Document:

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                                                                    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 DALE R. PFOST, 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, Sarnoff Corporation ("Sarnoff") 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 Sarnoff's 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
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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, Sarnoff 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 Sarnoff will license to the Company certain technology commonly referred
to as the "Blue Chip Technology" in exchange for the issuance by the Company to
Sarnoff 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 Sarnoff 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 Sarnoff in exchange for such license,
then at such time Orchid shall also

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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 Sarnoff 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

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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 Sarnoff
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.

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     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.   SARNOFF GUARANTY.
     ----------------

     Sarnoff 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,

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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.

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     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

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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,

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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:

          Dale Pfost
          4 Rosedale Way
          Pennington, NJ 08534

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     15.2  if to the Company:

           Orchid Biocomputer, Inc.
           201 Washington Road
           Princeton, New Jersey 08540
           Attention:

     15.3  in each instance, with a copy to:

           Sarnoff Corporation
           201 Washington Road
           Princeton, New Jersey 08540
           Attention: General Counsel

           Joseph L. Cole, Esq.
           SEED, MACKALL & COLE LLP
           1332 Anacapa Street, Suite 200
           Santa Barbara, California 93101

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
Mercer, 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

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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/ Dale R. Pfost, Ph.D.
                                  -----------------------------------------
                                  DALE R. PFOST, 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:

SARNOFF CORPORATION

By: /s/ James E. Carnes
   -------------------------
James E. Carnes, President

                                       11
<PAGE>

                                   Exhibit A

                                   GUARANTEE
                                   ---------

     The undersigned guarantor, Sarnoff Corporation ("Sarnoff"), acknowledges
that Dale R. Pfost -("Executive"), has agreed to enter into an Employment
Agreement (the "Agreement") of even date with Orchid Biocomputer, Inc.
("Orchid").

     1.   General Guarantee. Sarnoff 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, Sarnoff's liability hereunder is limited as follows:

     (1)  in all events Sarnoff's 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 Sarnoff's 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 Sarnoff 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 Sarnoff's 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 Sarnoff's 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
<PAGE>

     (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 Sarnoff's 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 Sarnoff 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 Sarnoff and to
all of the members of Orchid's Board of Directors. Within three (3) business
days after such notice, Sarnoff 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, Sarnoff shall have no further responsibility
to make such payment for such pay period under this Guarantee.

     4.   General Provisions. By signing this Guarantee, Sarnoff also agrees
that:

     4.1  Changes Do Not Affect Liability. Executive may without notice to
Sarnoff and in his absolute discretion and without prejudice to him or in any
way limiting Sarnoff's 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 pledger,
(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, Sarnoff agrees that by doing so Sarnoff's 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 Sarnoff's consent.

                                       13
<PAGE>

     4.2  Guarantee of Payment and Performance. Sarnoff's 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. Sarnoff hereby waives the
right to require Executive to (a) proceed against Orchid (except as provided
above in Section 3) or any other guarantor or pledger, (b) proceed against or
exhaust any security or collateral Executive may hold, or (c) pursue any other
right or remedy for Sarnoff's benefit, and agrees that Executive may proceed
against Sarnoff for the obligations guaranteed herein without taking any action
against Orchid or any other guarantor or pledger and without proceeding against
or exhausting any security or collateral Executive holds. Sarnoff 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 pledger
without impairing Executive's rights and remedies in enforcing this Guarantee,
under which Sarnoff's liabilities shall remain independent and unconditional.

     4.4  Additional Waivers. Sarnoff 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 Sarnoff
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
<PAGE>

Guarantee shall be enforced and interpreted according to the laws of the State
of New Jersey, irrespective of its conflicts of laws rules.

SARNOFF CORPORATION

By_______________________
Title____________________

_________________________
Date

                                       15
<PAGE>

                      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 Dale R. Pfost, 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
<PAGE>

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 David Sarnoff
Research Center, Inc. ("Sarnoff") 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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

     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:

                              _________________________________
                              Dale R. Pfost

                                       21<PAGE>
                                                                    Exhibit 10.1

                                  INFLOW, INC.

                               SERIES A PREFERRED

                            STOCK PURCHASE AGREEMENT

                                 APRIL  5, 1999

<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                         Page
                                                                         ----
<C>  <S>                                                                 <C>
1.   Purchase and Sale of Stock..........................................  1
     1.1  Sale and Issuance of Series A Preferred Stock..................  1
     1.2  Closing........................................................  1
     1.3  Subsequent Sale of Series A Preferred Stock....................  1

2.   Representations and Warranties of the Company.......................  2
     2.1  Organization, Good Standing, Power and Qualification...........  2
     2.2  Capitalization and Voting Rights...............................  2
     2.3  Subsidiaries...................................................  3
     2.4  Authorization..................................................  3
     2.5  Valid Issuance of Preferred and Common Stock...................  3
     2.6  Consents.......................................................  3
     2.7  Offering.......................................................  4
     2.8  Litigation.....................................................  4
     2.9  Proprietary Information Agreements.............................  4
     2.10 Patents and Trademarks.........................................  4
     2.11 Compliance with Other Instruments..............................  5
     2.12 Agreements; Action.............................................  5
     2.13 Related-Party Transactions.....................................  6
     2.14 Financial Statements...........................................  6
     2.15 Changes........................................................  6
     2.16 Tax Returns....................................................  7
     2.17 Permits........................................................  7
     2.18 Environmental and Safety Laws..................................  8
     2.19 Disclosure.....................................................  8
     2.20 Registration Rights............................................  8
     2.21 Corporate Documents............................................  8
     2.22 Title to Property and Assets...................................  8
     2.23 Labor Agreements and Actions...................................  9
     2.24 Insurance......................................................  9
     2.25 Year 2000 Compliance...........................................  9
     2.26 Governmental Regulations.......................................  9
     2.27 Small Business Concern......................................... 10

