SECOND AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT
SECOND AMENDED AND RESTATED
STOCKHOLDERS’ AGREEMENT
This SECOND
AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT (the
“Agreement) is entered into as of the 1st day of February,
2005 by and among Perlegen Sciences, Inc., a Delaware corporation
(the “Company”), the investors listed on
Schedule A (each an “Investor” and
collectively, the “Investors”) and the purchasers
listed on Schedule A hereto (each, a
“Purchaser” and collectively, the
“Purchasers”).
WHEREAS, certain
of the Purchasers are purchasing shares of the Company’s
Series D Preferred Stock (the “Series D
Stock”), pursuant to that certain Series D Preferred
Stock Purchase Agreement (the “Purchase Agreement”) of
even date herewith (the “Financing”);
WHEREAS, the
obligations in the Purchase Agreement are conditioned upon the
execution and delivery of this Agreement;
WHEREAS, certain
of the Purchasers (the “Prior Purchasers”) are holders
of the Company’s Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock (the
“Series A Stock,” “Series B
Stock” and “Series C Stock,” respectively,
together with the Series D Stock, the “Preferred
Stock”);
WHEREAS, the Prior
Purchasers and the Company are parties to an Amended and Restated
Stockholders’ Agreement dated January 23, 2003 (the
“Prior Agreement”);
WHEREAS, the
parties to the Prior Agreement desire to amend and restate the
Prior Agreement and accept the rights and covenants hereof in lieu
of their rights and covenants under the Prior Agreement;
and
WHEREAS, in
connection with the consummation of the Financing, the Company, the
Investors and the Purchasers have agreed to the preemptive rights,
bring-along rights, and other rights and obligations as set forth
below.
NOW, THEREFORE, in
consideration of these premises and for other good and valid
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1.
Definitions . As used in this Agreement, the following terms
shall have the meanings set forth below:
“
Affymetrix ” shall mean Affymetrix, Inc., a Delaware
corporation and holder of a majority of the Series A
Stock.
“
Affymetrix Agreements ” shall mean the Asset Purchase
Agreement, Intellectual Property Transfer and License Agreement
(Affymetrix to Perlegen), Intellectual Property Transfer and
License Agreement (Perlegen to Affymetrix), Supply Agreement,
Internal Use License Agreement, Research Agreement, Scientific
Collaboration Agreement and Services Agreement, in each case
between Affymetrix and the Company.
“
Affymetrix Entity ” shall mean any corporation or
other entity in which Affymetrix owns more than 50% of the
outstanding voting securities of such corporation or other
entity.
“ Agreed
Rate ” shall mean the product of (i) 0.20 multiplied
by (ii) the result of (a) the number of days in the
period commencing on the day that the Series B Stock,
Series C Stock or Series D Stock, as applicable, is
initially purchased by the Selling Purchaser and ending on the day
immediately preceding the Section 4 Closing divided by
(b) 365.
“ Agreed
Value ” shall mean an amount equal to the sum of
(i) the Original Series B Issue Price, the Original
Series C Issue Price or the Original Series D Issue
Price, as applicable, and (ii) the product of (a) the
Original Series B Issue Price, the Original Series C
Issue Price or the Original Series D Issue Price, as
applicable, multiplied by (b) the Agreed Rate.
“
Bring-Along Notice ” shall have the meaning ascribed
to such term in Section 3(a) of this Agreement.
“
Bring-Along Offer ” shall have the meaning ascribed to
such term in Section 3(a) of this Agreement.
“
Business Day ” shall mean a day other than a Saturday
or Sunday on which commercial banks in New York, New York are not
required or permitted under applicable laws or regulations to
close.
“
Buyer ” shall have the meaning ascribed to such term
in Section 3(a) of this Agreement.
“
Certificate ” shall mean the Third Amended and
Restated Certificate of Incorporation of the Company, as may be
amended, modified or restated from time to time.
“ Common
Stock ” shall mean the common stock of the
Company.
“
Controlling Group ” shall have the meaning ascribed to
such term in Section 3(a) of this Agreement.
“
Custodian ” shall have the meaning ascribed to such
term in Section 3(b) of this Agreement.
