Document:

ex10-6.htm

    EXHIBIT
10.6

      

      

      Warrant
Certificate No. _______

      

      THE
SECURITIES REPRESENTED HEREBY (AND THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF) HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THE SECURITIES ARE REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT IS AVAILABLE.

      

      Effective
Date: June 16, 2009 Void After: June 16, 2014

      

      

      WAFERGEN
BIO-SYSTEMS, INC.

      

      WARRANT
TO PURCHASE COMMON STOCK

      

      WaferGen Bio-systems, Inc., a
Nevada corporation (the “Company”), for value received
June 16, 2009 (the “Effective
Date”), hereby issues to
[                                        ] (the “Holder”) this Warrant (the
“Warrant”) to purchase,
[            ]
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at the
Exercise Price (as defined below), as adjusted from time to time as provided
herein, on or before June 16, 2014 (the “Expiration Date”), all subject
to the following terms and conditions.   The Warrant Shares (as
defined below) issued upon exercise of this Warrant shall be subject to the
provisions of the Company’s Amended and Restated Articles of Incorporation, a
copy of which will be furnished to the holder hereof upon written request and
without charge. Unless otherwise defined in this Warrant, terms appearing in
initial capitalized form shall have the meaning ascribed to them in that certain
Subscription Agreement between the Company and the purchaser signatory thereto
entered into in connection with a private placement of the Company’s securities
and pursuant to which this Warrant was issued (the “Subscription
Agreement”).  This Warrant is one of a series of Warrants
issued in accordance with the terms of the Offering (collectively, the “Warrants”) to the Holder and
additional investors (collectively, the “Holders”).

      

      As used
in this Warrant, (i) “Business
Day” means any day other than Saturday, Sunday or any other day on which
commercial banks in the City of New York, New York, are authorized or required
by law or executive order to close; (ii) “Exercise Price” means $2.00 per whole share of
Common Stock, subject to adjustment as provided herein; (iii) “Warrant Shares” means the
shares of Common Stock issuable upon exercise of the Warrant, including any
securities issued or issuable with respect thereto or into which or for which
such shares may be exchanged, or converted, pursuant to any stock dividend,
stock split, stock combination, recapitalization, reclassification,
reorganization or other similar event; (iv) “Trading Day” means any day on
which the Common Stock is traded on the primary national or regional stock exchange
on which the Common Stock is listed, or if not so listed, the OTC Bulletin
Board, if quoted thereon, is open for
the transaction of business; and (v) “Affiliate” means any person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, a person, as such terms are used
and construed in Rule 144 promulgated under the Securities Act of 1933, as
amended (the “Securities
Act”). 

        

      

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
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                1.

              	
                DURATION
      AND EXERCISE OF WARRANT

              

      

      

      (a)           Exercise
Period.  The Holder may exercise this Warrant at any time and
from time to time, in whole or in part, on any Business Day on or before 5:00
P.M., Eastern Time, on the Expiration Date, at which time this Warrant shall
become void and of no value, and all rights hereunder shall thereupon
cease.

      

      
        	
                 
      

              	
                (b)

              	
                Exercise
      Procedures.

              

      

      

      (i)           While
this Warrant remains outstanding and exercisable in accordance with Section
1(a), the Holder may exercise this Warrant, in whole or in part, as
follows:

      

      (A)           By
presentation and surrender of this Warrant to the Company at its principal
offices or at such other office or agency as the Company may specify in writing
to the Holder, with a duly executed copy of the Notice of Exercise attached as
Exhibit A;
and

      

      (B)                      Payment
of the then-applicable Exercise Price per share multiplied by the number of
Warrant Shares being purchased upon exercise of the Warrant (such amount, the
“Aggregate Exercise Price”) made in the
form of cash, or by certified check, bank draft or money order payable in lawful
money of the United States of America or in the form of a Cashless
Exercise (as defined below) to the extent permitted in Section 1(b)(ii)
below.

