FORM OF WAFERGEN BIO-SYSTEMS, INC. SUBSCRIPTION AGREEMENT
FORM
OF
0000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxxx Xxxxxx, President
WaferGen,
Inc.
Bayside
Technology Center
00000
Xxxxxxx Xxxx.
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxx Xxxxxx, President
Ladies
and Gentlemen:
1. Subscription. The
undersigned (the “Purchaser”),
intending to be legally bound, hereby agrees to purchase from WaferGen
Bio-systems, Inc. (the “Company”)
units
(the "Units")
to be
issued by the Company, each Unit consisting of one (1) share of the Company’s
common stock, par value $0.001 per share (“Common
Stock”),
and a
warrant (“Warrant”)
to
purchase three-tenths (3/10), or 30%, of one share of Common Stock, in the
amount set forth on the signature page hereof. The minimum subscription for
Units shall be $30,000, however the Company may, in its discretion, accept
less
than the minimum subscription amount. This subscription is submitted to you
in
accordance with and subject to the terms and conditions described in this
Subscription Agreement (the “Agreement”)
and
the Private Placement Memorandum of the Company, dated April 16, 2007, as
amended or supplemented from time to time, including all attachments, schedules
and exhibits thereto (the “Memorandum”),
relating to the offering (the “Offering”)
by the
Company of a minimum of $9,000,000 (the “Minimum
Amount”)
and a
maximum of $12,000,000 (the "Maximum
Amount")
in
aggregate purchase price of Units; provided,
however,
that
the Company may, in its sole discretion, accept subscriptions for Units in
excess of the Maximum Amount, but not to exceed $14,400,000. The purchase price
per Unit shall be equal to $1.50. All funds received in connection with
subscriptions for Units will be deposited in a separate escrow account (the
“Escrow
Account”)
held
by Signature Bank (the “Escrow
Agent”)
pursuant to the terms hereof and of that certain escrow agreement by and among
the Company, Xxxxxx & Xxxxxxx, LLC and the Escrow Agent (the “Escrow
Agreement”).
The
terms
of the Offering are more completely described in the Memorandum and such terms
are incorporated herein in their entirety. Certain terms used but not otherwise
defined herein shall have the respective meanings provided in the Memorandum
and
in Section 7 herein.
2. Closing,
Deliverables and Escrow.
(a) Closing.
On the
Closing Date, each Purchaser shall purchase from the Company, severally and
not
jointly with the other Purchasers, and the Company shall issue and sell to
each
Purchaser the number of Units equal to such Purchaser’s Subscription Amount
divided by the Per Unit Purchase Price, rounded down to the nearest whole Unit.
The aggregate Subscription Amounts for Units sold hereunder shall be up to
the
Maximum Amount; provided,
however,
that
the Company may, in its sole discretion, accept subscriptions for Units in
excess of the Maximum Amount, but not to exceed $14,400,000. Upon satisfaction
of the conditions set forth in this Section 2, the Closing shall occur at the
offices of Xxxxxx and Xxxxx, LLP, 000 Xxxx 00xx
Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000,
or
such
other location as the parties shall mutually agree.
(b) Deliveries.
(1) On
or
prior to the Closing Date, the Company shall deliver or cause to be delivered
to
each Purchaser the following:
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i.
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this
Agreement duly executed by the
Company;
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ii.
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a
certificate registered in the name of such Purchaser, evidencing
that
number of shares of Common Stock equal to such Purchaser’s Subscription
Amount divided by the Per Unit Purchase Price (the “Shares”)
and a warrant certificate, registered in the name of such Purchaser,
representing the right to purchase that number of shares of Common
Stock
equal to the product of (a) 0.3 and (b) the number of Shares, rounded
up
to the nearest whole number (the “Warrant
Shares”);
and
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iii.
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the
Registration Rights Agreement duly executed by the
Company.
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(2) On
or
prior to the Closing Date, each Purchaser shall deliver or cause to be delivered
to the Company the following:
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i.
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this
Agreement duly executed by such
Purchaser;
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ii.
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such
Purchaser’s Subscription Amount by check or wire transfer to the account
of the Escrow Agent; and
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iii.
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the
Registration Rights Agreement duly executed by such
Purchaser.
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(c) Closing
Conditions.
(1) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
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i.
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the
accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained
herein;
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ii.
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the
Merger of Acquisition Sub into WaferGen, Inc. (“WaferGen”) shall have been
consummated;
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iii.
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the
Company shall have received subscriptions for at least 8,000,000
Units
(or, at
its election, at least 6,000,000
Units);
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2
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iv.
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all
obligations, covenants and agreements of the Purchasers required
to be
performed at or prior to the Closing Date shall have been
performed;
and
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v.
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the
delivery by the Purchasers of the items set forth in Section 2(b)(2)
of
this Agreement.
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(2) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:
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i.
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the
accuracy in all material respects on the Closing Date of the
representations and warranties of WaferGen and the Company contained
herein;
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ii.
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all
obligations, covenants and agreements of WaferGen and the Company
required
to be performed at or prior to the Closing Date shall have been
performed;
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iii.
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the
delivery by the Company of the items set forth in Section 2(b)(1)
of this
Agreement;
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iv.
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the
Merger shall have been consummated;
and
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v.
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there
shall have been no Material Adverse Effect (as defined in Section
5(d)
hereof) with respect to the Company since the date
hereof.
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3. Acceptance
of Subscription.
The
Purchaser understands and agrees that the Company reserves the right to accept
or reject this or any other subscription for Units, in whole or in part, and
in
any order, notwithstanding prior receipt by the Purchaser of notice of
acceptance of this subscription. The Company shall have no obligation hereunder
until the Company shall execute and deliver to the Purchaser an executed copy
of
this Agreement. If this subscription is rejected in whole or the Offering is
terminated or the Minimum Amount is not raised, all funds received from the
Purchaser will be returned without interest, penalty, expense or deduction,
and
this Agreement and all other documents executed by the Purchasers shall
thereafter be of no further force or effect. If this subscription is rejected
in
part, and in any order, the funds for the rejected portion of this subscription
will be returned without interest, penalty, expense or deduction, and this
Agreement will continue in full force and effect with respect to the part of
the
subscription that was accepted.
