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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 9, 1998
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AFFYMETRIX, INC.
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(EXACT NAME OF REGISTRATION AS SPECIFIED IN CHARTER)
CALIFORNIA 333-38167 77-0319159
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION FILE NUMBER) IDENTIFICATION NO.)
3380 CENTRAL EXPRESSWAY, SANTA CLARA CA 95051
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (408) 731-5000
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
On March 9, 1998, the Company entered into a definitive agreement
to sell 1,634,522 shares of Series AA Preferred Stock to Glaxo Wellcome
Americas, Inc. for approximately $50 million. The text of the Company's
press release filed pursuant to Section 135(c) is attached hereto as Exhibit
99.1.
ITEM 7. EXHIBITS
(c) EXHIBITS:
Exhibit
Number
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4 Certificate of Determination as filed with the Secretary of State of
the State of California on March 11, 1998.
10 Series AA Preferred Stock Purchase Agreement dated March 9, 1998 by
and between Affymetrix, Inc. and Glaxo Wellcome Americas, Inc. with
exhibits.
99 March 10, 1998 Press Release: "Affymetrix Announces Definitive
Agreement to Sell $50 Million of Series AA Preferred Stock."
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
None of the securities in the above referenced transaction were
sold in reliance upon Regulation S of the Securities Act of 1933, as amended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Affymetrix, Inc.
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(Registrant)
Date: March 17, 1998 By: /s/ Edward M. Hurwitz
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Edward M. Hurwitz
Vice President and Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
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AFFYMETRIX, INC.
EXHIBIT INDEX
Exhibit
Number
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4 Certificate of Determination as filed with the Secretary of State of
the State of California on March 11, 1998.
10 Series AA Preferred Stock Purchase Agreement dated March 9, 1998 by
and between Affymetrix, Inc. and Glaxo Wellcome Americas, Inc.
with exhibits.
99 March 10, 1998 Press Release: "Affymetrix Announces Definitive
Agreement to Sell $50 Million of Series AA Preferred Stock."
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CERTIFICATE OF DETERMINATION
OF SERIES AA PREFERRED STOCK
OF AFFYMETRIX, INC.,
A CALIFORNIA CORPORATION
(PURSUANT TO SECTION 401 OF THE CALIFORNIA CORPORATIONS CODE)
The undersigned Stephen P.A. Fodor and Edward M. Hurwitz, do hereby certify:
1. That they are the duly elected and acting President and Chief Executive
Officer and the Chief Financial Officer, respectively, of Affymetrix, Inc.,
a California corporation (the "Corporation").
2. The authorized number of shares of the Corporation's Preferred Stock is
27,500,000, and the number of shares constituting Series AA Preferred Stock
is 1,634,522, none of the shares of that series has been issued.
3. That pursuant to the authority conferred upon the Board of Directors by the
Amended and Restated Articles of Incorporation of the Corporation, the Board
of Directors adopted the following resolution:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of the Corporation in
accordance with the provisions of the Corporation's Amended
and Restated Articles of Incorporation, the Board of Directors
hereby creates a new series of Preferred Stock designated as
Series AA Preferred Stock which shall be subject to the
following rights, preferences, privileges and restrictions
thereof as follows:
RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS OF PREFERRED STOCK. The
rights, preferences, privileges, and restrictions granted to and imposed on
the Series AA Preferred Stock, which series shall consist of one million six
hundred thirty four thousand five hundred twenty two (1,634,522) shares (the
"Series AA Preferred Stock"), are as set forth below in this Certificate of
Determination.
1. DIVIDEND PROVISIONS.
(a) Subject to the rights of any series of Preferred Stock that
may from time to time come into existence, the holders of shares of Series AA
Preferred Stock shall be entitled to receive dividends payable in cash, out
of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend (payable other than in Common Stock or
other securities and rights convertible into or entitling the holder thereof
to receive, directly or indirectly, additional shares of Common Stock of this
Corporation) on the Common Stock of this Corporation, at the rate per share
per annum of $1.99 (as adjusted for any stock splits, stock dividends,
combinations, recapitalizations or the like with respect to the Series AA
Preferred Stock) payable in two equal installments on June 30 and December 31
of each year so long as such share of Series AA Preferred Stock is then
outstanding. Such dividends shall accrue on
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each share from the Purchase Date (as defined below), and shall accrue from
day to day, whether or not earned or declared. Such dividends shall be
cumulative so that, except as provided below, if such dividends in respect of
any previous or current dividend period, at the annual rate specified above,
shall not have been paid, the deficiency shall first be fully paid before any
dividend or other distribution shall be paid on or declared and set apart for
the Common Stock. Cumulative dividends with respect to a share of Series AA
Preferred Stock which are accrued, payable and/or in arrears shall, upon
conversion of such share to Common Stock or redemption of such share, be paid
to the extent assets are legally available therefor pursuant to the
provisions of Section 2 and Section 3, respectively, and any amounts for
which assets are not legally available shall be paid promptly as assets
become legally available therefor; any partial payment will be made pro rata
among the holders of such shares. The holders of the outstanding Series AA
Preferred Stock can waive any dividend preference that such holders shall be
entitled to receive under this Section 1 upon the affirmative vote or written
consent of the holders of at least a majority of the Series AA Preferred
Stock then outstanding.
(b) Subject to the rights of any shares of Preferred Stock that
may from time to time come into existence and in addition to the amounts paid
pursuant to subsection 1(a) above, the holders of shares of Series AA
Preferred Stock shall be entitled to receive an amount equal to any dividend
paid (other than dividends paid in Common Stock or other securities and
rights convertible into or entitling the holder thereof to receive, directly
or indirectly, additional shares of Common Stock of this Corporation) on the
Common Stock of this Corporation (as determined on a per annum basis and on
as a converted basis for the Series AA Preferred Stock), payable when, as and
if declared by the Board of Directors. Such dividends shall not be
cumulative.
2. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
this Corporation, either voluntary or involuntary, subject to the rights of
series of Preferred Stock that may from time to time come into existence, the
holders of Series AA Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets of this Corporation to
the holders of Common Stock by reason of their ownership thereof, an amount
per share equal to the sum of (i) $30.59 for each outstanding share of Series
AA Preferred Stock (the "Original Series AA Issue Price") (subject to
adjustment of such fixed dollar amounts for any stock splits, stock
dividends, combinations, recapitalizations or the like with respect to the
Series AA Preferred Stock), (ii) accrued but unpaid dividends on such share,
and (iii) a per share amount equal to the difference obtained by subtracting
(A) the product of ten percent of the annual per share dividend multiplied by
a fraction, the numerator of which is the number of days elapsed since the
date upon which the first share of Series AA Preferred Stock was first issued
(the "Purchase Date") and the denominator of which is 365, from (B) the
annual per share dividend. The sum obtained by adding the amounts described
in clauses (i), (ii) and (iii) of the preceding sentence is referred to
herein as the "Series AA Liquidation Preference". If upon the occurrence of
such event, the assets and funds thus distributed among the holders of the
Series AA Preferred Stock shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then, subject to the
rights of series of Preferred Stock that may
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from time to time come into existence, the entire assets and funds of this
Corporation legally available for distribution shall be distributed ratably
among the holders of the Series AA Preferred Stock in proportion to the
amount of such stock owned by each such holder.
(b) Upon the completion of the distribution required by
subparagraph (a) of this Section 2 and any other distribution that may be
required with respect to series of Preferred Stock that may from time to time
come into existence, if assets remain in this Corporation, the holders of the
Common Stock of this Corporation, shall receive an amount per share of Common
Stock equal to the quotient obtained by dividing (i) the Series AA
Liquidation Preference, by (ii) the number of shares of Common Stock into
which one (1) share of Series AA Preferred Stock could then be converted
pursuant to Section 4 hereof. If upon the occurrence of such event, the
assets and funds thus distributed among the holders of the Common Stock shall
be insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then, subject to the rights of series of Preferred Stock
that may from time to time come into existence, the entire remaining assets
and funds of this Corporation legally available for distribution shall be
distributed ratably among the holders of the Common Stock in proportion to
the amount of such stock owned by each such holder.
(c) After the distributions described in subsection (a) and (b)
above have been paid, subject to the rights of series of Preferred Stock that
may from time to time come into existence, the remaining assets of this
Corporation available for distribution to shareholders shall be distributed
among the holders of Series AA Preferred Stock and Common Stock pro rata
based on the number of shares of Common Stock held by each (assuming full
conversion of all such Series AA Preferred Stock).
(d) (i) The following events shall be deemed to be a liquidation,
dissolution or winding up within the meaning of this Section 2: (A) a
consolidation or merger of this Corporation with or into any other
corporation or corporations as a result of which the holders of voting stock
of this Corporation immediately prior to such transaction do not own,
directly or indirectly, more than 50% of the voting power of the surviving
corporation or its parent corporation immediately after such transaction, or
(B) a sale, conveyance or disposition of all or substantially all of the
assets of this Corporation.
(ii) In any of such events, the value of the assets
distributed to the shareholders of this Corporation shall be determined as
set forth herein. If the assets distributed to the shareholders of this
Corporation consist of other than cash or securities, the value of such
assets shall be the fair market value thereof, as determined by the this
Corporation and the holders of at least a majority of the voting power of all
the then outstanding shares of Preferred Stock. If the assets distributed to
the shareholders of this Corporation consist of securities, such securities
shall be valued as follows:
(A) Securities not subject to investment letter or other
similar restrictions on free marketability covered by (B) below:
(1) If traded on a securities exchange or through
the Nasdaq National Market, the value shall be deemed to be the average of
the closing prices of the
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securities on such exchange or system over the twenty (20) trading day period
ending three (3) trading days prior to the closing;
(2) If actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid or sale prices
(whichever is applicable) over the twenty (20) trading day period ending
three (3) trading days prior to the closing; and
(3) If there is no active public market, the value
shall be the fair market value thereof, as mutually determined by this
Corporation and the holders of at least a majority of the voting power of all
then outstanding shares of Preferred Stock.
