NOTE AND WARRANT PURCHASE AGREEMENT BY AND BETWEEN WAFERGEN, INC. AND ALNOOR SHIVJI
THIS
NOTE AND WARRANT PURCHASE AGREEMENT
(this
“Agreement”)
is
made as of January 30, 2007 (the “Effective
Date”)
by and
among WaferGen,
Inc.,
a
Delaware corporation (the “Company”),
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ (the “Purchaser”).
Capitalized terms used herein and not otherwise defined herein shall have
the
respective meanings given to them in the Note (as defined below) and the
Warrant
(as defined below).
THE
PARTIES HEREBY AGREE AS FOLLOWS:
| 1. |
AMOUNT
AND TERMS OF THE LOAN; ISSUANCE OF WARRANT;
CLOSING.
|
1.1 The
Loan.
Subject
to the terms of this Agreement, the Purchaser agrees to purchase from the
Company and the Company agrees to sell and issue to the Purchaser the promissory
notes, the aggregate principal amount of which should not be in excess of three
hundred thousand dollars (US$300,000) (the “Loan
Amount” or
the
“Loan”),
in
the form attached hereto as Exhibit A (each,
a
“Note”
and
collectively, the “Notes”).
1.2 Issuance
of Warrant. Subject
to the terms and conditions of this Agreement, the Company agrees to issue
to
the Purchaser warrants (each, a “Warrant”
and
collectively, the “Warrants”)
in
substantially the form attached hereto as Exhibit
B,
representing
the right to purchase up to that number of shares of Series B Preferred Stock
of
the Company calculated as follows:
Number
of
shares of
Series
B
Preferred Stock = (Loan
Amount) x (0.25)
issuable
upon exercise $0.76
of
the
Warrant
1.3 Closing.
The
initial closing of the purchase and sale of the Note hereunder (the
“Initial
Closing”)
shall
occur at the principal office of the Company at 2:00 p.m. on January __, 2007
(the “Closing
Date”)
or at
such other time as the Company and the Purchaser shall agree. In the event
there
is more than one closing, the term “Closing” shall apply to each such closing,
unless otherwise specified in this Agreement. At
or
prior to the Closing, the Purchaser shall deliver to the Company a certified
check or wire transfer funds in the amount of the Purchaser’s Loan Amount, and
the Company shall issue and deliver to the Purchaser a Note in favor of the
Purchaser payable in the principal amount of such Purchaser’s Loan Amount and
the Company shall issue and deliver to the Purchase the Warrant. In addition,
the Company shall execute, deliver and/or file such other documents as the
Purchaser shall reasonably require.
| 2. |
REPRESENTATIONS
AND WARRANTIES OF THE
COMPANY.
|
The
Company hereby represents and warrants to the Purchaser as follows:
2.1 Organization,
Good Standing and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has the requisite corporate
power to own and operate its properties and assets and to carry on its business
as now conducted and as proposed to be conducted. The Company is duly qualified
and is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its activities and
of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so would not have a
material adverse effect on the Company or its business.
2.2 Corporate Power.
The
Company has all requisite corporate power to execute and deliver this Agreement,
the Note, the Warrant and any other document relating to any of the foregoing
(collectively, as the same may from time to time be amended, modified,
supplemented or restated, the “Loan
Documents”)
and to
carry out and perform its obligations under the terms of the Loan Documents.
The
Company’s Board of Directors has approved the Loan Documents based upon a
reasonable belief that the Loan is appropriate for the Company after reasonable
inquiry concerning the Company’s financing objectives and financial
situation.
2.3 Authorization.
All
corporate action on the part of the Company, its directors and its stockholders
necessary for the authorization, execution, delivery and performance of the
Loan
Documents by the Company and the performance of the Company’s obligations
thereunder, has been taken or will be taken prior to the Initial Closing. The
Loan Documents, when executed and delivered by the Company, shall constitute
valid and binding obligations of the Company enforceable against it in
accordance with their terms, subject to laws of general application relating
to
bankruptcy, insolvency, and the relief of debtors. The issuance of the Note
and
Warrant pursuant to the provisions of this Agreement will not violate any
preemptive rights or rights of first refusal granted by the Company, and the
Note and Warrant will be issued in compliance with all applicable federal and
state securities laws; provided, however, that the Note and Warrant may be
subject to restrictions on transfer under state and/or federal securities laws
as set forth herein or as otherwise required by such laws at the time the
transfer is proposed.