3.   Representations and Warranties of the Investors..................... 10
     3.1  Authorization.................................................. 10
     3.2  Purchase Entirely for Own Account.............................. 10
     3.3  Disclosure of Information...................................... 10
     3.4  Investment Experience.......................................... 10
     3.5  Accredited Investor............................................ 11
     3.5  Restricted Securities.......................................... 11
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
<C>  <S>                                                                 <C>
     3.7  Further Limitations on Disposition............................. 11
     3.8  Legends........................................................ 12
     3.9  Tax Advisors................................................... 12
     3.10  Investor Counsel.............................................. 12

4.   Conditions of Investor's Obligations at Closing..................... 12
     4.1  Representations and Warranties................................. 12
     4.2  Performance.................................................... 12
     4.3  Compliance Certificate......................................... 12
     4.4  Qualifications................................................. 13
     4.5  Proceedings and Documents...................................... 13
     4.6  Proprietary Information Agreements............................. 13
     4.7  Board of Directors............................................. 13
     4.8  Opinion of Company Counsel..................................... 13
     4.9  Investors' Rights Agreement.................................... 13
     4.10  Stockholders' Agreement....................................... 13
     4.11 No Material Adverse Change..................................... 13
     4.12 No Litigation or Other Proceedings............................. 13
     4.13 SBA Documents and Information.................................. 13

5.   Conditions of the Company's Obligations at Closing.................. 14
     5.1  Representations and Warranties................................. 14
     5.2  Payment of Purchase Price...................................... 14
     5.3  Investors' Rights Agreement.................................... 14
     5.4  Stockholders' Agreement........................................ 14

6.   Miscellaneous....................................................... 14
     6.1  Survival....................................................... 14
     6.2  Successors and Assigns......................................... 14
     6.3  Governing Law.................................................. 14
     6.4  Titles and Subtitles........................................... 14
     6.5  Notices........................................................ 14
     6.6  Finder's Fee................................................... 15
     6.7  Expenses....................................................... 15
     6.8  Amendments and Waivers......................................... 15
     6.9  Effect of Amendment or Waiver.................................. 15
     6.10 Severability................................................... 15
     6.11  Aggregation of Stock.......................................... 16
     6.12  Entire Agreement.............................................. 16
     6.13  Counterparts.................................................. 16

                                      ii
</TABLE>
SCHEDULE A    Schedule of Investors
SCHEDULE B    Schedule of Exceptions
SCHEDULE 2.2  Post-Closing Capitalization
<PAGE>

SCHEDULE 2.10  Intellectual Property
SCHEDULE 2.12  Material Contracts
SCHEDULE 2.22  Property
EXHIBIT A      Restated Certificate of Incorporation
EXHIBIT B      Investors' Rights Agreement
EXHIBIT C      List of Stockholders
EXHIBIT D      Opinion of Counsel for the Company
EXHIBIT E      Stockholders' Agreement

                                      iii
<PAGE>

                       PREFERRED STOCK PURCHASE AGREEMENT
                       ----------------------------------

          THIS PREFERRED STOCK PURCHASE AGREEMENT is made on the fifth day of
April, 1999, by and among InFlow, Inc., a Delaware corporation (the "Company"),
and the investors listed on Schedule A hereto (each, an "Investor" and
                            ----------
collectively, the "Investors").

          THE PARTIES HEREBY AGREE AS FOLLOWS:

          1.       Purchase and Sale of Stock.
                   --------------------------
                   1.1  Sale and Issuance of Series A Preferred Stock.
                   ---------------------------------------------
                   (a)  The Company shall adopt and file with the Secretary of
State of Delaware on or before the Closing (as defined below) the Amended and
Restated Certificate of Incorporation in the form attached hereto as Exhibit A
(the "Restated Certificate").                                        ---------

                   (b)  Subject to the terms and conditions of this Agreement,
each Investor agrees, severally, to purchase at the Closing and the Company
agrees to sell and issue to each Investor at the Closing, that number of shares
of the Company's Series A Preferred Stock set forth opposite each Investor's
name on Schedule A hereto for the purchase price set forth thereon.
        ----------

                   1.2  Closing. The purchase and sale of the Series A Preferred
                        -------
Stock shall take place at the offices of Brobeck, Phleger & Harrison LLP, 1125
Seventeenth Street, Suite 2525, Denver, Colorado 80202 at 10:00 a.m., on April
5, 1999, or at such other time and place as the Company and Investors acquiring
in the aggregate more than half the shares of Series A Preferred Stock sold
pursuant hereto mutually agree upon orally or in writing (which time and place
are designated as the "Closing"). At the Closing the Company shall deliver to
each Investor a certificate representing the Series A Preferred Stock that such
Investor is purchasing against payment of the purchase price therefor by check,
wire transfer, cancellation of indebtedness or any combination thereof. In the
event that payment by an Investor is made, in whole or in part, by cancellation
of indebtedness, then such Investor shall surrender to the Company for
cancellation at the Closing any evidence of such indebtedness or shall execute
an instrument of cancellation in form and substance acceptable to the Company.
In addition, at the Closing the Company shall deliver to any Investor choosing
to pay any part of the purchase price of the Series A Preferred Stock by
cancellation of indebtedness, a check in the amount of any interest accrued on
such indebtedness through the Closing.

                   1.3  Subsequent Sale of Series A Preferred Stock. The
                        -------------------------------------------
Company may sell up to the balance of the authorized number of shares of Series
A Preferred Stock not sold at the Closing to such purchasers as it shall select,
at a price not less than $3.50 per share, provided the agreement for sale is
executed not later than July 1, 1999. Any such purchaser shall become a party to
this Agreement and that certain Investors' Rights Agreement dated April 5, 1999,
by and among the Company and the Investors, the form of which is attached hereto
as Exhibit B (the "Investors' Rights Agreement") and that certain Stockholders'
   ---------
Agreement, by and among the
<PAGE>

Company and the Investors, the form of which is attached hereto as Exhibit E
                                                                   ---------
(the "Stockholders' Agreement") and shall have the rights and obligations
hereunder and thereunder.