      

      (ii)           At
any time when a registration statement covering the resale of the Warrant Shares
by the Holder is not effective after six months after the Effective Date, the
Holder may, in its sole discretion, exercise all or any part of the Warrant in a
“cashless” or “net-issue” exercise (a “Cashless Exercise”) by
delivering to the Company (1) the Notice of Exercise and (2) the original
Warrant, pursuant to which the Holder shall surrender the right to receive upon
exercise of this Warrant, a number of Warrant Shares having a fair market value
(as determined below) equal to the Aggregate Exercise Price, in which case, the
number of Warrant Shares to be issued to the Holder upon such exercise shall be
calculated using the following formula:

      

                                               X              =              Y * (A -
B)

                                                                                 A

      

                    with:              X
=       the number of Warrant Shares to be
issued to the Holder

      

      
        	
                 
      

              	 	
                Y
      =

              	
                the
      number of Warrant Shares with respect to which the Warrant is being
      exercised

              

      

       

       

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
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                A
      =

              	
                the
      fair market value per share of Common Stock on the date of exercise of the
      Warrant

              

      

      

                                          
B =       the then-current Exercise Price of
the Warrant

      

      Solely
for the purposes of this paragraph, “fair market value” per share of Common
Stock shall mean (A) the average of the closing sales prices, as quoted on the
primary national or regional stock exchange on which the Common Stock is listed,
or, if not listed, the OTC Bulletin Board if quoted thereon, on the twenty (20)
Trading Days immediately preceding the date on which the Notice of Exercise is
deemed to have been sent to the Company, or (B) if the Common Stock is not
publicly traded as set forth above, as reasonably and in good faith determined
by the Board of Directors of the Company as of the date which the Notice of
Exercise is deemed to have been sent to the Company.

       

       (iii)           Upon
the exercise of this Warrant in compliance with the provisions of this Section
1(b), the Company shall promptly issue and cause to be delivered to the Holder a
certificate for the total number of Warrant Shares for which this Warrant is
being exercised.  Each exercise of this Warrant shall be effective
immediately prior to the close of business on the date (the “Date of Exercise”) on which
the conditions set forth in Section 1(b) have been satisfied. On or before the
second Business Day following the date on which the Company has received each of
the Notice of Exercise and the Aggregate Exercise Price (or notice of a Cashless
Exercise in accordance with Section 1(b)(ii)) (the “Exercise Delivery Documents”), the Company shall
transmit an acknowledgment of receipt of the Exercise Delivery Documents to the
Company’s transfer agent (the “Transfer Agent”). On or before
the fifth Business Day following the date on which the Company has received all
of the Exercise Delivery Documents (the “Share Delivery Date”), the Company shall
(X) provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast
Automated Securities Transfer Program and either (A) there is an effective
Registration Statement permitting the resale of the Warrant Shares by the Holder
or (B) the shares are eligible for resale without volume or manner-of-sale
limitations pursuant to Rule 144, upon the request of the Holder credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the
Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as
specified in the Notice of Exercise, a certificate, registered in the Company’s
share register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise.  Upon delivery of the Exercise Delivery Documents, the
Holder shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Shares. If the number of Warrant Shares represented by this Warrant
is greater than the actual number of Warrant Shares being acquired upon
such an exercise,
then the Company shall as soon as practicable and in no event later than five
(5) Business Days after any exercise, and at its own expense, issue a new
Warrant of like tenor representing the right to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under this Warrant, less
the number of Warrant Shares with respect to which this Warrant is
exercised.

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
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      (iv)           If
the Company shall fail for any reason or for no reason to issue to the Holder,
within five (5) Business Days of receipt of the Exercise Delivery Documents, a
certificate for the number of shares of Common Stock to which the Holder is
entitled and register such shares of Common Stock on the Company’s share
register or to credit the Holder’s balance account with DTC for such number of
shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant, and if on or after such Business Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the
Company (a “Buy-In”),
then the Company shall, within five (5) Business Days after the Holder’s request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point
the Company’s obligation to deliver such certificate (and to issue such shares
of Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such shares of
Common Stock and pay cash to the Holder in an amount equal to the excess (if
any) of the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) the closing bid price on the date of exercise.

      

      (c)           Partial
Exercise.  This Warrant shall be exercisable, either in its
entirety or, from time to time, for part only of the number of Warrant Shares
referenced by this Warrant. If this Warrant is exercised in part, the Company
shall issue, at its expense, a new Warrant, in substantially the form of this
Warrant, referencing such reduced number of Warrant Shares that remain subject
to this Warrant.

      

      (d)           Disputes.  In
the case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 15.

      

      
        	
                2.

              	
                ISSUANCE
      OF WARRANT SHARES

              

      

      

      (a)           The
Company covenants that all Warrant Shares will, upon issuance in accordance with
the terms of this Warrant, be (i) duly authorized, fully paid and
non-assessable, and (ii) free from all liens, charges and security interests,
with the exception of claims arising through the acts or omissions of the Holder
and except as arising from applicable federal and state securities
laws.

