Document:

Exhibit 10.7

 

 

 

 

March 10, 2014                               

 

Dr. Zvi Yaniv

President and Chief Operating Officer

Applied Nanotech Holdings, Inc.

3006 Longhorn Boulevard, Suite 107

Austin, Texas 78758

 

Dear Zvi,

 

As you know, the Board of Applied Nanotech Holdings,
Inc. (the “Company”) has approved today the Agreement and Plan of Merger and Exchange (the “Merger Agreement”)
by and among the Company, NanoMerger Sub Inc., PEN Inc., NanoHolding Inc. and Carl Zeiss, Inc.. If the transactions contemplated
by that Merger Agreement become effective with the Company merging into PEN, Inc. (“PEN”), you agree that at the closing
you and PEN and its subsidiaries, as applicable, will execute and deliver the following documents:

 

		1.	Termination of Employment Agreement and Mutual Releases in the form attached to this letter as Annex A;

		2.	Letter Agreement regarding continued employment attached as Annex B;

		3.	Restricted Stock Agreement attached as Annex C;

		4.	Piggyback Registration Rights Agreement attached as Annex D; and

		5.	Form of Confidentiality Agreement executed by all employees of PEN.

 

In addition, on the closing date, the Company
(or its successor) will enter into a Services Agreement in the form attached as Annex E with a service company that you identify.

 

Your stock options, along with other options
of the Company, will not be affected by the Mergers. You will agree to amend your convertible note and convert it to stock of PEN
on terms substantially the same as those agreed to by the other non-employee noteholders who hold similar notes.

 

You have indicated that you plan to continue
to follow the direction of the Company’s board of directors with respect to the transactions described in the Merger Agreement
and the implementation of any board approved budget and other matters. However, you are authorized and requested to work with Scott
Rickert and any others associated with Nanofilm that he may identify in order to help them better understand the technology of
the Company and its subsidiaries and potential applications of that technology to products that can be developed by the Company
following the Mergers.

 

    	 

    	 

    

 

 

In the event that the Mergers have not become
effective, and the transactions described in the Merger Agreement have not been closed on or before the first to occur of (i) the
“End Date” as defined in the Merger Agreement or (ii) September 30, 2014, this letter agreement shall terminate automatically
and neither party shall have any further obligations under it. Also, if the parties to the Merger Agreement terminate that agreement,
this letter agreement shall terminate automatically and neither party shall have any further obligations under this letter.

 

Please confirm your agreement with the matters
described herein by your signature below.

 

 

	 	Sincerely,
	 	 
	 	 
	 	/s/ Robert
    Ronstadt
	 	Robert Ronstadt
	 	Chairman

 

 

Agreed:

 

 

/s/ Zvi Yaniv

Zvi Yaniv

 

 

    	 

    	 

    

 

 

 

 

 

ANNEX A

 

TERMINATION OF EMPLOYMENT AGREEMENT

 

AND MUTUAL RELEASES

 

This Termination of Employment Agreement
and Mutual Releases (this “Agreement”) is entered into by and between PEN, Inc., a Delaware corporation (the “Company”),
and its subsidiaries, Applied Nanotech, Inc., E.B.T., Inc. and EZDiagnostiX, Inc. (collectively, the “Subsidiaries”),
and Zvi Yaniv, a resident of Travis County, Texas (“Employee”), and the parties agree as follows:

 

		1.	Recitals.

 

		(a)	Employee entered into that certain Employment Agreement dated June 1, 1996 (the “Employment
Agreement”) with SI Diamond Technology, Inc., a Texas corporation (“SIDT”);

 

		(b)	SIDT changed its name to “Applied Nanotech Holdings, Inc.”;

 

		(c)	Applied Nanotech Holdings, Inc. has been a party to a merger (“Merger”) in which the
surviving company is the Company and as a result of which the Company is the owner and holder of all rights of SIDT under the Employment
Agreement;

 

		(d)	Applied Nanotech, Inc., E.B.T., Inc. and EZDiagnostiX, Inc. are wholly owned subsidiaries of the
Company;

 

		(e)	Employee has served as director, president and chief operating officer of Applied Nanotech Holdings,
Inc. and as CEO of Applied Nanotech, Inc.;

 

		(f)	Following the mergers, Employee shall continue his employment (on an “at will” basis)
with the Company but is resigning in all of his capacities as executive officer and director of the Company and each of the Subsidiaries;

 

		(g)	Employee is the holder of certain shares of stock (“Company Stock”), stock options
issued by Applied Nanotech Holdings, Inc. (the “Options”), and such Company Stock and Options are now Company Stock
and Options of the Company;

 

		(h)	Prior to the closing of the Merger, Employee was the holder of certain indebtedness of Applied
Nanotech, Inc. incurred in connection with loans made by Employee (the “Debt”);

 

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		(i)	The Company has granted to Employee 6,800,000 shares of the Class A common stock of the Company
(the “Restricted Stock”) subject to the terms, conditions and restrictions set forth in that certain Restricted Stock
Agreement of even date with this Agreement (“Restricted Stock Agreement”);

 

		(j)	Company and Employee desire to terminate the Employment Agreement and to release each other from
all obligations and liabilities with respect to the same as more particularly set forth below;

 

		(k)	Each of the Company and Employee acknowledges and agrees that each has given and received good,
present and sufficient consideration to support each of the obligations of the Company and the Employee as set forth in this Agreement.

 

		2.	Termination of Employment Agreement. The Company and the Employee agree that the Employment
Agreement is hereby terminated and shall be of no force or effect from and after the date of this Agreement.

