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Exhibit 10.51    
  

     AFFYMETRIX, INC.

AMENDED AND RESTATED

2000 EQUITY INCENTIVE PLAN  

(AS ADOPTED EFFECTIVE MARCH 9, 2000

AND AMENDED AND RESTATED AS OF

JULY 19, 2001)  

  
 

    TABLE OF CONTENTS    
  

	 
	 	Page

	ARTICLE 1.  INTRODUCTION	 	1
	

ARTICLE 2.  ADMINISTRATION	
 	

1
	 	2.1  Committee Composition	 	1
	 	2.2  Committee Responsibilities	 	1
	 	2.3  Committee for Non-Officer Grants	 	1
	

ARTICLE 3.  SHARES AVAILABLE FOR GRANTS	
 	

1
	 	3.1  Basic Limitation	 	1
	 	3.2  Additional Shares	 	2
	 	3.3  Dividend Equivalents	 	2
	

ARTICLE 4.  ELIGIBILITY	
 	

2
	 	4.1  Incentive Stock Options	 	2
	 	4.2  Other Grants	 	2
	

ARTICLE 5.  OPTIONS	
 	

2
	 	5.1  Stock Option Agreement	 	2
	 	5.2  Number of Shares	 	2
	 	5.3  Exercise Price	 	2
	 	5.4  Exercisability and Term	 	2
	 	5.5  Effect of Change in Control	 	3
	 	5.6  Modification or Assumption of Options	 	3
	 	5.7  Buyout Provisions	 	3
	

ARTICLE 6.  PAYMENT FOR OPTION SHARES	
 	

3
	 	6.1  General Rule	 	3
	 	6.2  Surrender of Stock	 	3
	 	6.3  Exercise/Sale	 	3
	 	6.4  Exercise/Pledge	 	3
	 	6.5  Promissory Note	 	4
	 	6.6  Other Forms of Payment	 	4
	

ARTICLE 7.  STOCK APPRECIATION RIGHTS	
 	

4
	 	7.1  SAR Agreement	 	4
	 	7.2  Number of Shares	 	4
	 	7.3  Exercise Price	 	4
	 	7.4  Exercisability and Term	 	4
	 	7.5  Effect of Change in Control	 	4
	 	7.6  Exercise of SARs	 	4
	 	7.7  Modification or Assumption of SARs	 	5
	

ARTICLE 8.  RESTRICTED SHARES	
 	

5
	 	8.1  Restricted Stock Agreement	 	5
	 	8.2  Payment for Awards	 	5
	 	8.3  Vesting Conditions	 	5
	 	8.4  Voting and Dividend Rights	 	5
	

ARTICLE 9.  STOCK UNITS	
 	

5
	 	9.1  Stock Unit Agreement	 	5
	 	9.2  Payment for Awards	 	5
	 	9.3  Vesting Conditions	 	5
	 	9.4  Voting and Dividend Rights	 	6
	 	9.5  Form and Time of Settlement of Stock Units	 	6

 

	 	9.6  Death of Recipient	 	6
	 	9.7  Creditors' Rights	 	6
	

ARTICLE 10.  PROTECTION AGAINST DILUTION	
 	

6
	 	10.1  Adjustments	 	6
	 	10.2  Dissolution or Liquidation	 	7
	 	10.3  Reorganizations	 	7
	

ARTICLE 11.  DEFERRAL OF AWARDS	
 	

7
	

ARTICLE 12.  AWARDS UNDER OTHER PLANS	
 	

8
	

ARTICLE 13.  PAYMENT OF DIRECTOR'S FEES IN SECURITIES	
 	

8
	 	13.1  Effective Date	 	8
	 	13.2  Elections to Receive NSOs, Restricted Shares or Stock Units	 	8
	 	13.3  Number and Terms of NSOs, Restricted Shares or Stock Units	 	8
	

ARTICLE 14.  LIMITATION ON RIGHTS	
 	

8
	 	14.1  Retention Rights	 	8
	 	14.2  Stockholders' Rights	 	8
	 	14.3  Regulatory Requirements	 	8
	

ARTICLE 15.  WITHHOLDING TAXES	
 	

9
	 	15.1  General	 	9
	 	15.2  Withholding in Shares	 	9
	

ARTICLE 16.  FUTURE OF THE PLAN	
 	

9
	 	16.1  Term of the Plan	 	9
	 	16.2  Amendment or Termination	 	9
	

ARTICLE 17.  LIMITATION ON PAYMENTS	
 	

9
	 	17.1  Scope of Limitation	 	9
	 	17.2  Basic Rule	 	9
	 	17.3  Reduction of Payments	 	9
	 	17.4  Overpayments and Underpayments	 	10
	 	17.5  Related Corporations	 	10
	

ARTICLE 18.  DEFINITIONS	
 	

10
	

ARTICLE 19.  EXECUTION	
 	

13

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AFFYMETRIX, INC.    
  

 
  AMENDED AND RESTATED
  2000 EQUITY INCENTIVE PLAN    
  

 ARTICLE 1. INTRODUCTION.  

    The Plan was adopted by the Board effective March 9, 2000 and amended and restated by the Board effective July 19, 2001. The purpose of the Plan
is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees, Outside Directors and Consultants to focus on critical long-range
objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking Employees, Outside Directors and
Consultants directly to stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares, Stock Units, Options
(which may constitute incentive stock options or nonstatutory stock options) or stock appreciation rights. 

    The
Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware (except for choice-of-law provisions). 

 ARTICLE 2. ADMINISTRATION.  

    2.1  Committee Composition.  The Plan shall be administered by the Committee. The Committee shall consist
exclusively of two or more directors of the Company, who shall be appointed by the Board. In addition, except as otherwise determined by the Board, the composition of the Committee shall satisfy: 

    (a) Such
requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under
Rule 16b-3 (or its successor) under the Exchange Act; and 

    (b) Such
requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under section
162(m)(4)(C) of the Code. 

    2.2  Committee Responsibilities.  The Committee shall (a) select the Employees, Outside Directors
and Consultants who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) interpret the Plan
and (d) make all other decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee's
determinations under the Plan shall be final and binding on all persons. 

    2.3  Committee for Non-Officer Grants.  The Board may also appoint another committee of the Board, which
shall be composed of one or more directors of the Company who need not satisfy the requirements of Section 2.1. Such other committee may administer the Plan with respect to Employees and Consultants
who are not considered officers or directors of the Company under section 16 of the Exchange Act, may grant Awards under the Plan to such Employees and Consultants and may determine all features and
conditions of such Awards. Within the limitations of this Section 2.3, any reference in the Plan to the Committee shall include such secondary committee. 

 ARTICLE 3. SHARES AVAILABLE FOR GRANTS.  

    3.1  Basic Limitation.  Common Shares issued pursuant to the Plan may be authorized but unissued shares
or treasury shares. The aggregate number of Options, SARs, Stock Units and Restricted Shares awarded under the Plan shall not exceed (a) 5,000,000 (as adjusted for the 2-for-1 stock split in
August 2000) plus (b) the additional Common Shares described in Section 3.2. The limitations of this Section 3.1 and Section 3.2 shall be subject to adjustment pursuant to
Article 10. 

 

    3.2  Additional Shares.  If Restricted Shares are forfeited, then such Common Shares shall again become
available for Awards under the Plan. If Stock Units, Options or SARs are forfeited or terminate for any other reason before being exercised, then the corresponding Common Shares shall again become
available for Awards under the Plan. If Stock Units are settled, then only the number of Common Shares (if any) actually issued in settlement of such Stock Units shall reduce the number available
under Section 3.1 and the balance shall again become available for Awards under the Plan. If SARs are exercised, then only the number of Common Shares (if any) actually issued in settlement of such
SARs shall reduce the number available under Section 3.1 and the balance shall again become available for Awards under the Plan. The foregoing notwithstanding, the aggregate number of Common Shares
that may be issued under the Plan upon the exercise of ISOs shall not be increased when Restricted Shares are forfeited or Common Shares are not issued pursuant to Stock Units, Options or SARs. 

    3.3  Dividend Equivalents.  Any dividend equivalents paid or credited under the Plan shall not be applied
against the number of Restricted Shares, Stock Units, Options or SARs available for Awards, whether or not such dividend equivalents are converted into Stock Units. 

 ARTICLE 4. ELIGIBILITY.  

    4.1  Incentive Stock Options.  Only Employees who are common-law employees of the Company, a Parent or a
Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any of its
Parents or Subsidiaries shall not be eligible for the grant of an ISO unless the requirements set forth in section 422(c)(6) of the Code are satisfied. 

    4.2  Other Grants.  Employees, Outside Directors and Consultants shall be eligible for the grant of
Restricted Shares, Stock Units, NSOs or SARs. 

 ARTICLE 5. OPTIONS.  

    5.1  Stock Option Agreement.  Each grant of an Option under the Plan shall be evidenced by a Stock Option
Agreement between the Optionee and the Company. Such Option shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Options may be granted in consideration of a reduction in the Optionee's other compensation. A
Stock Option Agreement may provide that a new Option will be granted automatically to the Optionee when he or she exercises a prior Option and pays the Exercise Price in the form described in Section
6.2. 

    5.2  Number of Shares.  Each Stock Option Agreement shall specify the number of Common Shares subject to
the Option and shall provide for the adjustment of such number in accordance with Article 10. Options granted to any Optionee in a single fiscal year of the Company shall not cover more than
1,000,000 Common Shares. The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 10. 