2.4 Governmental
Consents.
All
consents, approvals, orders, or authorizations of, or registrations,
qualifications, designations, declarations, or filings with, any governmental
authority, required on the part of the Company in connection with the valid
execution and delivery of the Loan Documents, the offer, sale or issuance of
the
Note and the Warrant and the equity securities issuable upon exercise of the
Warrant, conversion of the Note or the consummation of any other transaction
contemplated hereby shall have been obtained and will be effective at each
Closing, except for notices required or permitted to be filed with certain
state
and federal securities commissions, which notices will be filed on a timely
basis.
2.5 Offering.
Assuming
the accuracy of the representations and warranties of the Purchaser contained
in
Section 3 hereof, the offer, issuance, and sale of the Securities are and will
be exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the “Securities
Act”),
and
have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit, or qualification requirements
of
all applicable state securities laws.
2.6 Use
of Proceeds.
The
Company shall use the proceeds of the Loan solely for the operations of its
business, and not for any personal, family or household purpose.
| 3. |
REPRESENTATIONS
AND WARRANTIES OF THE
PURCHASER.
|
3.1 Purchase
for Own Account.
The
Purchaser represents that he is acquiring the Note, Warrant and the equity
securities issuable upon exercise of the Warrant (collectively, the
“Securities”)
solely
for his own account and beneficial interest for investment and not for sale
or
with a view to distribution of the Securities or any part thereof, has no
present intention of selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the same, and does
not
presently have reason to anticipate a change in such intention, other than
transfers between affiliates, including affiliate funds, or transfers to a
partner (or retired partner), member (or retired member) of the Purchaser,
or
transfers by gift, will or intestate succession to any spouse or lineal
descendants or ancestors, if all transferees agree in writing to be subject
to
the terms hereof to the same extent as if they were Purchasers
hereunder.
3.2 Information
and Sophistication.
The
Purchaser acknowledges that he has received all the information he has requested
from the Company and that he considers necessary or appropriate for deciding
whether to acquire the Securities. The Purchaser represents that he has had
an
opportunity to ask questions and receive answers from the Company regarding
the
terms and conditions of the offering of the Securities and to obtain any
additional information necessary to verify the accuracy of the information
given
the Purchaser. The Purchaser further represents that he has such knowledge
and
experience in financial and business matters that he is capable of evaluating
the merits and risk of this investment.
3.3 Ability
to Bear Economic Risk.
The
Purchaser acknowledges that investment in the Securities involves a high degree
of risk, and represents that he is able, without materially impairing his
financial condition, to hold the Securities for an indefinite period of time
and
to suffer a complete loss of his investment.
3.4 Restrictions
on Transfer.The
Purchaser understands that the Securities are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering
and
that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited
circumstances. The Purchaser understands that the Securities have not been
and
will not be registered under the Securities Act and have not been and will
not
be registered or qualified in any state in which they are offered, and thus
the
Purchaser will not be able to resell or otherwise transfer his Securities unless
they are registered under the Securities Act and registered or qualified under
applicable state securities laws, or an exemption from such registration or
qualification is available.
3.5 Further
Limitations on Disposition.
Without
in any way limiting the representations set forth above, the Purchaser further
agrees not to make any disposition of all or any portion of the Securities
unless and until:
(a) There
is
then in effect a Registration Statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
Registration Statement; or
(b) The
Purchaser shall have notified the Company of the proposed disposition and the
proposed disposition is in compliance with Rule 144 of the Securities
Act.