4. Purchaser
Representations and Warranties.
Each
Purchaser hereby represents, warrants, acknowledges and agrees as
follows:
(a) The
Shares, the Warrants and the Warrant Shares (collectively, the “Securities”)
are
not registered under the Securities Act of 1933, as amended, and the regulations
promulgated thereunder (the “Securities
Act”),
or
any state securities laws. The Purchaser understands that the offering and
sale
of the Units, including the Securities is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(2) thereof and
the
provisions of Regulation D promulgated thereunder, based, in part, upon the
representations, warranties and agreements of the Purchaser contained in this
Agreement.
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(b) The
Purchaser has received the Memorandum and all other documents requested by
the
Purchaser, has carefully reviewed them and understands the information contained
therein, and the Purchaser, prior to the execution of this Agreement, has had
access to the same kind of information which would be available in a
registration statement filed by the Company under the Securities
Act.
(c) Neither
the Commission nor any state securities commission has approved the Units or
the
Securities, or passed upon or endorsed the merits of the Offering or confirmed
the accuracy or determined the adequacy of the Memorandum. The Memorandum has
not been reviewed by any Federal, state or other regulatory
authority.
(d) All
documents, records and books pertaining to the investment in the Units
(including, without limitation, the Transaction Documents) have been made
available for inspection by the Purchaser and its representatives. The Purchaser
hereby acknowledges that all such information is confidential and the Purchaser
shall not disclose any such confidential information to any third party other
than as set forth herein.
(e) The
Purchaser has had a reasonable opportunity to ask questions of and receive
answers from a person or persons acting on behalf of WaferGen and the Company
concerning the offering of the Units and the business, financial condition,
results of operations and prospects of WaferGen and the Company, and all such
questions have been answered to the full satisfaction of the
Purchaser.
(f) In
evaluating the suitability of an investment in the Company, the Purchaser has
not relied upon any representation or other information (oral or written) other
than as stated in the Memorandum or this Agreement.
(g) The
Purchaser is unaware of, is in no way relying on, and did not become aware
of
the offering of the Units through or as a result of, any form of general
solicitation or general advertising as those terms are used in Regulation D
under the Securities Act, including, without limitation, any article, notice,
advertisement or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, in connection with the
offering and sale of the Units and is not subscribing for Units and did not
become aware of the offering of the Units through or as a result of any seminar
or meeting to which the Purchaser was invited by, or any solicitation of a
subscription by, a person not previously known to the Purchaser in connection
with investments in Units generally.
(h) The
Purchaser has taken no action which would give rise to any claim by any person
for brokerage commissions, finders’ fees or the like relating to this Agreement
or the transactions contemplated hereby other than the fees described in the
Memorandum.
(i) The
Purchaser has such knowledge and experience in financial, tax, and business
matters, and, in particular, investments in securities similar to the Units,
including the Securities, so as to enable the Purchaser to utilize the
information made available to it in connection with the Offering of the Units
to
evaluate the merits and risks of an investment in the Units and the Company
and
to make an informed investment decision with respect thereto.
(j) The
Purchaser is not relying on the Company or any of its employees, officers or
agents with respect to the legal, tax, economic and related considerations
as to
an investment in the Units, and the Purchaser has relied on the advice of,
or
has consulted with, only his own advisors.
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(k) The
Purchaser is acquiring the Units, including the Securities, solely for the
Purchaser's own account for investment and not with a view to resale, assignment
or distribution thereof, in whole or in part. The Purchaser has no agreement
or
arrangement, formal or informal, with any person to sell or transfer all or
any
part of the Units, including the Securities, and the Purchaser has no plans
to
enter into any such agreement or arrangement. The Purchaser will not engage
in
hedging transactions with respect to the Units or the Securities unless in
compliance with the registration requirements of the Securities
Act.
(l) The
Purchaser must bear the substantial economic risks of the investment in the
Units indefinitely because none of the Units or the Securities may be sold,
hypothecated or otherwise disposed of unless subsequently registered under
the
Securities Act and applicable state securities laws or an exemption from such
registration is available. Subject to the terms hereunder, legends shall be
placed on the Securities to the effect that they have not been registered under
the Securities Act or applicable state securities laws and appropriate notations
thereof will be made in the Company’s stock books. Stop transfer instructions
will be placed with the transfer agent of the Securities. Although the Company
has the obligation to register for resale the Shares (see the Registration
Rights Agreement), there can be no assurance that such registration will be
completed within the time frames required of the Company, or at all. It is
not
anticipated that there will be any active market for resale of the Units or
the
Securities, and such securities will not be freely transferable at any time
in
the foreseeable future, until the registration statement filed pursuant to
the
Registration Rights Agreement is declared effective, and in such case, solely
with respect to the Shares.
(m) The
Purchaser has adequate means of providing for its current financial needs and
foreseeable contingencies and has no need for liquidity of the investment in
the
Units for an indefinite period of time.
(n) The
Purchaser is aware that an investment in the Units involves a number of very
significant risks and has carefully read and considered the matters set forth
under the caption “Risk Factors” in the Memorandum.
(o) The
Purchaser meets the requirements of at least one of the suitability standards
for an “accredited investor” as set forth on the Investor Certification
contained herein.
