Exhibit 10.7
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT, effective November 1, 1996 (the "Effective Date"), by
and between ORCHID BIOCOMPUTER, INC., a Delaware corporation (the "Company"),
and XXXX X. XXXXX, Ph.D., an individual (the "Executive").
PRELIMINARY STATEMENTS
----------------------
WHEREAS, the Company wishes to employ the Executive as Chairman, President
and Chief Executive Officer of the Company;
WHEREAS, Xxxxxxx Corporation ("Xxxxxxx") owns the majority of outstanding
shares of the Company;
WHEREAS, the Executive wishes to enter into the employ of the Company as
its Chairman, President and Chief Executive Officer; and
WHEREAS, the parties understand and acknowledge that there are ongoing
discussions about the possible acquisition by the Company of various technology
rights related to the area of clinical diagnostics, and the parties anticipate
that with Xxxxxxx'x consent and cooperation there may be a transaction to have
such technology rights added to the Company's technology portfolio.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. TERM OF EMPLOYMENT.
------------------
Subject to the provisions for termination set forth in this Agreement, the
Company will employ the Executive, and the Executive will serve the Company, as
Chairman, President and Chief Executive Officer of the Company, for a period
commencing on the Effective Date and continuing until terminated in accordance
with the terms and condition of this Agreement ("Term of Employment"). The
parties understand and agree that the Executive shall be an at-will employee of
the Company.
2. POSITIONS AND DUTIES.
--------------------
2.1 Duties. During the Term of Employment, the Executive will serve as
------
Chairman, President and Chief Executive Officer of the Company with
responsibility for the business, affairs and operations of the Company, subject
to the terms of this Employment Agreement and subject to the direction and
control of the Board of Directors of the Company. The Executive will, during the
Term of Employment, serve the Company faithfully, diligently and competently and
to the best of his ability, and will hold, in addition to the offices of
Chairman, President and Chief Executive Officer of the Company, such other
executive offices in the Company to which he may be elected, appointed or
assigned by the Board of Directors from time to time and will discharge such
executive duties in connection therewith. The Executive shall devote all of his
business time to the performance of his duties hereunder; provided, however,
that, notwithstanding any provision in this Employment Agreement to the
contrary, the Executive
shall not be precluded from devoting reasonable periods of time required for
serving as a member of committees or advisory boards or board(s) of directors of
companies or organizations which have been approved by the Board of Directors of
the Company so long as such memberships or activities do not interfere with the
performance of the Executive's duties hereunder and are not contrary to the
business or other interests of the Company. In this respect the Executive is
currently serving on two such boards of directors and agrees to resign from
either or both with six months' advance written notice should the Board of the
Company decide that continuation of these directorships would not be in the best
interests of the Company. One such directorship is Pangea Systems, Inc., an
informatics company working in the drug discovery area, and the other is Spectra
Science, which is engaged in laser-based technologies.
2.2 Nomination to Board. So long as the Executive is the Chairman,
-------------------
President and/or Chief Executive Officer of the Company, Xxxxxxx and the Company
will continue to use diligent efforts to maintain Executive's election as a
director and Chairman of the Board of Directors of the Company.
3. COMPENSATION.
------------
3.1 Salary. The Company will, commencing with the Effective Date and
------
during the Term of Employment, pay to the Executive as compensation for the
performance of his duties and obligations hereunder a salary at the rate of Two
Hundred Twenty-Five Thousand Dollars ($225,000) per annum ("Salary"), payable in
approximately equal installments not less than twice per month and otherwise in
accordance with the Company's customary payroll practice. Such base salary shall
be reviewed, and any increases in the amount thereof shall be determined, by the
Board of Directors of the Company or a compensation committee formed by the
Board of Directors of the Company at the end of each 12-month period of
employment after the Effective Date during the Term of Employment. Such review
in the first instance shall take place in the first quarter of 1998 and will
reflect the more-than-one-year nature of the review and any appropriate
compensation adjustments on an approved pro rata basis.
3.2 Shares Issued Upon Execution. The Company shall issue to the Executive
----------------------------
as of the date of execution hereof 99,333 shares of the Company's common stock
(the "Shares"). The Company shall from time to time execute, or use diligent
efforts to cause to be executed, all such documents and agreements as are
necessary to vest in the Executive such rights with respect to the Shares that
are no less favorable than the preferential treatment (including without
limitation, liquidation preference and anti-dilution rights) granted to other
current or future holders of Common Stock.
3.2.1 Additional Blue Chip Technology Shares. The Company as of the
--------------------------------------
execution date of this Agreement is in the process of concluding a transaction
whereby Xxxxxxx will license to the Company certain technology commonly referred
to as the "Blue Chip Technology" in exchange for the issuance by the Company to
Xxxxxxx of additional shares of Orchid common stock. The Company agrees that at
the close of such licensing transaction the Company shall simultaneously issue
to Executive additional shares of Orchid common stock in an amount equal to four
percent (4%) of the equity value assigned to the Blue Chip Technology to be
licensed by Xxxxxxx to Orchid. By way of example only, if the proposed value of
such technology license is 250,000 shares, at the time the transaction closes
and 250,000 shares are issued by Orchid to Xxxxxxx in exchange for such license,
then at such time Orchid shall also
2
issue to Executive an additional 10,000 shares of Orchid common stock. Upon such
issuance, such additional shares shall be included in the definition of "Shares"
as defined at Section 3.2 above and used in this Agreement.
3.2.2 Repurchase Rights by the Company. Until the closing of an
--------------------------------
initial public offering of the Company's common stock, or until Xxxxxxx no
longer owns or controls at least 51% of the Company's outstanding voting shares,
the Company shall, upon any termination of Executive's employment, have the
right upon fourteen (14) days' prior written notice to Executive to purchase
from Executive all, but not less than all, of the Shares, at the following
prices per share:
A. The "vested" shares held by the Executive on the date of his
termination shall be purchased for a price per share equal to the fair market
value per share as of the date of such termination. The "fair market value per
share" shall be determined in good faith by the Board of Directors of the
Company in its sole discretion. If Executive disagrees with this valuation, upon
written notice by Executive to the Company, the parties mutually shall select a
neutral independent appraiser to determine such value within 90 days after such
notice, with the expense of such appraisal borne equally by the parties. The
number of Shares which are "vested" shall be calculated as follows: twenty-five
percent (25%) of the total Shares issued to Executive (including without
limitation the issuance of any additional Blue Chip Technology shares under
Section 3.2.1 above) plus the addition on the last day of each month following
November 1,1996 to such pool of "vested" Shares of 2.083% of the total Shares
(including any such Blue Chip Technology shares), so that all of the Shares
(including without limitation any such Blue Chip Technology shares) shall be
fully (100%) vested on the third anniversary of the Effective Date of this
Agreement.