“ Equity
Securities ” shall mean Common Stock and Preferred
Stock.
“
Financing ” shall have the meaning ascribed to such
term in the recitals to this Agreement.
“
Holders ” shall mean the Purchasers and the Investors,
or, in each case, persons who have acquired shares from any of such
persons or their permitted transferees or assignees in each case in
accordance with the provisions of this Agreement.
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“
Independent Directors ” shall have the meaning
ascribed to such term in Section 6(a)(iv) of this
Agreement.
“
Investor ” or “ Investors ” shall
have the meaning ascribed to such term in the recitals to this
Agreement.
“
Lien ” shall mean a charge, mortgage, pledge, security
interest, restriction, claim, lien, encumbrance or adverse claim of
any nature whatsoever.
“ Major
Holder ” shall have the meaning ascribed to such term in
Section 2.4(a) of this Agreement.
“ Major
Holder’s Proportionate Share ” shall mean, with
respect to a Major Holder, a fraction the numerator of which is the
total number of shares of Common Stock owned and/or issued upon
conversion of Preferred Stock owned by such Major Holder, and the
denominator of which is the total number of shares of Common Stock
then outstanding (assuming full conversion of outstanding Preferred
Stock and exercise of all outstanding convertible securities,
rights, options and warrants to acquire Common Stock of the
Company).
“
Management Directors ” shall have the meaning ascribed
to such term in Section 6(a)(i) of this Agreement.
“
Management Investor ” shall mean Brad Margus, David
Cox and Stephen P.A. Fodor.
“
Nominating Committee ” shall have the meaning ascribed
to such term in Section 6(b) of this Agreement.
“
Original Series B Issue Price ” shall have the
meaning ascribed to such term in the Certificate.
“
Original Series C Issue Price ” shall have the
meaning ascribed to such term in the Certificate.
“
Original Series D Issue Price ” shall have the
meaning ascribed to such term in the Certificate.
“
Permitted Transferee ” shall have the meaning ascribed
to such term in Section 2.3 of this Agreement.
“
Person ” shall mean an individual, partnership,
corporation, trust, limited liability company or unincorporated
organization, and a government or agency or political subdivision
thereof.
“
Preferred Stock ” shall have the meaning ascribed to
such term in the recitals to this Agreement.
“ Prior
Agreement ” shall have the meaning ascribed to such term
in the recitals to this Agreement.
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“ Prior
Purchasers ” shall have the meaning ascribed to such term
in the recitals to this Agreement.
“
Purchase Agreement ” shall have the meaning ascribed
to such term in the recitals to this Agreement.
“
Purchase Event ” shall mean the consummation of a
purchase of Equity Securities by Affymetrix (or one of the
Affymetrix Entities) that causes Affymetrix (together with the
Affymetrix Entities) to own more than 80% of the outstanding Equity
Securities.
“
Purchase Event Notice ” shall have the meaning
ascribed to such term in Section 4(a) of this Agreement.
“
Purchase Event Option ” shall have the meaning
ascribed to such term in Section 4(b) of this Agreement.
“
Qualified IPO ” shall have the meaning ascribed to
such term in the Certificate.
“ Related
Person ” shall mean with respect to any Person
(i) any other Person that directly or indirectly through one
or more intermediaries controls or is controlled by or is under
common control with such Person, or (ii) any other Person
owning or controlling 25% or more of the outstanding voting
securities of or other ownership interest in such Person or
(iii) any officer, director, general partner, managing partner
or member of such Person.
“
Right ” shall mean any option, warrant, security,
right or other instrument convertible into or exchangeable or
exercisable for, or otherwise giving the holder thereof the right
to acquire, directly or indirectly, from the Company any Common
Stock or any other such option, warrant, security, right or
instrument, including any instrument issued by the Company or any
subsidiary thereof the value of which is measured by reference to
the value of the Common Stock.
“
Section 3 Closing ” shall have the meaning
ascribed to such term in Section 3(a) of this Agreement.
“
Section 4 Closing ” shall have the meaning
ascribed to such term in Section 4(a) of this Agreement.
“
Securities Act ” shall mean the Securities Act of
1933, as amended.