     2.   Representations and Warranties of the Company.  The Company hereby
          ---------------------------------------------
represents and warrants to each Investor that, except as set forth on a Schedule
of Exceptions (the "Schedule of Exceptions") furnished each Investor and special
counsel for the Investors prior to execution hereof and attached hereto as
Schedule B, which exceptions shall be deemed to be representations and
----------
warranties as if made hereunder:

          2.1  Organization, Good Standing, Power and Qualification. The
               ----------------------------------------------------
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all requisite corporate
power and authority to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently, or is
currently proposed to be, engaged and has the power and authority to execute,
deliver and perform its obligations under this Agreement, the Investors' Rights
Agreement and the Stockholders' Agreement. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on the business,
assets or financial condition of the Company (an "MAE").

          2.2  Capitalization and Voting Rights.  (a)  The authorized capital
               --------------------------------
of the Company will consist immediately prior to the Closing of:

               (i)   Preferred Stock.  3,337,513 shares of Preferred Stock, par
                     ---------------
value $0.001 (the "Preferred Stock"), of which all such shares have been
designated Series A Preferred Stock (the "Series A Preferred Stock") and up to
37,857 shares of which will be sold at the Closing pursuant to this Agreement.
The rights, privileges and preferences of the Series A Preferred Stock will be
as stated in the Restated Certificate.

          (ii)  Common Stock.  15,000,000 shares of common stock, par value
                ------------
$0.001 ("Common Stock"), of which 3,060,000 are issued and outstanding.

          (iii) The outstanding shares of Common Stock are owned by the
stockholders and in the numbers specified in Exhibit C hereto.
                                             ---------

          (iv)  The outstanding shares of Common Stock are all duly and validly
authorized and issued, fully paid and nonassessable, and were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.

          (v)   Except for (A) the conversion privileges of the Series A
Preferred Stock to be issued under this Agreement, (B) the rights provided in
Section 3 of the Stockholders' Agreement, (C) the conversion privileges of those
certain Convertible Promissory Notes held by each of Art Zeile and Joel Daly to
be converted into Series A Preferred Stock at the Closing, and (D) currently
outstanding options to purchase 230,000 shares of Common Stock granted to
employees pursuant to the Company's 1997 Stock Option Plan (the "Option Plan"),
there are no outstanding options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. In addition to the aforementioned
options, the Company has reserved an additional 414,168

                                       2
<PAGE>

shares of its Common Stock for purchase upon exercise of options to be granted
in the future under the Option Plan. The Company is not a party or subject to
any agreement or understanding which affects or relates to the voting or giving
of written consents with respect to any security or other ownership interest in
the Company or by a director of the Company.

               (b)  As of the Closing and after giving effect to the
transactions contemplated by this Agreement, the authorized capital stock of the
Company and the issued and outstanding shares thereof are as described on
Schedule 2.2.
------------

          2.3  Subsidiaries.  The Company does not presently own or control,
               ------------
directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.

          2.4  Authorization.  All corporate action on the part of the Company,
               -------------
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Investors' Rights Agreement, and
the Stockholders' Agreement, the performance of all obligations of the Company
hereunder and thereunder, and the authorization (or, in the case of the Common
Stock, reservation for issuance), sale and issuance of the Series A Preferred
Stock being sold hereunder and the Common Stock issuable upon conversion of the
Series A Preferred Stock has been taken or will be taken prior to the Closing.
This Agreement, the Investors' Rights Agreement, and the Stockholders' Agreement
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws.

          2.5  Valid Issuance of Preferred and Common Stock.  The Series A
               --------------------------------------------
Preferred Stock that is being purchased by the Investors hereunder, when issued,
sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable, free and clear of all liens and other encumbrances and will be
free of restrictions on transfer, other than restrictions on transfer under this
Agreement, the Investors' Rights Agreement, the Stockholders' Agreement and
under applicable state and federal securities laws. The Common Stock issuable
upon conversion of the Series A Preferred Stock purchased under this Agreement
has been duly and validly reserved for issuance and, upon issuance in accordance
with the terms of the Restated Certificate, will be duly and validly issued,
fully paid and nonassessable, free and clear of all liens and other encumbrances
and will be free of restrictions on transfer, other than restrictions on
transfer under this Agreement, the Investors' Rights Agreement, the
Stockholders' Agreement and under applicable state and federal securities laws.

          2.6  Consents.  No consent, approval, order or authorization of, or
               --------
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority or any individual, firm,
corporation, partnership, trust, limited liability company, incorporated or
unincorporated association, joint venture, joint stock company or other entity
of any kind (each, a "Person") on the part of the Company is required in
connection with

                                       3
<PAGE>

the consummation of the transactions contemplated by this Agreement, except for
filings required pursuant to applicable federal and state securities laws and
blue sky laws, which filings will be effected within the required statutory
period.

          2.7  Offering.  No form of general solicitation or general advertising
               --------
was used by the Company or its representatives in connection with the offer or
sale of the Series A Preferred Stock or other securities. Assuming the truth and
accuracy of each Investor's representations set forth in Section 3 of this
Agreement, the offer, sale and issuance of the Series A Preferred Stock as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act of 1933, as amended (the "Act").

          2.8  Litigation.  There is no action, suit, proceeding or
               ----------
investigation pending, or to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement, the
Investors' Rights Agreement or the Stockholders' Agreement or the right of the
Company to enter into any of the foregoing or to consummate the transactions
contemplated hereby or thereby, or that would have, either individually or in
the aggregate, an MAE. The Company is not a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or investigation
by the Company currently pending or that the Company intends to initiate.

          2.9  Proprietary Information Agreements.  Each employee and officer of
               ----------------------------------
the Company has executed a Proprietary Information and Inventions Agreement in
substantially the form provided to special counsel to the Investors.