B. The "unvested" Shares held by the Executive on the date of
his termination shall be purchased for $.01 per share. The number of "unvested"
Shares shall be the total number of Shares, less the "vested" Shares (as
determined above) on the date of any such termination.
3.3 Employee's Sale Rights. At anytime, if the Executive's employment is
----------------------
terminated for any reason, with or without cause, the Executive shall have the
right to require the Company to purchase all, but not less than all, of the
fully "vested" Shares of the Company's capital stock held by the Executive on
the date of his termination at a price per share equal to the fair market value
per share of the stock, as determined in good faith by the Board of Directors in
its sole discretion. If Executive disagrees with this valuation, upon written
notice by Executive to the Company, the parties mutually shall select a neutral
independent appraiser to determine such value within 90 days after such notice,
with the expense of such appraisal borne equally by the parties. The number of
such "vested" shares shall be determined in accordance with Section 3.2.1 .A.
above. At the Closing of any such purchase, the Company shall also purchase all
of Executive's "unvested" Shares, with such unvested Shares being determined in
accordance with Section 3.2.1 .B. above, at a price of $.01 per Share.
4. EXPENSES AND BENEFITS.
---------------------
4.1 Relocation and Legal Expenses. The Company shall reimburse the
-----------------------------
Executive for (i) all reasonable costs incurred by him in connection with his
accepting this employment, up to a
3
maximum of Twenty-Five Thousand Dollars ($25,000.00) including, without
limitation, (1) the costs of moving his family and belongings from California
and the UK to the Princeton, New Jersey area; (2) housing search and closing
costs; and (3) legal fees in connection with the review and negotiation of this
Agreement, plus (ii) any federal, state or local income or payroll taxes
incurred by the Executive with respect to payments made to him or on his behalf
under this Section 4.1 so that Executive shall be made whole on an after tax
basis.
4.2 Additional Personal Expenses. In addition to the relocation expenses
----------------------------
set forth in Section 4.1 above, the Company shall reimburse the Executive for
(i) the reasonable costs of hotel and airfare for the Executive and his family
for two (2) trips to New Jersey to find housing in the Princeton area and (ii)
the reasonable cost of airfare for the Executive's travel to California for
Thanksgiving, Christmas and at one other time before December 31, 1996. The
Executive will use his best efforts to incorporate this personal travel to
California with business trips to the area made on behalf of the Company.
4.3 Business Expenses. All travel and other reasonable and ordinary
-----------------
business expenses incident to the rendering of services by the Executive
hereunder will be reimbursed by the Company subject to the submission of
appropriate vouchers and receipts in accordance with the Company's policies and
procedures from time to time in effect.
4.4 Benefits. During the Term of Employment, and thereafter under the
--------
specific circumstances set forth in this Agreement, the Executive shall be
entitled to participate in all employee and fringe benefits generally provided
on an ongoing basis to other members of the Company's management who are
similarly situated, including, without limitation, all pension, profit sharing,
incentive, retirement, insurance, health and disability benefits and plans.
Notwithstanding the foregoing, the Company shall provide, at Company cost, the
Executive with the following:
4.4.1 medical insurance for the Executive and his family under an
indemnity plan, not a health maintenance organization (HMO);
4.4.2 life insurance coverage in an amount equal to three (3) times
the Executive's Salary;
4.4.3 business travel insurance; and
4.4.4 contributory long-term disability insurance under the Xxxxxxx
plan or under a successor Company plan.
4.5 Cash and Stock Bonuses: Stock Options. Upon the execution of this
-------------------------------------
Employment Agreement, the Company shall pay to the Executive a one-time sign-on
bonus in the amount of $50,000, which shall be in the form of a non-recourse
loan to the Executive, the repayment of which shall be forgiven monthly over a
three-year period, calculated as of the Effective Date. The Company shall in
addition pay to the Executive an annual bonus of up to an amount equal to 25% of
the Executive's salary for each year during the "Term of Employment," subject to
achievement of specific performance milestones set forth in the Company's
Business Plan and agreed to in advance and in writing by both the Company and
the Executive. The Executive also shall be entitled to such stock bonuses and
stock options as determined by the Board of Directors from time to time.
4
4.6 Retirement Plan. In addition to the payment of Executive's Salary,
---------------
commencing with the Effective Date the Company shall contribute an additional
amount equal to 10% per year of the Executive's Salary to a qualified retirement
plan for the sole benefit of the Executive. Such retirement plan may be the
Company's retirement plan, or a plan established solely for the benefit of
Executive. If such 10% per year amount exceeds the amount that Executive is
permitted to contribute to any such retirement plans under applicable law, or if
there are no retirement plans in existence, then the Company shall pay any such
excess amounts to a non-qualified-plan established for the benefit of Executive.
Until such time as the Company or the Executive establishes a plan, then the
Company shall credit such contributions to the Executive's account from and
after the Effective Date, until such a plan is created.
4.7 Vacation. During the Term of Employment, the Executive shall be
--------
entitled to four (4) weeks per year of vacation time, to be taken consistent
with the policies of the Company and the effective discharge of the Executive's
duties. Such vacation time shall accumulate from year to year but the Executive
shall not be entitled to any payment with respect to vacation time remaining at
the end of any year, provided, however, that all accrued but unpaid vacation
pay and any other unpaid compensation shall be paid to Executive upon any
termination of Executive from employment. In addition, any such accrued vacation
pay may be paid to Executive earlier upon the approval of the Board of
Directors.
4.8 Sick Leave: Holidays. During the term hereof, the Executive shall be
--------------------
entitled to sick leave and holidays in accordance with the established polices
of the Company from time to time in effect.
5. XXXXXXX GUARANTY.
----------------
Xxxxxxx hereby agrees to guaranty the payment and satisfaction of all of
the Company's obligations to the Executive hereunder in accordance with the
Guaranty Agreement attached hereto as Exhibit A.
6. ANNUAL REVIEW.
-------------
The Board of Directors of the Company shall conduct an annual review of the
Executive's performance, at which time the Board shall determine Executive's
bonus for the previous year and the Salary for the following year pursuant to
Sections 4.5 and 3.1, respectively. The first annual review shall take place in
January 1998 and shall encompass the period commencing on the Effective Date and
running through December 31, 1997.