(p) The
Purchaser: (i) if a natural person, represents that the Purchaser has reached
the age of 21 and has full power and authority to execute and deliver this
Agreement and all other related agreements or certificates and to carry out
the
provisions hereof and thereof; (ii) if a corporation, partnership, limited
liability company or partnership, association, joint stock company, trust,
unincorporated organization or other entity, (A) such entity was not formed
for
the specific purpose of acquiring the Units, (B) such entity is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its
organization, (C) the consummation of the transactions contemplated hereby
is
authorized by, and will not result in a violation of law or its charter or
other
organizational documents, (D) such entity has full power and authority to
execute and deliver this Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof and to purchase
and hold the Units, (E) the execution and delivery of this Agreement has been
duly authorized by all necessary action, and (F) this Agreement has been duly
executed and delivered on behalf of such entity and is a legal, valid and
binding obligation of such entity; and (iii) if executing this Agreement in
a
representative or fiduciary capacity, such representative has full power and
authority to execute and deliver this Agreement in such capacity and on behalf
of the subscribing individual, xxxx, partnership, trust, estate, corporation,
limited liability company or limited liability partnership, or other entity
for
whom such representative is executing this Agreement, and such individual,
xxxx,
partnership, trust, estate, corporation, limited liability company or
partnership, or other entity has full right and power to perform this Agreement
and make an investment in the Company, and that this Agreement constitutes
a
legal, valid and binding obligation of such Purchaser. The execution and
delivery of this Agreement will not violate or be in conflict with any order,
judgment, injunction, agreement or controlling document to which the Purchaser
is a party or by which it is bound.
5
(q) The
Purchaser had the opportunity to obtain any additional information, to the
extent the Company or WaferGen had such information in its possession or could
acquire it without unreasonable effort or expense, necessary to verify the
accuracy of the information contained in the Memorandum and all documents
received or reviewed in connection with the purchase of the Units and the
opportunity to have representatives of the Company or WaferGen provide it with
such additional information regarding the terms and conditions of this
particular investment and the financial condition, results of operations,
business and prospects of the Company or WaferGen deemed relevant by the
Purchaser and all such requested information, to the extent the Company or
WaferGen had such information in its possession or could acquire it without
unreasonable effort or expense, has been provided to Purchaser to its full
satisfaction.
(r) The
Purchaser represents to the Company that any information which the undersigned
has heretofore furnished or furnishes herewith to the Company is complete and
accurate and may be relied upon by the Company in determining the availability
of an exemption from registration under Federal and state securities laws in
connection with the offering of Units as described in the Memorandum. The
Purchaser further represents and warrants that he will notify and supply
corrective information to the Company immediately upon the occurrence of any
change therein occurring prior to the Company's issuance of the
Securities.
(s) The
Purchaser has a sufficient net worth to sustain a loss of its entire investment
in the Company in the event such a loss should occur. The Purchaser’s overall
commitment to investments which are not readily marketable is not excessive
in
view of its net worth and financial circumstances and the purchase of the Units
will not cause such commitment to become excessive. The investment is a suitable
one for the Purchaser.
(t) No
oral
or written representations have been made, or oral or written information
furnished, to the Purchaser in connection with the offering of the Units or
as
to the Company or WaferGen, which are in any way inconsistent with the
information contained in the Memorandum.
(u) THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT,
OR
THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE
ON EXEMPTIONS FROM, OR IN TRANSACTIONS NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND SUCH LAWS PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. ALTHOUGH THE COMPANY HAS AN OBLIGATION
TO
REGISTER THE SHARES FOR RESALE, THERE CAN BE NO ASSURANCE THAT SUCH REGISTRATION
WILL BE COMPLETED WITHIN THE TIME FRAMES REQUIRED, OR AT ALL. THE UNITS,
INCLUDING THE SECURITIES, HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY,
NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS
OF
THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
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(v) (For
ERISA plans only)
The
fiduciary of the ERISA plan represents that such fiduciary has been informed
of
and understands the Company’s investment objectives, policies and strategies,
and that the decision to invest “plan assets” (as such term is defined in ERISA)
in the Company is consistent with the provisions of ERISA that require
diversification of plan assets and impose other fiduciary responsibilities.
The
Purchaser fiduciary or Plan (a) is responsible for the decision to invest in
the
Company; (b) is independent of the Company or any of its affiliates; (c) is
qualified to make such investment decision; and (d) in making such decision,
the
Purchaser fiduciary or Plan has not relied primarily on any advice or
recommendation of the Company or any of its affiliates.
(w) The
Purchaser should check the Office of Foreign Assets Control
(“OFAC”)
website at <xxxx://xxx.xxxxx.xxx/xxxx> before making the following
representations.
The
Purchaser represents that the amounts invested by it in the Company in the
Offering were not and are not directly or indirectly derived from activities
that contravene federal, state or international laws and regulations, including
anti-money laundering laws and regulations. Federal regulations and Executive
Orders administered by OFAC prohibit, among other things, the engagement in
transactions with, and the provision of services to, certain foreign countries,
territories, entities and individuals. The lists of OFAC prohibited countries,
territories, persons and entities can be found on the OFAC website at
<xxxx://xxx.xxxxx.xxx/xxxx>. In addition, the programs administered by
OFAC (the “OFAC
Programs”)
prohibit dealing with individuals1
or
entities in certain countries regardless of whether such individuals or entities
appear on the OFAC lists.
(x) To
the
best of the Purchaser’s knowledge, none of: (1) the Purchaser, (2) any person
controlling or controlled by the Purchaser, (3) if the Purchaser is a
privately-held entity, any person having a beneficial interest in the Purchaser,
or (4) any person for whom the Purchaser is acting as agent or nominee in
connection with this investment is a country, territory, individual or entity
named on an OFAC list, or a person or entity prohibited under the OFAC Programs.
Please be advised that the Company may not accept any amounts from a prospective
investor if such prospective investor cannot make the representation set forth
in the preceding paragraph. The Purchaser agrees to promptly notify the Company
should the Purchaser become aware of any change in the information set forth
in
these representations. The Purchaser understands and acknowledges that, by
law,
the Company may be obligated to “freeze the account” of the Purchaser, either by
prohibiting additional subscriptions from the Purchaser, declining any
redemption requests and/or segregating the assets in the account in compliance
with governmental regulations. The Purchaser further acknowledges that the
Company may, by written notice to the Purchaser, suspend the redemption rights,
if any, of the Purchaser if the Company reasonably deems it necessary to do
so
to comply with anti-money laundering regulations applicable to the Company
or
any of the Company’s other service providers. These individuals include
specially designated nationals, specially designated narcotics traffickers
and
other parties subject to OFAC sanctions and embargo programs.