 

		3.	Release by Employee. The Employee releases, acquits and discharges the Company and the Subsidiaries
of and from any and all claims, demands, liabilities, suits, causes of action or obligations whether arising under common law,
statute or contract (collectively, “Claims”) arising under or in connection with the Employment Agreement as well as
any Claims of the Employee arising in connection with the employment relationship of Employee with, or service to, any of the Company
or any of the Subsidiaries to the date of this Agreement, including, without limitation, all Claims relating to salary, bonus,
benefits and severance; provided, however, that this Agreement shall not release, limit or impair any of the rights of Employee
as the owner of Company Stock, the Stock Options, the Restricted Stock, any of the Debt that for any reason has not been converted
into Company Stock in connection with the Merger, any obligations of the Company or any of the Subsidiaries (under its bylaws or
otherwise) to indemnify, defend or hold Employee harmless from any claims that may be asserted against him with respect to his
service as an officer, director and/or employee of the Company or any of the Subsidiaries through the date of this Agreement, or
any rights of Employee under any policy of insurance (including, without limitation, directors and officers liability insurance).

 

		4.	Release by Company and the Subsidiaries of the Employee. Each of the Company and the Subsidiaries
releases, acquits and discharges Employee of and from any and all Claims of any kind, including, without limitation, any and all
Claims arising out of or in connection with the Employment Agreement and Employee’s prior service to the Company and/or any
of the Subsidiaries as a director, officer and/or employee.

 

		5.	Resignation. Employee hereby resigns in all of his capacities as a director and executive
officer of the Company and each of the Subsidiaries.

 

		6.	General Provisions.

 

		(a)	This Agreement constitutes the final agreement of the parties with respect to the subject matter
of the same and all prior discussions and negotiations are merged in this Agreement;

 

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		(b)	This Agreement shall be governed by Texas law and any and all disputes with respect to this Agreement
shall be submitted to a court of competent jurisdiction located in Travis County, Texas.

 

Executed to be effective _______________, 2014.

 

	 	COMPANY:
	 	 
	 	PEN, Inc., a Delaware corporation
	 	 
	 	 
	 	By:_____________________________
	 	Name:   Scott E. Rickert
	 	Title:  Chief Executive Officer
	 	 
	 	 
	 	SUBSIDIARIES:
	 	 
	 	Applied Nanotech, Inc., a Delaware corporation
	 	 
	 	 
	 	By: ____________________________
	 	Name: __________________________
	 	Title: ___________________________
	 	 
	 	 
	 	E.B.T., Inc., a Delaware corporation
	 	 
	 	 
	 	By: ____________________________
	 	Name: __________________________
	 	Title: ___________________________
	 	 
	 	 
	 	EZDiagnostiX, Inc., a Texas corporation
	 	 
	 	 
	 	By: ____________________________
	 	Name: __________________________
	 	Title: ___________________________

 

 

 

 

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ANNEX C

 

RESTRICTED STOCK AGREEMENT

 

 

This Agreement is made
and entered into as of the [Date of Merger becoming effective] __, 2014 (the “Date of Grant”) by and between PEN, Inc.,
a Delaware corporation (the “Company”), and Zvi Yaniv (“you”).

 

WHEREAS, the
Company in order to induce you to continue and dedicate service to the Company and to materially contribute to the success of the
Company grants you this restricted stock award (the “Award”); and

 

WHEREAS, you
desire to accept the Award made pursuant to this Agreement.

 

NOW, THEREFORE,
in consideration of and mutual covenants set forth herein and for other valuable consideration hereinafter set forth, the parties
agree as follows:

 

1.The Grant.
Subject to the conditions set forth below, the Company hereby grants you effective as of the Date of Grant, as a matter of separate
inducement but not in lieu of any salary or other compensation for your services for the Company, 6,800,000 shares (the “Restricted
Shares”) of Class A Common Stock of the Company (the “Company Stock”).

 

2.Escrow of
Restricted Shares. The Restricted Shares shall be deemed issued to you on the Date of Grant but shall be subject to the restrictions
and risk of forfeiture set forth in this Agreement. The Company shall cause you to be entered on the register of stockholders of
the Company as the holder of the Restricted subject to the provisions of this Agreement until the Forfeiture Restrictions (defined
below) on such Restricted Shares expire as contemplated in Sections 5 and 6 of this Agreement or the Restricted Shares are forfeited
as described in Sections 4 and 7 of this Agreement. You shall execute one or more instructions or stock powers in blank for the
Restricted Shares and deliver those to the Company. The Company shall hold the Restricted Shares and the related instructions or
stock powers pursuant to the terms of this Agreement until such time as (a) the Forfeiture Restrictions on the Restricted Shares
expire (in which event the Company shall promptly deliver to you stock certificates or other instruments evidencing your ownership
free of restrictions as to the Restricted Shares for which the Forfeiture Restrictions have expired) or (b) the Restricted Shares
are canceled and forfeited pursuant to this Agreement.

 

3.Ownership
of Restricted Shares. From and after the Date of Grant, you will be entitled to all the rights of absolute ownership of the
Restricted Shares, including the right to vote those shares and to receive dividends thereon if, as, and when declared by the Board,
subject to the terms, conditions and restrictions set forth in this Agreement; except, that (i) any dividends that are declared
with respect to Restricted Shares for which the Forfeiture Restrictions have not yet expired shall be subject to the same Forfeiture
Restrictions applicable to the Restricted Shares for which the dividend was paid and (ii) that any such dividends shall be payable
to you no later than 30 days following the expiration of the Forfeiture Restrictions applicable to such shares.

 

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4.Restrictions;
Forfeiture. The Restricted Shares are restricted in that they may not be sold, transferred or otherwise alienated or hypothecated
until the Forfeiture Restrictions are removed or expire as contemplated in Sections 5 and 6 of this Agreement. The Restricted Shares
are also restricted in the sense that they may be forfeited to the Company in accordance with Section 7 below (the “Forfeiture
Restrictions”). You hereby agree that if the Restricted Shares are forfeited, as provided in Section 7, the Company shall
have the right to deliver the Restricted Shares to the Company’s transfer agent for, at the Company’s election, cancellation
or transfer to the Company.

 

5.Expiration
of Restrictions and Risk of Forfeiture. The Forfeiture Restrictions on the Restricted Shares granted pursuant to this Agreement
will expire and, subject to, and conditioned upon, the payment required under Section 10, the Restricted Shares will become transferable
and nonforfeitable upon the first to occur of (i) a Change in Control of the Company (as defined in Section 26(ii)), (ii) the death
of Zvi Yaniv, or (iii) Stock Price Vesting.