“ Selling
Purchaser ” shall have the meaning ascribed to such term
in Section 4(b) of this Agreement.
“
Series A Director ” shall have the meaning
ascribed to such term in Section 6(a)(ii) of this
Agreement.
“
Series A Stock ” shall have the meaning ascribed
to such term in the recitals to this Agreement.
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“
Series B Stock ” shall have the meaning ascribed
to such term in the recitals to this Agreement.
“
Series C Stock ” shall have the meaning ascribed
to such term in the recitals to the Agreement.
“
Series D Stock ” shall have the meaning ascribed
to such term in the recitals to the Agreement.
2.
Agreements Among the Company and the Holders .
(a)
Transfer Notice . If at any time a Management Investor
proposes to transfer Equity Securities to one or more third parties
(a “Transfer”), then the Management Investor shall give
the Company written notice of the Management Investor’s
intention to make the Transfer (the “Transfer Notice”),
which Transfer Notice shall include (i) a description of the
Equity Securities to be transferred (“Offered Shares”),
(ii) the identity of the prospective transferee(s) and
(iii) the consideration and the material terms and conditions
upon which the proposed Transfer is to be made. The Transfer Notice
shall also include the material terms of the proposed
Transfer.
(b)
Company’s Option . The Company shall have an option
for a period of ten (10) days from the Company’s receipt
of the Transfer Notice to elect to purchase all but not less than
all of the Offered Shares at the same price and subject to the same
material terms and conditions as described in the Transfer Notice.
The Company may exercise such purchase option and, thereby,
purchase all of the Offered Shares by notifying the Management
Investor in writing before expiration of such ten (10) day
period as to the number of such shares which it wishes to purchase.
If the Company gives the Management Investor notice that it desires
to purchase such shares, then such notice shall constitute an
irrevocable commitment to purchase such shares and payment for the
Offered Shares shall be by check or wire transfer, against delivery
of the Offered Shares to be purchased at a place agreed upon
between the parties and at the time of the scheduled closing
therefor, which shall be no later than thirty (30) Business
Days after the Company’s receipt of the Transfer Notice,
unless the Transfer Notice contemplated a later closing with the
prospective third party transferee(s) or unless the value of the
purchase price has not yet been established pursuant to
Section 2.1(f) or unless antitrust or other regulatory
approvals or expirations of legally mandated waiting periods
require a closing at a later date. If the Company fails to purchase
all of the Offered Shares by exercising the option granted in this
Section 2.1(b) within the period provided, the Offered Shares
shall be subject to the options granted to each other Holder (each,
a “Non-Selling Holder”) pursuant to this Agreement and
the Company shall provide the Non-Selling Holders with the
Additional Transfer Notice (as defined below).
(c)
Additional Transfer Notice . Subject to the Company’s
right set forth in Section 2.1(b), if at any time the Management
Investor proposes a Transfer, then, after the Company has declined
to purchase the Offered Shares, the Company shall give each
Non-Selling Holder an “Additional Transfer Notice”
which shall include all of the information and certifications
required in a Transfer Notice and additionally shall state that the
Company has declined to purchase the Offered Shares and briefly
describe the Non-Selling Holders’ rights of first refusal
with respect to the proposed Transfer.
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(d)
Non-Selling Holders’ Option .
(i) The
Non-Selling Holders shall have an option for a period of ten
(10) days from the Non-Selling Holder’s receipt of the
Additional Transfer Notice from the Company set forth in
Section 2.1(c) to elect to purchase their respective pro rata
shares of the Offered Shares at the same price and subject to the
same material terms and conditions as described in the Additional
Transfer Notice. Each Non-Selling Holder may exercise such purchase
option and, thereby, purchase all or any portion of his, her or its
pro rata share (with any reallotments as provided below) of the
Offered Shares, by notifying the Management Investor and the
Company in writing, before expiration of the ten (10) day
period as to the number of such shares which he, she or it wishes
to purchase. Each Non-Selling Holder’s pro rata share of the
Offered Shares shall be a fraction of the Offered Shares, of which
the number of shares of Common Stock (including shares of Common
Stock issuable upon conversion of Preferred Stock) owned by such
Non-Selling Holder on the date of the Additional Transfer Notice
shall be the numerator and the total number of shares of Common
Stock (including shares of Common Stock issuable upon conversion of
Preferred Stock) held by all Holders (except the Management
Investor) on the date of the Additional Transfer Notice shall be
the denominator.
