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Exhibit 10.3  

 
 

SEPARATION AGREEMENT AND FULL RELEASE OF ALL CLAIMS    
    

        THIS SEPARATION AGREEMENT AND FULL RELEASE OF ALL CLAIMS (hereinafter the "Agreement") is entered into by and among FIRST HORIZON PHARMACEUTICAL CORPORATION (the
"Company") and CHRISTOPHER OFFEN ("Employee"). 

WITNESSETH  

        A.    The
Company and Employee are parties to that certain Employment Agreement (the "Employment Agreement") dated as of February 12, 2003, and that certain
Employee/Independent Contractor Confidentiality and Non-Solicitation Agreement (the "Confidentiality Agreement") dated February 7, 2003. 

        B.    Employee
has resigned as an officer of the Company and from related offices and positions with affiliates as set forth in the letter of resignation attached hereto as
Exhibit A for reference. 

        C.    Employee
and the Company are terminating their employment relationship effective March 31, 2003, and desire to settle fully and finally all differences between
them that may arise out of or relate to Employee's employment with the Company and all other claims Employee has or may have through the date of execution of this Agreement. 

        NOW,
THEREFORE, in consideration of the recitals, the mutual agreements contained herein and other good and valuable consideration, the receipt, adequacy and sufficiency of which is
hereby
acknowledged, the parties to this Agreement hereby agree, promise and covenant as to each of the following: 

        1.     Capacity
to Execute. 

        Each
of the parties represents and warrants that he or it is legally viable and competent to enter into this Agreement, is relying on independent judgment and the advice of legal counsel
and has not been influenced, pressured or coerced to any extent whatsoever in making this Agreement by any representations or statements made by the Company and/or any person or persons representing
the Company, and that the individuals executing this Agreement on his or its behalf are authorized to do so. Each of the parties further represents and warrants that he or it has not sold, assigned,
transferred, conveyed or otherwise disposed of all or any part of the claims released hereunder, whether known or unknown. 

        2.     Specific
Consideration Provided to Employee. 

        In
exchange for the covenants of Employee hereunder and other good and valuable consideration, and in addition to the benefits to Employee set forth in the Employment Agreement
(including those benefits set forth in Section 8(e) of the Employment Agreement which shall be payable to Employee even though Employee resigned) which shall remain in full force and effect
subject to the terms and conditions of the Employment Agreement and this Agreement, Employee shall receive the following forms of compensation as severance from the Company: 

        (a)   Provided
Employee shall not have breached any of the covenants contained in this Agreement, the Employment Agreement or the Confidentiality Agreement, Employee shall
receive, within five (5) days after the Effective Date (as defined in Section 10(e) below) of this Agreement but not before April 30, 2003, the sum of $2,000.00 less all legally
required deductions and withholdings. 

        (b)   The
benefits set forth in Section 8(e)(iii) of the Employment Agreement which provide for twelve months of COBRA coverage for Employee shall in addition
include such benefits for those of Employee's dependents who are currently included in such coverage subject to COBRA to the extent such benefits otherwise are in effect for Employee under the
Employment Agreement, 

 

understanding
however that Employee is responsible for complying with all terms and conditions of any employee benefit plan. 

        (c)   Provided
Employee shall not have breached any of the covenants contained in this Agreement, Employee shall have the option (to the extent it is lawful for and within the
ability of the Company to grant such option) exercisable until March 31, 2003 to purchase from the lessor the Employee's existing Company vehicle subject to and in accordance with the terms and
provisions of the lease of such vehicle. Employee understands that Employee is responsible for complying with all terms and conditions of the vehicle lease for exercising such option and that the
Company makes no representation or warranty whatsoever relative to the exerciseability of such option or the condition of or title to the Employee's existing Company vehicle. 

        (d)   Provided
Employee shall not have breached any of the covenants contained in this Agreement, Employee shall have the option exercisable until March 31, 2003 to
purchase from the Company any business equipment previously provided by the Company for the exclusive use of the Employee and which is owned by the Company at a price equal to the fair market value of
such equipment as determined by the Company at its sole discretion. 

        The
severance obligations set forth in paragraphs 2(a), 2(b), 2(c) and 2(d) herein shall constitute the total payment and severance obligations under this Agreement, which represent
payments and obligations that Employee would not otherwise be entitled to receive from the Company. Accordingly, Employee understands and warrants that no amount other than as set forth in this
Section 2 (which includes amounts set forth in the Employment Agreement) is or shall be due or claimed to be due from the Company and/or from any other person or entity released in
paragraph 3 below with respect to any claim or claims released in paragraph 3 below, including, but not limited to, any and all claims for attorneys' fees and the costs of litigation
that he may have under any federal, state or local law, common law or in equity. 