 

6.Stock Price
Vesting. Stock Price Vesting will be effective upon the last to occur of:

 

a.The day that is
180 days from Date of Grant;

 

b.The average stock
price of PEN shares for ten consecutive Trading Days reaching thresholds set forth below which will cause vesting of the number
of shares indicated:

 

	Threshold Price:	Number of Shares
	$.10	1,000,000
	$.15	1,000,000
	$.20	1,000,000
	$.25	1,000,000
	$.30	1,000,000
	$.35	1,800,000

 

 

Trading Days does not
include the 60 trading days following the Date of Grant.

 

7.Forfeiture.
Any Restricted Shares with respect to which the Forfeited Restrictions have not expired by the fifth anniversary of the date of
grant will be forfeited. If you fail to make the payment required under Section 10 for any Restricted Shares (or dividends payable
with respect to Restricted Shares) with respect to which the Forfeiture Restrictions would otherwise expire, those Restricted Shares
(or dividends, as applicable) will be forfeited.

 

8.Beneficiary.
You may designate a Beneficiary by notice to the Company. “Beneficiary” means one or more persons, trusts or other
entities which have been designated by you, in your most recent written beneficiary designation filed with the Company, to receive
the benefits specified under this Agreement upon your death. If, upon a your death, there is no designated Beneficiary or surviving
designated Beneficiary, then the term Beneficiary means the persons, trusts or other entities entitled by will or the laws of descent
and distribution to receive such benefits.

 

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9.Delivery of
Stock. Promptly following the expiration of the Forfeiture Restrictions on the Restricted Shares as contemplated in Section
5 of this Agreement, the Company shall cause to be issued and delivered to you or your designee a certificate or other evidence
of the number of Restricted Shares as to which restrictions have expired, free of any restrictive legend relating to the lapsed
restrictions, upon receipt by the Company of any tax withholding as may be required pursuant to Section 10, subject to forfeiture
for failure to pay as set forth in Section 6. The value of such Restricted Shares shall not bear any interest owing to the passage
of time.

 

10.Payment of
Taxes. As a condition to the expiration of the Forfeiture Restrictions with respect to any of the Restricted Shares (with respect
to which such Forfeiture Restrictions would otherwise expire in accordance with Section 5), you are required to pay cash to the
Company (or the Company’s Subsidiary if you are an employee of a Subsidiary of the Company) for transmittal to the Internal
Revenue Service or other government authority in an amount that is determined below not later than 60 days after the Company provides
written notice to you or after you provide written notice to the Company that one of the conditions of Section 5 has been met.
The amount due is the amount of all taxes that the Company (or its Subsidiary’s) is required by law to withhold as a result
of the issuance and delivery of any Restricted Shares pursuant to Section 9 hereof. Such amount will be reasonably calculated by
the Company (or its Subsidiary). The Company will afford you a reasonable opportunity to review and comment on the calculation
by the Company (or its Subsidiary). For clarity, the Company (or its Subsidiary) will not withhold and transmit to the Internal
Revenue Service or other government authority any amount with respect to Restricted Shares other than the amount that you pay to
the Company (or its Subsidiary).

 

11.Compliance
with Securities Law. 

 

a.You acknowledge
and agree that (i) you are not relying upon any determination by the Company, its affiliates, or any of their respective employees,
directors, officers, attorneys or agents (collectively, the “Company Parties”) of the Fair Market Value of the Company
Stock on the Date of Grant, (ii) you are not relying upon any written or oral statement or representation of the Company Parties
regarding the tax effects associated with your execution of this Agreement and your receipt, holding and vesting of the Restricted
Shares, and (iii) in deciding to enter into this Agreement, you are relying on your own judgment and the judgment of the professionals
of your choice with whom you have consulted. You hereby release, acquit and forever discharge the Company Parties from all actions,
causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature whatsoever,
known or unknown, on account of, arising out of, or in any way related to the tax effects associated with your execution of the
Agreement and your receipt, holding and exercise of the Restricted Shares.

 

b.The issuance of
Company Stock (including Restricted Shares) will be subject to compliance with all applicable requirements of federal, state, or
foreign law with respect to such securities and with the requirements of any stock exchange or market system upon which the Company
Stock may then be listed. No Company Stock will be issued hereunder if such issuance would constitute a violation of any applicable
federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system
upon which the Company Stock may then be listed. In addition, Company Stock will not be issued hereunder unless (i) a registration
statement under the Securities Act, is at the time of issuance in effect with respect to the shares issued or (ii) in the opinion
of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority,
if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the
Award will relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority
has not been obtained. As a condition to any issuance hereunder, the Company may require you to satisfy any qualifications that
may be necessary or appropriate to evidence compliance with any applicable law or regulation and to make any representation or
warranty with respect to such compliance as may be requested by the Company. From time to time, the Board and appropriate officers
of the Company are authorized to take the actions necessary and appropriate to file required documents with governmental authorities,
stock exchanges, and other appropriate Persons to make shares of Company Stock available for issuance.

 

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12.Subdivision
or Consolidation; Recapitalization; Reorganization.

 

a.The existence of
this Agreement and the Award shall not affect in any way the right or power of the Board or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or
its business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Company
Stock or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of
all or any part of its assets or business or any other corporate act or proceeding. In no event will any action taken by the Company
pursuant to this Section 12 result in the creation of deferred compensation within the meaning of the Nonqualified Deferred Compensation
Rules.

 

b.The Award and the
number of Restricted Shares subject to the Award shall be subject to adjustment from time to time, in accordance with the following
provisions:

 

(i)If at any time,
or from time to time, the Company shall subdivide as a whole (by reclassification, by a stock split, by the issuance of a distribution
on Company Stock payable in Company Stock, or otherwise) the number of Restricted Shares of Company Stock then outstanding into
a greater number of shares of Company Stock, then the number of Restricted Shares shall be increased proportionately and the Threshold
Price under Section 6b shall be decreased proportionately.