7. TERMINATION.
-----------
7.1 Death. This Employment Agreement shall be terminated by the death of
-----
the Executive. Provided that the Company-paid life insurance described at
Section 4.4.2 of this Agreement is still in effect, in the event of termination
by reason of death Executive's estate shall receive solely his accrued Salary
and other compensation benefits, including accrued vacation pay, through and
including his date of death.
7.2 Disability. this Employment Agreement may be terminated by the Board
----------
of Directors of the Company if the Executive shall be rendered Incapable by
illness or any other disability from complying with the terms, conditions and
provisions on his part to be kept,
5
observed and performed for a period in excess of six months during the Term of
Employment ("Disability"). In the event that the Executive receives disability
Insurance benefits paid for by the Company during any period prior to
termination of this Employment Agreement for Disability pursuant to this
Section, the Executive's Salary shall be reduced by an amount equal to such
disability insurance benefits during such period. If Executive's employment
hereunder is terminated by reason of Disability of the Executive, the Company
shall give ten (10) days' prior written notice to that effect to the Executive
in the manner provided herein. In such case, Executive shall receive as
severance one year of Salary and other fringe benefits for a period of one year
after the date of termination, provided, however, that the one year of Salary
severance payments payable hereunder by Company to Executive during such one-
year period shall be reduced by an amount equal to any disability insurance
benefits paid for by the Company and received to Executive during such one year
period, with such benefits being grossed up for purposes of such calculation by
the amount necessary to make such payment equivalent on a pre-tax basis to the
Salary payments received by Executive.
7.3 For Cause. The Company shall have the right to terminate the
---------
Executive's employment hereunder at any time for Cause (as hereinafter defined),
provided, however, that the Company first gives the Executive forty-five (45)
days advance written notice of the Company's intention to terminate the
Executive's employment for Cause, detailing the Company's good faith reasons for
any such determination, and, provided further, that the Executive then fails
within such 45-day period to cure or otherwise correct the circumstances giving
rise to such "Cause." For purposes of this Agreement, the Company shall have
"Cause" to terminate the Executive's employment hereunder upon the Executive's
(a) misconduct that is materially injurious, in the reasonable judgment of the
Board of Directors of the Company, to the Company or any of its subsidiaries,
stockholders or affiliates; (b) conviction of (or pleading nolo contendere to)
any felony or any misdemeanor involving moral turpitude which might, in the
reasonable judgment of the Board of Directors of the Company, cause
embarrassment to the Company or any of its subsidiaries, stockholders or
affiliates; (c) commission of an act of personal dishonesty or breach of
fiduciary duty involving personal profit in connection with the Executive's
employment by the Company; (d) commission of an act which the Board of Directors
of the Company shall reasonably have found to have involved willful misconduct
or gross negligence on the part of the Executive, in the conduct of his duties
hereunder (e) use of illegal drugs, habitual absenteeism, chronic alcoholism or
any other form of addiction; (f) criminal activity or unethical conduct which
would, in the reasonable judgment of the Board of Directors of the Company,
impair the Executive's ability to perform his duties under this Agreement; (g)
refusal or repeated failure to comply with the reasonable policies, standards or
regulations of the Company; or (h) Executive's material breach of the terms and
conditions of this Agreement. In the event of any such "Cause" termination under
this Section, the Company's obligations under this Employment Agreement shall
cease and the Executive shall forfeit all right to receive any future
compensation under this Agreement, except for any repurchase of his shares by
the Company as described in this Agreement. Executive shall, however, receive
all accrued compensation and benefits, including without limitation, vacation
pay, payable through the date of any such termination.
7.4 Termination Without Cause. Executive's employment is at will, and may
-------------------------
be terminated at any time other than for Cause, upon twelve (12) months' prior
written notice by Company to Executive, subject to the terms and conditions of
this Agreement.
6
7.5 Voluntary Termination for Breach. Notwithstanding any other provision
--------------------------------
of this Agreement, if during the Term of Employment the Executive terminates his
own employment due to any material breach hereunder by the Company, including
without limitation by reason of any material adverse change by the Company in
Executive's duties, responsibilities, compensation, benefits or perquisites, the
Company agrees to: (i) pay to the Executive his then current base salary for a
period of one year after the final date of Executive's termination of
employment, (ii) continue all fringe benefits for a period of one year
commencing upon the termination of employment, and (iii) pay as of the date of
termination any accrued but unpaid vacation pay and any other accrued but unpaid
compensation.
7.6 Delivery of Resignations. In the event that the Executive's services
------------------------
hereunder are terminated under any of the provisions of this Employment
Agreement (except by death), the Executive agrees that he will deliver his
written resignation as an officer and/or director of the Company to the Board of
Directors, such resignation to become effective as of the date of his final day
of employment; provided, however, that nothing herein shall be deemed to affect
the provisions of Sections 8, 9, 10 and 11 hereof relating to the survival
thereof following termination of the Executive's services hereunder.
8. DISCLOSURE OF INFORMATION: INVENTIONS AND DISCOVERIES.
-----------------------------------------------------
The Executive shall promptly disclose to the Company all processes,
trademarks, inventions, improvements, discoveries and other information related
to the business of the Company (collectively, "Developments") conceived,
developed or acquired by him alone or with others during the Term of Employment,
whether or not during regular working hours or through the use of materials or
facilities of the Company. All Developments shall be the sole and exclusive
property of the Company, and, upon request, the Executive shall promptly deliver
to the Company all drawings, sketches, models and other data and records
relating to the Developments. In the event any such Development shall be deemed
by the Company to be patentable, the Executive shall, at the expense of the
Company, assist the Company in obtaining a patent or patents thereon and execute
all documents and do all such other acts and things necessary or proper to
obtain letters of patent and to invest in the Company full right, title and
interest in and to such Development.
