EXHIBIT 10.1

 
 
Dated: 
 
To:
May 27, 2011
 
WaferGen Bio-systems, Inc.
7400 Paseo Padre Parkway
Fremont, CA  94555
Attention:  Don Huffman, Chief Financial Officer

 
Dear Don,
 
Reference is made to that certain Purchase Agreement (the “Purchase Agreement”),
dated as of May 25, 2011, by and among WaferGen Bio-systems, Inc. (the
“Company”) and the investors who have executed the signature page(s) thereto
(collectively, the “Investors”).  Capitalized terms used but not defined in this
letter shall have the respective meanings ascribed to them in the Purchase
Agreement.
 
Subject to the Company’s agreement hereto by its execution of this letter below
where indicated, the Investors and the undersigned individuals (collectively,
the “Management Members”) agree with each other and the Company as follows:
 
At any time the Company seeks to initially list the Company’s shares of Common
Stock on The NASDAQ Stock Market LLC or the NYSE Amex Equities (each, a
“Securities Exchange”) within the three (3) year period from the date hereof,
if, in order to complete such initial listing (or otherwise maintain such
listing following the listing of the shares on a Securities Exchange) the
Company is advised or required by the applicable Securities Exchange to increase
its shareholders’ equity by a specified dollar amount (the “Cure Amount”), then
the Company shall so notify the Investors and the Management Members in writing,
and Investors holding at least sixty-seven percent (67%) of the aggregate
principal amount of the Notes then outstanding, at their sole discretion, may
require that the Management Members and any Investors then holding Notes, within
ten (10) calendar days of the receipt of such written notice, increase their
holdings of equity in the Company in an aggregate amount equal to the Cure
Amount as follows:
 
(i)           Management:  First, the Management Members, on a pro rata basis
(based upon the principal amount of the Notes then held by them) or as otherwise
agreed by the Management Members, shall acquire, to the extent and only to the
extent amounts are owing under the Notes held by the Management Members,
additional shares of Series A Preferred Stock through the conversion of the
Notes held by such Management Members into shares of Series A Preferred Stock in
accordance with the terms of the Notes, but only to the extent necessary to
increase the Company’s shareholders’ equity by the Cure Amount.
 
(ii)          Investors:  Second, to the extent that the conversion of the Notes
held by Management Members as described in the foregoing paragraph (i) does not
result in the Company’s shareholders’ equity being increased by the Cure Amount
(such deficiency referred herein as the “Deficiency Amount”), then the
Investors, on a pro rata basis (based upon the
 
 
 
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principal amount of the Notes then held by them) or as otherwise agreed by the
Investors then holding Notes, shall acquire, to the extent and only to the
extent amounts are owing under the Notes, additional shares of Series A
Preferred through the conversion of Notes held by such Investors into shares of
Series A Preferred in accordance with the terms of the Notes, but only to the
extent necessary to further increase the Company’s shareholders’ equity by the
Deficiency Amount.

           The parties hereto agree that in case, at any time after the date
hereof, any further action is necessary or desirable to carry out the purposes
and intent of this letter, the parties will take such further action as any
party or parties may reasonably request.  This letter may be executed in one or
more counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.  Any signature page of any such
counterpart, or any electronic facsimile thereof, may be attached or appended to
any other counterpart to complete a fully executed counterpart of this letter,
and any telecopy or other facsimile transmission of any signature shall be
deemed an original.  This letter shall be binding upon each party’s successors
and assigns, and no party may transfer the Notes to another party without the
transferee first agreeing to be bound by the terms and conditions of this
letter.

 
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Please confirm your agreement with the foregoing by signing and returning to
Great Point Partners, LLC the duplicate copy of this letter agreement enclosed
herewith.

 
Very truly yours,
     
INVESTORS:
     
GREAT POINT PARTNERS, LLC
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 
BIOMEDICAL VALUE FUND, L.P.
 
By: Great Point Partners, LLC, its investment manager
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 
BIOMEDICAL INSTITUTIONAL VALUE FUND, L.P.
 
By: Great Point Partners, LLC, its investment manager
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 
BIOMEDICAL OFFSHORE VALUE FUND, LTD.
 