 

(ii)If at any time,
or from time to time, the Company shall consolidate as a whole (by reclassification, by reverse stock split or otherwise) the number
of shares of Company Stock then outstanding into a lesser number of shares of Company Stock, then the number of Restricted Shares
shall be decreased proportionately and the Threshold Price under Section 6b shall be increased proportionately.

 

(iii)Whenever the
number of Restricted Shares and the Threshold Price are required to be adjusted as provided in this Subsection 12b, the Company
shall promptly prepare, and deliver to you, a notice setting forth, in reasonable detail, the event requiring adjustment, the amount
of the adjustment, the method by which such adjustment was calculated, and the Threshold Price after giving effect to the adjustments.

 

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(iv)Adjustments
under Subsections 12b(i) and (ii) shall be made by the Company, and its reasonable determination as to what adjustments shall be
made and the extent thereof shall be final, binding, and conclusive. No fractional interest shall be issued on account of any such
adjustments.

 

c.The issuance by
the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor
or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of shares of Company Stock subject to the Award or
the Threshold Price.

 

13.Legends.
The Company may at any time place legends referencing any restrictions imposed on the shares pursuant to this Agreement on all
certificates or other evidence of ownership representing shares issued with respect to this Award.

 

14.Right of
the Company and Subsidiaries to Terminate Services. Nothing in this Agreement confers upon you the right to continue in the
employ of or performing services for the Company or any Subsidiary. Termination of your employment relationship with the Company
shall have no effect on your rights under this Agreement.

 

15.Furnish Information.
You agree to furnish to the Company all information requested by the Company to enable it to comply with any reporting or other
requirements imposed upon the Company by or under any applicable statute or regulation.

 

16.No Guarantee
of Value. Neither the Company nor the Board guarantee the Company Stock from loss or depreciation.

 

17.Tax Advice,
Section 83(b) Election. You understand and acknowledge that you should consult and have consulted with your tax advisor regarding
the tax consequences of this Agreement and the advisability of filing with the Internal Revenue Service an election under section
83(b) of the Code with respect to the Restricted Shares for which the restrictions have not lapsed. You confirm that you have consulted
with your own tax advisor regarding the tax consequences of this Agreement (and related transactions) and that you will not make
any election under section 83(b) of the Code with respect to any portion of the Award.

 

18.Notices.
All notices required or permitted under this Agreement must be in writing and either personally delivered or sent by mail or recognized
national or international courier service with confirming phone call or e-mail. Notices are delivered for purposes of this Agreement
on the date on which it is actually received by the person to whom it is properly addressed or, if earlier seven business days
after the date it is sent by United States mail or by recognized national or international courier.

 

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19.Waiver of
Notice. Any person entitled to notice hereunder may waive such notice in writing.

 

20.Transfer,
Assignment, Successors. Prior to the expiration of Forfeiture Restrictions on Restricted Shares such Restricted Shares may
not be transferred. You may not assign your rights under this Agreement except by will and the laws of descent and distribution.
This Agreement shall be binding upon you, your legal representatives, heirs, legatees and distributees, and upon the Company, its
successors and assigns.

 

21.Entire Agreement,
Severability. This Agreement and the Piggyback Registration Rights Agreement of even date are the entire agreement between
you and the Company with respect to the Award and the Restricted Shares issued under this Agreement. If any provision of this Agreement
is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof,
but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision
had never been included herein.

 

22.Company Action.
Any action required of the Company shall be by resolution of the Board or by a person or entity authorized to act by resolution
of the Board.

 

23.Governing
Law. All questions arising with respect to the provisions of this Agreement shall be determined by application of the laws
of Texas, without giving any effect to any conflict of law provisions thereof, except to the extent Texas state law is preempted
by federal law.

 

24.Consent to
Jurisdiction and Venue. You hereby consent and agree that any disposition arising under this Agreement shall be submitted to
a court having jurisdiction and located in Travis County, Texas and each party submits to the jurisdiction of such courts. In any
dispute with the Company, you will not raise, and you hereby expressly waive, any objection or defense to any such jurisdiction
and venue as an inconvenient forum.

 

25.Amendment.
This Agreement may only be amended by a writing signed by both you and the Company.

 

26.Definitions.
As used in this Agreement the terms below have the meaning indicated.

 

(i)“Board”
means the Company’s Board of Directors.

 

(ii)“Change
in Control” means (i) a sale of all or substantially all of the Company’s assets other than to an Excluded Entity (as
defined below), (ii) a merger, consolidation or other capital reorganization or business combination transaction of the Company
with or into another corporation, limited liability company or other entity other than an Excluded Entity, or (iii) the consummation
of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly
or indirectly, of all of the Company’s then outstanding voting securities. Notwithstanding the foregoing, a transaction shall
not constitute a Change in Control if its purpose is solely to (A) change the jurisdiction of the Company’s incorporation,
(B) create a holding company that will be owned in substantially the same proportions by the persons who hold the Company’s
securities immediately before such transaction, or (C) obtain funding for the Company in a financing that is approved by the Company’s
Board. An “Excluded Entity” means a corporation or other entity of which the holders of voting capital stock of the
Company outstanding immediately prior to such transaction are the direct or indirect holders of voting securities representing
at least a majority of the votes entitled to be cast by all of such corporation’s or other entity’s voting securities
outstanding immediately after such transaction.

 

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(iii)“Code”
means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions
and regulations thereto.

 

(iv)“Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions
and rules thereto.

 

(v)“Person”
means any person or entity of any nature whatsoever, specifically including an individual, a firm, a company, an entity, a partnership,
a limited liability company, a trust or other entity; a Person, together with that Person’s Affiliates and Associates (as
those terms are defined in Rule 12b-2 under the Exchange Act, provided that “registrant” as used in Rule 12b-2 shall
mean the Company), and any Persons acting as a partnership, limited partnership, joint venture, association, syndicate or other
group (whether or not formally organized), or otherwise acting jointly or in concert or in a coordinated or consciously parallel
manner (whether or not pursuant to any express agreement), for the purpose of acquiring, holding, voting or disposing of securities
of the Company with such Person, shall be deemed a single “Person.”

 

(vi)“Securities
Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder, or any successor law, as it may
be amended from time to time.

