EXHIBIT 10.42

 
WAFERGEN
 
 
Exclusive Distribution Agreement
 
This Exclusive Distribution Agreement (“Agreement”) is made and entered into as
of _______________, 200_ (“Effective Date”) by and between WaferGen Bio-Systems,
Inc., a Nevada corporation with offices at 46531 Fremont Blvd., Fremont,
CA  94538 (“WaferGen”), and __________________________, a ________________
corporation with its principal place of business at ___________________________
(“Distributor”).
 
 
Recitals
 
Whereas, WaferGen has rights to license and distribute, and to sublicense others
to license and distribute, the Products in the Territory (as those terms are
defined below); and
 
Whereas, WaferGen desires to have Distributor, and Distributor desires to,
license, market and distribute the Products in the Territory pursuant to the
terms and conditions of this Agreement.
 
Now, Therefore, in consideration of the mutual representations, warranties,
covenants and other terms and conditions contained herein, WaferGen and
Distributor agree as follows:
 
 
Agreement
 
1. Definitions
 
1.1 “Confidential Information” shall mean any information disclosed by WaferGen
to Distributor regarding the Products, proposed new Products or other
information related to WaferGen’s technology or business that Distributor knows,
or should know in light of the circumstances under which such information is
disclosed, is WaferGen’s confidential or proprietary information.  Confidential
Information shall include the terms of this Agreement and Distributor
Prices.  Notwithstanding the previous sentence, information shall not be deemed
Confidential Information to the extent that Distributor can document that such
information:  (a) was generally known and available in the public domain at the
time it was disclosed or subsequently becomes generally known and available in
the public domain through no fault of Distributor; (b) was known to the
Distributor at the time of disclosure; (c) is disclosed with the prior written
approval of WaferGen; (d) was independently developed by Distributor without any
use of the Confidential Information; or (e) becomes known to Distributor from a
source other than WaferGen without breach of this Agreement by Distributor and
is otherwise not in violation of WaferGen’s rights.
 
1.2 “Distributor Prices” shall mean the applicable price for each Product
payable by Distributor to WaferGen.
 
1.3  “Documentation” shall mean the standard user documentation for the
Products, including without limitation, user manuals, reference manuals,
training manuals, installation manuals and related materials and any derivatives
of the foregoing.
 
1.4 “End User” shall mean a Person, other than Distributor, who has purchased
the Hardware portion of Products and has licensed the Software portion for the
Products for ordinary internal business usage and not for purposes of further
resale.
 
1.5 “End User License Agreement” shall mean WaferGen’s then-current applicable
terms and conditions applicable to End Users for the license of the Software and
the sale of the Hardware, which term and conditions shall be subject to revision
from time to time, in WaferGen’s sole discretion.
 
1.6 “Hardware” shall mean the hardware portion of the Products.
 
1.7 “Intellectual Property Rights” shall mean, on a world-wide basis, any and
all now known or hereafter known tangible and intangible (a) rights associated
with works of authorship including, without limitation, copyrights, moral rights
and mask-works, (b) rights associated with trademarks, service marks, trade
names and similar rights, (c) trade secret rights, (d) patents, designs,
algorithms and other industrial property rights, (e) rights in domain names;
(f) all other intellectual and industrial property rights of every kind and
nature and however designated, whether arising by operation of law, contract,
license or otherwise, and (g) all registrations, applications, renewals,
extensions, continuations, divisions or reissues thereof now or hereafter
existing, made or in force (including any rights in any of the foregoing).
 

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1.8 “Parts” shall mean component, spare and/or replacement parts of the Products
and other parts which are used for the service or maintenance of the Products.
 
1.9 “Person” shall mean any natural person, corporation, partnership, firm,
association, government, governmental agency or any other entity, whether acting
in an individual, fiduciary or other capacity.
 
1.10 “Products” shall mean the products identified on Exhibit A hereto, which
may be amended from time to time by WaferGen by providing thirty (30) days prior
written notice to Distributor.  As used herein, “Products” shall include the
applicable Software, the Hardware, the Documentation, and Parts individually or
collectively.
 
1.11 “Software” shall mean any and all (a) software embedded within the
Products, and (b) stand alone software provided with the Products, and shall
include any updates and modifications thereto provided by WaferGen during the
term of this Agreement.
 
1.12 “Specifications” shall mean with the technical and functional
specifications for the Products set forth in the applicable Documentation for
such Products.
 
1.13 “Support Services” shall mean the Level One and Level Two maintenance and
support services set forth in the attached Exhibit C.
 
1.14  “Territory” shall mean that geographical area(s) set forth in the attached
Exhibit A.
 
1.15 “Trademarks” shall mean the trademarks, trade names and service marks set
forth in the attached Exhibit B, which may be amended from time to time by
WaferGen by prior written notice to Distributor during the term of this
Agreement.
 
2. Grant of Rights
 
2.1 Grant of Distributorship.  Subject to the terms and conditions of this
Agreement, WaferGen hereby grants to Distributor the non-transferable,
non-sublicensable, right during the term of this Agreement, exclusively within
the Territory, to:  (a) market, sell and/or otherwise distribute the Hardware to
End Users for installation and use within the Territory; (b) market and solicit
licenses for the Software and Documentation to End Users in the Territory solely
in combination with such Hardware; and (c) distribute the Software and
Documentation to such End Users, provided that such End Users have validly
entered into an End User License Agreement with WaferGen.  Distributor shall
distribute the Products solely in the form and packaging obtained from WaferGen.
 
2.2 Grant of License to Demonstration Units, Software and Documentation.  With
respect to demonstration units of the Products purchased by Distributor as
described in Section ‎3.5, WaferGen hereby grants to Distributor the
non-exclusive, non-transferable, non-sublicensable, royalty-free right and
license during the term of this Agreement, within the Territory, to use the
Software and Documentation for the sole purpose of (a) demonstrating, marketing,
selling, soliciting licenses for, and supporting the Products, solely with
respect to existing and potential End Users, including with respect to the use,
installation and operation of demonstration units of the Products, and (b)
otherwise fulfilling Distributor’s obligations expressly set forth in this
Agreement.  
 