(B) The method of valuation of securities subject to
investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a shareholder's status as an
affiliate or former affiliate) shall be to make an appropriate discount from
the market value determined as above in (A) (1), (2) or (3) to reflect the
approximate fair market value thereof, as mutually determined by this
Corporation and the holders of at least a majority of the voting power of all
then outstanding shares of such Preferred Stock.
3. REDEMPTION.
(a) REDEMPTION AT THE OPTION OF THIS CORPORATION.
(i) Subject to the rights of series of Preferred Stock that
may from time to time come into existence, at any time on or prior to March
9, 2001, this Corporation may at any time it may lawfully do so, at the
option of the Board of Directors, redeem in whole or in part the Series AA
Preferred Stock by paying in cash therefor a sum equal to (A) the Original
Series AA Issue Price (subject to adjustment of such fixed dollar amount for
any stock splits, stock dividends, combinations, recapitalizations or the
like with respect to the Series AA Preferred Stock), plus (B) accrued but
unpaid dividends on such share (the "Early Redemption Price"); provided that
the closing sale price of this Corporation's Common Stock on the Nasdaq
National Market (or such other national securities exchange on which the
Common Stock is then listed) has been at or above $52.00 (subject to
adjustment of such fixed dollar amount for any stock splits, stock dividends,
combinations, recapitalizations or the like with respect to the Common Stock)
for twenty (20) of thirty (30) consecutive trading days prior to the
applicable Corporation Redemption Date (as defined below), which thirty (30)
day period shall have ended not more than ten (10) trading days prior to the
date of the Corporation Redemption Notice (as defined below). Any redemption
effected pursuant to this subsection 3(a)(i) shall be made on a pro rata
basis among the holders of the Series AA Preferred Stock in proportion to the
number of shares of Series AA Preferred Stock then held by them.
(ii) Subject to the rights of series of Preferred Stock that
may from time to time come into existence, at any time after March 9, 2001,
this Corporation may at any time it may lawfully do so, at the option of the
Board of Directors, redeem in whole or in part the Series AA Preferred Stock
by paying in cash therefor a sum equal to the Series AA Liquidation
Preference (the "Late Redemption Price"). Any redemption effected pursuant
to this subsection
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3(a)(ii) shall be made on a pro rata basis among the holders of the Series AA
Preferred Stock in proportion to the number of shares of Series AA Preferred
Stock then held by them.
(iii) Subject to the rights of series of Preferred Stock
that may from time to time come into existence, at least twenty (20) but no
more than thirty (30) days prior to the date on which this Corporation
proposes to redeem any shares of Series AA Preferred Stock (each a
"Corporation Redemption Date"), written notice shall be personally delivered,
sent by reliable international courier, or sent by confirmed facsimile to
each holder of record (at the close of business on the business day next
preceding the day on which notice is given) of the Series AA Preferred Stock
to be redeemed, at the address last shown on the records of this Corporation
for such holder, notifying such holder of the redemption to be effected on
the applicable Corporation Redemption Date, specifying the number of shares
to be redeemed from such holder, the applicable Corporation Redemption Date,
the Early or Late Redemption Price, as applicable, the place at which payment
may be obtained and calling upon such holder to surrender to this
Corporation, in the manner and at the place designated, his, her or its
certificate or certificates representing the shares to be redeemed (the
"Corporation Redemption Notice"). Except as provided in subsection 3(a)(iv)
or 3(a)(v), on or after each Corporation Redemption Date, each holder of
Series AA Preferred Stock to be redeemed on such Corporation Redemption Date
shall surrender to this Corporation the certificate or certificates
representing such shares, in the manner and at the place designated in the
Corporation Redemption Notice, and thereupon the Early or Late Redemption
Price, as applicable, of such shares shall be payable to the order of the
person whose name appears on such certificate or certificates as the owner
thereof and each surrendered certificate shall be cancelled. In the event
less than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares. Any
shares of Series AA Preferred Stock that are not redeemed shall remain
subject to redemption by this Corporation pursuant to this Section 3(a).
(iv) Each holder of Series AA Preferred Stock may, at anytime
up to two (2) trading days prior to the applicable Corporation Redemption
Date, elect to convert all shares of Series AA Preferred Stock designated for
redemption in the Corporation Redemption Notice into shares of Common Stock
pursuant to Section 4 below.
(v) From and after each Corporation Redemption Date, unless
there shall have been a default in payment of the Early or Late Redemption
Price, as applicable, all rights of the holders of shares of Series AA
Preferred Stock designated for redemption on such Corporation Redemption Date
in the Corporation Redemption Notice as holders of Series AA Preferred Stock
(except the right to receive the Early or Late Redemption Price, as
applicable, without interest upon surrender of their certificate or
certificates) shall cease with respect to such shares, and such shares shall
not thereafter be transferred on the books of this Corporation or be deemed
to be outstanding for any purpose whatsoever. Subject to the rights of
series of Preferred Stock that may from time to time come into existence, if
the funds of this Corporation legally available for redemption of shares of
Series AA Preferred Stock on any Corporation Redemption Date are insufficient
to redeem the total number of shares of Series AA Preferred Stock to be
redeemed on such date, those funds that are legally available will be used to
redeem the maximum possible number of such shares ratably among the holder(s)
of such shares to be
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redeemed such that an equal percentage of the number of shares held by each
holder of Series AA Preferred Stock is redeemed (provided that this
Corporation shall have no obligation to issue or redeem any fractional
shares). The shares of Series AA Preferred Stock not redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein.
Subject to the rights of series of Preferred Stock that may from time to time
come into existence, at any time thereafter when additional funds of this
Corporation are legally available for the redemption of shares of Series AA
Preferred Stock, such funds will immediately be used to redeem the balance of
the shares that this Corporation has become obliged to redeem on any
Corporation Redemption Date but that it has not redeemed.
(b) REDEMPTION AT OPTION OF SHAREHOLDERS.
(i) Subject to the rights of series of Preferred Stock that
may from time to time come into existence, at any time on or after March 9,
2005, provided that this Corporation shall have received a written request
from the holders of not less than a majority of the then outstanding Series
AA Preferred Stock that a specified percentage of such holders' shares of
Series AA Preferred Stock be redeemed, and concurrently with surrender by
such holders of the certificates representing such shares, this Corporation
shall, to the extent it may lawfully do so, redeem the shares specified in
such request by paying in cash therefor a sum per share equal to (A) $30.59
per share of Series AA Preferred Stock (as adjusted for any stock splits,
stock dividends, recapitalizations or the like) plus (B) accrued but unpaid
dividends on such share (the "Series AA Redemption Price"); provided,
however, in no event shall this Corporation be required to redeem more than
817,261 shares of Series AA Preferred Stock (as adjusted for any stock
splits, stock dividends, recapitalizations or the like) during any twelve
month period. Any request made pursuant to this subsection 3(b)(i) shall be
delivered at least one hundred and eighty (180) days prior to the date on
which the redemption is requested to occur (a "Shareholder Redemption Date").
Any redemption of Series AA Preferred Stock effected pursuant to this
subsection 3(b)(i) shall be made on a pro rata basis among the holders of the
Series AA Preferred Stock in proportion to the number of shares of Series AA
Preferred Stock proposed to be redeemed by such holders.
(ii) Subject to the rights of series of Preferred Stock that
may from time to time come into existence, at least twenty (20) but no more
than thirty (30) days prior to a Shareholder Redemption Date, written notice
shall be personally delivered, sent by reliable international courier, or
sent by confirmed facsimile to each holder of record (at the close of
business on the business day next preceding the day on which notice is given)
of the Series AA Preferred Stock to be redeemed, at the address last shown on
the records of this Corporation for such holder, notifying such holder of the
redemption to be effected on the Shareholder Redemption Date, specifying the
number of shares to be redeemed from such holder, the Shareholder Redemption
Date, the Series AA Redemption Price, the place at which payment may be
obtained and calling upon such holder to surrender to this Corporation, in
the manner and at the place designated, his, her or its certificate or
certificates representing the shares to be redeemed (the "Shareholder
Redemption Notice"). Except as provided in subsection (3)(b)(iii), on or
after the Shareholder Redemption Date, each holder of Series AA Preferred
Stock to be redeemed on such Redemption Date shall surrender to this
Corporation the certificate or
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certificates representing such shares, in the manner and at the place
designated in the Shareholder Redemption Notice, and thereupon the Series AA
Redemption Price for such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the owner thereof
and each surrendered certificate shall be cancelled. In the event less than
all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(iii) From and after the Shareholder Redemption Date,
unless there shall have been a default in payment of the Series AA Redemption
Price, all rights of the holders of shares of Series AA Preferred Stock
designated for redemption on the Shareholder Redemption Date in the
Shareholder Redemption Notice as holders of Series AA Preferred Stock (except
the right to receive the Series AA Redemption Price without interest upon
surrender of their certificate or certificates) shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books
of this Corporation or be deemed to be outstanding for any purpose
whatsoever. Subject to the rights of series of Preferred Stock that may from
time to time come into existence, if the funds of this Corporation legally
available for redemption of shares of Series AA Preferred Stock on the
Shareholder Redemption Date are insufficient to redeem the total number of
shares of Series AA Preferred Stock to be redeemed on such date, those funds
that are legally available will be used to redeem the maximum possible number
of such shares ratably among the holders of such shares to be redeemed such
that an equal percentage of the number of shares held by each holder of
Series AA Preferred Stock is redeemed (provided that this Corporation shall
have no obligation to issue or redeem any fractional shares). The shares of
Series AA Preferred Stock not redeemed shall remain outstanding and entitled
to all the rights and preferences provided herein. Subject to the rights of
series of Preferred Stock that may from time to time come into existence, at
any time thereafter when additional funds of this Corporation are legally
available for the redemption of shares of Series AA Preferred Stock, such
funds will immediately be used to redeem the balance of the shares that this
Corporation has become obliged to redeem on the Shareholder Redemption Date
but that it has not redeemed.