 

(vii)“Subsidiary”
means with respect to the Company, any corporation or other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by the Company.

 

 

 

[ADD closing, sig blocks
and notice addresses (including phone and e-mail to confirm notices as required for notices delivered by mail or courier under
Section 18.]

 

 

 

 

 

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ANNEX D

 

Piggyback Registration
Rights Agreement

 

 

This
is the Piggyback Registration Rights Agreement (this “Agreement”) dated [Effective Date of Merger]________,
2014 by and between PEN, Inc., a Delaware corporation (the “Company”) and Zvi Yaniv, an individual (together
with his heirs “Holder”). Terms used with initial capital letters are used as defined in Section 7
of this Agreement.

 

Background

 

Holder is acquiring on the date of this
Agreement 6,800,000 shares of restricted Company Common Stock (the “Holder Stock”) under a Restricted Stock
Agreement of even date with this Agreement (the “Restricted Stock Agreement”). The Company is granting Holder
certain rights to register Holder Stock that are no longer subject to risk of forfeiture when the Company is registering shares
with the Securities Exchange Commission (“SEC”).

 

Agreement

 

Yaniv and the Company agree:

 

1.Registration
Rights.

 

(a)Right
to Piggyback. Whenever the Company proposes to register any of its equity securities under the Securities Act (excluding registrations
on Forms S-4 or S-8) and the registration form to be used may be used for the registration of Qualifying Shares, whether a sale
for the Company’s own account or for selling security holders (a “Piggyback Registration”), the Company
will give written notice to the Holders’ Representative prior to the filing of the registration statement of the Company’s
intention to effect such a registration and, subject to Section 1(b) below,
will include in such registration all Qualifying Shares with respect to which the Company has received written request for inclusion
for Holder within 10 days after the sending of the Company's notice.

 

(b)Priority.
If a Piggyback Registration is an underwritten registration, and the managing underwriters advise the Company that, in their opinion,
the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without
adversely affecting the marketability, proposed offering price, timing, distribution method or probability of success of such offering,
then the Company will include in such registration (i) first, the securities that the Company proposes to sell, (ii) second,
securities the Company is required to register under agreements entered into in 2013 (or earlier) that are not subject to cutback,
and (iii) third, Qualifying Shares requested to be included either by Holder or other Company securities requested to be included
by other holders that have registration rights which in the opinion of such underwriters can be sold without adverse effect, pro
rata among the holders of such securities on the basis of the number of such securities owned by each such holder. To facilitate
the allocation of shares in accordance with the above provisions, the underwriters may round the number of shares allocated to
any holder to the nearest 100 shares.

 

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(c)Selection
of Underwriters. If any Piggyback Registration is an underwritten offering, the selection of the investment banker(s) and manager(s)
for the offering will be made by the Company, in its sole and absolute discretion.

 

(d)Withdrawal
by Company. If, at any time after giving notice of its intention to register any of its securities as set forth in Section
1(a) and before the effective date of the registration statement filed in connection
with such registration, the Company determines, for any reason, not to register such securities, the Company will give written
notice of its determination to the Holder’s Representative and will promptly return any materials provided by the Holders
to the Company in connection with such registration.

 

2.Holdback
Agreements.

 

(a)No
Participating Holder will make any public sale or distribution (including sales pursuant to Rule 144) of equity securities of the
Company, or any securities, options, or rights convertible into or exchangeable or exercisable for such securities, during the
Applicable Period (except as part of such underwritten registration), unless the underwriters managing the registered public offering
otherwise agree. If requested by the Company, each Participating Holder agrees to execute customary lock-up agreements with the
managing underwriter(s) of an underwritten offering with a duration not to exceed the Applicable Period in such form as agreed
to by the Holders. The “Applicable Period” will begin ten days before and continue for 180 days following the
effective date of the registration statement for the first public offering of the Company's equity securities after the date of
this Agreement and will begin ten days before and continue for 90 days following the effective date of the registration statement
for any other underwritten public offering of the Company's equity securities, subject to extension as required by FINRA rules.
If requested by the underwriter(s), each Participating Holder will reconfirm this commitment in writing prior to any such offering.

 

(b)The
Company will not make any public sale or distribution of its equity securities, or any securities convertible into or exchangeable
or exercisable for such securities, during the Applicable Period (except as part of such underwritten registration or pursuant
to registrations on Form S-4 or S-8 or any successor form), unless the underwriters managing the registered public offering otherwise
agree.

 

3.Registration
Procedures. 

 

(a)
The Company will use commercially reasonable efforts to effect the registration and the sale of all Qualifying Shares in accordance
with the requirements of Section 1 and the Company will:

 

(i)prepare
and file with the Securities and Exchange Commission a registration statement with respect to the Qualifying Shares that are to
be included in the offering and thereafter use commercially reasonable efforts to cause such registration statement to become effective;

 

(ii)prepare
and file with the Securities and Exchange Commission such amendments and supplements or take such other action to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for
such period as will terminate when all of the securities covered by such registration statement during such period have been disposed
of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement
(but, in any event, not before the expiration of any longer period required under the Securities Act, or, if such registration
statement relates to an underwritten offering, such longer period as in the opinion of counsel for the underwriters a prospectus
is required by law to be delivered in connection with the sale of Qualifying Shares by an underwriter or dealer), and comply with
the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until
such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement;

 

    	D-2

    	 

    

 

 

(iii)furnish
to the Participating Holders such number of copies of such registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus), and such other documents as the Participating
Holders may reasonably request in order to facilitate the disposition of the Qualifying Shares included in the registration statement;

 

(iv)use
commercially reasonable efforts to register or qualify such Participating Holders’ Qualifying Shares under such other securities
or blue sky laws of such jurisdictions as the Holders reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Qualifying Shares
owned by the Participating Holders, except that the Company will not be required to (i) qualify generally to
do business in any jurisdiction where it would not otherwise be required to qualify, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such jurisdiction;

 

(v)unless
the Company has suspended the offering under Section 3(b), notify the Holders’
Representative, at any time when a prospectus relating to any Qualifying Shares is required to be delivered under the Securities
Act, upon discovery that, or upon the discovery of the happening of any event as a result of which, the prospectus included in
such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements
therein not misleading in the light of the circumstances under which they were made, and, at the request of the Holders’
Representative, the Company will prepare and furnish to the Participating Holders a reasonable number of copies of a supplement
or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Qualifying Shares, such prospectus will
not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading
in the light of the circumstances under which they were made;

 

(vi)use
commercially reasonable efforts to cause Qualifying Shares covered by such registration statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition
of such Qualifying Shares; and

 

    	D-3

    	 

    

 

 

(vii)cooperate
with the Participating Holders and each underwriter or agent participating in the disposition of Qualifying Shares and their respective
counsel in connection with any filings required to be made with the FINRA.