    5.3  Exercise Price.  Each Stock Option Agreement shall specify the Exercise Price; provided that the
Exercise Price shall in no event be less than 100% of the Fair Market Value of a Common Share on the date of grant. In the case of an NSO, a Stock Option Agreement may specify an Exercise Price that
varies in accordance with a predetermined formula while the NSO is outstanding. 

    5.4  Exercisability and Term.  Each Stock Option Agreement shall specify the date or event when all or
any installment of the Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated exercisability in the 

2

 

event of the Optionee's death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee's service. Options
may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited. 

    5.5  Effect of Change in Control.  The Committee may determine, at the time of granting an Option or
thereafter, that such Option shall become exercisable as to all or part of the Common Shares subject to such Option in the event that a Change in Control occurs with respect to the Company or in the
event that the Optionee is subject to an Involuntary Termination after a Change in Control. However, in the case of an ISO, the acceleration of exercisability shall not occur without the Optionee's
written consent. In addition, acceleration of exercisability may be required under Section 10.3. 

    5.6  Modification or Assumption of Options.  Within the limitations of the Plan, the Committee may
modify, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new options for the
same or a different number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an Option shall, without the consent of the Optionee, alter or impair his or her rights or obligations under such Option. 

    5.7  Buyout Provisions.  The Committee may at any time (a) offer to buy out for a payment in cash
or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and
conditions as the Committee shall establish. 

 ARTICLE 6. PAYMENT FOR OPTION SHARES.  

    6.1  General Rule.  The entire Exercise Price of Common Shares issued upon exercise of Options shall be
payable in cash or cash equivalents at the time when such Common Shares are purchased, except as follows: 

    (a) In
the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock
Option Agreement may specify that payment may be made in any form(s) described in this Article 6. 

    (b) In
the case of an NSO, the Committee may at any time accept payment in any form(s) described in this Article 6. 

    6.2  Surrender of Stock.  To the extent that this Section 6.2 is applicable, all or any part of the
Exercise Price may be paid by surrendering, or attesting to the ownership of, Common Shares that are already owned by the Optionee. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan. The Optionee shall not surrender, or attest to the ownership of, Common Shares in payment of the Exercise Price if such action would cause
the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. 

    6.3  Exercise/Sale.  To the extent that this Section 6.3 is applicable, all or any part of the Exercise
Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of the
Common Shares being purchased under the Plan and to deliver all or part of the sales proceeds to the Company. 

    6.4  Exercise/Pledge.  To the extent that this Section 6.4 is applicable, all or any part of the Exercise
Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to pledge all or part of the Common Shares being purchased under 

3

 

the Plan to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company. 

    6.5  Promissory Note.  To the extent that this Section 6.5 is applicable, all or any part of the Exercise
Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) a full-recourse promissory note. However, the par value of the Common Shares being purchased under the
Plan, if newly issued, shall be paid in cash or cash equivalents. 

    6.6  Other Forms of Payment.  To the extent that this Section 6.6 is applicable, all or any part of the
Exercise Price and any withholding taxes may be paid in any other form that is consistent with applicable laws, regulations and rules. 

 ARTICLE 7. STOCK APPRECIATION RIGHTS.  

    7.1  SAR Agreement.  Each grant of an SAR under the Plan shall be evidenced by an SAR Agreement between
the Optionee and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various
SAR Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction in the Optionee's other compensation. 

    7.2  Number of Shares.  Each SAR Agreement shall specify the number of Common Shares to which the SAR
pertains and shall provide for the adjustment of such number in accordance with Article 10. SARs granted to any Optionee in a single calendar year shall in no event pertain to more than 200,000
Common Shares. The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 10. 

    7.3  Exercise Price.  Each SAR Agreement shall specify the Exercise Price. An SAR Agreement may specify
an Exercise Price that varies in accordance with a predetermined formula while the SAR is outstanding. 

    7.4  Exercisability and Term.  Each SAR Agreement shall specify the date when all or any installment of
the SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR. An SAR Agreement may provide for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee's service. SARs may be awarded in combination with Options,
and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. An SAR may be included in an ISO only at the time of grant but may be included in an NSO
at the time of grant or thereafter. An SAR granted under the Plan may provide that it will be exercisable only in the event of a Change in Control. 

    7.5  Effect of Change in Control.  The Committee may determine, at the time of granting an SAR or
thereafter, that such SAR shall become fully exercisable as to all Common Shares subject to such SAR in the event that the Company is subject to a Change in Control or in the event that the Optionee
is subject to an Involuntary Termination after a Change in Control. In addition, acceleration of exercisability may be required under Section 10.3. 

    7.6  Exercise of SARs.  Upon exercise of an SAR, the Optionee (or any person having the right to exercise
the SAR after his or her death) shall receive from the Company (a) Common Shares, (b) cash or (c) a combination of Common Shares and cash, as the Committee shall determine. The
amount of cash and/or the Fair Market Value of Common Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of
the Common Shares subject to the SARs exceeds the Exercise Price. If, on the date when an SAR expires, the Exercise Price under such SAR is less than the Fair Market Value on such date but any portion
of such SAR has not been exercised or surrendered, then such SAR shall automatically be deemed to be exercised as of such date with respect to such portion. 

4

 

    7.7  Modification or Assumption of SARs.  Within the limitations of the Plan, the Committee may modify,
extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a
different number of shares and at the same or a different exercise price. The foregoing notwithstanding, no modification of an SAR shall, without the consent of the Optionee, alter or impair his or
her rights or obligations under such SAR. 

 ARTICLE 8. RESTRICTED SHARES.  

    8.1  Restricted Stock Agreement.  Each grant of Restricted Shares under the Plan shall be evidenced by a
Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical. 

    8.2  Payment for Awards.  Subject to the following sentence, Restricted Shares may be sold or awarded
under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services and future services. To the
extent that an Award consists of newly issued Restricted Shares, the consideration shall consist exclusively of cash, cash equivalents or past services rendered to the Company (or a Parent or
Subsidiary) or, for the amount in excess of the par value of such newly issued Restricted Shares, full-recourse promissory notes, as the Committee may determine. 

    8.3  Vesting Conditions.  Each Award of Restricted Shares may be subject to vesting as determined by the
Committee. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement may provide for accelerated
vesting in the event of the Participant's death, disability or retirement or other events. The Committee may determine, at the time of granting Restricted Shares or thereafter, that all or part of
such Restricted Shares shall become vested in the event that a Change in Control occurs with respect to the Company or in the event that the Participant is subject to an Involuntary Termination after
a Change in Control. 

    8.4  Voting and Dividend Rights.  The holders of Restricted Shares awarded under the Plan shall have the
same voting, dividend and other rights as the Company's other stockholders. A Restricted Stock Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received
in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid. 

 ARTICLE 9. STOCK UNITS.  

    9.1  Stock Unit Agreement.  Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit
Agreement between the recipient and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.
The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical. Stock Units may be granted in consideration of a reduction in the recipient's other compensation. 

    9.2  Payment for Awards.  To the extent that an Award is granted in the form of Stock Units, no cash
consideration shall be required of the Award recipients. 

    9.3  Vesting Conditions.  Each Award of Stock Units may be subject to vesting as determined by the
Committee. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Agreement. A Stock Unit Agreement may provide for accelerated vesting in the
event of the Participant's death, disability or retirement or other events. The Committee may 

5

 

determine, at the time of granting Stock Units or thereafter, that all or part of such Stock Units shall become vested in the event that the Company is subject to a Change in Control or in the event
that the Participant is subject to an Involuntary Termination after a Change in Control. In addition, acceleration of vesting may be required under Section 10.3. 

    9.4  Voting and Dividend Rights.  The holders of Stock Units shall have no voting rights. Prior to
settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee's discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an
amount equal to all cash dividends paid on one Common Share while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents
may be made in the form of cash, in the form of Common Shares, or in a combination of both. Prior to distribution, any dividend equivalents which are not paid shall be subject to the same conditions
and restrictions as the Stock Units to which they attach. 

    9.5  Form and Time of Settlement of Stock Units.  Settlement of vested Stock Units may be made in the
form of (a) cash, (b) Common Shares or (c) any combination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger or
smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the
average Fair Market Value of Common Shares over a series of trading days. Vested Stock Units may be settled in a lump sum or in installments. The distribution may occur or commence when all vesting
conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date. The amount of a deferred distribution may be increased by an interest factor or by
dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Article 10. 

    9.6  Death of Recipient.  Any Stock Units Award that becomes payable after the recipient's death shall be
distributed to the recipient's beneficiary or beneficiaries. Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient's death. If no beneficiary was designated or if no
designated beneficiary survives the Award recipient, then any Stock Units Award that becomes payable after the recipient's death shall be distributed to the recipient's estate. 

    9.7  Creditors' Rights.  A holder of Stock Units shall have no rights other than those of a general
creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement. 

 ARTICLE 10. PROTECTION AGAINST DILUTION.  

    10.1  Adjustments.  In the event of a subdivision of the outstanding Common Shares, a declaration of a
dividend payable in Common Shares or a combination or consolidation of the outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares, corresponding adjustments
shall automatically be made in each of the following: 

    (a) The
number of Options, SARs, Restricted Shares and Stock Units available for future Awards under Article 3; 

    (b) The
limitations set forth in Sections 5.2 and 7.2; 

    (c) The
number of Common Shares covered by each outstanding Option and SAR; 

    (d) The
Exercise Price under each outstanding Option and SAR; or 

    (e) The
number of Stock Units included in any prior Award which has not yet been settled. 