2.3 Grant of License to Trademarks.  Subject to the terms and conditions of this
Agreement, WaferGen hereby grants to Distributor the non-transferable,
non-sublicensable right during the term of this Agreement, exclusively within
the Territory, to use, reproduce and display the Trademarks solely in its
advertising and promotion of the Products hereunder, in accordance with
applicable law and WaferGen’s Trademark usage guidelines, as provided by
WaferGen from time to time, provided that prior to the use of any Trademarks,
Distributor will provide samples of all materials bearing the Trademarks,
including, without limitation, any advertising, packaging and other publicly
disseminated materials, and obtain WaferGen’s prior written approval
before.  Distributor will promptly correct any improper use of the Trademarks,
whether discovered by Distributor or by WaferGen.  Distributor shall not use any
other trademark or service mark confusingly similar to the Trademarks, or
combine the Trademarks with other marks without the prior written approval of
WaferGen.  Distributor shall not affix any Trademark to products other than the
genuine Products provided by WaferGen.  Distributor shall ensure that the nature
and quality of any services it provides in connection with its marketing and
distribution of the Products hereunder shall be first rate and professional and
shall otherwise conform to the standards set by WaferGen.  Distributor agrees to
cooperate with WaferGen in facilitating WaferGen’s monitoring and control of the
nature and quality of any services that Distributor provides in connection with
the Trademarks.  Distributor understands and agrees that the use of any
Trademark in connection with this Agreement shall not create any right, title or
interest in or to the Trademark, and that all such use and goodwill associated
therewith shall inure solely to
 

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the benefit of WaferGen.  Distributor will not, and is not entitled to, register
the Trademarks or similar trademarks in any class of products or services in the
Territory.  Distributor will not challenge the validity of the Trademarks or
challenge WaferGen’s ownership of the Trademarks or the enforceability of
WaferGen’s rights therein.
 
2.4 Exclusivity; Milestones.  The exclusive licenses in the Territory granted to
Distributor in Sections ‎2.1, ‎2.2 and ‎2.3 above shall be subject to
Distributor maintaining the purchasing milestones set forth in Exhibit A,
applicable to the first year (or portions thereof) of the term.  Exhibit A shall
be amended in writing by the parties to include the purchasing milestones for
subsequent years (or portions thereof), provided that if the parties fail to
amend the purchasing milestones in Exhibit A for any reason, then the purchasing
milestones applicable to the first year (or portions thereof) of the term of
this Agreement will be applicable to all subsequent years (or portions thereof)
of the term of this Agreement.  In the event that Distributor does not meet the
purchasing milestones set forth in Exhibit A, at WaferGen’s option and sole
discretion, and upon written notice to Distributor, the licenses granted in
Sections ‎2.1, ‎2.2 and ‎2.3 above shall become non-exclusive in nature, and all
other terms and conditions of this Agreement shall remain unchanged in full
force and effect.
 
3. Distributor Obligations
 
3.1 Marketing and Promotion.  Distributor shall use its best efforts to
advertise, market and promote the Products in the Territory.  Distributor shall
determine the marketing campaign it will undertake, subject to WaferGen’s
reasonable approval of such marketing campaign, which will be consistent with
the promotion activity of Distributor’s other similar products in the
Territory.  WaferGen agrees to provide, at its own cost, and at its sole
discretion, and upon the request of the Distributor:  (a) advertising and
promotional assistance in the form of copy and camera ready artwork for
advertising, trade shows, seminars and other promotional activities, and (b)
sales manuals, service manuals, sales literature and other sales promotional
documents for demonstrations, tradeshows and conferences. WaferGen will provide
the Distributor with such sales materials as well as electronic copies of the
Documentation in English.  Distributor will be responsible to translate such
sales materials and Documentation into the appropriate local language(s) for use
in the Territory and, subject to Section ‎2.3, may also create its own sales
material and literature in the appropriate local language(s) for use in the
Territory.  
 
3.2 Generally.  Distributor shall, at its own cost and expense, use best efforts
to:
 
(a) advertise, market and promote the Products throughout the Territory;
 
(b) meet the standards set by WaferGen from time to time for displaying,
demonstrating and explaining the operation and use of the Products;
 
(c) conduct all business diligently and represent WaferGen in a professional
manner that brings credit to WaferGen and enhances the reputation of WaferGen
and the Products;
 
(d) refrain from making claims or representations concerning the Products, other
than the applicable Specifications for each Product or other materials provided
by WaferGen;
 
(e) refrain from discrediting or disparaging either the Products or WaferGen;
 
(f) include in all advertising and promotional materials all applicable
copyright and trademark notices as they appear on the Products or as WaferGen
specifies from time to time;
 
(g) consult with WaferGen regarding any advertising or trade practice that might
affect the good name, trademarks, goodwill or reputation of WaferGen or the
Products, and comply with any requests of WaferGen with regard to any such
practice;
 
(h) as reasonably requested by WaferGen, assist WaferGen in improving the
promotion, distribution and licensing of the Products; and
 
(i) comply with any other reasonable requests of WaferGen in facilitating the
sale and distribution of the Products.
 
3.3 Training.  WaferGen shall provide reasonable and sufficient sales, customer
support and service training to Distributor’s staff as the parties mutually
agree upon in good faith.  The parties shall mutually agree on whether such
training shall take place in California or within the Territory.  All travel,
lodging and other costs associated with such training shall be borne by
Distributor.
 

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3.4 Personnel Requirements; Services.  Distributor shall maintain an adequate
staff of trained sales and support personnel to enable Distributor to develop
and support the market for the Products in the Territory in an effective
manner.  All services provided by Distributor in connection with the Products
shall be provided in a professional, workmanlike manner consistent with highest
industry standards.
 
3.5 Demonstration Units.  Distributor shall purchase from WaferGen and maintain
at its own expense the minimum number of demonstration units of the Products as
specified in Exhibit A, subject to the discounts applicable to demonstration
units described in Exhibit A.  Distributor shall not utilize more than one (1)
demonstration unit of each Product at one time without WaferGen’s prior written
approval.  Distributor may not resell demonstration units of the Products,
except to the extent that Distributor is replacing an existing demonstration
unit, in which case the existing demonstration unit may be sold subject to the
terms and conditions of this Agreement.
 
3.6 Inquiries from Outside the Territory.  Distributor will refer all inquiries
regarding the Products from Persons located outside the Territory, and requests
for Products to be shipped outside the Territory, to WaferGen.  Distributor
shall not be entitled to any compensation for such referrals.
 