        3.     Mutual
Release of Claims. 

        (a)   In
consideration of the payment provided for in paragraph 2 above and other good and valuable consideration, the receipt, adequacy, and sufficiency of which is
hereby acknowledged, Employee and his heirs, executors, administrators, agents, assigns, receivers, attorneys, servants, legal representatives, predecessors and successors in interest, regardless of
form, trustees in bankruptcy or otherwise, wards, and any other representative or entity acting on his or their behalf, pursuant to, or by virtue of the rights of any of them, do hereby now and
forever unconditionally release, discharge, acquit and hold harmless the Company and any parent, subsidiary or related companies, and any and all of their employees, agents, administrators, assigns,
receivers, attorneys, servants, legal representatives, affiliates, insurers, predecessors and successors in interest, regardless of form, trustees in bankruptcy or otherwise, insurance benefit plans,
and any other representative or entity acting on its or their behalf (collectively, the "Released Parties"), from any and all claims, rights, demands, actions, suits, damages, losses, expenses,
liabilities, indebtedness, and causes of action, of whatever kind or nature that existed from the beginning of time through the date of execution of this Agreement, regardless of whether known or
unknown, and regardless of whether asserted by Employee to date, including, but not limited to, all claims for or relating to assault, battery, negligence, negligent hiring, negligent retention,
negligent supervision, negligent training, negligent or intentional infliction of emotional distress, false imprisonment, defamation (whether libel or slander), personal injury, bodily injury, bad
faith, pain and suffering, medical expenses, wage and hour, lost income and earnings (including, but not limited to, back pay, front pay and any other form of present or future income, benefits and/or
earnings), equitable reinstatement, breach of any express or implied contract, breach of the covenant of good faith and fair dealing, workers' compensation, wrongful termination, wrongful demotion,
wrongful failure to promote, wrongful deprivation of a career opportunity, discrimination (including disparate treatment and disparate impact), hostile work environment, quid
pro quo sexual 

2

 

harassment,
retaliation, any request to submit to a drug or polygraph test, and/or whistleblowing, whether said claim(s) are brought pursuant to Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, 42 U.S.C. § 1981, the Employee Retirement Income Security Act, the Equal Pay Act, the Pregnancy Discrimination Act, the Fair Labor Standards Act, the Age Discrimination
in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act or any other constitutional, federal, regulatory, state or local law, or under the common law or in equity. 

        Employee
further understands and warrants that this Agreement shall operate as a fully binding and complete resolution of all claims as to the parties to this Agreement and all parties
represented by or claiming through such parties, and that he shall not be able to seek any monies for any claim, whether known or unknown, against any of the persons or entities released hereunder
other than as provided in paragraphs 2 and 6 of this Agreement. 

        (b)   The
Company does hereby now and forever unconditionally release, discharge, acquit and hold harmless Employee from any and all claims, rights, demands, actions, suits,
damages, losses, expenses, liabilities, indebtedness, and causes of actions, of whatever kind or nature that existed from the beginning of time through the date of execution of this Agreement,
regardless of whether known or unknown, and regardless of whether asserted by the Company to date, except for any fraudulent acts or omissions of Employee. 

        4.     Covenant
Not-to-Sue. 

        Employee
covenants and agrees not to file or initiate a lawsuit against any of the Released Parties in regard to any claims, demands, causes of action, suits, damages, losses and
expenses, arising from acts or omissions of the Company occurring on or before the date of execution of this Agreement, and Employee will ask no other person or entity to initiate such a lawsuit on
his behalf. If Employee breaches this covenant and agreement, Employee must immediately repay and refund to the Company all payments he received pursuant to paragraphs 2(a) and 2(b) above, and
Employee shall also indemnify and hold harmless the Company, any of the Released Parties, and any of their officers, owners, directors, employees and agents from any and all costs incurred by any and
all of them, including their reasonable attorneys' fees, in defending against any such lawsuit. 

        5.     No
Proceedings Initiated. 

        Employee
represents and warrants that neither he nor anyone acting on his behalf has filed or initiated any charge or claim against the Company in any administrative or judicial
proceeding. 

        6.     Amendment
of Employment Agreement; Covenants of Employee. 

        (a)   The
Company and Employee hereby amend the Employment Agreement to provide that the first $44,250 of compensation for consulting services which Employee may perform shall
not offset against any remaining Salary Continuance (as defined in the Employment Agreement) and Section 8(g) of the Employment Agreement shall be so modified. In addition, Section 8(b)
of the Employment Agreement is modified to delete the phrase "nor require more than twenty (20) hours of Executive's time per week" from such subsection. Employee acknowledges and agrees that
Employee will provide at least 80 hours of consulting services to the Company between the date of this Agreement and April 30, 2003. 

        (b)   Employee
ratifies and confirms each and every covenant and agreement of Employee contained in the Employment Agreement (as modified hereby) and the Confidentiality
Agreement. Employee acknowledges that certain of such covenants and agreement survive the termination of employment of Employee with the Company and remain in full force and effect in accordance with
their terms (as modified hereby). 