          2.10 Patents and Trademarks.  Schedule 2.10 sets forth a complete and
               ----------------------
accurate list of and describes all franchises, licenses, patents, patent rights,
patent applications, trademarks, trademark rights, service marks, service mark
rights, trade names, trade name rights, copyrights and rights with respect to
any of the foregoing (collectively, "Intellectual Property") presently owned or
held by the Company. The Company owns the right to use all of the Intellectual
Property. To the actual knowledge of the Company (without independent
investigation), the Intellectual Property is all that is necessary for the
Company to conduct its business as presently conducted. To its knowledge (but
without having conducted any special investigation or patent search), no
Intellectual Property conflicts with or infringes on the valid rights of others
and the Company has not received any notice of infringement upon or conflict
with the asserted rights of others. No event has occurred which permits, or
after notice or lapse of time would permit, the revocation or termination of any
of the Intellectual Property. The Company has a valuable body of trade secrets,
including know-how, concepts, computer programs and other technical data (the
"Proprietary Information"). To its knowledge, the Company has the right to use
the Proprietary Information free and clear of any rights, liens, encumbrances or
claims of others, except that the possibility exists that other persons may have
independently developed trade secrets or technical information similar or
identical to those of the Company. The Company is not aware of any such
independent development nor of any misappropriation of its Proprietary
Information. The Company is not aware that any of its employees is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the

                                       4
<PAGE>

interests of the Company or that would conflict with the Company's business. The
Company does not believe it is or will be necessary to utilize any inventions of
any of its employees (or people it currently intends to hire) made prior to
their employment by the Company, except for inventions that have been assigned
or licensed to the Company as of the date hereof.

          2.11 Compliance with Other Instruments.  The Company is not in
               ---------------------------------
violation of any provision of its Restated Certificate or Bylaws or any
securities issued by the Company, indenture, credit agreement, contract,
agreement, instrument or other undertaking ("Contractual Obligations") or any
judgment, order, writ, decree or contract, statute, rule or regulation to which
the Company or its assets or property is subject ("Requirements of Law"), a
violation of which would have an MAE. The execution, delivery and performance of
this Agreement, the Investors' Rights Agreement and the Stockholders' Agreement
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation, or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
Contractual Obligation or Requirement of Law or an event that results in the
creation of any lien, charge or encumbrance upon any assets of the Company or
the suspension, revocation, impairment, forfeiture or nonrenewal of any material
permit, license, authorization or approval applicable to the Company, its
business or operations or any of its assets or properties.

          2.12 Agreements; Action.  (a)  Except for agreements explicitly
               ------------------
contemplated hereby, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates
or any affiliate thereof.

               (b)  Except for this Agreement, the Investors' Rights Agreement
and the Stockholders' Agreement, Schedule 2.12 hereto sets forth a complete and
                                 -------------
accurate list of all material Contractual Obligations of the Company in effect
on and as of the Closing. Each such Contractual Obligation is valid and
enforceable by the Company against any other party thereto in accordance with
its terms except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, and by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies. The Company has performed and is in compliance with
all of the terms of such Contractual Obligations and all instruments and
agreements relating thereto and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on its part or on the part of any other party
thereto exists with respect to any material Contractual Obligation of the
Company. The Company has no actual knowledge that any such Contractual
Obligation contains any contractual requirement with which there is a reasonable
likelihood the Company will be unable to comply and such failure to comply would
likely result in a MAE or the Company's compliance is reasonably likely to
result in or MAE.

               (c)  There are no judgments, orders, writs or decrees to which
the Company is a party or by which it is bound that involve obligations
(contingent or otherwise) of, or payments to the Company, in excess of $25,000.

               (d)  The Company has not (i) declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series
of its capital

                                       5
<PAGE>

stock, (ii) incurred any indebtedness for money borrowed or any other
liabilities individually in excess of $25,000 or, in the case of indebtedness
and/or liabilities individually less than $10,000, in excess of $50,000 in the
aggregate, (iii) made any loans or advances to any Person, other than advances
in the ordinary course of business, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.

              (e) For the purposes of subsections (c) and (d) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same Person (including Persons the
Company has reason to believe are affiliated therewith) shall be aggregated for
the purpose of meeting the individual minimum dollar amounts of such
subsections.

        2.13  Related-Party Transactions.  No employee, officer or director of
              --------------------------
the Company or member of his or her immediate family is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them. To the best of the Company's knowledge, none of such
persons has any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation that competes with the Company, except
that employees, officers or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. No member of the immediate family of any officer or director
of the Company is directly or indirectly interested in any material Contractual
Obligation with the Company.

        2.14  Financial Statements.  The Company has delivered to each Investor
              --------------------
its audited financial statements (balance sheet and statement of operations,
statement of stockholders' equity and statement of cash flows, including notes
thereto) at December 31, 1998 and for the fiscal year then ended and its
unaudited financial statements (balance sheet and statement of operations,
statement of stockholders' equity and statement of cash flows) at February 28,
1999 and for the two-month period then ended (the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated and with each other, except that unaudited Financial Statements may
not contain all footnotes required by generally accepted accounting principles.
The Financial Statements fairly present the assets, liabilities, financial
condition and operating results of the Company as of the dates, and for the
periods, indicated therein, subject in the case of unaudited Financial
Statements to normal year-end audit adjustments. Except as set forth in the
Financial Statements, the Company has no liabilities or obligations, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of
business subsequent to December 31, 1998 and (ii) obligations under contracts
and commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company and
which the Company has satisfied as they have become due. Except as disclosed in
the Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other Person. The Company maintains and will continue to
maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.

        2.15  Changes.  Since December 31, 1998 there has not been:
              -------

                                       6
<PAGE>

              (a)  any change in the assets, liabilities, financial condition or
operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business consistent with
past practice that have not had an MAE;

              (b)  any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results or business of the Company;

              (c)  any waiver by the Company of a material right or of a
material debt owed to it;

              (d)  any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business consistent with past practice and not material to the assets,
properties, financial condition, operating results or business of the Company;

              (e)  any material change or amendment to a contract or arrangement
required to be set forth on Schedule 2.12 by which the Company or any of its
assets or properties is bound or subject;

              (f)  any material change in any compensation arrangement or
agreement with any employee; or

              (g)  any agreement or commitment by the Company to do any of the
things described in this Section 2.15.