3.7 Breach by End User.  Distributor shall advise WaferGen immediately if
Distributor becomes aware of any breach by an End User of any material provision
of an End User License Agreement or the use of the Products by an End User
outside of the Territory.
 
4. Distributor Restrictions
 
4.1 General Restrictions.  Distributor shall have no right to market, sell,
license (including any soliciting of licenses) or distribute Products, or any
part thereof outside the Territory, to any Person who is not an End User, or to
any Person who develops, sells, markets, distributes or manufactures cell
incubation products, software and/or parts.  For avoidance of doubt, Distributor
may not market, sell, distribute or license any Products, or any portions
thereof, through a subdistributor.  Distributor shall not have the right to use,
manufacture, assemble or modify the Products.  Distributor shall not distribute
the Products:  (a) by mail order, (b) by rental or lease, (c) in bulk for
redistribution, (d) to any Person whom Distributor knows or should reasonably
conclude will use the Products primarily for purposes of benchmark or similar
testing or in connection with timeshare or service bureaus, and (e) to any
Person who Distributor knows or should reasonably conclude will use the Products
outside of the Territory.
 
4.2 Advertising.  Distributor shall use only promotional and marketing material
relating to WaferGen or the Products that has been approved in writing by
WaferGen.
 
4.3 Representations.  Notwithstanding anything to the contrary herein,
Distributor shall have no right to:  (a) enter into sublicenses or other
agreements with regard to the Software or (b) enter into any legally binding
obligations on behalf of WaferGen.
 
4.4 Copying.  Distributor shall not copy, in whole or in part, any Software or
Documentation without the prior written authorization of WaferGen, except that
Distributor may make one (1) copy of any Software and Documentation for back-up
or archival purposes.  Software distributed to End Users shall be only (a) that
Software reproduced and packaged by WaferGen, or (b) in the case of Software
embedded within the Products, such Software as is embedded within such Products
by WaferGen.
 
4.5 Reverse Engineering.  Distributor shall not translate, disassemble or
reverse engineer the Products, in whole or in part (except to the extent
expressly permitted by applicable law, notwithstanding a contractual obligation
to the contrary), or determine or attempt to determine any source code,
algorithms, methods, or techniques used or embodied in the Products, in whole or
in part.
 
5. Installation, Maintenance and Support
 
Distributor shall be solely responsible to install and implement the Products
for the End Users and to change and replace Parts.  As between WaferGen and
Distributor, Distributor shall be responsible for providing End Users with Level
One Support Services for the Products, as set forth in Exhibit C.  WaferGen
shall provide Distributor (but not End Users directly) with Level Two Support
Services for the Products, as set forth in Exhibit C.  
 

 

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6. Changes in Specifications and Designs
 
WaferGen reserves the right at any time, and from time to time, to change the
specifications, functionalities, features and/or or designs of the Products and
to withdraw the availability of the Products.  WaferGen has the right to
discontinue the distribution or availability of any Product upon thirty (30)
days written notice to Distributor, provided that WaferGen shall fulfill its
obligations with respect to accepted purchase orders for the discontinued
Products.
 
7. Ownership of Intellectual Property
 
Distributor acknowledges that the Products and their sequence, structure and
organization are proprietary to WaferGen and that WaferGen or its suppliers and
licensors retain exclusive ownership of all Intellectual Property Rights
embodied in the Products, each portion thereof, and the Trademarks.  Distributor
shall take all reasonable measures to protect WaferGen’s Intellectual Property
Rights in any Product.  Except as provided herein, Distributor is not granted
any rights to any Intellectual Property Rights with respect to any Product.
 
8. Confidential Information
 
Distributor may receive WaferGen’s Confidential Information.  Distributor agrees
that, during and after the term of this Agreement, it shall use the Confidential
Information solely for purposes of performing its obligations and/or exercising
its rights under this Agreement, and shall not disclose to any third party any
Confidential Information without the prior written consent of
WaferGen.  Distributor may disclose the Confidential Information only to its
employees as is reasonably necessary to allow Distributor to perform its
obligations under this Agreement and to obtain the benefits thereof, provided
that each such employee is under a written obligation of nondisclosure which
protects the Confidential Information under terms substantially similar to those
herein.  Distributor shall take the same degree of care that it uses to protect
its own confidential and proprietary information of similar nature and
importance (but in no event less than reasonable care) to protect the
confidentiality and avoid the unauthorized use, disclosure, publication or
dissemination of the Confidential Information.  In the event that Distributor is
legally compelled to disclose such Confidential Information pursuant to a valid
court order, prior to any such compelled disclosure, Distributor shall (a) give
WaferGen reasonable advance notice of any such disclosure, (b) shall cooperate
with WaferGen in protecting against any such disclosure and/or obtaining a
protective order narrowing the scope of such disclosure and/or use of the
Confidential Information, and (c) and limit such disclosure to only the party
entitled to receive it.
 
9. Forecasts; Orders; Shipping; Cancellation
 
9.1 Forecasts.  Commencing within sixty (60) days after the Effective Date and
monthly thereafter, Distributor shall provide to WaferGen a good faith three (3)
month rolling non-binding forecast of Distributor’s quantity and shipment
requirements for the Products.
 
9.2 Purchase Orders.  Purchases of Products shall be initiated by Distributor
via a written purchase orders which shall include (a) each Product ordered and
the quantity thereof, (b) a commercially reasonable carrier or means of
transportation or routing, (c) the address within the Territory to which
Products are to be shipped, and (d) the requested delivery date, which shall be
at least sixty (60) days after the date WaferGen receives the applicable
purchase order.  WaferGen may, but is not required to, accept any purchase order
which specifies a delivery date earlier than sixty (60) days after the date
WaferGen receives the applicable purchase order.  WaferGen shall respond to the
proposed purchase order by either accepting or rejecting the proposed purchase
order in its sole discretion.  Failure of WaferGen to accept or reject any
proposed purchase order within seven (7) business days after receipt thereof
shall constitute rejection of such proposed purchase order.  If requested by
Distributor, WaferGen will provide the reason for rejecting a purchase
order.  Each purchase order shall be signed by an employee of Distributor duly
authorized by Distributor to place purchase orders and bind Distributor with
respect thereto.  WaferGen shall use commercially reasonable efforts to make
deliveries of purchase orders so accepted in a timely manner, but WaferGen shall
not be liable for any delay in delivery or error in filling any purchase orders
for any reason whatsoever.  If purchase orders for the Products exceed
WaferGen’s inventory, WaferGen shall allocate available inventory on a basis
WaferGen deems equitable in its sole discretion.  All purchase orders placed by
Distributor hereunder shall be governed by the terms and conditions of this
Agreement which shall supersede any different or additional terms on
Distributor’s purchase orders.  In the event of a conflict between the
provisions of
 

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this Agreement and the terms and conditions of any purchase orders, the
provisions of this Agreement shall prevail and control.
 