Notwithstanding
the provisions of paragraphs (a) and (b) above, there shall be no
restrictions whatsoever on any transfer by the Purchaser to an affiliate
(including affiliate funds), partner (or retired partner), member (or retired
member) of such Purchaser, or transfers by gift, will or intestate succession
to
any spouse or lineal descendants or ancestors, if all transferees agree in
writing to be subject to the terms hereof to the same extent as if they were
Purchasers hereunder.
3.6 Accredited
Investor Status.
The
Purchaser is an “accredited
investor”
as
such
term is defined in Rule 501 under the Securities Act.
3.7 Lock-Up
Agreement.
The
Purchaser hereby agrees that he will not, directly or indirectly, without the
prior written consent of the Company and the managing underwriter, during the
period commencing on the date of the final prospectus relating to the Company’s
initial public offering and ending on the date specified by the Company and
the
managing underwriter (such period not to exceed one hundred eighty (180) days)
(i) lend, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly
or
indirectly, any shares of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock (whether such
shares or any such securities are then owned by the Purchaser or are thereafter
acquired), or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing provisions of this
Section 3.7 shall not apply to the sale of any shares to an underwriter
pursuant to an underwriting agreement, and shall only be applicable to the
Purchaser if all officers and directors and greater than one percent (1%)
stockholders of the Company enter into similar agreements. The underwriters
in
connection with the Company’s initial public offering are intended third party
beneficiaries of this Section 3.7 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.
Notwithstanding the foregoing, nothing in this Section 3.7 shall prevent
the Purchaser from making a transfer of any Common Stock that was listed on
a
national stock exchange or actively traded over-the-counter at the time it
was
acquired by such Investor or was acquired by such Purchaser pursuant to
Rule 144A of the Act, including any shares acquired in the initial public
offering.
In
order
to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Securities of the Purchaser (and the shares
or
securities of every other person subject to the foregoing restriction) until
the
end of such period.
| 4. |
EVENTS
OF DEFAULT; REMEDIES
|
4.1 Events
of Default. Each
of
the following shall constitute an event of default (each, an “Event
of Default”)
under
this Agreement and the other Loan Documents:
(a) The
Company fails to pay on the Maturity Date, any unpaid principal, accrued
interest and all other amounts owing under any Loan Document;
(b) The
Company materially breaches any representation or warranty in any material
respect, made by the Company in any of the Loan Documents;
(c) The
Company materially breaches any covenant in, or fails to perform any obligations
under, the Loan Documents;
(d) The
Company files any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law or any other law for the relief
of,
or relating to, debtors, now or hereafter in effect, or makes any general
assignment for the benefit of creditors or takes any corporate action in
furtherance of any of the foregoing;
(e) An
involuntary petition is filed against the Company (unless such petition is
dismissed or discharged within thirty (30) days) under any bankruptcy statute
now or hereafter in effect, or a custodian, receiver, trustee, assignee for
the
benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of the Company;
(f) The
Company’s stockholders or board of directors affirmatively vote to liquidate,
dissolve, or wind up the Company or the Company otherwise ceases to carry on
its
ongoing business operations; or
(g) If
(i) a
material portion of the Company’s assets is attached, seized, levied on, or
comes into possession of a trustee or receiver and the attachment, seizure
or
levy is not removed in ten (10) days, (ii) the Company is enjoined, restrained,
or prevented by a court order or other order of a governmental body from
conducting its business, or (iii) notice of lien, levy, or assessment is filed
against any of the Company’s assets by any court order or other order of any
governmental body and it is not paid within thirty (30) days after the Company
received notice thereof.
4.2 Remedies.
Upon
the occurrence of any Event of Default, all unpaid principal on the Note,
accrued and unpaid interest thereon and all other amounts owing under any of
the
Loan Documents shall, at the option of the Purchaser thereof, automatically
be
immediately due, payable and collectible by the holder of the Note pursuant
to
applicable law. In the event of any Event of Default, the Company shall pay
all
reasonable attorneys’ fees and costs incurred by the holders of the Note in
enforcing and collecting the Note and the other Loan Documents.
| 5. |
MISCELLANEOUS.
|
5.1 Binding Agreement.
The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Either party
may not assign this Agreement without the written consent of the other side.