 

(b)At
any time, if the Company reasonably believes that there is or may be in existence material nonpublic information or events involving
the Company, the failure of which to be disclosed in the prospectus included in the registration statement could constitute a material
misstatement or omission, then, upon written notice to the Holder’s Representative and until the Holders receive copies of
the supplemented or amended prospectus, such period not to exceed 60 days (the “Suspension Period”), the Company
may suspend the use or effectiveness of any registration statement (and the Holders each hereby agree not to offer or sell any
Qualifying Shares pursuant to such registration statement during the Suspension Period). If the Company exercises its right to
delay or suspend the use or effectiveness of a registration hereunder, the applicable time period during which the registration
statement is to remain effective will be extended by a period of time equal to the duration of the Suspension Period. The Company
may extend the Suspension Period for an additional consecutive 60 days with the consent of the Holders, which will not be unreasonably
withheld. If so directed by the Company, the Holders will (i) not offer to sell any Qualifying Shares pursuant to the registration
statement during the period in which the delay or suspension is in effect after receiving notice of such delay or suspension and
(ii) use commercially reasonable efforts to deliver to the Company (at the Company's expense) all copies, other than permanent
file copies then in the Participating Holders' possession, of the prospectus relating to Qualifying Shares current at the time
of receipt of such notice

 

4.Registration
Expenses. All expenses incident to the filing of any Piggyback Registration and to
the Company's performance of or compliance with this Agreement (all such expenses being herein called “Registration Expenses”)
will be borne or paid by the Company, including, without limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery expenses, fees and disbursements of custodians, fees
and disbursements of counsel for the Company, and all independent certified public accountants, underwriters (excluding discounts
and commissions), and other Persons retained by the Company, including, without limitation, the Company's internal expenses (e.g.,
salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or
quarterly review, and the expenses and fees for listing the securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or, if none are so listed, on a securities exchange. The Company will not be responsible
for any discounts, commissions, transfer taxes or other similar fees incurred by the Holders in connection with the sale of the
Qualifying Shares.

 

    	D-4

    	 

    

 

 

5.Indemnification.

 

(a)The
Company agrees to indemnify and hold harmless, to the full extent permitted by law, each of the Participating Holders, severally
and not jointly, their respective officers, directors, members, agents, and employees and each Person who controls the Holders
(within the meaning of the Securities Act) against any and all losses, claims, damages, liabilities, joint or several, together
with reasonable costs and expenses (including reasonable attorney's fees), to which such indemnified party may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions or proceedings, whether commenced
or threatened, in respect thereof) arise out of, are based upon, are caused by, or result from (i) any untrue or alleged untrue
statement of material fact contained (A) in any registration statement, prospectus, or preliminary prospectus or any amendment
thereof or supplement thereto, or (B) in any application or other document or communication (in this Section 5
collectively called an “application”) executed by or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any securities covered by such registration
statement under the “blue sky” or securities laws thereof, or (ii) any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse the
Holders and each such director, officer, member, agent and employee for any legal or any other expenses incurred by them in connection
with investigating or defending any such loss, claim, liability, action, or proceeding; except that the Company will
not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof),
or expense arises out of, is based upon, is caused by, or results from an untrue statement or alleged untrue statement, or omission
or alleged omission, made in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement
thereto, or in any application, in reliance upon, and in conformity with, written information prepared and furnished to the Company
by a Participating Holder or other indemnified party expressly for use therein or by any Participating Holder’s failure to
deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished
the Holders with a sufficient number of copies of the same. 

 

(b)In
connection with any registration statement in which the Participating Holders are participating, each Participating Holder will
furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with
any such registration statement or prospectus and, to the full extent permitted by law, will, severally and not jointly, indemnify
and hold harmless the Company, and its directors, officers, members, agents, and employees and each other Person who controls the
Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities, together with reasonable costs
and expenses (including reasonable attorneys’ fees), to which such indemnified party may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of, are based upon, are caused by, or result from (i) any untrue or alleged untrue statement
of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or in any application, or (ii) any omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is made
in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written information prepared and furnished to the Company by such Holder expressly
for use therein. Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying
party of any claim with respect to which it seeks indemnification (except that the failure to give prompt notice will not impair
any Person's right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party), and (ii) unless
in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be unreasonably withheld, conditioned or delayed).
An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless
in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim.

 

    	D-5

    	 

    

 

 

(c)The
indemnifying party will not, except with the approval of each indemnified party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified
party of a release from all liability in respect to such claim or litigation without any payment or consideration provided by such
indemnified party.

 

(d)If
the indemnification provided for in this Section 5 is unavailable to, or is insufficient
to hold harmless, an indemnified party under the provisions above in respect to any losses, claims, damages, or liabilities referred
to therein, then each indemnifying party will contribute to the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, or liabilities in such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and of the Holder and any other sellers participating in the registration statement on the other hand in connection
with the registration statement on the other in connection with the statement or omissions which resulted in such losses, claims,
damages, or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand
and of the Holder and any other sellers participating in the registration statement on the other hand will be determined by reference
to, among other things, whether the untrue or alleged omission to state a material fact relates to information supplied by or relating
to the Company or whether it relates to information supplied by or relating to the Holder or other sellers participating in the
registration statement and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.