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        (c)   Employee
agrees that he shall not disparage the Company or otherwise seek to reduce the goodwill of the Company. The Company agrees not to disparage Employee or to act
in any way to diminish Employee's reputation. 

        (d)   For
the avoidance of doubt, the Company and the Employee acknowledge and agree that the following shall remain in full force and effect in accordance with their
respective terms: 

	(i)
	Any
stock options issued by the Company to Employee, as such stock options may have been modified or affected by the terms and provisions of the Employment Agreement and
this Agreement; and

	(ii)
	The
Indemnification Agreement dated as of January 22, 2001 between Employee and the Company. 

        7.     No
Voluntary Assistance. 

        Employee
hereby covenants and agrees that he will not voluntarily assist, support, or cooperate with, directly or indirectly, any entity or person alleging or pursuing any claim,
administrative charge, or cause of action against the Company, including without limitation, by providing testimony or other information, audio or video recordings, or documents, except under
compulsion of law. If compelled to testify, nothing contained herein shall in any way inhibit or interfere with Employee providing completely truthful testimony. Nor shall anything herein prevent
Employee's full cooperation with any investigation or other proceeding by any federal, state or local governmental agency. 

        8.     No
Admission of Liability. 

        The
parties agree and acknowledge that this Agreement is a full and complete compromise of the matters released herein between the parties hereto; that neither the releases nor the
negotiations for this Agreement and the settlement embodied herein, including all statements or communications made to date, shall be considered admissions by them. 

        9.     Confidentiality
Agreement. 

        (a)   Subject
to the limited exceptions set forth in sub-paragraphs 9(b) and 9(c) below, the parties to this Agreement, individually and collectively, agree that
all of the terms, conditions, and provisions of this Agreement, including the amount of consideration paid by the Company are to remain strictly and absolutely confidential. The parties, individually
and collectively, therefore specifically agree not to disclose any such terms, conditions, provisions, allegations or information to any third party or entity for any purpose other than as provided in
sub-paragraphs 9(b) and 9(c) below. 

        (b)   If
a subpoena is served upon Employee requiring the disclosure of any such confidential information protected by paragraph 9(a), Employee agrees to notify the
Company immediately upon service of the subpoena and before responding to the subpoena. 

        (c)   The
parties, individually or collectively, may disclose information protected by paragraph 9(a) to the following persons and under the following circumstances.
Both parties may disclose information protected by paragraph 9(a) to their accountants, financial advisors, tax advisors and attorneys, and the Internal Revenue Service. The Employee may
disclose the information published in paragraph 9(a), to his spouse, sons and daughters. The Company also may disclose the information protected by paragraph 9(a) to its management
employees and members of its Board of Directors, to any governmental regulatory agency or in any required filings with any regulatory agency, or as required under any state or federal law. In the
event of any such disclosure to any accountant, financial advisor, tax advisor, attorney, or to Employee's spouse, sons or daughter, the party who discloses such information shall make such persons
aware of the confidentiality provisions of this Agreement. 

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        10.   OWBPA
Rights. 

        (a)   Employee
is advised to seek legal counsel regarding the terms of this Agreement. Employee acknowledges that he has either sought legal counsel or has consciously decided
not to seek legal counsel, contrary to the Company's advice, regarding the terms and effect of this Agreement. 

        (b)   Employee
acknowledges that this Agreement releases only those claims which exist as of the date of Employee's execution of this Agreement. 

        (c)   Employee
acknowledges that (i) he may take a period of forty-five (45) days from the date of receipt of this Agreement (March 5, 2003)
within which to consider and sign this Agreement, and (ii) he has received the disclosure set forth on Exhibit B attached hereto and incorporated herein by
reference. 

        (d)   Employee
acknowledges that he will have seven (7) days from the date of signing this Agreement to revoke the Agreement in writing in its entirety ("Revocation
Period"). Employee acknowledges that the Agreement will not become effective or enforceable until the Revocation Period has expired. In the event the Employee chooses to revoke this Agreement, within
the Revocation Period, he will: 

        1.     Revoke
the entire Agreement in a signed writing, delivered to the following person on or before the seventh (7th) day after he executed the Agreement: 

Mr. Darrell
Borne

First Horizon Pharmaceutical Corporation

6195 Shiloh Road

Alpharetta, Georgia 30005 

        2.     Forfeit
all severance and other consideration from the Company that are contemplated by this Agreement; and 

        3.     Return
the full amount of consideration received, if any, to the Company along with the signed writing. 

        (e)   The
Effective Date of this Agreement shall be the eighth (8th) day after the date Employee signs the Agreement, assuming the Employee has not revoked the
Agreement in writing within the Revocation Period. 