        2.16  Tax Returns.  The Company has timely filed all federal, state,
              -----------
county, local and foreign income and other tax returns, reports and declarations
(collectively, "Returns") relating to all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property or windfall profits taxes, or other taxes of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority (domestic or foreign) upon the Company
("Taxes") which are required by applicable law to be filed except where the
failure to do so would not be reasonably likely to have an MAE. No audits of
federal income tax Returns of the Company have been conducted at any time since
its formation and the Company has not been advised that any of its returns have
been or are being audited. The Company has paid, or where payment is not
required to be made, has made adequate provision on its books and financial
statements for the payment of, all Taxes in respect of all periods covered by
the Returns and any other taxable period ending on or before the date hereof
except where the failure to do so would not be reasonably likely to have an MAE.
No deficiencies for any Tax, assessment or governmental charge have been
asserted or assessed against the Company which have not been paid, settled or
adequately provided for and there is no basis for.

        2.17  Permits.  The Company (i) has all material governmental or other
              -------
regulatory approvals, licenses, permits and other authorizations in accordance
with all Requirements of Law for it to conduct its business, each of which is in
full force and effect, is final and not subject to review on appeal and is not
the subject of any pending or, to the best of

                                       7
<PAGE>

its knowledge, threatened attack by direct or collateral proceeding, and (ii) is
in compliance in all respects with each governmental approval, license, permit
and authorization relating to it or any of its properties under all applicable
Requirements of Law except where the failure to do so would not be reasonably
likely to have an MAE. Since its date of organization, the Company has not, to
its knowledge, been the subject of any investigation conducted by any grand
jury, administrative agency or other governmental authority. The Company has
not, directly or indirectly, made or authorized any payment, contribution or
gift of money, property, or services, in violation of applicable law, (i) as a
kickback or bribe to any Person or (ii) to any political organization or the
holder of, or any aspirant to, any elective or appointive office of any
governmental authority.

        2.18  Environmental and Safety Laws.  To its knowledge, the Company is
              -----------------------------
not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.

        2.19  Disclosure.  Neither this Agreement (including all the exhibits
              ----------
and schedules hereto) nor any other certificates or agreements made or delivered
in connection herewith contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made.

        2.20  Registration Rights.  Except as provided in the Investors' Rights
              -------------------
Agreement, the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any person or entity.

        2.21  Corporate Documents.  Except for amendments necessary to satisfy
              -------------------
representations and warranties or conditions contained herein (the form of which
amendments has been approved by the Investors), the Restated Certificate and
Bylaws of the Company are in the form previously provided to special counsel for
the Investors. The minute books of the Company have been made available to the
Investors for their review in connection with the purchase of the Series A
Preferred Stock; such minute books are current and contain correct and complete
copies of all minutes of meetings, resolutions and other actions and proceedings
of the board of directors and shareholders and all committees of the Company.
The record books relating to the equity interests of the Company have been made
available to the Purchasers for their review in connection with its purchase of
the Series A Preferred Stock; such record books are current, correct and
complete and reflect the issuance, sale or exchange of all of capital stock and
other ownership and equity interests in the Company.

        2.22  Title to Property and Assets.  Exhibit 2.22 sets forth a complete
              ----------------------------   ------------
and accurate list of all real property and improvements (collectively "Real
Property") owned or leased by the Company. The Company has good and marketable,
indefeasible fee simple title to the Real Property described in Schedule 2.22 as
                                                                -------------
being owned by it, and valid and subsisting leasehold rights in the Real
Property described in Schedule 2.22 as being leased by it, free and clear of all
                      -------------
liens and other encumbrances. Schedule 2.22 also sets forth a complete and
                              -------------
accurate list of all of the material items of equipment, machinery, computers,
chattels, tools, parts, machine tools, furniture, furnishings, fixtures and
supplies of every nature owned or leased by the Company

                                       8
<PAGE>

in connection with its business as of December 31, 1998. The Company has good
and marketable fee simple title to such items described in Schedule 2.22 as
                                                           -------------
being owned by it, and valid and subsisting leasehold rights in such items
described in Schedule 2.22 as being leased by it, free and clear of all liens
             -------------
and other encumbrances.

        2.23  Labor Agreements and Actions.  The Company is not bound by or
              ----------------------------
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the Company's
knowledge, has sought to represent any of the employees, representatives or
agents of the Company. There is no strike or other labor dispute involving the
Company pending, or to the Company's knowledge, threatened, that would have an
MAE. The Company is not aware that any officer or key employee, or that any
group of key employees, intends to terminate their employment with the Company,
nor does the Company have a present intention to terminate the employment of any
of the foregoing. The employment of each officer and employee of the Company is
terminable at the will of the Company. The Company is not a party to or bound by
any currently effective employment contract, deferred compensation agreement,
bonus plan, incentive plan, profit sharing plan, retirement agreement or other
employee compensation agreement. To its knowledge, the Company has complied in
all material respects with all applicable state and federal equal employment
opportunity and other laws related to employment. To its knowledge, the Company
has withheld all amounts required by law or agreement to be withheld by it from
the wages, salaries and other payments to its employees and is not liable for
any arrears of wages or any taxes or penalties for failure to comply with any of
the foregoing. There are no pending, threatened or anticipated (i) employment
discrimination charges or complaints against or involving the Company, before
any federal, state, or local board, department, commission or agency, (ii)
unfair labor practice charges or complaints, disputes or grievances affecting
the Company, or (iii) strikes, slow downs, work stoppages, or lockouts or
threats thereof affecting the Company.

