CHECK

     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.

                                       16


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.

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.

                                       17


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 canceled at the same time. The  corporation
may issue a new  certificate of stock or  uncertificated  shares in the place of
any certificate  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      CONSTRUCTIONS 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.

                                       18


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.

     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.

8.9      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.

8.10     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.

8.11     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 IX

                                   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.

                                       19


                                   ARTICLE X

                                   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  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 XI

                                    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:

                                       20


     (i)  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


     (ii) 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

     (iii) the corporation has abandoned its business and has failed within
a reasonable time to take steps to dissolve, liquidate or distribute its assets.

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.

                                       21

EX-10

                                                                   EXHIBIT 10.18

                        AMENDMENT III TO LEASE AGREEMENT
                               DATED MAY 18, 1998
                                 BY AND BETWEEN
                  PIAZZA TRADING & COMPANY, LTD., LANDLORD AND
                      BIOMARIN PHARMACEUTICAL, INC., TENANT
                              DATED OCTOBER 3, 2000


The following sections of the Lease Agreement by and between the Landlord and
Tenant referenced herein above shall be amended as follows:

Section 2          Rentable Area of Premises:
                   the rentable area of the Tenant's Premises shall be increased
                   from 13,368 rentable feet to 14,988 rentable square foot.
Section 2:         Commencing upon execution of this Amendment III to Lease,
                   Tenant hereby leases from Landlord Suite 200 located at 371
                   Bel Marin Keys Boulevard, Novato, California hereinafter the
                   "Amended Premises".
Section 3:         Expiration Date:  May 31, 2004
Section 4:         Posession:
                   Tenant shall be granted Possession of the Premises from
                   Landlord on November 1, 2000. Tenant hereby accepts the
                   Premises in its "as-is" condition and repair including but
                   not limited to building operation systems, such as HVAC,
                   electrical, water, etc.
Section 5:         Rent Commencement:
                   Upon execution of this Amendment III to Lease, Tenant shall
                   pay to Landlord the first months rent for the Amended
                   Premises, Suite 200, in the amount of $3,645.00.
Section 5:         Monthly Base Rent:
                   The new monthly base rent payable by the Tenant as of
                   November 1, 2000 shall be $26,863.00 for the Premises as
                   defined in the lease by and between the parties herein dated
                   May 18, 1998, Amendment II dated February 12, 1999 and this
                   Amendment III. Upon execution of this Amendment III, Tenant
                   shall deposit with Landlord an additional security deposit in
                   the amount of $3,645.00 which increases the security deposit
                   held by Landlord to $26,868.00.





Section 6:         Tenant's Share of Expenses & Taxes:
                   47.94%
Section 7:         Parking:
                   Forty-one (41) unassigned and unreserved spaces.
Section 8:         Tenant shall have two (2), three (3) year options to
                   extend the lease for suites 200, 210, 230 and 250 pursuant to
                   the terms and conditions of the Amendment II to Lease dated
                   February 12, 1999 and this Amendment III to Lease. The
                   monthly rent for each year of the option period(s), if
                   exercised, shall be under the same terms and conditions
                   herein herein and shall adjust as indicated herein below.
Addendum to        Section 2 of the Addendum to Lease dated May 18, 1998,
Lease:             "Rental Adjustment", the minimum rental increase shall be
                   4% per annum and the maximum increase shall remain at
                   6% per annum.


All other terms and conditions of the Lease Agreement and Amendment to Lease by
and between the parties herein dated May 18, 1998 and Amendment II to Lease
dated February 12, 1999 shall remain in full force and effect except as amended
herein.

LANDLORD:  PIAZZA TRADING & COMPANY, LTD.




By:     /s/  Takeo Kohl
Its:    General Manager

Dated:_ October 25, 2000


TENANT:  BIOMARIN PHARMACEUTICAL, INC.



By:     /s/  R. W. Anderson
Its:    Vice President Finance

Dated:  October 25, 2000

EX-10

                                                                   EXHIBIT 10.20
                            FIRST AMENDMENT TO LEASE


This First Amendment to Lease Agreement (the "First Amendment") is made and
entered into as of April l4, 2000 by and between BioMarin Pharmaceutical, Inc.,
a Delaware corporation ("Tenant") and Limar Realty Corp. #18, a California
corporation ("Landlord"), with reference to the following facts:

                                    RECITALS

A.       Landlord and Tenant entered into that certain Lease Agreement dated
         June 25, 1998 (the "Lease") whereby Tenant is leasing from Landlord and
         Landlord is leasing to Tenant that certain real property located at 46
         Galli Drive, South Building, Novato, California containing 31,056
         rentable square feet (the "Existing Premises"), as such premises are
         more fully described in the Lease.

B.       Tenant and Landlord wish to modify some of the provisions of the Lease
         to permit Tenant to extend the Term of the Lease for the Existing
         Premises and lease additional area containing 38,793 rentable square
         feet known as 46 Galli Drive, North Building (the "Additional
         Premises") so that the total area shall become 69,849 rentable square
         feet (the "Expanded Premises") comprised of the Existing Premises and
         the Additional Premises.

C.       Landlord and Tenant desire to modify the Lease on terms and conditions
         set forth in this First Amendment.

NOW, THEREFORE, in consideration of the mutual covenants, representations and
warrants contained in the Lease and this First Amendment, Landlord and Tenant
hereto agree as follows:

         1.    Recitals: Landlord and Tenant agree that the above recitals are
               true and correct.

         2.    Expanded Premises: Commencing on the Additional Premises
               Commencement Date (as defined below), Landlord hereby leases to
               Tenant and Tenant hereby leases from Landlord, that certain real
               property located at 46 Galli Drive, Novato, California containing
               69,849 rentable square feet (i.e., the Expanded Premises( upon
               all of the terms and conditions set forth in the Lease, as the
               same are amended by this First Amendment.

         3.    Term:

               A.     Lease Commencement. This First Amendment shall be
                      effective as to the Additional Premises on the earliest
                      to occur of: (i) substantial completion of the Approved
                      Work (as defined below) in the Additional Premises;
                      (ii) Tenant's commencement of occupancy of the
                      Additional Premises; or (iii) one hundred twenty (120)
                      days following execution of this First Amendment (the
                      "Additional Premises Commencement Date").

               B.     Lease Expiration. The Term of the Lease as to the
                      Expanded Premises shall expire at 11:59 p.m. on August
                      31, 2010.

         4.    Monthly Base Rent: The Monthly Base Rent to be paid by Tenant to
               Landlord shall be as follows:

               A.     Existing Premises. The monthly Base Rent for the Existing
                      Premises will remain as scheduled in the Lease and shall
                      continue forward with the annual CPI adjustment pursuant
                      to Paragraphs 1.n. and 4.(b) of the Lease on September 1,
                      2003 and every September 1 thereafter.

               B.     Additional Premises. The initial monthly Base Rent for the
                      Additional Premises shall be Forty-Three Thousand Nine
                      Hundred Eighty-Six and 71/100 Dollars ($43,986.71).
                      Commencing September 1, 2001 and each September 1
                      thereafter, the monthly Base Rent for the Additional
                      Premises shall be increased in accordance with the annual
                      Cost of Living Adjustment as set forth in Paragraph 4.b.
                      of the Lease provided, however, the annual floor limit as
                      set forth in Paragraph 1.n. of the Lease for the
                      Additional Premises (the "Additional Premises Floor
                      Limit") shall be an increase of four percent (4%) and the
                      annual ceiling limit for the Additional Premises (the
                      "Additional Premises Ceiling Limit") shall be an increase
                      of six percent (6%).



         5.    Tenant's Pro Rata Share: Commencing on the Additional Premises
               Commencement Date, Tenant's Share of Building pursuant to
               Paragraph 1.j. of the Lease and Tenant's Share of Property
               pursuant to Paragraph 1.k. of the Lease shall be increased to one
               hundred percent (100%).

         6.    Condition of the Premises: Tenant hereby accepts and agrees to
               occupy the Additional Premises in its current "as is" condition
               with the roof water tight. The elevator serving the production
               space portion of the Additional Premises shall be fully
               operational and certified by the State of California as of the
               Additional Premises Commencement Date. Within twelve (12) months
               after the Additional Premises Commencement Date, Landlord shall
               repaint the exterior of the Building and upgrade the exterior
               landscaping. Landlord hereby grants Tenant a one-time
               construction allowance of up to Three Hundred Eighty-Seven
               Thousand Nine Hundred Thirty Dollars ($387,930.00) ("Tenant's
               Construction Allowance") for the cost of generic tenant
               improvements to be installed in the Additional Premises by Tenant
               including all associated architectural, engineering and
               professional fees and costs (exclusive of any overhead costs of
               Landlord). If requested by Tenant no later than September 1,
               2001, Landlord shall provide an additional allowance ("Tenant's
               Improvement Allowance") of up to $193,965 to reimburse Tenant for
               additional Approved Work. The amount of Tenant's Improvement
               Allowance that is actually used shall be fully amortized
               (inclusive of 10% per annum interest) over the Term of the Lease
               payable monthly as additional Rent. Tenant shall submit its plans
               for the tenant improvements for Landlord's written approval (the
               "Approved Work") prior to Tenant's commencement of construction
               of the Approved Work, and Landlord shall respond within five (5)
               business days of the date Tenant provides Landlord any specific
               set of complete preliminary or complete final plans required by
               Landlord's approval. All work performed by Tenant shall be
               performed in strict compliance with the plans submitted for the
               Approved Work and no modification shall be made in such plans
               without the prior written approval of Landlord. Landlord shall
               pay Tenant's outside vendors or contractors for materials and
               services constituting the Approved Work, up to the maximum
               Tenant's Construction Allowance set forth above, within thirty
               (30) days following Landlord's receipt of Tenant's submittal to
               Landlord of approved invoices and conditional lien releases for
               payment. Tenant shall also be reimbursed from Tenant's
               Construction Allowance for the reasonable cost of all preliminary
               and final plans and specifications and all permits relating to
               the installation of the Approved Work. All of the Approved Work
               to be done by Tenant shall be done in accordance with the
               provisions of Paragraph 14. of the Lease, and Tenant shall be
               required to follow Landlord's reasonable rules and regulations
               relating to contractors working in the Project. Landlord shall
               have the right to reasonably approve all of Tenant's proposed
               contractors and subcontractors related to the installation of the
               Approved Work. Landlord shall not charge an administrative fee
               relating to the installation of the Approved Work. Tenant shall
               have the right to access the Additional Premises upon full
               execution of this First Amendment and vacation of the Additional
               Premises by the existing tenant for the purpose of installing the
               Approved Work (the "Construction Period"), provided, however,
               Tenant shall be bound by the terms and conditions of the Lease
               and this First Amendment during the Construction Period except
               for Tenant's obligation to pay Base Rent or Operating Expenses.

         7.    Option(s) to Renew: Tenant's Option(s) to Renew as set forth in
               Paragraph 32. of the Lease shall be deleted in its entirety and
               replaced with the following:

               "OPTIONS TO RENEW:

               a.     Grant of Option(s). Tenant shall have the right, at its
                      option, to expand the Lease for the Extended Premises
                      for two (2) period(s) of five (5) years each ("Extended
                      Term(s)") on an "as is" basis commencing at the
                      expiration of the previous Term, provided that at the
                      time of exercise and at the time of commencement of
                      each Extended Term, Tenant is not in default beyond any
                      applicable cure period under this Lease.

               b.     Exercise of Option(s). If Tenant decides to extend the
                      Lease for an Extended Term, Tenant shall give written
                      notice to Landlord of its election to extend not less
                      than nine (9) months prior to the expiration of the
                      previous Term. Tenant's failure to give timely notice
                      to Landlord of Tenant's election to extend shall be
                      deemed a waiver of Tenant's right to extend. The terms
                      and conditions



                      applicable to each Extended Term shall be the same
                      terms and conditions contained in this Lease except
                      that Tenant shall not be entitled to any further
                      option to extend beyond the second Extended Term. The
                      Base Rent for each Extended Term shall be as
                      determined in accordance with Paragraph c, below.

               c.     Determination of Base Rent During Extended Term(s).

                       1)  Agreement on Initial Base Rent. Landlord shall not
                           be obligated to provide Tenant with the proposed
                           fair market rental value until six (6) months
                           prior to the expiration of the previous Term.
                           Landlord and Tenant shall have thirty (30) days
                           after Landlord provides the proposed fair market
                           rental value in which to agree on the Base Rent
                           during each Extended Term, which shall be the fair
                           market rental value of the Premises during said
                           Extended Term. The initial fair market rental
                           value of the Premises during said Extended Term
                           shall be based on the uses of the Premises
                           permitted under this Lease, and quality, size,
                           design and location of the Premises, and the
                           rental value for lease renewals or extensions of
                           comparable size, quality and location, provided,
                           however, the initial Fair Market Rental Value
                           shall be subject to a 4% annual rental increase.
                           If Landlord and Tenant agree on the Base Rent for
                           each Extended Term during the thirty (30) day
                           period, they shall immediately execute an
                           amendment to this Lease stating the new Base Rent.

                       2)  Selection of Appraisers. If Landlord and Tenant
                           are unable to agree on the Base Rent (including
                           any periodic adjustments) for the subject Extended
                           Term within the thirty (30) day period, then
                           within ten (10) days after the expiration of the
                           thirty (30) day period and provided that Tenant
                           has timely exercised the subject renewal option as
                           set forth above, Landlord and Tenant each at its
                           own cost and by giving notice to the other party,
                           shall appoint a competent and disinterested real
                           estate appraiser with at least five (5) years
                           full-time commercial appraisal experience in the
                           Marin County market area to appraise the fair
                           market rental value of the Premises and set the
                           initial Base Rent during said Extended Term. If
                           either Landlord or Tenant does not appoint an
                           appraiser within said ten (20) days, the single
                           appraiser appointed shall be the sole appraiser
                           and shall set the Initial Base Rent during said
                           Extended Term. If two (2) appraisers are appointed
                           by Landlord and Tenant as stated herein, they
                           shall meet promptly and attempt to set the Initial
                           Base Rent for said Extended Term. If the two (2)
                           appraisers are unable to agree within thirty (30)
                           days after the second appraiser has been
                           appointed, they shall attempt to select a third
                           appraiser meeting the same qualifications within
                           ten (20) days after the last day the two (2)
                           appraisers are given to set the Initial Base Rent.
                           If they are unable to agree on the third
                           appraiser, either Landlord or Tenant, by giving
                           ten (10) days' notice to the other party, can
                           apply to the then President of the Real Estate
                           Board or to the Presiding Judge of the Superior
                           Court of the county in which the Premises are
                           located, for the selection of a third appraiser
                           who meets the qualifications stated herein.
                           Landlord and Tenant each shall bear one-half (1/2)
                           of the cost of appointing the third appraiser and
                           of paying the third appraiser's fee. The third
                           appraiser, however selected, shall be a person who
                           has not previously acted in any capacity for
                           either Landlord or Tenant, or their affiliates.

                       3)  Value Determined by Three (3) Appraisers. Within
                           thirty (30) days after the selection of the third
                           appraiser, a majority of the appraisers shall set
                           the Initial Base Rent for each Extended Term. If a
                           majority of the appraisers are unable to set the
                           Initial Base Rent within the stipulated period of
                           time, Landlord's appraiser shall arrange for
                           simultaneous exchange eof written appraisals from
                           each of the appraisers and the three (3)
                           appraisals shall be added together and their total
                           divided by three (3); the resulting quotient shall
                           be the Initial Base Rent for the Premises during
                           each Extended Term. If, however, the low appraisal
                           and/or the high appraisal are/is more than fifteen
                           percent (15%) lower and/or higher than the middle
                           appraisal, such low appraisal and/or high
                           appraisal shall be disregarded. If only one (1)
                           appraisal is disregarded, the remaining



                           two (2) appraisals shall be added together
                           and their total divided by two (2); the
                           resulting quotient shall be the Initial Base
                           Rent for the Premises during each Extended
                           Term. If both the low appraisal and the high
                           appraisal are disregarded as stated in this
                           Paragraph c3, the middle appraisal shall be the
                           Initial Base Rent for the Premises during
                           each Extended Term.

                       4)  Minimum Base Rent Level. Notwithstanding any other
                           provision of this Lease, in no event shall the
                           Initial Base Rent for the subject Extended Term be
                           less than the Base Rent prevailing immediately
                           prior to the expiration of the previous Term.

8.       Parking:  Commencing on the Additional Premises Commencement Date,
         Tenant's parking shall be increased to include all of the parking
         spaces included with the Property.

9.       Security Deposit: Landlord acknowledges that Tenant has previous
         deposited with Landlord a Security Deposit in the amount of $114,000.00
         (the "Existing Security Deposit"). Upon execution of this First
         Amendment, Tenant shall deposit with Landlord an additional security
         deposit (the "Additional Security Deposit") in the amount of $87,973.42
         so that the Existing Security Deposit combined with the Additional
         Security Deposit shall collectively provide for an Expanded Premises
         Security Deposit of $201,973.42 to be held by Landlord in accordance
         with Paragraph 6 of the Lease.

10.      Effect of Amendment: Except as modified herein, the terms and
         conditions of the Lease shall remain unmodified and continue in full
         force and effect as to the Expanded Premises. In the event of any
         conflict between the terms and conditions of the Lease and this First
         Amendment, the terms and conditions of this First Amendment shall
         prevail.

11.      Definitions:  Unless otherwise defined in this First Amendment, all
         terms not defined in this First Amendment shall have the meaning set
         forth in the Lease.

12.      Authority: Subject to the provisions of the Lease, this First Amendment
         shall be binding upon and inure to the benefit of the parties hereto,
         their respective heirs, legal representatives, successors and assigns.
         Each party hereto and the persons signing below warrant that the person
         signing below on such party's behalf is authorized to do so and to bind
         such party to the terms of this First Amendment.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
the first date set forth hereinabove.

TENANT:                                          LANDLORD:
BioMarin Pharmaceutical, Inc.,                   Limar Realty Corp. #10,
a Delaware corporation                           a California corporation

By:  /s/ R. W. Anderson                          By:  /s/ Thomas Numainville
Name:  R. W. Anderson                            Name:  Thomas A. Numainville
Title:  V.P. Fin. and Admin.                     Title:  Sr. V.P.
Date:  April 19, 2000                            Date:  4-28-00

By:  /s/Christopher M. Stein                     By:  /s/ Thomas A. Numainville
Name:  Christopher M. Stein                      Name:  Thomas A. Numainville
Title:  V.P. Research & Development              Title:  Asst. Secretary
Date:  4/28/00                                   Date:  4/28/00

EX-10

                                                                 EXHIBIT 10.22

                               CONSENT TO SUBLEASE


               This Consent (the "Consent") to Sublease is entered into this
          30th day of August, 2001 by and between Condiotti Enterprises, a
          California Corporation ("Lessor"), Gateway Financial Corporation, a
          California Corporation (Lessee/ "Sublessor"), and BioMarin
          Pharmaceutical Inc., a Delaware Corporation ("Sublessee"). Lessor,
          Sublessor, and Sublessee will be referred to collectively as the
          "Parties" with reference to the following facts:

                                    RECITALS

               Sublessor is the Lessee under a Lease dated February 14, 1996,
          and subsequent Addenda and/or Amendments, (the "Master Lease") more
          particularly described in the Sublease. Sublessor is subleasing to
          Sublessee a portion of the Premises described in the Master Lease
          known as 79 Digital Drive, Novato California, which consists of
          approximately 25,658 square feet of office/warehouse space (see
          Exhibit "B" to Sublease Agreement). Sublessor and Sublessee wish to
          obtain the written consent of Lessor to the Sublease.

                                     CONSENT

1.   Consent.  Subject  to and  specifically  conditioned  upon  the  terms  and
     conditions  set forth  herein,  Lessor  hereby  grants  his  consent to the
     Sublease.

2.   No Release. This Consent does not release the Lessee or any person or
     entity claiming by, through or under Lessee, from any covenants,
     agreements, liabilities, and duties under the Lease, as it may be amended
     from time to time, without respect to any provision to the contrary in the
     Sublease.

3.   Provisions of Lease and Sublease. This Consent does not constitute approval
     by Lessor of any of the terms,  covenants,  conditions or provisions of the
     Sublease.  This  Consent  shall not be  construed to amend the Lease in any
     respect.  Notwithstanding any language to the contrary in the Sublease, the
     Parties acknowledge and agree that Sublessee is not an intended beneficiary
     of the Master Lease or Sublease.  The Parties further acknowledge and agree
     that Sublessee cannot enforce, as against Lessor, any terms,  covenant,  or
     conditions, of the Master Lease or Sublease.

4.   Sublessor's Continuing Liability. Sublessor shall be liable to Lessor for
     any default under the Lease, whether such default is caused by Sublessor or
     Sublessee or anyone claiming rights under the Sublease, by or through
     Lessee or Sublessee. The foregoing shall not be deemed to restrict or
     diminish any right which Lessor may have against Sublessee for violation of
     the Lease.



                                        2


5.   Acceptance by Sublessor and Sublessee.  Sublessor and Sublessee acknowledge
     and agree  that  Lessor  has  agreed to  execute  this  Consent  based upon
     Sublessor's and Sublease's  acknowledgment  and acceptance of its terms and
     conditions.

6.   Reservation of Rights. This consent is limited solely to this Sublease.
     Lessor reserves the right to consent or to withhold consent and all other
     rights under the Lease with respect to any further or additional subleases,
     assignments or transfers of the Lease, including a sublease or any
     assignment of the Sublease. Notwithstanding anything herein to the
     contrary, any consent and all other rights under the Master Lease shall not
     be unreasonably withheld by Lessor.

7.   Sublessor and Sublessee. By executing this Consent, Sublessor and Sublessee
     acknowledge  and agree to be bound by all the terms and condition set forth
     herein.

8.   Sublessee  shall not have the right to exercise any of the options to renew
     or extend the Master Lease.

     SUBLESSOR:                              SUBLESSEE:  BIOMARIN
     GATEWAY FINANCIAL CORPORATION           PHARMACEUTICAL, INC.


     By:       /s/ Edward J. Coyne            By:    /s/ R.W. Anderson
               ----------------------------          ---------------------------

     Title:    President                      Title:  V.P. Fin. and Admin.
               ----------------------------           --------------------------

     Date:     August 30, 2001                Date:   August 31, 2001
               ----------------------------           --------------------------


     LESSOR:
     CONDIOTTI ENTERPRISES, INC.


     By:       /s/ illegible
               ---------------------------------

     Title:    Vice President - CFO
               ---------------------------------

     Date:     09/10/01
               ---------------------------------






                                        1




                              AGREEMENT OF SUBLEASE


1.  PARTIES

This Sublease, dated July 27, 2001, is entered into by Gateway Financial
Corporation, a California Corporation, Inc. ("Sublessor"), and BioMarin
Pharmaceutical Inc., a Delaware Corporation ("Sublessee"), is subject to that
certain Standard Industrial Lease Agreement dated February 14, 1996, and addenda
and amendments (collectively, the "Master Lease") thereto between Condiotti
Enterprises, Inc., a California Corporation ("Lessor"), hereinafter the "Master
Lessor" and WorkRite Ergonomic Accessories, a California corporation ("Lessee").
A copy of the Master Lease is attached hereto as Exhibit "A-1".


2.  PROVISIONS CONSTITUTING SUBLEASE

Except to the extent that this Sublease clearly indicates otherwise, all terms
and conditions of the Master Lease, are incorporated into and made a part of
this Sublease as if Sublessor were the Lessor thereunder and Sublessee were the
Lessee thereunder, and as if the Sublease Premises were the Premises thereunder,
except for the following terms and conditions which are excluded from this
Sublease: In the body of the Master Lease, Articles: 1, 2, 4, 5, 34, 37, 39,
Exhibit "A", Exhibit "B", Amendment to Lease dated March 21, 1996, the Addendum
to Lease dated February 5, 1997, the Addendum to Lease dated June 4, 1997, the
Addendum to Lease dated October 7, 1997, Amendment #4 (excluding Articles 2, 3,
4, 5 and 6 only) dated March 17, 1998, and Contingency Release dated April 22,
1998. Subject to the foregoing exceptions, Sublessee hereby assumes and agrees
to perform the Lessee's obligations under the Master Lease during the term of
the Sublease to the extent that such obligations are applicable to the Premises
as defined in Section 5 herein. Without limiting the foregoing, Sublessee shall
name Sublessor, and Master Lessor as additional



                                        2


insureds under the insurance policies required to be carried by Sublessee
pursuant to the incorporation of the insurance paragraphs of the Master Lease
(Article 12). If the Master Lease terminates as a result of a default or breach
by Sublessee under this Sublease, and/or the Master Lease, Sublessee shall be
liable to the Sublessor for the damage suffered as a result of such termination.


3. PRESERVATION OF MASTER LEASE



Sublessor agrees not to terminate or modify the Master Lease without the
Sublessee's written consent, which shall not be unreasonably withheld or
delayed. Sublessee and Sublessor shall each refrain from any acts or omission
that would result in the failure or breach of any covenants, provisions or
conditions of the Master Lease on the part of the Lessee under the Master Lease.


4. MASTER LESSOR'S CONSENT REQUIRED

Sublessee acknowledges that, pursuant to the provisions of the Master Lease,
Sublessor is required to obtain Master Lessor's written consent to this
Sublease, and accordingly, the obligations of the Sublessor and Sublessee under
this Sublease are expressly subject to Sublessor obtaining such consent.


5. PREMISES

Sublessor hereby subleases to Sublessee the Premises commonly described as 79
Digital Drive, an office/warehouse building, located in Novato, California,
consisting of approximately 25,658 square feet (see Exhibit "B"). Neither
Sublessor nor Sublessee shall rely on the square footage calculation as provided
herein, and each party shall have the right to independently verify the square
footage. The taking of possession or use of the Premises by Subleases for any
purpose shall conclusively establish that Sublessee has inspected the Premises
and accepts them as being in good condition and repair, subject to Section 11
herein. Subleases acknowledges that Sublessor and Meridian



                                        3


Commercial,  Inc., the broker  involved in this Sublease  transaction,  have not
made any  representations  or warranties as to the suitability or fitness of the
Premises for the conduct of Sublessee's business, or for any other purpose.


6. WARRANTY BY SUBLESSOR

Sublessor warrants and represents to Sublessee that (i) the Master Lease
attached as Exhibit "A-1" is a true and complete copy of the Master Lease, that
Master Lease is in full force and effect, and that the Master Lease has not been
amended or modified except as represented herein; (ii) Sublessor has neither
given nor received a notice of any claim of default or breach of any of the
provisions of the Master Lease; and (iii) Sublessor shall continue to perform
its obligations under the Master Lease throughout the Term of this Sublease.


7. BASE RENTAL/RENTAL SCHEDULE

Unless otherwise indicated herein, Sublessee shall pay to Sublessor as rent for
the Premises in advance not later than the first (1st) day of each calendar
month of the term of the Sublease without deduction, offset, prior notice or
demand, to Gateway Financial Corporation, 767 Lincoln Avenue, Suite #4, San
Rafael, CA 94901, or at such other place as Sublessor may designate in writing,
in lawful money of the United States as follows: Sublessee shall pay the first
month's rent of $32,000.00 to Sublessor within one (1) business day following
full Sublease execution.

The monthly rent payable by Sublessee throughout the Sublease term shall be:

     November  1,  2001 to  October  31,  2002:  $32,000.00  per month
     November  1,  2002 to  October  31,  2003:  $32,960.00  per month
     November  1,  2003 to  October  31,  2004:  $33,948.00  per month
     November  1,  2004 to  October  31,  2005:  $34,967.00  per month
     November  1,  2005 to  July     31,  2006:  $36,016.00  per month

For purposes of this Sublease "Sublessee's Share" shall mean 50% and the "Base
Year" shall



                                        4


mean and refer to 1996, per the terms of the Master Lease.


8.  SECURITY DEPOSIT

The amount of the Security Deposit provided in Article 3 of the Master Lease is
revised in this Sublease to be $96,000.00. This Security Deposit shall be paid
to the Sublessor as follows: $32,000.00 within one (1) business day following
full Sublease execution and $64,000.00 not later then October 1, 2001 which
shall serve as a non-interest bearing security for Sublessee's performance under
this Sublease.

9. TERM/POSSESSION


This Sublease shall commence November 1, 2001 (the "Sublease Commencement Date")
and shall terminate on July 31, 2006, or upon the expiration or earlier
termination of the Master Lease. Promptly after delivery of possession of the
Premises to Sublessee, Sublessor shall provide Sublessee with a written
memorandum affirming the Commencement Date. As of the Sublease Commencement Date
Sublessee accepts the Premises in its "as-is" condition and repair, except as
indicated in Section 11 (Condition of Premises) and Section 12 (Tenant
Improvements) herein. In the event Sublessor cannot deliver the Premises to
Subleases on or before February 1, 2002, including the failure of Sublessor to
obtain the Master Lessor's consent to this Sublease, then Sublessee may, at
Sublessee's option, by written notice to Sublessor within ten (10) days
thereafter, cancel this Sublease, in which event neither party shall have any
further obligation to the other, and all deposit monies shall be returned to
Sublessee without offset or deduct.


10. USE

The Premises shall be used and occupied by the Sublessee as follows: Warehouse
for cGMP (current Good Manufacturing Practices, a FDA Standard) materials,
quality control test laboratories for cGMP materials, cold storage of research
materials (primarily proteins), central



                                        5


storage of research and development materials, storage of administrative
records, administrative offices and spaces for the functions outlined herein,
wet and dry laboratories for various purposes, and other office storage
functions and for no other purpose (unless Sublessee receives Sublessor's and
Master Lessor's approval per the terms and conditions of the Master Lease).


11. CONDITION OF PREMISES

Sublessor, at Sublessor's sole cost and expense, shall deliver the Premises with
the following as of the Sublease Commencement date: (1) the roof shall be in
good condition and repair, and leak free; (2) all HVAC units for the Premises
shall be in good operating condition and repair, and fully serviced per
manufacturers specifications; (3) the existing restrooms shall meet current
applicable governmental requirements; including without limitation those under
the Americans with Disabilities Act; otherwise Sublessor shall be responsible
for the costs to upgrade the restrooms to meet the requirements; (4) and
Sublessor shall paint the interior of the warehouse on both the first and second
floors. Sublessor will install an elevator to access the second floor if
required by any federal, state or local government agency for Sublessee's
occupancy of the Premises, though not in the event that Sublessee's occupancy in
the Premises is considered by the applicable government agency to be a change in
use over the previous use, thus triggering the requirement for the elevator.
Sublessor will use its best efforts to have the Master Lessor paint the exterior
of the Premises within two (2) years of the Sublease Commencement Date.