        (f)    Employee
expressly acknowledges that the payments and the other consideration that he is receiving under this Agreement constitute material consideration for his
execution of this Agreement, and represent valuable consideration to which he would not otherwise be entitled. 

        11.   Jurisdiction/Choice
of Forum. 

        The
laws of the State of Georgia shall govern this Agreement, unless pre-empted by any applicable federal law controlling the review of this Agreement. The parties further
stipulate and agree that any litigation regarding this Agreement shall be brought in the state or federal courts for the Northern District of Georgia and neither party will object to personal
jurisdiction or venue in any of these courts. 

        12.   Advice
of Attorneys. 

        The
parties acknowledge that they have fully read, understood and unconditionally accepted this Agreement after consulting with their attorneys or having the opportunity to consult with
an attorney, and acknowledge that this Agreement is mutual and binding upon all parties hereto regardless of the extent of damages allegedly suffered by any of the parties hereto. 

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        13.   Counterparts.

        This
Agreement may be signed in counterpart originals with the same force and effect as if signed in a single original document. 

        14.   Cooperation
of the Parties. 

        The
parties to this Agreement agree to cooperate fully and to execute any and all supplementary documents and to take all additional actions that may be necessary or appropriate to give
full force and effect to the basic terms and intent of this Agreement and the settlement embodied herein. Employee further agrees to fully cooperate with the Company in any and all investigations,
inquiries or litigation whether in any judicial, administrative, or public, quasi-public or private forum, in which the Company is involved, whether or not Employee is a defendant in such
investigations, inquiries, proceedings or litigation. Employee shall provide truthful and accurate testimony, background information, and other support and cooperation as the Company may reasonably
request. The Company will compensate Employee for all travel expenses, attorney's fees, and preparation expenses and lost wages associated with pursuit of actions necessary to comply with
Section 14. 

        15.   Modification
in Writing Only. 

        Neither
this Agreement nor any provision of this Agreement may be modified or waived in any way except by an agreement in writing signed by each of the parties hereto consenting to such
modification or waiver. 

        16.   Construction
of this Agreement. 

        The
parties agree that they each have participated in the drafting of this Agreement, and that, as a result, this Agreement shall not be construed in favor of or against any party
hereto. 

        17.   No
False Statements or Misrepresentation. 

        The
Company and Employee hereby warrants and represents that they have not made any false statements or misrepresentations in connection with this Agreement. 

        18.   Headings
and Captions. 

        The
headings and captions used in the Agreement are for convenience of reference only, and shall in no way define, limit, expand, or otherwise affect the meaning or construction of any
provision of this Agreement. 

        19.   Entire
Agreement. 

        This
Agreement contains the entire agreement of the parties concerning the subject matter hereof, and is intended and shall be construed as an integrated Agreement. Each party
understands, acknowledges and hereby represents and warrants that this Agreement supersedes any and all prior or contemporaneous understandings, agreements, representations and/or promises, whether
oral or written, which are not expressly set forth herein or expressly referred to in this Agreement, and no understanding, agreement, representation, warranty, promise or inducement has been made
concerning the subject matter of this Agreement other than as set forth in this Agreement, and that each party enters into this Agreement without any reliance whatsoever upon any understanding,
agreement, representation, warranty or promise not set forth herein. 

        This
Agreement shall be binding upon and inure to the benefit of the parties hereto, jointly and severally, and the past, present and future heirs, executors, administrators, agents,
employees, servants, attorneys, affiliated persons and entities, predecessors and successors in interest and assigns, regardless of form, trustees in bankruptcy or otherwise, and any other
representative or entity acting on behalf of, pursuant to, or by virtue of the rights of each. 

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        IN
WITNESS WHEREOF, the undersigned have executed this Separation Agreement and Full Release of All Claims. 

	 	 	EMPLOYEE:
	

 	
 	

/s/  CHRISTOPHER OFFEN      
 Christopher Offen
	

 	
 	

Date:	
 	

03/05/03

	

 	
 	
FIRST HORIZON PHARMACEUTICAL CORPORATION:
	

 	
 	

By:	
 	

/s/  DARRELL BORNE      

	 	 	Its:	 	CFO

	 	 	Date:	 	3/5/03

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Exhibit A  

March 5,
2003 

Chief
Executive Officer and

Board of Directors

First Horizon Pharmaceutical Corporation

6195 Shiloh Road

Alpharetta, Georgia 30005 

Gentlemen: 

        I
am resigning effective immediately from all of my offices with First Horizon Pharmaceutical Corporation and any subsidiary of First Horizon Pharmaceutical Corporation and as trustee,
administrator or otherwise for any employee plan of First Horizon Pharmaceutical Corporation. 