 

(e)The
Company and the Participating Holders agree that it would not be just and equitable if contribution pursuant to this Section
5 were determined by pro rata allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, and liabilities referred to in the immediately preceding paragraph
will be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.

 

(f)The
indemnification and contribution by any such party provided for under this Agreement will be in addition to any other rights to
indemnification or contribution which any indemnified party may have pursuant to law or contract and will remain in full force
and effect regardless of any investigation made or omitted by or on behalf of the indemnified party or any officer, director, employee
or controlling Person of such indemnified party and will survive the transfer of securities. 

 

    	D-6

    	 

    

 

 

6.Participation
in Underwritten Registrations.

 

(a)No
Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees to sell such Person's
securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements (including, without limitation, pursuant to the terms of any over-allotment or “green shoe” option
requested by the managing underwriter(s); except that a Participating Holder will not be required to sell more than
the number of Qualifying Shares that the Participating Holder has requested the Company to include in any registration), and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, and other documents reasonably required
under the terms of such underwriting arrangements.

 

(b)Each
Person that is participating in any registration hereunder agrees that, upon receipt of any notice from the Company of the initiation
of a Suspension Period, such Person will forthwith discontinue the disposition of its Qualifying Shares pursuant to the registration
statement until such Person's receipt of the copies of a supplemented or amended prospectus.

 

7.Definitions.

 

“Board”
means the board of directors of the Company.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations promulgated
thereunder, all as amended, modified or supplemented from time to time.

 

“Holder”
means Zvi Yaniv and/or his heirs or personal representatives.

 

“Holders’
Representative” means the person designated from time to time by the Participating Holders or, as to a particular registration
statement, the person designated by those Participating Holders. The Company will only recognize one Holders’ Representative
at any time. Until the Company is notified otherwise, the Holders Representative is Yaniv.

 

“Participating
Holder” means any Holder who has elected to have Qualified Shares included in any registration under this Agreement.

 

“Person”
means an individual, a corporation, a limited liability company, an association, a joint-stock company, a business trust or other
similar organization, a partnership, a joint venture, a trust, an unincorporated organization or a government or any agency, instrumentality
or political subdivision thereof.

 

    	D-7

    	 

    

 

 

“Qualifying Shares”
means any of the Holder Stock with respect to which all forfeiture restrictions have expired in accordance with the applicable
Restricted Stock Agreement.

 

“Securities Act”
means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations promulgated thereunder,
all as amended, modified or supplemented from time to time.

 

“Suspension Period”
has the meaning set forth in Section 3(b).

 

8.Miscellaneous.

 

(a)Amendment
and Waiver. No modification, amendment, or waiver of any provision of this Agreement will be effective unless such modification,
amendment, or waiver is approved in writing by the parties. The failure of any party to enforce any of the provisions of this Agreement
will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each
and every provision of this Agreement in accordance with its terms.

 

(b)Severability.
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other provision or any other
jurisdiction, but this Agreement will be reformed, construed, and enforced in such jurisdiction as if such invalid, illegal, or
unenforceable provision had never been contained herein.

 

(c)Entire
Agreement. Except as otherwise expressly set forth herein, this Agreement is the complete agreement and understanding among
the parties related to the subject matter hereof.

 

(d)Successors
and Assigns. Neither party may assign this Agreement without the consent of the other party. Subject to the foregoing, all
of the terms and provisions of this Agreement will inure to the benefit of and be binding upon the parties hereto and their respective
executors, heirs, personal representatives, successors and assigns.

 

(e)Counterparts.
This Agreement may be executed in any number of counterparts and delivered via facsimile or attachment to electronic mail, each
of which when executed and delivered will be deemed to be an original and all of which counterparts taken together will constitute
but one and the same instrument.

 

(f)Remedies.
Any Person having rights under any provision of this Agreement will be entitled to enforce their rights under this Agreement specifically
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their
favor; except that the parties hereto stipulate that the remedies at law of any party hereto in the event of any default or threatened
default by any other party hereto in the performance of or compliance with the terms hereof are not and will not be adequate and
that, to the fullest extent permitted by law, such terms may be specifically enforced (without posting a bond or other security)
by a decree for the specific performance thereof, whether by an injunction against violation thereof or otherwise.

 

    	D-8

    	 

    

 

 

(g)Notices.
Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder will be
in writing and will be deemed given (i) on the date established by the sender as having been delivered personally, (ii) on the
date delivered by a private courier as established by the sender by evidence obtained from the courier, or (iii) on the seventh
day after the date mailed return receipt requested, postage prepaid with a confirming e-mail or phone call made when the notice
is sent. Such communications, to be valid, must be addressed as follows:

 

If to the Holders, to:

 

_________________________

 

_________________________

 

_________________________

 

 

If to the Company, to:

 

 

PEN, Inc.

9 Diamond Drive

Key West, FL 33040

Attn: Jeanne Rickert, General Counsel

 

 

With a copy to:

 

 

Laura Anthony, Esq.

Legal & Compliance LLC

330 Clematis Street, Suite 217

West Palm Beach, FL 33401

 

 

or to such other address or to the attention of such person
or persons as the recipient party has specified by prior written notice to the sending party (or in the case of counsel, to such
other readily ascertainable business address as such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth above will control.

 

(h)Governing
Law. This Agreement will be governed by and interpreted and enforced in accordance with the Laws of the State of New York,
without giving effect to any choice of Law or conflict of Laws rules or provisions that would cause the application of the Laws
of any jurisdiction other than the State of New York.

 

(i)Consent
to Jurisdiction. Each party irrevocably submits to the jurisdiction of (i) the State of New York, and (ii) the United States
District Court for the Eastern District of New York, for the purposes of any action arising out of this Agreement or any transaction
contemplated hereby. Each party agrees to commence any such action either in the United States District Court for the Eastern District
of New York or, if such action may not be brought in such court for jurisdictional reasons, in the state courts of the State of
New York. Each party further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s
respective address set forth above will be effective service of process for any action in the State of New York with respect to
any matters to which it has submitted to jurisdiction in this Section 8(i).
Each party irrevocably and unconditionally waives any objection to the laying of venue of any action arising out of this Agreement
or the transactions contemplated hereby in New York, New York, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action brought in any such court has been brought in an inconvenient forum.
EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF AND THEREOF.