12. TENANT IMPROVEMENTS

Sublessor shall provide Sublessee with an allowance in the amount of $31,188.00
(the "Tenant Improvement Allowance") for improvements to the Premises. Said
Tenant Improvement Allowance shall be paid by Sublessor to Sublessee upon
receipt of invoices for completed work



                                        6


and lien releases in a form subject to Sublessor's reasonable approval. Subject
to Article 7 (Alterations: Liens) of the Master Lease, Sublessor shall have the
right to reasonably approve Sublessee's tenant improvement plans and
specifications prior to the commencement of the construction of the tenant
improvements. Sublessee shall contract for the construction of the tenant
improvements with a bondable and licensed contractor of Sublessee's choice
subject to the Sublessor's reasonable approval. Subject to Master Lessor's
approval, Subleases shall have the right to install an emergency back-up power
generator adjacent to the Premises. Sublessee shall provide plans and
specifications for the generator to Sublessor for Sublessor's reasonable
approval. Sublessee shall be responsible for obtaining all governmental
approvals associated with the installation of the generator.


13. MASTER LEASE NOTICES

Sublessor and Sublessee each agree to promptly deliver to the other copies of
any and all notices of default, notices or other correspondence that it sends to
or receives from Master Lessor relating to the Premises or this Sublease and
further agrees, notwithstanding Section 15 of this Sublease to the contrary, to
so deliver same in the manner most appropriate to insure that each party will be
able to respond to any of such notices or other correspondence from the Master
Lessor within any time period set forth the in the Master Lease.


14.  DEFAULT UNDER MASTER LEASE

In the event that Sublessor defaults under its obligations to be performed under
the Master Lease, Sublessee shall have the right to, but not obligation, to cure
any monetary default of Sublessor on behalf of Sublessor described in any notice
of default within ten (10) days after delivery of such default notice to
Sublessee. If Sublessee cures such default on behalf on Sublessor, Sublessor



                                        7


shall reimburse Sublessee for such amounts with ten (10) day after Sublessee's
notice to and demand therefor from Sublessor together with any late charge
specified in the Master Lease.



15. NOTICES

All notices or demands, which may or are required or permitted to be given by
either party to the other hereunder shall be in writing. All notices and demands
between Sublessor and Sublessee shall be hand delivered or sent by United States
mail, certified with return receipt requested, postage prepaid, addressed to the
parties at the addresses designated below, or to such other places as may be
designated from time to time by the parties pursuant to the provisions of this
section.

     SUBLESSEE                               SUBLESSOR
     BioMarin Pharmaceutical, Inc.           Gateway Financial Corporation
     371 Bel Marin Keys Boulevard            767  Lincoln  Avenue,  Suite 4
     Novato, CA 94949                        San Rafael,  CA 94901
     Attention:  William  Anderson,  CFO     Attention: Edmund Coyne, President

     (415) 884-6700  fax (415)884-7889       (415) 453-0451   fax (415) 453-0465


16. BROKER PARTICIPATION

     The parties acknowledge that Meridian Commercial, Inc. is the only broker
     who negotiated this Sublease and agree that Sublessor shall be responsible
     for the payment of all brokerage commissions to said broker, and that
     Sublessee shall have no responsibility therefor. As part of the
     consideration for the granting of this Sublease, Sublessor and Sublessee
     represent and warrant to each other, that, to their knowledge, no other
     broker, agent or finder negotiated or was instrumental in negotiating or
     consummating this Sublease on behalf of Sublessor or Sublessee, and that
     Sublessor and Sublessee know of no other real estate broker, agent or
     finder who is or might be entitled to a commission or compensation in
     connection with this Sublease. Each party



                                        8


     agrees to indemnify and hold harmless the other party from and against any
     damages resulting from any claims that may be asserted against the other
     party by any broker, finder or other person, with whom the indemnifying
     party has purportedly dealt.


17. SIGNAGE

     Subject to Article 22 (Signs) of the Master Lease, and subject to
     Sublessor's written approval, which shall not be unreasonably withheld,
     Sublessee, at its sole cost and expense and its option, shall have the
     right to install signage in accordance with the project master signage
     program.


18. PARKING

Sublessee, its employees, representatives, guests and invitees shall have the
right to use the parking adjacent to the Premises on an unassigned and
unreserved basis. Sublessor has confirmed that there are currently approximately
140 parking spaces in the immediate vicinity of the Premises and the building at
81 Digital Drive.


19. MISCELLANEOUS

     A.   Defined Term. All  capitalized  terms used herein  without  definition
          shall have the meanings given them in the Master Lease.

     B.   Amendment.  No amendment,  modification  or alteration of terms hereof
          shall be binding unless the same shall be in writing, dated subsequent
          to tile date hereof and duly executed by the parties.

     C.   Attorneys' Fees. In the event any litigation,  arbitration,  mediation
          or other proceeding  ("Proceeding")  is initiated by any party against
          any other party to enforce,  interpret or otherwise obtain judicial or
          quasi-judicial   relief  in  connection   with  this   Sublease,   the
          substantially  prevailing party or parties in such proceeding shall be
          entitled to recover from the unsuccessful  party or parties all costs,
          expenses and reasonable  attorney's fees relating to or arising out of
          such Proceeding  (whether or not the Proceeding results in judgement),
          including  any  post-judgement  or post award  Proceeding,  including,
          without  limitation,  one to enforce any judgement or award  resulting
          from any such Proceeding.  Any such judgement or award shall contain a
          specific provision for the recovery of all such subsequently  incurred
          costs, expenses and reasonable attorneys' fees.

     D.   Successors and Assigns.  This Sublease shall be binding upon and inure
          to the benefit of parties hereto and their  respective  successors and
          assigns in accordance with the terns of this Sublease.



                                        9


     E.   Time is of the Essence.  Time is of the essence in the  performance by
          the Sublessee of its obligations hereunder.

     F.   Entire Agreement. The terms and provisions of all schedules and
          exhibits described herein and attached hereto are hereby made a part
          hereof for all purposes. This Sublease constitutes the entire
          agreement of the parties with respect to the subject matter hereof,
          and all prior correspondence, memoranda, agreements or understandings
          (written or oral) with respect hereto are merged into and superseded
          by this Sublease.

     G.   Severability.   In  any  term  or  provision  of  this  Sublease,   or
          application  thereof  to any  person  or  circumstances,  shall to any
          extent be invalid or unenforceable,  the reminder of this Sublease, or
          the  application of such provision to persons or  circumstances  other
          than those as to which it is invalid  or  unenforceable,  shall not be
          affected  thereby,  and each provision of this Sublease shall be valid
          and shall be enforceable to the extent permitted by law.

     H.   Additional Documents and Acts. Without further consideration, each
          party agrees to execute and deliver such additional documents and
          instruments and to perform such additional acts as may be necessary or
          appropriate to effectuate, carry out and perform all the terms,
          provisions, and conditions of this Sublease and the transactions
          contemplated hereby.

     I.   Counterpart.  This Sublease may be executed in  counterparts,  each of
          which (when  delivered)  shall be the same  agreement.  Only one fully
          executed counterpart need be produced in order to prove this Sublease.
          The parties may execute this  Agreement by executing  signature  pages
          and authorizing them to be attached to the body of this Agreement.

     J.   Inconsistency.  In the event of any  inconsistency or conflict between
          the provisions of the Master Lease and the terms of this Sublease, the
          terms of this Sublease shall control.

          SUBLESSOR:   Gateway   Financial       SUBLESSEE:   BioMarin
          Corporation                            Pharmaceutical  Inc.
          By:     /s/  Edward J. Coyne         By:     /s/ R. W.  Anderson
                  ------------------------            --------------------------

          Title:  President                    Title:  V.P. Fin. and Admin.
                  ------------------------            --------------------------

          Date:   August 30, 2001              Date:  August 31, 2001
                  ------------------------            --------------------------





                                        1



                                   EXHIBIT A-1

                            STANDARD INDUSTRIAL LEASE



     THIS LEASE, made this 14 day of February, 1996, between Condiotti
Enterprises, Inc., a California corporation, with offices at 2880 Cleveland
Avenue, Suite B, Santa Rosa, California 95406, as "Lessor," and WorkRite
Ergonomic Accessories, a California corporation, with offices to be located at
77 Digital Drive, as "Lessee."


     For and in consideration of the rents, covenants and agreements hereinafter
agreed by Lessee to be paid, kept and performed, Lessor leases unto Lessee and
Lessee hires from Lessor the following described Premises, the "Premises"
together with appurtenances. situated in the building "Building" located at 77
Digital Drive in the City of Novato, County of Marin, State of California.


     The Premises are approximately 2,235 sq. ft. first floor office,  2,500 sq.
ft. second floor office and 13,000 sq. ft. first floor warehouse (17,735 sq. ft.
total) of the Building a indicated on Exhibit "B", attached hereto.


     The said Building is more particularly described in Exhibit "A" attached
hereto and made a part hereof.


     Said hiring and letting is upon the following terms and conditions:


1.   TERM:  POSSESSION:


     a.   The term of this  Lease  shall  begin  with the  "Commencement  Date",
          May 1,  1996,  for the  Premises,  and the term shall  continue  until
          July 31,  2001. Lessee shall be tendered  occupancy of the Premises as
          of the stipulated  Commencement Date. In the event the improvements to
          the Premises  pursuant to  section 39  herein are  completed  prior to
          May 1,  1996, and a certificate  of occupancy is issued,  Lessee shall
          have the right to take  possession of the Premises  without  advancing
          the lease Termination Date.


     b.   Lessor  shall  keep  Lessee  informed  of any  changes in the date for
          occupancy.


     c.   If Lessor shall not have tendered possession of the Premises to Lessee
          such that the  occupancy  date  thereof  would be more than sixty (60)
          days after the target date set forth in Paragraph A above,  Lessee may
          at Lessee's  option by notice in writing to Lessor  cancel this Lease,
          in which event the parties  shall be  discharged  from all  obligation
          hereunder.  In the event this  Lease is  cancelled  by Lessee,  due to
          Lessor's  failure to diligently  pursue the work on the Premises to be
          performed by it, Lessor shall be discharged from all obligations under
          the Lease and shall not be liable for any other costs or damages which
          Lessee may suffer except for return of all advance rental payments and
          security deposits made by Lessee.


2.   RENT:


     a.   Starting with the Commencement  Date,  Lessee shall pay to Lessor Rent
          for the  Premises  in the  amount of  Thirteen  Thousand  One  Hundred
          Thirty-Eight  and 50/100 Dollars  ($13,138.50)  each month,  the fixed
          minimal rental hereunder. The Fixed Minimal Monthly Rent shall be paid
          in  advance  on the first  (1st)  day of each  month  during  the term
          hereof.  Lessor acknowledges  receipt of Thirteen Thousand One Hundred
          Thirty-Eight and 50/100 Dollars  ($13,138.50) on the execution of this
          Lease, which shall be applied to the first month rent due hereunder.


     b.   If the commencement date or the termination date does not fall on the
          first or last day of the month, or if Lessee with Lessor's consent
          occupies the Premises prior to the Commencement Date or terminates on
          a date other than the last day of a month, Lessee shall pay rent for
          such partial month prorated on the basis of a thirty (30) day month.


     c.   The fixed minimal rental hereunder shall be increased during the term
          hereof as hereinafter provided, but in no event shall any adjustment
          to rent result in a reduction below the initial fixed minimal rent or
          any subsequently determined rent, whichever is higher. Rent shall be
          payable in lawful money of the United States to Lessor at the address
          hereinabove set forth or to such other persons or at such other places
          as Lessor may designate in writing.


     d.   In consideration of Lessee executing this lease agreement, Lessee
          shall have the right to occupy the premises on a rent free basis for
          the second, third and fourth months of the lease term.


3.   SECURITY DEPOSIT:


     Lessee shall deposit with Lessor upon execution hereof the sum or Thirteen
     Thousand One Hundred Thirty-Eight and 50/100 Dollars ($13,138.50) as
     security for Lessee's faithful performance of Lessee's obligations
     hereunder. If Lessee fails to pay rent or other charges due hereunder or
     otherwise defaults with respect to any provision of this Lease, Lessor may
     use, apply or retain all or any portion of said deposit for the payment of
     any rent or other charge in default, or for the payment of any other sum to
     which Lessor may become obligated by reason of Lessee's default, or to
     compensate Lessor for any loss or damage which Lessor may suffer thereby.
     If Lessor so uses or applies all or any portion of said deposit, Lessee
     shall within ten (10) days after written demand therefor deposit cash with
     Lessor in an amount sufficient to restore said deposit to the full amount
     hereinabove stated and Lessee's failure to do so shall be a material breach
     of this Lease. Lessor shall not be required to keep said deposit separate
     from its general accounts. If Lessee performs all of Lessee's obligations
     hereunder, said deposit, or so much thereof as has not therefore been
     applied by Lessor, shall be returned, without payment of interest or other
     increment for its use, to Lessee (or at


                                                                Lessor:_Lessee:_



                                        2


     Lessor's option, to the last assignee, if any, of Lessee's interest
     hereunder) at the expiration of the initial five (5) year term of this
     Lease in the event Lessee has not exercised its option to extend the term
     of this Lease, and after Lessee has vacated the Premises. In the event
     Lessee has not exercised its option to extend the term of this Lease, such
     security deposit shall be applied as a credit towards the security deposit
     owed by Lessee under the extended term of this Lease. No trust relationship
     is created herein between Lessor and Lessee with respect to said Security
     Deposit.


4.   USE:


     The Premises the hereby leased to Lessee upon the express condition that
     Lessee shall use said Premises for administrative offices, manufacturing
     and assembly of office furniture, sales, warehousing and related uses.


     Lessee agrees that the said Lessee's business shall be established and
     conducted through the term hereof in a first class manner; that Lessee will
     not use the demised Premises for, or carry on or permit upon said Premises
     any offensive, noisy or dangerous trade, business, manufacture or
     occupation or any nuisance, or anything against public policy, nor permit
     any auction sale to be held or conducted on or about said Premises; that
     Lessee shall not commit, or suffer to be committed, any waste upon the
     Premises; that Lessee will not do or suffer anything to be done upon said
     Premises which will cause structural injury to said Premises or the
     building of which same form a part; that said Premises will not be
     overloaded and that no machinery, apparatus or other appliance shall be
     used or operated in or upon the Premises which will in any manner injure,
     vibrate or shake said Premises or the building of which it is a part; that
     no use will be made of the Premises which will in any way impair the
     efficient operation of the sprinkler system (if any) within the building
     containing the Premises; that Lessee will not vacate or abandon said
     Premises during the term hereof unless pursuant to an assignment of this
     Lease or subletting of the Premises; Lessee further agrees not to use or
     permit the use of the Premises or any part thereof, for any immoral or
     other purpose prohibited by law or which will increase the existing rate of
     insurance (or if a newly constructed building, lien the initial rate of
     insurance) upon the building in which the Premises may be located, or cause
     a cancellation of any insurance policy covering said building or any part
     thereof. If any act on the part of Lessee or use of the Premises by Lessee
     shall cause, directly or indirectly, any increase of Lessor's insurance
     expense, said additional expense shall be paid by Lessee to Lessor upon
     demand. No such payment by Lessee shall limit Lessor in the exercise of any
     other rights or remedies, or constitute a waiver of Lessor's right to
     require Lessee to discontinue such act or use. No use shall be made or
     permitted to be made of the Premises or any part thereof, and no act done
     therein, which may disturb the quiet enjoyment of any other tenant in the
     building of which the Premises are a part. Lessee, at Lessee's sole cost
     and expense, agrees to do all things necessary to maintain the Premises, in
     a clean, neat and sanitary manner; and repair and maintain the interior of
     the Premises forming a part of the building in compliance and conformity
     with all laws and ordinances, municipal, state, federal and/or any other
     governmental board or authority, present or future, in anywise relating to
     the condition, use or occupancy of the Premises throughout the entire term
     of this lease and to the perfect exoneration from liability of Lessor, or
     if due to Lessee's specific use of the Premises any governmental authority
     requires alterations, Lessee shall make such alternations at its sole cost
     and expense, excluding structural changes not related to or affected
     Lessee's improvements or acts. The judgment of any court of competent
     jurisdiction or the admission of Lessee in any action or proceeding against
     Lessee, whether Lessor be a party thereto or not, that Lessee has violated
     any such law, ordinance, requirement or order in the use of the Premises,
     shall be conclusive of that fact as between Lessor and Lessee.


5.   CONDITION OF PREMISES:


     Lessor shall deliver the Premises to Lessee clean and free of debris
     (broomswept floors, windows washed, HVAC grills cleaned, etc.) on the
     Commencement Date and warrants to Lessee that the interior plumbing,
     interior electrical, and interior sewage systems, the heating and air
     conditioning installation. the lighting (including replacement or burnt out
     light fixtures) and loading doors, if any, in the Premises shall be in good
     operating condition on the Commencement date. In the event a non-compliance
     with said warranty exists as of the Commencement Date, Lessor shall
     promptly, after receipt of written notice from Lessee setting forth the
     nature and extent of such non-compliance, rectify the same at Lessor's sole
     cost and expense. If Lessee does not give Lessor written notice of a
     non-compliance with this warranty within three (3) months after the
     Commencement Date, correction of that non-compliance shall be the
     obligation of Lessee at Lessee's sole cost and expense.


6.   REPAIRS:


     a.   Repairs by Lessee:


          Lessee agrees at its own cost and expense to maintain, repair and keep
          the interior of the Premises forming a part of the building, and all
          appurtenances (including interior wiring, interior plumbing, interior
          sewage system, heating and air cooling installation, all glazing in or
          bordering the Premises and any store front), in good condition and
          repair during the term of this Lease, excepting capital replacement or
          improvement of building systems that have outlived their useful life
          in which event Lessor will be responsible. Lessor is responsible for
          foundations, and structural portions of the Premises and damage to
          such Premises by fire, earthquake, civil insurrection, and acts of God
          or the elements. In the event Lessee should fail to make the repairs
          required of Lessee forthwith upon notice by Lessor, Lessor, in
          addition to all other remedies available hereunder or by law, and
          without waiving any said alternative remedies, may make same and
          Lessee agrees to repay Lessor the cost thereof as part of the rental
          (payable as such) on the next day on which rent becomes due, and
          failure to pay same shall carry with it the same consequences as
          failure to pay any installment of rental. Lessee agrees during the
          full term of this Lease, at its own cost and expense, to make all
          repairs and replacements of whatever kind or nature, either to the
          interior or exterior of said Premises, rendered necessary by reason of
          any act or omission of Lessee or its agents, servants or employees.
          Upon lease termination, Lessee shall surrender unto Lessor the
          Premises in the same condition as received, ordinary wear and tear and
          damage by fire, earthquake, civil insurrection, acts or God or the
          elements alone excepted. Notwithstanding the foregoing, Lessor shall
          repair damages to the Premises caused by acts or omissions of Lessor
          or it's authorized representatives or agents or the Lessor's failure
          to perform its obligations under Paragraph b, herein below.


                                                                Lessor:_Lessee:_



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     b.   Repairs by Lessor:


          Lessor agrees, after written notice of the necessity therefor, and
          should the same not be caused by the gross negligence or willful
          misconduct of Lessee, to initiate necessary repairs to the sprinkler
          system, foundations and other structural portions of the Premises
          forming a part of the building; the common areas, if any; and the
          roof, exterior walls, bearing walls, window frames, gutters and
          downspouts, subflooring parking area, landscaping and all wiring,
          plumbing and sewage system exterior to the Premises, within thirty
          (30) days of notification thereof, except in the event of any
          emergency Lessor will make repairs as soon as reasonably possible.


     c.   If Lessor fails to perform its obligation as to any and all repairs
          and maintenance of the Premises within thirty (30) days notification
          of the necessity of the same, Lessee may perform Lessor's obligations
          and have the right to be reimbursed for the sum it actually expands in
          the permanence of Lessors obligations.


7.   ALTERNATIONS:  LIENS:


     Lessee agrees not to make any structural alterations of, changes in or
     additions to the Premises. Lessee agrees not to make any non-structural
     alterations of, changes in or additions to the Premises of a cost in excess
     of Five Thousand Dollars ($5,000) without the prior written consent of
     Lessor. Lessee agrees that should Lessor give written consent, all
     alterations, additions and improvements, including fixtures, made in, to or
     on the Premises, except unattached movable business fixtures, shall be the
     property of Lessor at termination of Lease and shall remain upon and be
     surrendered with the Premises. If Lessor shall require to have the Premises
     or any part or parts thereof restored to their condition when the Premises
     were delivered to Lessee then Lessor shall notify Lessee thereof together
     with Lessor's written consent to any alterations or changes to the
     Premises, and if Lessor shall so desire, Lessee shall so restore the
     Premises or such part or parts thereof by the end of the term of this
     Lease, entirely at Lessee's own cost and expense.


     Lessee agrees that if any such alterations, changes or additions are to be
     made, same shall not be commenced until two (2) days after receipt of
     written consent of Lessor required by this paragraph, in order that Lessor
     may post appropriate notice to avoid liability on account thereof. Lessee
     agrees to indemnify and save harmless Lessor from all liens, claims or
     demands arising out of any work performed, materials furnished, or
     obligations incurred by or for Lessee upon the Premises during said term,
     and agrees not to suffer any such lien or other lien to be created.


8.   UTILITIES:


     Lessee shall pay far all gas, heat, light, power, telephone, refuse
     service, and other utilities and services supplied to the Premises,
     together with any taxes thereon. If any such services are not separately
     metered to Lessee, Lessee shall pay a pro-rata proportion to be determined
     by Lessor of all charges jointly metered with other Premises.


9.   ENTRY AND INSPECTION:


     Lessee agrees that Lessor and his agents may enter upon the Premises at
     reasonable times and upon reasonable notice to inspect the same, to submit
     them to a prospective purchaser, lender, or lessee, or to make any changes
     or alterations or repairs which Lessor shall consider necessary for the
     protection, improvement or preservation thereof, or of the building in
     which the Premises are situated, or to make changes in the plumbing,
     wiring, meters or other equipment, fixtures or appurtenances of the
     building, or to post any notice provided for by law, or otherwise to
     protect any and all rights of Lessor; and Lessor shall have the right to
     erect and maintain all necessary or proper scaffolding or other structures
     for the making of such changes, alterations or repairs (provided the
     entrance to the Premises shall not be blocked thereby and that such work
     shall be completed with diligence and dispatch) and there shall be no
     liability against Lessor for damages thereby sustained by Lessee, nor shall
     Lessee be entitled to any abatement of rental by reason of the exercise by
     Lessor of any such rights herein reserved. Nothing herein contained shall
     be construed to obligate Lessor to make any changes, alterations or
     repairs. Lessee, further agrees that at any time after six (6) months prior
     to the termination of this Lease, Lessor may place thereon any usual or
     ordinary "To Let" or "To Lease" signs.


10.  ASSIGNMENT AND SUBLETTING:


     a.   Lessor's  Consent  Required:   Lessee  shall  not  voluntarily  or  by
          operation  of law assign,  transfer,  mortgage,  sublet,  or otherwise
          transfer  or  encumber  all or any part of  Lessee's  interest in this
          Lease or in the Premises without Lessor's prior written consent, which
          Lessor  shall not  unreasonably  withhold.  Lessor  shall  respond  to
          Lessee's  request for  consent  hereunder  in a timely  manner and any
          attempted assignment,  transfer,  mortgage,  encumbrance or subletting
          without such consent shall be void,  and shall  constitute a breach of
          this Lease.


     b.   Lease  Affiliate:  Notwithstanding  the  provisions  of paragraph  "A"
          hereof,  Lessee may assign  this Lease or sublet the  Premises  or any
          portion  thereof,  without Lessors consent,  to any corporation  which
          controls,  is controlled by or is under common control with Lessee, or
          to any  corporation  resulting from the merger or  consolidation  with
          Lessee,  or to any person or entity  which  acquires all the assets of
          Lessee as a going concern of the business first is being  conducted on
          the Premises, provided in the case of an assignment that said assignee
          assumes, in full, are obligations of Lessee under this Lease.


     c.   No Release of Lessee: Regardless of Lessor's consent, no subletting or
          assignment  shall release  Lessee of Lessee's  obligation or alter the
          primary  liability  of Lessee to pay the rent and to perform all other
          obligations  to  be  performed  by  Lessee  hereunder,  unless  Lessor
          specifically consents to Release of Liability.  The acceptance of rent
          by Lessor from any other  person shall not be deemed to be a waiver by
          Lessor  of  any  provision  hereof.   Consent  to  one  assignment  or
          subletting shall not be deemed consent to any subsequent assignment or
          subletting.  In the event of default by any  assignee of Lessee or any
          successor  of Lessee to the  performance  of any of the terms  hereof,
          Lessor may proceed  directly  against  Lessee without the necessity of
          exhausting remedies against said assignee.  Any subsequent assignment,
          sublease,  amendment or  modification  of this lease with assignees or
          successors  of lease,  made without  Lessee's  written  consent  shall
          relieve Lessee from liability under this lease.


                                                                Lessor:_Lessee:_



                                        4


     d.   Attorney's  Fees:  In the event  Lessee  shall  assign  or sublet  the
          Premises  or  request  the  consent  of  Lessor to any  assignment  or
          subletting,  or if Lessee shall  request the consent of Lessor for any
          act Leasee proposes to do, so long that Lessee is not in default under
          any of the terms and  conditions of the lease  agreement,  then Lessee
          shall pay Lessor's  reasonable  attorney's fees incurred in connection
          therewith,  not to exceed  $500.00  for each  proposed  assignment  or
          sublet.


11.  HOLD HARMLESS:


     This Lease is made upon the express condition that Lessee agrees to keep,
     save and hold Lessor free from all liability, penalties, losses, damages,
     costs, expenses, causes of action, claims and/or judgments arising by
     reason of any injury or damage to any person or persons, including without
     limitation, Lessee, its servants, agents and employees, or property of any
     kind whatsoever and to whomsoever belonging, including without limitation,
     Lessee's, its servants', agents', and employees', from any cause or causes
     whatsoever, including leakage, while in, upon or in any way connected with
     said demised Premises, of its appurtenances during the term of this Lease
     or any occupancy hereunder, Lessee hereby covenanting and agreeing to
     indemnify, protect and save Lessor harmless from all liability, loss costs
     and obligations on account of or arising out of any such injuries or
     losses, however incurring.


     Lessee, as a material part of the consideration to be rendered to Lessor,
     hereby waives all claims against Lessor for damages to goods, wares and
     merchandise in, upon of about the Premises and for injuries to Lessee, his
     agents or third persons in or about the Premises from any cause arising at
     any time including, without limiting the generality of the foregoing,
     damages arising from acts or omissions of other tenants of the building of
     which the Premises are a part.


     Notwithstanding the foregoing, in no event shall the Lessee be liable for
     damages or injury occasioned by the gross negligence or intentional acts or
     omissions of the Lessor or of Lessor's designated agents, servants or
     employees in which case the Lessor shall hold the Lessee harmless from all
     damages arising out of the same.


     A parties obligation under this paragraph shall be limited to the sum that
     exceeds the amount of insurance proceeds, if any received by the party
     being indemnified.


12.  INSURANCE:


     a.   Liability  Insurance:  Lessee shall, at Lessee's  expense,  obtain and
          keep in force  during  the term of this  Lease a  policy  of  Combined
          Single Limit,  Bodily Injury and Property  Damage  insurance  insuring
          Lessor and Lessee against any liability  arising out of the ownership,
          use,  occupancy,   or  maintenance  of  the  Premises  and  all  areas
          appurtenant  thereto.  Such insurance shall be a combined single limit
          policy  in an amount  not less than  $2,000,000  per  occurrence.  The
          policy  shall  insure  the risks  assumed  by Lessee of the  indemnity
          provision  of Paragraph 9 and 11. The limits of said  insurance  shall
          not, however, limit the liability of Lessee hereunder.


     b.   Property Insurance: Lessee shall obtain and keep in force during the
          term of this Lease a policy or policies of insurance covering loss or
          damage to its fixtures, equipment, tenant improvements, inventory and
          other contents stored in the Premises in the amount of the full
          replacement value thereof, as the same may exist from time to time.


     c.   Insurance Policies. Insurance required hereunder shall be in companies
          holding a "General  Policyholders  Rating" of at least B plus, or such
          other  rating  as may be  required  by a  lender  having a lien on the
          Premises,  as set forth in the most current issue of "Best's Insurance
          Guide".  The insuring party shall deliver to the other party copies of
          policies of such  insurance or  certificates  evidencing the existence
          and amounts of such insurance with loss payable clauses as required by
          this  paragraph  12. No such policy shall be  cancelable or subject to
          reduction of coverage or other  modification  except after thirty (30)
          days' prior written notice to Lessor. If Lessee is the insuring party,
          Lessee  shall,  at least thirty (30) days prior to the  expiration  of
          such policies,  furnish Lessor with renewals or "binders" thereof,  or
          Lessor may order such insurance and charge the cost thereof to Lessee,
          which amount shall be payable by Lessee upon demand.


     d.   Waiver of  Subrogation:  Lessee and Lessor  each  hereby  release  and
          relieve the other,  and waive their entire  right of recovery  against
          the  other  and   against   the   officers,   employees,   agents  and
          representatives  of the  other for loss or  damage  arising  out of or
          incident to the perils  insured  against  under  paragraph  12,  which
          perils  occur  in,  an or  about  the  Premises,  whether  due  to the
          negligence of Lessor or Lessee or their agents, employees, contractors
          and/or invites.  Lessee and Lessor shall,  upon obtaining the policies
          of insurance required hereunder,  give notice to the insurance carrier
          or  carriers  that the  foregoing  mutual  waiver  of  subrogation  is
          contained in this Lease.


     e.   Fire and Extended Coverage Insurance:  At all times from and after the
          date of  commencement  of this Lease,  Lessor  shall keep the building
          which  constitutes  a part of the  Premises  insured  for  the  mutual
          benefit of Lessor and  Lessee  against  (i) loss or damage by fire and
          such other  risks as may be  included  in a standard  form of extended
          coverage insurance from time to time available,  in amounts sufficient
          to prevent  Lessor or Lessee  from  becoming a  co-insurer  within the
          terms of the applicable  policies and, in any event.  In an amount not
          less than one  hundred  percent  (100%)  of the then full  replacement
          value of the building, together with an addendum thereto providing for
          six (6) month's rental income coverage payable to Lessor, (ii) loss or
          damage from leakage of sprinkler systems now or hereafter installed in
          the building in such amount as Lessor shall reasonably establish,  and
          (iii) loss or damage  resulting  from  explosion of steam boiler,  air
          conditioning equipment,  pressure vessels or similar apparatus, now of
          hereafter  installed  in the  building  by Lessor,  in such  amount as
          Lessor shall reasonably establish.


                                                                Lessor_:Lessee:_



                                        5



     f.   Notice by Lessee: Lessee agrees to give prompt notice to Lessor with
          respect to all events occurring upon the Premises which may be the
          subject of claims on insurance policies, whether policies are being
          maintained by Lessor or by Lessee.