4. CONVERSION. The holders of the Series AA Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each share of Series AA Preferred Stock
shall be convertible, at the option of the holder thereof, at any time after
the Purchase Date of such share and on or prior to the second trading day
prior to the Redemption Date, if any, as may have been fixed in any
Redemption Notice with respect to such share of the Series AA Preferred
Stock, at the office of this Corporation or any transfer agent for such
stock, into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing the Original Series AA Issue Price by the
Conversion Price applicable to such share, determined as hereafter provided,
in effect on the date the certificate is surrendered for conversion (the
"Conversion Ratio"). The initial Conversion Price per share for shares of
Series AA Preferred Stock shall be $39.77 per share; provided, however, that
the Conversion Price for the Series AA Preferred Stock shall be subject to
adjustment as set forth in subsection 4(d).
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(b) AUTOMATIC CONVERSION. Each share of Series AA Preferred Stock
shall automatically be converted into shares of Common Stock at the
Conversion Ratio at the time in effect for such Series AA Preferred Stock
immediately upon the date specified by written consent or agreement of the
holders of a majority of the then outstanding shares of Series AA Preferred
Stock.
(c) MECHANICS OF CONVERSION. Before any holder of Series AA
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he or she shall surrender the certificate or certificates therefor,
duly endorsed, at the office of this Corporation or of any transfer agent for
the Series AA Preferred Stock, and shall give written notice to this
Corporation at its principal corporate office, of the election to convert the
same and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. This Corporation
shall, as soon as practicable thereafter, issue and deliver at such office to
such holder of Series AA Preferred Stock, or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been made immediately prior to the close of business
on the date of such surrender of the shares of Series AA Preferred Stock to
be converted, and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock as of such
date. If the conversion is in connection with an underwritten offering of
securities registered pursuant to the Securities Act of 1933, the conversion
may, at the option of any holder tendering Series AA Preferred Stock for
conversion, be conditioned upon the closing with the underwriters of the sale
of securities pursuant to such offering, in which event the persons entitled
to receive the Common Stock upon conversion of the Series AA Preferred Stock
shall not be deemed to have converted such Series AA Preferred Stock until
immediately prior to the closing of such sale of securities.
(d) CONVERSION PRICE ADJUSTMENTS OF PREFERRED STOCK FOR SPLITS,
STOCK DIVIDENDS, COMBINATIONS AND THE LIKE. The Conversion Price of the
Series AA Preferred Stock shall be subject to adjustment from time to time as
follows:
(i) In the event this Corporation should at any time or from
time to time after the Purchase Date fix a record date for the effectuation
of a split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or
other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock
(hereinafter referred to as "Common Stock Equivalents") without payment of
any consideration by such holder for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise thereof), then, as of such record date
(or the date of such dividend distribution, split or subdivision if no record
date is fixed), the Conversion Price of the Series AA Preferred Stock shall
be appropriately decreased so that the number of shares of Common Stock
issuable on conversion of each share of such series shall be increased in
proportion to such increase of the aggregate of shares of Common Stock
outstanding and those issuable with respect to such Common Stock Equivalents.
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(ii) If the number of shares of Common Stock outstanding at
any time after the Purchase Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the Conversion Price for the Series AA Preferred Stock shall be
appropriately increased so that the number of shares of Common Stock issuable
on conversion of each share of such series shall be decreased in proportion
to such decrease in outstanding shares.
(e) OTHER DISTRIBUTIONS. In the event this Corporation shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by this Corporation or other persons, assets (excluding
cash dividends) or other options or rights not referred to in subsection
4(d)(i), then, in each such case for the purpose of this Subsection 4(e), the
holders of the Series AA Preferred Stock shall be entitled to a proportionate
share of any such distribution as though they were the holders of the number
of shares of Common Stock of this Corporation into which their shares of
Series AA Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of this Corporation entitled to
receive such distribution.
(f) RECAPITALIZATIONS. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 4 or Section 2) provision shall be made so that the holders of
the Series AA Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series AA Preferred Stock the number of shares of stock or
other securities or property of this Corporation or otherwise, to which a
holder of Common Stock deliverable upon conversion would have been entitled
on such recapitalization. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Section 4 with respect to
the rights of the holders of the Series AA Preferred Stock after the
recapitalization to the end that the provisions of this Section 4 (including
adjustment of the Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series AA Preferred Stock) shall be
applicable after that event as nearly equivalent as may be practicable.
(g) NO IMPAIRMENT. This Corporation will not, by amendment of its
Amended and Restated Articles of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by this Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order to
protect the Conversion Rights of the holders of the Series AA Preferred Stock
against impairment.
(h) NO FRACTIONAL SHARES AND CERTIFICATE AS TO ADJUSTMENTS.
(i) No fractional shares shall be issued upon the conversion
of any share or shares of the Series AA Preferred Stock, and the number of
shares of Common Stock to be issued shall be rounded down to the nearest
whole share. This Corporation shall provide the holder of any fractional
interest with an amount of cash equal to the fair market value of one
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share of this Corporation's Common Stock multiplied by such fractional
interest. Whether or not fractional shares are issuable upon such conversion
shall be determined on the basis of the total number of shares of Series AA
Preferred Stock the holder is at the time converting into Common Stock and
the number of shares of Common Stock issuable upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or readjustment of
the Conversion Price of Series AA Preferred Stock pursuant to this Section 4,
this Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to
each holder of Series AA Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. This Corporation shall, upon the
written request at any time of any holder of Series AA Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting
forth (A) such adjustment and readjustment, (B) the Conversion Price for such
series of Preferred Stock at the time in effect, and (C) the number of shares
of Common Stock and the amount, if any, of other property that at the time
would be received upon the conversion of a share of Series AA Preferred Stock.
(i) NOTICES OF RECORD DATE. In the event of any taking by this
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, this
Corporation shall mail to each holder of Series AA Preferred Stock, at least
twenty (20) days prior to the date specified therein, a notice specifying the
date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
(j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. This
Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series AA Preferred Stock, such
number of its shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of the Series AA Preferred
Stock; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series AA Preferred Stock, in addition to such
other remedies as shall be available to the holder of such Preferred Stock,
this Corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain
the requisite shareholder approval of any necessary amendment to this
Certificate of Designation or the Amended and Restated Articles of
Incorporation.
(k) NOTICES. Any notice required by the provisions of this
Section 4 to be given to the holders of shares of Series AA Preferred Stock
shall be deemed given if deposited in the United States mail, postage
prepaid, and addressed to each holder of record at his address appearing on
the books of this Corporation.
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5. VOTING RIGHTS. The holder of each share of Series AA
Preferred Stock shall have the right to one vote for each share of Common
Stock into which such Series AA Preferred Stock could then be converted at
the record date for determination of the shareholders entitled to vote
thereon, and with respect to such vote, such holder shall have full voting
rights and powers equal to the voting rights and powers of the holders of
Common Stock, and shall be entitled, notwithstanding any provision hereof, to
notice of any shareholders' meeting in accordance with the bylaws of this
Corporation, and shall be entitled to vote, together with holders of Common
Stock, with respect to any question upon which holders of Common Stock have
the right to vote and otherwise as required by law. Fractional votes shall
not, however, be permitted and any fractional voting rights available on an
as-converted basis (after aggregating all shares into which shares of Series
AA Preferred Stock held by each holder could be converted) shall be rounded
to the nearest whole number (with one-half being rounded upward).
4. We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and
correct of our own knowledge.
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RESOLVED FURTHER, that the officers of the Corporation are each
authorized to execute, verify and file in the office of the California
Secretary of State a Certificate of Determination in accordance with
this resolution and California law.
Executed on March __, 1998 at Menlo Park, California.
--------------------------------
Stephen P. A. Fodor
President and Chief Executive Officer
--------------------------------
Edward M. Hurwitz
Chief Financial Officer
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SERIES AA PREFERRED STOCK
PURCHASE AGREEMENT
This SERIES AA PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement")
dated March 9, 1998 is entered into by and between Affymetrix, Inc., a
California corporation (together with its successors, the "Company"), and
Glaxo Wellcome Americas Inc., a Delaware corporation ("Investor").
Unless otherwise defined herein, capitalized terms used herein and
not defined herein shall have the meanings given to them under the Securities
Act of 1933, as amended (the "Securities Act").
The parties hereto agree as follows:
1. PURCHASE AND SALE. In consideration of and upon the basis of
the representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:
a. Investor agrees to purchase from the Company and the
Company agrees to sell to Investor, on the Closing Date specified in Section
2 hereof, 1,634,522 shares of the Company's Series AA Preferred Stock (the
"Preferred Shares") for a price per share equal to $30.59 (the "Purchase
Price"). On or before the Closing Date (as defined below), the Company will
have authorized the sale and issuance to Investor of the Preferred Shares,
having the rights, preferences and priviledges set forth in the Certificate
of Determination attached hereto as EXHIBIT A (the "Certificate of
Determination").
b. The term "Conversion Stock" shall mean any shares of the
Company's common stock, no par value per share (the "Common Stock") issued or
to be issued to Investor upon conversion of the Preferred Shares pursuant to
the terms of this Agreement and the Certificate of Determination.
2. CLOSING.
a. The closing of the sale of the Preferred Shares (the
"Closing") shall take place on March ___, 1998 upon satisfaction or, if
applicable, waiver of the conditions set forth in Sections 6 and 7 hereof, or
at such other date and time as the Investor and the Company shall mutually
agree (such date and time being referred to herein as the "Closing Date").
b. At the Closing, the Company shall deliver to Investor a
certificate representing the Preferred Shares that Investor is purchasing,
duly registered on the books of the Company in the name of Investor, against
payment by Investor of the Purchase Price by check or wire transfer of
immediately available funds.