(y) To
the
best of the Purchaser’s knowledge, none of: (1) the Purchaser, (2) any person
controlling or controlled by the Purchaser, (3) if the Purchaser is a
privately-held entity, any person having a beneficial interest in the Purchaser,
or (4) any person for whom the Purchaser is acting as agent or nominee in
connection with this investment is a senior foreign political figure2 , or
any
immediate family3
member or
close
associate4 of
a
senior foreign political figure, as such terms are defined in the footnotes
below.
1 These
individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and
embargo
programs.
2 A
“senior
foreign political figure” is defined as a senior official in the executive,
legislative, administrative, military or judicial branches of a foreign
government (whether elected or not), a senior official of a major foreign
political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for
the
benefit of, a senior foreign political figure.
3 “Immediate
family” of a senior foreign political figure typically includes the figure’s
parents, siblings, spouse, children and in-laws.
4 A
“close
associate” of a senior foreign political figure is a person who is widely and
publicly known to maintain an unusually close relationship with the
senior
foreign political figure, and includes a person who is in a position
to conduct
substantial domestic and international financial transactions on behalf
of the
senior foreign political figure.
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(z) If
the
Purchaser is affiliated with a non-U.S. banking institution (a “Foreign
Bank”),
or if
the Purchaser receives deposits from, makes payments on behalf of, or handles
other financial transactions related to a Foreign Bank, the Purchaser represents
and warrants to the Company that: (1) the Foreign Bank has a fixed address,
other than solely an electronic address, in a country in which the Foreign
Bank
is authorized to conduct banking activities, (2) the Foreign Bank maintains
operating records related to its banking activities, (3) the Foreign Bank is
subject to inspection by the banking authority that licensed the Foreign Bank
to
conduct banking activities, and (4) the Foreign Bank does not provide banking
services to any other Foreign Bank that does not have a physical presence in
any
country and that is not a regulated affiliate.
5. Company
Representations and Warranties. The
Company and WaferGen hereby jointly and severally represent, warrant,
acknowledge and agree as follows:
(a) Subsidiaries.
Except
as set forth on Schedule 5(a), the Company and WaferGen have no direct or
indirect subsidiaries.
(b) Organization
and Qualification.
The
Company is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the State of Nevada, with the requisite
power and authority to own and use its properties and assets and to carry on
its
business as currently conducted. The Company is not in violation of any of
the
provisions of its Articles of Incorporation or By-Laws. WaferGen is an entity
duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the State of Delaware, with the requisite power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. WaferGen is not in violation of any of the provisions
of
its Certificate of Incorporation or By-Laws.
(c) Authorization;
Enforcement.
The
Company has the requisite corporate power and authority to enter into and to
consummate the Offering. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby
have
been duly authorized by all necessary action on the part of the Company and
no
further consent or action is required by the Company, other than the Required
Approvals (as defined below). This Agreement, when executed and delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and general principles of equity.
(d) No
Conflicts.
The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the Offering do not and will not: (i) conflict
with or violate any provision of the Company’s Articles of Incorporation or
By-Laws, or (ii) subject to obtaining the Required Approvals (as defined below),
conflict with, or constitute a default (or an event that with notice or lapse
of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice
or
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding
to
which the Company is a party or by which any material property or asset of
the
Company is bound or affected, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority as currently in effect to which the Company
is
subject (including federal and state securities laws and regulations), or by
which any material property or asset of the Company is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not, individually
or in the aggregate (a) adversely affect the legality, validity or
enforceability of the Offering, (b) have or result in a material adverse effect
on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company, taken as a whole, or (c) adversely
impair the Company's ability to perform fully on a timely basis its obligations
under this Agreement (any of (a), (b) or (c), a “Material
Adverse Effect”).
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(e) Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court
or
other Federal, state, local or other governmental authority or other Person
in
connection with the execution, delivery and performance by the Company of this
Agreement, other than (i) the filing with the Commission of the Registration
Statement, (ii) the filing with the Commission of a Form D pursuant to
Regulation D under the Securities Act and (iii) applicable Blue Sky filings
(collectively, the “Required
Approvals”).
(f) Issuance
of the Units.
The
Securities are duly authorized and, when issued and paid for in accordance
with
this Agreement, will be duly and validly issued, fully paid and nonassessable,
free and clear of all liens. The Securities conform to the description contained
in the Memorandum. Assuming the accuracy of the Purchaser's representations
and
warranties set forth in Section 4, no registration under the Securities Act
is
required for the offer and sale of the Units, including the Securities, by
the
Company to the Purchaser as contemplated hereby. No stockholder approval is
required for the Company to fulfill its obligations pursuant to this
Offering.
(g) Capitalization.
The
number of shares and type of all authorized, issued and outstanding capital
stock of the Company and of WaferGen are as set forth in the Memorandum. No
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the Offering. Except as a result of
the
purchase and sale of the Units, including the Securities, which may be issued
in
connection with this Offering and, except as described in the Memorandum
(including the financial statements thereto), there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or shares, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company is or may become bound to issue additional
shares of Common Stock or rights convertible or exchangeable into shares of
Common Stock. Except for certain outstanding options and warrants to purchase
shares of Common Stock (which options and warrants are fully described in the
Memorandum) and as otherwise described in the Memorandum, the issuance and
sale
of the Units, including the Securities, will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the
Purchaser and other purchasers in the Offering) and will not result in a right
of any holder of Company equity to adjust the exercise, conversion, exchange
or
reset price under such securities.
(h) Financial
Statements.
The
financial statements of WaferGen and the Company included in the Memorandum
or
publicly filed with the Commission pursuant to the Securities Act or the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto (and that the unaudited financial statements omit notes and normal
year-end adjustments), and fairly present in all material respects the financial
position of WaferGen and the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended.
9
(i) Material
Changes.