9.3 Packing; Shipping; Insurance.  All Products will be suitably packed for
shipment by air, unless otherwise requested by Distributor and agreed in writing
by WaferGen.  The Distributor Prices include standard packing for commercial air
shipment, and Buyer will pay for any increased cost of special packaging it
requests.  WaferGen may make delivery for a single purchase order in
installments and may issue a separate invoice for each installment.  All
shipments shall be made FCA origin (WaferGen’s facility at 46531 Fremont Blvd.,
Fremont, CA 94538 or successor location) (FCA as described in Incoterms 2007) to
Distributor’s address in the Territory as set forth in the applicable purchase
order.  Delivery shall be deemed complete and risk of loss or damage to the
Products shall pass to Distributor upon delivery to the carrier, subject to
WaferGen’s rights of stoppage in transit and reclamation.  If Distributor has
not identified the carrier to transport the Products within the applicable
purchase order, WaferGen may select the carrier and shall purchase on behalf of
Distributor appropriate shipping insurance.  Distributor shall pay all costs of
transportation, insurance, export and import fees, customs brokerage expenses
and similar charges.  Distributor, at its expense, shall make and negotiate any
claims against any carrier, insurer, customs broker, freight forwarder or
customs collector.
 
9.4 Cancellation and Rescheduling.  Upon the acceptance of a purchase order by
WaferGen, such purchase order may not be cancelled by Distributor for any
reason.  WaferGen will make commercially reasonable efforts to reschedule the
delivery date of an accepted purchase order, if requested by Distributor,
provided that (a) the rescheduled delivery date is within thirty (30) days after
the original delivery date, and (b) WaferGen receives the rescheduling request
within fifteen (15) days after WaferGen’s original acceptance of such purchase
order.
 
9.5 Initial Purchase.  Effective as of the Effective Date, Distributor hereby
agrees to purchase, the initial purchase of Products (including demonstration
units) identified on Exhibit A and will submit a purchase order for such initial
purchase within three (3) business days after the Effective Date.
 
10. Price; Taxes; Payments; Records; Reports
 
10.1 Distributor Prices.  The Distributor Prices of the respective Products
ordered by Distributor from WaferGen shall be set forth in WaferGen’s
distributor price list in effect at the time WaferGen accepts the applicable
purchase order for the Products.  The Distributor Prices in effect as of the
Effective Date are set forth in Exhibit A, provided that WaferGen reserves the
right to change the Distributor Prices at any time with or without notice to
Distributor.  Distributor is free to establish prices for the sale of Products
to End Users.  The difference between the price Distributor charges End Users
for Products and the Distributor Prices Distributor pays WaferGen for Products
shall be Distributor’s sole compensation under this Agreement.
 
10.2 Shipping Costs; Taxes.  The total amount payable for the Products shall
include the Distributor Prices, plus the appropriate amount for shipping,
insurance and other costs described in Section ‎9.3 (collectively, “Shipping
Costs”).  In addition to the Distributor Prices and Shipping Costs due to
WaferGen under this Agreement, Distributor shall pay, indemnify and hold
WaferGen harmless from any sales, use, excise, import or export, value added or
similar tax, not based on WaferGen’s net income (collectively the “Taxes”) and
any penalties or interest associated with any of the Taxes, imposed by any
governmental authority with respect to either or both of any payment to be made
by Distributor to WaferGen under this Agreement or any Products to be delivered
by WaferGen under this Agreement.
 
10.3 Payments for Products.  Payment for the Products ordered from WaferGen and
Shipping Costs shall be due and payable within thirty (30) days after the date
of WaferGen’s invoice therefor.  Payment will be made only in United States
Dollars, by wire transfer to the bank designated by WaferGen or other means
satisfactory to WaferGen.  Payments made by Distributor, even if marked to
indicate payment in full, will be deposited by WaferGen or otherwise accepted by
its bank notwithstanding such markings and such deposit and/or acceptance shall
not indicate WaferGen’s acceptance of the payment as payment in full unless the
remittance actually constitutes payment of all sums owed.  All sums not paid
when due shall accrue interest daily at the lesser of a monthly rate of 1.5% or
the highest rate permissible by law on the unpaid balance until paid in full.
 
10.4 Credit.  In the event that Distributor fails to pay any amounts due and
such failure extends beyond forty-five (45) days after the applicable invoice
date or is otherwise more than fifteen (15) calendar days late, WaferGen may, at
any time thereafter and in its sole discretion and without any liability to
Distributor, suspend production, shipments, deliveries, and/or performance of
Support Services, and demand such other terms or conditions or
 

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security arrangements for Distributor’s due performance, as WaferGen, in its
sole discretion, deems appropriate, including without limitation requiring full
or partial payment be made upon acceptance of a purchase order or prior to
shipment of the Products.  If, within the period stated in such demand, but in
no event longer than thirty (30) days, Distributor fails to pay in full all
amounts due WaferGen or otherwise fails to give adequate assurance of due
performance, WaferGen may (1) by notice to Distributor, treat such failure as a
repudiation by Distributor of this Agreement, whereupon WaferGen may in its sole
discretion cancel all outstanding purchase orders, refuse to accept any
additional purchase orders, and any amounts unpaid hereunder shall immediately
become due and payable, or (2) make shipments of Products under reservation of a
security interest and demand payment against tender of documents transferring
title.  Distributor shall be responsible for all collection costs (including
reasonably attorneys’ fees and litigation costs) associated WaferGen’s
collection of amounts not paid when due under this Agreement.  Distributor
hereby represents to WaferGen that Distributor is now solvent and agrees that
each purchase order submitted by Distributor under this Agreement shall
constitute reaffirmation of this representation at such time.
 