6

 

    In
the event of a declaration of an extraordinary dividend payable in a form other than Common Shares in an amount that has a material effect on the price of Common Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of the foregoing. Except as provided in
this Article 10, a Participant shall have no rights by reason of any issuance by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of
stock of any class. 

    10.2  Dissolution or Liquidation.  To the extent not previously exercised or settled, Options, SARs and
Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company. 

    10.3  Reorganizations.  In the event that the Company is a party to a merger or other reorganization,
outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement shall provide for (a) the continuation of the outstanding Awards by the Company, if the Company
is a surviving corporation, (b) the assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary, (c) the substitution by the surviving corporation or
its parent or subsidiary of its own awards for the outstanding Awards, (d) full exercisability or vesting and accelerated expiration of the outstanding Awards or (e) settlement of the
full value of the outstanding Awards in cash or cash equivalents followed by cancellation of such Awards. 

 ARTICLE 11. DEFERRAL OF AWARDS.  

    The Committee (in its sole discretion) may permit or require a Participant to: 

    (a) Have
cash that otherwise would be paid to such Participant as a result of the exercise of an SAR or the settlement of Stock Units credited to a deferred
compensation account established for such Participant by the Committee as an entry on the Company's books; 

    (b) Have
Common Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Stock
Units; or 

    (c) Have
Common Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR or the settlement of Stock Units converted
into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company's books. Such amounts shall be determined by reference to the Fair
Market Value of such Common Shares as of the date when they otherwise would have been delivered to such Participant. 

7

 
    A deferred compensation account established under this Article 11 may be credited with interest or other forms of investment return, as determined by the Committee. A
Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of
the Company and shall be subject to the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the
Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established
under this Article 11. 

 ARTICLE 12. AWARDS UNDER OTHER PLANS.  

    The Company may grant awards under other plans or programs. Such awards may be settled in the form of Common Shares issued under this Plan. Such Common Shares
shall be treated for all purposes under the Plan like Common Shares issued in settlement of Stock Units and shall, when issued, reduce the number of Common Shares available under Article 3. 

 ARTICLE 13. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.  

    13.1  Effective Date.  No provision of this Article 13 shall be effective unless and until the
Board has determined to implement such provision. 

    13.2  Elections to Receive NSOs, Restricted Shares or Stock Units.  An Outside Director may elect to
receive his or her annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs, Restricted Shares or Stock Units, or a combination thereof, as determined by the Board. Such
NSOs, Restricted Shares and Stock Units shall be issued under the Plan. 

    13.3  Number and Terms of NSOs, Restricted Shares or Stock Units.  The number of NSOs, Restricted Shares
or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board. The terms
of such NSOs, Restricted Shares or Stock Units shall also be determined by the Board. 

 ARTICLE 14. LIMITATION ON RIGHTS.  

    14.1  Retention Rights.  Neither the Plan nor any Award granted under the Plan shall be deemed to give
any individual a right to remain an Employee, Outside Director or Consultant. The Company and its Parents, Subsidiaries and Affiliates reserve the right to terminate the service of any Employee,
Outside Director or Consultant at any time. 

    14.2  Stockholders' Rights.  A Participant shall have no dividend rights, voting rights or other rights
as a stockholder with respect to any Common Shares covered by his or her Award prior to the time when a stock certificate for such Common Shares is issued or, if applicable, the time when he or she
becomes entitled to receive such Common Shares by filing any required notice of exercise and paying any required Exercise Price. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to such time, except as expressly provided in the Plan. 

    14.3  Regulatory Requirements.  Any other provision of the Plan notwithstanding, the obligation of the
Company to issue Common Shares under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves
the right to restrict, in whole or in part, the delivery of Common Shares pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Common Shares, to
their registration, qualification or listing or to an exemption from registration, qualification or listing. 

8

 

 ARTICLE 15. WITHHOLDING TAXES.  

    15.1  General.  A Participant or his or her successor shall make arrangements satisfactory to the Company
for the satisfaction of any obligations of the Company to withhold income and employment taxes under applicable federal, state, local or foreign law in connection with Awards under the Plan. The
Company shall not be required to issue any Common Shares or make any cash payment under the Plan until such obligations are satisfied. 

    15.2  Withholding in Shares.  The Committee may permit such Participant to satisfy all or part of such
tax withholding obligations by having the Company withhold all or a portion of any Common Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Common Shares
that he or she previously acquired. Such Common Shares shall be valued at their Fair Market Value on the date when they are withheld or surrendered. 

 ARTICLE 16. FUTURE OF THE PLAN.  

    16.1  Term of the Plan.  The Plan, as set forth herein, shall become effective on March 9, 2000.
The Plan shall remain in effect until it is terminated under Section 16.2, except that no ISOs shall be granted on or after the 10th anniversary of the later of (a) the date when the Board
adopted the Plan or (b) the date when the Board adopted the most recent increase in the number of Common Shares available under Article 3 which was approved by the Company's stockholders. 

    16.2  Amendment or Termination.  The Board may, at any time and for any reason, amend or terminate the
Plan. An amendment of the Plan shall be subject to the approval of the Company's stockholders only to the extent required by applicable laws, regulations or rules. No Awards shall be granted under the
Plan after the termination thereof. The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan. 

 ARTICLE 17. LIMITATION ON PAYMENTS.  

    17.1  Scope of Limitation.  This Article 17 shall apply to an Award only if: 

    (a) The
independent auditors most recently selected by the Board (the "Auditors") determine that the after-tax value of such Award to the Participant, taking into
account the effect of all federal, state and local income taxes, employment taxes and excise taxes applicable to the Participant (including the excise tax under section 4999 of the Code), will be
greater after the application of this Article 17 than it was before the application of this Article 17; or 

    (b) The
Committee, at the time of making an Award under the Plan or at any time thereafter, specifies in writing that such Award shall be subject to this
Article 17 (regardless of the after-tax value of such Award to the Participant). 

    If
this Article 17 applies to an Award, it shall supersede any contrary provision of the Plan or of any Award granted under the Plan. 

    17.2  Basic Rule.  In the event that the Auditors determine that any payment or transfer by the Company
under the Plan to or for the benefit of a Participant (a "Payment") would be nondeductible by the Company for federal income tax purposes because of the provisions concerning "excess parachute
payments" in section 280G of the Code, then the aggregate present value of all Payments shall be reduced (but not below zero) to the Reduced Amount. For purposes of this Article 17, the
"Reduced Amount" shall be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by the Company because
of section 280G of the Code. 

    17.3  Reduction of Payments.  If the Auditors determine that any Payment would be nondeductible by the
Company because of section 280G of the Code, then the Company shall promptly 

9

 

give the Participant notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Participant may then elect, in his or her sole discretion, which and how
much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall advise the Company in writing of
his or her election within 10 days of receipt of notice. If no such election is made by the Participant within such 10-day period, then the Company may elect which and how much of the Payments shall
be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall notify the Participant promptly of such election. For purposes
of this Article 17, present value shall be determined in accordance with section 280G(d)(4) of the Code. All determinations made by the Auditors under this Article 17 shall be
binding upon the Company and the Participant and shall be made within 60 days of the date when a Payment becomes payable or transferable. As promptly as practicable following such determination and
the elections hereunder, the Company shall pay or transfer to or for the benefit of the Participant such amounts as are then due to him or her under the Plan and shall promptly pay or transfer to or
for the benefit of the Participant in the future such amounts as become due to him or her under the Plan. 

    17.4  Overpayments and Underpayments.  As a result of uncertainty in the application of section 280G of
the Code at the time of an initial determination by the Auditors hereunder, it is possible that Payments will have been made by the Company which should not have been made (an "Overpayment") or that
additional Payments which will not have been made by the Company could have been made (an "Underpayment"), consistent in each case with the calculation of the Reduced Amount hereunder. In the event
that the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service
against the Company or the Participant which the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment shall be treated for all purposes as
a loan to the Participant which he or she shall repay to the Company, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code; provided, however, that
no amount shall be payable by the Participant to the Company if and to the extent that such payment would not reduce the amount which is subject to taxation under section 4999 of the Code. In the
event that the Auditors determine that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Participant, together with
interest at the applicable federal rate provided in section 7872(f)(2) of the Code. 

    17.5  Related Corporations.  For purposes of this Article 17, the term "Company" shall include
affiliated corporations to the extent determined by the Auditors in accordance with section 280G(d)(5) of the Code. 

 ARTICLE 18. DEFINITIONS.  

    18.1  "Affiliate"  means any entity other than a Subsidiary, if the Company and/or one or more
Subsidiaries own not less than 50% of such entity. 

    18.2  "Award"  means any award of an Option, an SAR, a Restricted Share or a Stock Unit under the Plan. 

    18.3  "Board"  means the Company's Board of Directors, as constituted from time to time. 

    18.4  "Cause"  shall mean (a) the unauthorized use or disclosure of the confidential information
or trade secrets of the Company, which use or disclosure causes material harm to the Company, (b) conviction of, or a plea of "guilty" or "no contest" to, a felony under the laws of the United
States or any State thereof, (c) gross negligence, (d) willful misconduct or (e) a failure to perform assigned duties that continues after the Participant has received written
notice of such failure from the Board. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions that the Company (or the Parent, Subsidiary or Affiliate employing the
Participant) may consider as grounds for the discharge of the Participant without Cause. 