        2.24  Insurance.  The Company maintains insurance policies (i) insuring
              ---------
the properties, assets and operations of the business in such amounts and
against such liabilities to the extent required by applicable law or regulations
and (ii) insuring against interruptions in its business. Such policies are in
full force and effect and have been underwritten by unaffiliated insurers. To
its knowledge, the Company has not done anything by way of action or inaction
that invalidates any of such policies in whole or in part.

        2.25  Year 2000 Compliance.  The Company has initiated a review of its
              --------------------
operations with a view to assessing whether its business or operations will, in
the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data, be vulnerable to any significant
risk that computer hardware or software used in its business or operations will
not, in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000. Based on such review and as of the date
hereof, the Company has no reason to believe that any such risk could have an
MAE.

        2.26  Governmental Regulations.  The Company is not a "registered
              ------------------------
investment company" or an "affiliated person" or a "principal underwriter" of a
"registered

                                       9
<PAGE>

investment company" as such terms are defined in the Investment Company Act of
1940, as amended.

          2.27 Small Business Concern.  The Company, together with its
"affiliates" (as that term is defined in Title 13, Code of Federal Regulations,
(SS)121.101), is a "small business concern" within the meaning of the Small
Business Investment Act of 1958 and the regulations thereunder, including Title
13, Code of Federal Regulations, (SS)121.201. The Company does not engage in,
nor shall it hereafter engage in, any activities, nor shall the Company use
directly or indirectly the proceeds from the sale of the Series A Preferred
Stock hereunder for any purpose, for which a "small business investment company"
is prohibited from providing funds by the Small Business Investment Act of 1958
and the regulations thereunder (including Title 13, Code of Federal Regulations,
(SS)107.720).

     3.   Representations and Warranties of the Investors.  Each Investor
severally, but not jointly, hereby represents, warrants and covenants that:

          3.1  Authorization.  Such Investor has full power and authority to
enter into this Agreement, the Investors' Rights Agreement and the Stockholders'
Agreement, and each such agreement constitutes its valid and legally binding
obligation, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Investors' Rights Agreement may be
limited by applicable federal or state securities laws.

          3.2  Purchase Entirely for Own Account.  This Agreement is made with
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series A Preferred Stock to be received by such Investor and
the Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for such Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in or otherwise distributing the same. By executing
this Agreement, such Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Securities.

          3.3  Disclosure of Information.  Such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series A Preferred Stock. Such Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Series A Preferred Stock and the business, properties, prospects and financial
condition of the Company.

          3.4  Investment Experience.  Investor is an investor in securities of
companies in the development stage and acknowledges that it can bear the
economic risk of its

                                      10
<PAGE>

investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Series A Preferred Stock.  If other than an individual, such Investor
also represents it has not been organized for the purpose of acquiring the
Series A Preferred Stock.

          3.5 Accredited Investor. Such Investor is an "accredited Investor"
              -------------------
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.

          3.6  Restricted Securities. Such Investor understands that the
               ---------------------
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities (or the Common Stock issued on
conversion thereof) or an available exemption from registration under the Act,
the Series A Preferred Stock (and any Common Stock issued on conversion thereof)
must be held indefinitely. In this connection, such Investor represents that it
is familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Act, including without limitation
the Rule 144 condition that current information about the Company be available
to the public. Such information is not now available and the Company has no
present plans to make such information available.

          3.6  Further Limitations on Disposition. Without in any way limiting
               ----------------------------------
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3, the Investors' Rights Agreement and the Stockholders' Agreement,
and:

               (a)  There is then in effect a registration statement under the
     Act covering such proposed disposition and such disposition is made in
     accordance with such registration statement; or

               (b)  (i) Such Investor shall have notified the Company of the
     proposed disposition and shall have furnished the Company with a detailed
     statement of the circumstances surrounding the proposed disposition, and
     (ii) if requested by the Company, such Investor shall have furnished the
     Company with an opinion of counsel, reasonably satisfactory to the Company
     that such disposition will not require registration of such shares under
     the Act. It is agreed that the Company will not require opinions of counsel
     for transactions made pursuant to Rule 144 except in unusual circumstances.

               (c)  Notwithstanding the provisions of subsections (a) and (b)
     above, no such registration statement or opinion of counsel shall be
     necessary for a transfer by an Investor that is a partnership to a partner
     of such partnership or a retired partner of such partnership who retires
     after the date hereof, or to the estate of any such partner or retired
     partner or the transfer by gift, will or intestate succession of any
     partner to his or her spouse or to the siblings, lineal descendants or
     ancestors of such partner or his or her spouse, if the transferee

                                      11
<PAGE>

agrees in writing to be subject to the terms hereof to the same extent as if he
or she were an original Investor hereunder.

          3.8  Legends.  It is understood that the certificates evidencing the
               -------
Securities may bear one or all of the following legends:

               (a)  "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."

               (b)  Any legend required by the Investors' Rights Agreement and
the Stockholders' Agreement.

          3.9  Tax Advisors.  Such Investor has reviewed with such Investor's
               ------------
own tax advisors the federal, state and local tax consequences of this
investment, where applicable, and the transactions contemplated by this
Agreement. With respect to matters related to the tax consequences of the
transactions contemplated by this Agreement, each such Investor is relying
solely on such advisors and not on any statements or representations of the
Company or any of its agents and understands that each such Investor (and not
the Company) shall be responsible for such Investor's own tax liability that may
arise as a result of this investment or the transactions contemplated by this
Agreement.

          3.10 Investor Counsel.  Such Investor acknowledges that such Investor
               ----------------
has had the opportunity to review this Agreement, the exhibits and the schedules
attached hereto and the transactions contemplated by this Agreement with such
Investor's own legal counsel. Each such Investor is relying solely on such
Investor's legal counsel and not on Brobeck, Phleger & Harrison LLP, for legal
advice with respect to this investment or the transactions contemplated by this
Agreement.

     4.   Conditions of Investor's Obligations at Closing.  The obligations of
          -----------------------------------------------
each Investor under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
thereto:

          4.1  Representations and Warranties.  The representations and
               ------------------------------
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.