10.5 Records and Audit.  Distributor agrees to maintain complete, clear and
accurate records for at least two (2) years backwards at any point in time of
its activities under this Agreement, including, without limitation, its
inventory, sales of each Product and the identity and address of each End User,
in accordance with standard business practices.  Upon three (3) days prior
written notice to Distributor, Distributor shall permit WaferGen or persons
designated by WaferGen to inspect records pertaining to the Products and any
other materials provided to Distributor by WaferGen to ensure compliance by
Distributor with this Agreement.  Any such inspection and audit shall be
conducted during regular business hours and in such a manner as not to interfere
unduly with normal business activities of Distributor.
 
10.6 Reports.  Distributor shall provide WaferGen a monthly report of its
inventory and sales of Products.  Inventory shall be reported by Product as of
the end of each month.  Sales shall be reported in terms of the volume of each
Product distributed, and each End User name, serial number of the Products
purchased by such End User, and location of the Products.  Distributor shall
promptly provide such additional information as WaferGen may request, including,
without limitation, information regarding market conditions and Distributor’s
marketing plans and progress, marketing staff and financial
condition.  Distributor shall promptly communicate to WaferGen any problems with
or changes or improvements to the Products suggested by any customer or any
employee of Distributor.
 
11. Acceptance; Warranty
 
11.1 Acceptance.  Distributor shall have a period of fourteen (14) days after
receipt of the Products (“Acceptance Period”) to inspect the Products for
substantial nonconformity with the applicable Specifications
(“Nonconformities”).  During the Acceptance Period, Distributor may reject
Products with Nonconformities, in which case Distributor shall provide WaferGen
before the end of the Acceptance Period with a written notice of rejection
that:  (a) specifies in reasonable detail the Nonconformities that are the basis
for the rejection, and (b) is accompanied by test suites and test results, if
applicable, evidencing (and allowing WaferGen to replicate) such
Nonconformities.  Any Products not specifically rejected by Distributor during
the Acceptance Period shall be deemed finally accepted by Distributor.  For all
Products which have Nonconformities, Distributor must obtain from WaferGen a
return material authorization (“RMA”) number prior returning such
Products.  Distributor will return rejected Products to WaferGen in their
original packing, with the RMA number marked on the packaging, and subject to
WaferGen’s shipping and insurance instructions.  If WaferGen’s examination of
the returned Products confirms the existence of Nonconformities, WaferGen shall
be obligated to, at its sole option, (i) repair the Products, (ii) replace such
Products with conforming Products, or (iii) credit Distributor the purchase
price paid for such Products.
 
11.2 Warranty to End Users Only.  WaferGen makes warranties to only End Users
regarding the Products pursuant to the warranty terms and conditions set forth
in the Documentation, and no warranty is extended directly to Distributor.  The
warranty provided by WaferGen to End Users is that the Products will be free of
defects in material and workmanship and shall otherwise not have any material
Nonconformities for a period of one (1) year after the delivery date thereof to
Distributor (“Warranty Period”) and that the End User’s sole and exclusive
remedy arising out of or relating to such warranty shall be to return the
defective Products to Distributor (and not to WaferGen directly) for repair or
replacement in accordance with WaferGen’s warranty terms and conditions.
 

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11.3 Distributor Warranty Service.  Upon the return by an End User to
Distributor of a defective Product which qualifies under the warranty provisions
of the applicable End User License Agreement and which is returned during the
Warranty Period, Distributor shall first make best efforts to repair the Product
and if Distributor is not able to do so, then Distributor will first obtain a
RMA number from WaferGen and then return such defective Product to WaferGen for
warranty service.  Distributor must return the defective Product, marked with
the RMA number, to WaferGen within thirty (30) days after Distributor’s receipt
of the defective Product from the End User.  Shipping cartons that are not
marked with RMA numbers shall be rejected by WaferGen.  The transportation
charges for all Products returned to WaferGen under warranty shall be borne by
Distributor.  WaferGen’s obligations under this Section shall not apply if
WaferGen’s testing and examination discloses that any alleged material
Nonconformities or defects in the Products do not exist or were caused by
Distributor’s or the End User’s misuse, neglect, modification, improper
installation or testing, unauthorized attempts to repair, by an accident or by
other reason not caused by WaferGen. WaferGen shall pay the transportation
charges involved in the return of warranted Products to Distributor.  Hardware
returned to WaferGen may be repaired or replaced by WaferGen on a unit-for-unit
basis.
 
11.4 Disclaimer.  EXCEPT AS SET FORTH HEREIN, WAFERGEN DISCLAIMS ALL WARRANTIES,
WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, THE
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT, AND ALL WARRANTIES THAT MAY ARISE FROM COURSE OF DEALING,
COURSE OF PERFORMANCE OR USAGE OF TRADE.  WAFERGEN NEITHER ASSUMES, NOR
AUTHORIZES ANY OTHER PERSON TO ASSUME FOR IT, ANY OTHER LIABILITY IN CONNECTION
WITH THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, LIABILITY ARISING OUT OF THE
DELIVERY OR USE OF THE PRODUCTS.
 
12. Consequential Damages Waiver
 
IN NO EVENT SHALL WAFERGEN BE LIABLE TO DISTRIBUTOR, ANY END USER OR ANY OTHER
THIRD PARTY UNDER ANY LEGAL THEORY FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES, OR ANY DAMAGES FOR LOSS OF PROFITS, REVENUE,
BUSINESS, SAVINGS, DATA OR USE INCURRED BY DISTRIBUTOR OR ANY THIRD PARTY, EVEN
IF WAFERGEN HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
 
13. Limitation of Liability
 
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, AND TO THE FULLEST EXTENT
ALLOWED UNDER APPLICABLE LAW, WAFERGEN’S AGGREGATE LIABILITY TO DISTRIBUTOR OR
ANY THIRD PARTY FOR CLAIMS RELATING TO THIS AGREEMENT, WHETHER FOR BREACH,
NEGLIGENCE, INFRINGEMENT, IN TORT OR OTHERWISE, SHALL BE LIMITED TO AN AMOUNT
EQUAL TO THE TOTAL PAYMENTS ACTUALLY RECEIVED BY WAFERGEN UNDER THIS AGREEMENT
IN THE TWELVE (12) MONTH PERIOD PRECEDING EITHER PARTY’S INITIAL NOTICE TO THE
OTHER PARTY OF ANY CLAIM OR POTENTIAL CLAIM HEREUNDER.  FURTHERMORE, WAFERGEN
SHALL NOT BE LIABLE OR RESPONSIBLE FOR ANY DAMAGES FOR DELAYS IN MANUFACTURE,
ASSEMBLY, SHIPMENT OR FURNISHING OF THE PRODUCTS OR ANY SERVICES.
 