10

 

    18.5  "Change in Control"  shall mean: 

    (a) The
consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders
of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity; 

    (b) The
sale, transfer or other disposition of all or substantially all of the Company's assets; 

    (c) A
change in the composition of the Board, as a result of which fewer than 80% of the incumbent directors are directors who either (i) had been directors of
the Company on the date 24 months prior to the date of the event that may constitute a Change in Control (the "original directors") or (ii) were elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors whose election or
nomination was previously so approved; or 

    (d) Any
transaction as a result of which any person is the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing at least 50% of the total voting power represented by the Company's then outstanding voting securities. For purposes of this Paragraph (d), the term "person"
shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or of a Parent or Subsidiary and (ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their
ownership of the common stock of the Company. 

    A
transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company's securities immediately before such transaction. 

    18.6  "Code"  means the Internal Revenue Code of 1986, as amended. 

    18.7  "Committee"  means a committee of the Board, as described in Article 2. 

    18.8  "Common Share"  means one share of the common stock of the Company. 

    18.9  "Company"  means Affymetrix, Inc., a Delaware corporation. 

    18.10  "Consultant"  means a consultant or adviser who provides bona fide services to the Company, a
Parent, a Subsidiary or an Affiliate as an independent contractor. Service as a Consultant shall be considered employment for all purposes of the Plan, except as provided in Section 4.1. 

    18.11  "Employee"  means a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate. 

    18.12  "Exchange Act"  means the Securities Exchange Act of 1934, as amended. 

    18.13  "Exercise Price,"  in the case of an Option, means the amount for which one Common Share may be
purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. "Exercise Price," in the case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one Common Share in determining the amount payable upon exercise of such SAR. 

11

 

    18.14  "Fair Market Value"  means the market price of Common Shares, determined by the Committee in good
faith on such basis as it deems appropriate. Whenever possible, the determination of Fair Market Value by the Committee shall be based on the prices reported in The Wall Street
Journal. Such determination shall be conclusive and binding on all persons. 

    18.15  "Involuntary Termination"  means the termination of the Participant's service by reason of: 

    (a)  The
involuntary discharge of the Participant by the Company (or the Parent, Subsidiary or Affiliate employing him or her) for reasons other than Cause; or 

    (b)  The
voluntary resignation of the Participant following (i) a material adverse change in his or her title, stature, authority or responsibilities with
the Company (or the Parent, Subsidiary or Affiliate employing him or her), (ii) a material reduction in his or her base salary or (iii) receipt of notice that his or her principal
workplace will be relocated by more than 30 miles. 

    18.16  "ISO"  means an incentive stock option described in section 422(b) of the Code. 

    18.17  "NSO"  means a stock option not described in sections 422 or 423 of the Code. 

    18.18  "Option"  means an ISO or NSO granted under the Plan and entitling the holder to purchase Common
Shares. 

    18.19  "Optionee"  means an individual or estate who holds an Option or SAR. 

    18.20  "Outside Director"  shall mean a member of the Board who is not an Employee. Service as an Outside
Director shall be considered employment for all purposes of the Plan, except as provided in Section 4.1. 

    18.21  "Parent"  means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. 

    18.22  "Participant"  means an individual or estate who holds an Award. 

    18.23  "Plan"  means this Affymetrix, Inc. 2000 Equity Incentive Plan, as amended from time to
time. 

    18.24  "Restricted Share"  means a Common Share awarded under Article 8 of the Plan. 

    18.25  "Restricted Stock Agreement"  means the agreement between the Company and the recipient of a
Restricted Share which contains the terms, conditions and restrictions pertaining to such Restricted Share. 

    18.26  "SAR"  means a stock appreciation right granted under the Plan. 

    18.27  "SAR Agreement"  means the agreement between the Company and an Optionee which contains the terms,
conditions and restrictions pertaining to his or her SAR. 

    18.28  "Stock Option Agreement"  means the agreement between the Company and an Optionee that contains
the terms, conditions and restrictions pertaining to his or her Option. 

    18.29  "Stock Unit"  means a bookkeeping entry representing the equivalent of one Common Share, as
awarded under the Plan. 

    18.30  "Stock Unit Agreement"  means the agreement between the Company and the recipient of a Stock Unit
which contains the terms, conditions and restrictions pertaining to such Stock Unit. 

12

 

    18.31  "Subsidiary"  means any corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of
such date. 

 ARTICLE 19. EXECUTION.  

    To record the amendment and restatement of the Plan by the Board on July 19, 2001, the Company has caused its duly authorized officer to execute this
document in the name of the Company. 

	 	 	AFFYMETRIX, INC.
	

 	
 	

By:	
 	

/s/ STEPHEN P.A. FODOR, PH.D.   
 Name: Stephen P.A. Fodor, Ph.D.

Title:  Chairman and Chief Executive Officer

13

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Exhibit 10.51

TABLE OF CONTENTS

AFFYMETRIX, INC.

AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLANPrepared by MERRILL CORPORATION

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EXHIBIT 4.1  

 
  STOCK PURCHASE AGREEMENT    
  

    STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of May 31, 2001, by and between
StockerYale, Inc., a Massachusetts corporation (the "Company"), and the investor named on the signature page hereof (the
"Investor"). 

 
 

W I T N E S S E T H    
  

    WHEREAS, the Company is offering for sale 1,700,000 shares (the "Shares") of its Common Stock (as defined
below) at the price of $10.25 per share of Common Stock (the "Per Share Purchase Price"), pursuant to an Offering Memorandum dated as of
April 23, 2001 (the "Memorandum"), this transaction generally being herein referred to as the "Private
Placement"; and 

    WHEREAS,
the Investor desires to purchase from the Company shares of Common Stock on the terms and conditions set forth herein. 

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for good and valuable consideration the receipt of which is hereby acknowledged, the
parties agree as follows: 

    1.  Definitions.  Unless specifically defined herein, capitalized terms used herein have the meaning
ascribed to such terms in the Memorandum except that, unless the context requires otherwise, the following terms have the meanings indicated: 

    "Business Day" shall mean any day except Saturday, Sunday and any day which shall be in Boston, Massachusetts a legal holiday or a day
on which banking institutions are authorized or required by law or other government action to close. 

    "Common Stock" shall mean the Common Stock, par value $0.001 per share, of the Company. 

    "Investors" shall mean all of the purchasers of Shares sold in the Private Placement. 

    "Person" shall mean any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality thereof. 

    "Total Purchase Price" shall mean the aggregate purchase price for all of the Shares sold in the Private Placement. 

    2.  Purchase of Common Stock.  Subject and pursuant to the terms and conditions set forth in this
Agreement, the Company agrees that it will issue and sell to the Investor and the Investor agrees that it will purchase from the Company, at the Per Share Purchase Price,         shares of
Common Stock (the "Investor Shares"). The aggregate purchase price for the shares of Common Stock shall be $         (the
"Aggregate Purchase Price"). The shares of Common Stock are being offered pursuant to the Memorandum. 

    3.  Deliveries at Closing.  

    (a)
Deliveries by the Investor. At the Closing of the transactions contemplated hereby, the Investor shall deliver to the Company the
following: 

    (1) the
Aggregate Purchase Price by wire transfer of immediately available funds to an account designated by the Company as set forth on Annex
VI hereto, which funds will be delivered to the Company in consideration of the Investor Shares issued at the closing of the transaction contemplated hereby; 

    (2) an
executed Investor Questionnaire in the form attached as Annex I; 

 

    (3) an executed Managed Account Representation Letter in the form attached as Annex II, if the Investor is acting on
behalf of a managed account in the purchase of the Investor Shares; 

    (4) a
completed copy of Annex III representing and warranting as to the number of shares beneficially owned prior to the
purchase of Common Stock by the Investor contemplated by this Agreement; and 

    (5) a
completed Registration Statement Questionnaire in the form attached as Annex IV. 

    (b) Deliveries by the Company. At the Closing of the transactions contemplated hereby, the Company shall deliver to the
Investor one or more certificates representing the Investor Shares registered in the name of the Investor or its nominee(s), as the Investor has specified in writing to the Company. 

    4.  Representations, Warranties, Covenants and Agreements.  

    (a) Investor Representations, Warranties and Covenants. The Investor represents, warrants and agrees as follows: 

    (1) The
Investor has received and reviewed a copy of the Memorandum, and all appendices and supplements (if any) thereto, relating to the Shares and understands that no
Person has been authorized to give any information or to make any representations that were not contained in the Memorandum, and the Investor has not relied on any such other information or
representations in making a decision to purchase the Investor Shares. The Investor has had access to such financial and other information and has had the opportunity to ask questions and receive
answers as deemed necessary in respect of the decision to purchase the Investor Shares, and has consulted with advisors concerning the proposed investment in the Company. The Investor understands that
an investment in the Company involves a high degree of risk for the reasons, among others, set forth under the caption "RISK FACTORS" in the Memorandum. 

    (2) The
Investor has decided to invest in the Shares and, in making the decision to so invest, is not in any way relying on the fact that any other Person has decided
to invest in the Shares. 

    (3) The
Investor represents that the Investor (or, if applicable, each managed account on whose behalf the Investor Shares are being purchased by such Investor) is a
sophisticated investor or is an
"accredited investor" as defined in Rule 501 under the Securities Act of 1933, as amended (the "Securities Act"), as certified by the Investor
pursuant to the Investor Questionnaire attached hereto as Annex I. The Investor further represents that the Investor (or, if applicable, each managed
account on whose behalf the Investor Shares are being purchased) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of an investment
in the Shares and can bear the economic risk of loss of the entire investment in the Shares being purchased. 