 

    	D-9

    	 

    

 

 

(j)No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied against any party.

 

(k)Business
Days. If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or legal
holiday in the state in which the Company's chief executive office is located, the time period will automatically be extended to
the business day immediately following such Saturday, Sunday or legal holiday.

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

 

 

 

 

    	D-10

    	 

    

IN WITNESS WHEREOF,
the parties hereto have executed this Registration Rights Agreement on the day and year first above written.

 

 

	PEN Inc.
	
         

        By: ______________________

	     Scott E Rickert, Chief Executive Officer
	
         

         

         

         

	
 

        Zvi Yaniv

	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	D-11Exhibit 10.36

 

[Company Letterhead]

 

REVISED

 

December 17, 2013

 

Steven B. Bernitz

29 Day Street

Somerville, MA 02144

 

Dear Steve:

 

On behalf of Synta Pharmaceuticals, I am pleased to offer you the position of Senior Vice President, Corporate Development reporting to Safi Bahcall, President and Chief Executive Officer for Synta Pharmaceuticals Corp. (hereinafter “Synta Pharmaceuticals” or the “Company”).

 

1.                                      Effective Date:  The effective date of your employment is TBD.

 

2.                                      Compensation:  Your initial base salary will be $315,000.00 annually, payable at a semi-monthly rate of $13,125.00, from which all applicable taxes and other customary employment-related deductions will be taken.

 

For the first annual performance review following your hire date, all pay-for-performance compensation (such as merit increases, bonuses and annual stock option grants) will be pro-rated to reflect your start date and the percentage of the calendar year that you worked.  Employees who start after September 30th will not be included in the performance review for that calendar year.

 

3.                                      Bonus:  You will be eligible to receive an annual, discretionary performance based bonus.  This cash bonus, for fully meeting and exceeding expectations under the Company’s bonus program, is expected to be at a target level of 40% of your base salary.  Such bonus, if any, will be granted at the discretion of the Company’s Board of Directors and will be paid to you by no later than March 15th of the calendar year immediately following the calendar year in which it was earned.

 

4.                                      Stock Option:  You will be granted an incentive stock option to purchase 150,000 shares of the Company’s common stock pursuant to the terms of the Synta Pharmaceuticals Corp. 2006 Stock Plan (the “Plan”) and formal stock option agreement.  All stock option grants shall be priced at the fair market value (as defined in the 2006 plan) on the grant date and are subject to a vesting schedule over four years (25% vest on the first year anniversary of your hire date and the remainder in equal portions quarterly over the next three years).  If there is a conflict between the terms of the Plan, a copy of which will be provided to you with the grant, and any stock option agreement, the terms of the Plan will control.

 

You will also be granted 25,000 restricted shares of the Company’s common stock pursuant to the terms of the Plan and a formal restricted share agreement to be executed by you pursuant thereto.  These restricted shares shall be subject to the following vesting schedule:  50% vest on

 

1

 

the second anniversary of your hire date and the remainder on the third anniversary of your hire date.  If there is conflict between the terms of the Plan, a copy of which will be provided to you with the grant, and any restricted share agreement, the terms of the Plan will control.

 

5.                                      Severance and Change of Control:  Please refer to the document included with this offer of employment entitled Severance and Change of Control Agreement, a copy of which is attached hereto as Exhibit B.

 

6.                                      Benefits:  As a full-time employee, you will be eligible to participate in certain Company-sponsored benefit plans to the same extent as, and subject to the same terms, conditions and limitations applicable to other employees of the Company of similar rank and tenure.  All benefits may be changed or modified from time to time at the Company’s sole discretion.

 

7.                                      Employment Period:  Your employment with the Company will be at-will, meaning that you will not be obligated to remain employed by the Company for any specified period of time; likewise, the Company will not be obligated to continue your employment for any specific period and may terminate your employment at any time, with or without cause.

 

8.                                      Contingencies:  Our employment offer to you is contingent upon (1) your execution of the standard form of Non-Competition, Confidentiality and Inventions Agreement (a copy of which is attached hereto as Exhibit A); (2) your ability, as required under federal law, to establish your employment eligibility as a U.S. citizen, a lawful permanent resident of the U.S. or an individual specifically authorized for employment by the Immigration and Naturalization Service; and (3) completion of a satisfactory background check.  If any of the foregoing conditions are not met, this employment offer shall be null and void.

 

9.                                      Jurisdiction and Waiver:  In the case of any dispute, this offer of employment shall be interpreted under the laws of the Commonwealth of Massachusetts.  By accepting this offer of employment, you agree that any action, demand, claim or counterclaim in connection with any aspect of your employment with the Company or any separation of employment (whether voluntary or involuntary) from the Company, shall be resolved in a court of competent jurisdiction in Massachusetts by a judge alone, and you knowingly waive and forever renounce your right to a trial before a civil jury; provided, however, that any claims related to the terms of the Severance and Change of Control Agreement shall be resolved in the arbitration forum specified in that agreement.

 

10.                               Orientation:  On your first day of employment, please arrive at 45 Hartwell Avenue at 8:30am for benefits enrollment with Human Resources.

 

2

 

Steve, we are very enthusiastic and looking forward to your joining us as a Synta Pharmaceuticals employee.  Please indicate your acceptance of the foregoing by signing one enclosed copy of this letter and returning it to Art McMahon by no later than Wednesday, December 18, 2013.  After that date, this offer will lapse.  If you need additional time to respond to this offer, please let us know immediately.

 

	
Sincerely,
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SYNTA   PHARMACEUTICALS CORP.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Safi Bahcall, Ph.D.
    	
 
    	
 
    
	
Safi   Bahcall, Ph.D.
    	
 
    	
 
    
	
Director,   President and Chief Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Agreed   to and accepted:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
/s/   Steven B. Bernitz
    	
 
    	
Date:
    	
12/18/13
    
	
 
    	
Steven   B. Bernitz
    	
 
    	
 
    

 

3

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