(ii)
Each Non-Selling Holder shall have a right of reallotment such
that, if any other Non-Selling Holder fails to exercise the right
to purchase its full pro rata share of the Offered Shares within
ten (10) days from the date of receipt of the Additional
Transfer Notice (as described in Section 2(d)(i) above), the
Management Investor will give the Non-Selling Holders who exercised
in full such Non-Selling Holders pro rata share of Offered Stock
(as set forth above in Section 2(d)(i)) (each, a
“Fully-Exercising Investor”) notice (the “Second
Notice”) of the number of Offered Shares not subscribed for
by the other Non-Selling Holders. Each Fully-Exercising Investor
shall have ten (10) days from the date of receipt of the
Second Notice to agree to exercise an additional right to purchase,
on a pro rata basis equal to the proportion that the number of
shares of Common Stock (including shares of Common Stock issuable
upon conversion of Preferred Stock) owned by such Fully-Exercising
Investor bears to the total number of shares of Common Stock
(including shares of Common Stock issuable upon conversion of
Preferred Stock) owned by all Fully-Exercising Investors who wish
to purchase such unsubscribed Offered Stock, the Offered Shares not
previously purchased. Each participating Non-Selling Holder shall
be entitled to apportion Offered Shares to be purchased among its
partners and affiliates, provided that such participating
Non-Selling Holder notifies the Management Investor of such
allocation. If a Non-Selling Holder gives the Management Investor
notice that it desires to purchase its pro rata share of the
Offered Shares and, as the case may be, its reallotment, then such
notice shall constitute an irrevocable commitment to purchase such
shares and payment for the Offered Shares shall be by check or wire
transfer, against delivery of the Offered Shares to be purchased at
a place agreed upon between the parties and at the time of the
scheduled closing therefor, which shall be no later than thirty
(30) Business Days after the Company’s receipt of the
Transfer Notice, unless the Transfer Notice contemplated a later
closing with the prospective third party transferee(s) or unless
the value of the purchase price has not yet been established
pursuant to Section 2.1(f) or unless antitrust or other
regulatory approvals or expirations of legally mandated waiting
periods require a closing at a later date.
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(e) [
Intentionally Omitted ]
(f)
Valuation of Property . Should the purchase price specified
in the Transfer Notice or Additional Transfer Notice be payable in
property other than cash or evidences of indebtedness, the Company
(and/or the Non-Selling Holders) shall have the right to pay the
purchase price in the form of cash equal in amount to the value of
such property. If the Management Investor and the Company (and/or
the Non-Selling Holders) cannot agree on such cash value within ten
(10) Business Days after the Company’s receipt of the
Transfer Notice, the valuation shall be made by an appraiser of
recognized standing selected by the Management Investor and the
Company (and/or the Non-Selling Holders) or, if they cannot agree
on an appraiser within twenty (20) Business Days after the
Company’s receipt of the Transfer Notice, each shall select
an appraiser of recognized standing and the two appraisers shall
designate a third appraiser of recognized standing, whose appraisal
shall be determinative of such value. The cost of such appraisal
shall be paid by the Company (and/or the Non-Selling Holders). The
cost borne by the Company and the Non-Selling Holders shall be
borne pro rata by each based on the number of shares such parties
desire to purchase pursuant to this Section 2. If the time for
the closing of the Company’s purchase or the Non-Selling
Holders’ purchase has expired but for the determination of
the value of the purchase price offered by the prospective
transferee(s), then such closing shall be held on or prior to the
fifth Business Day after such valuation shall have been made
pursuant to this subsection.