9. NON-DISCLOSURE.
--------------
The Executive shall not, at any time during or after the Term of
Employment, divulge, furnish or make accessible to anyone (other than in the
regular course of business of the Company or as may be required by law) or use
for his own account or for the account of any person any Confidential
Information or any knowledge or information with respect to confidential or
secret processes, inventions, discoveries, improvements, formulae, plans,
material, devices or ideas or other know-how, whether patentable or not, with
respect to any confidential or secret development or research work or with
respect to any other confidential or secret aspects of the Company's business
(including, without limitation, customer lists, supplier lists and pricing
arrangements with customers or suppliers). All Confidential Information shall be
the exclusive property of the Company and all such Confidential Information
shall be returned to the Company by the Executive upon the request of the
Company or upon the termination of the Executive's employment by the Company. As
used in this Section, Confidential Information
7
shall mean information of any nature and in any form, except for information
which the Executive can demonstrate:
9.1 was at the time of disclosure to the Executive generally part of the
public domain or thereafter becomes part of the public domain through no act or
omission by the Executive; or
9.2 was lawfully in the Executive's possession as shown in written records
prior to disclosure by the Company and without obligation of confidentiality; or
9.3 was lawfully received by the Executive after disclosure from a third
party without obligation of confidentiality and without violation by said third
party of an obligation of confidentiality to another; or
9.4 was independently developed by the Executive without any use of
Confidential Information; or
9.5 was required to be disclosed by law or court order.
10. NON-COMPETITION.
---------------
The Company and the executive agree that the services rendered by the
Executive hereunder are unique and irreplaceable. The Executive hereby agrees
that, during the Term of Employment and for a period of one (1) year thereafter,
the Executive shall not (a) in the United States or in those foreign countries
where the Company during the Term of Employment conducts business or proposes to
conduct business or initiate activities, engage or participate in, directly or
indirectly (whether as an officer, director, employee, partner, consultant,
holder of an equity or debt investment, lender or in any other manner or
capacity), or lend his name (or any part or variant thereof) to, any business
which is, or as a result of the Executive's engagement or participation would
become, competitive with any aspect of the business of the Company, such
business being the development and commercialization of microfluid-based systems
for drug discovery research and such other specific technologies in which the
Company has, during the Term of Employment, initiated significant plans to
develop products; (b) deal, directly or indirectly, in a competitive manner with
any customers doing business with the Company during the Term of Employment
(except in connection with the performance of the duties and obligations of the
Executive during the Term of Employment); (c) solicit any officer, director,
employee or agent of the Company to become an officer, director, employee or
agent of the Executive, his respective affiliates or anyone else; or (d) engage
in or participate in, directly or indirectly, any business conducted under any
name that shall be the same as or similar to the name of the Company or any
trade name used by it. Ownership, in the aggregate, of less than 1% of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or publicly held
in the over-the-counter market shall not constitute a violation of the foregoing
provision. "Proposes to conduct business" as used above in this Section 10 means
that such proposed area was the subject of significant plans at the Company.
11. PROPERTY.
--------
Upon termination of the Term of Employment for any reason, the Executive or
his personal representative shall promptly deliver to the Company all books,
memoranda, plans,
8
records and written data of every kind relating to the business and affairs of
the Company and all other property owned by the Company which is then in the
Executive's possession.
12. INSURANCE.
---------
The Company shall have the right at its own cost and expense to apply for
and to secure in its own name, or otherwise, life, health or accident insurance
or any or all of them covering the Executive, and the Executive agrees to submit
to usual and customary medical examinations and otherwise to cooperate with the
Company in connection with the procurement, of any such insurance, and any
claims thereunder.
13. SPECIFIC PERFORMANCE.
--------------------
The Executive acknowledges that, in the event of any breach of Sections 8,
9, 10 or 11 of this Agreement by the Executive, the remedy of the Company at law
would be inadequate. The Executive therefore agrees that the Company shall be
entitled to enforce its rights under Sections 8, 9, 10 or 11 of this Agreement
not only by an action or actions for damages but also by an action or actions
for injunctive and other equitable relief without the necessity of proving
irreparable harm or actual damage.
14. SUCCESSORS: BINDING AGREEMENT.
-----------------------------
14.1 Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties hereto, their heirs, legal representatives, successors
and permitted assigns.
14.2 Delegation. The Executive may not delegate or assign the performance
----------
of any duties and responsibilities imposed nor assign any rights and benefits
created by this Agreement; provided, however, that any amounts which are due and
owing to the Executive at the time of his death shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee or other
designee or if there be no such designee, to the Executive's estate.
14.3 No Conflicts. The Executive represents that the execution and
------------
delivery of this Agreement and the performance of his duties hereunder do not
and shall not conflict with the terms of any agreement or obligation to his
prior employer or to any other party.
15. NOTICES.
-------
All notices required or permitted under this Agreement shall be in writing
and delivered by any method providing for proof of delivery. Any notice shall be
deemed to have been given on the date of receipt. Notices shall be delivered to
the parties at the following addresses until a different address has been
designated by notice to the other party:
15.1 if to the Executive:
Xxxx Xxxxx
0 Xxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
9
15.2 if to the Company:
Orchid Biocomputer, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention:
15.3 in each instance, with a copy to:
Xxxxxxx Corporation
000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Xxxxxx X. Xxxx, Esq.
SEED, XXXXXXX & XXXX LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
16. MISCELLANEOUS.
-------------
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Company and the Executive. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. Except for the guaranty attached hereto and made a part hereof,
no agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party or any other
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New Jersey applicable in the case of agreements made
and entirely performed in such State. The parties agree that all actions or
proceedings arising in connection with this Agreement shall be tried and
litigated exclusively in the State and Federal courts located in the County of
Xxxxxx, State of New Jersey. The aforementioned choice of venue is intended by
the parties to be mandatory and not permissive in nature, thereby precluding the
possibility of litigation between the parties with respect to or arising out of
this Agreement in any jurisdiction other than that specified in this paragraph.
17. VALIDITY.
--------
It is the intention of the Executive and the Company that the provisions of
this Agreement (including, without limitation, those of Sections 8, 9,10 and 11
hereof) shall be enforced to the fullest extent permissible under the laws and
public policies of each jurisdiction in which such enforcement is sought. The
invalidity or enforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. If any' tribunal of
competent jurisdiction shall decide that any of the provisions of this Agreement
should be deemed illegal or unenforceable, then only those provisions shall be
deemed invalid (or shall be appropriately
10
modified to the maximum extent permissible in keeping with the intent of the
parties) and the remainder of this Agreement shall continue in full force and
effect.
18. SURVIVAL.
--------
The provisions of Sections 7 (regardless of the continuation of Executive's
Salary thereunder), 8, 9, 10,11 and 18 hereof shall survive the termination of
this Agreement and shall be binding upon the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devises and legatees.
19. HEADINGS.
--------
The headings of this Agreement are for convenience of reference only and
are not part of the substance of this Agreement.
20. COUNTERPARTS.
------------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be a original but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date and year first above written.
ORCHID COMPUTER, INC.
By: /s/ Xxxx X. Xxxxx, Ph.D.