Except
for the proposed Offering or as otherwise described in or contemplated by the
Memorandum, since the date of the latest financial statements included in the
Memorandum or publicly filed with the Commission pursuant to the Securities
Act
or the Exchange Act: (i) there has been no event, occurrence or development
that
has had a Material Adverse Effect, (ii) WaferGen and the Company have not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent
with
past practice, and (B) liabilities not required to be reflected in WaferGen’s or
the Company’s financial statements pursuant to GAAP or required to be disclosed
in filings made with the Commission, (iii) WaferGen and the Company have not
altered their methods of accounting or changed their auditors, (iv) WaferGen
and
the Company have not declared or made any dividend or distribution of cash
or
other property to their stockholders except in the ordinary course of business
consistent with prior practice, or purchased, redeemed or made any agreements
to
purchase or redeem any shares of its capital stock except consistent with prior
practice or pursuant to existing WaferGen or Company stock option or similar
plans, and (v) neither WaferGen nor the Company has issued any equity shares
to
any officer, director or affiliate, except pursuant to existing WaferGen or
Company stock option or similar plans.
(j) Litigation.
There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of WaferGen or the Company, threatened against
or
affecting WaferGen or the Company or its properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”)
which:
(i) adversely affects or challenges the legality, validity or enforceability
of
this Agreement or the Offering or (ii) would, if there were an unfavorable
decision, individually or in the aggregate, have or reasonably be expected
to
result in a Material Adverse Effect with respect to either company. WaferGen
and
the Company are not nor have they ever been the subject of any Action involving
a claim of violation of or liability under Federal or state securities laws.
There has not been, and to the knowledge of WaferGen or the Company, there
is
not pending or contemplated, any investigation by the Commission involving
WaferGen or the Company.
(k) Compliance.
Except
as disclosed in the Memorandum, neither WaferGen nor the Company is: (i) in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default
by
WaferGen or the Company under), nor has WaferGen or the Company received notice
of a claim that it is in default under or that it is in violation of, any
material indenture, loan or credit agreement or any other material agreement
or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), which default
or violation would have or result in a Material Adverse Effect with respect
to
either company, (ii) in violation of any order of any court, arbitrator or
governmental body, or (iii) or has not been in violation of any statute, rule
or
regulation of any governmental authority, except in each case as would not,
individually or in the aggregate, have or result in a Material Adverse Effect
with respect to either company.
(l) Regulatory
Permits.
Except
as otherwise described in the Memorandum, WaferGen and the Company possess
or
have applied for all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary
to
conduct their business as described in the Memorandum, except where the failure
to possess such permits would not, individually or in the aggregate, have a
Material Adverse Effect (“Material
Permits”),
and
neither WaferGen nor the Company has received any notice of proceedings relating
to the revocation or modification of any Material Permit.
10
(m) Lack
of Publicity.
None of
WaferGen, the Company, its subsidiaries or any person acting on its or their
behalf have engaged or will engage in any form of general solicitation or
general advertising as those terms are used in Regulation D under the Securities
Act in the United States with respect to the Units, including, without
limitation, any article, notice, advertisement or other communication published
in any newspaper, magazine or similar media or broadcast over television or
radio, regarding the Offering, nor did any such person sponsor any seminar
or
meeting to which potential investors were invited by, or any solicitation of
a
subscription by, a person not previously known to such investor in connection
with investments in the Units, including the Securities, generally.
(n) Disclosure.
The
disclosure provided to the Purchaser regarding WaferGen, the Company, their
businesses and the transactions contemplated hereby, furnished by or on behalf
of WaferGen or the Company, including the Memorandum, does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
6. Covenants
of the Purchaser and the Company.
(a) Transfer
Restrictions.
(1) The
Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of such securities (or hedging
activities involving such securities) other than pursuant to an effective
registration statement or Rule 144, to the Company or to an affiliate of a
Purchaser or in connection with a pledge as contemplated below, the Company
may
require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the Company, the form
and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act. As a condition of transfer,
any
such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights of a Purchaser under this Agreement and
the
Registration Rights Agreement.
(2) The
Purchaser agrees to the imprinting, so long as is required by this Section
6(a),
of a legend on any of the Securities in the following form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. ADDITIONALLY, HEDGING TRANSACTIONS IN RESPECT OF THESE SECURITIES
MUST
BE EFFECTED IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
11
(3) The
Company acknowledges and agrees that a Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and the Registration Rights Agreement and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured Securities to the
pledgees or secured parties. Such a pledge or transfer would not be subject
to
approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith. Further,
no
notice shall be required of such pledge. At the appropriate Purchaser’s expense,
the Company will execute and deliver such reasonable documentation as a pledgee
or secured party of Securities may reasonably request in connection with a
pledge or transfer of the Securities, including, if the Securities are subject
to registration pursuant to the Registration Rights Agreement, the preparation
and filing of any required prospectus supplement under Rule 424(b)(3) under
the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders thereunder.
(4) Certificates
evidencing the Securities shall not contain any legend (including the legend
set
forth in Section 6(a)(2)): (i) following the resale of such Securities pursuant
to an effective registration statement under the Securities Act (including,
with
respect to the Shares only, the Registration Statement) covering the resale
of
such Securities, or (ii) following any resale of such Securities pursuant to
Rule 144, or (iii) if such Securities are eligible for resale under Rule 144(k),
or (iv) if such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued
by
the Staff of the Commission). Promptly following the Effective Date, subject
to
compliance with applicable law, the Company shall cause its counsel to issue
a
legal opinion to the Company’s transfer agent to the effect that (A) resale of
the Securities has been registered under the Securities Act and (B) the
Securities may be transferred pursuant to such registration statement and
certificates representing such transferred shares should not contain a legend
restricting future transfers (although residual certificates issued to such
holder of Securities shall contain a restrictive legend). The Company agrees
that following the time when a legend is no longer required under this Section
6(a)(4), it will, no later than three (3) Trading Days following the delivery
by
a Purchaser to the Company or the Company's transfer agent of a certificate
representing Securities issued with a restrictive legend (such date, the
“Legend
Removal Date”),
deliver or cause to be delivered to such Purchaser’s transferee, a certificate
representing such Securities that is free from all restrictive and other
legends. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section. Notwithstanding anything to the contrary
contained herein, the Company shall not be required to effect a removal of
a
restrictive legend to the extent such legend is required under applicable
requirements of the Securities Act, including any rule of the Commission
promulgated thereunder, and judicial interpretations thereof.