2.2
Non-Exercise of Rights . In the event that the Company and
the Non-Selling Holders have not exercised their rights to purchase
the Offered Shares within the time periods specified in
Section 2.1, the Management Investor shall have a period of
ninety (90) days from the expiration of such rights (or such
longer period as is necessary to comply with any applicable
regulatory waiting period or obtain any applicable regulatory
approval) in which to sell the Offered Shares upon terms and
conditions (including the purchase price) no more favorable than
those specified in the Transfer Notice to the third-party
transferee(s) identified in the Transfer Notice. The third-party
transferee(s) shall acquire the Offered Shares free and clear of
subsequent rights of first refusal under this Agreement. In the
event the Management Investor does not consummate the sale or
disposition of the Offered Shares within the ninety (90) day
period from the expiration of these rights (or such longer period
as is necessary to comply with any applicable regulatory waiting
period or obtain any applicable regulatory approval), the
Company’s and the Non-Selling Holders’ first refusal
rights shall continue to be applicable to any subsequent
disposition of the Offered Shares by the Management Investor until
such right lapses in accordance with the terms of this Agreement.
Furthermore, the exercise or non-exercise of the rights of the
Company or the Non-Selling Holders under this Section 2 to
purchase Equity Securities from the Management Investor shall not
adversely affect their rights to make subsequent purchases from the
Management Investor of Equity Securities.
2.3
Limitations to Rights of Refusal .
Each Management
Investor may sell or otherwise assign, with or without
consideration, Equity Securities (a) in the case of a
Management Investor who is an individual, (i) to any spouse or
member of such Management Investor’s immediate family, or to
a custodian, trustee (including a
7
trustee of a
voting trust), executor, or other fiduciary for the account of such
Management Investor’s spouse or members of the Management
Investor’s immediate family, or to a trust for the Management
Investor’s own self, or a charitable remainder trust, and
(ii) to a family limited partnership or family limited
liability company which is controlled by the Management Investor
and in which all partners or members are members of the Management
Investor’s immediate family, or (b) in the case of a
Management Investor that is not an individual, to any person or
entity controlling, controlled by or under common control with such
Management Investor, provided, however, that for any transfer
effected pursuant to this Section 2.3 each such transferee or
assignee (each, a “Permitted Transferee”), prior to the
completion of the sale, transfer, or assignment shall have executed
documents assuming the obligations of the Management Investor under
this Agreement with respect to the transferred
securities.
(a) If
the Company proposes to issue, grant or sell equity securities or
Rights, the Company shall first give to the Holders of 1,000,000 or
more shares (subject to appropriate adjustments for stock splits,
stock dividends, combinations and other recapitalizations) of
Common Stock, including shares of Common Stock issuable upon
conversion of the Preferred Stock in the Company (a “Major
Holder”) written notice setting forth in reasonable detail
the price and other terms on which such equity securities or Rights
are proposed to be issued, granted or sold, the terms of any such
Rights and the amount thereof proposed to be issued, granted or
sold. The Major Holders shall thereafter have the preemptive right,
exercisable by written notice to the Company no later than ten
(10) Business Days after the Company’s notice is deemed
given (as determined pursuant to Section 11 hereof), to
purchase the number of such equity securities or Rights set forth
in the Major Holders’ notice (which may be less than, but in
no event more than, the Major Holders’ Proportionate Share
thereof, as of the date of the Company’s notice), at the
price and on the other terms set forth in the Company’s
notice. Any notice by the Major Holders exercising the right to
purchase equity securities or Rights pursuant to this
Section 2.4 shall constitute an irrevocable commitment to
purchase from the Company the equity securities or Rights specified
in such notice, subject to the maximum set forth in the preceding
sentence. The closing of the purchase of equity securities shall
take place at the same time as the closing of such issuance, grant
or sale referred to in the Company’s notice.
(b) From
the expiration of the 10 Business Day period first referred to in
Section 2.4(a) and for a period of 90 days thereafter,
the Company may offer, issue, grant and sell to any person or
entity equity securities or Rights having the terms set forth in
the Company’s notice relating to such equity securities or
Rights at a price and on other terms no less favorable to the
Company, and including no less cash, than those set forth in such
notice (without deduction for reasonable underwriting, sales agency
and similar fees payable in connection therewith); provided,
however, that the Company may not issue, grant or sell equity
securities or Rights to third parties in an amount greater than the
amount set forth in such notice minus the amount purchased or
committed to be purchased by the Purchasers.