	 	 	Sincerely,
	

 	
 	

/s/  CHRISTOPHER OFFEN      

8

 
Exhibit B  

        First Horizon Pharmaceutical Corporation ("the Company") is experiencing a change in management wherein certain individuals, as set forth below, have been offered
the opportunity to submit their voluntary resignations in exchange for good and valuable consideration to which they would not otherwise have been entitled. The only eligibility factor for this
voluntary resignation program is the job position held by each individual listed below. This voluntary resignation program will remain open for a period of 45 days from the presentation of the
Separation Agreement and Full Release of all Claims to each individual named below as being 40 years of age or older, unless extended by the Company in its sole and absolute discretion. 

        The
individuals eligible for this voluntary resignation program are as follows: 

        1.     Bala
Venkataraman, Chief Operating Officer, age 35. No other person is employed in this job class so as to be eligible for this voluntary resignation program; and 

        2.     Christopher
Offen, Chief Commercial Officer, age 54. No other person is employed in this job class so as to be eligible for this voluntary resignation program. 

        No
other person employed by the Company is in any way eligible for this voluntary resignation program at this time. 

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SEPARATION AGREEMENT AND FULL RELEASE OF ALL CLAIMSEXHIBIT 10.55

 

PROMISSORY NOTE

SECURED BY DEED OF TRUST

 

(HOUSING RELOCATION LOAN

PURSUANT TO AN EXTENSION

OF CREDIT MADE ON JUNE 21, 2002)

 

	
  $400,000.00

  	
  Santa Clara, California

  
	
   

  	
  January 8, 2003

  

 

1.             FOR VALUE RECEIVED, the
undersigned, Trevor J. Nicholls (“Maker”), hereby promises to pay to
Affymetrix, Inc., a Delaware corporation (“Holder”), at 3380 Central
Expressway, Santa Clara, California, or such other place as Holder may from
time to time designate by written notice to Maker, the sum of Four Hundred
Thousand Dollars ($400,000.00) together with interest on the unpaid principal
hereof from the date hereof at the rate equal to the IRS imputed interest rate
per annum, on the terms and conditions specified herein.  Subject to paragraphs 2 and 4 below, the
entire principal amount under this Promissory Note (this “Note”), together with
any accrued and unpaid interest, shall be due and payable on January 7,
2008.  The Maker hereby certifies that
such sum shall be used for the exclusive purpose of the purchase of his new
principal residence in connection with his transfer to a new principal place of
work.

 

2.             This Note may be prepaid in whole
or in part at any time without penalty. 
All amounts payable hereunder shall be payable in lawful money of the
United States of America.

 

3.             This Note is secured by the Deed of
Trust made by Maker for the benefit of Holder encumbering certain real property
commonly known as 230 Wooded View Drive, Los Gatos, California 95032.  Such Deed of Trust will be subordinate only
to (i) a deed of trust (the “First Deed of Trust”) made by Maker, as trustor,
for the benefit of an institutional lender that loaned money to Maker for the
purpose of financing the original purchase price of the Property (or any
refinancing of the principal amount of same); or (ii) a deed of trust made by
Maker, as trustor, for the benefit of lender that loaned money to Maker in the
form of a home improvement or home equity loan not to exceed $250,000 (the
“Junior Deeds of Trust”).

 

4.             Notwithstanding anything to the
contrary contained in this Note, the entire principal balance of this Note,
together with accrued but unpaid interest, shall become immediately due and
payable, upon the occurrence of any of the following:

 

a.             The 90th day following
the date of any sale, conveyance, assignment, alienation or any other form of
transfer of the Property, or any part thereof or interest therein, whether
voluntary or involuntary, other than the First Deed of Trust or the Junior
Deeds of Trust;

 

b.             Default in the performance or
observance of any of the material covenants, conditions, provisions or
agreements contained in this Note or in the Deed of Trust;

 

c.             Default in the performance or
observance of any of the material covenants, conditions, provisions or
agreements contained in any deed of trust (“Senior Deed of Trust”) which is or
becomes a lien against the Property senior to the lien of the Deed of Trust, or
any promissory note or obligation secured by such Senior Deed of Trust;

 

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d.             The 90th day following
the termination of Maker’s employment with the Company by the Company or Maker
for any reason; or

 

e.             Default in the performance or
observance of any of the material, covenants, conditions, provisions, or
agreements contained in that certain Note of even date herewith in the amount
of $600,000.00.

 

The failure of
Holder to exercise any of the rights created by law or by this Note, or to
promptly enforce any of the provisions hereof, shall not constitute a waiver of
the right to exercise any such rights or to enforce any such provisions.  The waiver by Holder or any breach of or
default under any term, covenant or condition herein or in any other agreement
referred to above shall not be deemed to be a waiver of any subsequent breach
of or default under the same or any other such term, covenant or condition.

 

Holder may
elect to forgive up to one hundred percent (100%) of the interest accrued
during each calendar year during the term of this Note based on Maker’s
achievement of annual performance criteria as determined by Maker in its sole
and absolute discretion.