14. Indemnification
 
14.1 Distributor Indemnity.  Distributor shall defend, indemnify and hold
WaferGen harmless against any and all damages, costs, liabilities, expenses
(including reasonable attorneys’ fees) and settlement amounts incurred in
connection with any suit, claim or action by any third party against WaferGen as
a result of:  (a) negligence, misrepresentation, error or omission on the part
of Distributor or its representatives relating to or concerning the Products;
and (b) Distributor’s breach of this Agreement.
 
14.2 WaferGen Indemnity.  WaferGen shall defend, indemnify and hold Distributor
harmless against any and all damages, costs, liabilities, expenses (including
reasonable attorneys’ fees) and settlement amounts incurred in connection with
any suit, claim or action by any third party alleging that the Products
furnished and used within the scope of this Agreement infringe any trade secret,
copyright, United States patent issued as of the Effective Date or United States
trademark.  The foregoing indemnity obligation shall not extend to any claims of
infringement arising out of or related to:  (a) modification of the Products by
anyone other than WaferGen; (b) combination of the
 

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products with any third party software or hardware where such combination is the
cause of such infringement; or (c) use of a version of Products other than the
then-current version if infringement would have been avoided by the use of the
then-current version.  Upon notice of an alleged infringement, or if in
WaferGen’s opinion such a claim is likely, WaferGen shall have the right, at its
sole option and expense, to:  (i) obtain for Distributor the continuing right to
distribute the Products; (ii) modify the Products or substitute other
non-infringing hardware or software with similar operating capabilities; or
(iii) if WaferGen determines that neither (i) nor (ii) described above are
reasonable, WaferGen may refund the fees paid by Distributor for the infringing
copies of the Products upon Distributor’s return of such Products to
WaferGen.  THIS SECTION ‎14.2 SETS FORTH WAFERGEN’S SOLE AND EXCLUSIVE LIABILITY
AND DISTRIBUTOR’S SOLE AND EXCLUSIVE REMEDIES FOR INFRINGEMENT BY THE PRODUCTS
OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OF ANY KIND.
 
14.3 Indemnity Procedures.  Each party’s obligation to indemnify the other party
hereunder is subject to such other party:  (a) giving the party from whom
indemnification is sought (the “Indemnifying Party”) prompt written notice of
any such claim; (b) giving the Indemnifying Party sole control over the defense
and settlement of any such claim; (c) providing full cooperation for the defense
of any such claim, at the Indemnifying Party’s expense; and (d) not entering
into any settlement or compromise of any such claim without the Indemnifying
Party’s prior written approval.
 
15. Term and Termination
 
15.1 Term.  The term of this Agreement shall commence as of the Effective Date
and continue for one (1) year thereafter.  Subsequently, this Agreement shall
automatically renew for successive one (1) year renewal terms, unless, at least
thirty (30) days prior to the beginning of any renewal term, either party gives
the other party written notice of its intent not to renew this Agreement.
 
15.2 Termination.
 
(a) Either party may terminate this Agreement upon thirty (30) days written
notice of a material breach of this Agreement by the other party, if such breach
(including, without limitation, a failure to pay WaferGen any amount due under
this Agreement or a failure to provide End Users adequate support for the
Products) is not cured within such thirty (30) day period.
 
(b) Notwithstanding the above, WaferGen may terminate this Agreement
immediately, upon written notice, for Distributor’s breach of Sections ‎2.3, ‎4,
‎7 or ‎8.
 
(c) Either party may terminate this Agreement immediately upon written notice if
the other party becomes insolvent or fails to pay its obligations as they arise,
files for bankruptcy, or if a proceeding by or against the other party under any
law providing relief to the other party as debtor is commenced and is not
dismissed within sixty (60) days after commencement.
 
15.3 Effect of Termination.  Upon any termination or expiration of this
Agreement:
 
(a) The rights and licenses granted in Section ‎2 shall immediately
cease.  Distributor shall immediately cease using the Trademarks and discontinue
all representations that it is a distributor of the Products.  WaferGen shall be
entitled to:  (i) reject all or part of any purchase orders received from
Distributor after notice but prior to the effective date of termination; and/or
(ii) require Distributor’s performance of any outstanding orders notwithstanding
the fact that delivery dates for such orders may extend beyond the effective
date of termination.  Notwithstanding any credit terms made available to
Distributor prior to that time, any Products shipped during said period shall be
paid for in full by certified or cashier’s check prior to shipment.
 
(b) Distributor shall submit to WaferGen within ten (10) days after the
effective date of termination or expiration an inventory summary of the number
of the respective Products owned by Distributor as of the effective date of
termination or expiration.  WaferGen may, at its option, repurchase any or all
of such Products from Distributor upon written notice of its intention to do so
within a reasonable period after receiving the inventory summary, at prices to
be agreed upon between the parties, but in no event greater than the respective
prices paid by Distributor for such Products.  After WaferGen’s receipt of such
Products from Distributor, WaferGen shall issue an appropriate credit to
Distributor’s account and refund any amount greater than the outstanding balance
due WaferGen.
 
(c) The payment date of all monies due WaferGen shall automatically be
accelerated so that they shall become due and payable on the effective date of
termination, even if longer terms had been provided previously.
 

 
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(d) If WaferGen chooses not to exercise its rights to repurchase Distributor’s
inventory, Distributor shall have sixty (60) days from the effective date of
termination to distribute its inventory.  Following such period, Distributor
shall return to WaferGen or destroy, as directed by WaferGen, all Products
remaining in Distributor’s inventory and shall promptly certify the same in
writing to WaferGen.  Within ten (10) days after the effective date of
termination, Distributor shall return or destroy all copies of the Confidential
Information.  At the request of WaferGen, the president or the equivalent
officer of Distributor shall certify in writing that Distributor has complied
with its obligations hereunder.
 