Nothing in this Agreement, express or implied, is intended to confer upon any
third party any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
5.2 Severability.
If one
or more provisions of this Agreement or of any other Loan Document are held
to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement or from such other Loan Document and the balance of the Agreement
or of such other Loan Document shall be interpreted as if such provision were
so
excluded and shall be enforceable in accordance with its terms.
5.3 Governing
Law.
This
Agreement shall be governed by and construed under the laws of the State of
California as applied to agreements among California residents, made and to
be
performed entirely within the State of California.
5.4 Consent
to Jurisdiction and Venue. Any
legal
action or other legal proceeding relating to this Agreement and the other Loan
Documents and the enforcement of any provision thereof, may be brought or
otherwise commenced in any state or federal court located in the County of
Alameda, California. Each party to this Agreement expressly and irrevocably
consents and submits to the jurisdiction of each state and federal court located
in the County of Alameda, California (and each appellate court located in the
State of California) in connection with any such legal proceeding and agrees
that each state and federal court located in the County of Alameda, California
shall be deemed to be a convenient forum.
5.5 Waiver
of Jury Trial.
TO
THE
EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE
DEALING OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT AND THE OTHER
LOAN
DOCUMENTS, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE. TO THE EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO
HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT EITHER PARTY HERETO MAY FILE
AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF ANY OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT
TO
TRIAL BY JURY. If the jury waiver set forth in this Section 5.5 is not
enforceable, then any dispute, controversy or claim arising out of or relating
to the Loan Documents, or any of the transactions contemplated therein shall
be
settled by final and binding arbitration held in San Jose, California in
accordance with the then applicable Commercial Arbitration Rules of the American
Arbitration Association. Judgment upon any award resulting from arbitration
may
be entered into and enforced by any state or federal court having jurisdiction
thereof.
5.6 Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
5.7 Notices.
Any
notice required or permitted under this Agreement shall be given in writing
and
shall be deemed effectively given upon personal delivery or upon deposit with
the United States Post Office or Federal Express, postage prepaid, addressed
to
the Company at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or to the Purchaser
at
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such other address as such party
may designate by ten (10) days advance written notice to the other
party.
5.8 Modification;
Waiver.
No
modification or waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and approved by the
Company and the Purchaser, and then it shall be effective only in the specific
instance and for the specific purpose for which it was given. Any provision
of
this Agreement or any other Loan Document may be amended or waived by the
written consent of the Company and the Purchaser.
5.9 Cumulative
Remedies.
The
Purchaser’s rights and remedies under this Agreement and the other Loan
Documents shall be cumulative. The Purchaser shall have all other rights and
remedies not inconsistent herewith as provided under by law or in equity. No
exercise by the Purchaser of one right or remedy shall be deemed an election,
and no waiver of any Event of Default shall be deemed a continuing waiver.
5.10 Entire
Agreement.
This
Agreement, the Exhibits hereto, and the Loan Documents constitute the full
and
entire understanding and agreement between the parties with regard to the
subjects hereof and no party shall be liable or bound to any other party in
any
manner by any representations, warranties, covenants and agreements except
as
specifically set forth herein or in the other Loan Documents.
5.11 Expenses.
The
Company shall pay all reasonable costs and expenses, including attorneys’ fees,
which it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement and the other Loan Documents.
5.12 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
IN
WITNESS WHEREOF, the
parties have executed this NOTE
AND WARRANT PURCHASE AGREEMENT as
of the
date first written above.
|
COMPANY:
WAFERGEN,
INC.
By:
/s/ ▇▇▇▇▇
▇▇▇▇
Print
Name:
Title:
CFO
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
Facsimile:
________________________________
E-mail:
PURCHASER:
▇▇▇▇▇▇
▇▇▇▇▇▇
/s/
▇▇▇▇▇▇
▇▇▇▇▇▇
Address:_________________________________
Telephone:_______________________________
Facsimile:________________________________
E-mail:___________________________________
|
EXHIBIT
A
FORM
OF PROMISSORY NOTE
EXHIBIT
B
FORM
OF WARRANT