 

5.             Maker hereby waives demand and
presentment for payment, notice of non-payment and dishonor, protest and notice
of protest, and the benefit of any homestead exemption which may by law be
waived as to this obligation.

 

6.             This Note may not be assigned,
transferred, hypothecated, sold or otherwise disposed of by the Maker without
the prior written consent of Holder, which consent may be withheld in its sole
discretion.  All of the rights and/or
duties of Holder hereunder shall be freely assignable.

 

7.             In the event Maker defaults on
payment of this Note and such default continues for a period of sixty (60) days
following written notice from Holder, Holder may, at its election, subsequent
thereto charge a default rate of interest equal to 10% per annum.  In the event this Note is placed in the
hands of an attorney for collection, Holder shall be entitled to recover its
reasonable attorneys’ fees and costs incurred in collection of this Note.

 

8.             This Note shall be construed in
accordance with and governed by the laws of the State of California.

 

	
   

  	
  MAKER:

  
	
   

  	
   

  
	
   

  	
  /s/ Trevor
  J. Nicholls

  
	
   

  	
  Name:

  	
  Trevor J.
  Nicholls

  
	
   

  	
  Address:

  	
  230 Wooded
  View Drive

  
	
   

  	
   

  	
  Los Gatos,
  CA 95032

  

 

2

 

SPOUSAL CONSENT

 

The
undersigned spouse of Maker hereby approves the terms and conditions of this
Note.  The undersigned hereby agrees to
be irrevocably bound by the terms of the Note and the Amended and Restated Deed
of Trust attached as Exhibit A hereto and further agrees that any community
property interest shall be similarly bound. 
The undersigned hereby appoints the undersigned’s spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights or obligations hereunder.

 

	
   

  	
  SPOUSE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ J.M.
  Nicholls

  
	
   

  	
  Name:  J.M. Nicholls

  

 

 

3

 

	
  RECORDING
  REQUESTED BY

  	
   

  	
  EXHIBIT
  A

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

WHEN
RECORDED MAIL TO:

Affymetrix,
Inc.

3380
Central Expressway

Santa
Clara, CA 95051

Attention:  General Counsel

	
   

  

SPACE ABOVE LINE FOR RECORDER’S USE

 

AMENDED
AND RESTATED

DEED
OF TRUST

THIS
AMENDED AND RESTATED DEED OF TRUST (this “Trust Deed”) is made as of
January 8, 2003, by TREVOR J. NICHOLLS (“Trustor”), in favor of STEWART
TITLE OF CALIFORNIA, INC. (“Trustee”), for the benefit of AFFYMETRIX,
INC., a Delaware corporation (“Beneficiary”), who amend and restate that
certain Deed of Trust dated January 8, 2003 and recorded on January 10,
2003 as Document No. 16742159, Office Records, Santa Clara County, California,
as follows:

Trustor
irrevocably grants, transfers and assigns to Trustee in trust, with power of
sale, that certain property (the “Property”) located in Santa Clara
County, California, more particularly described in Exhibit A attached
hereto, together with the rents, issues and profits thereof; subject, however,
to the right, power and authority hereinafter given to and conferred upon
Trustor to collect and apply such rents, issues and profits, for the purpose of
securing: (i) payment of the aggregate amount of One Million Dollars
($1,000,000.00) with interest thereon according to the terms of those certain
promissory notes (individually a “Note” and collectively, the “Notes”)
of even date herewith made by Trustor, and extensions or renewals thereof; (ii)
the performance of each agreement of Trustor incorporated by reference or
contained herein or reciting it is so secured; and (iii) payment of additional
sums and interest thereon which may hereafter be loaned to Trustor, when
evidenced by a promissory note or notes reciting that they are secured by this
Deed of Trust.

A.            To protect the
security of this Deed of Trust and with respect to the Property, Trustor
agrees:

 

(i)            To keep the Property in good
condition and repair; not to remove or demolish any building thereon; to
complete or restore promptly and in good and workmanlike manner any building
constructed thereon which may be damaged or destroyed and to pay when due all
claims for labor performed and materials furnished therefor; to comply with all
laws affecting the Property or requiring any alterations or improvements to be
made thereon; not to commit or permit waste thereof; not to commit, suffer or
permit any act upon the Property in violation of law; to cultivate, irrigate,
fertilize, fumigate, prune and do all other acts which from the character or
use of the Property may be reasonably necessary, the specific enumerations
herein not excluding the general.

(ii)           To appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary; and to pay all costs and expenses, including 

4

 

the
cost of evidence of title and attorneys’ fees in a reasonable sum, in any
action or proceeding in which Beneficiary may appear, and in any suit brought
by Beneficiary to foreclose this Deed of Trust.