    (4) The
Investor understands and expressly acknowledges and agrees that none of the Shares has been, or will be, registered or qualified under the Securities Act, or
under any applicable securities laws of any State of the United States ("Applicable State Law") and therefore may not be offered, sold, transferred,
assigned, pledged, hypothecated or otherwise disposed of, directly or indirectly, unless subsequently registered or qualified under the Securities Act and under Applicable State Law or unless an
exemption from the registration requirements of the Securities Act and Applicable State Law is available, in each case to the extent permitted by the terms of this Agreement. 

2

 

    (5) The Investor understands and agrees that all certificates representing the Investor Shares shall bear a legend which will be substantially in the form of the
following: 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS ("APPLICABLE STATE LAW"). THESE SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED OR HYPOTHECATED OR OTHERWISE ASSIGNED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE ACT OR APPLICABLE STATE LAW
RELATING TO DISPOSITION OF SECURITIES." 

    (6) The
Investor (or, if applicable, each managed account on whose behalf the Investor Shares are being purchased by the Investor) will acquire the Investor Shares
pursuant to this Agreement for its own account for investment and not with a view to, or in connection with, the resale or distribution thereof or in any arrangement or understanding with any other
persons regarding the distribution of such Investor Shares in violation of the Securities Act. The Investor hereby covenants and agrees that, during the six month period following the Closing, the
Investor shall execute a lockup agreement, containing a restriction on the sale of Investor Shares for a period terminating on the earlier of the ninetieth day following closing of a primary offering
by the Company or the six month anniversary of the Closing, and other standard terms and conditions, with any requesting underwriter participating in a primary offering (as defined in
Section 5(a)(1) below). 

    (7) The
Investor hereby covenants and agrees with the Company not to, directly or indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish a "put equivalent position" as such term is defined by Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or otherwise dispose of any Investor Shares, options or warrants to acquire Investor Shares, or securities exchangeable or
exercisable for or convertible into Investor Shares currently owned either of record or beneficially (as defined in Rule 13d-3 under the Exchange Act) by the Investor or publicly
announce the Investor's intention to do any of the foregoing or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic benefits or risks of
ownership of the Investor Shares, prior to the date on which the Registration Statement (as defined in Section 5(a)(2)) is declared effective (other than in connection with a sale pursuant to a
registration statement effected under Section 5(a)(1) hereof). 

    (8) The
Investor hereby covenants and agrees with the Company not to make any sale of the Investor Shares without causing the prospectus delivery requirement under the
Securities Act to be satisfied or otherwise complying with the Securities Act, and the Investor acknowledges and agrees that the Investor Shares are not transferable on the books of the Company unless
the certificate submitted to the transfer agent evidencing the Investor Shares is accompanied by (a) a separate certificate (i) in the form of Annex
V hereto, (ii) executed by an officer of, or other authorized person designated by, the Investor, and (iii) to the effect that (A) the Investor Shares have
been sold in accordance with a registration statement pursuant to Section 5 hereof and (B) the requirement of delivering a current prospectus has been satisfied; or (b) an opinion
of counsel reasonably satisfactory to the Company stating that registration is not required under the Securities Act. The Investor acknowledges that there may be times when the Company may suspend the
use of the prospectus forming a part of a registration statement in the event that, and during such period as, pending negotiations relating to, or consummation of, a transaction, or the occurrence of
any other event, would require additional disclosure of material information by the Company in the registration 

3

 

statement and the Company determines that disclosing such information would (x) adversely affect the Company, (y) make it impractical or inadvisable to cause the registration statement
to be filed or to become effective or to amend or supplement the registration statement or (z) otherwise render the Company unable to comply with the requirements of the Securities and Exchange
Commission (the "Commission"). In such event, subject to the last sentence of this Section 4(a)(8), the Company may suspend the use of such
prospectus until such time as an amendment to such registration statement has been filed by the Company and declared effective by the Commission, or until such time as the Company has filed an
appropriate report with the Commission pursuant to the Exchange Act. The Investor hereby covenants and agrees that it will not sell any Investor Shares pursuant to said prospectus during the period
commencing at the time at which the Company gives the Investor written notice of the suspension of the use of said prospectus and ending the date on which the Company gives the Investor written notice
that the Investor may thereafter effect sales pursuant to said prospectus. Anything herein to the contrary notwithstanding, the Company does not have the right to suspend the use of such prospectus or
otherwise restrict the Investor's ability to sell or otherwise transfer the Investor Shares (or any other securities of the Company the Investor holds) for a period of more than fifteen
(15) business days per suspension, and the Company may not exercise this right to suspend the use of such prospectus more than twice in any twelve-month period. 

    (9) The
execution and delivery of this Agreement by the Investor and the performance of this Agreement and the consummation by the Investor or the Investor's advisory
clients, as the case may be, of the transactions contemplated hereby have been duly authorized by all necessary (corporate, in the case of a corporation) action of the Investor and, if applicable, the
Investor's advisory clients; and this Agreement, when duly executed and delivered by the Investor, will constitute a valid and legally binding instrument, enforceable in accordance with its terms
against the Investor or any of the Investor's advisory clients, as the case may be. 

    (10) The
Investor represents that: 

    (A) If
the Investor is a corporation, it is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority (corporate and other) to perform its obligations under this Agreement. If the Investor is a limited liability company, it is a limited liability company
duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with full power and authority (limited liability company and other) to perform its
obligations under this Agreement.  The person executing this Agreement on behalf of the Investor is authorized to act for the Investor in purchasing the Shares. 

    (B) If
the Investor is a corporation acting in an advisory capacity, it is a corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (corporate and other) to act on behalf of its advisory clients under this Agreement. If the Investor is a limited liability company
acting in an advisory capacity, it is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with full power and
authority (corporate and other) to act on behalf of its advisory clients under this Agreement. 

    (C) If
the Investor is a trust, the trustee thereunder has been duly appointed as trustee of such Investor with full power and authority to act on behalf of such
Investor and to perform the obligations of such Investor under this Agreement. Furthermore, the trustee under such trust has independently determined that the purchase of the Investor 

4

 

Shares is a suitable investment for such trust as authorized by the terms thereof and applicable laws and regulations. 

    (D) If
the Investor is a limited partnership, it is a limited partnership duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization, with full power and authority to perform its obligations under this Agreement. 

    (E) If
the Investor is a limited partnership acting in an advisory capacity, it is a limited partnership duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, with full power and authority to act on behalf of its advisory clients under this Agreement. 

    (F) If
the Investor is a corporation, limited liability company, partnership, trust or other form of business entity, the execution and delivery of this Agreement will
not contravene or result in a default under any provision of existing law or regulations to which the Investor is subject, the provisions of its trust instrument, charter, by-laws or other
governing documents or any indenture, mortgage or other agreement or instrument to which it is a party or by which it is bound and does not require on its part any approval, authorization, license or
filing from or with any foreign, federal, state or municipal board or agency which has not been obtained or duly made. 

    (G) If
the Investor is an individual, the Investor has full power and authority to perform its obligations under this Agreement. 

    (11) The
Investor agrees to complete and execute and return to the Company (a) the Investor Questionnaire attached as Annex
I to this Agreement representing that the Investor is investing in Shares as an "accredited investor;" (b) if the Investor is acting on behalf of a managed account in
the purchase of any Investor Shares, the Managed Accounts Representation Letter attached as Annex II to this Agreement; and (c) the Registration
Statement Questionnaire attached as Annex IV, in each case together with an executed signature page to this Agreement. The Investor represents and
warrants that the answers thereto are true and correct as of the date hereof and will be true and correct as of the effective date of the Registration Statement (as defined in Section 5). The
Investor further represents and warrants that it is not purchasing the Investor Shares on behalf of any managed account other than as listed in the Managed Account Representation Letter. 

    (12) The
Investor has not entered into any contracts, arrangements, understandings or relationships (written or otherwise) with any other Person or Persons (other than
the Company or a limited partner/member or affiliate of Investor, which in any case shall not violate any securities laws) with respect to any securities of the Company (including but not limited to
transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding
of proxies) or the operations, management or control of the Company; the Investor is not bound together, under common control with, in a common enterprise with, or otherwise acting in concert with,
any other Person or Persons (other than a limited partner/member or affiliate of Investor, which in any case shall not violate any securities laws) in connection with the transactions contemplated by
this Agreement; and the Investor does not own any securities of the Company which are pledged or otherwise subject to a contingency the occurrence of which would give another Person voting power or
investment power over such securities. 

    (13) Except
as otherwise set forth in Annex III, as of the date hereof, the Investor does not beneficially own any
shares of Common Stock. The Company acknowledges that certain of the members/limited partners of Investor may own shares of Common Stock; provided that
such member/limited partner is an "accredited investor" as defined in Rule 501 of the Securities Act. 

5

 

    (14) No state, federal or foreign regulatory approvals, permits, licenses or consents or other contractual or legal obligations are required for the Investor to enter
into this Agreement or otherwise purchase the Investor Shares. 

    (b)  Company Representations, Warranties and Covenants.  The Company hereby represents, warrants and
agrees as follows: 

    (1) The
Company has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its organization, with full power and authority
(corporate and other) to perform its obligations under this Agreement and to consummate the transactions contemplated hereby. 

    (2) The
execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly
authorized by all necessary action of the Company and the Agreement has been duly executed and delivered by the Company; and this Agreement, when duly executed and delivered by the Investor, will
constitute a valid and legally binding instrument of the Company enforceable in accordance with its terms. 