-----------------------------------------
XXXX X. XXXXX, Ph.D.
Title: Chief Executive Officer and President
---------------------------------------
THE UNDERSIGNED ACKNOWLEDGES AND AGREES TO THE PROVISIONS OF SECTIONS 2.2, 3.2
AND 5 HEREOF AND, WITH RESPECT TO SECTION 2.2, THE UNDERSIGNED AGREES TO VOTE
ITS SHARES FOR SUCH ELECTION OF THE EXECUTIVE:
XXXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------------
Xxxxx X. Xxxxxx, President
11
Exhibit A
GUARANTEE
---------
The undersigned guarantor, Xxxxxxx Corporation ("Xxxxxxx"), acknowledges
that Xxxx X. Xxxxx -("Executive"), has agreed to enter into an Employment
Agreement (the "Agreement") of even date with Orchid Biocomputer, Inc.
("Orchid").
1. General Guarantee. Xxxxxxx hereby acknowledges receipt of good,
adequate and valuable consideration, and hereby unconditionally and irrevocably
guarantees: (1) the full and prompt payment of all sums that may be due by
Orchid to Executive under the Agreement as they relate to Executive's equity,
salary, benefits and severance, and (2) the performance of all obligations of
Orchid under such Agreement as they relate to Executive's equity, salary,
benefits and severance.
2. Limitations on Guarantee. Notwithstanding any other provision of this
Guarantee, Xxxxxxx'x liability hereunder is limited as follows:
(1) in all events Xxxxxxx'x total liability under this instrument shall
not exceed $300,000;
(2) this guarantee shall lapse on the seventh annual anniversary of the
"Effective Date" of the Agreement;
(3) if Xxxxxxx'x direct and indirect ownership interest in Orchid become
less than 50 percent of the outstanding voting shares of Orchid by
reason of the sale by Xxxxxxx of its shares in Orchid to a third
party, then the obligations due Executive under the Agreement shall be
limited to four months of compensation and fringe benefits payable to
Executive as an officer, together with the one year of severance
benefits applicable in specified circumstances under the Agreement;
(4) if Xxxxxxx'x direct and indirect ownership interest in Orchid become
less than 50 percent of the outstanding voting shares of Orchid by
reason of a capital raising transaction approved by the Board of
Directors of Orchid, and which as part of such Board approval receives
the affirmative vote of Executive as a director of Orchid, then this
guarantee shall automatically lapse upon the close of any such
transaction;
(5) if Xxxxxxx'x direct and indirect ownership interest in Orchid become
less than 50 percent of the outstanding voting shares of Orchid by
reason of a capital raising transaction approved by the Board of
Directors of Orchid, but which as part of such Board approval did not
receive the affirmative vote of Executive as a director of Orchid,
then the obligations due Executive under the Agreement shall be
limited to four months of compensation and fringe benefits payable to
Executive as an officer, together with the one year of severance
benefits applicable in specified circumstances under the Agreement;
12
(6) this guarantee shall lapse in the event of an underwritten initial
public offering of the Company's common stock which results in $10
million in minimum net proceeds to the Company;
(7) this guarantee in all events shall lapse on that date which is three
years after the date that Xxxxxxx'x direct and indirect ownership
interest in Orchid become less than 50 percent of the outstanding
voting shares of Orchid;
(8) this guarantee shall lapse with the prior written consent of the
Executive;
(9) this guarantee shall lapse upon its replacement by $300,000 in funds
deposited by Xxxxxxx into an escrow account, or by another such
equivalent security device, with any such device being under such
written terms and conditions as may be mutually acceptable to the
parties.
3. Payment of Compensation. Further, notwithstanding any other provision
of this Guarantee, if, during the Term of Employment as defined under the
Agreement, Executive, as the CEO or Chairman of Orchid, makes a good faith
determination that Orchid is unable to meet part or all of its payroll
obligations for any pay period, including, without limitation, Orchid's ability
to pay to Executive his compensation for such pay period, then Executive will
deliver written notice of such circumstances simultaneously to Xxxxxxx and to
all of the members of Orchid's Board of Directors. Within three (3) business
days after such notice, Xxxxxxx agrees to pay directly to Executive his
compensation for such pay period. If, however, after receiving such notice from
Executive, a majority of Orchid's Board disagrees in good faith with Executive's
determination, the Board may overrule Executive by directing Executive to obtain
his compensation for such period directly from Orchid if such funds are existent
in the normal accounts of the company, and, upon Executive's receipt of such
compensation payment from Orchid, Xxxxxxx shall have no further responsibility
to make such payment for such pay period under this Guarantee.
4. General Provisions. By signing this Guarantee, Xxxxxxx also agrees
that:
4.1 Changes Do Not Affect Liability. Executive may without notice to
Xxxxxxx and in his absolute discretion and without prejudice to him or in any
way limiting Xxxxxxx'x liability under this Guarantee, (a) grant extensions of
time, renewals or other indulgences and modifications to Orchid or any other
party under the Agreement, (b) change, amend or modify the Agreement, (c)
authorize the use, exchange, release or subordination of any security or
collateral for the Agreement, whether real or personal property, (d) take
additional security for the Agreement, whether real or personal property, (e)
discharge or release any party or parties liable under the Agreement, (f) accept
or make compositions or other arrangements or file or refrain from filing a
claim in any bankruptcy proceeding of Orchid or any other guarantor or xxxxxxx,
(g) credit payments in such manner and order of priority as Executive may
determine in its discretion, and (h) otherwise deal with Orchid or any other
guarantor or party related to the Agreement or any security or collateral as
Executive may determine in its discretion. Without limiting the generality of
the foregoing, Xxxxxxx agrees that by doing so Xxxxxxx'x liability shall
continue even if Executive alters any obligations under the Agreement in any
respect or Executive's remedies or rights against Orchid are in any way impaired
or suspended without Xxxxxxx'x consent.
13
4.2 Guarantee of Payment and Performance. Xxxxxxx'x liability under this
Guarantee is a guarantee of payment and performance of the Agreement and not of
collect ability, and is not conditioned or contingent upon the genuineness,
validity, regularity or enforceability of any of the Agreement.