<PAGE>
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set
forth in the Disclosure Letter delivered to Investor by the Company
concurrently with this Agreement, the Company hereby represents and warrants
to Investor as follows:
a. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and
has all requisite corporate power and authority to carry on its business as
now conducted and as proposed to be conducted. The Company is duly qualified
to transact business and is in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse effect on its
business or properties.
b. All corporate action on the part of the Company, its
officers and directors necessary for the authorization, execution and
delivery of this Agreement, the Voting Trust Agreement dated of the Closing
Date between the Company, Wachovia Bank, N.A. (the "Trustee") and Investor
("Voting Trust Agreement") in the form attached hereto as EXHIBIT B, the
Amendment to Governance Agreement dated as of the Closing Date between the
Company and Glaxo Wellcome PLC ("Glaxo") and accepted and agreed to by the
Investor (the "Amendment") in the form attached hereto as EXHIBIT C, the
performance of all obligations of the Company hereunder and thereunder, and
the authorization, issuance (or reservation for issuance), sale and delivery
of the Preferred Shares being sold hereunder and the Common Stock issuable
upon conversion of the Preferred Shares has been taken or will be taken prior
to the Closing, and this Agreement, the Voting Trust Agreement and the
Amendment constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.
c. The Company is not in violation or default of any
provision of its Amended and Restated Articles of Incorporation or bylaws, or
of any judgment, order, writ, or decree by which it is bound. The Company is
not in violation or default in any material respect of any instrument or
contract to which it is a party or by which it is bound, or, to its
knowledge, of any provision of any federal or state statute, rule or
regulation applicable to the Company. The execution, delivery and
performance of this Agreement, the Voting Trust Agreement, and the Amendment,
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation or be in conflict with or constitute, with
or without the passage of time and giving of notice, either a default under
any such provision, instrument, judgment, order, writ, decree or contract or
an event that results in the creation of any lien, charge or encumbrance upon
any assets of the Company or the suspension, revocation, impairment,
forfeiture, or nonrenewal of any material permit, license, authorization, or
approval applicable to the Company, its business or operations or any of its
assets or properties.
d. Except as may be required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR Act"), no consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection
with the consummation of the transactions contemplated by this Agreement,
except (i) the filing of the
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Certificate of Determination with the Secretary of State of California; and
(ii) the filing pursuant to Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act, which filing will be effected
within 15 days of the sale of the Preferred Shares hereunder, or such other
post-closing filings as may be required.
e. Except as disclosed in the SEC Filings (as defined below)
and in the Company's registration statement on Form S-3 as filed with the SEC
on October 17, 1997 (the "S-3"), (i) there is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement, the Voting
Trust Agreement or the Amendment, or the right of the Company to enter into
such agreements, or to consummate the transactions contemplated hereby or
thereby, and (ii) there is no action, suit, proceeding or investigation
pending or, to the knowledge of the Company, currently threatened in writing
against the Company, or against any executive officer or director of the
Company which might result, either individually or in the aggregate, in any
material adverse change in the business, properties, financial condition or
operating results of the Company, as such business is presently conducted.
f. The Company has timely filed all filings with the United
States Securities and Exchange Commission (the "SEC") under the Securities
Act or under Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or under the rules and regulations
promulgated by the SEC (any such filing, an "SEC Filing") required to be
filed by the Company pursuant to such acts and no SEC Filing contained, on
the date on which such document was filed with the SEC, any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in SEC Filings (including any similar
documents filed after the date of this Agreement) comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case
of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto), and fairly present the consolidated financial position of
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).
g. Since the date of the Company's most recent quarterly
report on Form 10-Q or most recent periodic report on Form 8-K filed with the
SEC, there has not been any development that has not otherwise been publicly
disclosed that is reasonably likely to result in any material adverse change
in the financial condition or results of operations of the Company.
h. Except as disclosed in the SEC Filings and the S-3 and as
contemplated hereby, the Company has not granted or agreed to grant any
registration rights, including piggy-back rights, to any person or entity.
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i. As of February 28, 1998, the authorized capital stock of
the Company consisted of 27,500,000 shares of Preferred Stock, none of which
were issued and outstanding, and 50,000,000 shares of Common Stock,
22,842,355 shares of which were issued and outstanding (the "Preferred Stock"
and the "Common Stock" are collectively referred to herein as the "Capital
Stock"). All of the issued and outstanding shares of Capital Stock have been
duly authorized, validly issued and are fully paid and nonassessable. There
has been no material change in the capitalization of the Company from
February 28, 1998 to the date of this Agreement.
j. The Preferred Shares that are being purchased by the
Investor hereunder, when issued, sold or delivered in accordance with the
terms hereof, for the consideration expressed herein, and the shares of
Common Stock issuable upon conversion of the Preferred Shares, upon issuance
in accordance with the terms of the Certificate of Determination, will be
duly and validly issued, fully paid and nonassessable and will be free of any
liens and encumbrances created by the Company and, subject to the accuracy of
the representations of the Investor in this Agreement, will be issued in
compliance with all applicable federal and state securities laws.
4. REPRESENTATIONS AND WARRANTIES OF INVESTOR. Investor hereby
represents and warrants to the Company on the date hereof, and agrees with
the Company (unless otherwise specified as provided in the paragraphs below),
as follows:
a. Investor understands that no United States federal or
state agency has passed on, reviewed or made any recommendation or
endorsement of the Preferred Shares or the Conversion Stock.
b. Investor has full power and authority to enter into this
Agreement, the Voting Trust Agreement and the Amendment, and such Agreements
constitute its valid and legally binding obligation, enforceable in
accordance with their terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies.
c. This Agreement is made with Investor in reliance upon
Investor's representation to the Company, which by Investor's execution of
this Agreement Investor hereby confirms, that the Preferred Shares to be
received by Investor and the Conversion Stock issuable upon conversion
thereof (collectively, the "Securities") will be acquired for investment for
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that Investor has no present
intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, Investor further
represents that Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to
such person or to any third person, with respect to any of the Securities.
d. Investor is an investor in securities of companies in the
development stage and acknowledges that it can bear the economic risk of its
investment, and has
4
<PAGE>
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Preferred
Shares. Investor also represents it has not been organized for the purpose
of acquiring the Preferred Shares.
e. Investor is an "accredited investor" within the meaning
of SEC Rule 501(a) of Regulation D, as presently in effect.
f. Investor understands that the Preferred Shares are being
offered and sold in reliance on a transactional exemption from the
registration requirements of Federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Investor
set forth herein in order to determine the applicability of such exemptions
and the suitability of the Investor to acquire the Preferred Shares.
g. Investor understands that the Securities it is purchasing
are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a transaction
not involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act, only in certain limited circumstances. In this connection,
Investor represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
h. Without in any way limiting the representations set forth
above, Investor further agrees not to make any disposition of all or any
portion of the Securities unless and until the transferee has agreed in
writing for the benefit of the Company to be bound by the terms of this
Agreement provided and to the extent such terms are then applicable, and:
(1) There is then in effect a Registration Statement
under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such Registration Statement; or
(2) (i) Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii)
if reasonably requested by the Company, Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company
that such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in circumstances
that require a determination of an entity's status as an "affiliate".
i. It is understood that the certificates evidencing the
Securities will bear the following legends:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
5
<PAGE>
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST
AGREEMENT, DATED AS OF MARCH__, 1998, A COPY OF WHICH IS AVAILABLE FROM THE
COMPANY AND ANY SUCCESSOR THERETO."
j. The execution, delivery and performance of this
Agreement, the Voting Trust Agreement and the Amendment, and the consummation
by Investor of the transactions contemplated hereby and thereby do not and
will not (i) result in a violation of Investor's charter documents or bylaws
or (ii) conflict with any material agreement, indenture or instrument to
which Investor is a party, or (iii) result in a violation of any order,
judgment or decree of any court or governmental agency applicable to Investor
or, to the Investor's knowledge, of any law, rule, or regulation. Except as
may be required under the HSR Act, Investor is not required to obtain any
consent or authorization of any governmental agency in order for it to
perform its obligations under this Agreement, under the Voting Trust
Agreement or under the Amendment.
5. COVENANTS.
a. The Company covenants and agrees with Investor as follows:
(1) For so long as any of the Preferred Shares are
outstanding, and in any case for a period of 40 calendar days thereafter, the
Company will cause its Common Stock to continue to be registered under
Sections 12(b) or 12(g) of the Exchange Act, will comply in all respects with
its reporting and filing obligations under said act, and will not take any
action or file any document (whether or not permitted by the Act or the
Exchange Act or the rules thereunder) to terminate or suspend its reporting
and filing obligations under said acts, except as permitted herein. For so
long as any of the Preferred Shares are outstanding, and in any case for a
period of 40 calendar days thereafter, the Company will use its best efforts
to continue the listing or trading of its Common Stock on Nasdaq National
Market ("Nasdaq") or on a national securities exchange (as defined in the
Exchange Act) and will comply in all respects with the Company's reporting,
filing and other obligations under the bylaws or rules of the National
Association of Securities Dealers and Nasdaq. Notwithstanding the foregoing,
the provisions of this subsection shall not in any way restrict the Company's
ability to negotiate and consummate the consolidation, reorganization or
merger of the Company with or into any other corporation or corporations or a
sale, conveyance, or other disposition of all or substantially all of the
Company's property or business
(2) The Company will (i) comply with the terms and
conditions of the Preferred Shares as set forth in the Certificate of
Determination and (ii) not amend the Certificate of Determination without
Investor's express written consent.
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(3) For so long as any of the Preferred Shares are
outstanding, the Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for
issuance upon conversion of such Preferred Shares, not less than the maximum
number of shares of Common Stock then so issuable in exchange for all
Preferred Shares that have been issued pursuant to this Agreement and not
previously converted.
b. The Investor covenants and agrees with the Company that
neither Investor nor any of Investor's affiliates nor any person acting on
its or their behalf will at any time offer or sell any Preferred Shares or
any Conversion Stock other than pursuant to registration under the Securities
Act or pursuant to an available exemption therefrom.
c. The covenants contained in this Section 5 shall terminate
upon the consummation of any consolidation, reorganization or merger of the
Company with or into any other corporation or corporations or a sale,
conveyance, or other disposition of all or substantially all of the Company's
property or business.
d. With a view to making available the benefits of certain
rules and regulations of the SEC that may at any time permit the sale of the
restricted securities to the public without registration, the Company agrees
to:
(1) Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times after the effective date of the first registration under the Securities
Act filed by the Company for an offering of its securities to the general
public;
(2) Use its best efforts to then file with the SEC in a
timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(3) So long as Investor owns any Preferred Shares, to
furnish to the Investor upon request, a written statement by the Company as
to its compliance with the reporting requirements of said Rule 144 and of the
Securities Act and of the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as the Investor may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Investor to sell any such securities
without registration.
e. HSR ACT FILING. Each of the Company and Investor shall
(i) promptly make or cause to be made the filings required of such party or
any of its affiliates or subsidiaries under the HSR Act with respect to the
purchase of the Preferred Shares, and (ii) comply at the earliest practicable
date with any request under the HSR Act for additional information,
documents, or other material received by such party or any of its affiliates
or subsidiaries from the Federal Trade Commission or the Department of
Justice or other appropriate regulatory agency in respect of such filings and
the sale of the Preferred Shares. Each of the Company and Investor shall use
commercially reasonable efforts to take such action as may be required to
cause the expiration of the notice periods under the HSR Act with respect
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<PAGE>
to the sale of Preferred Shares as soon as possible after the execution of
this Agreement. The Company agrees to pay any filing fees in connection with
all filings required under the HSR Act in connection with the transaction
contemplated hereby, and agrees to pay reasonable legal counsel fees and
expenses not to exceed $5,000 incurred in connection with such filings.