13.  PERSONAL PROPERTY TAXES:


     a.   Lessee shall pay prior to delinquency all taxes assessed against and
          levied upon trade fixtures, furnishing, equipment and all other
          personal property of Lessee contained in the Premises or elsewhere as
          it may affect the Premises. When possible, Lessee shall cause said
          trade fixtures, furnishings, equipment and all other personal property
          to be assessed and billed separately from the real property of Lessor.


     b.   If any of Lessee's said personal property shall be assessed with
          Lessor's real property, Lessee shall pay Lessor the taxes attributable
          to Lessee within ten (10) days after receipt of a written statement
          selling forth the taxes applicable to Lessee's property.


14.  DEFAULTS:  REMEDIES:


     a.   Defaults:  The  occurrence of any one or more of the following  events
          shall  constitute  a  material  default  and  breach of this  Lease by
          Lessee:


          i.   The vacating or abandonment of the Premises by Lessee or assignee
               or sublessee as applicable.


          ii.  The failure by Lessee to make any payment of rent or any other
               payment required to be made by Lessee hereunder, as and when due,
               where such failure shall continue for a period of ten (10) days
               after written notice thereof from Lessor to Lessee. In the event
               that Lessor serves Lessee with a Notice to Pay Rent or Quit
               pursuant to applicable Unlawful Detainer statutes, such Notice to
               Pay Rent or Quit shall also constitute the notice required by
               this subparagraph.


          iii  The failure by Lessee to observe or perform any conditions or
               provisions of this Lease to be observed or performed by Lessees,
               other than described in paragraph (ii) above, where such failure
               shall continue for a period of thirty (30) days after written
               notice thereof from Lessor to Lessee; provided, however, that if
               the nature of Lessee's default is such that more than thirty (30)
               days are reasonably required for its cure, that Lessee shall not
               be deemed to be in default if Lessee commenced such cure within
               said thirty (30) day period and thereafter diligently prosecutes
               such cure to completion.


          iv.  (a) The making by Lessee of any general arrangement or assignment
               for the benefit of creditors; (b) Lessee becomes a "debtor" as
               defined in 11 U.S.C. 101 or any successor statute thereto
               (unless, in the case of a petition filed against Lessee, the same
               is dismissed within sixty [60] days); (c) the appointment of a
               trustee or receiver to take possession of substantially all of
               Lessee's assets located at the Premises or of Leassee's interest
               in this Lease, where possession is not restored to Lessee within
               thirty (30) days; or (d) the attachment, execution or other
               judicial seizure of substantially all of Lessee' assets located
               at the Premises or of Lessee's interest in this Lease, where such
               seizure is not discharged within thirty (30) days. Provided,
               however, in the event that any provision of this paragraph A (iv)
               is contrary to any applicable law, such provision shall be of no
               force or effect.


          v.   The discovery by Lessor that any financial statement given to
               Lessor by Lessee, any assignee of Lessee, any subtenant of
               Lessee, any successor in interest of Lessee or any guarantor of
               Lessee's obligation hereunder, and any or them, was materially
               false.


          Remedies: In the event of any such material default or breach by
          Lessee, Lessor may at any time thereafter, by written notice or demand
          and without limiting Lessor in the exercise of any right or remedy
          which Lessor may have by reason of such default or breach:


          i.   Terminate  Lessee's  right to  possession  of the Premises by any
               lawful means, in which case this Lease shall terminate and Lessee
               shall immediately surrender possession of the Premises to Lessor.
               In such event Lessor shall be entitled to recover from Lessee all
               damages   incurred  by  Lessor  by  reason  of  Lessee's  default
               including,  but not limited to, the cost of recovering possession
               of the  Premises,  expenses  of  re-letting  including  necessary
               renovation and alteration of the Premises,  reasonable attorney's
               fees, and any real estate commission actually paid; and the worth
               at the time of award by the court having jurisdiction  thereof of
               the amount by which the unpaid  rent for the  balance of the term
               after the time of such award  exceeds  the amount of such  rental
               loss for the same period that Lessee  proves could be  reasonably
               avoided.


          ii.  Maintain Lessee's right to possession in which case this Lease
               shall continue in effect whether or not Lessee shall have
               abandoned the Premises. In such event, Lessor shall be entitled
               to enforce all of Lessor's rights and remedies under this Lease,
               including the right to recover the rent as it becomes due
               hereunder.


          iii. Pursue any other remedy now or hereafter available to Lessor
               under the laws or judicial decision of the state wherein use
               Premises are located. Unpaid installments of rent and other
               unpaid monetary obligations of Lessee under the terms of this
               Lease shall bear interest from the date due at the maximum rate
               then allowable by law.


                                                                Lessor:_Lessee:_



                                        6


     c.   Default by Lessor:  Lessor shall not be in default unless Lessor fails
          to perform  obligations  required of Lessor within a reasonable  time,
          but in no event later than thirty  (30) days after  written  notice by
          Lessee to Lessor  and to the holder of any first  mortgage  of deed of
          trust  covering  the  Premises  whose  name  and  address  shall  have
          therefore  been  furnished  to Lessee in writing,  specifying  wherein
          Lessor has failed to perform such obligation;  provided, however, that
          if the nature of  Lessor's  obligation  is such that more than  thirty
          (30) days are  required  for  performance  then Lessor shall not be in
          default if Lessor  commences  performance  within such thirty (30) day
          period and thereafter diligently prosecutes the same to completion.


          In the event Lessor shall neglect or fail to perform or observe any of
          the covenants, provision or conditions contained in this Lease on its
          part to be performed or observed within thirty (30) days after written
          notice of default, or if more than thirty (30) days shall be required
          because of the nature of the default, if Lessor shall fail to proceed
          diligently to cure such default after written notice, then in that
          event, Lessor shall be responsible to Lessee for any and all damages
          sustained by Lessee as a result of Lessor's breach.


     d.   Late Charges:  Lessee hereby  acknowledges that late payment by Lessee
          to Lessor of rent and other sums due  hereunder  will cause  Lessor to
          incur costs not  contemplated by this Lease, the exact amount of which
          will be extremely difficult to ascertain.  Such costs include, but are
          not limited to processing  and  accounting  charges,  and late charges
          which may be imposed on Lessor by the terms of any  mortgage  or trust
          deed covering the Premises. Accordingly, if any installment of rent or
          any  other sum due from  Lessee  shall  not be  received  by Lessor or
          Lessor's designee within ten (10) days after such amount shall be due,
          then,  without any requirement for notice to Lessee,  Lessee shall pay
          to Lessor a late charge  equal to five  percent  (5%) of such  overdue
          amount.  The parties  hereby agree that such late charge  represents a
          fair and reasonable  estimate of the costs Lessor will incur by reason
          of late  payment by Lessee.  Acceptance  of such late charge by Lessor
          shall in no event constitute a waiver of Lessee's default with respect
          to such overdue amount,  nor prevent Lessor from exercising any of the
          other rights and remedies granted hereunder.  In the event that a late
          charge is payable hereunder,  whether or not collected,  for three (3)
          consecutive installments of rent, then rent shall automatically become
          due  and  payable   quarterly   in  advance,   rather  than   monthly,
          notwithstanding  paragraph #2 or any other  provision or this Lease to
          the contrary.


15.  ABANDONMENT:


     If Lessee should abandon, vacate or surrender the Premises or be
     dispossessed by process of law, in addition to all other remedies of
     Lessor, Lessor, at its option, may deem that any personal property
     belonging to Lessee left on the Premises is abandoned and/or Lessor may at
     once enter upon the Premises and remove therefrom any and all equipment,
     fixtures and merchandise therein and may sell said fixtures, equipment and
     merchandise at public or private sale at such price and upon such terms as
     Lessor may determine, without notice to or demand upon Lessee. Out of the
     proceeds of such sale, Lessor may reimburse itself for the expense of such
     taking, removal and sale and for any indebtedness of Lessee to Lessor and
     the surplus, if any, shall be accounted for to Lessee.


16.  DESTRUCTION:  RENEWAL:


     a.   In the event of damage or  destruction of the Premises or the building
          and other  improvements  in which the Premises are located  during the
          term hereof,  which Lessor is obligated to repair to substantially the
          same  condition as the Premises or the building or other  improvements
          in  which  the  Premises  are  located  were  prior to the  damage  or
          destruction by the terms of this Lease,  Lessor shall forthwith repair
          the same,  provided such repairs can be made within sixty (60) days of
          the date of such damage or destruction  under the laws and regulations
          of  State,  Federal,   County  of  Municipal  authorities,   but  such
          destruction  shall in no way annul or void  this  Lease,  except  that
          Lessee  shall be  entitled  to a  proportionate  reduction  in minimal
          monthly  rent to be based  upon the extent to which the making of such
          repairs shall interfere with the business  carried on by Lessee in the
          Premises.  If such repairs  cannot be made in sixty (60) days,  Lessor
          may, at its option, make same within a reasonable time, in which event
          this Lease shall  continue  in full force and effect,  and the monthly
          rental shall be proportionately  abated as aforesaid in this paragraph
          provided.  In the  event  that  Lessor  does not so elect to make such
          repairs which cannot be made within sixty (60) days, this Lease may be
          terminated at the option of either  party.  If repairs to the Premises
          or the  building  and other  improvements  in which the  Premises  are
          located  cannot be made  within  ninety  (90) days of the date of such
          damage or destruction, so long as Lessee, its agent or representatives
          are not the cause of such damage or destruction. Lessee shall have the
          right to terminate  this lease.  Lessor  shall give written  notice to
          Lessee  within  thirty (30) days of the  occurrence  of said damage or
          destruction  requiring repair in the event such repairs cannot be made
          within  said sixty (60) days or if repairs can and will be made within
          ninety (90) days of such damage and destruction.


     b.   In respect to any damage or  destruction  which Lessor is obligated to
          repair or may elect to repair under the terms of this  paragraph,  the
          provisions  of  Section  1932,  Subdivision  2. and of  Section  1933,
          Subdivision 4 of the Civil Code of the State of California  are waived
          by Lessee. In the event that the building in which the Premises may be
          situated be damaged or  destroyed  to the extent of 33-1/3% or more of
          the  replacement  cost  thereof,  Lessor may elect to  terminate  this
          Lease, whether the Premises be injured or not.


     c.   Should the parties hereto be unable to agree in writing as to the time
          required for repair of any such damage or destruction to the Premises
          or the building and other improvements in which the Premises are
          located or as to the percentage of damage to the building of which the
          same are a part, within five (5) days after the happening of said
          occurrence, or to the extent, if any, of reduction of rental during
          the period of repair within fifteen (15)


                                                                Lessor:_Lessee:_



                                        7


          days after the happening of said occurrence, each shall within five
          (5) days following written notice from either party to such effect,
          provided such party is not in default or this Lease at such time,
          select an arbitrator and notify in writing the other of the name and
          address of the arbitrator so selected. Within five (5) days thereafter
          the two so selected shall appoint a third arbitrator and notify in
          writing within said last mentioned time the Lesser and Lessee of the
          name and address of said appointee, or of their inability to agree
          upon said appointee, if such should be the fact. In the latter event,
          the selection of the third arbitrator shall be committed to the
          Presiding Judge of the Superior Court of the State of California, of
          the County in which the Premises are located, and such appointment
          shall be invoked by written request addressed to said Judge signed by
          Lessor or by Lessee, or their respective counsel, within five (5) days
          after receipt by the Lessor and Lessee of said notice of inability
          from said two arbitrators and Lessor and Lessee. When the three
          arbitrators have been selected in either of the ways above set forth,
          they shall forthwith convene and determine the issue or issues
          submitted unto them, and the written determination under the
          signatures of a majority of said arbitrators shall be final, binding
          and conclusive upon the parties hereto. Should either party refuse or
          fall to select an arbitrator within the time as above provided and
          notify the other party thereof, the arbitrator selected by such other
          party shall be the sole arbitrator and his decision shall have the
          same effect as if rendered by a majority of three arbitrators. Save as
          modified hereby, the provisions of Title IX of Part III of the Code or
          Civil Procedure of the State of California dealing with the subject or
          arbitration shall apply. The costs or any arbitration shall be borne
          equally by the parties except in the instance of refusal of a party to
          abide thereby, in which event, and should the award be confirmed by
          judicial order in conformity with the said provisions of said Title,
          all costs, including those incurred in the court proceeding, shall be
          assessed against and borne by the disaffirming party.


     d.   Notwithstanding  anything  herein  to the  contrary,  if,  at any time
          during the term hereof,  any governmental  agency having  jurisdiction
          over the  Premises or the  building of which the  Premises  are a part
          shall require the making of any repairs,  improvements  or alterations
          to said building or Premises,  and Lessor  determines to demolish said
          building or Premises rather than to make said repairs, improvements or
          alterations,  or allow same to be made,  Lessor,  upon at least ninety
          (90) days  written  notice to Lessee shall have the right to terminate
          this Lease.  Upon the date specified in such notice,  this Lease shall
          terminate and Lessor shall have no further  liability to Lessee except
          that: (i) Lessor shall refund to Lessee any unearned rentals and shall
          return  any  security  deposit,  and  (ii) in  the  event  Lessor  had
          therefore given written consent to any leasehold improvements upon the
          Premises  made by Lessee and had agrees,  in  writing,  as to the cost
          thereof to Lessee.  Lessor  shall pay to Lessee upon such  termination
          that  percentage or such cost to Lessee as the number of full calendar
          months remaining in the original term of this Lease bears to the total
          number of calendar months in said original term.


17.  COSTS OF SUIT:


     Lessee agrees that if Lessor is involuntarily made a party defendant to any
     litigation concerning this Lease or the Premises by reason of any act or
     omission of Lessee and not because of any act or emission of Lessor, then
     Lessee shall hold harmless the Lessor from all liability by reason thereof,
     including reasonable attorneys' fees incurred by Lessor in such litigation
     and all taxable court costs. If legal action shall be brought by either of
     the parties hereto for the unlawful detainer of the Premises, for the
     recovery or any rent due under the provisions of this Lease, or because of
     the breach of any term, covenant, or provision hereof, the party prevailing
     in said action (Lessor or Lessee as the case may be) shall be entitled to
     recover from the parry not prevailing costs of suit and a reasonable
     attorney's fee which shall be fixed by the Judge of the Court.


18.  HOLDING OVER:


     Should Lessee hold over the term hereby created with or without the consent
     or Lessor, Lessee shall became a tenant from month to month at 125% of the
     minimal monthly rental paid in the final month of the lease term, and
     otherwise upon the covenants and conditions in this Lease contained, and
     shall continue to be such tenant until thirty (30) days after either party
     hereto serves upon the other written notice of intention to terminate such
     monthly tenancy. Should such termination occur on any day other than the
     last day of any rental month, any unearned prepaid rental shall,
     immediately following surrender of the Premises by Lessee, be refunded unto
     him.


19.  SALE OF PREMISES:


     In the event of a sale or conveyance by Lessor of the Premises, the same
     shall operate to release Lessor from any future liability upon any of the
     covenants or conditions, express or implied, herein contained in favor of
     Lessee, and in such event Lessee agrees to look solely to the
     responsibility of the successor in interest of Lessor. If any security be
     given by Lessee to secure faithful performance of Lessee's covenants in
     this Lease or any rent shall have been prepaid, Lessor shall transfer the
     same, as such, to the purchaser of the reversion and thereupon Lessor shall
     be discharged from any further liability in reference thereto.


20.  CONDEMNATION:


     If any part of the Premises or the building in which the Premises are
     located (even though no part of the Premiums be taken) be condemned for a
     public or quasi-public use by right of eminent domain, with or without
     litigation, or transferred by agreement in connection with such public or
     quasi-public use, this Lease, as to the part so taken, shall terminate as
     of the date title shall vest in the condemnor, and the rent payable
     hereunder shall be adjusted so that Lessee shall be required to pay for the
     remainder of the term only such portion of such rent as the value of the
     part remaining after condemnation bears to the value of the entire Premises
     at the date of condemnation; but in either such event Lessor shall have the
     option to terminate this Lease as of the date when title to the part so
     condemned vests in the condemnor.


                                                                 Lessor:_Lessee_



                                        8


     Lessee shall have the right to this lease if: (1) any part of the Premises
     is taken if such taking renders the remaining portion of such Premises
     substantially unsuitable for Lessee's continued use therein, and (2) if the
     building in which the Premises are located, whether or not any part of the
     Premises are taken, or if the parking areas adjacent to the building or
     other improvements in which the Premises are located, are taken in which
     taking renders the Premises substantially unsuitable for Lessee's continued
     use.

     If either Lessor or Lessee elects to terminate this lease under this
     section 20, such Lesser or Lessee must exercise said right to terminate by
     giving written thirty (30) day notice to the other of such exercise and the
     date of termination within ten (10) days after the nature and extent of the
     taking have been finally determined.

     All compensation for loss of use of premises, not loss of business or other
     incidental compensation awarded upon such condemnation or taking shall
     belong and be paid to Lessor and Lessee shall have no claim thereto, and
     Lessee hereby irrevocably assigns and transfers to Lessor any right to
     compensation or damages for loss of use of the Premises to which Lessee of
     Lessor may become entitled during the term hereof by reason of the
     condemnation of all or part of the Premises.

     Lessor and Lessee waives the provisions of the Code of Civil Procedure
     section 1265.130 allowing either party to petition the superior court to
     terminate this Lease in the event of a partial taking of the Premises.


21.  SUBORDINATION:


     a.   Within thirty (30) days after the date of execution of this Lease, but
          in no event later than the lease commencement date, Lessor shall
          deliver to Lessee a commercially reasonable non-disturbance agreement
          in form and substance reasonably acceptable to Lessee executed by any
          ground lessor or lender holding a lien in the Premises.


          With respect to security devices entered into by the Lessor after the
          execution of this Lease, Lessee's subordination of this Lease shall be
          subject to receiving assurance (a "non-disturbance agreement") from
          the lender that Lessee's possession and this Lease, including any
          options to extend the term hereof, will not be disturbed so long as
          Lessee is not in breach of any of the terms and conditions of this
          Lease and attorns to the owner of record the Premises hereof.


     b.   This Lease,  at Lessor's  option,  shall be  subordinate to any ground
          lease, mortgage, deed of trust, or any other hypothecation or security
          now or hereafter  placed upon the real  property of which the Premises
          are a part and to any and all advances  made on the  security  thereof
          and to all renewals, modifications,  consolidations,  replacements and
          extensions thereof.  If any mortgagee,  trustee or ground lessor shall
          elect to have this Lease  prior to the lien of its  mortgage,  deed of
          trust or ground  lease,  and shall  give  written  notice  thereof  to
          Lessee,  this Lease  shall be deemed  prior to such  mortgage  deed of
          trust,  or  ground  lease,  whether  this  Lease is dated  prior to or
          subsequent to the date of said mortgage, deed of trust or ground lease
          or the date of recording thereof.


     c.   Lessee  agrees to execute  any  documents  required to  effectuate  an
          attornment,  a subordination,  or to make this Lease prior to the lien
          of any mortgage,  deed of trust or ground  lease,  as the case may be.
          Lessee's  failure to execute such documents within ten (10) days after
          written  demand  shall   constitute  a  material   default  by  Lessee
          hereunder, or, at Lessor's option, Lessor shall execute such documents
          on behalf of Lessee and Lessee's attorney-in-fact.  Lessee does hereby
          make,   constitute   and   irrevocably   appoint  Lessor  as  Lessee's
          attorney-in-fact  and in Lessee's  name,  place and stead,  to execute
          such documents in accordance with this Paragraph 21C.


22.  SIGNS:


     Lessee agrees not to inscribe, paint or affix any signs, advertisements,
     placards or awnings on the exterior or roof of the Premises or upon the
     entrance doors, windows, or the sidewalk on or adjacent to the Premises
     without the written consent of Lessor first obtained. Any signs so placed
     on the Premises shall be so placed upon the understanding and agreement
     that Lessee will remove same at the termination of the tenancy herein
     created and repair any damage or injury to the Premises caused thereby, and
     if not so removed by Lessee, then Lessor may have same so removed at
     Lessee's expense. Lessee shall not be allowed to use the name of the
     building, or words to such effect in connection with any business carried
     on in the Premises (except as the address of the Lessee) without the
     written consent of Lessor. Lessor reserves the right to change the name and
     title of the building at any time during the term of said Lease. Lessee
     hereby expressly agrees to such change at the option of Lessor and waives
     any and all damage occasioned thereby.


23.  SURRENDER OF LEASE


     No act or conduct of Lessor, whether consisting of the acceptance of the
     keys to the Premises, or otherwise, shall be deemed to be or constitute an
     acceptance of the surrender of the Premises by Lessee prior to the
     expiration of the term hereof, and such acceptance by Lessor of surrender
     by Lessee shall only flow from and must be evidenced by a written
     acknowledgment of acceptance of surrender by Lessor. The voluntary or other
     surrender of this Lease by Lessee, or a mutual cancellation thereof, shall
     not work a merger, and shall, at the option of the Lessor, terminate all or
     any existing subleases of subtenancies, or concessions, or may at the
     option of Lessor operate as an assignment to him of any or all such
     subleases or subtenancies or concessions.


                                                                Lessor:_Lessee:_



                                        9


24.  NOTICES:


     It is agreed between the parties hereto that any notice required hereunder
     or by law to be served upon either of the parties shall be in writing and
     shall be delivered personally upon the other or sent by registered or
     certified mail, postage prepaid, addressed m the above address or to slide
     other address as may be from drain to time furnished in writing by Lessor
     to Lessee or by Lessee to Lessor, each of the parties hereto waiving
     personal or any other service than as in this paragraph provided for.
     Notice by registered or certified mail shall be deemed to be communicated
     the second business day from the time of mailing.


25.  CUMULATIVE REMEDIES; NON WAIVER:


     The receipt by Lessor of any rent or payment wide or without knowledge of
     the breach of any covenant hereof shall not be deemed a waiver of any such
     breach and no waiver by Lessor of any sum due hereunder or any provision
     hereof shall be deemed to leave been made unless expressed in writing and
     signed by Lessor. No delay or omission in the exercise of any right or
     remedy deeming to Lessor upon any breech by Lessee under this Lease shall
     impair such right or remedy or be construed as a waiver of any such breach
     theretofore or hereafter occurring. The waiver by Lessor of any breach of
     any term, covenant or condition herein contained shall not be deemed to be
     a waiver of any subsequent breach of the same or any other term, covenant
     or condition herein contained. All rights, powers, options or remedies
     afforded to Lessor either hereunder or by law shall be cumulative and not
     alternative and the exercise of one right, power, option or remedy shall
     not bar other rights, powers, options or remedies allowed hereto or by law.


26.  ADDITIONAL RENT:


     Any monetary obligations of Lessee to Lessor under the terms of this Lease
     shall be deemed to be rent.


27.  INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS:


     This Lease contains all agreements of the parties with respect to any
     matter mentioned herein. No prior agreement or understanding pertaining to
     any such matter shall be effective. This Lease may be modified in writing
     only, signed by the parties in interest at the time of the modification.
     Except as otherwise stated in this Lease, Lessee hereby acknowledges that
     neither the Lessor nor any employees or agents of any of said person has
     made any oral or written warranties or representations to Lessee relative
     to the condition or use by Lessee of the Premises and Lessee acknowledges
     that Lessee assumes all responsibility regarding the Occupational Safety
     Health Act, the legal use and adaptability of the Premises and the
     compliance thereof with all applicable laws and regulations in effect
     during the term of this Lease except as otherwise specifically stated in
     this lease.


28.  MULTIPLE TENANT BUILDING:


     In the event that the Premises are a part or a larger building or group of
     buildings, then Lessee agrees that it will abide by, keep and observe all
     reasonable rules and regulations which Lessor may make from time to time
     for the management, safety, care, and cleanliness of the building and
     grounds, the parking of the vehicles and the preservation or good order
     therein as well as for the convenience of other occupants and tenants of
     the building. The violations of any such rules and regulations shall be
     deemed a material breach of this Lease by Lessee.


29.  SECURITY MEASURES:


     Lessee hereby acknowledges that the rental payable to Lessor hereunder does
     not included the cost of guard service or other security measures, and that
     Lessor shall have no obligation whatsoever to provide same. Lessee assumes
     all responsibility for the protection of Lessee, its agents and invites the
     Premises and any property on the Premises from acts of third parties.


30.  EASEMENTS:


     Lessor reserves to itself the right, from time to time, to grant such
     easements, rights and dedications that Lessor deems necessary or desirable,
     and to cause the recordation of parcel maps and restrictions, so long as
     such easements, rights, dedications, maps and restrictions do not
     unreasonably interfere with the use of the Premises by Lessee. Lessee shall
     sign any of the aforementioned documents upon request of Lessor and failure
     to do so shall constitute a material breach of this Lease.


31.  PERFORMANCE UNDER PROTEST:


     If at any time a dispute shall arise as to any amount or sum of money to be
     paid by one Party to the other under the provisions hereof, the party
     against whom the obligation to pay the money is asserted shall have the
     right to make payment "under protest" and such payment shall not be
     regarded as a voluntary payment, and there shall survive the right on the
     part of said party to institute suit for recovery of such sum. If it shall
     be adjudged that there was no legal obligation on the part of said party to
     pay such sum or any part thereof, said party shall be entitled to recover
     such sum or so much thereof as it was not legally required to pay under the
     provisions of this Lease.


                                                                Lessor:_Lessee:_



                                       10


32.  AUTHORITY:


     If Lessee is a corporation, trust, or general or limited partnership, each
     individual executing this Lease on behalf of such entity represents and
     warrants that he or she is duly authorized to execute and deliver this
     Lease on behalf of said entity. If Lessee is a corporation, trust, or
     partnership, Lessee shall, within thirty (30) days after execution of this
     Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.


33.  CONFLICT:


     Any conflict between the printed provisions of this Lease and the
     typewritten or handwritten provisions shall be controlled by the
     typewritten or handwritten provisions.


34.  OPTION TO EXTEND:


     If the Lessee has fully and faithfully kept and performed all of the terms,
     covenants and conditions of this Lease on the part of the Lessee to be kept
     and performed, including the full and prompt payments of all rental herein
     reserved, then Lessee shall have the right, at its option, to renew and
     extend this Lease for one (1) additional term of five (5) years, to begin
     at the expiration of the primary term hereof, upon and subject to all the
     terms and conditions set forth in this lease provided Lessee gives written
     notice to Lessor of intent to exercise said option at least six (6) months
     prior to the date of expiration of the term of this Lease. In the event
     that the Lessee exercises the option hereinabove described, the fixed
     minimal monthly rental to be charged shall be adjusted in accordance with
     section 37 herein.


35.  MISCELLANEOUS:


     a.   It is agreed by and between the parties hereto that all agreements
          herein contained upon the part of Lessee, whether technically
          covenants or conditions, shall be deemed conditions for the purpose
          hereof, conferring upon lessor, in the event of breach of any of said
          agreements, the right to terminate this Lease.


     b.   Lessee agrees,  at any time and from time to time within ten (10) days
          of written request from Lessor, to execute, acknowledge and deliver to
          Lessor a statement in writing certifying that this Lease is unmodified
          and in full force and  effect  (or if there  have been  modifications,
          that the same is in full force and effect as modified, and stating the
          modifications), and the dates to which the rent and other charges have
          been  paid in  advance,  if any,  it  being  intended  that  any  such
          statement  delivered  pursuant to this paragraph may be relied upon by
          any prospective  purchaser,  mortgagee or assignee of any mortgages of
          the Premises.


     c.   Lessee and Lessee's Guarantor, if any, agree to deliver to Lessor,
          within thirty (30) days from written request therefore (but not more
          frequently than once each calendar year), a balance sheet prepared and
          certified by a Public Accountant or Certified Public Accountant
          showing the true and accurate net worth of Lessee and said Guarantor,
          if any, as of the close of Lessee's and the Guarantor's last
          accounting period.


     d.   In case there is more than one Lessee, the obligation of Lessee
          executing this Lease shall be joint and several. The words "Lessor"
          and "Lessee" as used herein shall include the plural as well as the
          singular. The covenants and agreements contained herein shall be
          binding upon and be enforceable by the parties hereto and their
          respective heirs, executors, administrators, successors and assigns,
          subject to the restrictions herein imposed on assignment by Lessee.


     e.   Time is of the  essence of this Lease and of each and every  covenant,
          condition and provision herein contained.


     f.   The paragraph headings of this Lease are inserted only as a matter of
          convenience and for reference, and in no way define, limit or describe
          the scope or intent of this agreement or any provision thereof or in
          any way affect this agreement.


     g.   Consent:  Wherever  in this Lease the consent of one party is required
          to an act of the other party,  such content shall not be  unreasonably
          withheld.


     h.   Guarantor:  In the event that there is a Guarantor of this Lease, said
          Guarantor shall have the same obligations as Lessee under this Lease.


     i.   If any term of or  provision  of the lease  shall,  to any extent,  be
          determined  by a court of  competent  jurisdiction  to be  invalid  or
          unenforceable,  the  remainder  of the  Lease  shall  not be  affected
          thereby,  and each term and provision of this Lease shall be valid and
          enforceable  to  the  fullest  extent  permitted  by  law;  it is  the
          intention  of the Lessor and Lessee  hereto that if any  provision  of
          this Lease is capable of two constructions,  one of which would render
          the  provision  void and the other of which would render the provision
          valid,  then the  provision  shall have the  meaning  that  renders it
          valid.


     j.   This lease shall be governed by the laws of the State of California.


     k.   The masculine, feminine, of neuter gender and the singular or plural
          number shall each include the other whenever the context indicates.


                                                                Lessor:_Lessee:_



                                       11


     l.   This lease is subject to Lessee satisfying itself that it will be able
          to obtain such permits and licenses as required by governmental
          agencies for Lessee's use and occupancy of the Premises pursuant to
          section 4 within fourteen (14) day, of lease execution.


     m.   Lessee's leasing of an additional 5,200 square feet of warehouse space
          pursuant to Exhibit "B" is subject to Lessee's subleasing or
          termination or that certain lease agreement on warehouse space, Lessee
          is currently leasing at 5715 Redwood Drive, Rohnert Park, California
          within thirty (30) days of lease execution.


36.  BROKERS:


     Meridian Commercial, Inc., represents the Lessor and the Lessee, and Lessor
     and Lessee consent hereto.


37.  COST OF LIVING ADJUSTMENT:


     Pursuant to section 2 herein, on each of every anniversary following
     commencement of this Lease, the fixed minimal rental provided for by this
     Lease shall be adjusted for the ensuing twelve (12) months by the
     proportion that the Producer Price Index (base year 1967 = 100) for the
     United States of the U.S. Department of Labor, Bureau of Labor Statistics,
     then most recently published, bears to the Producer Price Index for the
     month of May 1996. The annual adjustment shall be no more than five (5%)
     percent greater than the rent for the previous year. In no event shall any
     adjustment to the fixed minimal rental result in its reduction below the
     base minimal rent herein provided. Lessor shall make all such adjustments
     and shall notify Lessee of any changes to the fixed minimum rental provided
     herein. Lessor shall also provide Lessee with the backup data pertinent to
     such changes.