          4.2  Performance.  The Company shall have performed and complied with
               -----------
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.

          4.3  Compliance Certificate.  The President of the Company shall
               ----------------------
delivery to each Investor at the Closing a certificate stating that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.

                                      12
<PAGE>

          4.4  Qualifications.  All authorizations, approvals or permits, if
               --------------
any, of any governmental authority or regulatory body of the United States or of
any state or any Person that are required in connection with the consummation of
the transactions contemplated by this Agreement, including the lawful issuance
and sale of the Securities pursuant to this Agreement, shall be duly obtained
and effective as of the Closing.

          4.5  Proceedings and Documents.  All corporate and other proceedings
               -------------------------
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Investors' special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.

          4.6  Proprietary Information Agreements.  Each employee of the Company
               ----------------------------------
shall have entered into a Proprietary Information and Inventions Agreement in
the form previously provided to special counsel for the Investors.

          4.7  Board of Directors.  The Company shall have taken all necessary
               ------------------
corporate action such that immediately following the Closing, the directors of
the Company shall be Art Zeile, Joel Daly, Stephen O. James, Watts Hamrick and
Scott Perper.

          4.8  Opinion of Company Counsel.  Each Investor shall have received
               --------------------------
from Brobeck, Phleger & Harrison LLP, counsel for the Company, an opinion, dated
as of the Closing, in the form attached hereto as Exhibit D.
                                                  ---------

          4.9  Investors' Rights Agreement.  The Company shall have entered into
               ---------------------------
the Investors' Rights Agreement in the form attached as Exhibit B.

          4.10 Stockholders' Agreement.  The Company, Art Zeile and Joel Daly
               -----------------------
shall have entered into the Stockholders' Agreement in the form attached as
Exhibit D.
---------

          4.11 No Material Adverse Change.  On and prior to the Closing, there
               --------------------------
shall have occurred no material adverse change in the business, assets or
financial condition of the Company.

          4.12 No Litigation or Other Proceedings.  There shall be no pending or
               ----------------------------------
threatened litigation, bankruptcy, insolvency, injunction, order, suit,
investigation or claim against or affecting the Company, any of its properties
or rights, any of its executive officers or with respect to any of the
transactions contemplated by this Agreement, the Investors' Rights Agreement or
the Stockholders' Agreement which would be reasonably likely to have an MAE.

          4.13 SBA Documents and Information.  The Company shall have executed
               -----------------------------
and delivered to First Union Capital Partners, Inc. forms and information
required by the rules and regulations of the United States Small Business
Administration, including, without limitation, a Size Status Declaration on SBA
Form 480 and an Assurance of Compliance on SBA Form 652 and information
necessary for the preparation of a Portfolio Financing Report on SBA Form 1031.
In the event such forms and information are not delivered at Closing, the
Company covenants and agrees to deliver them as soon as practicable thereafter.

                                      13
<PAGE>

     5.   Conditions of the Company's Obligations at Closing.  The obligations
          --------------------------------------------------
of the Company to each Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
Investor:

          5.1  Representations and Warranties.  The representations and
               ------------------------------
warranties of the Investors contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.

          5.2  Payment of Purchase Price.  The Investor shall have delivered the
               -------------------------
purchase price specified in Section 1.2.

          5.3  Investors' Rights Agreement.  Each Investor shall have entered
               ---------------------------
into the Investors' Rights Agreement in the form attached as Exhibit B.

          5.4  Stockholders' Agreement.  Each Investor shall have entered into
               -----------------------
the Stockholders' Agreement in the form attached as Exhibit E.

     6.   Miscellaneous.
          -------------

          6.1  Survival.  The warranties, representations and covenants of the
               --------
Company and Investors contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the Closing and shall
in no way be affected by any investigation of the subject matter thereof made by
or on behalf of the Investors or the Company.

          6.2  Successors and Assigns.  Except as otherwise provided herein, the
               ----------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

          6.3  Governing Law.  This Agreement shall be governed by and construed
               -------------
under the laws of the State of Colorado as applied to agreements among Colorado
residents entered into and to be performed entirely within Colorado, without
giving effect to such state's conflict of laws principles.

          6.4  Titles and Subtitles.  The titles and subtitles used in this
               --------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

          6.5  Notices.  All notices required or permitted hereunder shall be in
               -------
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the address
as set forth on the

                                      14
<PAGE>

signature page hereof or at such other address as such party may
designate by ten days advance written notice to the other parties hereto.

          6.6  Finder's Fee.  Each party represents that it neither is nor will
               ------------
be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees or representatives is responsible. The Company agrees to indemnify and
hold harmless each Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.

          6.7  Expenses.  Irrespective of whether the Closing is effected, the
               --------
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. If the
Closing is effected, the Company shall, at the Closing, reimburse the Investors
for all reasonable expenses of the Investors incurred in connection with the
negotiation, execution, delivery and performance of this Agreement including,
but not limited to, reasonable fees and, upon receipt of a bill therefor, and
out of pocket expenses of a single special counsel for all Investors. Investors
agree that every effort will be made to minimize these expenses. If any action
at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the Investors' Rights Agreement, the Stockholders' Agreement or the
Restated Certificate, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

          6.8  Amendments and Waivers.  Any term of this Agreement may be
               ----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Common Stock not previously sold to the public that is issued
or issuable upon conversion of the Series A Preferred Stock. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
holder of all such securities and the Company.

          6.9  Effect of Amendment or Waiver.  Each Investor acknowledges that
               -----------------------------
by the operation of Section 6.8 hereof the holders of a majority of the Common
Stock not previously sold to the public that is issued or issuable upon
conversion of the Series A Preferred Stock will have the power to diminish or
eliminate all rights of such Investor under this Agreement.

          6.10 Severability.  If one or more provisions of this Agreement are
               ------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.

                                      15
<PAGE>

        6.11  Aggregation of Stock.  All shares of the Series A Preferred Stock
              --------------------
or Common Stock issued upon conversion thereof held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.