      

      (b)           The
Company shall register this Warrant upon records to be maintained by the Company
for that purpose in the name of the record holder of such Warrant from time to
time. The Company may deem and treat the registered Holder of this Warrant as
the absolute owner thereof for the purpose of any exercise thereof, any
distribution to the Holder thereof and for all other purposes.

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
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      (c)           The
Company will not, by amendment of its articles of incorporation or by-laws or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all action necessary or appropriate in order to protect the rights of
the Holder to exercise this Warrant, or against impairment of such
rights.

      

      
        	
                3.

              	
                ADJUSTMENTS
      OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT
  SHARES

              

      

      

      (a)           The
Exercise Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3(a); provided, that
notwithstanding the provisions of this Section 3(a), the Company shall not be
required to make any adjustment if and to the extent that such adjustment would
require the Company to issue a number of shares of Common Stock in excess of its
authorized but unissued shares of Common Stock, less all shares of Common Stock
that have been reserved for issuance upon the conversion of all outstanding
securities convertible into shares of Common Stock and the exercise of all
outstanding options, warrants and other rights exercisable for shares of Common
Stock.  If the Company does not have the requisite number of
authorized but unissued shares of Common Stock to make any adjustment, the
Company shall use its commercially reasonable efforts to obtain the necessary
shareholder consent to increase the authorized number of shares of Common Stock
to make such an adjustment pursuant to this Section 3(a).

      

      (i)           Subdivision or Combination
of Stock.  If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of Warrant Shares
shall be proportionately increased.  If the Company at any time after
the date of issuance of this Warrant combines (by combination, reverse stock
split or otherwise) its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of Warrant Shares
shall be proportionately decreased.  Any adjustment under this Section
3(a)(i) shall become effective at the close of business on the date the
subdivision or combination becomes effective.  The Exercise Price and
the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described in this Section
3(a)(i).

       

                (ii)           Distribution of
Assets.  If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spinoff, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case the Exercise Price
and the number of Warrant Shares in
effect immediately prior to the close of business on the record date fixed for
the determination of holders of Common Stock entitled to receive the
Distribution shall be adjusted proportionately, and the Holder hereof shall,
upon the exercise of this Warrant, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of assets that such
Holder would hold on the date of such exercise had such Holder been the holder
of record of such Common Stock as of such record date.  The Exercise
Price and the Warrant Shares, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described in this
Section 3(a)(ii).

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
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      (iii)           Reorganization, Reclassification,
Consolidation,
Merger or Sale. If any recapitalization, reclassification or
reorganization of the capital stock of the Company, or any consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets or other transaction shall be effected in such a
way that holders of Common Stock shall be entitled to receive stock, securities
or other assets or property (an “Organic Change”), then, as a
condition of such Organic Change, lawful and adequate provisions shall be made
by the Company whereby upon any subsequent exercise of this Warrant, the Holder
hereof shall thereafter have the right to purchase and receive (in lieu of the
shares of Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented by this Warrant) such
shares of stock, securities or other assets or property that the Holder would
have received upon or as a result of such Organic Change if the Holder had
exercised this Warrant immediately prior to such event.  In the event
of any Organic Change, appropriate provision shall be made by the Company with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable, in
relation to any shares of stock, securities or other assets or property
thereafter deliverable upon the exercise hereof. The Company will not effect any
such consolidation, merger or sale unless, prior to the consummation thereof,
the successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume
by written instrument reasonably satisfactory in form and substance to the
Holder executed and mailed or delivered to the registered Holder hereof at the
last address of such Holder appearing on the books of the Company, the
obligation to deliver to such Holder such shares of stock, securities or other
assets or property as, in accordance with the foregoing provisions, such Holder
may be entitled to purchase. If there is an Organic Change, then the Company shall
cause to be mailed to the Holder at its last address as it shall appear on the
books and records of the Company, at least 10 calendar days before the effective date of the Organic Change, a notice
stating the date on which such Organic Change is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares for
such shares of stock, securities or other
assets or property delivered upon such
Organic Change; provided, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such
notice.  The Holder is entitled to exercise this Warrant during the
10-day period commencing on the date of such notice to the effective date of the
event triggering such notice.  In any event, the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall be deemed to assume such
obligation to deliver to such Holder such shares of stock, securities or other
assets or property even in the absence of a written instrument assuming such
obligation to the extent such assumption occurs by operation of
law.