     In case the U.S. Department of Labor shall discontinue the computation and
     publication of said Producer Price Index or the publication thereof should
     be delayed so as to prevent its use hereunder at the times required, there
     shall be substituted therefor by Lessor such other other index or method of
     ascertaining changes in the price levels as, in the opinion of the Lessor,
     most closely resembles the Producer Price Index and method of arriving at
     the index figure by said Bureau.


38.  INCREASES IN OPERATING EXPENSES:


     a.   Lessee shall pay to Lessor during the term hereof, in addition to the
          fixed minimal monthly rent pursuant to sections 2 and 37 of this
          Lease, Lessee's Share, as hereinafter defined, of the Increases in the
          Operating Expenses over the Base Year as hereinafter defined.


          i.   "Lessee's  Share" is defined,  for the purpose of this Lease,  is
               80.85%.


          ii.  Base Year: The calendar year the which this Lease term commence.


          iii. Comparison  Year:  Each  calendar year of the term after the Base
               Year, including the option to extend.


          iv.  "Operating  Expenses" is defined,  for purposes of this Lease, as
               all costs incurred by Lessor, if any, for:


               (1)  The operation,  repair and maintenance, in neat, clean, good
                    order arid condition of the following:
                    (a)  The  Common  Areas,  including,  but  not  limited  to,
                         parking areas, loading and unloading areas, trash
                         areas, roadways, sidewalks, walkways, parkways,
                         driveways, landscaped areas, striping, bumpers,
                         irrigation systems, Common Area lighting facilities,
                         and fences and gates, common entrances, common
                         stairwells, common restrooms and common access ways.
                    (b)  Lessor's direct cost in providing landscaping service
                    (c)  Five (5)  percent  of the total  cost of the  Operating
                         Expenses as a fee for its  general  and  administrative
                         expenses
                    (d)  Trash disposal services
                    (e)  Fire detection systems, including sprinkler maintenance
                         and repair;
                    (f)  Security  services
                    (g)  Any other service to be provided by Lessor that is
                         elsewhere in this Lease stated to be an Operating
                         Expense.
                    (h)  Notwithstanding the foregoing Operating Expenses shall
                         not include capital replacements or improvements of or
                         to the items set out in this subparagraph (1).
               (2)  The  cost  of  premiums  for  the   liability  and  property
                    insurance policies to be maintained by Lessor;
               (3)  The  amount of the real  property  tax to be paid by Lessor,
                    excluding only any penalties for late payment;
               (4)  The cost of water, gas and electricity to service the Common
                    Areas.


          v.   If the Operating Expenses paid or incurred by the Lessor for the
               Comparison Year are in excess of the Operating Expenses paid or
               incurred for the Base Year, then the Lessee shall pay 80.85% of
               the increase. This percentage is that portion of the total
               rentable area of the Building occupied by the Lessee hereunder.


                                                                Lessor:_Lessee:_



                                       12


          vi.  The inclusion of the improvements, facilities and services set
               forth herein the definition of the Operating Expense shall not be
               deemed to impose an obligation upon Lessor to either have said
               improvements or facilities or to provide those services unless
               the Building already has the same, Lessor already provides the
               services or Lessor has agreed elsewhere in this Lease to provide
               the same or some of them.


          vii. Lessee's Pro-rata Share of the increases in Operating Expenses
               shall be payable by Lessee within ten (10) days after a
               reasonable detailed statement of actual expenses is presented to
               Lessee by Lessor. At Lessor's option, however, an amount may be
               estimated by Lessor from time to time of Lessee's Share of
               increases in Opening Expenses and the same shall be payable
               monthly or quarterly, as Lessor shall designate, anytime after
               the first year of the Lease term aforesaid. Lessor shall deliver
               to Lessee within sixty (60) days after the expiration of each
               calendar year a reasonably detailed statement showing Lessee's
               Pro-rata Share of the increases and actual Operating Expenses
               incurred during the preceding year. If Lessee's payments under
               this paragraph during said preceding year exceed Lessee's Share
               as indicated on said statement, Lessee shall be entitled to
               credit the amount of such overpayment against Lessee's Share of
               Operating Expense increases next falling due. If Lessee's
               payments under this paragraph during said preceding year were
               less than Lessee's Share as indicated an said statement, Lessee
               shall pay to Lessor the amount of the deficiency within ten (10)
               days after delivery by Lessor to Lessee of said statement.


39.  TENANT IMPROVEMENTS:


     As a material put of this Lease, Lessor has agreed to make tenant
     improvements to the premises, up to Sixty Thousand Dollars ($60,000),
     herein after the "Allowance," per the approved specifications and plans to
     be attached as Exhibit "C". Lessor's cost of building the improvements per
     Exhibit "C" to be attached unless modified by Lessee, shall not exceed
     $60.000.00 including architectural fees, building permits, and new locks on
     exterior doors.


     Additionally, in consideration of Lessee leasing an additional 5,200 square
     feet of warehouse space, as defined in Exhibit "B" attached hereto, and
     subject to section 35.1 herein, Lessor agrees to provide Lessee an
     additional allowance of Twenty-Six Thousand Dollars ($26,000.00), herein
     after the "Additional Allowance", for improvements to the warehouse space
     pursuant to Exhibit "C" to be attached.


     IN WITNESS WHEREOF, the parties hereto lave subscribed their names, and if
corporations, executed this Lease by officers thereunto duly authorized by
resolution of said corporations, in duplicate the day and year first hereinabove
written.


LESSOR: Condiotti Enterprises, Inc.,    LESSEE: Work Rite Ergonomic Accessories,
        A California Corporation        Inc., A California Corporation

By:     /s/ Solomon S. Condiotti         By:    /s/ Raymond L. Henrickson
       -----------------------------           ---------------------------------
Its:   Property Mgr.                     Its:   President
       -----------------------------           ---------------------------------
Date:  2/15/96                           Date:  2-14-96
       -----------------------------           ---------------------------------


                                                                Lessor:_Lessee:_





PROPERTY:      77 Digital Drive, Novato, CA,
               -------------------------------------



HAZARDOUS MATERIALS WARNING: Current and future federal, state, and local laws
and regulations may require the clean-up of such toxic, hazardous, or
undesirable materials at the expense of those persons who in the past, present,
or future have had any interest in the Property Including, but not limited to,
current, past, present, and future owners and users of the Property. Lessor and
Lessee are advised to consult with independent legal counsel of their choice or
other experts, to determine their potential liability.

AMERICANS WITH DISABILITIES ACT: On July 26, 1991, the federal legislation known
as the Americans with Disabilities Act (ADA) was signed Into law. The purpose of
the ADA is to integrate persons with disabilities into the economic and social
mainstream of American life. Title III of the ADA applies to landlords and
tenants of "places of public accommodation" and "commercial facilities," and
requires that places of public accommodation undertake "readily achievable"
removal of communication and access barriers to the disabled. This requirement
of Title III of the ADA is effective January 26, 1992. Lessor and Lessee should
seek expert advice regarding the implications of the Act as it affects this
agreement.

LIABILITY  RELEASE:  Meridian  Commercial,  Inc.,  and its  salespeople  in this
transaction,  have no expertise  regarding  hazardous materials or the Americans
with  Disabilities  Act.  Lessor and Lessee agree that they shall  indemnify and
hold Meridian  Commercial,  Inc., and its salespeople,  harmless from any claim,
liability, or expense regarding hazardous materials or the ADA.

BROKER REPRESENTATION:  Meridian Commercial, Inc., is the real estate broker for
the Lessor and the Lessee.


LESSOR:  CONDIOTTI ENTERPRISES              LESSEE:  WORK-RITE
By:    /s/ Solomon S. Condioitti            By:      /s/ Raymond L. Henricksen
       ----------------------------                 ----------------------------
Date:  2/15/96                              Title:   President
       ----------------------------                 ----------------------------

                                             Date:   2-14-96
                                                    ----------------------------





                                               EXHIBIT "A-1"

                               AMENDMENT TO LEASE
                                  BY & BETWEEN
                       CONDIOTTI ENTERPRISES, INC., LESSOR
                                       AND
                     WORKRITE ERGONOMIC ACCESSORIES, LESSEE
                             DATED: MARCH 21, 1996

1.   TENANT IMPROVEMENTS Lessor, at Lessor's sole cost and expense, shall
     complete the improvements pursuant to the approved plans and specifications
     prepared by Greg LeDoux and Associates dated February,1996 and the revision
     dated March 5, 1996.

2.   ADDITIONAL RENT In consideration of the Lessor completing the "Tenant
     Improvements" pursuant to Section 1 herein, Lessee shall pay additional
     rent for the lease term in the amount of $515.25 per month ($.029 per
     square foot x 17,735 square feet). Pursuant to Section 2 of the lease
     agreement, the monthly rent shall be $13,653.50.

3.   5,200 SQUARE FOOT WAREHOUSE Lessee hereby agrees to lease upon the lease
     commencement date, the 5,200 square foot warehouse space, which is included
     in the 17,735 square feet, as defined in Exhibit "B" of the lease
     agreement, and Lessor shall complete the improvements to the 5,200 square
     foot per the approved plans and specifications.

4.   SUBORDINATION Pursuant to Section 21 of the lease agreement Lessee hereby
     waives its requirement of Lessor to provide Lessee a non-disturbance
     agreement.

     All  other terms and conditions of the lease agreement by and between the
          parties shall remain in full force and affect.

LESSOR:  Condiotti Enterprises, Inc.

By:    /s/ Solomon S. Condiotti
       -----------------------------------------

Its:   Property Mgr.
       -----------------------------------------

Date:  4/1/96
       -----------------------------------------

LESSEE:  Work-Rite Ergonomic Accessories

By:    /s/ Raymond L. Henricksen
       -----------------------------------------

Its:   President
       -----------------------------------------

Date:  3-28-96
       -----------------------------------------



                                        2


                                                  EXHIBIT "A-1"

                                    ADDENDUM

This Addendum to Lease dated 2/14/96, and subsequent Addenda, made by and
between Condiotti Enterprises, Inc. (Lessor) and Workrite Ergonomic Accessories
(Lessee).

The parties do hereby desire to amend the Lease as follows:

1.   There shall be added to the Lessee's space 1000 square feet of the upstairs
     premises of 77 Digital Drive, effective 2/15/97 and continuing through the
     end of the Lease term.

2.   Rent for such additional space to be $700.00 per month, due on the first of
     each month in advance. Rent for the period 2/15-28/97 to be $350.00.

3.   All other terms and conditions of the Lease and Addenda not in conflict
     with the agreements set forth above shall remain in full force and effect.


/s/ Solomon S. Condiotti                    /s/ Raymond L. Henricksen
- -----------------------------------         ------------------------------------
Solomon S. Condiotti                        Workrite Ergonomics Accessories
Property Manager,
Condiotti Enterprises
                                            Raymond L. Henricksen, President
                                            ------------------------------------
                                            By

2/5/97                                      2-3-97
- -----------------------------------         ------------------------------------
Date                                        Date



                                        3


                                               EXHIBIT "A-1"

                                    ADDENDUM


This Addendum to Lease dated 2/14/96, and subsequent Addenda, made by and
between Condiotti Enterprises, Inc. (Lessor) and Workrite Ergonomic Accessories
(Lessee).

The parties do hereby desire to amend the Lease as follows:

1. There shall be added to the Lessees space 5250 square feet located at 75
Digital Drive, effective 6/01/97 and continuing through the end of the Lease
term.

2. Base rent for such additional space to be $2,925.00 per month, due on the
first of each month in advance till May 1, 1998. Then subject to CPI as provided
for in Paragraph 37 of the Lease.

3. All other terms and conditions of the Lease and Addenda not in conflict with
the agreements set forth above shall remain in full force and effect.


/s/ Solomon S. Condiotti                   /s/ Raymon L. Henricksen
- ------------------------------------       -------------------------------------
Solomon S. Condiotti                       Workrite Ergonomics Accessories
Property Manager,
Condiotti Enterprises

                                           -------------------------------------
                                           By


6/4/97                                     5-28-97
- ------------------------------------       -------------------------------------
Date                                       Date



                                        4


                                                                   EXHIBIT "A-1"

                                    ADDENDUM

This Addendum to Lease dated 2/14/96, and subsequent Addenda, made by and
between Condiotti Enterprises, Inc. (Lessor) and Workrite Ergonomic Accessories
(Lessee).

The parties do hereby desire to amend the Lease as follows:

1. The remainder of the space located at 77 Digital Drive shall be added to the
Lease effective 10/01/97 and continuing through the end of the Lease term.

2.   Rent shall be increased by $1,100.00.  The new monthly rent will be
$15,881.11 effective 10/01/97.

3. All other terms and conditions of the Lease and Addenda not in conflict with
the agreements set forth above shall remain in full force and effect.


/s/ Solomon S. Condiotti                /s/ Raymond L. Henricksen
- ---------------------------------       ----------------------------------------
Solomon S. Condiotti                    Workrite Ergonomics Accessories
Property Manager,
Condiotti Enterprises

                                        ----------------------------------------
                                       By

10/7/97                                 10-3-97
- ----------------------------------      ----------------------------------------
Date                                    Date



                                        5


                                                 EXHIBIT "A-1"

                  AMENDMENT #4 TO THAT CERTAIN LEASE AGREEMENT
                            DATED FEBRUARY 14, 1996
                                 BY AND BETWEEN
                       CONDIOTTI ENTERPRISES, INC., LESSOR
                                       AND
                     WORKRITE ERGONOMIC ACCESSORIES, LESSEE
                             DATED: MARCH 17, 1996

The following terms and conditions of that certain lease agreement by and
between the parties hereto shall be amended as followings;

1.   PREMISES: Lessee agrees to lease, and add to its existing lease, 79 Digital
     Drive,  Novato,  Ca. (entire  building)  including the following  terms and
     conditions herein this Amendment to Lease.

2.   COMMENCEMENT TERM: The term of the lease for 79 Digital Drive shall
     commence March 1, 1999 end shall terminate concurrently with the lease
     termination date of July 31, 2001 for Lessee's existing space at 75 and 77
     Digital Drive, Novato, Ca.

3.   RENT:  The monthly  rent for the first year of the lease term at 79 Digital
     Drive shall be  $18,492.90.  Upon  Lessee's  determination  that 79 Digital
     Drive is compatible  with Lessee's  intended use and occupancy  pursuant to
     section 5 herein  Lessee shall  deposit  with Lessor  $5,000 which shall be
     credited  towards the First months rent (March 1999),  and shall be due and
     payable to Lessor upon  Lessee's  written  release of section 5 herein this
     Amendment.  The next installment of rent due end payable to Lessor shall be
     June 1999 in the amount of  $18,492.90  and shall remain the same until May
     1, 2000 then the rent shall  adjust per section 37 of the lease  agreement.
     Lessee shall have the right to occupy the Premises on a rent free basis for
     the months of April  1999 and May 1999.  The rent  shall  adjust  each year
     thereafter pursuant to section 37 of the lease agreement.

4.   TENANT IMPROVEMENTS: Lessor shall provide Lessee with $75,000 as a tenant
     improvement allowance for lessee improvements to 79 Digital Drive. Lessee
     reserves the right to contract for and supervise all such tenant
     improvements. In addition to the tenant improvement allowance, Lessor shall
     install, at its sole cost and expense, two (2) additional restrooms (single
     stall) on the first floor of 79 Digital Drive behind the existing first
     floor restrooms.

5.   SUBJECT TO: Upon  execution  of this Lease  Amendment by Lessor and Lessee,
     Lessee  shall have  thirty (30) days to conduct a  feasibility  study of 79
     Digital Drive for Lessee's intended use and occupancy.  In the event Lessee
     determines that 79 Digital Drive is not compatible  with Lessee's  intended
     use  and   occupancy   Lessee  shall  notify  Lessor  in  writing  of  such
     incompatibility  and this  Amendment to Lease shall be of no further  force
     and effect.  In the event Lessee  determines in said thirty (30) day period
     that  79  Digital  Drive  is  compatible  with  Lessee's  intended  use and
     occupancy,  Lessor shall deposit with Lessor by the end of said  thirty(30)
     day  period  the sum of $5,000  which  shall be  credited  toward the first
     month's rent of $18,492.90  and the balance of the final month's rent shall
     be due and payable to Lessor on or before  January 1, 1999.  Upon  Lessee's
     release of this condition herein section 5 this Amendment to Lease shall be
     in full force and effect.

6.   RELEASE OF SPACE: Upon execution of this agreement Lessee shall have during
     the term of the lease period at its sole discretion the right to terminate
     its lease for all of those premises Lessee is leasing from Lessor at 75
     Digital Drive upon giving Lessor sixty (60) days prior written notice of
     the same. Thereafter Lessee shall have no further obligation with 75
     Digital Drive.

All other terms and conditions of that certain lease dated February 14, 1996
shall remain in full force and effect.



                                        6


LESSOR:  CONDIOTTI ENTERPRISES, INC.       LESSEE:  WORK-RITE ACCESSORIES, INC.
By:    /s/ Solomon S. Condiotti            By:  /s/ Raymond L. Henricksen
       -------------------------------          --------------------------------
Its:   Property Manager                    Its:   President
       -------------------------------            ------------------------------
Date:  3/23/98                             Date:  3-17-98
       -------------------------------            ------------------------------




                                        7


                                                       EXHIBIT "A-1"

CONTINGENCY RELEASE

DATED APRIL 22, 1998

Work-Rite Accessories, Inc, hereby releases its contingencies pursuant to
"Section 5. Subject to" in the Amendment #4 To That Certain Lease Agreement
Dated February 14, 1996 by and Between Condiotti Enterprises, Inc., Lessor and
Work-Rite Accessories, Inc., Lessee, Dated March 17, 1998, upon the following
terms and conditions which shall include the following amendment to section 4
"Tenant Improvements";

Lessor shall not be required to install two additional restrooms on the first
floor at 79 Digital Dr.

Lessor shall, at its sole cost and expense, convert the existing two single
stall restrooms at 77 Digital Dr. on the first floor into one larger restroom
with two stalls and one sink, and one new restroom with two stalls, one urinal
and one sink.

All other terms and conditions of the Lease Agreement and Amendments shall
remain the same.


LESSOR:  Condiotti Enterprises

By:    /s/ Solomon S. Condiotti
       ---------------------------------------

Title: Property Manager
       ---------------------------------------

Date:  4/22/98
       ---------------------------------------

LESSEE:  Work-Rite Ergonomic Accessories, Inc.

By:    /s/ Raymond L. Henricksen
       ---------------------------------------

Title: President
       ---------------------------------------

Date:  4-22-98
       ---------------------------------------

@



                                        8


                                                                   EXHIBIT "A-2"


                            ASSIGNMENT AND ASSUMPTION
                                       OF
                                    AGREEMENT

     THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT ("Assignment") is entered
into on April 30, 2001, by and among WORKRITE ERGONOMIC ACCESSORIES, INC., a
Delaware corporation, as assignor ("Assignor" or "Tenant"), and GATEWAY
FINANCIAL CORPORATION, a California corporation, as assignee ("Assignee") and
Condiotti Enterprises, Inc., a California corporation, as landlord ("Landlord").

                                    RECITALS

A. Landlord, and Assignor, as tenant, executed that certain Lease dated February
14, 1996, an addendum dated February 14, 1996, an amendment dated March 21,
1996, a second amendment dated February 3, 1997, a third amendment dated May 28,
1997, an amendment dated October 3, 1997, and a "fourth" [sic] amendment dated
March 17, 1998, (collectively, the "Lease"), a copy of which is attached as
Exhibit A and incorporated herein by reference, pursuant to which Landlord
leased to Tenant and Tenant leased from Landlord the Premises. The term
"Premises" includes 5250 square feet in 75 Digital Drive, Novato, California;
20,446 square feet in 77 Digital Drive and 25,658 square feet in 79 Digital
Drive.

B. The current rental rates for various portions of the Premises are as follows:



                                        9






- ---------------- ------------------- --------------------- ----------------
Building             Type              Square footage        Rent sq. ft.
                                                              per month*
                                                  
- ---------------- ------------------- --------------------- ----------------
- ---------------- ------------------- --------------------- ----------------
75 Digital       Warehouse Office    5,250 N/A             Deleted EAC
- ---------------- ------------------- --------------------- ----------------
- ---------------- ------------------- --------------------- ----------------
77 Digital       Warehouse Office    13,000                Deleted EAC
                                      7,446
- ---------------- ------------------- --------------------- ----------------
- ---------------- ------------------- --------------------- ----------------
79 Digital       Warehouse Office    15,262                Deleted EAC
                                     10,396
- ---------------- ------------------- --------------------- ----------------



*All rental rates are subject to escalation as provided in the Lease; the next
increase takes effect May 1.

C.  Assignor  desires to assign the Lease to Assignee,  and Assignee  desires to
accept the  assignment  of the Lease from  Assignor  and assume all  obligations
under the Lease.

THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are acknowledged, Assignor and Assignee agree as follows:

1.  Extension of Term:  Landlord and Tenant agree that the term of the Lease has
been  extended to July 31,  2006,  and  Paragraph 34 of the Lease has been fully
executed.

2. Assignment: As of August 1, 2001 ("Effective Date") Assignor assigns and
transfers to Assignee all right, title and interest in and to the Lease, and
Assignee accepts from Assignor all right, title and interest in and to the
Lease, subject to the terms and conditions set forth herein.

3.  Assumption of Lease Obligations:  As of the Effective Date,  Assignee
assumes and agrees to perform and fulfill all past, present and future terms,
covenants, conditions and  obligations  required to be performed and fulfilled
by Assignor,



                                       10


as Tenant, under the Lease, including, without limitation, making all payments
due to or payable on behalf of Assignor under the Lease.

4.  Assignor's and Landlord's Covenants:

(a) Assignor and Landlord each acknowledges and covenants that the copy of the
Lease attached as Exhibit A is a true and accurate copy of the Lease as
currently in effect and that there exists no other agreement affecting
Assignor's tenancy under the Lease.

(b) Assignor and Landlord each covenants that the Lease is in full force and
effect and that no defaults exist under the Lease, nor any acts or events which,
with the passage of time or the giving of notice or both, could become defaults.

(c) Landlord represents and warrants that it is the sole owner in fee simple of
the properties on which the Premises are located.

5. Security Deposit: As of the Effective Date, Assignor assigns all right in any
security deposits held by Landlord to Assignee.

6. Discharge of Assignor:  Assignor shall be discharged from any liability under
the Lease for any duty or obligation arising after the Effective Date.

7.  Limitation on Further  Assignment or  Subletting:  In addition to compliance
with all terms and  conditions  governing  assignment  or  subletting  under the
Lease,  Assignee shall not assign or sublet the Premises or any portion  thereof
to an



                                       11


assignee or sublessee for any rental amounts which are less than the amounts
then being charged under the Lease. Furthermore, in no event shall Landlord be
required to consent to recognition of an assignee or sublessee or to grant any
further extension of the term of the Lease, other than as provided in the Lease.

8.  Guaranty:  Landlord's consent to this  Assignment is conditioned on and made
subject to the  delivery of a signed  guaranty  from Edmund J. Coyne in the form
attached to this Assignment as Exhibit B and incorporated by this reference.

9. Litigation costs: If any litigation between Assignor and Assignee arises out
of this Assignment or concerning the meaning of interpretation of this
Assignment, the losing party shall pay the prevailing party's costs and expenses
of this litigation, including, without limitation, reasonable attorney fees.

10. Indemnification: Assignor indemnifies Assignee from and against any loss,
cost, or expense, including attorney fees and court costs, relating to the
default of Assignor to fulfill Assignor's obligations under the Lease, and
accruing with respect to the period on or prior to the Effective Date. Assignee
indemnifies Assignor from and against any loss, cost, or expense, including
attorney fees and court costs, relating to the default of Assignee to fulfill
obligations under the Lease, and accruing with respect to the period subsequent
to the Effective Date.

11. Successors and Assigns: This Assignment shall be binding on and inure to the
benefit of the parties to it, their



                                       12


heirs, executors, administrators, successors in interest, and, assigns.

12.  Governing  Law:  This  Assignment  shall be  governed by and  construed  in
accordance with California law.

The parties have executed this Assignment as of the date first mentioned above.



          "ASSIGNOR"                          "ASSIGNEE"

WORKSITE ERGONOMIC ACCESSORIES,      GATEWAY FINANCIAL CORPORATION,
INC., a Delaware corporation         a California corporation

By   /s/ illegible                   By   /s/ Ed Coyne
     ----------------------------         --------------------------------------


Its  President                       Its  President
     ----------------------------          -------------------------------------


THE TERMS AND CONDITIONS OF THIS ASSIGNMENT ARE AGREED AND CONSENTED TO:

         "LANDLORD"

Condiotti Enterprises, Inc.,
a California corporation

By   /s/illegible
     ---------------------------

Its  VP-CFO
     ---------------------------

EX-10

                                                                 EXHIBIT 10.26



                           SECOND AMENDED AND RESTATED
                        AGREEMENT FOR PLAN OF ARRANGEMENT

                                  BY AND AMONG

                          BIOMARIN PHARMACEUTICAL INC.
                             A DELAWARE CORPORATION

                          BIOMARIN DELIVERY CANADA INC.
                 A CORPORATION EXISTING UNDER THE LAWS OF CANADA

                                       AND

                            SYNAPSE TECHNOLOGIES INC.
                 A CORPORATION EXISTING UNDER THE LAWS OF CANADA



                             DATED: FEBRUARY 4, 2002




                                                               Execution Version





                           SECOND AMENDED AND RESTATED
                        AGREEMENT FOR PLAN OF ARRANGEMENT


        This SECOND AMENDED AND RESTATED AGREEMENT FOR PLAN OF ARRANGEMENT (this
"Agreement"), dated as of February 4, 2002, is entered into by and among
BioMarin Pharmaceutical Inc., a Delaware corporation ("BioMarin"), BioMarin
Delivery Canada Inc., a corporation existing under the laws of Canada ("Newco")
and Synapse Technologies Inc., a corporation existing under the laws of Canada
(the "Company").


                                    RECITALS


        A. Newco is a wholly-owned Subsidiary of BioMarin Holdings (Nova Scotia)
Company, an unlimited liability company existing under the Companies Act (Nova
Scotia) and an indirectly owned Subsidiary of BioMarin ("BioMarin Nova Scotia").

        B. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Canada Business Corporations Act (the "CBCA"), BioMarin,
Newco and the Company intend to enter into a business combination transaction by
way of the Arrangement whereby immediately following the Effective Time, each
outstanding Company Common Share and Company Preferred Share that is not held by
a holder who has exercised its Dissenters' Rights and is ultimately entitled to
be paid the fair value of its shares shall be exchanged for BioMarin Common
Shares as set forth herein and one (1) Exchangeable Share.

        C. The Board of Directors: (i) has commissioned an opinion from Capital
West Partners that the Arrangement is fair to the shareholders of the Company
from a financial point of view; (ii) has determined that the Arrangement is in
the best interests of the Company and its shareholders; (iii) has unanimously
approved this Agreement, the Arrangement and the other transactions contemplated
by this Agreement; and (iv) has determined to recommend that the shareholders of
the Company adopt and approve the Arrangement.

        D. The parties intend, by executing this Agreement, to adopt a plan of
reorganization which shall qualify, in certain respects, for an election
pursuant to Section 85(1) of the Income Tax Act (Canada).

        E. BioMarin, the Company and BioMarin Pharmaceutical Delivery Nova
Scotia Company, an unlimited liability company under the laws of Nova Scotia
("Delivery"), previously entered into that certain Agreement for Plan of
Arrangement dated December 21, 2001 (the "Original Agreement"), which was
subsequently amended and restated by such parties by that certain Amended and
Restated Agreement for Plan of Arrangement dated January 14, 2002 (the "First
Amendment Agreement").

        F. Pursuant to that certain letter agreement dated as of the date
hereof, by and among BioMarin, Delivery, Newco and the Company, Delivery was
released as a party to the First Amendment Agreement and the Company Ancillary
Agreement, and BioMarin Delivery Canada


                                                               Execution Version





Inc. was substituted as "Newco" under the First Amendment Agreement and the
Company Ancillary Agreement.

        G. BioMarin, Newco and the Company hereby desire to amend and restate in
its entirety the First Amendment Agreement upon the terms and conditions set
forth in this Agreement.

        NOW, THEREFORE, in consideration of the respective covenants and
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

        1.1    Defined Terms. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference. All
accounting terms defined in this Article I and those accounting terms used in
this Agreement and not defined in this Article I shall, except as otherwise
provided for herein, be construed in accordance with Canadian GAAP. References
herein to an "Article," an "Annex," a "Section," a "Schedule" or an "Exhibit"
are, unless otherwise specified herein, references to an Article of, an Annex
attached to, a Section of, or a Schedule or an Exhibit attached to, this
Agreement or the Company Ancillary Agreement, respectively. All references to
currency herein, unless otherwise indicated, shall be deemed to be in Canadian
dollars, and any required conversions of U.S. dollars or Canadian dollars shall
be made at an agreed upon exchange rate of 0.6397 U.S. Dollars to one (1)
Canadian dollar.

               "Action" shall mean any action, claim, suit, litigation,
proceeding, labor dispute, arbitral action, governmental audit, governmental
inquiry (including any request for information), criminal prosecution,
investigation or unfair labor practice charge or complaint.

               "Affiliate" shall mean, as to any one Person, another Person
which directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such Person.

               "Arrangement" shall mean an arrangement under Section 192 of the
CBCA on the terms and subject to the conditions set out in this Agreement and
the Plan of Arrangement, subject to any amendments or variations thereto made in
accordance with the provisions of this Agreement or made at the direction of the
Court in the Final Order.

               "Arrangement Resolution" means the special resolution of the
holders of shares of each class of the Company's Stock to be substantially in
the form and content of Exhibit A annexed hereto.

               "Articles of Arrangement" means the Articles of Arrangement of
the Company in respect of the Arrangement that are required by the CBCA to be
sent to the Director after the Final Order is made.



                                       2                       Execution Version




               "Assets" shall mean the assets and property owned or used by the
Company.

               "Balance Sheet" shall mean the audited balance sheet of the
Company as of September 30, 2001 included in the Financial Statements.

               "Balance Sheet Date" shall mean September 30, 2001.

               "BioMarin Common Shares" shall mean shares of BioMarin's Common
Stock, par value U.S.$0.001 per share.

               "Board of Directors" shall mean the board of directors of the
Company.

               "Books and Records" shall mean (i) all records and lists
pertaining to the Company, or to customers, suppliers or personnel of the
Company, (ii) all product, business and marketing plans of the Company and (iii)
all books, ledgers, files, reports, plans, drawings and operating records of
every kind maintained by the Company.

               "Canadian GAAP" shall mean Canadian generally accepted accounting
principles, consistently applied.

               "Canadian Securities Legislation" shall mean the statutory
securities laws in each province of Canada in which shareholders of the Company
reside, together with the regulations promulgated thereunder, together with the
rules, policies, orders and requirements of the securities regulatory
authorities in each such province.