        6.12  Entire Agreement.  This Agreement and the documents referred to
              ----------------
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.

        6.13  Counterparts.  This Agreement may be executed in two or more
              ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                         [SIGNATURE PAGE(S) TO FOLLOW]

                                      16
<PAGE>

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

                              INFLOW, INC.

                              By:   /s/ Art Zeile
                                    -----------------------------------
                                    Art Zeile, President and Chief Executive
                                    Officer

                              By:   /s/ Joel Daly
                                    -----------------------------------
                                    Joel Daly, Chief Operating Officer and
                                    Secretary

                              Address:  1860 Lincoln Street
                                        Suite 305
                                        Denver, CO 80295

                              INVESTORS:

                              FIRST UNION CAPITAL PARTNERS, INC.

                              By:   /s/ L. Watts Hamrick, III
                                    ___________________________________

                              Name: L. Watts Hamrick, III
                                    ___________________________________

                              Title: Senior Vice President
                                    ___________________________________

                              Address:  301 South College Street
                                        Charlotte, N.C. 28288-0732

                                      17
<PAGE>

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

                              INVESTORS:

                              RICHARD COLEMAN

                              /s/ RICHARD COLEMAN
                              _______________________________________
                              Address:  22 Viking Drive
                                         Englewood, CO 80110
<PAGE>

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

                              INVESTORS:

                              RICHARD A. FINK

                              /s/ RICHARD A. FINK
                              _______________________________________
                              Address:  5492 Calle Chaparro
                                         P.O. Box 1647 (U.S. Mail only)
                                         Rancho Santa Fe, CA 92067
<PAGE>

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

                              INVESTORS:

                              RICHARD R. PLUMRIDGE

                              /s/ RICHARD R. PLUMRIDGE
                              _______________________________________
                              Address:  2848 Ginny Way
                                         Lafayette, CO 80026
<PAGE>

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

                              INVESTORS:

                              JEREMY W. MAKARECHIAN

                              /s/ JEREMY W. MAKARECHIAN
                              _______________________________________
                              Address:  3555 West 110th Place
                                         Westminster, CO 80030
<PAGE>

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

                              INVESTORS:

                              DAVID A. MAKARECHIAN

                              /s/ DAVID A. MAKARECHIAN
                              _______________________________________
                              Address:  916 Palm Avenue
                                         San Mateo, CA 94401
<PAGE>

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

                              INVESTORS:

                              BRUCE E. CUNNINGHAM

                              /s/ BRUCE E. CUNNINGHAM
                              _______________________________________
                              Address:  4901 West 93rd Avenue
                                         Apt. 2227
                                         Westminster, CO 80030
<PAGE>

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

                              INVESTORS:

                              JOHN E. HAYES III

                              /s/ JOHN E. HAYES III
                              _______________________________________
                              Address:  125 Willowleaf Drive
                                         Littleton, CO 80127
<PAGE>

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

                              INVESTORS:

                              LEE R. SPIEGLER

                              /s/ LEE R. SPIEGLER
                              _______________________________________
                              Address:  16209 West 70th Place
                                         Arvada, CO 80007
<PAGE>

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

                              INVESTORS:

                              ARUN JHA

                              /s/ ARUN JHA
                              _______________________________________
                              Address:  4901 West 93rd Avenue
                                         Apt. 332
                                         Westminster, CO 80030
<PAGE>

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

                              INVESTORS:

                              BROBECK, PHLEGER & HARRISON LLP

                       BY:    /s/ Richard A. Fink
                              ______________________________________

                       NAME:  Richard A. Fink
                              ______________________________________

                       TITLE: Partners
                              ______________________________________
<PAGE>

                                   SCHEDULE A
                                   ----------

<TABLE>
<CAPTION>
Name                                              Amount Invested             Number of Shares Purchased
-------------------------------------------  --------------------------  ------------------------------------
-------------------------------------------------------------------------------------------------------------
<S>                                          <C>                         <C>
Brobeck, Phleger & Harrison LLP                                $ 50,000                                14,286
-------------------------------------------------------------------------------------------------------------
Richard Coleman                                                  50,000                                14,286
-------------------------------------------------------------------------------------------------------------
Richard A. Fink                                                   7,500                                 2,143
-------------------------------------------------------------------------------------------------------------
Richard R. Plumridge                                              7,500                                 2,143
-------------------------------------------------------------------------------------------------------------
Jeremy W. Makarechian                                             7,500                                 2,143
-------------------------------------------------------------------------------------------------------------
David A. Makarechian                                              2,500                                   714
-------------------------------------------------------------------------------------------------------------
Bruce E. Cunningham                                               2,500                                   714
-------------------------------------------------------------------------------------------------------------
John E. Hayes, III                                                2,500                                   714
-------------------------------------------------------------------------------------------------------------
Lee R. Spiegler                                                   2,500                                   714
-------------------------------------------------------------------------------------------------------------
Arun Jha                                                          2,500                                   714
-------------------------------------------------------------------------------------------------------------
Totals                                                         $132,500                                37,857
-------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                   Exhibit C
                                   ---------

                              List of Stockholders

<TABLE>
<CAPTION>
                            Common Stock    Series A Preferred
                                                  Stock
---------------------------------------------------------------
<S>                         <C>            <C>
Art Zeile                       1,500,000               186,858
Joel Daly                       1,500,000               187,381
Stephen O. James                   60,000

First Union Capital                                   2,857,143
 Partners

Brobeck, Phleger &                                       14,286
 Harrison LLP
Richard Coleman                                          14,286
Richard A. Fink                                           2,143
Richard R. Plumridge                                      2,143
Jeremy W. Makarechian                                     2,143
David A. Makarechian                                        714
Bruce E. Cunningham                                         714
John E. Hayes, III                                          714
Lee R. Spiegler                                             714
Arun Jha                                                    714
---------------------------------------------------------------
</TABLE>

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