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
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      (b)           Certificate as to
Adjustments. Upon the occurrence of each adjustment or readjustment
pursuant to this Section 3, the Company at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and furnish
to each Holder of this Warrant a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall promptly furnish or cause to be
furnished to such Holder a like certificate setting forth: (i) such adjustments
and readjustments; and (ii) the number of shares and the amount, if any, of
other property which at the time would be received upon the exercise of the
Warrant.

      

      (c)           Certain Events. If
any event occurs as to which the other provisions of this Section 3 are not
strictly applicable but the lack of any adjustment would not fairly protect the
purchase rights of the Holder under this Warrant in accordance with the basic
intent and principles of such provisions, or if strictly applicable would not
fairly protect the purchase rights of the Holder under this Warrant in
accordance with the basic intent and principles of such provisions, then the
Company’s Board of Directors will, in good faith and subject to applicable law,
make an appropriate adjustment to protect the rights of the Holder; provided, that no
such adjustment pursuant to this Section 3(c) will increase the Exercise Price
or decrease the number of Warrant Shares except as otherwise determined pursuant
to this Section 3.

      

      (d)           Adjustment of Exercise Price
upon Issuance of Additional Shares of Common Stock.  In the
event the Company shall at any time prior to the Expiration Date issue
Additional Shares of Common Stock, as defined below, without consideration or
for a consideration per share less than the Exercise Price in effect immediately
prior to such issue, then the Exercise Price shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Exercise Price by a fraction, (A) the numerator of which shall
be (1) the number of shares of Common Stock outstanding immediately prior to
such issue plus (2) the number of shares of Common Stock which the aggregate
consideration received or to be received by the Company for the total number of
Additional Shares of Common Stock so issued would purchase at such Exercise
Price; and (B) the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issue plus the number of such
Additional Shares of Common Stock so issued; provided that, (i)
for the purpose of this Section 3(d), all shares of Common Stock issuable upon
conversion or exchange of convertible securities outstanding immediately prior
to such issue shall be deemed to be outstanding, and (ii) the number of shares
of Common Stock deemed issuable upon conversion or exchange of such outstanding
convertible securities shall be determined without giving effect to any
adjustments to the conversion or exchange price or conversion or exchange rate
of such convertible securities resulting from the issuance of Additional Shares
of Common Stock that is the subject of this calculation.  For purposes
of this Warrant, “Additional Shares of Common Stock” shall mean all shares of
Common Stock issued by the Company after the Effective Date (including without
limitation any shares of Common Stock issuable upon conversion or exchange of
any convertible securities or upon exercise of any option or warrant, on an
as-converted basis), other than: (i) shares of Common Stock issued or
issuable upon conversion or exchange of any convertible securities
or exercise of any options outstanding on the Effective Date, provided that the
conversion or exercise prices thereof have not been lowered since the Effective
Date; (ii) shares of Common Stock issued or issuable upon conversion of the
Warrants issued in connection with the Offering; (iii) shares of Common
Stock issued or issuable by reason of a dividend, stock split, split-up or other
distribution on shares of Common Stock that is covered by Sections 3(a)(i)
through 3(a)(iii) above; (iv) shares of Common Stock issued in a registered
public offering under the Securities Act; (v) shares of Common Stock issued or
issuable (x) pursuant to the acquisition of another corporation by the
Corporation by merger, purchase of substantially all of the assets or other
reorganization or (y) pursuant to a joint venture agreement with an operating
company in a business synergistic with the business of the Company and in which
the Company receives benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities; provided such transaction is approved by a majority of
the disinterested directors of the Company; (vi) shares of Common Stock
issued or issuable to officers, directors and employees of, or consultants to,
the Company pursuant to stock grants, option plans, purchase plans or other
employee stock incentive programs or arrangements approved by the Board of
Directors, or upon exercise of options or warrants granted to such parties
pursuant to any such plan or arrangement; (v) securities issued pursuant to
strategic transactions approved by a majority of the disinterested directors of
the Company, provided that any such issuance shall only be to an entity which
is, itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities; or (vi) any securities pursuant to this Agreement.  The
provisions of this Section 3(d) shall not operate to increase the Exercise
Price.

      
        
          
            {00103924.1
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                4.