               "CBCA" means the Canada Business Corporations Act as now in
effect and as may be amended from time to time prior to the Effective Date.

               "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations thereunder.

               "Commissions" shall mean the securities commissions which
administer Canadian Securities Legislation.

               "Company Ancillary Agreement" shall mean that certain amended and
restated ancillary agreement which is incorporated herein by reference
containing certain exhibits regarding closing deliveries to be made by the
parties in order to consummate the Transactions, certain schedules attached
thereto as referenced herein and specific additions and exceptions to the
representations and warranties made by the Company in Article IV of this
Agreement, by and among BioMarin, Newco and the Company as of the date of this
Agreement.

               "Company Common Shares" shall mean the common shares of the
Company as currently constituted.

               "Company Intellectual Property" shall mean any and all
Intellectual Property used in, necessary to the conduct of or being developed by
or for the Company's business.



                                       3                       Execution Version




               "Company Preferred Shares" shall mean the preferred shares,
Series 1 of the Company as currently constituted.

               "Company Shareholders" shall mean the holders of all of the
Company Common Shares and Company Preferred Shares.

               "Company Shareholders Meeting" shall mean the special meeting of
Company Shareholders, including any adjournment thereof, to be called and held
in accordance with the Interim Order to consider the Arrangement.

               "Company Stock Option Plan" means the Company's 1998 stock option
plan, including all amendments thereto.

               "Company Stock Options" shall mean all stock options granted by
the Company under the Company Stock Option Plan which are outstanding and vested
at the Effective Time.

               "Company Technology" shall have the meaning set forth in the
Exchangeable Shares Terms.

               "Company Warrants" means all outstanding warrants to purchase
Company Common Shares.

               "Contract" shall mean any oral or written agreement, contract,
note, loan, evidence of indebtedness, guaranty, purchase order, letter of
credit, indenture, security or pledge agreement, franchise agreement, capital or
operating Lease, undertaking, covenant not to compete, employment agreement,
license, instrument, obligation or commitment, to which the Company is a party
or otherwise bound.

               "Court" shall mean the Supreme Court of British Columbia.

               "Court Order" shall mean any judgment, decision, consent decree,
injunction, ruling or order of any Governmental Authority that is binding on any
Person or its property under applicable law.

               "Damages" shall mean all costs, losses, Taxes, Liabilities,
damages, lawsuits, demands, and expenses (whether or not arising out of
third-party claims), including, without limitation, interest, fines, penalties,
costs of mitigation, losses in connection with any Environmental Law (including,
without limitation, any clean-up or remedial action), losses in connection with
any Health Law, other losses resulting from any shutdown or curtailment of
operations, attorneys' fees and all amounts paid in investigation, defense or
settlement of any of the foregoing.

               "Default" shall mean (i) a breach of or default under any
Contract, (ii) the occurrence of an event that with the passage of time or the
giving of notice or both would constitute a breach of or default under any
Contract, or (iii) the occurrence of an event that with or without the passage
of time or the giving of notice or both would give rise to a right of
termination or acceleration under any Contract.



                                       4                       Execution Version




               "Director" shall mean the director appointed pursuant to the
CBCA.

               "Effective Date" shall mean the date shown on the certificate of
arrangement to be issued by the Director under the CBCA giving effect to the
Arrangement.

               "Effective Time" has the meaning ascribed thereto in the Plan of
Arrangement.

               "Encumbrance" shall mean any claim, lien, pledge, option, charge,
easement, restriction, security interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other right of third parties, whether voluntarily incurred or
arising by operation of law, and includes, without limitation, any agreement to
give any of the foregoing in the future.

               "Environmental Law" shall mean any applicable Regulation which
regulates or relates to the protection or clean-up of the environment, the use,
treatment, storage, transportation, generation, manufacture, processing,
distribution, handling or disposal of, or emission, discharge or other release
or threatened release of, Hazardous Substances, the preservation or protection
of waterways, groundwater, drinking water, air, wildlife, plants or other
natural resources, or the health and safety of persons or property, including,
without limitation, protection of the health and safety of employees.

               "Exchangeable Shares" shall mean the Class A preferred shares of
Newco without nominal or par value in the capital of Newco with the rights and
preferences set forth on Exhibit B hereto (the "Exchangeable Shares Terms").

               "Exchange Act" shall mean the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.

               "Exchange Ratio" means the quotient obtained by dividing (i) the
amount, as converted to U.S. dollars, by which the aggregate stated capital of
the Company of $15,914,752 (as such stated capital may be increased by the
aggregate cash exercise prices actually received by the Company after the date
of this Agreement and prior to the Effective Time from the exercise of any
Company Stock Options outstanding as of the date of this Agreement pursuant to
and in accordance with the terms of the Company Stock Option Plan and the
related option agreements) exceeds the Preferred Return Amount, divided by the
total number of issued and outstanding Company Common Shares and Company
Preferred Shares at the Effective Time, by (ii) U.S.$11.50 rounded to the
nearest seven decimal places.

               "Fair Market Value" shall mean the average of the closing prices
of one (1) BioMarin Common Share on Nasdaq over the twenty (20) business day
period concluding on the date for which the "Fair Market Value" is being
determined. The term "business day" as used in the immediately preceding
sentence means business days on which Nasdaq is open for trading.

               "Final Order" shall mean the final order of the Court approving
the Arrangement as such order may be amended at any time prior to the Effective
Date or, if appealed, then, unless such appeal is withdrawn or denied, as
affirmed.



                                       5                       Execution Version




               "Financial Statements" shall mean the audited balance sheets of
the Company as of September 30, 2001, 2000 and 1999 and the related audited
statements of loss and deficit and cash flows for the fiscal years ended
September 30, 2001, 2000 and 1999.

               "Governmental Authority" shall mean any local, state, federal or
foreign (i) court, (ii) government or (iii) governmental department, commission,
instrumentality, administrative body, board, agency or authority, including any
taxing authority.

               "Hazardous Substance" shall mean any pollutant, contaminant,
chemical, waste and any toxic, infectious, carcinogenic, reactive, corrosive,
ignitable or flammable chemical or chemical compound or hazardous substance,
material or waste, whether solid, liquid or gas, including, without limitation,
any quantity of asbestos in any form, urea formaldehyde, PCB's, radon gas, crude
oil or any fraction thereof, all forms of natural gas, petroleum products or
by-products or derivatives, radioactive substance or material, pesticide waste
waters, sludge, slag and any other substance, material or waste that is subject
to regulation, control or remediation under any Environmental Law.

               "Health Laws" shall mean any applicable Regulations which
regulate or relate to health and human safety.

               "HSR Act" shall mean the United States Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder.

               "Insurance Policies" shall mean the insurance policies of the
Company, including but not limited to its policies or binders of fire,
liability, property, title, worker's compensation, product liability and other
forms of insurance.

               "Intellectual Property" shall mean any or all of the following
and all rights in, arising out of, or associated therewith: (i) all United
States, Canadian and other patents (including utility models, supplementary
protection certificates and applications therefor) and all reissues, divisions,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof, and equivalent or similar rights anywhere in the world in inventions
and discoveries ("Patents"); (ii) all inventions (whether patentable or not),
improvements, trade secrets, proprietary information, know-how, technology,
technical data and customer lists, and all documentation embodying or evidencing
any of the foregoing ("Trade Secrets"); (iii) all copyrights, copyright
registrations and applications therefor and all other rights corresponding
thereto throughout the world ("Copyrights"); (iv) all mask works, mask work
registrations and applications therefor, and any equivalent or similar rights in
semiconductor masks, layouts, architectures or topology ("Maskworks"); (v) all
industrial designs and any registrations and applications therefor throughout
the world; (vi) all trade names, logos, common law trademarks and service marks,
trademark and service mark registrations and applications therefor and all
goodwill associated therewith throughout the world ("Trademarks"); (vii) all
rights in databases and data collections throughout the world; (viii) all
Software; and (ix) any similar, corresponding or equivalent rights to any of the
foregoing anywhere in the world.

               "Interim Order" means the interim order of the Court in respect
of the Arrangement, as contemplated by Section 2.1.



                                       6                       Execution Version




               "Knowledge" of any party to this Agreement with respect to any
fact or other matter shall mean either that (i) such individual is actually
aware of such fact or other matter or (ii) a prudent individual could be
expected to discover or otherwise become aware of such fact or other matter in
the course of conducting a reasonably comprehensive investigation concerning the
existence of such fact or other matter.

               "Leases" shall mean any lease with respect to personal or real
property to which the Company is a party.

               "Liabilities" shall mean any direct or indirect liability,
indebtedness, obligation, commitment, expense, claim, deficiency, guaranty or
endorsement of or by any Person of any type, whether accrued, absolute,
contingent, matured, unmatured or other.

               "Management Information Circular" shall mean the notice of the
Company Shareholders Meeting, the accompanying management information circular
and form of proxy to be sent to holders of Company Common Shares and Company
Preferred Shares in connection with the Company Shareholders Meeting, including
all appendices thereto.

               "Material Adverse Effect" or "Material Adverse Change" shall
mean, (i) with respect to the Company, any change, effect, event or occurrence
that has, or is reasonably likely to have, individually or in the aggregate with
other changes, effects, events or occurrences, a material adverse impact on the
business, financial position, assets, results of operations or prospects of the
Company, and (ii) with respect to BioMarin, any change, effect, event or
occurrence that has, or is reasonably likely to have, individually or in the
aggregate with other changes, effects, events or occurrences, a material adverse
impact on the business, financial position, assets, results of operations or
prospects of BioMarin and its Subsidiaries, taken together as a whole; provided,
however, that a Material Adverse Effect or Material Adverse Change with respect
to either the Company or BioMarin shall not include any change or effect
resulting from significant downward movement in the U.S. or Canadian financial
markets.

               "New BioMarin Product" shall have the meaning set forth in the
Exchangeable Shares Terms.

               "Ordinary Course" shall mean with respect to any party hereto,
the ordinary course of the business conducted by that party consistent with the
past practice of that party.

               "Organizational Documents" shall mean the Company's Articles,
By-laws, shareholder agreements, agreements providing for rights of first
refusal, preemptive rights or options with respect to the purchase of stock,
other securities or assets, and all other documents and contracts, and all
amendments and supplements to any of the foregoing, relating to the
organization, ownership, management or structure of the Company.

               "Permits" shall mean all certificates of need, licenses, permits,
franchises, approvals, authorizations, consents or orders of, or filings with,
any Governmental Authority necessary for the conduct of, or relating to the
Company.



                                       7                       Execution Version




               "Permitted Encumbrances" shall mean liens for any Taxes not yet
due and payable as to which adequate reserves have been established in the Books
and Records, including, without limitation, on the Balance Sheet.

               "Person" shall mean any natural person, corporation, business
trust, association, company, partnership, limited liability company, joint
venture, Governmental Authority and any other entity.

               "Plan of Arrangement" shall mean the plan of arrangement
substantially in the form and content of Exhibit C annexed hereto and any
amendments or variations thereto made in accordance with the provisions of this
Agreement or made at the direction of the Court in the Final Order and which are
acceptable to BioMarin and the Company.

               "Preferred Exchange Ratio" means the quotient obtained by
dividing (i) the Preferred Return Amount, as converted to U.S. dollars, divided
by the total number of issued and outstanding Company Preferred Shares at the
Effective Time by (ii) U.S.$11.50, rounded to the nearest seven decimal places.

               "Preferred Return Amount" shall mean $10,021,328, which amount is
four (4) times the aggregate stated capital of the Company Preferred Shares at
the date of this Agreement.

               "Regulations" shall mean any laws, statutes, ordinances,
regulations, rules, notice requirements, court decisions, agency guidelines, and
orders of any Governmental Authority.

               "Representative" shall mean any officer, director, principal,
attorney, agent, employee, consultant or other representative.

               "SEC" shall mean the United States Securities and Exchange
Commission.

               "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

               "Securities Exemption Orders" shall mean orders of the
Commissions exempting the trades contemplated by the Plan of Arrangement from
the registration and prospectus requirements of applicable Canadian Securities
Legislation, including but not limited to the distribution of Exchangeable
Shares and BioMarin Common Shares as the case may be, the distribution of any
securities upon the conversion or exchange of such securities in accordance with
their terms (including in connection with the exchange of the Company Stock
Options and Company Warrants), or the resale by holders of any securities
distributed to them pursuant to the Arrangement or upon the conversion or
exercise of any security issued to them pursuant to the Plan of Arrangement,
including but not limited to the resale of BioMarin Common Shares.

               "Significant Business Associate" shall mean any Person (other
than the Company or any employee of the Company) with which the Company has
consummated or entered into any Contract providing for, or with respect to which
the Company has performed, any transaction or series of similar transactions
involving since January 1, 2001 Liabilities of at least $50,000 to the Company
or any such transaction or series of transactions currently proposed or
anticipated involving at least such amount.



                                       8                       Execution Version




               "Software" shall mean computer software, programs and databases
in any form, including Internet web sites, web content and links, Uniform
Resource Locators, domain names, source code, object code, operating systems and
specifications, data, databases, database management code, utilities, graphical
user interfaces, menus, images, icons, forms, methods of processing, software
engines, platforms and data formats, all versions, updates, corrections,
enhancements and modifications thereof and all related documentation, developer
notes, comments and annotations.

               "Stock" of any Person shall mean capital stock, membership or
economic interests or participations or other equivalents of or interests in
(however designated) equity of such Person, securities exchangeable for or
convertible into any of the foregoing and options, warrants, preemptive rights,
rights of first refusal and all other rights to acquire any of the foregoing.

               "Subsidiary" shall mean, with respect to any non-natural Person,
any other non-natural Person in which such non-natural Person then owns directly
or indirectly Stock possessing 50% or more of the total combined voting power of
all classes of Stock of such other non-natural Person.

               "Tax" shall mean any tax, levy, impost, fee, assessment or other
government charge, including, without limitation, income, estimated income,
business, occupation, franchise, property, payroll, personal property, sales,
transfer, use, employment, commercial rent, occupancy, franchise or withholding
taxes, and any premium, including, without limitation, interest, penalties and
additions, in connection therewith.

               "Tax Return" shall mean any return (including any information
return), report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Authority in connection with the determination,
assessment, collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance with any
Regulation relating to any Tax.

               "Technology and Know-How" shall mean all Trade Secrets,
engineering information, specifications, designs, drawings, processes and
quality control data, computer hardware, management information systems,
Software and any other intangible property and applications for the same used or
held for use by the Company.

               "Transactions" shall mean the transactions contemplated by this
Agreement.

               "U.S. GAAP" shall mean United States generally accepted
accounting principles, consistently applied.

        1.2    Other Defined Terms. The following terms shall have the meanings
defined for such terms in the Sections set forth below:

            Term                                         Section

            Agreement                                    Preamble



                                       9                       Execution Version




            Term                                         Section

            Ancillary Agreements                         8.7
            BioMarin                                     Preamble
            BioMarin Nova Scotia                         Recital A
            BioMarin Option                              2.11(a)
            BioMarin Option Plan                         2.11(a)
            BioMarin SEC Documents                       5.4
            BioMarin Warrant                             2.11(b)
            CBCA                                         Recital B
            Certificates                                 2.7(a)
            Claim                                        9.2(d)
            Claim Notice                                 9.2(d)
            Closing                                      3.1(a)
            Company                                      Preamble
            Company Option Plans                         4.2
            Company Stock Options                        4.2
            Confidential Information                     10.13
            Delivery                                     Preamble
            Dispute                                      10.5(a)
            Dispute Notice                               10.5(a)
            Dissenters' Rights                           2.5(a)
            Dissenting Shares                            2.5(a)
            Employee Plans                               4.20
            Escrow                                       2.7(d)
            Escrow Agreement                             2.7(d)
            Escrowed Shares                              2.7(d)
            First Amendment Agreement                    Preamble
            General Release                              8.6
            Material Breach                              10.1(a)(iii)
            New Company Products                         6.6
            Original Agreement                           Preamble
            Other Filings                                6.7(a)
            Proposed Acquisition Transaction             6.2(a)
            Report                                       6.4(b)
            Required Company Shareholder Vote            2.2(b)
            Shareholders' Representative                 2.7(d)(ii)
            Shareholders' Representative Agreement       2.7(d)(ii)
            Suspension Period                            2.6(b)(ii)
            Termination Date                             10.1(a)
            Warrant Holder                               2.11(b)
            Warrant Shares                               2.11(b)



                                       10                      Execution Version




                                   ARTICLE II
                                 THE ARRANGEMENT

        2.1    Implementation Steps by the Company. The Company covenants in
favor of BioMarin and Newco that the Company shall:

               (a) as soon as reasonably practicable, apply in a manner
acceptable to BioMarin under Section 192 of the CBCA for the Interim Order, and
thereafter proceed with and diligently pursue the obtaining of the Interim
Order;

               (b) convene and hold the Company Shareholders Meeting for the
purpose of considering the Arrangement Resolution (and for any other proper
purpose as may be set out in the notice for such meeting);

               (c) subject to obtaining such shareholder approval as is required
by the CBCA and the Interim Order, diligently pursue the application to the
Court for the Final Order; and

               (d) subject to obtaining the Final Order and the satisfaction or
waiver of the other conditions herein contained in favor of the Company, file
with the Director Articles of Arrangement and such other documents as may be
required in connection therewith under the CBCA to give effect to the
Arrangement.

        2.2    Interim Order. The notice of motion for the application referred
to in Section 2.1(a) shall request that the Interim Order provide:

               (a) for the class or classes of Persons to whom notice is to be
provided in respect of the Arrangement and the Company Shareholders Meeting and
for the manner in which such notice is to be provided;

               (b) that the requisite shareholder approval for the Arrangement
Resolution shall be 66 2/3% of the votes cast on the Arrangement Resolution by
holders of Company Common Shares and Company Preferred Shares, in each case
voting separately as a class and present in Person or by proxy at the Company
Shareholders Meeting (the "Required Company Shareholder Vote");

               (c) that, in all other respects, the terms, restrictions and
conditions of the by-laws and articles of the Company, including quorum
requirements and all other matters, shall apply in respect of the Company
Shareholders Meeting; and

               (d) for the grant of the Dissenters' Rights.

        2.3    Effect of the Arrangement. At the Effective Time, the effect of
the Arrangement shall be as provided in this Agreement and the Plan of
Arrangement and the applicable provisions of the CBCA.



                                       11                      Execution Version




        2.4    Effect on Capital Stock. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Arrangement, the
following shall occur:

               (a) Exchange of Company Common Shares and Company Preferred
Shares. A part of each Company Preferred Share issued and outstanding
immediately prior to the Effective Time, other than any Dissenting Shares (as
defined in and to the extent provided in Section 2.5), will be automatically
exchanged (subject to Section 2.4(d)) for the right to receive the product of
(X) one (1) BioMarin Common Share multiplied by (Y) the Preferred Exchange
Ratio. Each Company Common Share and a part of each Company Preferred Share
issued and outstanding immediately prior to the Effective Time, other than any
Dissenting Shares (as defined in and to the extent provided in Section 2.5) will
be automatically exchanged (subject to Section 2.4(d)) for (i) the right to
receive the product of (X) one (1) BioMarin Common Share multiplied by (Y) the
Exchange Ratio and (ii) one Exchangeable Share. After giving effect to the two
foregoing sentences, each Company Common Share and each Company Preferred Share
shall have been exchanged in full. Section 2.4 of the Company Ancillary
Agreement sets forth the number of BioMarin Common Shares issuable pursuant to
this Agreement to each Company Shareholder based upon the Exchange Ratio and the
Preferred Exchange Ratio; provided, however, in the event that the Exchange
Ratio is recalculated as a result in any increase in the stated capital of the
Company by the aggregate cash exercise prices actually received by the Company
after the date of the this Agreement and prior to the Effective Time from the
exercise of any Company Stock Options outstanding as of the date of this
Agreement pursuant to and in accordance with the terms of the Company Stock
Option Plan and the related option agreements, then the parties acknowledge and
agree that Section 2.4 of the Company Ancillary Agreement shall be
correspondingly updated.

               (b) Stock Options. At the Effective Time, options to purchase
Company Common Shares then outstanding and vested under any Company Option Plan
shall be assumed or replaced by BioMarin in accordance with Section 2.11 hereof.

               (c) Warrants. At the Effective Time, the Company Warrants then
outstanding shall be replaced by BioMarin in accordance with Section 2.11
hereof.

               (d) Fractional Shares. No fraction of a share of an Exchangeable
Share or a BioMarin Common Share will be issued by virtue of the Arrangement. In
lieu of any fractional BioMarin Common Share, each holder of Company Common
Shares or Company Preferred Shares who would otherwise be entitled to a fraction
of a share of a BioMarin Common Share (after aggregating all fractional shares
of BioMarin Common Shares that otherwise would be received by such holder)
shall, upon surrender of such holder's Certificates(s) (as defined in Section
2.6) receive from Newco an amount of cash (rounded to the nearest whole cent),
without interest, equal to the product of such fraction, multiplied by
U.S.$11.50.

        2.5    Dissenting Shares.

               (a) Notwithstanding any provision of this Agreement to the
contrary, the shares of any holder of Company Common Shares or Company Preferred
Shares who has demanded and perfected appraisal and dissent rights ("Dissenters'
Rights") in respect of such Company Common Shares or Company Preferred Shares in
accordance with the Interim Order



                                       12                      Execution Version




or the CBCA and who, as of the Effective Time, has not effectively withdrawn or
lost such appraisal and dissent rights ("Dissenting Shares"), shall not be
converted into or represent a right to receive Exchangeable Shares or BioMarin
Common Shares pursuant to Section 2.4, but the holder thereof shall only be
entitled to such rights as are granted by the Interim Order or the CBCA, as the
case may be.

               (b) Notwithstanding the provisions of subsection (a), if any
holder of Company Common Shares or Company Preferred Shares who demands
appraisal of such shares under the CBCA shall effectively withdraw (or otherwise
by law not be entitled to) the right to appraisal, then, as of the Effective
Time, such holder's shares shall automatically be converted into and represent
only the right to receive Exchangeable Shares and BioMarin Common Shares, as the
case may be, without interest thereon, upon surrender of the certificate
representing such shares.

               (c) The Company shall give BioMarin (i) prompt notice of any
written demands for appraisal of any Company Common Shares or Company Preferred
Shares, withdrawals of such demands, and any other instruments served pursuant
to the CBCA and received by the Company which relate to any such demand for
appraisal and (ii) the opportunity to participate in all negotiations and
proceedings which take place prior to the Effective Time with respect to demands
for appraisal and dissent under the CBCA. The Company shall not, except with the
prior written consent of BioMarin, voluntarily make any payment with respect to
any demands for appraisal of Company Common Shares or Company Preferred Shares
or offer to settle or settle any such demands.

        2.6    Securities Compliance; Registration.

               (a) Securities Compliance. BioMarin shall use commercially
reasonable efforts to obtain any and all orders required from the Commissions in
the provinces of British Columbia and Ontario to permit the issuance and first
resale of (a) BioMarin Common Shares and Exchangeable Shares issued pursuant to
the Arrangement, (b) the BioMarin Common Shares, if any, to be issued upon
exchange of the Exchangeable Shares from time to time, and (c) the BioMarin
Common Shares to be issued from time to time upon exercise of the BioMarin
Options and BioMarin Warrants, in each case without qualification with or
approval of or the filing of any prospectus or similar document or the taking of
any other proceeding in connection therewith.

               (b) Registration.

                   (i) In the event that Newco or BioMarin Nova Scotia
determines to deliver its Redemption Price or Redemption Call Purchase Price (as
such terms are defined in the Exchangeable Shares Terms) by issuing BioMarin
Common Shares to the Company Shareholders pursuant Section 5.3 of the
Exchangeable Shares Terms, such issuance shall occur pursuant to an exemption
from registration or pursuant to an effective registration statement under the
Securities Act. If such shares are issued pursuant to an exemption from
registration under the Securities Act, then within fifteen (15) days after the
Redemption Date (as defined in the Exchangeable Shares Terms), BioMarin shall
prepare and file a registration statement on Form S-3 under the Securities Act,
covering the resale of such BioMarin Common Shares and



                                       13                      Execution Version




shall use its commercially reasonable efforts to cause such registration
statement to become effective as expeditiously as possible and to remain
effective until the earliest to occur of (i) the date the BioMarin Common Shares
covered thereby have been sold, (ii) the date by which all BioMarin Common
Shares covered thereby may be sold under Rule 144 without restriction as to
volume, or (iii) the date which is the twenty-fourth month anniversary of such
Redemption Date.

                   (ii) Following the effectiveness of a registration statement
filed pursuant to this section, BioMarin may, at any time, suspend the
effectiveness of such registration for up to sixty (60) days, as appropriate (a
"Suspension Period"), by giving notice to the Company Shareholders, if BioMarin
shall have determined that BioMarin may be required to disclose any material
corporate development which disclosure may have a material adverse effect on
BioMarin or any of its Subsidiaries.

                   (iii) When BioMarin files a registration statement with
respect to BioMarin Common Shares under the Securities Act pursuant to Section
2.6(b), BioMarin will, at its expense, as expeditiously as possible:

                         (1) In accordance with the Securities Act and the rules
and regulations of the SEC, prepare and file in accordance with Section 2.6(b),
with the SEC a registration statement with respect to such BioMarin Common
Shares and use its commercially reasonable efforts to cause such registration
statement to become and remain effective for the period described in Section
2.6(b)(i), and prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such period;

                         (2) Furnish to the Persons participating in such
registration such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as such
Persons may reasonably request in order to facilitate the public offering of
such BioMarin Common Shares;

                         (3) Notify such Persons participating in the
registration, promptly after it shall receive notice thereof, of the date and
time when such registration statement and each post-effective amendment thereto
has become effective or a supplement to any prospectus forming a part of such
registration statement has been filed;

                         (4) Notify such Persons participating in the
registration promptly of any request by the SEC for the amending or
supplementing of such registration statement or prospectus or for additional
information;

                         (5) Prepare and promptly file with the SEC, and
promptly notify such Persons participating in the registration of the filing of,
such amendments or supplements to such registration statement or prospectus as
may be necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, any event has occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and



                                       14                      Execution Version




                         (6) Advise such Persons participating in the
registration, promptly after it shall receive notice or obtain Knowledge
thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of such registration statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued.

                   (iv) With respect to any registration effected pursuant to
this section, all fees, costs and expenses of and incidental to such
registration shall be borne by BioMarin; provided, however, that, the Persons
participating in the registration shall bear their own legal fees and all
underwriting discounts and commissions.

        2.7    Surrender of Certificates.

               (a) Exchange Procedures. Promptly after the Effective Time, each
holder of record (as of the Effective Time) of a certificate or certificates
(the "Certificates"), which immediately prior to the Effective Time represented
outstanding Company Common Shares or Company Preferred Shares, shall be required
to send to Newco (i) a duly completed and validly executed letter of transmittal
in substantially the same form attached hereto as Exhibit D, together with the
Certificates and any Company Warrants held by such holder, and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing BioMarin Common Shares, Exchangeable Shares and cash
in lieu of any fractional shares pursuant to Section 2.4(d), as appropriate.
Upon surrender of Certificates to Newco or to such other agent or agents as may
be appointed by BioMarin, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, the
holders of such Certificates shall be entitled to receive in exchange therefor,
subject to the escrow provisions set forth in Section 2.7(d) below, certificates
representing the number of whole shares of Exchangeable Shares and BioMarin
Common Shares, as appropriate, into which their Company Common Shares or Company
Preferred Shares were exchanged at the Effective Time, together with payment in
lieu of fractional shares which such holders have the right to receive pursuant
to Section 2.4(d), and the Certificates so surrendered shall forthwith be
cancelled. Until so surrendered, outstanding Certificates will be deemed from
and after the Effective Time, for all corporate purposes, subject to Section
2.4(d), to evidence only the ownership of the number of full Exchangeable Shares
or BioMarin Common Shares into which such Company Common Shares or Company
Preferred Shares are entitled to be exchanged and the right to receive an amount
in cash in lieu of the issuance of any fractional shares in accordance with
Section 2.4(d).

               (b) Required Withholding. Newco shall be entitled to deduct and
withhold from any consideration payable or otherwise deliverable pursuant to
this Agreement to any holder or former holder of Company Common Shares or
Company Preferred Shares such amounts as may be required (as advised by tax
counsel for BioMarin) to be deducted or withheld therefrom under the Code, the
Income Tax Act (Canada) or under any provision of United States or Canadian
federal, state, provincial, regional, local or foreign tax law or under any
other applicable legal requirement. To the extent such amounts are so deducted
or withheld, such amounts shall be treated for all purposes under this Agreement
as having been paid to the Person to whom such amounts would otherwise have been
paid.



                                       15                      Execution Version




               (c) No Liability. Notwithstanding anything to the contrary in
this Section 2.6, neither BioMarin, the Company, BioMarin Nova Scotia nor Newco
nor any party hereto shall be liable to a holder of BioMarin Common Shares or
Exchangeable Shares, Company Common Shares or Company Preferred Shares for any
amount properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.

               (d) Escrow.

                   (i)   On or prior to the Effective Time, Newco, BioMarin, the
Shareholders' Representative (as defined below) and U.S. Bank Trust National
Association, as escrow agent, shall execute an escrow agreement (the "Escrow
Agreement") in the form of Exhibit E attached hereto with respect to all the
BioMarin Common Shares and Exchangeable Shares to be issued to the Company
Shareholders in exchange for Company Common Shares and Company Preferred Shares
as of the Effective Date (the "Escrowed Shares"). Certificates representing the
Escrowed Shares shall be issued in the names of the Company Shareholders in
accordance with Section 2.4(a) and Section 2.7(a) above and shall be delivered
by Newco into an escrow (the "Escrow") pursuant to the terms of the Escrow
Agreement.

                   (ii)  Ventures West Management VI Ltd. (the "Shareholders'
Representative") will be appointed pursuant to that certain Shareholders'
Representative Agreement to be entered into by and among the Majority
Shareholders (as such term is defined in the Escrow Agreement) prior to the
Effective Time (the "Shareholders' Representative Agreement") to serve as agent
and representative of each Majority Shareholder (as such term is defined in the
Escrow Agreement), for and on behalf of such Majority Shareholder. Such
Shareholders' Representative shall be empowered by the Shareholders'
Representative Agreement to perform its obligations and responsibilities under
the Escrow Agreement. If the Shareholders' Representative or its agent shall
notify BioMarin of such Shareholders' Representative's intent to resign as the
Shareholders' Representative, the Shareholders' Representative shall appoint a
successor Shareholders' Representative within thirty (30) days, which successor
shall be acceptable to BioMarin in its reasonable discretion.