6. CONDITIONS PRECEDENT TO INVESTOR'S OBLIGATIONS. The
obligations of Investor under subsection 1.a of this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions,
unless expressly waived in writing by the Investor:
a. The representations and warranties of the Company
contained in Section 3 shall be true on and as of the Closing with the same
effect as though such representations and warranties had been made on and as
of the date of such Closing, except for representations and warranties made
as of a particular date, which shall be true and correct as of such date.
b. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
c. The President of the Company shall deliver to Investor at
the Closing a certificate stating that the conditions specified in Sections
6.a and 6.b have been fulfilled and stating that there shall have been no
material adverse change in the business, affairs, operations, properties,
assets or financial condition of the Company since the date of this Agreement.
d. The Company shall have caused the Certificate of
Determination to be filed with the Secretary of State of the State of
California in accordance with the laws thereof.
e. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction
which prohibits the consummation of any of the transactions contemplated by
this Agreement.
f. The applicable waiting period under the HSR Act relating
to the sale of the Preferred Shares shall have expired or been terminated.
g. The Company, the Trustee and Investor shall have entered
into the Voting Trust Agreement.
h. The Company shall have delivered to Investor a
certificate representing the Preferred Shares, duly registered on the books
of the Company in the name of the Investor.
i. Investor shall have received from Gunderson Dettmer
Stough Villeneuve Franklin & Hachigian, LLP, counsel for the Company, an
opinion, dated as of the Closing Date, in substantially the form attached
hereto as EXHIBIT D.
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j. The Company and Glaxo shall have entered into the
Amendment and Investor shall have accepted and agreed to the Amendment.
7. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS. The
obligations of the Company to Investor under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions
by the Investor, unless expressly waived in writing by the Company:
a. The representations and warranties of the Investor
contained in Section 4 shall be true on and as of the Closing with the same
effect as though such representations and warranties had been made on and as
of the date of such Closing, except for representations and warranties made
as of a particular date, which shall be true and correct as of such date.
b. The Investor shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
c. An appropriate officer of Investor shall deliver to the
Company at the Closing a certificate stating that the conditions specified in
Sections 7.a and 7.b have been fulfilled.
d. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction
which prohibits the consummation of any of the transactions contemplated by
this Agreement.
e. The applicable waiting period under the HSR Act relating
to the sale of the Preferred Shares shall have expired or been terminated.
f. The Company, the Trustee and Investor shall have entered
into the Voting Trust Agreement.
g. The Investor shall have delivered the aggregate Purchase
Price for the Preferred Shares.
h. The Company and Glaxo shall have entered into the
Amendment and Investor shall have accepted and agreed to the Amendment.
i. The Company shall have caused the Certificate of
Determination to be filed with the Secretary of State of the State of
California in accordance with the laws thereof.
8. FEES AND EXPENSES. Each of Investor and the Company agrees to
pay its own expenses incident to the performance of its obligations
hereunder, including, but not limited to the fees, expenses and disbursements
of such party's counsel, except as is otherwise expressly provided in this
Agreement.
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9. SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, ETC. The
respective representations, warranties, and agreements made herein by or on
behalf of the parties hereto shall remain in full force and effect for a
period of two years from the Closing Date, regardless of any investigation
made by or on behalf of the other party to this Agreement or any officer,
director or employee of, or person controlling or under common control with,
such party and will survive delivery of and payment for the Preferred Shares
and any Conversion Stock issuable hereunder.
10. TERMINATION.
a. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the
Closing as follows:
(i) by mutual written consent of the Company and the
Investor; or
(ii) by either the Company or the Investor if the Closing
shall not have occurred on or before May 31, 1998 (the "Termination Date");
provided, however, that the right to terminate this Agreement under this
Section 10 shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before the Termination Date; and
provided further, that if a request for additional information is received
from an appropriate regulatory authority pursuant to the HSR Act, such date
shall be extended to the 90th day following acknowledgment by such regulatory
authority that Investor and the Company complied with such request.
b. In the event of termination of this Agreement by either the
Company or Investor as provided in this Section 10, this Agreement shall
forthwith become void and have no effect, without any liability or obligation
on the part of the Company or Investor, other than the provisions of this
Section 10 and Section 12, and except to the extent that such termination
results from the willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
11. NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon delivery by confirmed facsimile or reliable
international courier service or upon personal delivery to the party to be
notified.
12. MISCELLANEOUS.
a. This Agreement may be executed in one or more
counterparts and it is not necessary that signatures of all parties appear on
the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
b. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors and assigns.
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<PAGE>
c. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California without regard
to principles of conflict of laws.
d. The provisions of this Agreement are severable, and if
any clause or provision hereof shall be held invalid, illegal or
unenforceable in whole or in part, such invalidity or unenforceability shall
not in any manner affect any other clause or provision of this Agreement.
e. The headings of the sections of this document have been
inserted for convenience of reference only and shall not be deemed to be a
part of this Agreement.
f. This Agreement (including the terms and conditions of the
Certificate of Determination relating to the Preferred Shares), the Voting
Trust Agreement and the Amendment constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral,
between the parties hereto with respect to the subject matter of this
Agreement and is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder or under the terms of the
term sheets between such parties.
g. The term "affiliate" is used herein as defined in Rule
144(a)(1) under the Securities Act.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, all as of the day and year first above written.
AFFYMETRIX, INC.
By:
---------------------------------
Name:
Title:
GLAXO WELLCOME AMERICAS INC.
By:
---------------------------------
Name:
Title:
<PAGE>
EXHIBIT A OF EXHIBIT 10
See Exhibit 4 of Form 8-K, March 9, 1998
<PAGE>
EXHIBIT B OF EXHIBIT 10
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (the "Agreement") is entered into as of
March __, 1998, by and among Affymetrix, Inc. (the "Company"), Wachovia Bank,
N.A. (the "Trustee"), and Glaxo Wellcome Americas Inc. ("GWA") as holder of
the Company's Series AA Preferred Stock. GWA and transferees of GWA pursuant
to Section 3 hereof are individually each referred to herein as a "Party" and
are collectively referred to herein as the "Parties." The Company's Board of
Directors is referred to hereto as the "Board."
RECITALS:
WHEREAS, on the date hereof, GWA purchased 1,634,522 shares of the
Company's Series AA Preferred Stock pursuant to that certain Series AA
Preferred Stock Purchase Agreement between the Company and GWA ("Securities
Purchase Agreement"); and
WHEREAS, in order to induce the Company to sell shares of Preferred
Stock to GWA, GWA has agreed to be bound by the terms of this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and
certain other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:
1. VOTING TRUST CERTIFICATES.
(a) Upon execution of this Agreement, GWA shall deliver to
the Trustee all certificates held by GWA representing the Shares (as defined
herein), and the Trustee shall issue and deliver to GWA, a voting trust
certificate in substantially the form attached hereto as SCHEDULE I (a
"Voting Trust Certificate"), for the number of Shares owned by GWA and
transferred to the Trustee. The Company shall cause such Shares to be
transferred to the Trustee on the Company's books. Any Shares acquired by
GWA after the date hereof shall be issued to the Trustee, who shall, within
five (5) business days (as defined in the Securities Purchase Agreement),
issue and deliver to GWA, a Voting Trust Certificate for the number of
additional Shares so acquired by GWA. The Trustee shall have no
responsibility for Shares not delivered to it.
(b) The Trustee shall hold the Shares in trust subject to
the terms of this Agreement. The Trustee shall distribute all dividends and
other distributions to GWA or GWA's successors (other than dividends or other
distributions payable in Shares which shall not be distributed but shall
remain subject to the terms of this Agreement) in proportion to their
respective interests as represented by the Voting Trust Certificates.
(c) All Voting Trust Certificates will be registered in the
trust system maintained by the Trustee for that purpose (the "Trust
Register"). The Trustee may treat the registered holder of each Voting Trust
Certificate as the absolute owner and holder of the Shares
<PAGE>
evidenced thereby and of all of the other rights and interests represented
thereby. All transfers of Shares will be recorded by the Trustee in the
Trust Register.
(d) If a Voting Trust Certificate is lost, stolen, mutilated
or destroyed, the Trustee will issue a duplicate Voting Trust Certificate
upon receipt by the Trustee of evidence satisfactory to the Trustee and the
Company of the loss, theft, mutilation or destruction, and upon receipt of a
bond, undertaking or other indemnity reasonably satisfactory to the Trustee
and the Company. The Trustee will also keep correct records of account of
all business transactions with respect to the Voting Trust, which records,
including the Trust Register, may be inspected by any Party and such Party's
agents or personal representatives at any time during normal business hours.