4.3 Waivers of Certain Rights and Defenses. Xxxxxxx hereby waives the
right to require Executive to (a) proceed against Orchid (except as provided
above in Section 3) or any other guarantor or xxxxxxx, (b) proceed against or
exhaust any security or collateral Executive may hold, or (c) pursue any other
right or remedy for Xxxxxxx'x benefit, and agrees that Executive may proceed
against Xxxxxxx for the obligations guaranteed herein without taking any action
against Orchid or any other guarantor or xxxxxxx and without proceeding against
or exhausting any security or collateral Executive holds. Xxxxxxx agrees that
Executive may unqualifiedly exercise in his sole discretion any or all rights
and remedies available to him against Orchid or any other guarantor or xxxxxxx
without impairing Executive's rights and remedies in enforcing this Guarantee,
under which Xxxxxxx'x liabilities shall remain independent and unconditional.
4.4 Additional Waivers. Xxxxxxx hereby waives diligence and all demands,
protests, presentments and notices of every kind or nature, including notices of
protests, dishonor, nonpayment, acceptance of this Guarantee and the creation,
renewal, extension, modification or accrual of any of the obligations Xxxxxxx
hereby guarantees. No failure or delay on Executive's part in exercising any
power, right or privilege hereunder shall impair any such power, right or
privilege or be construed as a waiver of or an acquiescence therein.
4.5 Changes, Waivers, Amendments, Attorney's Fees. No terms or provisions
of this Guarantee may be changed, waived, revoked or amended without the prior
written consent of both parties to this Guarantee. Should any provision of this
Guarantee be determined by a court of competent jurisdiction to be
unenforceable, all of the other provisions shall remain effective. This
Guarantee embodies the entire agreement among the parties hereto with respect to
the matters set forth herein, and supersedes all prior agreements among the
parties with respect to the matters set forth herein. No course of prior
dealing among the parties, no usage of trade, and no parol or extrinsic evidence
of any nature shall be used to supplement, modify or vary any of the terms
hereof. There are no conditions to the full effectiveness of this Guarantee. The
prevailing party in any dispute resulting in arbitration, litigation or other
proceedings between any guarantor hereunder and Executive shall be entitled to
its costs and expenses for such proceedings, including reasonable attorneys'
fees.
4.6 Inconsistent Law. Notices and Governing Law. If any of the provisions
of this Section 4 are inconsistent with the provisions of Sections 1, 2, or 3 of
this Guarantee, the provisions of Sections 1, 2 or 3, as the case may be, shall
control. All notices, requests and demands to be made hereunder shall be in
writing at the last known business address of each party by any of the following
means: (i) personal service (including service by overnight courier service);
(ii) electronic communication, whether by telex, telegram or telecopying (if
confirmed in writing sent by personal service or by registered or certified,
first class mail, return receipt requested); or (iii) registered or certified,
first class mail, return receipt requested. Such addresses may be changed by
notice to the other parties given in the same manner as provided above. Any
notice, request or demand sent pursuant to either subsection (i) or (ii) hereof
shall be deemed received upon such personal service or upon dispatch by
electronic means, and, if sent pursuant to subsection (iii) shall be deemed
received seven (7) days following deposit in the mail. This
14
Guarantee shall be enforced and interpreted according to the laws of the State
of New Jersey, irrespective of its conflicts of laws rules.
XXXXXXX CORPORATION
By_______________________
Title____________________
_________________________
Date
15
RESTRICTED STOCK PURCHASE AGREEMENT
-----------------------------------
This Agreement dated as of November 30, 1997 (the "Effective Date") is by
and between Orchid Biocomputer, Inc., a Delaware corporation (the "Company"),
and Xxxx X. Xxxxx, Ph.D. (THE "Stockholder").
WHEREAS, the Company and the Stockholder have entered into an Employment
Agreement dated as of November 1, 1996 (the "Employment Agreement") pursuant to
which the Company has agreed to employ the Stockholder subject to the terms
described therein and
WHEREAS, pursuant to Sections 3.2 and 3.2.1 of the Employment Agreement,
the Company is obligated to issue to the Stockholder shares of the Company's
Common Stock, $.001 par value per share (the "Common Stock"), totaling 99,333
and 10,000 shares, respectively (or 109,333 shares in the aggregate).
NOW, THEREFORE, in consideration of the mutual covenants and
representations herein set forth, the parties hereby agree as follows:
1. Purchase of Stock. Subject to the terms and conditions of this
-----------------
Agreement, the Company hereby grants and delivers to the Stockholder an
aggregate of 109,333 shares of the Common Stock of the Company (such shares,
together with any other securities of the Company that may be issued in exchange
for or in respect of such shares of Common Stock by way of a stock split, stock
dividend, combination, reclassification, reorganization, or any other means,
being referred to herein as the "Shares"). Upon execution by the Stockholder of
this Agreement, the Company shall deliver to the Stockholder a certificate
representing the Shares being granted to the Stockholder by the Company,
2. Vesting of Shares. The Shares shall be subject to vesting in
-----------------
accordance with the following schedule:
(a) Fifty percent (50%) of the Shares will vest on the Effective
Date.
(b) The remaining fifty percent (50%) of the Shares will vest monthly
on the last day of each month in twenty-four equal portions of
2.083% per month, with the first such vesting to occur on
November 30, 1997.
The portion of the Shares that has not vested is referred to herein as the
"Unvested Shares;" the portion of the Shares that has vested is referred to
herein as the "Vested Shares."
3. Shares Subject to Restrictions. During the term of this Agreement, the
------------------------------
Shares may not be sold, assigned, transferred, pledged, hypothecated, mortgaged
or disposed to by gift or otherwise, or in any way encumbered, except in
accordance with this Agreement.
4. Repurchase Right of the Company.
-------------------------------
4.1 Repurchase Right. In the event that the Stockholder's employment with
----------------
the Company is terminated for any reason, whether by the Stockholder or by the
Company, and with or without cause, the Company shall have the option to
purchase from the Stockholder (or the
16
Stockholder's heirs or the legal representatives in the event of the
Stockholder's death), and the Stockholder shall be obligated to sell to the
Company, at a price equal to the Repurchase Price (as defined below), all of the
Shares (the "Repurchase Option").
4.2 Mechanics of Repurchase. The Company may exercise the Repurchase
-----------------------
Option upon written notice (the "Company Notice") to the Stockholder within
fourteen (14) days after the date of termination of the Stockholder's employment
with the Company. Such Company Notice shall state the following: (i) the number
of Shares that the Company will repurchase, (ii) the aggregate Repurchase Price
of such Shares, and (iii) a closing date for the repurchase. On the specified
closing date, at the principal offices of the Company or by other mutually
agreeable arrangement, the Stockholder shall deliver to the Company the duly
endorsed certificate(s) representing the Shares subject to repurchase, and the
Company shall pay the Repurchase Price of such Shares (in cash, by check, or by
cancellation of indebtedness of the Stockholder to the Company). The closing
date described in the preceding sentence shall be within sixty (60) days after
the date of the Company Notice; provided, however, if there is a valuation
disagreement that is submitted to appraisal under Paragraph 4.5 of this
Agreement, then the closing date shall be thirty (30) days after the valuation
determination has been made by the appraiser.