12
(5) Each
Purchaser, severally and not jointly with the other Purchasers, agrees that
the
removal of the restrictive legend from certificates representing Securities
as
set forth in this Section 6(a) is predicated upon the Company’s reliance that
the Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom.
(b) Furnishing
of Information.
As long
as any Purchaser owns Securities and is eligible to transfer the such Securities
under Rule 144, if the Company is not required to file reports pursuant to
the
Exchange Act, it will prepare and furnish to each Purchaser and make publicly
available in accordance with Rule 144(c) such information as is required for
each Purchaser to sell the Securities under Rule 144. The Company further
covenants that it will take such further action as any holder of Securities
may
reasonably request, all to the extent required from time to time to enable
such
Person to sell such Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144.
(c) Integration.
The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Units, including
the
Securities, in a manner that would require the registration under the Securities
Act of the sale of the Units, including the Securities, to the
Purchasers.
(d) Shareholders
Rights Plan.
No
claim will be made or enforced by the Company or, to the knowledge of the
Company, any other Person that any Purchaser is an “Acquiring
Person”
under
any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and the Purchasers. The Company is not, and is not an Affiliate
of,
and immediately after receipt of payment for the Units, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in
a
manner so that it will not become subject to registration under such
Act.
(e) Non-Public
Information.
The
Company covenants and agrees that following the Effective Date neither it nor
any other Person acting on its behalf will provide any Purchaser or its agents
or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have executed
a written agreement regarding the confidentiality and use of such information.
The Company understands and confirms that each Purchaser shall be relying on
the
foregoing representations in effecting transactions in securities of the
Company. The foregoing shall not apply to any notice required to be given to
a
Purchaser pursuant to the terms of the Registration Rights Agreement.
(f) Disclosure;
Publicity.
No
Purchaser shall issue any press release or otherwise make any public statement
with respect to the transactions contemplated hereby without the prior consent
of the Company, except if such disclosure is required by law, in which case
the
Purchaser shall promptly provide the Company with prior written notice of such
public statement or communication. The Company shall not publicly disclose
the
name of any Purchaser, or include the name of any Purchaser in any filing with
the Commission or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except (i) as required by federal securities
and (ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under subclause (i) or (ii).
13
(g) Indemnification
of Purchasers.
Subject
to the provisions of this Section 6(g), the Company will indemnify and hold
the
Purchasers and their directors, officers, shareholders, partners, employees
and
agents (each, a “Purchaser
Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result
of
or relating to (i) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (ii) any action instituted against a Purchaser, or
any
of them or their respective Affiliates, by any stockholder of the Company who
is
not an Affiliate of such Purchaser, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon
a
breach of such Purchaser’s representation, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser may
have with any such stockholder or any violations by the Purchaser of state
or
federal securities laws). If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of
its
own choosing. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees
and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (A) the employment thereof has been specifically
authorized by the Company in writing; (B) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (C)
in
such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company
and
the position of such Purchaser Party. The Company will not be liable to any
Purchaser Party under this Agreement (I) for any settlement by a Purchaser
Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld, conditioned or delayed; or (II) to the extent, but only
to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or
agreements made by the Purchasers in this Agreement or in the other Transaction
Documents.
(h) Equal
Treatment of Purchasers.
No
consideration shall be offered or paid to any person to amend or consent to
a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the
Transaction Documents. For clarification purposes, this provision constitutes
a
separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended to treat the Purchasers as a
class
and shall not in any way be construed as the Purchasers acting in concert or
as
a group with respect to the purchase, disposition or voting of Securities or
otherwise.
(i) Future
Financings.
From
the date hereof until ninety (90) days after the Effective Date, other than
as
contemplated by this Agreement, neither the Company nor any Subsidiary (with
respect to Common Stock Equivalents) shall issue or sell any Common Stock or
Common Stock Equivalents entitling any Person to acquire shares of Common Stock
except for (i) an Exempt Issuance or (ii) if the consent of two-thirds of the
holders of Registrable Securities (as defined in the Registration Rights
Agreement) is obtained. Notwithstanding anything herein to the contrary, the
fifteen (15) day period set forth in this Section 6(i) shall be extended for
the
number of Trading Days during such period in which, following the Effective
Date, the Registration Statement is not effective or the prospectus included
in
the Registration Statement may not be used by each Purchaser for the resale
of
the Shares. In addition to the limitations set forth herein, from the date
hereof until one hundred eighty (180) days following the Effective Date, the
Company shall be prohibited from effecting or entering into a “Variable
Rate Transaction”
(as
defined below). The term “Variable
Rate Transaction”
shall
mean a transaction in which the Company issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at
a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or
(B)
with a conversion, exercise or exchange price that is subject to being reset
at
some future date after the initial issuance of such debt or equity security
or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common
Stock.
14
7. Definitions.
In
addition to the terms defined elsewhere in this Agreement: (i) capitalized
terms
that are not otherwise defined herein have the meanings given to such terms
in
the Memorandum (as defined herein), and (ii) the following terms have the
meanings indicated in this Section 7:
(a) “Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Securities Act. With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.
(b) “Closing
Date”
means
the Trading Day when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to
(i)
each Purchaser’s obligations to pay the Subscription Amount have been satisfied
or waived (ii) and the Company’s obligations to deliver the Securities have been
satisfied or waived.
(c) “Commission”
means
the Securities and Exchange Commission.
(d) “Common
Stock”
means
the common stock of the Company, par value $0.001 per share, and any securities
into which such common stock shall hereinafter been reclassified
into.