(c)
The provisions of this Section 2.4 shall not apply to the
following issuances of securities or Rights: (i) the issuance
of Common Stock upon the conversion of Series A Stock,
Series B Stock, Series C Stock or Series D Stock,
(ii) the issuance of up to 24,516,722 shares
8
of Common Stock
(subject to adjustment for stock splits, reverse stock splits,
subdivisions, stock dividends, combinations, reclassifications,
recapitalizations and similar events) pursuant to restricted stock
sold to, or the exercise of stock options issued to, employees,
consultants, officers or directors of the Company under a stock
option plan or restricted stock issuance plan approved by a
majority of the board of directors of the Company, (iii) the
issuance of Common Stock as direct consideration for the
acquisition of another business entity or business segment of any
such entity by the Company by merger, purchase of substantially all
of the assets or other reorganization whereby the Company will own
substantially all the assets or more than fifty percent (50%) of
the voting power of such business entity or business segment of any
such entity if such issuance is approved by a majority of the board
of directors of the Company, (iv) the issuance of any shares
of Common Stock in connection with a stock split or dividend of the
Company (other than a Deemed Liquidation Event as defined in the
Certificate), (v) the issuance of Common Stock in connection
with a Qualified IPO, (vi) the issuance of Common Stock or
Preferred Stock in connection with a lease financing or other
asset-based financing, whether issued to a lessor, guarantor or
other person (a “ Lease Financing ”), provided
that such Lease Financing is approved by a majority of the board of
directors of the Company; and provided further that any such Lease
Financing which in aggregate amount exceeds $10,000,000 is approved
by a majority of the board of directors including the director
designated by the holders of the Series C Stock and the
director designated by the holders of the Series D Stock,
(vii) the issuance of Common Stock or Preferred Stock in
connection with a corporate partnering, alliance or similar
strategic transaction approved by a majority of the board of
directors of the Company, or (viii) the issuance or deemed
issuance of Common Stock or Preferred Stock upon exercise or
conversion of any options or warrants, or upon the conversion of
convertible securities outstanding as of the date of the first
issuance of the Series D Stock.
(a)
Bring-Along Notice . Notwithstanding anything contained in
Section 2 to the contrary, if Holders in excess of 80% of the
outstanding shares of Common Stock (including shares of Common
Stock issuable upon conversion of Preferred Stock) (a
“Controlling Group”), acting jointly, intend to effect
a sale to a third party (a “Buyer”) of in excess of 80%
of the outstanding shares of Common Stock (including shares of
Common Stock issuable upon conversion of Preferred Stock) and elect
to exercise their rights under this Section 3, such
Controlling Group shall deliver written notice (a
“Bring-Along Notice”) to the Company and the other
Holders, which notice shall (i) state (1) that the
Controlling Group wishes to exercise its rights under this
Section 3 with respect to such transfer, (2) the name and
address of the Buyer, (3) the per share amount and form of
consideration the Controlling Group proposes to receive for its
shares of Common Stock (including shares of Common Stock issuable
upon conversion of Preferred Stock), (4) the percentage of the
shares of Common Stock (including shares of Common Stock issuable
upon conversion of Preferred Stock) held by the members of the
Controlling Group being sold by the members of the Controlling
Group and (5) the terms and conditions of payment of such
consideration and all other material terms and conditions of such
transfer, (ii) contain an offer (the “Bring-Along
Offer”) by the Buyer to purchase from the Holders that
percentage of their shares of Common Stock (including shares of
Common Stock issuable upon conversion of Preferred Stock) as is
being sold by the members of the Controlling Group, on and subject
to the same price, terms and conditions offered to the Controlling
Group and (iii) state the anticipated time and place of the
closing of such transfer (a “Section 3 Closing”),
which (subject to such terms and conditions) shall occur not fewer
than five (5) Business
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Days nor more
than ninety (90) days after the date such Bring-Along Notice
is delivered, provided that if such Section 3 Closing
shall not occur prior to the expiration of such ninety
(90) day period, the Controlling Group shall be required to
deliver another Bring-Along Notice with respect to such Bring-Along
Offer. Upon request of a Controlling Group, the Company shall
provide the Controlling Group with a current list of the names and
addresses of the Holders.