4.3 Failure to Deliver Shares. If the Stockholder becomes obligated to
-------------------------
sell any Shares to the Company under this Section 4 and fails to deliver such
Shares in accordance with the terms of the Agreement, the Company may, in
addition to all other available remedies, send to the Stockholder the Repurchase
Price for the Shares in accordance with this Section 4 and then, immediately
upon written notice, the Company may take the following actions: (i) cancel on
its books the certificate(s) representing Shares not delivered and, at is
election, issue to itself or its assignee one or more new certificates
representing the repurchased Shares, and (ii) issue to the Stockholder a
certificate representing any Shares represented by the canceled certificate(s).
In such event, the Stockholder shall have no further rights in and to such
undelivered Shares.
4.4 Termination of Repurchase Option. This Repurchase Option shall
--------------------------------
terminate on the earlier to occur of (i) the consummation by the Company of its
first underwritten public offering pursuant to an effective registration
statement or Form S-1 (or its equivalent) under the Securities Act of 1933, as
amended (a "Qualified Offering"), and (ii) the date on which Xxxxx Xxxxxxx
Research Center, Inc. ("Xxxxxxx") first ceases to own or control at least 51% of
the issued and outstanding shares of the capital stock of the Company having the
right to vote in the election of directors.
4.5 Repurchase Price. As used herein, the term "Repurchase Price" shall
----------------
mean (i) with respect to the Vested Shares, the fair market value per share as
of the date of termination of the Stockholder's employment as determined in good
faith by the Board of Directors of the Company and (ii) with respect to the
Unvested Shares, $.01 per share. In the event that the Stockholder shall
disagree with the valuation of the Vested Shares determined in accordance with
subsection (i) of this Section 4.5, then, upon written notice to the Company
given within ten (10) days of the date the Board shall notify the Stockholder of
its determination of such fair market value, the parties shall select a neutral
independent appraiser to determine such value within ninety (90) days of such
notice, with the expense of such appraisal to be borne equally by the parties.
17
5. Put Right of the Stockholder.
----------------------------
5.1 Put Right. In the event that the Stockholder's employment with the
---------
Company is terminated for any reason, whether by the Stockholder or by the
Company, and with or without cause, the Stockholder shall have the right to
require the Company to purchase from the Stockholder (or the Stockholder's heirs
or the legal representatives in the event of the Stockholder's death), at a
price equal to the Repurchase Price (as defined in Section 4.5 above), all of
the Shares (the "Put Option").
5.2 Mechanics of Put Right. The Stockholder may exercise the Put Right
----------------------
upon written notice (the "Stockholder's Notice") to the Company within fourteen
(14) days after the date of termination of the Stockholder's employment with the
Company. The Stockholder's Notice shall state the following: (i) the number of
Shares that the Stockholder will be selling to the Company, and (ii) a closing
date for the sale. On the specified closing date, at the principal offices of
the Company or by other mutually agreeable arrangement, the Stockholder shall
deliver to the Company the duly endorsed certificate(s) representing the Shares
subject to the Put Right, and the Company shall pay the Repurchase Price of such
Shares (in cash, by check, or by cancellation of indebtedness of the Stockholder
to the Company). The closing date described in the preceding sentence shall be
within sixty (60) days after the date of the Stockholder's Notice, provided
however, if there is a valuation disagreement that is submitted to appraisal
under Paragraph 4.5 of this Agreement, then the closing date shall be thirty
(30) days after the valuation determination has been made by the appraiser.
6. Transfer of Unvested Shares. No portion of the Unvested Shares shall
---------------------------
be transferable, except to a trust for the benefit of (i) an immediate family
member (spouse, parents, children, or grandchildren) or (ii) the Stockholder.
7. Transfer of Vested Shares.
-------------------------
7.1 Right of First Refusal. If the Stockholder desires to sell all or
----------------------
any part of the Vested Shares and has received in writing an irrevocable and
unconditional bona fide offer (the "Bona Fide Offer") for the purchase thereof
from a party (the "Offeror"), the Stockholder shall give written notice (the
"BFO Notice") to the Company setting forth Stockholder's desire to sell such
Vested Shares, which BFO Notice shall be accompanied by a photocopy of the
original executed Bona Fide Offer and shall set forth at least the name and
address of the Offeror and the price and terms of the Bona Fide Offer. Upon
receipt of the BFO Notice, the Company shall have an option to purchase all (but
not less than all) of such Vested Shares specified in the BFO Notice, such
option to be exercised by giving, within thirty (30) days after receipt of the
BFO Notice, a written counter-notice to the Stockholder. If the Company elects
to purchase all (but not less than all) of such Vested Shares, it shall be
obligated to purchase, and the Stockholder shall be obligated to sell to the
Company, such Vested Shares at the price and in accordance with the terms
indicated in the Bona Fide Offer within sixty (60) days from the date of receipt
by the Company of the BFO Notice. The Company may assign the right of first
refusal granted by this Section 7.1.
7.2 Subsequent Sale of the Vested Shares. The Stockholder may sell
------------------------------------
any or all of the Vested Shares that the Company or its assignees have not
elected to purchase during the twenty (20) days following the expiration of the
exercise period for such purchase by the
18
Company, provided that such sale is made only pursuant to the terms of the Bona
Fide Offer. If, however, any or all of the Vested Shares is not sold pursuant to
the Bona Fide Offer within such twenty-day period, the unsold portion of the
Vested Shares shall remain subject to the terms of this Agreement.
7.3 Restrictions on Offeror. Any Offeror purchasing all or any
-----------------------
portion of the Vested Shares from the Stockholder under Section 7.2 shall be
subject to the terms of this Agreement.
7.4 Exempted Transfers. The Stockholder shall be permitted to
------------------
transfer portions of the Vested Shares owned by him without complying with the
provisions of this Section 7 in the following situations: (i) any inter vivos
transfer by the Stockholder to any member of his immediate family (spouse,
parents, children or grandchildren) or to any trust for the benefit of any such
immediate family member or himself, or a family limited partnership or family
limited liability company, provided that any such transferee referred to above
shall have delivered to the Company the written agreement of such transferee to
be bound by all of the provisions of this Agreement to the same extent as the
Stockholder, or (ii) by will or the laws of descent and distribution, in which
event each such transferee shall be bound by all of the provisions of this
Agreement to the same extent as if such transferee were the Stockholder.