(e) “Common
Stock Equivalents”
means
any securities of the Company or any Subsidiary which would entitle the holder
thereof to acquire at any time Common Stock, including without limitation,
any
debt, preferred stock, rights, options, warrants or other instrument that is
at
any time convertible into or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.
(f) “Effective
Date”
means
the date that the Registration Statement is first declared effective by the
Commission.
(g) “Exempt
Issuance”
means
the issuance of (a) shares of Common Stock or options to employees, officers,
or
directors of or consultants to the Company pursuant to any stock or option
grant, stock option plan, employee stock purchase plan, restricted stock plan
or
other similar plan or agreement adopted by a majority of the non-employee
members of the Board of Directors of the Company or a majority of the members
of
a committee of non-employee directors established for such purpose; (b)
securities issued or issuable upon the exercise of or conversion of (i) any
securities issued hereunder or to the Placement Agent in connection with the
Offering or the Merger or (ii) convertible securities, options or warrants
issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities; (c) securities issued or issuable as a result
of
any stock split, combination, dividend, distribution, reclassification, exchange
or substitution; (d) securities issued or issuable in connection with
acquisitions by the Company, whether by merger, consolidation, sale of assets,
sale or exchange of stock or otherwise; (e) securities issued (or issuable
upon
exercise of rights, options or warrants) granted or issued to persons or
entities with whom the Company has business relationships, including under
equipment leasing arrangements, bank or other institutional loans, strategic
partnerships, acquisitions of companies or product lines or other arrangements
or transactions wherein the principal purpose of the issuance of such shares
(or
rights, warrants or options) is not for the purpose of raising capital or to
an
entity whose primary business is investing in securities; or (f) securities
issued in lieu of repayment of indebtedness outstanding on the date of this
Agreement, at the then fair market value, not to exceed an aggregate of $250,000
amount of such indebtedness; provided that in no event shall any securities
or
rights to acquire securities issued pursuant to clauses (a) or (f) prior to
the
90th
day
following the effectiveness of the Registration Statement contemplated by the
Registration Rights Agreement be issued an a price less than the Per Unit
Purchase Price.
15
(h) “Per
Unit Purchase Price”
means
$1.50 per Unit.
(i) “Person”
means
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
(j) “Placement
Agent”
means
Xxxxxx & Xxxxxxx, LLC.
(k) “Registration
Rights Agreement”
means
the Registration Rights Agreement, dated the date hereof, among the Company
and
each Purchaser, in the form of Exhibit
B
attached
to the Memorandum.
(l) “Subscription
Amount”
shall
mean, as to each Purchaser, the amount to be paid for the Units purchased
hereunder as specified below such Purchaser's name on the signature page of
this
Agreement, in United States Dollars.
(m) “Trading
Day”
means
a
day on which the Trading Market on which the Common Stock is listed or quoted
for trading is open.
(n) “Trading
Market”
means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the New York
Stock Exchange, the Nasdaq Global Market, the Nasdaq Capital Market or the
OTC
Bulletin Board.
(o) “Transaction
Documents”
means
this Agreement, the Memorandum, the Escrow Agreement, the Registration Rights
Agreement and any other documents or agreements executed in connection with
the
transactions contemplated hereunder.
8. Irrevocability;
Binding Effect.
The
Purchaser hereby acknowledges and agrees that the subscription hereunder is
irrevocable by the Purchaser, except as described in the Memorandum or as
required by applicable law, and that this Agreement shall survive the death
or
disability of the Purchaser and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives and permitted assigns. If the Purchaser is more than one person,
the obligations of the Purchaser hereunder shall be joint and several and the
covenants, agreements, representations, warranties, and acknowledgments herein
shall be deemed to be made by and be binding upon each such person and such
person's heirs, executors, administrators, successors, legal representatives
and
permitted assigns.
16
9. Modification.
Neither
this agreement nor any provision hereof may be waived, modified, amended or
terminated except by a written agreement signed by the Company and the holders
of a majority in interest of the Units, including the Securities (or any
securities into which they are exchanged); provided that
no
waiver, modification, amendment or termination to the right of a Purchaser
shall
be made without the written consent of such Purchaser if it shall disadvantage
the rights of such Purchaser disproportionately from the rights of the other
Purchasers.
10. Notices.
Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested,
sent by nationwide overnight courier or delivered against receipt to the party
to whom it is to be given (a) if to the Company or WaferGen, at the addresses
set forth above, or (b) if to the Purchaser, at the address set forth on the
signature page hereof (or, in either case, to such other address as the party
shall have furnished in writing in accordance with the provisions of this
Section). Any notice or other communication given by certified mail shall be
deemed given at the time that it is signed for by the recipient except for
a
notice changing a party's address which shall be deemed given at the time of
receipt thereof. Any notice or other communication given by nationwide overnight
courier shall be deemed given the next business day following being deposited
with such courier.
11. Assignability.
This
Agreement and the rights, interests and obligations hereunder are not
transferable or assignable by the Purchaser and the transfer or assignment
of
the Securities shall be made only in accordance with all applicable
laws.
12. Applicable
Law. All
questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents shall be governed by and construed and enforced
in
accordance with the internal laws of the State of New York, without regard
to
the principles of conflicts of law thereof. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
in
the City of New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding
is
improper or inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in
any way any right to serve process in any manner permitted by law. The parties
hereby waive all rights to a trial by jury. If either party shall commence
an
action or proceeding to enforce any provisions of the Transaction Documents,
then the prevailing party in such action or proceeding shall be reimbursed
by
the other party for its attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
13. Blue
Sky Qualification.
The
purchase of Units, including the Securities, under this Agreement is expressly
conditioned upon the exemption from qualification of the offer and sale of
the
Units, including the Securities, from applicable Federal and state securities
laws. The Company shall not be required to qualify this transaction under the
securities laws of any jurisdiction and, should qualification be necessary,
the
Company shall be released from any and all obligations to maintain its offer,
and may rescind any sale contracted, in such jurisdiction.
17
14. Use
of Pronouns.