(iii)          To pay (a) at least ten (10) business
days before delinquency, all taxes and assessments affecting the Property,
including assessments on appurtenant water stock; (b) when due, all
encumbrances, charges and liens, with interest, on the Property or any part
thereof, which appear to be prior or superior hereto; and (c) all costs, fees
and expenses of this Deed of Trust.

Should
Trustor fail to make any payment or to do any act as herein provided, then
Beneficiary may, but without obligation to do so and without notice to or
demand upon Trustor and without releasing Trustor from any obligation hereof,
make or do the same in such manner and to such extent as either may deem
necessary to protect the security hereof. 
Beneficiary is hereby authorized (a) to enter upon the Property for such
purposes; (b) to appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary; (c) to pay,
purchase, contest or compromise any encumbrance, charge, or lien which in the
judgment of either appears to be prior or superior hereto; and (d) in
exercising such powers, to pay necessary expenses, employ counsel and pay his
or her reasonable fees.

(iv)          To pay immediately and without demand
all sums so expended by Beneficiary, with interest from date of expenditure at
the amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby, any amount demanded by Beneficiary not to exceed the
maximum allowed by law at the time when said statement is demanded.

B.            It is mutually
agreed:

 

(i)            That any award of damages in
connection with any condemnation for public use of or injury to the Property or
any part thereof is hereby assigned and shall be paid to Beneficiary.

(ii)           That, by accepting payment of any sum
secured hereby after its due date, Beneficiary does not waive its right either
to require prompt payment when due of all other sums so secured or to declare
default for failure to so pay.

(iii)          That, at any time or from time to
time, without liability therefor and without notice, upon written request of
Beneficiary and presentation of this Deed of Trust and the Notes for
endorsement, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, Beneficiary may reconvey any part of
the Property, consent to the making of any map or plat thereof, join in
granting any easement thereon, or join in any extension agreement or any
agreement subordinating the lien or charge hereof.

(iv)          That, upon written request of
Beneficiary stating that all sums secured hereby have been paid, and upon
surrender of this Deed of Trust and the Notes to Trustee for cancellation and
retention or other disposition as Trustee in its sole discretion may choose and
upon payment of its fees, Trustee shall reconvey, without warranty, the
Property then held hereunder.  The
recitals in such reconveyance of any matters or facts shall be conclusive proof
of the truthfulness thereof.  The grantee
in such reconveyance may be described as “the person or persons legally entitled
thereto.”

 

 

5

 

 

(v)           That, as additional security, Trustor
hereby given to and confers upon Beneficiary the right, power and authority,
during the continuance of these trusts to collect the rents, issues and profits
of the Property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance of any
agreement hereunder, to collect and retain such rents, issues and profits as
they become due and payable.  Upon any
such default, Beneficiary may, at any time without notice, either in person, by
agent, or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon and
take possession of the Property or any part thereof, in its own name sue for or
otherwise collect such rents, issues, and profits, including those past due and
unpaid, and apply the same, less costs and expenses of operation and
collection, including reasonable attorneys’ fees, upon any indebtedness secured
hereby, and in such order as Beneficiary may determine.  The entering upon and taking possession of
the Property, the collection of such rents, issues and profits and the
application thereof as aforesaid, shall not cure or waive any default or notice
of default hereunder or invalidate any act done pursuant to such notice.

(vi)          That, upon default by Trustor in
payment of any indebtedness secured hereby or in performance of any agreement
thereunder, Beneficiary may declare all sums secured hereby immediately due and
payable by delivery to Trustee of written declaration of default and demand for
sale and of written notice of default and of election to cause to be sold the
Property, which notice Trustee shall cause to be filed for record.  Beneficiary also shall deposit with Trustee
this Deed of Trust, the Notes and all documents evidencing expenditures secured
hereby.

After
the lapse of such time as may then be required by law following the recordation
of said notice of default, and notice of sale having been given as then
required by law, Trustee, without demand on Trustor, shall sell the Property at
the time and place fixed by it in said notice for sale, either as a whole or in
separate parcels, and in such order as it may determine, at public auction to
the highest bidder for cash in lawful money of the United States, payable at
time of sale.  Trustee may postpone sale
of all or any portion of the Property by public announcement at such time and
place of sale, and from time to time thereafter may postpone such sale by
public announcement at the time fixed by the preceding postponement.  Trustee shall deliver to such purchaser its
deed conveying the property so sold, but without any covenant or warranty, express
or implied.   The recitals in such deed
of any matters of facts shall be conclusive proof of the truthfulness
thereof.   Any person, including Trustor
or Trustee, may purchase at such sale.

After
deducting all costs, fees and expenses of Trustee and of this Deed of Trust,
including cost of evidence of title in connection with sale, Trustee shall
apply (in the following order) the proceeds of sale to the payment of:  all sums expended under the terms hereof, not
then repaid, with accrued interest at the amount allowed by law in effect at
the date hereof, all other sums then secured hereby; and the remainder, if any,
to the person or persons legally entitled thereto.