By: Great Point Partners, LLC, its investment manager
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 
WS INVESTMENTS III, LLC
 
By: Great Point Partners, LLC, its investment manager
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 

 

[Side Letter Agreement]

 
 

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DAVID J. MORRISON
 
By: Great Point Partners, LLC, its investment manager
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 
CLASS D SERIES OF GEF-PS, L.P.
 
By: Great Point Partners, LLC, its investment manager
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 
LYRICAL MULTI-MANAGER FUND, L.P.
 
By: Great Point Partners, LLC, its investment manager
     
By:
  /s/ David E. Kroin
     
Name: David E. Kroin
Title: Managing Director

 
JEFFREY R. JAY, TRUSTEE FOR THE BENEFIT OF
 
THOMAS C. JAY QPERT
     
By:
  /s/ Jeffrey R. Jay
     
Name:
Title:

 
JEFFREY R. JAY, TRUSTEE FOR THE BENEFIT OF
 
CAROLYN JAY TRUST
     
By:
  /s/ Jeffrey R. Jay
     
Name:
Title:

 
JEFFREY R. JAY, TRUSTEE FOR THE BENEFIT OF
 
JR JAY JR TRUST
     
By:
  /s/ Jeffrey R. Jay
     
Name:
Title:

 
 
 
 
[Side Letter Agreement]
 
 
 
 

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DEERFIELD SPECIAL SITUATION FUND, L.P.
 
By:
Deerfield Capital, L.P.
   
General Partner
   
By:
J.E. Flynn Capital, LLC
     
General Partner
               
By:
  /s/ J. E. Flynn
         
Name: James E. Flynn
       
Title:   President

 
DEERFIELD SPECIAL SITUATIONS FUND
 
INTERNATIONAL, LIMITED
     
By:
  /s/ J. E. Flynn
     
Name:
James E. Flynn
   
Title:
President

 

 
DEERFIELD PRIVATE DESIGN FUND II, L.P.
 
By:
Deerfield Capital, L.P.
   
General Partner
   
By:
J.E. Flynn Capital, LLC
     
General Partner
               
By:
  /s/ J. E. Flynn
         
Name: James E. Flynn
       
Title:   President

 
 

  DEERFIELD PRIVATE DESIGN  
INTERNATIONAL II, L.P.
 
By:
Deerfield Capital, L.P.
   
General Partner
   
By:
J.E. Flynn Capital, LLC
     
General Partner
               
By:
  /s/ J. E. Flynn
         
Name: James E. Flynn
       
Title:   President

 
 
 
 
[Side Letter Agreement]

 
 

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JEFFREY R JAY
     
By:
  /s/ Jeffrey R Jay
 

 
PAUL SCHIMMEL ROLLOVER IRA
     
By:
  /s/ Paul Schimmel      
Name:
     
Title:
 

 
MERLIN NEXUS III, LP
 
By:
Merlin Nexus III, LLC (Its General Partner)
           
By:
  /s/ Dominique Sémon        
Name:  Dominique Sémon
     
Title:

 

 

[Side Letter Agreement]

 
 

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THE SHIVJI FAMILY TRUST DATED JUNE 12, 2000
     
By:
  /s/ Alnoor Shivji
     
Name:
Alnoor Shivji
     
Title:
Trustee
 

 

 

[Side Letter Agreement]

 
 

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ROBERT CORADINI
     
  /s/ Robert Coradini
   
Name:
Robert Coradini
 

 
 
 

[Side Letter Agreement]

 
 

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CIBC TRUST COMPANY (BAHAMAS) LIMITED
 
AS TRUSTEE
     
By:
  /s/ Helen M. Carroll     /s/ Linda G. Williams
     
Name:
Helen M. Carroll & Linda G. Williams
     
Title:
Authorised Signatories
 

 
KANTER FAMILY FOUNDATION
     
By:
  /s/ Joel Kanter      
Name:
Joel Kanter      
Title:
President
 

 
JOEL KANTER
     
By:
  /s/ Joel Kanter  

 
 

[Side Letter Agreement]

 
 

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Accepted and agreed:

WaferGen Bio-systems, Inc.

 
 
 
By:
  /s/ Alnoor Shivji
   
Name:
Alnoor Sivji
 
Title:
Chief Executive Officer

cc:
Morrison & Foerster LLP
 
425 Market Street
 
San Francisco, CA  94105
 
Attention:  John M. Rafferty, Esq.

 
 

 
[Side Letter Agreement]