                   (iii) A decision, act, consent or instruction of the
Shareholders' Representative shall constitute a decision of all of the Majority
Shareholders with respect to the Escrow Agreement and this Agreement, and shall
be final, binding and conclusive upon each Majority Shareholder. BioMarin, Newco
and the Company may rely upon any decision, act, consent or instruction of the
Shareholders' Representative as being the decision, act, consent or instruction
of each and all of the Majority Shareholders. BioMarin, Newco and the Company
are relieved from any liability to any Person for any acts done by any or all of
them in accordance with or pursuant to such decision, act, consent or
instruction.

        2.8    No Further Ownership Rights in Company Common Shares or Company
Preferred Shares . All Exchangeable Shares and BioMarin Common Shares issued in
accordance with the terms hereof (including any cash paid in respect thereof
pursuant to Section 2.4(d)) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Company Common Shares and Company
Preferred Shares, and, following the Effective Time, there shall be no further
registration of transfers on the records of the Company of Company Common Shares
or Company Preferred Shares which were outstanding immediately



                                       16                      Execution Version




prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Company for any reason, they shall be cancelled and exchanged
as provided in this Article II, subject to the Plan of Arrangement.

        2.9    Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Company shall issue
in exchange for such lost, stolen or destroyed Certificates, upon the making of
an affidavit of that fact by the holder thereof, certificates representing the
Exchangeable Shares or BioMarin Common Shares into which the Company Common
Shares or Company Preferred Shares represented by such Certificates were
exchanged pursuant to Section 2.4, and cash for fractional shares, if any, as
may be required pursuant to Section 2.4(d); provided, however, that Newco may,
in its discretion and as a condition precedent to the issuance of such
certificates representing Exchangeable Shares or BioMarin Common Shares and
cash, require the owner of such lost, stolen or destroyed Certificates to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Newco with respect to the Certificates alleged to
have been lost, stolen or destroyed.

        2.10   Tax Consequences. It is intended by the parties hereto that the
Arrangement shall, for United States income tax purposes, constitute a taxable
disposition of Company Common Shares and Company Preferred Shares by Company
Shareholders subject to United States income tax and shall, for Canadian income
tax purposes, qualify, within prescribed limits, for an election pursuant to
Section 85 of the Income Tax Act (Canada)

        2.11   Company Stock Options and Company Warrants.

               (a) Company Stock Options. BioMarin and the Company shall provide
that on the Effective Date each Company Stock Option shall be exchanged for an
option to purchase BioMarin Common Shares as provided in Section 2.11 of the
Company Ancillary Agreement (a "BioMarin Option") and pursuant to BioMarin's
1997 Stock Plan, as amended on December 22, 1998 (the "BioMarin Option Plan"),
as shares issuable upon exercise of options granted under such BioMarin Option
Plan were registered on a registration statement on Form S-8 under the
Securities Act. All stock options granted by the Company which have not vested
at the Effective Time will be cancelled automatically at the Effective Time
without the need for any action by the Company or any other party. From and
after the Closing, there shall be no Company Stock Options outstanding.

               (b) Company Warrants. BioMarin and the Company shall provide that
on the Effective Date each outstanding Company Warrant shall be exchanged for a
warrant to purchase BioMarin Common Shares (such shares, "Warrant Shares") as
provided in Section 2.11 of the Company Ancillary Agreement in the form attached
as Exhibit F to the Company Ancillary Agreement (a "BioMarin Warrant"). BioMarin
shall notify each holder (a "Warrant Holder") of a BioMarin Warrant or Warrant
Shares, in writing at least ten (10) days prior to filing any registration
statement pursuant to Section 2.6(b) above, and will afford each Warrant Holder
an opportunity to include in such registration statement all or any part of the
Warrant Shares then held by such Warrant Holder. Such right shall be exercisable
by each Warrant Holder, if at all, by the delivery of written notice by such
Warrant Holder to BioMarin within five (5) days after receipt of the
above-described notice from BioMarin, informing BioMarin of the number of



                                       17                      Execution Version




Warrant Shares such Warrant Holder wishes to include in such registration
statement. If a Warrant Holder does not deliver such notice within such five (5)
day period, such Warrant Holder shall not have any right to include any of its
Warrant Shares in such registration statement thereafter filed by BioMarin. All
expenses (other than each Warrant Holder's legal fees and expenses and all
underwriting discounts and commissions) related to such registration of a
Warrant Holder's Warrant Shares shall be paid by BioMarin.

               (c) Further Assurances. The Company and BioMarin shall take all
action that may be necessary (under the option agreements and otherwise) to
effectuate the provisions of this Section 2.11. As soon as practicable after the
Closing, BioMarin shall deliver to holders of Company Stock Options and Company
Warrants appropriate notices setting forth such holders' rights pursuant to the
BioMarin Option Plan, if applicable, and the agreements evidencing the grants of
such BioMarin Options and BioMarin Warrants.

        2.12   Transfer Taxes and Fees. The Company shall be responsible for all
documentary and transfer taxes and all sales or use taxes imposed by reason of
the transfer of Company Common Shares and Company Preferred Shares (but
specifically excluding any tax based on or measured with respect to income or
gain) and any deficiency, interest or penalty asserted with respect thereto. The
Company shall pay the fees and costs of recording or filing all applicable
conveyancing instruments for such transfer.

                                   ARTICLE III
                                     CLOSING

        3.1    Closing.

               (a) In General. The consummation of the Arrangement (other than
obtaining the Final Order and the filing with the Director of the Articles of
Arrangement) shall occur at the closing contemplated herein (the "Closing")
which shall be held at 9:00 a.m. local time on such date mutually agreed upon by
the parties hereto, which date shall not be before the satisfaction or waiver of
all of the conditions specified in Articles VII and VIII hereof and not later
than the Termination Date, at the offices of Paul, Hastings, Janofsky & Walker
LLP located at 345 California Street, Twenty-Ninth Floor, San Francisco,
California.

               (b) Form of Instruments. To the extent that a form of any
document to be delivered hereunder is not attached as an exhibit hereto, such
documents shall be in form and substance, and shall be executed and delivered in
a manner reasonably satisfactory to BioMarin.

               (c) Deliveries. The Company will, at the Closing, deliver to
BioMarin the documents required by Article VIII.

               (d) Consents. To the extent not already delivered on or before
the date hereof, the Company shall deliver to BioMarin at the Closing all
Permits and any other third party consents contemplated or described herein or
in the Company Ancillary Agreement.



                                       18                      Execution Version




               (e) Resignations. The Company shall deliver to BioMarin at the
Closing written resignations, effective as of the Effective Date, of each
director and officer of the Company.

               (f) Plan of Arrangement. Each party hereto shall comply with the
terms of the Plan of Arrangement.

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company hereby represents and warrants to BioMarin and Newco as
follows:

        4.1    Organization of the Company; Organizational Documents.

               (a) The Company is duly organized, validly existing and in good
standing under the laws of Canada, with full power and authority to own and
lease its properties and assets and to conduct its business as currently
conducted and as proposed to be conducted. The Company is duly qualified to do
business and is in good standing in each jurisdiction where the character of its
properties owned or leased or the nature of its activities make such
qualification necessary. The Company has not conducted business in any
jurisdiction other than British Columbia, Canada.

               (b) Section 4.1(b) of the Company Ancillary Agreement contains a
true, correct and compete list of all of the Organizational Documents of the
Company. Copies of all of the Organizational Documents of the Company have
heretofore been delivered or made available to BioMarin, and as so delivered or
made available are accurate and complete.

        4.2    Capitalization. The authorized capital Stock, the total issued
and outstanding Stock, the name of each shareholder and the number of shares
held by each shareholder of the Company is set forth in Section 4.2 of the
Company Ancillary Agreement. All of the issued and outstanding Stock of the
Company is duly authorized, validly issued, fully paid, nonassessable and free
of all preemptive or similar rights. One Million Eight Hundred Thirty-Eight
Thousand Three Hundred Eighty-Four (1,838,384) shares of the Company's Stock
have been reserved for issuance and issuable upon or otherwise deliverable in
connection with the exercise of outstanding options and warrants granted by the
Company to purchase shares of the Company's Stock. Section 4.2 of the Company
Ancillary Agreement contains a complete and correct list of: (a) all of the
Company's stock option plans; (b) all holders of options to acquire shares of
the Company's Stock, including such person's name, the number of options
(vested, unvested and total) held by such person, the stock option plan pursuant
to which the option was granted, the remaining term for vesting of such options
and the exercise price for each such option; and (c) all holders of warrants to
acquire shares of the Company's Stock, including such person's name, the number
of shares of the Company's Stock subject to each such warrant and the exercise
price for each such warrant. Except as set forth in Section 4.2 of the Company
Ancillary Agreement, there are no existing options, warrants, right, calls or
commitments of any character relating to the Company's Stock. There are no
outstanding securities or other instruments convertible into or exchangeable for
the Company's Stock and there are no commitments to issue any such securities or
instruments. No Person has any right of first refusal, preemptive right,
subscription



                                       19                      Execution Version




right or similar right with respect to any Stock of the Company. There are no
stock plans, stock appreciation rights, phantom stock rights or any rights of a
similar nature that would require any Person to pay cash or issue any securities
as a result of or in connection with the Transactions or otherwise give any
Person any right to or in respect of any security of BioMarin. All of the
outstanding shares of the Company's Stock were issued in compliance with all
applicable Regulations, including, without limitation, all applicable securities
laws.

        4.3    Subsidiaries. The Company does not own or control any Stock of
any Person. The Company is not a participant in, or member or equity or debt
holder of, any joint venture, partnership or similar arrangement.

        4.4    Authorization. The Company has all requisite power and authority,
and has taken all corporate action necessary, to execute and deliver this
Agreement, the Ancillary Agreements and to perform its obligations hereunder and
under any other agreement contemplated hereby and, subject to obtaining the
Required Company Shareholder Vote and the approval of the Court to the
Arrangement, to consummate the Transactions. The execution and delivery of this
Agreement and the Ancillary Agreements by the Company and, subject to obtaining
the Required Company Shareholder Vote and the approval of the Court to the
Arrangement, the consummation by the Company of the Transactions have been duly
approved by all corporate action of the Company. No other corporate proceedings
on the part of the Company is necessary to authorize its execution, delivery and
performance of this Agreement and the Ancillary Agreements and the consummation
of the Transactions (other than all proceedings related to the approval of the
Arrangement by the Required Company Shareholder Vote and Court approval of the
Arrangement). This Agreement and the Ancillary Agreements have been duly
executed and delivered by the Company and each of this Agreement and each
Ancillary Agreement is the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, except that such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting the
rights of creditors generally, and that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought.

        4.5    Absence of Certain Changes or Events. Since the Balance Sheet
Date, except as set forth in Section 4.5 of the Company Ancillary Agreement,
there has not been any:

               (a) Material Adverse Change;

               (b) change in accounting methods, principles or practices
affecting in any material respect the Company;

               (c) damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting the Company;

               (d) cancellation of any indebtedness or waiver or release of any
right or claim of the Company in excess of $10,000 in the aggregate;



                                       20                      Execution Version




               (e) declaration, setting aside, or payment of dividends or
distributions by the Company, or any redemption, purchase or other acquisition
of any securities of the Company;

               (f) increase in the rate of compensation payable or to become
payable to any Representative of the Company (other than compensation increases
for non-officer employees of the Company made in the Ordinary Course) including,
without limitation, the making of any loan (except travel advances, if any, made
in reasonable amounts and in the Ordinary Course) to, or the payment, grant or
accrual of any bonus, incentive compensation, service award or other similar
benefit to, any such Person, or the addition to, modification of, or
contribution to any Plan or other arrangement to which the Company is a party or
otherwise is bound;

               (g) Material Adverse Change in employee relations which has or is
reasonably likely to have a Material Adverse Effect;

               (h) amendment (except in the Ordinary Course), cancellation or
termination of any material Contract, transaction or Permit relating to the
Company or to which the Company is a party, or entry by the Company into any
Contract or transaction which is not in the Ordinary Course, including, without
limitation, any employment or consulting agreements;

               (i) mortgage, pledge or other material Encumbrance of any of the
Assets, other than Permitted Encumbrances;

               (j) sale, assignment or transfer of any of the Assets;

               (k) incurrence of indebtedness by the Company for borrowed money
or commitment to borrow money entered into by the Company or loans made or
agreed to be made by the Company or indebtedness guaranteed by the Company;

               (l) incurrence by the Company of any Liabilities (except
Liabilities incurred in the Ordinary Course not in excess of an aggregate of
$10,000);

               (m) payment, discharge or satisfaction of any Liabilities of the
Company other than the payment, discharge or satisfaction in the Ordinary
Course;

               (n) capital expenditure by the Company in excess of $10,000 in
the aggregate, or the incurring of any obligation by Company to make any capital
expenditure in excess of $10,000;

               (o) failure to pay or satisfy when due or other default in
respect of any material Liability of the Company;

               (p) disposition of any Company Intellectual Property which is
material to the Company; or

               (q) agreement by the Company to do any of the things described in
the preceding clauses (a) through (p) other than as expressly provided for
herein.



                                       21                      Execution Version




        4.6    Encumbrances. To the Knowledge of the Company, each Company
Shareholder owns all of its Company Common Shares and Company Preferred Shares,
free and clear of all Encumbrances; provided, however, that the Company has made
no inquiry of any Company Shareholder other the Majority Shareholders (as such
term is defined in the Escrow Agreement) with respect to this representation.
Upon consummation of the Transactions, BioMarin shall be the owner, beneficially
and of record, of all the Company's Common Shares and Company Preferred Shares,
free and clear of all Encumbrances.

        4.7    Condition of the Assets. All tangible Assets of the Company are
in good operating condition and repair and are usable in the Ordinary Course and
conform to all applicable Regulations (including Environmental Laws and Health
Laws) relating to their construction, use and operation, except where the
failure to so conform would not have a Material Adverse Effect.

        4.8    Contracts and Commitments.

               (a) Contracts. Section 4.8 of the Company Ancillary Agreement
sets forth a complete and accurate list of all Contracts of the following
categories:

                   (i) Contracts not made in the Ordinary Course;

                   (ii) Employment contracts and severance agreements;

                   (iii) Labor or union contracts;

                   (iv) Distribution, franchise, license, technical assistance,
sales, commission, consulting, or other Contracts that individually (A) since
January 1, 2001 have involved revenues or Liabilities in excess of $20,000, (B)
are known by the Company to involve future estimated annual revenues in excess
of $20,000, (C) involve future annual expenditures or Liabilities, actual or
potential, estimated to be in excess of $20,000, (D) terminate or expire at any
time after the first anniversary of the Effective Date, or (E) are otherwise
material to the Company;

                   (v) Promissory notes, loans, indentures, evidences of
indebtedness, letters of credit, guarantees, or other instruments relating to an
obligation to pay money, whether the Company is the borrower, lender, guarantor
or grantor thereunder;

                   (vi) Contracts containing covenants limiting the freedom of
the Company or any shareholder, officer, director, partner or employee of the
Company to engage in any line of business, to perform or render to any Person
any service or to compete with any Person;

                   (vii) Any Contract with any Governmental Authority;

                   (viii) Leases of real property;



                                       22                      Execution Version




                   (ix) Leases of personal property not cancelable (without
Liability) within thirty (30) calendar days or which have aggregate annual lease
payments in excess of $20,000;

                   (x) Contracts entered into in settlement of any Action or
threatened Action;

                   (xi) Contracts involving rights of first refusal, first
offer, first negotiation, first look or similar rights that the Company has
granted to third parties;

                   (xii) Contracts not cancelable (without Liability) on less
than thirty (30) days notice by the Company.

                   The Company has delivered or made available to BioMarin true,
correct and complete copies of all of the written Contracts listed in Section
4.8 of the Company Ancillary Agreement, including all amendments and supplements
thereto, and has provided to BioMarin true, correct and complete summaries of
all of the oral Contracts described above, including all amendments and
supplements thereto.

               (b) All of the Contracts are valid, binding and enforceable upon
the Company and, to the Knowledge of the Company, each other party thereto in
accordance with their terms (except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights of creditors generally,
and that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceedings therefore may be brought), except as
could not reasonably be anticipated, individually or in the aggregate, to have a
Material Adverse Effect. The Company has fulfilled, or taken all action
necessary to enable it to fulfill when due, all of its obligations under such
Contracts, except where a failure to do so (either in any individual Contract or
in the aggregate) could not reasonably be anticipated to have a Material Adverse
Effect. The Company is not, and, to the Knowledge of the Company, no other party
is, in Default with respect to any such Contract, which Default would be
reasonably likely to have a Material Adverse Effect, either individually or in
the aggregate, and no notice of any claim of material Default has been given to
the Company.

        4.9    Permits; Consents and Approvals.

        (a)    Section 4.9 of the Company Ancillary Agreement sets forth a
complete list of all Permits material to the Company. The Company has, and at
all times has had, all Permits required under any Regulation (including
Environmental Laws and Health Laws) in connection with the operations of the
Company except where the failure to have any such Permit would not have a
Material Adverse Effect. The Company is not in Default, nor has it received any
notice of any claim of Default, with respect to any such Permit. Except as set
forth in Section 4.9 of the Company Ancillary Agreement, no such Permit which is
material to the Company will be adversely affected by the completion of the
Transactions. No present or former shareholder or Representative of the Company
or any Affiliates thereof, or any other Person, owns or has any



                                       23                      Execution Version




proprietary, financial or other interest (direct or indirect) in any Permit
which the Company owns, possesses or uses.

               (b) No notice to, declaration, filing or registration with, or
Permit or consent from, any Governmental Authority, or any other Person, is
required to be made or obtained by the Company in connection with the execution,
delivery or performance of this Agreement and the consummation of the
Transactions.

        4.10   No Conflict or Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the Transactions, nor
compliance by the Company with any of the provisions hereof, will (a) violate or
conflict with any provision of any Organizational Document of the Company, (b)
violate, conflict with, or result in or constitute a Default under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration or the loss of a material benefit under, or
result in the incurrence of any Liability under, or result in the creation of
any Encumbrance (other than a Permitted Encumbrance) upon any of the Assets
under any of the terms, conditions or provisions of any Contract or material
Permit (i) to which the Company is a party or (ii) by which any of the Assets
are bound or affected; unless in each case such violation, conflict, Default,
termination, acceleration, Liability, or Encumbrance would not, when taken
individually, or together with other violations, conflicts, Defaults,
terminations, accelerations, Liabilities, or Encumbrances in the aggregate,
reasonably be expected to have a Material Adverse Effect, (c) violate any
Regulation or Court Order, or (d) impose any Encumbrance (other than a Permitted
Encumbrance) on any of the Assets.

        4.11   Financial Statements. True and complete copies of the Financial
Statements are attached to the Company Ancillary Agreement under Section 4.11
thereto. The Financial Statements (a) are derived from the books and records of
the Company, (b) fairly present the financial position of the Company as
described therein as of the respective dates thereof and the results of
operations, changes in shareholders' equity and cash flows of the Company for
the periods covered thereby and (c) are true and correct in all material
respects. The Financial Statements were prepared in accordance with Canadian
GAAP.

        4.12   Books and Records. The minute books of the Company, true and
complete copies of which have been delivered to BioMarin, are complete and
correct in all material respects.

        4.13   Litigation. There is no Action pending or, to the Knowledge of
the Company, threatened against, related to or affecting the Company (including
with respect to Environmental Laws and Health Laws) or that seek to delay, limit
or enjoin the Transactions. The Company is not subject to any Court Order and is
not in Default with respect to any Court Order that relates to the Company, and
there are no unsatisfied judgments against the Company. There are no Court
Orders or agreements with, or liens by, any Governmental Authority or
quasi-governmental entity relating to any Environmental Law or Health Law which
regulate, obligate, bind or in any way affect the Company.

        4.14 Labor Matters. The Company is not a party to any labor agreement
with respect to any of its employees. The Company has not experienced any
attempt by organized labor or its



                                       24                      Execution Version




representatives to make it conform to demands of organized labor relating to its
employees or to enter into a binding agreement with organized labor that would
cover its employees. There is no labor strike or labor disturbance pending or,
to the Company's Knowledge, threatened against the Company by any of its
employees, nor is any grievance currently being asserted. The Company has not
experienced a work stoppage or other labor difficulty by its employees or former
employees. The Company is not engaging nor has engaged in any conduct that could
reasonably be anticipated to be deemed an unfair labor practice. Set forth in
Section 4.14 of the Company Ancillary Agreement are the names and current annual
base salary rates of all present employees of the Company, their bonus
compensation for the year ending December 31, 2000 and bonus compensation paid,
expected to be payable or otherwise accrued with respect to the year ending
December 31, 2001.

        4.15 Liabilities. Except as set forth in Section 4.15 of the Company
Ancillary Agreement, the Company does not have any Liabilities, except (a)
Liabilities which are set forth or reserved for on the Balance Sheet, which have
not been paid or discharged since the Balance Sheet Date and (b) Liabilities not
exceeding $5,000 individually or $10,000 in the aggregate incurred since the
Balance Sheet Date in the Ordinary Course.

        4.16   Compliance with Law. The Company has not violated and is in
compliance with all applicable Regulations and Court Orders relating to the
Company, unless such violations or failures to be in compliance would not,
individually or in the aggregate, have a Material Adverse Effect. The Company
has not received any notice or otherwise been advised that it is not in
compliance with any such Regulations or Court Orders. The Company has no reason
to anticipate that any existing circumstances are likely to result in violations
of any of the foregoing, unless, individually and in the aggregate, such
violations would not have a Material Adverse Effect.

        4.17   No Brokers. Except as set forth in Section 4.17 of the Company
Ancillary Agreement, neither the Company nor any of its respective
Representatives, partners or Affiliates has employed or made any agreement with
any broker, finder or similar agent or any other Person which will result in the
obligation of the Company or BioMarin or any of their respective Affiliates to
pay any finder's fee, brokerage fees or commission or similar payment in
connection with the Transactions.

        4.18   No Other Agreement to Sell the Shares or Assets. Neither the
Company nor, to the Knowledge of the Company, any of its officers, directors,
Affiliates, or shareholders have any commitment or legal obligation, absolute or
contingent, to any other Person other than BioMarin to sell, assign, transfer or
effect a sale of any of the Shares or the Assets or any portion thereof, to
effect any merger, consolidation, liquidation, dissolution or other
reorganization, or to enter into any agreement or cause the entering into of an
agreement with respect to any of the foregoing.

        4.19   Intellectual Property.

               (a) The Company owns, licenses or has other valid rights, title
and interest, free and clear of all Encumbrances, to use the Company
Intellectual Property and the Technology and Know-How, without infringing upon
or otherwise acting adversely to the right



                                       25                      Execution Version




or claimed right of any third party, except where the failure to so own, license
or have such rights would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. Section 4.19(a) of the Company
Ancillary Agreement sets forth all domestic and foreign Patents, Copyrights,
Maskworks, Trademarks, and licenses with respect to the foregoing, included in
the Company Intellectual Property. All of the Company Intellectual Property and
Technology and Know-How are valid and enforceable rights of the Company and will
not cease to be valid and in full force and effect by reason of the execution
and delivery of this Agreement or the consummation of the Transactions.

               (b) Section 4.19(a) of the Company Ancillary Agreement identifies
the owner or licensor of all Company Intellectual Property. The Company is not
obligated or under any liability whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any Company Intellectual Property. Upon consummation of the Transactions,
Purchaser will be entitled to continue to use all of the Company Intellectual
Property without the payment of any fees, licenses or other payments to any
Person except as set forth in Section 4.19(a) of the Company Ancillary
Agreement.

               (c) To the Company's Knowledge, (i) except with respect to the
rights of any licensor under agreements listed on Section 4.19(a) of the Company
Ancillary Agreement or as set forth on paragraph 16 of Section 4.19(a) of the
Company Ancillary Agreement, no other Person has any right to the Company
Intellectual Property or the Technology and Know-How and (ii) the Company has
not, and the Company has not received any notice from any Person within the past
three (3) years claiming that it has, infringed, misappropriated, violated or
otherwise operated adversely to any Intellectual Property of any Person,
violated any export control law or regulation, violated the rights of any Person
(including rights to privacy or publicity), or conducted unfair competition or
trade practices under any applicable laws.

               (d) To the Company's Knowledge, no Person is infringing or
misappropriating any rights with respect to the Company Intellectual Property or
engaging in other conduct that may diminish or undermine the Company
Intellectual Property, such as the disclosure of any of the Confidential
Information.

               (e) The Company has taken all reasonable steps to protect its
rights in the Technology and Know-How. Without limiting the foregoing, (i) the
Company has, and enforces, a policy requiring each of its executive officers and
research and development personnel to execute non-competition, confidentiality
and non-solicitation agreements, and all such individuals have executed such an
agreement, and (ii) each of the Company's employees and other Persons who,
either alone or in concert with others, developed, invented, discovered,
derived, programmed or designed any of the Technology and Know-How, or who has
Knowledge of or access to information about any of the Technology and Know-How,
has entered into a written agreement with the Company providing that such
Technology and Know-How and other information are proprietary to the Company and
are not to be divulged or misused and transferring to the Company, without any
further consideration being given therefor, all of such employee's or other
Person's right, title and interest in and to such Technology and Know-How and to
all Company Intellectual Property with respect to such Technology and Know-How.



                                       26                      Execution Version




               (f) Except as set forth in Section 4.19(f) of the Company
Ancillary Agreement, the Company has not sold, transferred, assigned, licensed
or subjected to any Encumbrance, any Company Intellectual Property or Technology
and Know-How, or any interest therein.

        4.20   Employee Benefit Plans. All benefit and compensation plans,
contracts, policies or arrangements (other than government-sponsored employee
benefit arrangements) covering current or former employees of the Company and
current or former directors of the Company, and deferred compensation, stock
option, stock purchase, stock appreciation rights, stock based, incentive and
bonus plans (the "Employee Plans") are listed on Section 4.20 of the Company
Ancillary Agreement. All of the Employee Plans are in compliance with, and have
been administered and operated in accordance with, the terms of such Employee
Plans and applicable Regulations, except for any failure to so comply, operate
or administer the Employee Plans that could not reasonably be expected to have a
Material Adverse Effect. With respect to each Employee Plan, a complete and
correct copy of the most recent plan document or agreement, all related trust
and funding documents, and all amendments thereto; the most recent summary plan
description, and all related summaries of material modifications; and all
actuarial and financial reports for the last three plan years, where applicable,
have been provided or made available to BioMarin. No audit, claim, action or
litigation has been made, commenced or, to the Knowledge of the Company,
threatened with respect to any Employee Plan. The Company does not have any
obligations for retiree health and life benefits under any Employee Plan. The
Company may amend or terminate any such retiree plan at any time without
incurring any liability thereunder. There has been no amendment to, announcement
by the Company relating to, or change in employee participation or coverage
under, any Employee Plan which would increase materially the expense of
maintaining such plan above the level of the expense incurred therefor for the
most recent fiscal year. Neither the execution of this Agreement, shareholder
approval of this Agreement nor the consummation of the Transactions will (a)
entitle any employee of the Company to severance pay or any increase in
severance pay upon any termination of employment after the date hereof, (b)
accelerate the time of payment or vesting or trigger any payment or funding
(through a grantor trust or otherwise) of compensation or benefits under,
increase the amount payable or trigger any other obligation pursuant to, any of
the Employee Plans, (c) limit or restrict the right of the Company or, after the
consummation of the Transactions, Newco or BioMarin to merge, amend or terminate
any of the Employee Plans, or (d) cause the Company or, after the consummation
of the Transactions, Newco or BioMarin to record additional compensation expense
with respect to any outstanding stock option or other equity-based award.

        4.21   Transactions with Affiliates. Except as set forth in Section 4.21
of the Company Ancillary Agreement, no shareholder, member, manager, officer,
director or employee of the Company nor any member of any such Person's
immediate family or any Person controlled by such Person or in which such Person
has a substantial beneficial interest, is presently, or within the prior two
years has been, a party to any transaction with the Company (other than for
services as officers, directors, employees or consultants of the Company),
including, without limitation, any contract, agreement or other arrangement (a)
providing for the furnishing of services by, (b) providing for the rental of
real or personal property from, or (c) otherwise requiring payments to, any such
Person or corporation, partnership, trust or other entity in which any such
Person has an interest as a shareholder, officer, director, trustee or partner.



                                       27                      Execution Version




        4.22   Tax Matters.

               (a) The Company has filed or caused to be filed all Tax Returns
that are or were required to be filed by or with respect to it pursuant to
applicable Regulations. All Tax Returns filed by the Company are true, correct,
and complete. The Tax Returns of the Company subject to such Taxes have not been
audited by any Governmental Authority, and the Company has not received notice
from any Governmental Authority of any pending examination or any proposed
deficiency, addition, assessment, demand for payment or adjustment relating to
or affecting the Company or its Assets and it has no reason to believe that any
Governmental Authority may assess (or threaten to assess) any Taxes for any
period ending on or prior to the Effective Date. Section 4.22 of the Company
Ancillary Agreement sets forth a true and complete copy of each Tax Return of
the Company with respect to the past three taxable years.

               (b) The Company has (i) duly and timely paid, or made provision
for the payment of, all Taxes that have or may have become due pursuant to its
Tax Returns or otherwise, or pursuant to any assessment received by the Company
and (ii) withheld from each payment made to its past or present employees,
officers, directors and independent contractors, creditors, shareholders, other
third parties all Taxes and other material deductions required to be withheld
and have, within the time required by Regulation, paid such amounts to the
proper Governmental Authority.

               (c) The charges, accruals, and reserves with respect to Taxes on
the books and records of the Company are adequate (determined in accordance with
Canadian GAAP) and are at least equal to the Company's liability for Taxes.
There exists no proposed tax assessment against the Company. All Taxes that the
Company is or was required by any Regulations to withhold or collect have been
duly withheld or collected and, to the extent required, have been paid to the
proper Governmental Authority or other Person.

        4.23   Insurance. Section 4.23 of the Company Ancillary Agreement
contains a complete and accurate list of all Insurance Policies (showing as to
each policy or binder the carrier, policy number, coverage limits, expiration
dates, annual premiums, a general description of the type of coverage provided,
and the loss experience history of the Company by line of coverage) held or
maintained by the Company. Each Insurance Policy is in full force and effect,
insures the Company in the amounts described therein against the risks described
therein and provides coverage as is required by applicable Regulation and by any
and all Contracts. There is no Default under any such Insurance Policy nor has
there been any failure to give notice or present any claim under any Insurance
Policy in a due and timely fashion. There are no outstanding unpaid premiums
except in the Ordinary Course, and no notice of cancellation or nonrenewal of
any such Insurance Policy has been received by the Company. There are no
outstanding performance bonds covering or issued for the benefit of the Company.
No insurer has advised the Company that it intends to reduce coverage, increase
premiums or fail to renew any existing Insurance Policy.

        4.24   Employees. The Company has no reason to believe Reinhard
Gabathuler will not continue to serve in his current capacity following the
consummation of the Transactions.