(vii)         Beneficiary, or any successor in
ownership of any indebtedness secured hereby, may from time to time, by
instrument in writing, substitute a successor or successors to any Trustee
named herein or acting hereunder, which instrument, executed by the Trustee and
duly acknowledged and recorded in the office of the recorder of the county or
counties where the Property is situated, shall be conclusive proof of the
proper substitution of such successor Trustee or Trustees, who shall, without
conveyance from the predecessor trustee, succeed to all its title, estate,
rights, powers and duties.  Said
instrument must contain the name of the original Trustor or

 

6

 

 

Trustee hereunder, the book and page
where this Deed of Trust is recorded and the name and address of the new
Trustee.

 

                                (viii)        That this Deed of Trust applies to,
inures to the benefit of, and binds all parties hereto, their heirs, legatees,
devisees, administrators, executors, successors, and assigns.  The term Beneficiary shall mean the owner and
holder, including pledgees, of the Notes secured hereby, whether or not named
herein.  In this Deed of Trust, whenever
the context so requires, the masculine gender includes the feminine and/or the
neuter, and the singular number includes the plural.

                                (ix)           The Trustee accepts this trust when this
Deed of Trust, duly executed and acknowledged, is made a public record as
provided by law.  Trustee is not
obligated to notify any party hereto of pending sale under any other Deed of
Trust or of any action or proceeding in which Trustor or Trustee shall be a
party unless brought by Trustee.

                                Beneficiary may
charge for a statement regarding the obligation secured hereby, provided the
charge thereof does not exceed the maximum allowed by laws.

                                The undersigned
Trustor, requests that a copy of any notice of default and any notice of sale
hereunder be mailed to it at the address hereinbefore set forth.

C.            Insurance and Damage Claims.  Trustor shall maintain fire and other
insurance on the Property consistent with industry standards.  All proceeds of any claim, demand, award,
settlement or other payment arising or resulting from or otherwise relating to
any such insurance or any loss or destruction of, injury or damage to the
Property (a “Damage Claim”) are hereby assigned and shall be payable and
delivered to Beneficiary (any such proceeds of any Damage Claim being referred
to in this Trust Deed as “Damage Proceeds”). 
Trustor shall take all action reasonably necessary or required by
Beneficiary in order to protect Trustor’s and Beneficiary’s rights and interests
with respect to any Damage Claim, including the commencement of, appearance in
and prosecution of any appropriate action or other proceeding, and Beneficiary
may in its discretion participate in any such action or proceeding at the
expense of Trustor.

 

D.            Transfer.

 

(i)            Trustor agrees that Trustor shall
not directly or indirectly sell, transfer or convey, whether voluntarily,
involuntarily or by operation of law, or suffer or permit the same, all or any
part of the Property subject to this Deed of Trust (each of which actions or
events being herein called a “Transfer”) without Beneficiary’s prior
written consent.

(ii)           If any Transfer occurs without
Beneficiary’s prior written consent, then, at its sole option, Beneficiary may,
by written notice to Trustor, declare all obligations secured by this Deed of
Trust immediately due and payable. 
Trustor shall notify Beneficiary promptly in writing of all Transfers.

E.             Event of
Default.

 

                Each of the
following events constitutes a default by Trustor of its obligations hereunder:

 

 

7

 

 

(i)            The failure by Trustor to perform or
comply with any material obligation, covenant or condition contained in the
Notes or this Deed of Trust;

(ii)           The occurrence of any Transfer
without Trustee’s prior written consent;

(iii)          The occurrence of any event set forth
in Section 4 of either Note; or

(iv)          The occurrence of a default under any
senior lien on the Property.

F.             Subordination.

 

                This Deed of Trust is junior and
subordinate to that certain deed of trust in favor of Bank of America, N.A. in
the amount of  $1,000,000.00 dated
January 8, 2003.

IN
WITNESS WHEREOF, Trustor has executed this Deed of Trust effective as of the
date first set forth above.

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  “Trustor”

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Trevor
  J. Nicholls

  

 

 

8

 

EXHIBIT
A

DESCRIPTION OF PROPERTY

The
land referred to herein is situated in the State of California, County of Santa
Clara, Town of Los Gatos, and is described as follows:

Lot
18, as shown on that certain Map of Tract No. 3907, which Map was filed for
record in the office of the Recorder of the County of Santa Clara, State of
California on March 22, 1965, in Book 192 of Maps, page(s) 25, 26 and 27.

 

9

 

STATE OF CALIFORNIA )

COUNTY OF                        )

                On
                         
, 2000, before me,
                                                  ,
Notary Public, personally appeared
                                                                       ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

                WITNESS my hand and office
seal.

 

__________________________________

Signature of Notary

(SEAL)

 

 

10

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