7.5 Failure to Deliver Shares. If the Stockholder becomes obligated
-------------------------
to sell any Shares to the Company or its assignee under this Section 7 and fails
to deliver such Shares in accordance with the terms of this Agreement, the
Company or its assignee may, at its option, in addition to all other remedies it
may have, send to the Stockholder the purchase price for such Shares as is
herein specified. Thereupon, the Company upon written notice to the Stockholder,
(i) shall cancel on its books the certificate or certificates representing the
Shares to be sold and (ii) shall issue, in lieu thereof, in the name of the
Company or its assignee, a new certificate or certificates representing such
Shares, and thereupon all of the Stockholder's rights in and to such Shares
shall terminate.
7.6 Term. This Agreement shall terminate (i) immediately prior to the
----
consummation of a Qualified Offering, or (ii) upon the closing of an
acquisition, consolidation, or merger of the Company or a sale or transfer of
all or substantially all of the assets of the Company.
8. Legend. Each certificate evidencing any of the Shares shall bear a
------
legend substantially as follows:
"The shares represented by this certificate are subject to
restrictions on transfer and repurchase provisions and may not be
sold, exchanged, transferred, pledged, hypothecated, or otherwise
disposed of except in accordance with and subject to all the terms and
conditions of a certain Restricted Stock Purchase Agreement dated as
of November 30, 1997, a copy of which the Company will furnish to the
holder of this certificate upon request and without charge."
9. Specific Performance. Because the Shares cannot be readily purchased or
--------------------
sold in the open market, and for other reasons deemed sufficient by them, the
parties hereto acknowledge that they will be irreparably damaged in the event
that this Agreement is not
19
specifically enforced. Upon a breach or threatened breach of the terms,
covenants and/or conditions of this Agreement by either of the parties hereto,
the other, in addition to all other remedies, shall be entitled, without showing
any actual damage, to a temporary or permanent injunction and/or a decree for
specific performance, in accordance with the provisions hereof.
10. Section 83(b) Election. The Stockholder acknowledges that Section 83
----------------------
of the Internal Revenue Code of 1986, as amended (the "Code"), may apply to the
grant of Shares under this Agreement. The Stockholder further acknowledges that
an election under Section 83(b) of the Code must be filed with I.R.S., if
desired, within thirty (30) days after the date the Shares was granted to the
Stockholder under this Agreement. Because the particular tax situation for the
Stockholder will depend on individual circumstances, the Stockholder should
consult a personal tax adviser with respect to the federal income tax
consequences of the Shares received under this Agreement, as well as with
respect to the effects of applicable state tax laws and any applicable tax laws
of foreign jurisdictions. THE STOCKHOLDER ACKNOWLEDGES THAT IT IS THE
RESPONSIBILITY OF THE STOCKHOLDER AND NOT OF THE COMPANY TO FILE A TIMELY
ELECTION UNDER SECTION 83(b) OF THE CODE EVEN IF THE STOCKHOLDER REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON BEHALF OF THE STOCKHOLDER.
11. Investment Representations.
--------------------------
11.1 Investment Intent. The Stockholder represents that the Shares
-----------------
are being acquired for his own account for investment and not with a view to, or
for sale in connection with, the distribution thereof, nor with any present
intention of distributing or selling the Shares and acknowledge that the
certificate from the Shares will bear a legend reflecting the provisions of this
Section 11.1.
11.2 Disclosure of Information. The Stockholder has received all the
-------------------------
information that he considers necessary or appropriate for deciding whether to
purchase the Shares. The Stockholder further represents that he has had
sufficient opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Shares.
11.3 Lack of Registration. The Stockholder understands and
--------------------
acknowledges that the Shares is unregistered and may not be sold publicly unless
subsequently registered under the Securities Act, of 1933, as amended (the
"Act") or unless an exemption from such registration is available; that the
exemption from registration under Rule 144 promulgated under the Act will not be
available in any event for at least one (1) year from the date of purchase and
payment for the Shares and even then will not be available unless (i) a public
trading market then exists for the interest of the Company, (ii) adequate
current information concerning the Company is then available to the public, and
(iii) other terms and conditions of Rule 144 are complied with; and that any
sale of the Shares may be made only in limited amounts in accordance with such
terms and conditions. The Company further understands and acknowledges that: (1)
there is not presently available, and may not be available at the time he wishes
to sell the Shares adequate current public information with respect to the
Company that would permit offers or sales of the Shares pursuant to Rule 144
promulgated under the Act, and, therefore, compliance with Regulation A of the
Act may be required for any such offer or sale; and (ii) the Company is under no
obligation to register the Shares or to make Rule 144 available.
20
12. Governing Law. This Agreement shall be construed under and governed by
-------------
the internal laws of the State of New Jersey, without regard to principles of
conflicts of law.
13. Notice. Notice hereunder shall be deemed to have been duly given if in
------
writing (i) on the date delivered, if delivered in person, (ii) on the business
day after the date sent, if sent by recognized overnight courier service, or
(iii) three (3) days after the date of mailing, if sent by registered or
certified mail, postage prepaid, return receipt requested. The parties shall
designate their respective addresses.
14. Entire Agreement; Amendment. This Agreement supersedes all prior
---------------------------
written and oral agreements and understandings among the parties as to its
subject matter and constitutes the entire agreement of the parties with respect
to the subject matter hereof. This Agreement may not be modified, amended,
terminated or any provision thereof waived in whole or in part except by a
written agreement signed by the parties.
15. Waivers. No waiver hereunder shall be deemed a waiver of any
-------
subsequent breach or default of the same or similar nature.
16. Severability; Reformation. If any provision of this Agreement shall be
-------------------------
determined by a court of law to be unenforceable for any reason, such
unenforceability shall not affect the enforceability of any of the remaining
provisions hereof, and this Agreement, to the fullest extent lawful, shall be
reformed and construed as if such unenforceable provision, or part of a
provision, had never been contained herein, and such provision or part reformed
so that it would be enforceable to the maximum extent legally possible.
17. Headings. Headings are for convenience only and are not deemed to be
--------
part of this Agreement.
18. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned as
of the date first written above.
ORCHID BIOCOMPUTER, INC.
By:______________________________
Name:
Title:
_________________________________
Xxxx X. Xxxxx
21