(e) Termination of this Agreement by either party shall not act as a waiver of
any breach of this Agreement and shall not act as a release of either party from
any liability for breach of such party’s obligations under this
Agreement.  Neither party shall be liable to the other for damages of any kind
solely as a result of terminating this Agreement in accordance with its
terms.  Either party’s termination of this Agreement shall be without prejudice
to any other right or remedy that it may have at law or in equity, and shall not
relieve either party of breaches occurring prior to the effective date of such
termination.  Neither WaferGen nor Distributor shall be liable to the other,
because of such expiration or termination, for compensation, reimbursement or
damages:  (i) for the loss of prospective profits, anticipated sales or
goodwill; (ii) on account of any expenditures, investments or commitments made
by either party; or (iii) for any other reason whatsoever based upon the result
of such expiration or termination.
 
(f) Sections ‎4 , ‎7, ‎8, ‎10.2, ‎10.3, ‎10.5, ‎11.4, ‎12, ‎13, ‎14, ‎15.3 and
‎16 shall survive any termination or expiration of this Agreement.
 
16. Miscellaneous Terms
 
16.1 Relationship of the Parties.  This Agreement shall not be construed as
creating an agency, partnership, joint venture or any other form of association,
for tax purposes or otherwise, between the parties, and the parties shall at all
times be and remain independent contractors.  Except as expressly agreed by the
parties in writing, neither party shall have any right or authority, express or
implied, to assume or create any obligation of any kind, or to make any
representation or warranty, on behalf of the other party or to bind the other
party in any respect whatsoever.
 
16.2 Import/Export.  Distributor shall comply with all applicable foreign and
domestic laws and regulations relating to the importation or exportation of the
Products and to this Agreement (“Export Laws”).  Distributor shall not knowingly
import or export or cause to be imported or exported, directly or indirectly,
any technology licensed hereunder to any country for which any governmental
authority requires a license or other government approval at the time of such
import or export, without first obtaining the required license or
approval.  Without limiting the generality of the foregoing, Distributor shall
not, and shall require its representatives not to, export, direct or transfer
any Products, or any direct product thereof, to any destination, person or
entity restricted or prohibited by the Export Laws.  Any and all obligations of
WaferGen to provide software, technical information, technical assistance, media
in which any of the foregoing is contained, or training or related technical
data to Distributor or an End User shall be subject in all respects to the
Export Laws.
 
16.3 Governing Law, Jurisdiction, and Venue.  This Agreement shall be governed
by and construed in accordance with the laws of the State of California, U.S.A.,
without reference to its conflicts of law provisions.  Any dispute regarding
this Agreement shall be subject to the exclusive jurisdiction of the state and
federal courts located in San Francisco County, California, U.S.A., and the
parties hereby irrevocably agree to submit to the personal and exclusive
jurisdiction and venue of such courts.  This Agreement shall not be governed by
the United Nations Convention on Contracts for the International Sale of Goods,
the application of which is hereby expressly excluded.
 
16.4 Force Majeure.  Neither party shall be liable under this Agreement because
of any failure or delay in the performance of its obligations (except for
payment of money) on account of strikes, shortages, riots, fire, flood, storm,
earthquake, acts of God, hostilities or any other cause beyond its reasonable
control.
 
16.5 Notices.  Any notice, request, demand or other communication required or
permitted hereunder shall be in writing, shall reference this Agreement and
shall be deemed to be properly given:  (a) when delivered personally; (b) one
(1) business day after the date of transmission when sent by facsimile, with
written confirmation of receipt by the sending facsimile machine; (c) five (5)
business days after having been sent by registered or certified mail,
 

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return receipt requested, postage prepaid; or (d) two (2) business days after
deposit with a private industry express overnight courier, with written
confirmation of receipt.  All notices shall be sent to the party and address set
forth after the signature of each party below (or to such other address or
person as may be designated by a party by giving written notice to the other
party pursuant to this Section).
 
16.6 Assignment.  Distributor shall not assign, transfer, delegate or otherwise
dispose of this Agreement or any right or obligation hereunder (whether by
express transfer, operation of law or otherwise) without the prior written
consent of WaferGen.  WaferGen shall be entitled to assign, transfer, delegate
or otherwise dispose of, whether voluntarily or involuntarily, by operation of
law or otherwise, this Agreement and any of its rights or obligations under this
Agreement.  Any attempted or purported assignment or other transfer not
complying with the foregoing shall be null and void.  Subject to the foregoing,
this Agreement shall inure to the benefit of and bind the successors and assigns
of the parties.
 
16.7 Injunctive Relief.  Distributor acknowledges that the breach of any
provision of Sections ‎2.3, ‎4, ‎7 or ‎8 shall cause irreparable injury to
WaferGen, and agrees that WaferGen shall have the right to seek and obtain
(notwithstanding the provisions in Section ‎16.3) from any court of competent
jurisdiction temporary, preliminary and permanent injunctive relief, without the
necessity of proving actual damages or posting a bond, to prevent any such
breach.  In the event WaferGen is required to file a lawsuit or court action
against Distributor to prevent such breach, Distributor agrees to pay WaferGen’s
reasonable attorney fees, expenses and court costs.
 
16.8 Counterparts.  This Agreement may be executed in one or more counterparts,
all of which together shall constitute a single agreement.
 
16.9 Headings.  The various section headings used herein are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement or any section thereof.
 
16.10 Severability.  If any term, provision, covenant or condition of this
Agreement is held by a court or arbitral panel of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions hereof shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
 
16.11 Construction.  This Agreement shall be deemed to have been drafted by all
parties and, in the event of a dispute, no party hereto shall be entitled to
claim that any provision should be construed against any other party by reason
of the fact that it was drafted by one particular party.
 
16.12 Entire Agreement.  This Agreement and the Exhibits hereto contain the
entire understanding of the parties with respect to the subject matter of this
Agreement and merges and supersedes all prior and contemporaneous agreements and
understandings between the parties, whether oral or written, with respect to the
subject matter of this Agreement.  Any waiver, modification or amendment of any
provision of this Agreement shall be effective only if in writing and signed by
the authorized representatives of both parties.
 