    (3) The
Investor Shares have been duly authorized by the Company, and when issued and delivered by the Company against payment therefor as contemplated hereby and in
accordance with the terms of the Memorandum, the Investor Shares will be validly issued, fully paid and nonassessable, free of preemptive rights and free from all taxes, liens, charges and security
interests in respect of the issuance thereof. 

    (4) The
execution and delivery of this Agreement, the consummation by the Company of the transactions herein contemplated and the compliance by the Company with the
terms hereof do not and will not violate the Articles of Organization (as amended to date) of the Company, or the By-Laws (as amended to date) of the Company, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of their properties or assets are subject, or any applicable statute or any order, judgment,
decree, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets; and no consent, approval,
authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the valid authorization, execution, delivery and performance by the Company
of this Agreement, the issue of the Investor Shares or the consummation by the Company of the other transactions contemplated by this
Agreement, except for such consents, approvals, authorizations, registrations or qualifications as may be required under Federal or state securities or "blue sky" laws or, with respect to requirements
applicable to the Investor. 

    (5) The
information contained in the following documents, which the Company has furnished to the Investor does not contain any untrue statement of material fact or omit
to state any material fact necessary in order to make the statements therein in light of the circumstances in which they were made not misleading as of the respective final dates of the documents.
Each of the documents listed in (A), (B) and (C) below complied as to form in all material respects with the applicable requirements of the Securities Act or Exchange Act as of the date
filed with the Commission. 

    (A) the
Company's Annual Report to Stockholders on Form 10-KSB for the fiscal year ended December 31, 2000 (without exhibits); 

    (B) Notice
to Stockholders and Proxy Statement for its Special Meeting in lieu of an Annual Meeting of Stockholders to be held May 24, 2001; 

6

 

    (C) the Company's Quarterly Report on Form 10-QSB for the quarter ended March 31, 2001; and 

    (D) the
Memorandum. 

    (6) The
balance sheets of the Company for the three months ended March 31, 2001 have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis, are consistent in all material respects with the books and records of the Company and accurately present in all material respects the financial position of the Company
and its subsidiaries as of March 31, 2001. There has been no material adverse change in the financial condition or business or results of operations of the Company or its subsidiaries since
March 31, 2001. 

    (7) All
patents, trademarks, copyrights and other proprietary rights owned by or licensed to the Company are referred to in this Section 4(b)(7) as the
"Proprietary Rights." The Company owns or has the contractual right to use, sell or license all Proprietary Rights necessary or required for the conduct
of its business as presently conducted, except for any failure to own or right to use, sell or license that would not reasonably be expected to have a material adverse effect on the financial
condition, business or results of operation of the Company. To the Company's knowledge, no other person has an interest in or right or license to use, or the right to license others to use any of said
Proprietary Rights and the
Company has not received any notice of any such interest or right. There are no claims or demands of any other person pertaining to the Proprietary Rights and no proceedings are pending or, to the
Company's knowledge, threatened that challenge the rights of the Company in respect thereof that would reasonably be expected to have a material adverse effect on the financial condition, business or
results of operation of the Company. None of such Proprietary Rights is subject to any outstanding order, decree, judgment, or stipulation, or is being infringed by others. 

    (8) There
is no litigation, arbitration or governmental proceeding or investigation currently pending or, to the Company's knowledge, threatened by or against the
Company or affecting any of the Company's properties or assets that would reasonably be expected to have a material adverse effect on the financial condition, business or results of operations of the
Company. The Company is not a party to or in default with respect to any order, writ, injunction, decree, ruling or decision of any court, commission, board or other government agency that may have a
material adverse effect on the financial condition, business or results of operations of the Company. 

    (9) Except
as disclosed in reports filed under the Securities and Exchange Act of 1934, (i) the operations of the Company are in material compliance with all
Environmental Laws; (ii) to the knowledge of the Company, there has been no release of Hazardous Materials at any of the properties owned or operated by the Company, except in material
compliance with Environmental Laws; (iii) no lien has been imposed on any property owned by the Company in connection with the presence of any Hazardous Material thereon; and (iv) the
Company has not entered into or been subject to any consent decree, compliance order, or administrative order, received any request for information, notice, demand letter, administrative inquiry, or
complaint, or been subject to any governmental or citizen enforcement action, each with respect to the presence of Hazardous Materials at any property owned by the Company. 

    For
purposes of this Section 4(b)(9): (i) "Environmental Law" shall mean any statute, regulation, rule, or ordinance at
the federal, state or local level relating to protection of the environment, and (ii) "Hazardous Materials" shall mean any pollutant, toxic
substance, 

7

 

hazardous waste, hazardous material, hazardous substance, contaminant, or oil as defined in or pursuant to any Environmental Law. 

    (c)
Survival of Representations, Warranties and Agreements. Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and the Investor herein and in the certificates for the Investor Shares delivered pursuant hereto shall survive the execution
of this Agreement, the delivery to the Investor of the Investor Shares and the payment therefor. 

    5.  Registration of the Shares; Compliance with the Securities Act.  

    (a) Registration Rights; Registration Procedures and Expenses.

    (1) If
at any time or times after the date hereof, the Company shall determine or be required to register any shares of its Common Stock or other equity securities for
sale under the Securities Act in exchange for cash (whether in connection with a public offering of securities by the Company (a "primary offering"), a
public offering of securities by stockholders of the Company (a "secondary offering") or both), but not in connection with a registration effected
solely to implement an employee benefit plan or a transaction to which Rule 145 or any other similar rule of the Commission under the Securities Act is applicable, the Company shall: 

    (A) Promptly
give written notice thereof to each of the Investors. 

    (B) Use
commercially reasonable efforts to effect the registration under the Securities Act of all Investor Shares (but not any other shares) which such Investors
request to be registered in a writing delivered to the Company within 10 days after such Investors' receipt of the notice referred to above, subject to subparagraph (iii) below. 

    (C) In
the case of the registration of shares of Common Stock by the Company in connection with an underwritten public offering, (a) the Company shall not be
required to include any Investor Shares in such underwriting unless the Investors thereof accept the terms of the underwriting as agreed upon between the Company and the underwriter or underwriters
selected by it, and (b) if the underwriter(s) determines that marketing factors require a limitation on the number of Investor Shares to be offered, the Company shall not be required to
register Investor Shares of the Investors in excess of the amount, if any, of shares of the capital stock which the principal underwriter of such underwritten offering shall reasonably and in good
faith agree to include in such offering in excess of any amount to be registered for the Company, and in the event of any such limitation, the number of Investor Shares of any Investor requesting
inclusion in such registration shall be based upon the relative holdings of Common Stock of all Investors requesting such registration (and if any Investor would thus be entitled to include more
Investor Shares than such Investor requested to be registered, the excess shall be allocated among other requesting Investors pro rata based upon their
relative holdings of Common Stock). All expenses relating to the registration and offering of Investor Shares pursuant to this Section 5(a)(1) and pursuant to Section 5(a)(2) below shall
be borne by the Company, except that the Investors shall bear underwriting and selling commissions attributable to their Investor Shares being registered, any transfer taxes on shares being sold by
such Investors and the costs of any counsel or other professional advisors engaged by the Investors. 

    (2) The
Company shall: 

    (A) Subject
to the provisions of subparagraph (B) of this Section 5(a)(2) and Sections 5(c) and 5(d) below, use commercially reasonable efforts to
prepare, file with the 

8

 

Commission and cause to be declared effective by the Commission within 120 days of the Closing (the "Target Deadline") a registration statement
(the "Registration Statement") to enable the public offering and sale of the Investor Shares by the Investor from time to time through the Nasdaq
National Market, the over-the-counter market or in privately-negotiated transactions or otherwise. 

    (B) Use
commercially reasonable efforts to prevent the Registration Statement from being declared effective within 90 days of the Closing. The Company shall use
commercially reasonable efforts, subject to receipt of necessary information from the Investor, to cause the Registration Statement to become effective as promptly as practicable after filing thereof,
subject to the preceding sentence. 

    (C) Promptly
prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may
be necessary to keep the Registration Statement effective for a period not exceeding the second anniversary of the Closing, or such shorter period which will terminate on the earlier of the date when
(i) the Shares held by the Investor may be sold without registration under the Securities Act or (ii) all of the Shares covered by such Registration Statement have been sold pursuant to
such Registration Statement or otherwise. 

    (D) Promptly
furnish to the Investor with respect to the Investor Shares registered under the Registration Statement (and to each underwriter, if any, of such Investor
Shares) such number of copies of the Registration Statement and any amendment or supplement thereto and of prospectuses and preliminary prospectuses in conformity with the requirements of the
Securities Act as the Investor shall reasonably request. 

    (E) Promptly
file documents required of the Company for customary "blue sky" clearance in states specified in writing by the Investor and reasonably required by the
Investor in order to resell its Investor Shares; provided, however, that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or has not so consented. 

    (F) Promptly
inform the Investor when any stop order by the Commission has been issued with respect to the Investor Shares and use commercially reasonable efforts to
promptly cause such stop order to be withdrawn. 

    (G) Take
such other actions as may reasonably be necessary to effect the registration of the resale of the Investor Shares in accordance with the terms of this
Agreement and to allow such Investor Shares to trade in the same market system or exchange where the Company's Common Stock then trades. 