              	
                TRANSFERS
      AND EXCHANGES OF WARRANT AND WARRANT
SHARES

              

      

      

      (a)           Registration of Transfers
and Exchanges. Subject to Section 4(c), upon the Holder’s surrender of
this Warrant, with a duly executed copy of the Form of Assignment attached as
Exhibit B, to the
Secretary of the Company at its principal offices or at such other office or
agency as the Company may specify in writing to the Holder, the Company shall
register the transfer of all or any portion of this Warrant. Upon such
registration of transfer, the Company shall issue a new Warrant, in
substantially the form of this Warrant, evidencing the acquisition rights
transferred to the transferee and a new Warrant, in similar form, evidencing the
remaining acquisition rights not transferred, to the Holder requesting the
transfer.

      

      (b)           Warrant Exchangeable for
Different Denominations. The Holder may exchange this Warrant for a new
Warrant or Warrants, in substantially the form of this Warrant, evidencing in
the aggregate the right to purchase the number of Warrant Shares that may then
be purchased hereunder, each of such new Warrants to be dated the date of such
exchange and to represent the right to purchase such number of Warrant Shares as
shall be designated by the Holder. The Holder shall surrender this Warrant with
duly executed instructions regarding such re-certification of this Warrant to
the Secretary of the Company at its principal offices or at such other office or
agency as the Company may specify in writing to the Holder.

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
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      (c)           Restrictions on
Transfers. This Warrant may not be transferred at any time without (i)
registration under the Securities Act or (ii) an exemption from such
registration and a written opinion of legal counsel addressed to the Company
that the proposed transfer of the Warrant may be effected without registration
under the Securities Act, which opinion will be in form and from counsel
reasonably satisfactory to the Company.

      

      (d)           Permitted Transfers and
Assignments.  Notwithstanding any provision to the contrary in
this Section 4, the Holder may transfer, with or without consideration, this
Warrant or any of the Warrant Shares (or a portion thereof) to the Holder’s
Affiliates (as such term is defined under Rule 144 of the Securities Act)
without obtaining the opinion from counsel that may be required by Section
4(c)(ii); provided that the
Holder delivers to the Company and its counsel certification, documentation, and
other assurances reasonably required by the Company’s counsel to enable the
Company’s counsel to render an opinion to the Company’s Transfer Agent that such
transfer does not violate applicable securities laws.

      

      
        	
                5.

              	
                MUTILATED
      OR MISSING WARRANT CERTIFICATE

              

      

      

                 If
this Warrant is mutilated, lost, stolen or destroyed, upon request by the
Holder, the Company will, at its expense, issue, in exchange for and upon
cancellation of the mutilated Warrant, or in substitution for the lost, stolen
or destroyed Warrant, a new Warrant, in substantially the form of this Warrant,
representing the right to acquire the equivalent number of Warrant Shares; provided that, as a
prerequisite to the issuance of a substitute Warrant, the Company may require
satisfactory evidence of loss, theft or destruction as well as an indemnity from
the Holder of a lost, stolen or destroyed Warrant.

      

      
        	
                6.

              	
                PAYMENT
      OF TAXES

              

      

      

      The
Company will pay all transfer and stock issuance taxes attributable to the
preparation, issuance and delivery of this Warrant and the Warrant Shares (and
replacement Warrants) including, without limitation, all documentary and stamp
taxes; provided, however, that the
Company shall not be required to pay any tax in respect of the transfer of this
Warrant, or the issuance or delivery of certificates for Warrant Shares or other
securities in respect of the Warrant Shares to any person or entity other than
to the Holder.

      

      7.           FRACTIONAL
WARRANT SHARES

      

      No
fractional Warrant Shares shall be issued upon exercise of this Warrant. The
Company, in lieu of issuing any fractional Warrant Share, shall round up the
number of Warrant Shares issuable to nearest whole share. The Company shall not
be required to make any cash or other adjustment in respect of such fraction of
a share to which the Holder would otherwise be entitled.

      

      

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
          9

          
            

          

        

        
           

        

      

      

      8.           NO
EQUITY INTEREST RIGHTS AND LEGEND

      

      No holder
of this Warrant, as such, shall be entitled to vote or be deemed the holder of
any other securities of the Company that may at any time be issuable on the
exercise hereof, nor shall anything contained herein be construed to confer upon
the holder of this Warrant, as such, the rights of a shareholder of the Company
or the right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or give or withhold consent to any
corporate action or to receive notice of meetings or other actions affecting
shareholders (except as provided herein), or to receive dividends or
subscription rights or otherwise (except as provided herein).