(e) In the event that during the term of this Agreement, a
Beneficial Owner elects to convert a portion of such Beneficial Owner's
Shares into Common Stock, such Beneficial Owner shall deliver to the Trustee,
(i) a notice containing the identity of the Beneficial Owner and the number
of Shares to be converted into Common Stock (the "Conversion Shares"), and
(ii) the original Voting Trust Certificate(s) representing the Conversion
Shares. Upon the Trustee's receipt of such notice and the appropriate Voting
Trust Certificate(s), the Trustee shall, as soon as practicable thereafter,
(i) deliver the Conversion Shares to the Company (or its designated transfer
agent) and (ii) issue and deliver to such Beneficial Owner a Voting Trust
Certificate representing the balance of the shares of Series AA Preferred
Stock not to be converted into Common Stock, if any, represented by the
Voting Trust Certificate(s) delivered by the Beneficial Owner to the Trustee
pursuant to this Section 1(e). Upon Trustee's delivery of the Conversion
Shares to the Company (or its designated transfer agent), the Trustee shall
be fully acquitted and discharged with respect to such Conversion Shares.
After the Conversion Shares have been delivered to the Company pursuant to
this Section, the conversion of such shares shall be governed by and pursuant
to the terms and provisions of the Certificate of Determination of Series AA
Preferred Stock of the Company (the "Certificate of Determination").
(f) In the event that during the term of this Agreement, any
Shares of a Beneficial Owner are subject to redemption pursuant to Section
3(a) of the Certificate of Determination, the Company shall deliver the
Corporation Redemption Notice (as defined in the Certificate of
Determination) to the Trustee and to each Person set forth in Section 22
hereof at least twenty (20) but not more than thirty (30) days prior to the
Corporation Redemption Date (as defined in the Certificate of Determination).
At least ten (10) days prior to the Corporation Redemption Date, each
Beneficial Owner shall deliver to the Trustee the original Voting Trust
Certificate(s) representing the Shares Beneficially Owned by such Person
along with written instructions to the Trustee to either (i) convert the
Shares to be redeemed under Section 1(e) of this Agreement or (ii) to
surrender such Shares for redemption. The Trustee shall, (i) at least three
(3) days prior to the Corporation Redemption Date, deliver the certificate(s)
representing the Shares to be redeemed as set forth in the Corporation
Redemption Notice (and which have not previously been converted) to the
Company (or its designated transfer agent) and (ii) as soon as practicable
thereafter, issue and deliver to such Beneficial Owner a Voting Trust
Certificate representing the balance of the Shares not to be redeemed, if
any, represented by the Voting Trust Certificate(s) delivered by the
Beneficial Owner to the Trustee pursuant to this
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<PAGE>
Section 1(f). Upon the Trustee's receipt of the Early Redemption Price or
Late Redemption Price (as such terms are defined in the Certificate of
Determination), as the case may be, payable with respect to the Shares
redeemed, the Trustee shall, as soon as practicable thereafter, deliver the
Early Redemption Price or Late Redemption Price, as the case may be, payable
with respect to the Shares redeemed to the Beneficial Owners such that each
Beneficial Owner receives that portion of the Early Redemption Price or Late
Redemption Price paid by the Company, as the case may be, equal to the
proportion of Shares Beneficially Owned by such Beneficial Owner to the total
number of Shares subject to this Agreement. Upon Trustee's delivery of the
Early Redemption Price or Late Redemption Price, as the case may be, payable
with respect to such Shares to the appropriate Beneficial Owner, the Trustee
shall be fully acquitted and discharged with respect to such redeemed Shares.
(g) In the event that during the term of this Agreement,
Beneficial Owners holding at least a majority of the then outstanding Shares
elect to have some or all of such Beneficial Owners' Shares redeemed pursuant
to the provisions of Section 3(b) of the Certificate of Determination, such
Beneficial Owners shall deliver to the Trustee and the Company a notice
containing the identity of the Beneficial Owners, the percentage of the
Shares to be redeemed (the "Redemption Shares") and the date on which the
redemption is requested to occur. The Company agrees that such notice shall
constitute notice from the holders of the Shares under Section 3(b)(i) of the
Certificate of Determination. The Company shall deliver the Shareholder
Redemption Notice (as defined in the Certificate of Determination) to the
Trustee and to each Person set forth in Section 22 hereof at least twenty
(20) but not more than thirty (30) days prior to the Shareholder Redemption
Date (as defined in the Certificate of Determination). At least ten (10) days
prior to the Shareholder Redemption Date, each Beneficial Owner shall deliver
to the Trustee the original Voting Trust Certificate(s) representing the
Shares Beneficially Owned by such Person along with written instructions to
the Trustee to either (i) convert the Shares to be redeemed under Section
1(e) of this Agreement or (ii) to surrender such Shares for redemption. The
Trustee shall, (i) at least three (3) days prior to the Shareholder
Redemption Date, deliver the certificate(s) representing the Redemption
Shares as set forth in the Shareholder Redemption Notice (and which have not
previously been converted) to the Company (or its designated transfer agent)
and (ii) as soon as practicable thereafter, issue and deliver to such
Beneficial Owner a Voting Trust Certificate representing the balance of the
Shares not to be redeemed, if any, represented by the Voting Trust
Certificate(s) delivered by the Beneficial Owner to the Trustee pursuant to
this Section 1(g). Upon the Trustee's receipt of the Series AA Redemption
Price (as defined in the Certificate of Determination) payable with respect
to such Redemption Shares, the Trustee shall, as soon as practicable
thereafter, deliver the Series AA Redemption Price payable with respect to
such Redemption Shares to the appropriate Beneficial Owner. Upon Trustee's
delivery of the Series AA Redemption Price payable with respect to such
Redemption Shares to the appropriate Beneficial Owner, the Trustee shall be
fully acquitted and discharged with respect to such Redemption Shares.
2. TRUSTEE'S POWERS AND DUTIES. (a) During the term of this
Agreement, the Trustee shall have the exclusive right to vote all Shares
Beneficially Owned (as defined herein) by a Party on all matters as to which
such Party is entitled to vote at a meeting of the shareholders of the
Company, or otherwise, or to which such Party is entitled to express consent
3
<PAGE>
or dissent to corporate action in writing without a meeting. The Trustee
shall give each Party not less than five (5) business days prior written
notice of any such vote or right to express consent or dissent. The Trustee
shall exercise such voting rights, solely as follows:
(i) With respect to any consolidation, reorganization
or merger of the Company with or into any other corporation or corporations
or a sale, conveyance, or other disposition of all or substantially all of
the Company's property or business (each a "Business Combination") or any
other transaction or proposal that requires the majority vote of each
outstanding class of capital stock voting as separate classes and in each
case would not have an Adverse Effect on the Shares (as defined below), the
Trustee shall vote the Shares at a regular or special meeting of shareholders
(or by written consent) proportionately in accordance with the votes cast by
all holders of the Company's Common Stock for and against such transaction or
proposal. If the transaction or proposal would have an Adverse Effect on the
Shares, the Trustee shall vote the Shares in accordance with Section 2(a)(ii)
below.
(ii) For all other votes, consents or dissents by
holders of Shares and for votes that would have an Adverse Effect on the
Shares, the Trustee shall vote the Shares as follows:
(A) as directed in writing by the Beneficial Owner
of such Shares;
(B) if not so directed in writing, proportionately
in accordance with the votes cast by such Beneficial Owner (or its
affiliates) with respect to other shares of the Company's stock owned by such
Beneficial Owner (or its affiliates); or
(C) if not so directed in writing and if such
Beneficial Owner does not own or vote any other shares of the Company's stock
on such matter, the Trustee shall not vote such shares and such shares shall
not be counted for the purpose of determining whether a quorum is present or
any percentage of shares of the Company's capital stock is achieved.
(b) For purposes of Section 2(a), "Adverse Effect on the
Shares" shall mean:
(i) any Business Combination in which the Beneficial
Owners of Shares would not receive as consideration for such Shares (A) cash
or securities with a fair market value equal to or greater than the then
applicable Series AA Liquidation Preference (as defined in the Certificate of
Determination of Series AA Preferred Stock) with respect to such Shares, and
(B) if the form of such consideration is other than cash, publicly-traded
equity securities of securities convertible into publicly-traded equity
securities, securities having rights, preferences, privileges or restrictions
at least equivalent to those of the Shares; or
(ii) any other proposal or transaction that would:
4
<PAGE>
(A) Increase or decrease the aggregate number of
authorized shares of the Series AA Preferred Stock, other than an increase as
provided in either subdivision (b) of Section 405 or subdivision (c) of
Section 902 of the California Corporation Code;
(B) Effect an exchange, reclassification, or
cancellation of all or part of the shares of Series AA Preferred Stock,
including a reverse stock split but excluding a stock split;
(C) Effect an exchange, or create a right of
exchange, of all or part of the shares of another class of capital stock into
shares of the Series AA Preferred Stock;
(D) Change the rights, preferences, privileges or
restrictions of the Shares, other than as a result of the creation of a new
series of Preferred Stock;
(E) Create a new class of shares having rights,
preferences or privileges prior to the Shares, or increase the rights,
preferences or privileges or the number of authorized shares of any class
having rights, preferences or privileges prior to the Shares;
(F) Reclassify the Shares into series having
different rights, preferences, privileges or restrictions, or authorize the
Board to do so; or
(G) Cancel or otherwise affect dividends on the
Shares which have accrued but have not been paid.
(c) Except as expressly granted under Section 2(a)(i) above
with respect to the voting rights enumerated therein, the Trustee shall have
no rights with respect to the Shares. Without limiting the preceding
sentence, the parties acknowledge that the Trustee shall have no authority to
sell, encumber or otherwise dispose of any Shares. The Trustee shall have no
voting or other rights with respect to any shares of capital stock
Beneficially Owned as of the date hereof by any Party other than the Shares.
3. TRANSFER. The provisions of this Agreement shall be binding
upon the successors in interest to any of the Shares. The Company shall not
permit the transfer of any of the Shares on their books or issue new
certificates representing the Shares or any new Voting Trust Certificates
unless and until the person to whom such units are to be transferred shall
have executed a written agreement, substantially in the form of this
Agreement, pursuant to which such person becomes a party to this Agreement.
Nothing in the foregoing sentence shall, however, invalidate any succession
in ownership occurring by operation of law, and any successor by operation of
law shall be bound by this Agreement as fully and completely as if the
successor were a party to this Agreement.