All
pronouns and any variations thereof used herein shall be deemed to refer to
the
masculine, feminine, neuter, singular or plural as the identity of the person
or
persons referred to may require.
15. Miscellaneous.
(a) This
Agreement and its exhibits and schedules constitutes the entire agreement
between the Purchaser and the Company with respect to the subject matter hereof
and supersedes all prior oral or written agreements and understandings, if
any,
relating to the subject matter hereof. The terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted, only
by
a written document executed by the party entitled to the benefits of such terms
or provisions. The
parties acknowledge that the provisions of the
Registration Rights Agreement
provided with the Memorandum are incorporated by reference and made a part
hereof.
(b) The
Purchaser's and the Company's covenants, agreements, representations and
warranties made in this Agreement and the Memorandum shall survive the execution
and delivery hereof and delivery of the Securities.
(c) Each
of
the parties hereto shall pay its own fees and expenses (including the fees
of
any attorneys, accountants, appraisers or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby whether
or not the transactions contemplated hereby are consummated.
(d) This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which shall together constitute one and the
same
instrument.
(e) Each
provision of this Agreement shall be considered separable and, if for any reason
any provision or provisions hereof are determined to be invalid or contrary
to
applicable law, such invalidity or illegality shall not impair the operation
of
or affect the remaining portions of this Agreement.
(f) Section
titles are for descriptive purposes only and shall not control or alter the
meaning of this Agreement as set forth in the text.
(g) The
undersigned understands and acknowledges that there may be multiple Closings
for
the Offering.
18
Investor
Certification
NAME
OF INVESTOR: __________________
Initial
or Check the appropriate item(s)
US
INVESTORS - The undersigned further represents and warrants as indicated below
by the undersigned’s initials:
| A. |
Individual
investors:
(Please initial one or more of the following
statements)
|
| 1. __ |
I
certify that I am an accredited investor because I have had individual
income (exclusive of any income earned by my spouse) of more than
$200,000
in each of the most recent two years and I reasonably expect to have
an
individual income in excess of $200,000 for the current
year.
|
| 2. __ |
I
certify that I am an accredited investor because I have had joint
income
with my spouse in excess of $300,000 in each of the most recent two
years
and reasonably expect to have joint income with my spouse in excess
of
$300,000 for the current year.
|
| 3. __ |
I
certify that I am an accredited investor because I have an individual
net
worth, or my spouse and I have a joint net worth, in excess of
$1,000,000.
|
| 4. __ |
I
am a director or executive officer of WaferGen Bio-systems,
Inc.
|
| 5. __ |
I
have individual net worth or my spouse and I have joint net worth
of over
$5,000,000.
|
|
B.
|
Partnerships,
corporations, trusts or other entities:
(Please initial one of the following seven statements). The undersigned
hereby certifies that it is an accredited investor because it
is:
|
|
1.
__
|
an
employee benefit plan whose total assets exceed
$5,000,000;
|
|
2.
__
|
an
employee benefit plan whose investments decisions are made by a plan
fiduciary which is either a bank, savings and loan association or
an
insurance company (as defined in Section 3(a) of the Securities Act)
or an
investment adviser registered as such under the Investment Advisers
Act of
1940;
|
|
3.
__
|
a
self-directed employee benefit plan, including an Individual Retirement
Account, with investment decisions made solely by persons that are
accredited investors;
|
|
4.
__
|
an
organization described in Section 501(c)(3) of the Internal Revenue
Code
of 1986, as amended, not formed for the specific purpose of acquiring
the
Units, with total assets in excess of
$5,000,000;
|
|
5.
__
|
a
corporation, partnership, limited liability company, limited liability
partnership, other entity or similar business trust, not formed for
the
specific purpose of acquiring the Units, with total assets excess
of
$5,000,000;
|
|
6.
__
|
a
trust, not formed for the specific purpose of acquiring the Units,
with
total assets exceed $5,000,000, whose purchase is directed by a person
who
has such knowledge and experience in financial and business matters
that
he is capable of evaluating the merits and risks of an investment
in the
Units; or
|
19
|
7.
__
|
an
entity (including a revocable grantor trust but other than a conventional
trust) in which each of the equity owners qualifies as an accredited
investor.
|
20
SIGNATURE
PAGE TO
EXECUTION
OF THIS AGREEMENT BY ANY PURCHASER SHALL ALSO BE DEEMED TO CONSTITUTE EXECUTION
BY SUCH PURCHASER OF THE REGISTRATION RIGHTS AGREEMENT ANNEXED TO THE
MEMORANDUM.
(NOTE:
to
be completed by subscriber):
Purchaser
hereby elects to subscribe under the Subscription Agreement for a total of
$__________ of Units.
Date:
_______________, 2007.
If
the
purchaser is an INDIVIDUAL, or if the purchasers are INDIVIDUALS who have
purchased as JOINT TENANTS, as JOINT TENANTS with RIGHT OF SURVIVORSHIP, as
TENANTS IN COMMON, or as COMMUNITY PROPERTY:
|
___________________________
Print
Names(s)
|
___________________________
Social
Security Number(s)
|
|
___________________________
Signature(s)
of Investor(s)
|
___________________________
Joint
Signature
|
|
___________________________
Address
|
___________________________
Date
|
If
the
purchaser is a PARTNERSHIP, CORPORATION, TRUST, LIMITED LIABILITY COMPANY or
LIMITED LIABILITY PARTNERSHIP:
|
___________________________
Name
of Partnership, Corporation,
Trust,
Limited Liability Company
or
Limited Liability Partnership
Address:
|
___________________________
Federal
Taxpayer
Identification
Number
|
|
By:___________________________
|
___________________________
|
|
Name:
________________________
|
State
of Organization
|
|
Title:________________________
|
Company
Signature Page Follows
1
THE
FOREGOING SUBSCRIPTION IS ACCEPTED AND AGREED TO this _____ day of _________
2007 with respect to _____________ Units.
| By: | |||
|
Name: |
|||
|
Title:
|
Company
Signature Page to Subscription Agreement
2