                                       28                      Execution Version




        4.25   Payments. The Company has not, directly or indirectly, paid,
delivered, offered or agreed to deliver any fee, commission or other sum of
money or item of property, however characterized, to any finder, agent, client,
customer, supplier, government official or other party, in Canada, the United
States or any other country, which was, at the time made or given, illegal under
any federal, state, provincial or local laws of Canada, the United States
(including, without limitation, the U.S. Foreign Corrupt Practices' Act) or any
other country having jurisdiction.

        4.26   Business Relationships. The Company has not received any written
communication from any Significant Business Associate of any intention to
terminate or materially reduce such Significant Business Associate's
relationship with the Company or any other communication to such effect. To the
Company's Knowledge, no Significant Business Associate intends to terminate such
relationship, whether as a result of the Transactions or otherwise.

        4.27   Compliance With Environmental and Health Laws. The Company is and
at all times has been in compliance with all Environmental Laws. The Company is
and at all times has been in compliance with all Health Laws.

        4.28   Disclosure. No representation or warranty of the Company in this
Agreement and no information contained in the Company Ancillary Agreement, any
Ancillary Agreement or any other agreement executed by the Company in connection
with the Transactions contains any untrue statement of a material fact or omits
to state a material fact required to make the statements herein or therein not
misleading.

                                    ARTICLE V
              REPRESENTATIONS AND WARRANTIES OF BIOMARIN AND NEWCO

        BioMarin and Newco hereby jointly and severally represent and warrant to
the Company as follows:

        5.1    Organization. Each of BioMarin and Newco is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation with full power and authority to own
and lease its properties and assets and to conduct its business as currently
conducted and as proposed to be conducted. BioMarin is duly qualified to do
business and is in good standing in each jurisdiction where the character of its
properties owned or leased or the nature of its activities make such
qualification necessary.

        5.2    No Conflict or Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the Transactions, nor
compliance by BioMarin or Newco with any of the provisions hereof, will (a)
violate or conflict with any provision of the Certificate of Incorporation or
Bylaws of BioMarin or Newco, (b) violate, conflict with, or result in or
constitute a Default under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any Encumbrance upon any of BioMarin's
assets under, any of the terms, conditions or provisions of any contract,
indebtedness, note, bond, indenture, security or pledge agreement, commitment,
license, lease, franchise, permit, agreement, authorization, concession, or
other instrument or obligation to which BioMarin or Newco is a party, (c)
violate any Regulation or Court Order,



                                       29                      Execution Version




except, in the case of clause (b) above, for such violations, Defaults,
terminations or accelerations which, in the aggregate, would not have a Material
Adverse Effect on the ability of BioMarin to consummate the Transactions.

        5.3    Consents and Approvals.

               (a) Each of BioMarin and Newco has all requisite power and
authority, and has taken all corporate action necessary, to execute and deliver
this Agreement, the Ancillary Agreements and to perform its obligations
hereunder and under any other agreement contemplated hereby and, subject to the
approval of the Court to the Arrangement, to consummate the Transactions. No
vote of the shareholders of BioMarin or Newco is required in connection with the
Arrangement. The execution and delivery of this Agreement and the Ancillary
Agreements by BioMarin and Newco and, subject to the Approval of the Court to
the Arrangement, the consummation by BioMarin and Newco of the Transactions have
been duly approved by all corporate action of BioMarin and Newco. No other
corporate proceedings on the part of BioMarin and Newco is necessary to
authorize its execution, delivery and performance of this Agreement and the
Ancillary Agreements and the consummation of the Transactions (other than Court
approval of the Arrangement). This Agreement and the Ancillary Agreements have
been duly executed and delivered by BioMarin and Newco and each of this
Agreement and each Ancillary Agreement is a legal, valid and binding obligation
of BioMarin and Newco, enforceable against each of BioMarin and Newco in
accordance with its respective terms, except that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights of creditors
generally, and that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be brought.

               (b) Other than in connection with or in compliance with the
provisions of the HSR Act, if required, and the Securities Act, and other than
as described in this Agreement, no notice to, declaration, filing or
registration with, or authorization, consent or approval of, or permit from, any
domestic or foreign governmental or regulatory body or authority, or any other
Person, is required to be made or obtained by BioMarin or Newco in connection
with the execution, delivery and performance of this Agreement and the
consummation of the Transactions.

        5.4    SEC Filings. As of their respective filing dates, each form,
statement, annual, quarterly and other report, registration statement (including
exhibits and amendments) and definitive proxy statement filed by BioMarin with
the SEC since January 1, 2000 (the "BioMarin SEC Documents"), which are all the
documents (other than preliminary material) that BioMarin was required to file
with the SEC since such date, complied in all material respects with the
requirements of the Exchange Act. As of their respective filing dates, none of
the BioMarin SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which they
were made, not misleading. Since the filing of the most recent Quarterly Report
on Form 10-Q included in the BioMarin SEC Documents, neither of BioMarin's
Certificate of Incorporation nor Bylaws have been amended or modified. The
consolidated balance sheets and the related consolidated statements of
operations, stockholders'



                                       30                      Execution Version




equity (deficit) and cash flows (including the related notes thereto) of
BioMarin included in the BioMarin SEC Documents were prepared in accordance with
the books and records of BioMarin and U.S. GAAP and present fairly the financial
position of BioMarin as of their respective dates, and the results of its
operations and its cash flows for the periods presented therein (subject, in the
case of the interim financial statements, to normal year-end adjustments).

        5.5    Absence of Certain Changes or Events. Since the date of the
filing of its most recent Quarterly Report on Form 10-Q included in the BioMarin
SEC Documents, there has not been any (a) Material Adverse Change or change in
accounting methods, principles or practices affecting in any material respect
BioMarin, (b) declaration, setting aside, or payment of dividends or
distributions by BioMarin, or (c) redemption, purchase or other acquisition of
any securities of BioMarin, other than in connection with the BioMarin Option
Plan.

        5.6    Suspension and Trading. The BioMarin Common Shares are currently
quoted on Nasdaq. No order ceasing or suspending trading in securities of
BioMarin is outstanding and no proceedings for this purpose have been instituted
or, to the Knowledge of BioMarin, are pending or threatened.

        5.7    No Brokers. Except for BioMarin's engagement of Leerink, Swann,
Garrity, Sollami, Yaffe & Wynn, Inc. for the rendering of a fairness opinion to
it regarding the Transactions, neither BioMarin nor any of its officers,
directors, employees or Affiliates has employed or made any agreement with any
broker, finder or similar agent or any Person which will result in the
obligation of BioMarin or the Company or any of their respective Affiliates to
pay any finder's fee, brokerage fees or commission or similar payment in
connection with the Transactions.

        5.8    Securities. At the Closing, the issuance of BioMarin Common
Shares and Exchangeable Shares to be issued at such Closing in accordance
herewith will have been duly authorized, and, upon their issuance in accordance
with the terms of this Agreement and assuming the truth of the representations
and warranties of the Company set forth in Article IV, such BioMarin Common
Shares and Exchangeable Shares will be validly issued, fully paid and
non-assessable, and will not be subject to any preemptive or similar right.

        5.9    Securities Exemption. The offer and sale of the BioMarin Common
Shares and the Exchangeable Shares upon their issuance at the Effective Time in
accordance with the terms of this Agreement and the Plan will be exempt from
registration under the Securities Act pursuant to Section 3(a)(10) of the
Securities Act.

        5.10    Transferability. The BioMarin Common Shares and the Exchangeable
Shares upon their issuance at the Effective Time in accordance with the terms of
this Agreement and the Plan will not be restricted securities within the meaning
of Rule 144 of the Securities Act, will not bear a restrictive legend and will
be fully transferable under U.S. federal securities laws by the holders thereof
(subject to Rule 145(d) under the Securities Act).

        5.11   Disclosure. No representation or warranty of BioMarin or Newco in
this Agreement and no information contained in the Company Ancillary Agreement,
any Ancillary Agreement or any other agreement executed by BioMarin or Newco in
connection with the



                                       31                      Execution Version




Transactions contains any untrue statement of a material fact or omits to state
a material fact required to make the statements herein or therein not
misleading.

                                   ARTICLE VI
                                    COVENANTS

        The Company and BioMarin each covenant with the other as follows:

        6.1    Further Assurances. Upon the terms and subject to the conditions
contained herein, the parties agree, both before and after the Closing, to (a)
use commercially reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the Transactions, (b) execute any documents,
instruments or conveyances of any kind which may be reasonably necessary or
advisable to carry out any of the Transactions, and (c) cooperate with each
other in connection with the foregoing. Without limiting the foregoing, the
parties agree to cooperate with each other and use their respective commercially
reasonable efforts to (w) obtain all necessary waivers, consents and approvals
from other parties to consummate the Transactions; (x) obtain all necessary
Permits as are required to be obtained under any Regulations, (y) give all
notices to, and make all registrations and filings with, third parties,
including, without limitation, submissions of information requested by
Governmental Authorities, and (z) fulfill all conditions to the consummation of
the Transactions. Each party will commence all action required under this
Section 6.1 by a date which is early enough to allow the Transactions to be
consummated as soon as practicable prior to the Termination Date.

        6.2    No Solicitation.

               (a) From the date hereof through the Closing or the earlier
termination of this Agreement, the Company shall not, and shall cause its
shareholders or Representatives (including, without limitation, investment
bankers, attorneys and accountants), not to, directly or indirectly, enter into,
solicit, initiate or continue any discussions or negotiations with, or encourage
or respond to any inquiries or proposals by, or participate in any negotiations
with, or provide any information to, or otherwise cooperate in any other way
with any Person or group, other than BioMarin and their Representatives,
concerning any sale of all or a portion of the Assets or any shares of the
Company's Stock, including, without limitation, any merger, consolidation,
liquidation, dissolution or similar transaction (each such transaction being
referred to herein as a "Proposed Acquisition Transaction"). The Company and its
Affiliates shall not, directly or indirectly, through any Representative or
otherwise, solicit, initiate or encourage the submission of any proposal or
offer from any Person (including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act) or entity relating to any Proposed
Acquisition Transaction or participate in any negotiations regarding, or furnish
to any other Person any information with respect to the Company or the Assets
for the purposes of, or otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
Person to seek or effect a Proposed Acquisition Transaction. The Company agrees
not to release any third party from, or waive any provision of, any
confidentiality agreement to which the Company is a party.



                                       32                      Execution Version




               (b) The Company will immediately notify BioMarin if any
discussions or negotiations are sought to be initiated, any inquiry or proposal
is made, or any information is requested with respect to any Proposed
Acquisition Transaction and notify BioMarin of the terms of (and provide
BioMarin with a copy of) any proposal which it may receive in respect of any
such Proposed Acquisition Transaction, including, without limitation, the
identity of the prospective purchaser or soliciting party.

        6.3    Notification of Certain Matters. From the date hereof through the
Closing, (a) the Company shall give prompt notice to BioMarin of (i) the
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty made by the Company contained
in this Agreement, the Company Ancillary Agreement or in any exhibit or Schedule
hereto or thereto to be untrue or inaccurate and (ii) any failure of the Company
or any of its Affiliates, or of any of its shareholders or Representatives, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement or any exhibit or Schedule hereto and
(b) BioMarin shall give prompt notice to the Company of (i) the occurrence, or
failure to occur, of any event which occurrence or failure would be likely to
cause any representation or warranty of BioMarin or Newco contained in this
Agreement or in any exhibit or Schedule hereto to be untrue or inaccurate and
(ii) any failure of BioMarin or Newco to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement or any exhibit or Schedule hereto; provided, however, that such
disclosure under this Section 6.3 shall not be deemed to cure any breach of a
representation, warranty, covenant or agreement or to satisfy any condition. The
Company shall promptly notify BioMarin of any Default, the threat or
commencement of any Action, or any development that occurs before the Closing
that could reasonably be anticipated in any way to materially and adversely
affect the Company or materially and adversely affect the Company's ability to
consummate the Transactions.

        6.4    Access.

               (a) Prior to the Effective Date. Between the date hereof and the
Effective Date, the Company will give to BioMarin and its Representatives full
access to the Company's facilities, employees and all the properties, documents,
contracts, personnel files and other records of the Company and shall furnish
BioMarin with copies of such documents and with such information with respect to
the Company as BioMarin may from time to time reasonably request. The Company
will disclose to BioMarin and make available to it and its Representatives all
books, contracts, accounts, personnel records, letters of intent, papers,
records, communications with regulatory authorities and other documents
reasonably relating to the Company. All such access shall be granted during
normal business hours.

               (b) After the Effective Date. Subject to the terms and conditions
contained in this Section, for each of the first four (4) calendar quarters
ending after the Effective Date and for each semi-annual period thereafter,
BioMarin will prepare a report (a "Report") summarizing activities related to
the development of the Company Technology during the quarter or semi-annual
period, as applicable, then ended. BioMarin shall deliver to the Shareholder
Designee (as defined below) each Report within thirty (30) days after the end of
the period to which it relates. The Shareholder Designee shall initially be Mr.
Yad Garcha and should such person cease to act as the Shareholder Designee for
any reason, or no reason, a replacement shall be chosen by



                                       33                      Execution Version




mutual agreement of BioMarin and the Majority Shareholders (as such term is
defined in the Escrow Agreement). Subject to the terms and conditions contained
in this Section, the Shareholder Designee shall have the right at its expense to
meet in person with a representative of BioMarin at BioMarin's principal offices
not more than twice during the year following the Effective Date and not more
than once per year thereafter to discuss the most recently delivered Report.
BioMarin's obligations under this Section shall continue only until the earlier
of (x) the Automatic Redemption Date (as defined in the Exchangeable Shares
Terms), and (y) the date by which Newco or BioMarin Nova Scotia has paid in the
aggregate Redemption Price(s) or Redemption Call Price(s) (as defined in the
Exchangeable Shares Terms ) for the Exchangeable Shares of eight million dollars
($8,000,000). Notwithstanding the foregoing, the Company acknowledges and agrees
that: (i) the management of the Company and employment of its capital, resources
and personnel, including the Company Technology, shall be solely within the
business judgment and discretion of BioMarin, any of its management designees
and the officers and directors of the Company, (ii) BioMarin has no obligation
to consider the views of the Shareholder Designee with respect to any and all
matters affecting the Company and its business, finances and affairs, including
the Company Technology, and (iii) BioMarin shall have no liability or obligation
to the Shareholder Designee or any Company Shareholder with respect to the
business judgment, management, and discretion exercised by BioMarin, its
management designees or the officers and directors of the Company regarding the
Company's business, its assets, liabilities, employees or resources or the use,
development or deployment thereof, including, but not limited to, the
development of the Company Technology.

        6.5    Conduct of Business. From the date hereof through the Closing,
the Company shall operate in the Ordinary Course, and the Company will not take
any action inconsistent with this Agreement or with the consummation of the
Transactions. Without limiting the generality of the foregoing, the Company will
not do any of the following without the prior written consent of BioMarin, which
may be withheld by BioMarin in its sole and absolute discretion:

               (a) change or amend its Organizational Documents;

               (b) enter into, extend, materially modify, terminate or renew any
Contract or Lease, except in the Ordinary Course;

               (c) sell, assign, transfer, convey, lease, mortgage, pledge or
otherwise dispose of or encumber any of the Assets, or any interests therein,
except in the Ordinary Course;

               (d) except in the Ordinary Course, incur any Liability;

               (e) (i) take any action with respect to the grant of any bonus,
severance or termination pay (otherwise than in the Ordinary Course) or with
respect to any increase of benefits payable under its severance or termination
pay policies or agreements in effect on the date hereof or increase in any
manner the compensation or fringe benefits of any employee (other than as may be
required pursuant to the terms of an existing Contract, which requirement and
terms are described in the Company Ancillary Agreement) or pay any benefit not
required by any existing employee plan or policy;

                   (ii) make any change in its management structure;



                                       34                      Execution Version




                   (iii) adopt, enter into or amend any employee plan, agreement
(including, without limitation, any employment agreement), trust, fund or other
arrangement for the benefit or welfare of any employee, except for any such
amendment as may be required to comply with applicable Regulations; or

                   (iv) fail to maintain all employee plans in accordance with
applicable Regulations in all material respects;

               (f) acquire by merger or consolidation with, or merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire any assets or business of any corporation, partnership, association or
other business organization or division thereof;

               (g) declare, set aside, make or pay any dividend or other
distribution to, or make any other payment for any reason to the shareholders of
the Company or any Affiliate of any of such shareholders;

               (h) willingly allow or permit to be done, any act by which any of
the Insurance Policies may be suspended, impaired or canceled;

               (i) (i) fail to pay its accounts payable and any debts owed or
obligations due, or pay or discharge when due any Liabilities, in the Ordinary
Course other than accounts payable or debts that are the subject of good faith
disputes and for which appropriate reserves are established in the Financial
Statements; or

                   (ii) fail to use its reasonable commercial efforts to collect
its accounts receivable in the Ordinary Course;

               (j) enter into (other than in the Ordinary Course and as would
not have a Material Adverse Effect), renew, modify or revise any agreement or
transaction with, or forgive any indebtedness of the Company or any of its
Affiliates;

               (k) fail to maintain the Assets in substantially their current
state of repair, excepting normal wear and tear;

               (l) make any loans or advances to any Person, except for advances
to any employee for reasonable business expenses incurred in the Ordinary
Course;

               (m) make any income tax election or settlement or compromise with
tax authorities;

               (n) fail to comply in all material respects with all Regulations
applicable to it;

               (o) intentionally do any other act for the purpose of causing any
representation or warranty of the Company in this Agreement to be or become
untrue in any material respect (or in any respect if such representation or
warranty is qualified as to materiality);



                                       35                      Execution Version




               (p) fail to use its reasonable efforts, consistent with past or
reasonable commercial practices, to (i) retain its employees and (ii) maintain
the Company so that such employees will remain available to BioMarin on and
after the Effective Date, (iii) maintain existing relationships with suppliers,
customers and others having business dealings with it and (iv) otherwise to
preserve the goodwill of the Company so that such relationships and goodwill
will be preserved on and after the Effective Date;

               (q) make any payment of any kind whatsoever to or on behalf of
any shareholder, beneficiary, member or partner of the Company or any Affiliate
of the Company, whether in payment of an account payable or debt owed or
obligation due or Liability to any such Person or otherwise;

               (r) license any of its Intellectual Property, including the
Company Technology, to any Person; or

               (s) enter into any agreement, or otherwise become obligated, to
do any action prohibited hereunder.

        6.6    New Company Products. BioMarin and the Company have developed a
business plan to allocate funding to products of the Company that use the
Company Technology but that are not New BioMarin Products (such products, "New
Company Products"), based on a reasonable determination of what resources are
necessary (using standards commonly used in the pharmaceutical industry) in
order to demonstrate certain levels of proof of principle, sufficient to
generate interest from third parties for such New Company Products.
Notwithstanding the foregoing, BioMarin shall not be bound by such business plan
and shall have the sole authority and right to make and direct investment
decisions of the Company, including, without limitation, any decision related to
the Company Technology. Notwithstanding the foregoing, the Company acknowledges
and agrees that: (i) the management of the Company and employment of its
capital, resources and personnel, including the Company Technology, shall be
solely within the business judgment and discretion of BioMarin, any of its
management designees and the officers and directors of the Company, (ii)
BioMarin shall not be bound by, and in its sole and absolute discretion may
deviate from, such Business Plan, and (iii) BioMarin shall have no liability or
obligation to any Company Shareholder with respect to the business judgment,
management, and discretion exercised by BioMarin, its management designees or
the officers and directors of the Company regarding the Company's business, its
assets, liabilities, employees or resources or the use, development or
deployment thereof, including, but not limited to, the development of the
Company Technology.

        6.7    Management Information Circular; Board Recommendations; Other
Filings.

               (a) As promptly as practicable after the execution of this
Agreement, the Company will prepare the Management Information Circular.
BioMarin shall provide promptly to the Company such information concerning its
business and financial and other affairs as, in the reasonable judgment of
BioMarin or its counsel, may be required or appropriate for inclusion in the
Management Information Circular, or in any amendments or supplements thereto,
and shall cause its counsel and auditors to cooperate with the other's counsel
and auditors in the preparation of the Management Information Circular. The
Company will afford BioMarin an



                                       36                      Execution Version




opportunity to review the Management Information Circular and all materials to
be submitted to the Court, and shall make all such changes as are reasonably
requested. The Company will respond to any comments of the Court with the
acceptance of BioMarin and will use its commercially reasonable efforts to have
the Interim Order issued as promptly as practicable after such filing. The
Company will cause the Management Information Circular to be mailed to its
shareholders at the earliest practicable time after the Interim Order has been
granted by the Court. As promptly as practicable after the date of this
Agreement, the Company and BioMarin will prepare and file any other filings
required to be filed by it pursuant to the requirements of the CBCA, the Interim
Order, and applicable Regulations relating to the Arrangement and the
Transactions (the "Other Filings"). Each of the Company and BioMarin will notify
the other promptly upon the receipt of any comments from the Court or its staff
or any other government officials and of any request by the Court or its staff
or any other government officials for amendments or supplements to the
Management Information Circular or any Other Filing or for additional
information and will supply the other with copies of all correspondence between
such party or any of its Representatives, on the one hand, and the Court or its
staff or any other government officials, on the other hand, with respect to the
Management Information Circular, the Arrangement or any Other Filing. Each of
the Company and BioMarin will cause all documents that it is responsible for
filing with the Court or other regulatory authorities under this Section 6.7(a)
to comply in all material respects with all applicable Regulations. Whenever any
event occurs which is required to be set forth in an amendment or supplement to
the Management Information Circular or any Other Filing, the Company or
BioMarin, as the case may be, will promptly inform the other of such occurrence
and cooperate in filing with the Court or its staff or any other government
officials, and/or mailing to shareholders of the Company, such amendment or
supplement.

               (b) Each of the Company and BioMarin shall ensure that the
information supplied by it in writing for inclusion in the Management
Information Circular does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements contained therein not misleading in light of the circumstances in
which they are made.

               (c) The Management Information Circular will include the
recommendation of the Board of Directors that the shareholders of the Company
vote in favor of approval of the Arrangement.

               (d) As soon as practicable after the execution of this Agreement,
BioMarin shall prepare, with the co-operation of the Company, applications and
will file such applications with the Commissions in the Provinces of British
Columbia and Ontario and exercise its commercially reasonable efforts to cause
such Commissions to grant the Securities Exemption Orders. BioMarin and the
Company shall each use commercially reasonable efforts to cause such
applications to comply with the requirements of Canadian Securities Legislation.
Each of BioMarin and the Company agrees to provide promptly to the other such
information concerning its business and financial and other affairs as, in the
reasonable judgment of the providing party or its counsel, may be required or
appropriate for inclusion in such applications, or in any amendments or
supplements thereto, and to cause its counsel and auditors to co-operate with
the other's counsel and auditors in the preparation of such application. The
Company will promptly advise BioMarin, and BioMarin will promptly advise the
Company, in writing, if at any time



                                       37                      Execution Version




prior to the Effective Time either the Company or BioMarin shall obtain
Knowledge of any facts that might make it necessary or appropriate to amend or
supplement the applications in order to make the statements contained or
incorporated by reference therein not misleading or to comply with Canadian
Securities Legislation.

        6.8    Meeting of the Company Shareholders.

               (a) Promptly after the date hereof, the Company will take all
action pursuant to the requirements of the CBCA, the Interim Order, applicable
Regulations and the Organizational Documents to convene the Company Shareholders
Meeting to be held as promptly as practicable, and in any event the Company will
use its reasonable commercial efforts to convene such meeting not later than
February 28, 2002 for the purpose of voting upon the Arrangement. The Company
shall ensure that the Company Shareholders Meeting is called, noticed, convened,
held and conducted, and that all proxies solicited in connection with the
Company Shareholders Meeting are solicited, in compliance with all applicable
Regulations (including the Interim Order and the Organizational Documents). The
Company will use its commercially reasonable efforts to solicit from its
shareholders proxies in favor of the approval of the Arrangement.
Notwithstanding anything to the contrary contained in this Agreement, the
Company may adjourn or postpone the Company Shareholders Meeting to the extent
necessary to ensure that any necessary supplement or amendment to the Management
Information Circular is provided to the Company's shareholders in advance of a
vote on the Arrangement or, if as of the time for which the Company Shareholders
Meeting is originally scheduled (as set forth in the Management Information
Circular) there are insufficient Company Common Shares or Company Preferred
Shares represented (either in Person or by proxy) to constitute a quorum
necessary to conduct the business of the Company Shareholders Meeting.

               (b) The Board of Directors shall recommend that the Company's
shareholders vote in favor of and adopt and approve the Arrangement at the
Company Shareholders Meeting. The Management Information Circular shall include
a statement to the effect that the Board of Directors has recommended
(unanimously, if such is the case) that the Company's shareholders vote in favor
of and adopt and approve the Arrangement at the Company Shareholders Meeting.
Neither the Board of Directors nor any committee thereof shall withdraw, amend
or modify, or propose or resolve to withdraw, amend or modify in a manner
adverse to BioMarin, the recommendation of the Board of Directors that the
Company's shareholders vote in favor of and adopt and approve the Arrangement.

                                   ARTICLE VII
                  CONDITIONS TO THE OBLIGATIONS of the company

        The obligations of the Company to consummate the Transactions are
subject to the satisfaction, on or prior to the Effective Date, of each of the
following conditions, any of which may be waived by the Company:

        7.1    Representations, Warranties and Covenants. The representations
and warranties of BioMarin set forth in this Agreement shall be true and correct
as of the date of this Agreement and as of the Effective Date as though made on
and as of the Effective Date, except



                                       38                      Execution Version




to the extent that such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall be true
and correct on and as of such earlier date). BioMarin shall have performed all
agreements and covenants required hereby to be performed by it prior to or on
the Effective Date.

        7.2    Permits, Consents and Regulatory Compliance. The Permits,
consents, approvals and waivers from Governmental Authorities and other parties
necessary to the consummation of the Transactions described in the Company
Ancillary Agreement shall have been obtained. The applicable waiting period,
including any extension thereof, under the HSR Act shall have expired, if so
required.

        7.3    No Actions or Court Orders. No Action by any Governmental
Authority or other Person shall have been instituted or, to the extent the
Company reasonably concludes that there is a basis therefor, threatened which
questions the validity or legality of the Transactions and which could
reasonably be expected to have a Material Adverse Effect. There shall not be any
Regulation or Court Order that makes the Transactions illegal or otherwise
prohibited.

        7.4    Opinions of Counsel.

               (a) United States Counsel. BioMarin shall have delivered to the
Company an opinion of Paul, Hastings, Janofsky & Walker LLP, special counsel to
BioMarin, dated as of the Effective Date, in form and substance as set forth in
Exhibit C-1 to the Company Ancillary Agreement.

               (b) Canadian Counsel. BioMarin shall have delivered to the
Company an opinion of Cassels Brock & Blackwell LLP, special counsel to
BioMarin, dated as of the Effective Date, in form and substance as set forth in
Exhibit C-2 to the Company Ancillary Agreement.

        7.5    Certificates. BioMarin shall furnish the Company with such
certificates of its officers and others to evidence compliance with the
conditions set forth in Section 7.1 as may be reasonably requested by the
Company.

        7.6    Corporate Documents. The Company shall have received from
BioMarin resolutions adopted by the board of directors of BioMarin approving
this Agreement and the Transactions, certified by BioMarin's corporate
secretary.

        7.7    Shareholder Approval. The Arrangement shall have been duly
approved by the Required Company Shareholder Vote, and in accordance with any
additional conditions which may be imposed by the Interim Order and which are
satisfactory to the Company, acting reasonably.

        7.8    Securities Exemption Orders. BioMarin and the Company shall have
received all necessary Securities Exemption Orders.

        7.9    Court Orders. The Interim Order and the Final Order shall each
have been obtained on terms satisfactory to the Company, acting reasonably, and
shall not have been set aside or modified in a manner unacceptable to the
Company on appeal or otherwise.



                                       39                      Execution Version




        7.10   Support Agreement. BioMarin shall deliver an executed Support
Agreement in the form attached to this Agreement as Exhibit F.

        7.11   No Material Change. No act, event or condition shall have
occurred after the date hereof which has had or could reasonably be expected to
have a Material Adverse Change with respect to BioMarin.

                                  ARTICLE VIII
                 CONDITIONS TO OBLIGATIONS OF BIOMARIN AND NEWCO

        The obligations of BioMarin and Newco to consummate the Transactions are
subject to the satisfaction, on or prior to the Effective Date, of each of the
following conditions, any of which conditions may be waived by BioMarin;
provided, however, that the occurrence of the Closing will not be deemed a
waiver of the breach of any representation or warranty of the Company hereunder:

        8.1    Representations, Warranties and Covenants. The representations
and warranties of the Company set forth in this Agreement and the Company
Ancillary Agreement shall be true and correct as of the date of this Agreement
and as of the Effective Date as though made on and as of the Effective Date,
except to the extent that such representations and warranties expressly relate
to an earlier date (in which case such representations and warranties shall be
true and correct on and as of such earlier date). The Company shall have
performed all agreements and covenants required hereby to be performed by it
prior to or on the Effective Date.

        8.2    Permits, Consents and Regulatory Compliance. All Permits,
consents, approvals and waivers from Governmental Authorities and other parties
necessary to the consummation of the Transactions shall have been obtained. The
applicable waiting period, including any extension thereof, under the HSR Act
shall have expired, if so required.

        8.3    No Actions or Court Orders. No Action by any Governmental
Authority or other Person shall have been instituted or, to the extent BioMarin
reasonably concludes there is a basis therefor, threatened which questions the
validity or legality of the Transactions and which could reasonably be expected
to have a Material Adverse Effect. There shall not be any Regulation or Court
Order that makes the Transactions illegal or otherwise prohibited.

        8.4    Opinion of Counsel. The Company shall have delivered to BioMarin
an opinion of Koffman Kalef, special counsel to the Company, dated as of the
Effective Date, in form and substance reasonably satisfactory to BioMarin, with
respect to the matters set forth in Exhibit D to the Company Ancillary
Agreement.

        8.5    Certificates. The Company shall furnish BioMarin with such
certificates of its officers and others to evidence compliance with the
conditions set forth in Section 8.1 as may be reasonably requested by BioMarin.

        8.6    Release of All Claims. Each of Reinhard Gabathuler, Z. Sam
Ruttonsha and Malcolm Kennard shall have executed and delivered to the Company a
general release of all



                                       40                      Execution Version




claims against the Company in the form attached as Exhibit E to the Company
Ancillary Agreement (the "General Release").

        8.7    Ancillary Agreements. The following agreements ("Ancillary
Agreements") will be delivered, or will have been delivered, as follows:

               (a) Reinhard Gabathuler shall have delivered an executed
employment agreement with the Company in a form acceptable to BioMarin in its
sole discretion.

               (b) The Company, the Shareholders' Representative and the
Majority Shareholders shall deliver the Escrow Agreement.

               (c) The Shareholders' Representative shall deliver the
Shareholders' Representative Agreement duly executed by it and the Majority
Shareholders (as defined in the Escrow Agreement).