4. NO WITHDRAWAL. No Party may withdraw from this Agreement
prior to termination of this Agreement pursuant to Section 7 hereof.
5
<PAGE>
5. REPLACEMENT OR REMOVAL OF TRUSTEE. In the event of the
Trustee's dissolution, resignation, removal or inability to act, the Parties
shall select a successor or Trustee mutually acceptable to the Company and
the holders of a majority of the Shares Beneficially Owned then outstanding.
Any Trustee may be removed by the affirmative vote of a majority of the
Shares then outstanding or the Company. Notwithstanding any change in the
Trustee, the certificates for Shares standing in the name of the Trustee may
be endorsed and transferred to any successor Trustee without the further
action of any Party or predecessor Trustee with the same effect as if
endorsed and transferred by the Trustee who has ceased to act.
6. TRUSTEE'S LIABILITY AND INDEMNITY. The Trustee shall not be
liable for any error of judgment or mistake of fact or law, or for any act or
omission undertaken in good faith in connection with the Trustee's powers and
duties under this Agreement, except for the Trustee's own willful misconduct
or gross negligence. The Trustee is authorized and empowered to construe
this Agreement and its reasonable construction made in good faith shall be
conclusive and binding upon the Company and the Parties. The Trustee shall
not be liable for acting on any legal advice or on any notice, request or
instruction or other document believed by the Trustee to be genuine and to
have been signed by the proper Party or Parties. The Company shall indemnify
the Trustee for, and hold the Trustee harmless against, any expenses, claims,
losses, damages or liabilities, including without limitation attorneys' fees,
incurred by the Trustee and arising out of or in connection with the
administration of this trust and its rights and duties hereunder, except to
the extent that a court of competent jurisdiction determines that the Trustee
is not entitled to such indemnification because the action giving rise to
such indemnification was the result of willful misconduct or gross negligence
by the Trustee. This indemnity shall survive the termination of this
Agreement.
7. TERM. This Agreement shall terminate and be of no further
force or effect on the earlier of (a) the closing of the acquisition of the
Company by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or
consolidation) that results in the transfer of fifty percent (50%) or more of
the outstanding voting power of the Company or a sale of all or substantially
all of the assets of the Company, (b) such time as no Shares are outstanding,
or (c) ten (10) years from the date hereof.
At any time within two (2) years prior to the time of expiration of this
Agreement pursuant to Section 7(c), the Company and the Parties may, by
written agreement and with the written consent of the Trustee, extend the
duration of this Agreement for an additional period not exceeding ten (10)
years from the expiration date of this Agreement as originally fixed or as
last extended as provided in this paragraph.
As soon as practicable after the termination of this Agreement, the
Trustee shall deliver to each Party share certificates or securities
representing the number of Shares or other securities in respect of which
Voting Trust Certificates registered in the name of such Party are then
outstanding, upon the surrender of such Voting Trust Certificates properly
endorsed and upon payment by the persons entitled to receive such share
certificates or other securities of a sum sufficient to cover any tax or
governmental charge in respect of the transfer or delivery of such
certificates. If any Party cannot be located or fails or refuses to
surrender Voting Trust
6
<PAGE>
Certificates in exchange for Shares or other securities as aforesaid, the
Trustee shall deliver said Shares or other securities to the Company or to
any bank or trust company in California for the benefit of the Person or
Persons entitled thereto. Upon any such delivery, the Trustee shall be fully
acquitted and discharged with respect to said Shares or other securities.
8. COVENANTS OF THE COMPANY. The Company agrees to use its best
efforts to ensure that the rights granted hereunder are effective and that
the Parties hereto enjoy the benefits thereof. The Company will not, by any
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be performed hereunder by the Company, but will at all times
in good faith assist in the carrying out of all of the provisions of this
Agreement and in the taking of all such actions as may be necessary,
appropriate or reasonably requested by the holders of a majority of the
outstanding Shares in order to protect the rights of the Parties hereunder
against impairment.
9. DEFINED TERMS. As used in this Agreement, the following terms
have the respective meanings set forth below:
BENEFICIAL OWNER: shall have the meaning set forth in Rule
13d-3(a) and (b) of the Rules and Regulations to the Securities Exchange Act
of 1934, as amended; and Beneficially Owned shall have a correlative meaning.
PERSON: shall mean an individual, partnership, corporation, trust,
limited liability company or unincorporated organization, and a government or
agency or political subdivision thereof.
SHARES: shall consist of all shares of Series AA Preferred Stock
issued to GWA pursuant to the Securities Purchase Agreement or thereafter
obtained by a Party.
10. REMEDIES. The Company and the Parties agree and acknowledge
that money damages may not be an adequate remedy for breach of the provisions
of this Agreement and that the Company and any Party shall be entitled, in
its sole discretion, to apply to any court of competent jurisdiction for
specific performance, injunctive relief or such other equitable remedy or
remedies as the court may in its discretion order to enforce or prevent any
violations of the provisions of this Agreement, in addition to its remedies
at law. In respect of any such equitable remedy so sought, the Company and
the Parties hereby waive the requirement of the posting of any bond or the
necessity to show irreparable injury on the part of the Person seeking such
relief.
11. NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon delivery by confirmed facsimile or reliable
international courier service or upon personal delivery to the party to be
notified.
12. MODIFICATION, AMENDMENT, WAIVER. Any term hereof may be
amended and the observance of any term hereof may be waived (either generally
or in a particular instance and either retroactively or prospectively) only
with the written consent of the holders of a
7
<PAGE>
majority of the then outstanding voting Shares Beneficially Owned by the
Party or Parties for whose benefit such term has been included and the
Company; provided that, the Trustee must consent in writing to any amendment
or modification that changes the rights, obligations and/or liability of the
Trustee under this Agreement. Any amendment or waiver so effected shall be
binding upon the Parties hereto. The failure of the Trustee, the Company or
any Party at any time to enforce any of the provisions of this Agreement
shall in no way be construed as a waiver of such provisions and shall not
affect the rights of the Trustee, the Company or any Party thereafter to
enforce the provisions of this Agreement in accordance with its terms.
13. COMPLETE AGREEMENT. This document, the Voting Trust
Certificates, the Securities Purchase Agreement and the Amended and Restated
Articles of Incorporation (including the Certificate of Determination
thereto) of the Company embody the complete agreement and understanding
between and among the Parties hereto with respect to the subject matter
hereof, and supersede and preempt any prior understandings, agreements or
representations by or among the parties hereto, written or oral, which may
have related to the subject matter hereof.
14. SUCCESSORS AND ASSIGNS. This Agreement will bind and inure to
the benefit of and be enforceable by the Parties and their respective
permitted transferees, successors and assigns.
15. LEGENDS.
(a) In addition to legends required by the Securities
Purchase Agreement, each certificate evidencing Shares shall bear a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST AGREEMENT, DATED
ON OR ABOUT APRIL 1998, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY
AND ANY SUCCESSOR THERETO.
(b) Each Voting Trust Certificate evidencing Shares shall
bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL TO THE HOLDER HEREOF (WHICH COUNSEL SHALL BE
REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT
REQUIRED.
8
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST AGREEMENT, DATED
AS OF MARCH __, 1998, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY AND
ANY SUCCESSOR THERETO.
16. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken
together will constitute one and the same Agreement.
17. APPLICABLE LAW. All questions concerning this Agreement will
be governed by and interpreted in accordance with the internal laws of the
State of California, without regard to internal law concerning choice or
conflict of law. Any disputes arising hereunder shall be resolved before the
appropriate state or federal courts in the State of California, and the
Parties hereto hereby consent to the personal jurisdiction of such courts in
respect of such disputes.
18. SEVERABILITY. If any one or more of the provisions of this
Agreement, as applied to the Trustee, the Company or any Party or any
circumstance, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be unenforceable as to duration,
scope, activity or subject, such provisions shall be construed by limiting
and reducing it so as to make such provision enforceable to the extent
compatible with the then existing applicable law.
19. TRUSTEE'S EXPENSES. The Trustee shall be reimbursed by the
Company for its initial and annual fees pursuant to the fee letter dated as
of March 5, 1998, and all reasonable out-of-pocket expenses (including its
reasonable attorneys' fees) incurred pursuant to this Agreement.
20. NATURE OF RELATIONSHIP. The Trust created by this Agreement
is not intended to be, shall not be deemed to be and shall not be treated as
a general partnership, limited partnership, joint venture, corporation, joint
stock company or association. The relationship of the Parties to the Trustee
shall be solely that of beneficiaries of the Trust created by this Agreement,
and their rights and obligations shall be limited to those set forth in this
Agreement.
21. INVESTMENT REPRESENTATIONS. In acquiring Voting Trust
Certificates hereunder, each Party acknowledges and represents that such
Party has had an opportunity to discuss the business of the Company with the
officers and directors of the Company and has received satisfactory answers
in response to such inquiries. Such Party further acknowledges that the
Voting Trust Certificates are highly speculative and involve a high degree of
risk and that the Voting Trust Certificates have not been registered under
the Securities Act of 1933, as amended (the "Act") and may not be sold or
otherwise disposed of except pursuant to an exemption from the Act. Such
Party represents and warrants to the Trustee and the Company
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<PAGE>
that such Party is acquiring the Voting Trust Certificate for such Party's
own account for investment and not with a view to or for sale in connection
with any distribution of said Voting Trust Certificates or with any present
intention of distributing or selling said Voting Trust Certificates, and such
Party does not presently have reason to anticipate any change in
circumstances or any particular occasion or event that would cause it to sell
said Voting Trust Certificate.
22. NOTICES. All notices, demands and other communications made
hereunder shall be in writing and shall be given either by personal delivery,
by nationally recognized overnight courier (with charges prepaid) or by
facsimile (with telephone confirmation), and shall be deemed to have been
given or made when personally delivered, the day following the date deposited
with such overnight courier service or when transmitted to telecopy machine
and confirmed by telephone, addressed to the respective parties at the
following addresses (or such other address for a party as shall be specified
by like notice):
If to the Company:
Affymetrix, Inc.