    (H) File
the reports required to be filed by it under the Securities Act and the Exchange Act (or, if the Company is not required to file such reports, it will, upon
the request of any holder of Investor Shares, make publicly available other information so long as necessary to permit sales under Rule 144 under the Securities Act), all to the extent required
from time to time to enable the Investor to sell Investor Shares without registration under the Securities Act within the limitations provided by (i) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission; provided, however,
that nothing in this Agreement shall require the Company to file reports under the Securities Act or the Exchange Act, to register any of its securities under the Exchange Act, or to make publicly
available any information concerning the Company at any time when it is not required by law or by any agreement by which it is bound to do any of the foregoing. 

9

 

A
questionnaire related to the Registration Statement to be completed by the Investor is attached hereto as Annex IV. 

    (b)
Transfer of Shares. The Investor agrees not to effect any disposition of the Investor Shares or the right to purchase the Investor
Shares that would constitute a sale within the meaning of the Securities Act except as contemplated in Sections 5(a)(1) and (2) or pursuant to an exemption from registration under the
Securities Act. The Investor agrees to promptly notify the Company of any changes in the information set forth in any registration statement regarding the Investor Shares or the Investor. 

    (c) The
Investor hereby acknowledges and agrees that in the event that the Company makes any filing with the SEC in connection with a primary underwritten offering
within 120 days following the Closing Date, the time period for preparing and filing a Registration Statement as contemplated by Section 5(a)(2) above shall be extended until
January 1, 2002 and the Company shall use commercially reasonable efforts, subject to the receipt of necessary information from the Investor, to cause the Registration Statement to become
effective as promptly thereafter as practicable. 

    (d)  Postponement. The Company may postpone the filing or effectiveness of any registration statement to be filed pursuant to this
Section 5 for a reasonable period of time if (i) the Company is engaged in confidential negotiations or other confidential business activities, disclosure of which would be required in
such registration statement and (ii) the Board of Directors of the Company determines in good faith that such disclosure would have a material adverse effect on any such confidential
negotiations or other confidential business activities or would be materially detrimental to the Company. 

    (e)  Liquidated Damages.

    (1) If
the Registration Statement is filed, but has not become effective on or before the date which is 30 days after the Target Deadline (the
"Target Effective Date"), the Company shall pay liquidated damages to the Investors, on a pro rata basis, in an amount equal to 1% of the Total Purchase
Price per week beginning on the day after the Target Effective Date; provided, however, that the aggregate liquidated damages to be paid pursuant to this Section 5(e) shall, under no
circumstances, exceed 5% of the Total Purchase Price. The liquidated damages to be paid to the Investors pursuant to this Section 5(e) shall cease to accrue on the day the Registration
Statement is declared effective. 

    (2) Notwithstanding
the foregoing, if the sole reason why the Registration Statement has not become effective on or before the Target Effective Date is because any of
the Investors did not provide the Company with information which is required to be disclosed in the Registration Statement and which the Company requested such Investor to so provide in writing at
least 10 days prior to the Target Effective Date, the Company's obligation to pay liquidated damages with respect thereto will not begin to accrue until 15 days after such information
has been provided. 

    (3) The
Company shall pay the liquidated damages due with respect to the Shares at the end of each week during which such damages accrue. Liquidated damages shall be
paid to the Investors by wire transfer in immediately available funds to the accounts designated by the Investors. 

10

 

    (f)  Indemnification and Contribution.

    (1) For
the purpose of this Section 5(f): 

    (A) The
term "Selling Shareholder" shall include the Investor, officers, directors, trustees, or any affiliate of such
Investor and each person, if any, who controls the Selling Shareholder within the meaning of the Securities Act and 

    (B) The
term "Registration Statement" shall include (i) the Registration Statement and any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration Statement and (ii) any registration statement filed in connection with Section 5(a)(1) and any final
prospectus, exhibit, supplement or amendment included in or relating to such registration statement; and 

    (2) The
Company agrees to indemnify and hold harmless each Selling Shareholder from and against any losses, claims, damages or liabilities to which such Selling
Shareholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based
upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or arise out of any failure by the Company to fulfill any undertaking included in the Registration Statement and the Company
will reimburse such Selling Shareholder for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim,  provided, however, that the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is
based upon, any such untrue statement or omission made in such Registration Statement in reliance upon written information furnished to the Company by or on behalf of such Selling Shareholder for use
in preparation of the Registration Statement, or the failure of such Selling Shareholder to comply with the covenants and agreements contained in Sections 4(a)(7) and 5(b) hereof respecting sale of
the Shares or any statement or omission in any prospectus that is corrected or made not misleading in any subsequent prospectus that was delivered to the Investor prior to the pertinent sale or sales
by the Investor. The Company will reimburse such Selling Shareholder, as the case may be, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any
such action, proceeding or claim. 

    (3) The
Investor agrees to indemnify and hold harmless the Company (and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and against any losses, claims, damages or liabilities to which the Company (or
any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any failure to comply with the covenants and agreements contained in Sections 4(a)(7) and 5(b) hereof respecting sale of the Shares, or any untrue
statement of a material fact contained in the Registration Statement on the effective date thereof if such untrue statement was made in reliance upon written information furnished by or on behalf of
the Investor for use in preparation of the Registration Statement, provided, however, that such Investor shall not be liable in any such case to the
extent that the Investor has furnished in writing to the Company information expressly for use in such Registration Statement or any amendment thereof or supplement thereto which corrected or made not
misleading information previously furnished to the Company prior to the filing of the Registration Statement, and if furnished to the Company after the filing of the Registration Statement, has
notified the Company of such information 

11

 

immediately upon its occurrence or the Investor's knowledge of its occurrence. The Investor will reimburse the Company (or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. In no event shall the liability of the Investor hereunder be
greater in amount than the dollar amount of the proceeds received by such Investor (net of any underwriting discount) upon the sale of the Shares giving rise to such indemnification obligation. 

    (4) Promptly
after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 5(f), such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, and, subject to
the provisions hereinafter stated, in case any such action shall be brought against an indemnified person and such indemnifying person shall be entitled to participate therein, and, to the extent it
shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the
defense thereof, provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the opinion of
counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person; provided, however, that no indemnifying person shall be responsible for
the fees and expenses of more than one separate counsel for all indemnified parties. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written
consent, but, if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party or parties in accordance with the
provisions of this Section 5(f). 

    (5) If
the indemnification provided for in this Section 5(f) from the indemnifying person is determined by a court of competent jurisdiction to be unavailable to
an indemnified person hereunder in respect of any losses, claims, damages, liabilities or expenses referred to herein, then the indemnifying person, in lieu of indemnifying such indemnified person,
shall contribute to the amount paid or payable by such indemnified person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying person and indemnified persons in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying person and indemnified persons shall be determined by reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact, has been made by, or relates to information supplied by, such indemnifying person or indemnified persons, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred
to above shall be deemed to include, subject to the limitations set forth in this Section 5(f), any reasonable legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding. 

    The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(f) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(f), no Investor shall
be 

12

 

required to contribute any amount in excess of the dollar amount of the proceeds received by such Investor (net of any underwriting discount) upon the sale of the Shares giving rise to such
contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. 

    (g)
Termination of Conditions and Obligations. The conditions precedent imposed by Section 2 or this Section 5 upon the
transferability of the Investor Shares shall cease and terminate as to any particular number of the Investor Shares when such Investor Shares shall have been effectively registered under the
Securities Act and sold or otherwise disposed of in accordance with the intended method of disposition set forth in the registration statement covering such Investor Shares or at such time as an
opinion of counsel satisfactory to the Company shall have been rendered to the effect that such conditions are not necessary in order to comply with the Securities Act. 

    (h)
Information Available. So long as a registration statement is effective covering the resale of the Investor Shares, the Company
will furnish to the Investor: 

    (1) As
soon as practicable after available (but in the case of the Company's Annual Report to Shareholders, within one hundred twenty (120) days after the end of
each fiscal year of the Company), one copy of (i) its Annual Report to Shareholders (which Annual Report shall contain financial statements audited in accordance with generally accepted
accounting principles by a national firm of certified public accountants), (ii) if not included in substance in the Annual Report to Shareholders, its Annual Report on
Form 10-KSB or equivalent form, (iii) its Quarterly Reports to Shareholders, (iv) if not included in substance in its Quarterly Reports to Shareholders, its quarterly
reports on Form 10-QSB or equivalent form, and (v) a full copy of the particular registration statement covering the Shares (the foregoing, in each case, excluding exhibits); 

    (2) Upon
the reasonable request of the Investor, all exhibits excluded by the parenthetical to subparagraph (1) of this Section 5(g) and all other
information that is made available to shareholders; and 

    (3) Upon
the reasonable request of the Investor, an adequate number of copies of the prospectuses to supply to any other party requiring such prospectuses; 

and
the Company, upon the reasonable request of the Investor, will meet with the Investor or a representative thereof at the Company's headquarters to discuss all information relevant for disclosure
in the registration statement covering the Investor Shares and will otherwise cooperate with any Investor conducting an investigation for the purpose of reducing or eliminating such Investor's
exposure to liability under the Securities Act, including the reasonable production of information at the Company's headquarters. 

    6.  Miscellaneous.  

    (a)
Fees and Expenses. Each of the parties hereto shall be responsible for their own expenses incurred in connection with the
transactions contemplated hereby. The Company shall reimburse the Investor for its reasonable out-of-pocket expenses incurred in connection with the procedures in
Section 5(a)(2)(a) through (h) hereof, other than fees and expenses, if any, of one counsel or other advisors to all of the Investors upon delivery to the Company of reasonable
documentation setting forth such out-of-pocket expenses. 