(b)
Conditions to Bring-Along . Upon delivery of a Bring-Along
Notice, each of the Holders shall have the obligation to transfer
that percentage of its shares of Common Stock (including shares of
Common Stock issuable upon conversion of Preferred Stock) as is
being sold by the members of the Controlling Group pursuant to the
Bring-Along Offer, as such offer may be modified from time to time,
provided that the members of the Controlling Group transfer
the same percentage of their shares of Common Stock (including
shares of Common Stock issuable upon conversion of Preferred Stock)
to the Buyer at the Section 3 Closing and that all shares of
the Preferred Stock or Common Stock held by the Controlling Group
and the Holders being so sold are sold to the Buyer at the same
price, and on the same terms and conditions. On or before the date
set for the closing in the Bring-Along Notice, each of the Holders
shall deliver to a member of the Controlling Group or such other
person designated in the Bring-Along Notice (the
“Custodian”) certificates representing such
Holder’s applicable percentage of shares of Common Stock
(including shares of Common Stock issuable upon conversion of
Preferred Stock), duly endorsed for transfer or accompanied by duly
executed stock powers, free and clear of all Liens. On or before
the date set for the closing in the Bring-Along Notice, each Holder
shall represent and warrant to and indemnify the Buyer that
(i) the agreement containing such representations, warranties
and indemnities has been duly authorized, executed and delivered by
or on behalf of such Holder, (ii) such Holder has full power,
right and authority to transfer the shares to be sold by such
Holder and to enter into such agreement, (iii) immediately
before the closing, such Holder will have good and valid title to
the shares to be sold by such Holder free and clear of all Liens
and, upon payment for and delivery of the shares, the Buyer will
acquire all of the rights of the Holder in the shares to be sold by
the Holder and will acquire its interest in such shares free of any
“adverse claim” (as defined in Section 8-102 of
the Uniform Commercial Code) and (iv) delivery of the of the
shares to be sold by such Holder to the Buyer will pass title to
such shares free and clear of any Liens. The Custodian shall hold
such shares and other documents in trust for such Holder pending
completion or abandonment of such sale. If, within ninety
(90) days after the Controlling Group delivers the Bring-Along
Notice, the Controlling Group has not completed the sale of the
applicable percentage of the shares of Common Stock (including
shares of Common Stock issuable upon conversion of Preferred Stock)
owned by the Controlling Group and the Holders to the Buyer and
another Bring-Along Notice with respect to such Bring-Along Offer
has not been sent to the Holders, the Custodian shall return to
each Holder all certificates representing the shares. Promptly
after the Section 3 Closing, the Custodian shall give notice
thereof to the Holders, shall remit to each of the Holders the
total consideration for the shares of such Holder sold pursuant
thereto, and shall furnish such other evidence of the completion
and time of completion of such sale and the terms thereof as may
reasonably be requested by any of the Holders.
(c)
Remedies . Each of the Holders acknowledges that the
Controlling Group would be irreparably damaged in the event of a
breach or a threatened breach by such Holder of any of its
obligations under this Section 3 and each of the Holders
agrees that, in the event of a breach or a threatened breach by
such Holder of any such obligation, the Controlling Group shall, in
addition
10
to any other
rights and remedies available to it in respect of such breach, be
entitled to an injunction from a court of competent jurisdiction
(without any requirement to post bond) granting it specific
performance by such Holder of its obligations under this
Section 3. Each of the Holders agrees that, in the event of a
breach or a threatened breach by such Holder of its obligations
under this Section 3, the Company may record the transfer of
such Holders’ shares to the Buyer on the books and records of
the Company. In the event that the Controlling Group shall file
suit to enforce the covenants contained in this Section 3 (or
obtain any other remedy in respect of any breach thereof) the
prevailing party in the suit shall be entitled to recover, in
addition to all other damages to which it may be entitled, the
costs incurred by such party in conducting the suit, including
reasonable attorney’s fees and expenses.
(a)
Purchase Event Notice . Affymetrix shall, within
30 days following the date of the first Purchase Event,
deliver written notice (a “Purchase Event
Notice’’) to the Company and each of the Purchasers,
which notice shall state (i) that a Purchase Event
ha
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