3380 Central Expressway
Santa Clara, California 95051
Attention: Edward Hurwitz, Chief Financial Officer
Telephone: 408-731-5000
Facsimile: 408-481-0422
With a copy (which shall not constitute notice) to:
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, California 94025
Attention: Carla S. Newell
Telephone: 650-463-5470
Facsimile: 650-321-2800
If to the Beneficial Owner:
Glaxo Wellcome Inc.
Five Moore Drive
Research Triangle Park, North Carolina 27709
Attention: General Counsel
Telephone: 919-483-2505
Facsimile: 919-483-0265
If to the Trustee:
Wachovia Bank, N.A.
100 Main Street
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Winston-Salem, North Carolina 27102
Attention: John N. Smith, III, Executive Services Department
Telephone: 336-770-6984
Facsimile: 336-770-4059
23. INSPECTION. A duplicate of this Agreement and any extension
hereof shall be filed with the Trustee and shall be open to inspection by any
shareholder of the Company, any holder of a Voting Trust Certificate or the
agent of either, upon the same terms as the record of shareholders of the
Company is open to inspection.
11
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
COMPANY:
AFFYMETRIX, INC.
By:
-------------------------------
Print Name:
-----------------------
Title:
----------------------------
Address: 3380 Central Expressway
Santa Clara, CA 95051
TRUSTEE:
WACHOVIA BANK, N.A.
By:
-------------------------------
Print Name:
-----------------------
Title:
----------------------------
Address: 100 Main Street
Winston-Salem, NC 27102
GWA:
GLAXO WELLCOME AMERICAS INC.
By:
-------------------------------
Print Name:
-----------------------
Title:
----------------------------
Address: 499 Park Avenue
New York, NY 10022
<PAGE>
SCHEDULE I
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL TO THE HOLDER HEREOF (WHICH COUNSEL SHALL BE
REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST AGREEMENT, DATED
AS OF MARCH __, 1998, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY AND
ANY SUCCESSOR THERETO.
This certifies that Glaxo Wellcome Americas Inc. has deposited
or has caused to be deposited 1,634,522 shares of the Series AA Preferred
Stock of Affymetrix, Inc., a California corporation (the "Company"), under a
Voting Trust Agreement, dated as of March __, 1998 (the "Voting Trust
Agreement"), among the Company, Wachovia Bank, N.A. (the "Trustee"), and the
Parties named in the Voting Trust Agreement. The Trustee shall possess and
be entitled to the exclusive right to vote such shares upon the terms and
subject to the conditions stated in the Voting Trust Agreement.
This Voting Trust Certificate shall be transferable only on
the records of the Trustee upon surrender hereof by the registered holder in
person or by attorney duly authorized and, until so transferred, the Trustee
may treat the registered holder as the owner of this Voting Trust Certificate
for all purposes whatsoever, unaffected by any notice to the contrary. As a
condition precedent to the making of any transfer of this Voting Trust
Certificate, the Trustee may require the payment of a sum sufficient to cover
the amount of any taxes or other governmental charges incident thereto.
This Voting Trust Certificate is issued pursuant to, and the
rights of the holder hereof are subject to and limited by the terms and
conditions of, the Voting Trust Agreement. The holder of this Voting Trust
Certificate, by the acceptance hereof, assents to and agrees to be bound by
all the terms and conditions of the Voting Trust Agreement. Copies of the
Voting Trust Agreement are on file at the principal office of the Company and
at the office of the Trustee.
Certificates for the number of shares in respect of which this
Voting Trust Certificate was issued, or the net proceeds in cash or property
of said number of shares at the
<PAGE>
time of surrender hereof, all as provided in the Voting Trust Agreement,
shall be deliverable hereunder upon the termination of the Voting Trust
Agreement.
Dated: ____________, 199_
WACHOVIA BANK, N.A.,
as Trustee
By:
-------------------------------------
Its:
------------------------------------
<PAGE>
EXHIBIT C OF EXHIBIT 10
AMENDMENT TO GOVERNANCE AGREEMENT
THIS AMENDMENT TO GOVERNANCE AGREEMENT ("Amendment") is
entered into as of March __, 1998, by and between Affymetrix, Inc. (the
"Company") and Glaxo Wellcome PLC ("Glaxo Wellcome"). Capitalized terms not
otherwise defined in this Amendment have the meaning given them in that
certain Governance Agreement (the "Governance Agreement") dated as of July 6,
1995, by and between Affymetrix, Inc. and Glaxo Wellcome.
RECITALS
A. The Company and Glaxo Wellcome constitute all of the
parties to the Governance Agreement and desire to enter into this Amendment.
B. The Company and Glaxo Wellcome Americas Inc. ("GWA"), a
wholly owned subsidiary of Glaxo Wellcome, are entering into that certain
Series AA Preferred Stock Purchase Agreement ("Purchase Agreement") of even
date herewith pursuant to which GWA is purchasing shares of the Company's
Series AA Preferred Stock.
C. In order to induce the Company to enter into the Purchase
Agreement and to induce GWA to invest funds in the Company pursuant to the
Purchase Agreement, the Company and Glaxo Wellcome desire to make the
amendments described herein to the Governance Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants described below, the Company and Glaxo Wellcome hereby agree as
follows:
1. Paragraph 1 of the Governance Agreement shall be amended and
restated to read in full as follows:
"So long as GLAXO WELLCOME or any of its subsidiaries,
including, but not limited to, Glaxo Wellcome Americas Inc.,
(collectively, "GW") together own, or are part of a group that owns,
(a) a majority of the outstanding AFFYMETRIX voting shares, GW (or such
group) will have the right to designate five out of nine AFFYMETRIX
directors, (b) less than a majority but greater than 35% of the
outstanding AFFYMETRIX voting shares, GW (or such group) will have the
right to designate four out of nine AFFYMETRIX directors, (c) less than
a 35% but greater than 25% of the outstanding AFFMETRIX voting shares,
GW (or such group) will have the right to designate three out of nine
AFFYMETRIX directors, (d) less than 25% but more than 15% of the
outstanding AFFYMETRIX voting shares, GW (or such group) will have the
right to designate two out of nine AFFYMETRIX directors and (e) less
than 15% but more than 5% of the outstanding AFFYMETRIX voting shares,
GW (or such group) will have the right to designate one out of nine
AFFYMETRIX directors, in each case such designations to be included as
part of the management slate to be recommended to the shareholders
subsequent to 1995. For purposes of determining the percentage of
outstanding voting
<PAGE>
shares held by GW (or such group), shares of Series AA Preferred Stock
held by GW shall not be counted; PROVIDED HOWEVER, that upon conversion
of the shares of Series AA Preferred Stock owned by GW into shares of
Common Stock, such shares of Common Stock shall be counted for purposes
of determining the percentage of outstanding voting shares held by GW
(or such group). All discretionary proxies will be voted in favor of
such nominees. GW (or such group) will otherwise vote its shares, or
give its proxy to vote its shares, for the other nominees on the slate
of directors recommended to the shareholders. The parties agree to take
appropriate action, if necessary, to comply with the requirements of the
California Corporations Code to make this provision valid and
enforceable, including without limitation, to enter into a voting trust
agreement."
2. The last sentence of paragraph 6.2(a) of the Governance
Agreement is hereby amended and restated to read in its entirety as follows:
"'Registrable Securities' shall mean all Common Stock of the Company
issued or issuable upon conversion of the Company's Series 1 Subordinated
Convertible Preferred Stock, Series 2 Convertible Preferred Stock and
Series AA Preferred Stock, including Common Stock issued pursuant to stock
splits, stock dividends and similar distributions with respect to such
shares."
3. The terms and conditions of this Amendment and the
Governance Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.
4. This Amendment may be executed in two or more
counterparts, each which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
5. This Amendment shall be governed by and construed under
the laws of the State of California as applied to agreements entered into
solely between residents of and to be performed entirely within such state.
6. The Governance Agreement and this Amendment constitute
the entire agreement between the parties hereto pertaining to the subject
matter thereof and hereof.
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Amendment to Governance Agreement as of the day and year first above written.
AFFYMETRIX, INC. GLAXO WELLCOME PLC
By: By:
------------------------------ ------------------------------
Title: Title:
--------------------------- --------------------------
AGREED TO AND ACCEPTED BY:
GLAXO WELLCOME AMERICAS INC.
By:
------------------------------
Title:
---------------------------
3
<PAGE>
EXHIBIT 99
TEXT OF PRESS RELEASE DATED MARCH 10, 1998
FOR IMMEDIATE RELEASE
Affymetrix Announces Definitive Agreement to Sell $50 Million of Series AA
Preferred Stock
March 10, 1998 8:00 AM EST
SANTA CLARA, Calif., March 10 /PRNewswire/ -- Affymetrix, Inc., (Nasdaq:
AFFX) announced today that it has entered into a definitive agreement with
Glaxo Wellcome Americas, Inc., to sell 1,634,522 shares of Series AA
Preferred Stock for an aggregate purchase price of $50 million. The
transaction, which is subject to customary closing conditions including
regulatory approval, is expected to close in approximately 30 days. The
Series AA Preferred Stock will be convertible into Affymetrix Common Stock at
approximately $40 per share. Until such time as the Series AA Preferred
Shares are converted into Common Stock, Affymetrix will pay a 6 1/2% dividend
on such Shares.
The Company intends to use the proceeds from the sale of the Series AA
Preferred Shares for capital expenditures (manufacturing scale-up and
construction of a new manufacturing facility, expansion of research and
development facilities), research and development, expansion of sales and
marketing, working capital and other general corporate purposes.
The Series AA Preferred Shares and the Common Stock underlying the Series AA
Preferred Shares have not been registered under the Securities Act of 1933.
Accordingly, the Series AA Preferred Shares and the underlying common stock
may not be offered or sold in the United States, except pursuant to an
applicable exemption from the registration requirements of the Securities
Act.
This press release shall not constitute an offer to sell or the solicitation
of an offer to buy the Series AA Preferred Shares. This press release is
being issued pursuant to and in accordance with rule 135c under the
Securities Act. SOURCE Affymetrix, Inc.