 
In Witness Whereof, the parties hereto have executed this Exclusive Distribution
Agreement as of the Effective Date.
 

WaferGen
Distributor
 
By:                                                                
 
By:                                                                
 
Name:
 
Name:
 
Title:                                                                
 
Title:                                                                
 
Address for Notices:
 
Address:                      46531 Fremont Blvd.
Fremont, CA  94538
U.S.A
 
Attention:VP of Sales
Telephone:+11 510-651-4450 x 268
Fax:                      +11 510-651-4599
 
Address for Notices:
 
Address:                      
 
Attention:
Telephone:
Fax:                      
 

 

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Exhibit A
 
Territory, Products and Pricing, Purchasing Milestones, Demonstration Units
 

 
I.           Territory:                                                                                     
 

 
II.           Products and Pricing:

2008 Pricing Schedule for SmartSlide Micro-incubation Systems

SmartSlide Micro-incubation System
         
Part #
Description
 
List Price
(USD $)
Distributor Price
(USD $)
 
WFSS50
SmartSlide 50 Micro-incubation System
-
-
 
WFSS100
SmartSlide 100 Micro-incubation System w/ Integrated Fluidics
-
-
 
WFSS150
SmartSlide 150 Micro-incubation System w/ Integrated Multi-Fluidics
-
-
 
WFSS200
SmartSlide 200 Micro-incubation System w/ Perfusion
-
-
         
SmarSlide-6 Micro-incubator
       
Quantity
Part#
Description
SmartSlide-6 Micro-incubator.  Sterile, disposable, SBS standard multiwell plate
w/ heated thin bottom glass (175mm) and heated glass lid
 
List Price
(USD $)
Distributor Price
(USD $)
1-50 *
WFSS6MI
 
-
-
51-75
WFSS6MI
 
-
-
76 or more
WFSS6MI
 
-
-

* Demonstration units and the initial purchase units shall be included.

 

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III.           Purchasing Milestones
 
Time Period
Milestone
June 1, 2008 – December 31, 2008
$___________ ** of purchase orders for Products submitted and accepted (not
including demonstration units) for Products to be delivered no later than third
quarter 2008.
January 1, 2009 – May 30, 2009
$___________ ** of purchase orders submitted and accepted (not including
demonstration units) for Products to be delivered no later than first quarter of
2009.
 
____________ ** Total

** Figure refers to Products order and Distributor Price (not List Price) paid
for such Products.
 

 

 
IV.           Demonstration Units
 
At all times during the Term of this Agreement, Distributor will maintain at
least one unit of each of the following two (2) Products: (i) WFSS50, and (ii)
WFSS150, as demonstration units of the Products.
 
Distributor, at its option, may maintain one unit of each of the following two
(2) Products: (a) WFSS100, and (b) WFSS200, as demonstration units of the
Products.
 
During each six (6) month period following the Effective Date, Distributor may
purchase one demonstration unit of each of the foregoing Products at a special
discounted price of fifty percent (50%) off the Suggested Retail Price.  Any
additional demonstration units of the Products purchased will purchased at the
Distributor Price applicable to such Products.
 

 
V.           Initial Purchase
 
The initial purchase of Products by Distributor includes the following: (a) the
demonstration units of the Products described in Section IV above, and (b) ten
units of the WFSS6MI Product.
 

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Exhibit B
 
 

 
 
Trademarks
 

 
WaferGen Biosystems™
 
SmartSlide 50 Micro-incubation System™
 
SmartSlide 100 Micro-incubation System w/ Integrated Fluidics™
 
SmartSlide 150 Micro-incubation System w/ Integrated Multi-Fluidics™
 
SmartSlide 200 Micro-incubation System w/ Perfusion™
 
SmartSlide-6 Micro-incubator™
 

 
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Exhibit C
 
 
Maintenance and Support Services
 

 
I.           Level One Support
 
A.  
Support by Distributor.  Distributor shall, at its own expense, provide all
front-end customer support and training relating to the use of the Product by
End Users (“Level One Support”) for any and all units of the Product marketed
and distributed by Distributor.  Level One Support shall include, at a minimum,
technical support for the installation, use and operation of the Products, by
telephone, fax and e-mail during normal business hours.

 
B.  
 Support Personnel.  Distributor shall, at its expense, retain a minimum of one
(1) full-time employee who shall:  (i) provide Level One Support to End Users;
and (ii) act as Distributor’s liaison for all technical communications with
WaferGen.

 

 
II.           Level Two Support
 
A.  
Support by WaferGen.  WaferGen shall provide to Distributor back-end academic
and theory support, technical information,  cooperation and assistance as may be
reasonably necessary for Distributor to provide Level One Support to End Users
(“Level Two Support”), including, without limitation, reasonable telephone, fax
and e-mail support during WaferGen’s normal business hours.

 
B.  
Assistance of Distributor.  Distributor agrees to provide WaferGen with all
information and materials requested by WaferGen for use in replicating,
diagnosing and correcting an error or other problem with the Products reported
by WaferGen to the extent such information and materials are reasonably
available to WaferGen.

 
C.  
Exclusions.  Level Two Support shall exclude maintenance or service for the
following:

 
 
(i)
computer hardware or equipment;

 
 
(ii)
software developed or provided to Distributor or End User by any party other
than WaferGen and used in connection with the Products;

 
 
(iii)
restoration of lost data;

 
 
(iv)
any Software that has been customized or modified by any party other than
WaferGen;

 
 
(v)
integration, installation or configuration of the Software or any software that
interacts therewith, including operating systems, data communications products
and databases;

 
 
(vi)
problems or errors caused by the negligence of Distributor or any third party;

 
 
(vii)
Software installed, operated, or maintained other than in conformance with the
Agreement, the End User Agreement, Documentation or any WaferGen instructions.

 
In the event that WaferGen determines that a failure of the Products, or any
part thereof, to operate substantially in accordance with the Documentation is
caused directly or indirectly by misuse of the Products, or is directly caused
by modification or alteration of the Products by any party other than WaferGen,
or from any cause other than a defect in the Software, WaferGen’s services in
making such determination and in remedying any problem shall be deemed to be
consulting services and shall be billed to Distributor in accordance with
WaferGen’s then-current time-and-material fees.
 
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