    (b)
Binding Agreement; Assignment. This Agreement shall be binding upon, and shall inure solely to the benefit of, each of the parties
hereto, and each of their respective heirs, executors, administrators, successors and permitted assigns, and no other person shall acquire or have any 

13

 

right under or by virtue of this Agreement. The Investor may not assign any of its rights or obligations hereunder to any other person or entity without the prior written consent of the Company. 

    (c) Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and may be amended only by written execution by both parties. By executing this Agreement below, the Investor agrees to be bound by all of the terms, provisions, warranties,
covenants and conditions contained herein. Upon acceptance by the Company, this Agreement shall be binding on both parties hereto. 

    (d) Consent To Jurisdiction. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PRINCIPLES. FURTHERMORE, EACH INVESTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES OF AMERICA FOR THE DISTRICT OF MASSACHUSETTS IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. 

    (e) Notices. All notices, requests, consents and other communication hereunder shall be in writing, shall be mailed by
first class registered or certified mail, or nationally recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as addressed as follows: 

    if
to the Company, to: 

	 	 	StockerYale, Inc.

32 Hampshire Road

Salem, New Hampshire 03079

Attn: Mark W. Blodgett,

          Chief Executive Officer

    with
a copy mailed to: 

	 	 	Goodwin Procter LLP

Exchange Place

Boston, Massachusetts 02109

Attn: Stuart M. Cable, P.C.

or
to such other person at such other place as the Company shall designate to the Investor in writing; and 

if
to the Investor, at its address as set forth at the end of this Agreement, or at such other address or addresses as may have been furnished to the Company in writing. 

    (f)  Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one in the same agreement. 

    [Remainder of Page Intentionally Left Blank]

14

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 

	 	 	STOCKERYALE, INC.
	

 	
 	

By:	

 Name:

Title:

Accepted and Agreed as of the date

first above written: 

	

 Name of Investor (Print)	
 	

 
	

By:	
 	

 Name:

Title	
 	

 
	

Address:	
 	

	
 	

 
	

Telephone:	
 	

	
 	

 
	Facsimile:	 	
	 	 
	

Nominee (name in which Investor Shares are to be registered, if different than name of Investor) 
	
 	

 
	

Address of Nominee:	
 	

 
	

	 	 
	

Taxpayer I.D. Number:
	
 	

 
	(if acquired in the name of a nominee, the taxpayer I.D. number of such nominee)	 	 

EACH
INVESTOR EXECUTING THESE PURCHASE AGREEMENT SIGNATURE PAGES ON BEHALF OF ONE OR MORE MANAGED ACCOUNTS SHOULD PROVIDE THE NAME OF, AND FOREGOING INFORMATION WITH RESPECT TO, EACH SUCH MANAGED
ACCOUNT. 

ANNEX
I 

INVESTOR QUESTIONNAIRE  

    The Shares are being offered for sale to "accredited investors" as that term is defined in Rule 501 under the Securities Act of 1933, as amended (the
"Act"). 

    The
undersigned entity certifies that it (and each managed account on whose behalf Investor Shares are being purchased by it) is an "accredited investor" because it is (check one or
more items below): 

	    	 	i.	 	a bank as defined in section 3(a)(2) of the Act whether acting in its individual or fiduciary capacity;
	

    	
 	

ii.	
 	

a savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity;
	

    	
 	

iii.	
 	

a broker dealer registered pursuant to section 15 of the Securities Exchange Act of 1934, as amended;
	

    	
 	

iv.	
 	

an insurance company as defined in section 2(13) of the Act;
	

    	
 	

v.	
 	

an investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act");
	

    	
 	

vi.	
 	

a business development company as defined in section 2(a)(48) of the 1940 Act;
	

    	
 	

vii.	
 	

a Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;
	

    	
 	

viii.	
 	

a plan established and maintained by a state or its political subdivision for the benefit of its employees, provided that such plan has total assets in excess of $5,000,000;
	

    	
 	

ix.	
 	

an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 ("ERISA"), provided that the investment decision is made by a plan fiduciary, as defined in section 3(21) of ERISA, and the plan fiduciary
is either a bank, savings and loan association, insurance company or registered investment adviser or provided that the employee benefit plan has total assets in excess of $5,000,000; or if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;
	

    	
 	

x.	
 	

a private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;
	

    	
 	

xi.	
 	

an organization described in section 501(c)(3) of the Internal Revenue Code, not formed for the specific purpose of acquiring the Investor Shares, with total assets in excess of $5,000,000;
	

    	
 	

xii.	
 	

a director or executive officer, or general partner of the Company;
	

    	
 	

xiii.	
 	

a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Investor Shares, with total assets in excess of $5,000,000;
	

    	
 	

xiv.	
 	

a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Investor Shares, and the purchase of the Investor Shares is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the
Act;
	

    	
 	

xv.	
 	

a natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000;
	

    	
 	

xvi.	
 	

a natural person who had an individual income in excess of $200,000 in each of 1998 and 1999 or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in
2000;

	

    	
 	

xvii.	
 	

an entity in which all of the equity owners are accredited investors (described in any of (i) - (xvi) above).

	 	 	INVESTOR:
	

 	
 	

By:	

 Name:

Title:

ANNEX II 

[Form of Managed Accounts Representation Letter]

StockerYale, Inc.

32 Hampshire Road

Salem, New Hampshire 03079

Attn: Mark W. Blodgett

          Chief Executive Officer 

Ladies
and Gentlemen: 

    Reference
is hereby made to that certain Stock Purchase Agreement, dated as of May  , 2001 (the "Agreement"), by and between you and the undersigned relating to the
purchase of shares of the common stock, par value $0.001 per share (the "Common Stock"), of StockerYale, Inc. ("Stocker"). Capitalized terms used herein that are not defined herein have the
meaning set forth in the Agreement. 

    The
undersigned has executed or is executing the Agreement as an Investor. 

    This
Managed Accounts Representation Letter will serve to advise you that in executing the Agreement, the undersigned has acted for or on behalf of one or more persons ("Accounts")
pursuant to authority granted to the undersigned by each such Account. 

    The
undersigned hereby represents and warrants to, and covenants and agrees with, you that: 

	i.
	the
shares of Common Stock being purchased under the Agreement by or for an Account are being purchased for the benefit of the Account and the
undersigned is not acting for itself but is acting as a fiduciary on behalf of such Account;

	ii.
	the
representations and warranties of the Investor set forth in Section 4(a) of the Agreement are true and correct as to each Account and the
Investor Shares being purchased by or for such Account;

	iii.
	each
such Account will be fully bound by and subject to the Agreement in all respects as an Investor;

	iv.
	the
undersigned is fully authorized by each such Account to enter into the Agreement with full authority regarding the investment in and disposition
of the Investor Shares, the evaluation of the merits and risks of the investment and to execute this Managed Accounts Representation Letter for or on behalf of such Account; and

	v.
	the
undersigned is registered or licensed as either an investment adviser or a dealer or broker and is in compliance with all investment adviser or
dealer and broker requirements, as the case may be, in connection with the sale of the Investor Shares and with all the statutes, rules and regulations with respect to registration or licensing in
each state in which the Investor Shares are sold by the undersigned. 

    Executed
as of the date as of which the Agreement is executed by the undersigned. 

	 	 	ACCOUNT MANAGER:
	

 	
 	

By:	

 Name:

Title:
	

 	
 	

On behalf of the following accounts:

ANNEX III 

NUMBER OF SHARES BENEFICIALLY OWNED  

ANNEX IV 

REGISTRATION STATEMENT QUESTIONNAIRE  

    In connection with the preparation of the Registration Statement, please provide us with the following information: 

    1.
Pursuant to the "Selling Shareholder" section of the Registration Statement, please state your or your organization's name exactly as it should appear in the Registration
Statement: 

    2.
Please provide the following information, as of the Closing Date: 

	(1)	 	(2)
	Number of Shares

which are being

included in the

Registration Statement

(if all purchased, put all)	 	Number of shares

if any, which will

be owned after

completion of sale

of Shares included

in the Registration Statement
	
	 	

    3.
Have you or your organization had any position, office or other material relationship within the past three (3) years with the Company or its affiliates other than as
disclosed in the Memorandum? 

	    Yes	 	    No

    If yes, please indicate the nature of any such relationship below: 

ANNEX V 

Attention:

INVESTOR'S CERTIFICATE OF SUBSEQUENT SALE  

    The undersigned, [an officer of, or other person duly authorized by]            [fill in official name of
individual or institution] hereby certifies that he/she [said institution] is the Investor in the shares evidenced by the attached certificate, and as such, sold
such shares on      [date] in accordance with registration statement number            [fill in the number of or otherwise identify registration
statement] and the requirement of delivering a current prospectus and current annual and quarterly reports by the Company has been complied with in connection with such sale. 

Print
or Type: 

	 	 	Name of Investor

(Individual or Institution)	 	

	

 	
 	

Name of Individual Representing Investor (if an Institution):	
 	

	

 	
 	

Title of Individual Representing Investor (if an Institution):      	
 	

	

Signature by:	
 	

 
	

 	
 	

Individual Investor or Individual representing Investor:	
 	

ANNEX VI 

WIRE INSTRUCTIONS  

Aggregate
Purchase Price to be wired to: 

	 	 	Fleet Bank

Boston, MA 02211

ABA# 011-000-138

Account name: StockerYale, Inc.

Account # 0562781184

QuickLinks

STOCK PURCHASE AGREEMENT

W I T N E S S E T H

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