        8.8    Shareholders Approval. The Arrangement shall have been duly
approved by Required Company Shareholder Vote, and in accordance with any
additional conditions which may be imposed by the Interim Order and which are
satisfactory to BioMarin, acting reasonably.

        8.9    Corporate Documents. BioMarin shall have received from the
Company resolutions adopted by the Board of Directors approving this Agreement
and the Transactions, certified by the Company's corporate secretary.

        8.10   Court Orders. The Interim Order and the Final Order shall each
have been obtained on terms satisfactory to BioMarin, acting reasonably, and
shall not have been set aside or modified in a manner unacceptable to BioMarin
on appeal or otherwise.

        8.11   Securities Exemption Orders. BioMarin and the Company shall have
received all necessary Securities Exemption Orders.

        8.12   No Material Change. No act, event or condition shall have
occurred after the date hereof which has had or could reasonably be expected to
have a Material Adverse Change with respect the Company.

        8.13   Return of Deposit. BioMarin shall have received from the Company
a repayment of its good faith deposit of $100,000 paid pursuant to the
Memorandum of Understanding by and between the Company and BioMarin dated
September 6, 2001.

        8.14   Termination of Certain Agreements. The following agreements shall
have been terminated pursuant to an agreement reasonably acceptable to BioMarin:
(a) that certain Amended and Restated Shareholders' Agreement, as amended dated
as of January 19, 2000, by and among the Company, 442668 B.C. Ltd., Dr. Wilfred
Jefferies, MDS Ventures Pacific Inc. (in its capacity as General Partner of
British Columbia Life Sciences Limited Partnership and on behalf of Royal Bank
Ventures Inc.), Neuroscience Partners Limited Partnership, Canadian Medical
Discoveries Fund Inc., Ventures West VI Limited Partnership, Bank of Montreal
Capital Corporation, Working Opportunity Fund (EVCC) Ltd., Business Development
Bank of Canada, Royal Bank Ventures Inc., and Futurefund Capital (VCC)
Corporation; (b) Consulting,



                                       41                      Execution Version




Non-Competition and Confidentiality Agreement dated as of June 22, 2001, by and
among Synapse Technologies Inc., Hanbury Management Ltd., and Z. Sam Ruttonsha,
as amended by that certain letter agreement dated December 17, 2001; (c)
Indemnity Agreement dated as of June 22, 2001, by and between Working
Opportunity Fund (EVCC) Ltd., Sam Ruttonsha and Synapse Technologies Inc.; (d)
Letter Agreement dated as of January 18, 2001, by and among Research Capital
Corporation, TD Securities Inc. and Synapse Technologies Inc., as amended by
Amendment to Letter Agreement of January 18, 2001, dated as of July 16, 2001, by
and between Research Capital Corporation and Synapse Technologies Inc.; and (e)
Letter Agreement dated as of September 6, 2001, by and between Research Capital
Corporation and Synapse Technologies Inc.

        8.15   Dissenters. Holders of: (i) no more than one percent (1%) in the
aggregate of the issued and outstanding Company Common Shares; and (ii) no more
than one percent (1%) in the aggregate of the Company Preferred Shares shall
have exercised (and not withdrawn such exercise) Dissenters' Rights in respect
of the Arrangement.

                                   ARTICLE IX
                            SURVIVAL; INDEMNIFICATION

        9.1    Survival of Representations. The representations and warranties
of the parties hereto contained in this Agreement, the Company Ancillary
Agreement or in any writing executed by a party hereto and delivered at the
Closing pursuant to this Agreement shall survive the execution and delivery of
this Agreement until the third anniversary of the Closing; provided, however,
that the representations of the Company set forth in Sections 4.2, 4.4, 4.6,
4.19, 4.20, 4.22, 4.27 and 4.28 shall survive indefinitely. Notwithstanding the
foregoing, any obligation in respect of a claim for indemnity as a result of a
breach of any representation or warranty of any party that is asserted in
writing with reasonable specificity as to the nature and, if then determinable,
amount of the claim prior to the third anniversary shall survive past such date.

        9.2    Indemnification.

               (a) By the Company. The Company shall indemnify, save and hold
harmless BioMarin, its Affiliates and Subsidiaries, and each of their respective
Representatives, from and against any and all Damages, incurred in connection
with, arising out of, resulting from or incident to (i) any breach of any
representation or warranty or the inaccuracy of any representation, made by the
Company in or pursuant to this Agreement or the Company Ancillary Agreement, or
(ii) any breach of any covenant or agreement made by the Company in or pursuant
to this Agreement or the Company Ancillary Agreement.

                   The term "Damages" as used in this Section is not limited to
matters asserted by third parties against the Company or BioMarin, but includes
Damages incurred or sustained by any of them in the absence of third party
claims.

               (b) By BioMarin. BioMarin shall indemnify and save and hold
harmless the Company and its respective Representatives from and against any and
all Damages incurred in connection with, arising out of, resulting from or
incident to (i) any breach of any representation or warranty or the inaccuracy
of any representation, made by BioMarin or Newco in or pursuant



                                       42                      Execution Version




to this Agreement or (ii) any breach of any covenant or agreement made by
BioMarin or Newco in or pursuant to this Agreement.

               (c) Cooperation. The indemnified party shall cooperate in all
reasonable respects with the indemnifying party and such attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; provided, however, that the indemnified party may, at its own
cost, participate in the investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom. The parties shall cooperate with each
other in any notifications to insurers.

               (d) Defense of Claims. If a claim for Damages (a "Claim") is to
be made by a party entitled to indemnification hereunder against the
indemnifying party or parties, the party claiming such indemnification shall
give written notice (a "Claim Notice") to the indemnifying party as soon as
practicable after the party entitled to indemnification becomes aware of any
fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 9.2. The failure of any
indemnified party to give timely notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, the
indemnifying party shall be entitled, if it so elects at its own cost, risk and
expense, (i) to take control of the defense and investigation of such lawsuit or
action, (ii) to employ and engage attorneys of its own choice to handle and
defend the same unless the named parties to such action or proceeding include
both the indemnifying party and the indemnified party and the indemnified party
has been advised in writing by counsel that there may be one or more legal
defenses available to such indemnified party that are different from or
additional to those available to the indemnifying party, in which event the
indemnified party shall be entitled, at the indemnifying party's cost, risk and
expense, to separate counsel of its own choosing, and (iii) to compromise or
settle such claim, which compromise or settlement shall be made only with the
written consent of the indemnified party or parties, such consent not to be
unreasonably withheld; provided, however, if the remediation or resolution of
any such Claim will occur on or at any property or is reasonably expected to
have a Material Adverse Effect on the operations of the Company and the
indemnified parties are one or more of BioMarin and the Company or their
respective Affiliates, Subsidiaries or Representatives in their capacities as
such, then, notwithstanding the foregoing, the indemnified party shall be
entitled to control such remediation or resolution, including, without
limitation, to take control of the defense and investigation of such lawsuit or
action, to employ and engage attorneys of its own choice to handle and defend
the same, at the indemnifying parties' cost, risk and expense, and to compromise
or settle such Claim. If the indemnifying party fails to assume the defense of
such claim within fifteen (15) calendar days after receipt of the Claim Notice,
the indemnified party against which such claim has been asserted will, upon
delivering notice to such effect to the indemnifying party, have the right to
undertake at the indemnifying party's or parties' cost and expense, the defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party; provided, however, that such Claim shall not be
compromised or settled without the written consent of the indemnifying party,
which consent shall not be unreasonably withheld. In the event the indemnified
party assumes the defense of the claim, the indemnified party will keep the
indemnifying party or parties reasonably informed of the progress of any such
defense, compromise or settlement. The indemnifying party or parties shall be
liable for any settlement of any action effected pursuant to and in accordance
with this Section 9.2 and for any final judgment (subject to any right of
appeal), and the



                                       43                      Execution Version




indemnifying party or parties agree to indemnify and hold harmless the
indemnified party from and against any Damages by reason of such settlement or
judgment.

                                    ARTICLE X
                                  MISCELLANEOUS

        10.1   Termination.

               (a) Termination. This Agreement may be terminated at any time
prior to the Closing:

                   (i) By mutual written consent of the Company and BioMarin;

                   (ii) By BioMarin or the Company if the Closing shall not have
occurred on or before the "Termination Date" (as defined below); provided,
however, that this provision shall not be available to a party if any other
party has the right (or upon lapse of the ten (10) day period referred to in the
following clause (iii) or clause (iv) would have the right) to terminate this
Agreement under clause (iii) or clause (iv) of this Section 10.1(a);

                   (iii) By the Company in the event of a material breach by
BioMarin or Newco of any representation, warranty, covenant or other agreement
contained in this Agreement which (A) would give rise to the failure of a
condition set forth in this Agreement and (B) cannot be or has not been cured
within ten (10) days after the giving of written notice to BioMarin of such
breach (a "Material Breach") provided that the Company is not then in material
breach of any representation, warranty, covenant or other agreement contained in
this Agreement; provided, however, that a breach of the covenants set forth in
Section 10.13 (Confidentiality) shall not be subject to the ten (10) day cure
period;

                   (iv) By BioMarin in the event of a material breach by the
Company of any representation, warranty, covenant or other agreement contained
in this Agreement which (A) would give rise to the failure of a condition set
forth in this Agreement and (B) cannot be or has not been cured within ten (10)
days after the giving of written notice to the breaching party of such breach (a
"Material Breach") provided that BioMarin is not then in material breach of any
representation, warranty, covenant or other agreement contained in this
Agreement; provided, however, that a breach of the covenants set forth in
Section 6.2 (Non-Solicitation) and Section 10.13 (Confidentiality) shall not be
subject to the ten (10) day cure period; or

                   (v) By either BioMarin or the Company if any court of
competent jurisdiction or other Governmental Authority shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Transactions and such order, decree,
ruling or other action shall have become final and nonappealable.

                   The term "Termination Date" shall mean April 15, 2002.



                                       44                      Execution Version




               (b) In the Event of Termination. In the event of termination of
this Agreement:

                   (i) Each party will deliver all documents, work papers and
other material of any other parties relating to the Transactions, whether so
obtained before or after the execution hereof, to the party furnishing the same;
and

                   (ii) All further obligations of the parties under this
Agreement will terminate, except that the obligations in Section 10.9 (Expenses)
and Section 10.13 (Confidentiality) will survive; provided, however, that if
this Agreement is terminated by a party because of a Material Breach by the
other party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.

               (c) Other Remedies. Each party's right of termination under this
Section 10.1(c) is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies.

        10.2   Equitable Remedies. In addition to legal remedies, in recognition
of the fact that remedies at law would be inadequate, which the parties hereby
acknowledge, the parties hereto shall be entitled to equitable remedies for
breaches or defaults hereunder, including, without limitation, specific
performance and injunction, and no provision of this Agreement shall limit or
restrict the availability of specific performance or injunctive or other
equitable relief.

        10.3   Assignment; Successors and Assigns; Third Party Beneficiaries.
Neither this Agreement nor any of the rights or obligations hereunder may be
assigned by any party without the prior written consent of the other parties.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, and no other Person shall have any right, benefit or obligation under
this Agreement as a third party beneficiary or otherwise.

        10.4   Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method (upon confirmation of delivery); the business day after it is sent, if
sent for next day delivery to a domestic address by recognized overnight
delivery service (e.g., Federal Express); and upon receipt, if sent by certified
or registered mail, return receipt requested. In each case, notice shall be sent
to:



                                       45                      Execution Version




                      If to the Company, addressed to:

                             Synapse Technologies Inc.
                             6660 NW Marine Drive
                             Vancouver, BC  V6T 1Z4
                             Facsimile:     604-822-1939
                             Attention:     Mr. Sam Ruttonsha
                                            Chief Executive Officer

                      with a copy to:

                             Koffman Kalef
                             885 West Georgia Street, 19th Floor
                             Vancouver, BC  V6C 3H4
                             Facsimile:     604-891-3788
                             Attention:     Bernard G. Poznanski, Esq.

                      If to BioMarin or Newco:

                             BioMarin Pharmaceutical Inc.
                             371 Bel Marin Keys Boulevard, Suite 210
                             Novato, California 94949
                             Facsimile:     415-382-7889
                             Attention:     Mr. Fredric Price
                                            Chairman and Chief Executive Officer

                      with copies to:

                             Paul, Hastings, Janofsky & Walker LLP
                             555 South Flower Street, Suite 2300
                             Los Angeles, California 90071
                             Facsimile:     213-627-0705
                             Attention:     Siobhan M. Burke, Esq.

                             Cassels Brock & Blackwell LLP
                             Suite 2100
                             Scotia Plaza
                             40 King Street West
                             Toronto, Ontario M5H 3C2
                             Facsimile:     416-350-6933
                             Attention:     Mark T. Bennett, Esq.

        10.5   Dispute Resolution.

               (a) Each Party (as such term is defined herein) hereto hereby
agrees that it shall attempt to settle any claim, controversy or dispute among
the Parties hereto arising out of or relating to this Agreement or the
Transactions (a "Dispute") by negotiating in good faith. If



                                       46                      Execution Version




either Party has a Dispute, it shall deliver a written notice (a "Dispute
Notice") of such Dispute to the other Party. If the Parties are unable by
negotiating in good faith to resolve the Dispute within thirty (30) days of the
delivery of such a Dispute Notice, then such Dispute shall be finally settled by
arbitration in accordance with the terms hereof, except for any Dispute arising
from or in connection with any third party claim or proceeding contemplated
under Section 9.2(d). Such arbitration may be initiated by either Party serving
upon the other Party notice (i) stating that the notifying Party desires to have
such controversy reviewed by a board of three arbitrators, and (ii) naming one
person whom such Party chooses to act as one of the three arbitrators. Within
fifteen (15) days after receipt of such a notice, the other Party shall
designate one person to act as arbitrator and shall notify the Party requesting
arbitration of such designation and the name of the person so designated. If the
Party upon whom a request for arbitration is served shall fail to designate its
arbitrator within fifteen (15) days after receipt of such a notice, then the
arbitrator designated by the Party requesting arbitration shall act as the sole
arbitrator to resolve the controversy at hand. For purposes of this Section
10.5, the term "Party" shall be deemed to mean BioMarin and Newco, on the one
hand, and the Company, on the other.

               (b) If both Parties have designated an arbitrator, the two
arbitrators designated as aforesaid shall promptly select a third arbitrator. If
the two arbitrators chosen by the Parties hereto are not able to agree on such
third arbitrator within thirty (30) days after the second arbitrator is
designated, unless such time is extended by the Parties, then either arbitrator,
on five (5) days' notice to the other, shall apply to the American Arbitration
Association to designate and appoint such third arbitrator.

               (c) The Parties agree that all arbitrators chosen pursuant to
Sections 10.5(a) and 10.5(b) above shall not in any manner be related to or
affiliated with any Party.

               (d) Except as otherwise set forth herein, the arbitral
proceedings shall be conducted in the English language and in accordance with
and subject to the Commercial Arbitration Rules of the American Arbitration
Association in effect from time to time. The arbitration proceedings shall be
conducted in the County of Marin, California.

               (e) The decision in writing of the arbitrators so selected or
appointed shall be final and conclusive upon the Parties. The costs and expenses
of arbitration, including the compensation and expenses of the arbitrator(s),
shall be borne by the Parties as the arbitrator(s) may determine. Either Party
may apply to any court which has jurisdiction for an order confirming an
arbitration award hereunder.

               (f) In proceeding with arbitration provided for herein, and in
making determinations thereunder, the arbitrator(s) shall not extend, modify or
suspend any of the terms of this Agreement, the Company Ancillary Agreement or
any Ancillary Agreement. A notice of or request or demand for arbitration will
not operate to stay, postpone or rescind the effectiveness of any termination of
this Agreement, the Company Ancillary Agreement or any Ancillary Agreement in
accordance herewith or therewith.



                                       47                      Execution Version




               (g) The Parties agree that service of process in any proceeding
arising out of or relating to this Agreement or the performance hereof may be
made by personally serving an authorized recipient of such Party at the
addresses set forth in Section 10.4 above.

               (h) Notwithstanding anything to the contrary in this Section
10.5, the provisions set forth in this Section 10.5 shall not apply if the
Closing occurs.

        10.6   Choice of Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
California (without reference to the choice of law provisions of California
law), except to the extent relating to matters of corporate governance of the
Company which shall be construed and interpreted in accordance with the CBCA
(without reference to the choice of law provisions of the CBCA, if any). Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of California and of the
United States of America in each case located in the County of Marin for any
litigation arising out of or relating to this Agreement or the Transactions (and
agrees not to commence any litigation relating thereto except in such courts),
and further agrees that service of any process, summons, notice or document by
U.S. (or Canadian ) registered mail to its respective address set forth in
Section 10.4 shall be effective service of process for any litigation brought
against it in any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any litigation
arising out of this Agreement or the Transactions in the courts of the State of
California or of the United States of America in each case located in the County
of Marin and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such litigation brought in any
such court has been brought in an inconvenient forum. Each of the parties hereto
hereby waives, to the fullest extent permitted by applicable law, any right it
may have to a trial by jury in respect of any action, suit or proceeding arising
out of or relating to this Agreement. Each party hereto certifies that it has
been induced to enter into this Agreement or instrument by, among other things,
the mutual waivers and certifications set forth above in this Section 10.6.

        10.7   Entire Agreement, Amendments and Waivers. This Agreement amends
and restates in its entirety the First Amendment Agreement and shall be
effective as of the date hereof. This Agreement, which amends and restates in
its entirety the First Amendment Agreement, together with all schedules and
exhibits hereto, including the Company Ancillary Agreement and all agreements
entered into contemporaneously herewith or in furtherance of the Transactions
constitute the entire agreement among the parties pertaining to the subject
matter hereof and supersede all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the parties, including, without
limitation, that certain Memorandum of Understanding entered into by and between
BioMarin and the Company on September 6, 2001. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto. No amendment, supplement, modification or waiver of this Agreement shall
be binding unless executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.



                                       48                      Execution Version




        10.8   Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        10.9   Expenses. Each party to this Agreement shall bear its own costs
and expenses incurred in connection with the negotiation, execution and
performance of this Agreement and the consummation of the transactions
contemplated hereby. BioMarin acknowledges that upon the Closing, it shall be
responsible for payment of those bonus and success fees set forth in Section
4.17 of the Company Ancillary Agreement.

        10.10  Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.

        10.11  Titles; Gender. The titles, captions or headings of the Articles
and Sections herein, and the use of the word "its" in lieu of "his" or "hers",
are for convenience of reference only and are not intended to be a part of or to
affect or restrict the meanings or interpretation of this Agreement.

        10.12  Public Statements and Press Releases. The parties hereto covenant
and agree that, except as provided for hereinbelow and as specifically provided
in Section 6.7 with respect to the Management Information Circular, the Other
Filings and in response to any comments from the Court and any request by the
Court for amendments or supplements thereto or for any additional information
with respect thereto, each will not from and after the date hereof until the
Effective Date make, issue or release any public announcement, press release,
statement or acknowledgment of the existence of, or reveal publicly the terms,
conditions and status of, the Transactions, without the prior written consent of
the other party as to the content and time of release of and the media in which
such statements or announcement is to be made, except in the case of
announcements, statements, acknowledgments or revelations (a) which either party
is required by law to make, issue or release or (b) which are in or in
connection with any filing made by BioMarin with the SEC, Nasdaq or the Swiss
Stock Exchange.

        10.13  Confidential Information. Except as expressly set forth in
Section 10.12 with respect to information regarding the terms, conditions and
status of the Transactions, each Party (as defined below) shall keep
confidential all proprietary information (the "Confidential Information")
obtained from the other Party or its Representatives in connection with the
other Party, this Agreement and the Transactions and that all such Confidential
Information obtained by it from the other Party or any of its Representatives
shall be used solely for the purpose of evaluating the Transactions and for no
other purpose. The term "Confidential Information" shall not include any
information which: (a) is or becomes generally available to the public other
than as a result of a disclosure by the receiving Party or its Representatives;
(b) becomes known to the receiving Party or its Representatives on a
non-confidential basis from a source (other than the disclosing Party) which is
not known to the receiving Party to be bound to the disclosing Party by a legal,
contractual or fiduciary obligation; (c) was known to the receiving Party or its
Representatives on or prior to the date hereof; or (d) was independently
discovered or developed



                                       49                      Execution Version




by the receiving Party without reference to any of the Confidential Information.
If this Agreement is terminated without consummation of the Transactions, each
Party shall return to the other Party all Confidential Information in its
possession regarding the other Party and all copies and extracts thereof or with
the consent of the other Party shall destroy all such Confidential Information
and copies and extracts and shall deliver to the other Party evidence of
destruction of such Confidential Information and copies and extracts as such
other Party may reasonably request. For purposes of this Section 10.13, the term
"Party" shall be deemed to mean BioMarin and Newco, on the one hand, and the
Company, on the other. Notwithstanding the foregoing, from and after the
Effective Time, BioMarin shall have no obligation pursuant to this Section 10.13
with respect to the Confidential Information of the Company.

        10.14  Cumulative Remedies. All rights and remedies hereunder of either
party hereto are cumulative of each other and of every other right, recovery or
remedy such party may otherwise have at law or in equity, and the exercise of
one or more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.



                                       50                      Execution Version




        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf, by their respective officers thereunto
duly authorized, all as of the day and year first above written.


                               BIOMARIN PHARMACEUTICAL INC.


                               By:         /s/ Christopher M. Starr
                                    --------------------------------------------
                                    Name:  Christopher M. Starr
                                    Title: Senior Vice President, Research and
                                    Development


                               BIOMARIN DELIVERY CANADA INC.


                               By:         /s/ Christopher M. Starr
                                    --------------------------------------------
                                    Name:  Christopher M. Starr
                                    Title: President


                               SYNAPSE TECHNOLOGIES INC.


                               By:         /s/ Z. Sam Ruttonsha
                                    --------------------------------------------
                                    Name:  Z. Sam Ruttonsha
                                    Title: President and Chief Executive Officer



                                       51                      Execution Version




                                  EXHIBIT INDEX


Exhibit A      Arrangement Resolution

Exhibit B      Exchangeable Shares Terms

Exhibit C      Plan of Arrangement

Exhibit D      Form of Letter of Transmittal

Exhibit E      Escrow Agreement

Exhibit F      Support Agreement



                                                               Execution Version







                                TABLE OF CONTENTS

                                                                                         Page


                                                                                     
ARTICLE I         DEFINITIONS...............................................................2

        1.1    Defined Terms................................................................2

        1.2    Other Defined Terms..........................................................9


ARTICLE II        THE ARRANGEMENT..........................................................11

        2.1    Implementation Steps by the Company.........................................11

        2.2    Interim Order...............................................................11

        2.3    Effect of the Arrangement...................................................11

        2.4    Effect on Capital Stock.....................................................12

        2.5    Dissenting Shares...........................................................12

        2.6    Securities Compliance; Registration.........................................13

        2.7    Surrender of Certificates...................................................15

        2.8    No Further Ownership Rights in Company Common Shares or Company
               Preferred Shares ...........................................................16

        2.9    Lost, Stolen or Destroyed Certificates......................................17

        2.10   Tax Consequences............................................................17

        2.11   Company Stock Options and Company Warrants..................................17

        2.12   Transfer Taxes and Fees.....................................................18


ARTICLE III       CLOSING..................................................................18

        3.1    Closing.....................................................................18


ARTICLE IV        REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................19

        4.1    Organization of the Company; Organizational Documents.......................19

        4.2    Capitalization..............................................................19

        4.3    Subsidiaries................................................................20

        4.4    Authorization...............................................................20

        4.5    Absence of Certain Changes or Events........................................20

        4.6    Encumbrances................................................................22

        4.7    Condition of the Assets.....................................................22

        4.8    Contracts and Commitments...................................................22

        4.9    Permits; Consents and Approvals.............................................23

        4.10   No Conflict or Violation....................................................24




                                       -i-






                                TABLE OF CONTENTS
                                   (continued)

                                                                                         Page


                                                                                     
        4.11   Financial Statements........................................................24

        4.12   Books and Records...........................................................24

        4.13   Litigation..................................................................24

        4.14   Labor Matters...............................................................24

        4.15   Liabilities.................................................................25

        4.16   Compliance with Law.........................................................25

        4.17   No Brokers..................................................................25

        4.18   No Other Agreement to Sell the Shares or Assets.............................25

        4.19   Intellectual Property.......................................................25

        4.20   Employee Benefit Plans......................................................27

        4.21   Transactions with Affiliates................................................27

        4.22   Tax Matters.................................................................28

        4.23   Insurance...................................................................28

        4.24   Employees...................................................................28

        4.25   Payments....................................................................29

        4.26   Business Relationships......................................................29

        4.27   Compliance With Environmental and Health Laws...............................29

        4.28   Disclosure..................................................................29


ARTICLE V         REPRESENTATIONS AND WARRANTIES OF BIOMARIN AND NEWCO.....................29

        5.1    Organization................................................................29

        5.2    No Conflict or Violation....................................................29

        5.3    Consents and Approvals......................................................30

        5.4    SEC Filings.................................................................30

        5.5    Absence of Certain Changes or Events........................................31

        5.6    Suspension and Trading......................................................31

        5.7    No Brokers..................................................................31

        5.8    Securities..................................................................31

        5.9    Securities Exemption........................................................31

        5.10   Transferability.............................................................31

        5.11   Disclosure..................................................................31





                                      -ii-






                                TABLE OF CONTENTS
                                   (continued)

                                                                                         Page


                                                                                     
ARTICLE VI        COVENANTS................................................................32

        6.1    Further Assurances..........................................................32

        6.2    No Solicitation.............................................................32

        6.3    Notification of Certain Matters.............................................33

        6.4    Access......................................................................33

        6.5    Conduct of Business.........................................................34

        6.6    New Company Products........................................................36

        6.7    Management Information Circular; Board Recommendations; Other Filings.......36

        6.8    Meeting of the Company Shareholders.........................................38


ARTICLE VII       CONDITIONS TO THE OBLIGATIONS of the company.............................38

        7.1    Representations, Warranties and Covenants...................................38

        7.2    Permits, Consents and Regulatory Compliance.................................39

        7.3    No Actions or Court Orders..................................................39

        7.4    Opinions of Counsel.........................................................39

        7.5    Certificates................................................................39

        7.6    Corporate Documents.........................................................39

        7.7    Shareholder Approval........................................................39

        7.8    Securities Exemption Orders.................................................39

        7.9    Court Orders................................................................39

        7.10   Support Agreement...........................................................40

        7.11   No Material Change..........................................................40


ARTICLE VIII      CONDITIONS TO OBLIGATIONS OF BIOMARIN AND NEWCO..........................40

        8.1    Representations, Warranties and Covenants...................................40

        8.2    Permits, Consents and Regulatory Compliance.................................40

        8.3    No Actions or Court Orders..................................................40

        8.4    Opinion of Counsel..........................................................40

        8.5    Certificates................................................................40

        8.6    Release of All Claims.......................................................40

        8.7    Ancillary Agreements........................................................41

        8.8    Shareholders Approval.......................................................41




                                     -iii-






                                TABLE OF CONTENTS
                                   (continued)

                                                                                         Page


                                                                                     
        8.9    Corporate Documents.........................................................41

        8.10   Court Orders................................................................41

        8.11   Securities Exemption Orders.................................................41

        8.12   No Material Change..........................................................41

        8.13   Return of Deposit...........................................................41

        8.14   Termination of Certain Agreements...........................................41

        8.15   Dissenters..................................................................42


ARTICLE IX        SURVIVAL; INDEMNIFICATION................................................42

        9.1    Survival of Representations.................................................42

        9.2    Indemnification.............................................................42


ARTICLE X         MISCELLANEOUS............................................................44

        10.1   Termination.................................................................44

        10.2   Equitable Remedies..........................................................45

        10.3   Assignment; Successors and Assigns; Third Party Beneficiaries...............45

        10.4   Notices.....................................................................45

        10.5   Dispute Resolution..........................................................46

        10.6   Choice of Law...............................................................48

        10.7   Entire Agreement, Amendments and Waivers....................................48

        10.8   Multiple Counterparts.......................................................49

        10.9   Expenses....................................................................49

        10.10  Invalidity..................................................................49

        10.11  Titles; Gender..............................................................49

        10.12  Public Statements and Press Releases........................................49

        10.13  Confidential Information....................................................49

        10.14  Cumulative Remedies.........................................................50


                                      -iv-

EX-21

                                                                   Exhibit 21.1
                                                           List of Subsidiaries



                                                                Jurisdiction of
                                                                Incorporation /
Subsidiaries of BioMarin Pharmaceutical Inc. (Delaware)            Organization
- -----------------------------------------------------------  ------------------
Glyko, Inc.                                                          California
Glyko, Inc.                                                            Delaware
BioMarin / Genzyme LLC                                                 Delaware
BioMarin Genetics, Inc.                                                Delaware
BioMarin Enzymes Inc.                                                  Delaware
         BioMarin Pharmaceutical Nova Scotia Company                Nova Scotia
BioMarin Holdings (Del.) Inc.                                          Delaware
         BioMarin Pharmaceutical Delivery Nova Scotia Company       Nova Scotia
                  Synapse Technologies Inc.                              Canada
         BioMarin Holdings (Nova Scotia) Company                    Nova Scotia
                  BioMarin Delivery Canada Inc.                          Canada
BioMarin Acquisition (Del.) Inc.                                       Delaware
         BioMarin Acquisition (Nova Scotia) Company                 Nova Scotia

EX-23

                                                                   Exhibit 23.1



                                     CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the inclusion of our
report dated February 21, 2002 contained in BioMarin Pharmaceutical Inc.'s
Annual Report on Form 10-K filed on April 1, 2002, and to the incorporation by
reference of such report in three of BioMarin Pharmaceutical Inc.'s Registration
Statements on form S-3, Registration Nos. 333-48800, 333-61322 and 333-72866.




                                       /s/  Arthur Andersen LLP

San Francisco, California
March 28, 2002

EX-99

Exhibit 99.1
                                                              March 29, 2002




Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC  20549

                  Re: Letter to Commission Pursuant to Temporary Note 3T

Ladies and Gentlemen:

         Pursuant to Temporary Note 3T to Article 3 of Regulation S-X, Arthur
Andersen LLP has represented to BioMarin Pharmaceutical Inc. by letter dated
March 29, 2002, that its audit of the consolidated financial statements of
BioMarin Pharmaceutical Inc. as of December 31, 2001 was subject to Andersen's
quality control system for its U.S. accounting and auditing practice to provide
reasonable assurance that the engagement was conducted in compliance with
professional standards and that there was appropriate continuity of Andersen
personnel working on the audit, availability of national office consultation and
availability of personnel at foreign affiliates of Andersen to conduct the
relevant portions of the audit.

Very truly yours,
BioMarin Pharmaceutical Inc.



By:  /s/ Kim Tsuchimoto
Name:  Kim Tsuchimoto
Title:  Vice President, Controller