      

                 Each
certificate for Warrant Shares initially issued upon the exercise of this
Warrant, and each certificate for Warrant Shares issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:

      

      For
accredited investors:

      

      THE
SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”).  THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THE SECURITIES ARE
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IS AVAILABLE.  IN ADDITION, HEDGING
TRANSACTIONS INVOLVING SUCH SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.

      

      For
investors acquiring the Units in an offshore transaction outside the United
States and who are not U.S. Persons:

      

      THE
SECURITIES REPRESENTED HEREBY WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS
WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S) PURSUANT TO REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). ACCORDINGLY, NONE OF SUCH SECURITIES HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
          10

          
            

          

        

        
           

        

      

      

      
        	
                9.

              	
                REGISTRATION
      UNDER THE SECURITIES ACT OF 1933

              

      

      

      The
Company agrees to provide registration rights for the resale of the Warrant
Shares under the Securities Act on the terms and subject to the conditions set
forth in the Registration Rights Agreement between the Company and each of the
investors party to the subscription agreements and/or
securities purchase agreements
similar to
the Subscription Agreement and/or the Securities Purchase Agreement, pursuant to
which this Warrant was issued, or any permitted transferee of the Holder
pursuant to Section 4(d) hereof.

      

      10.           NOTICES

      

                 All
notices, consents, waivers and other communications under this Warrant must be
in writing and will be deemed given to a party when (a) delivered to the
appropriate address by hand or by nationally recognized overnight courier
service (costs prepaid); (b) sent by facsimile or e-mail with confirmation of
transmission by the transmitting equipment; (c) received or rejected by the
addressee, if sent by certified mail, return receipt requested, if to the
registered Holder hereof; or (d) seven days after the placement of the notice
into the mails (first class postage prepaid), to the Holder at the address,
facsimile number or e-mail address furnished by the registered Holder to the
Company in accordance with the Subscription Agreement, or if to the Company, to
it at Bayside Technology Center, 46531 Fremont Blvd., Fremont,
CA  94538, Facsimile:  510-651-4599, Attention: Alnoor
Shivji, CEO (or to such other address, facsimile number or e-mail address as the
Holder or the Company as a party may designate by notice the other party) with a
copy to Morrison & Foerster LLP, 425 Market Street, San Francisco, CA
94105, Attention: John W. Campbell, Esq.

      

      
        	
                11.

              	
                SEVERABILITY

              

      

      

      If a
court of competent jurisdiction holds any provision of this Warrant invalid or
unenforceable, the other provisions of this Warrant will remain in full force
and effect. Any provision of this Warrant held invalid or unenforceable only in
part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.

      

      
        	
                12.

              	
                BINDING
      EFFECT

              

      

      

      This
Warrant shall be binding upon and inure to the sole and exclusive benefit of the
Company, its successors and assigns, the registered Holder or Holders from time
to time of this Warrant and the Warrant Shares.

      

      
        	
                13.

              	
                SURVIVAL
      OF RIGHTS AND DUTIES

              

      

      

      This
Warrant shall terminate and be of no further force and effect on the earlier of
5:00 P.M., Eastern Time, on the Expiration Date or the date on which this
Warrant has been exercised in full.

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
          11

          
            

          

        

        
           

        

      

      

      
        	
                14.

              	
                GOVERNING
      LAW

              

      

      

      This
Warrant will be governed by and construed under the laws of the State of New
York without regard to conflicts of laws principles that would require the
application of any other law.

      

      
        	
                15.

              	
                DISPUTE
      RESOLUTION

              

      

      

      In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two (2)
Business Days of receipt of the Notice of Exercise giving rise to such dispute,
as the case may be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the
Warrant Shares within three Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within two (2) Business Days, submit via facsimile (a) the disputed
determination of the Exercise Price to an independent, reputable investment bank
selected by the Company and approved by the Holder or (b) the disputed
arithmetic calculation of the Warrant Shares to the Company’s independent,
outside accountant. The Company shall cause at its expense the investment bank
or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than
ten (10) Business Days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.  The party whose proposed Exercise Price is
furthest from the actual Exercise Price determined by the investment bank or the
accountant shall be responsible for the fees and expenses of the investment bank
or the accountant pursuant to this Section 15.

      

      
        	
                16.

              	
                NOTICES
      OF RECORD DATE

              

      

      

      Upon (a)
any establishment by the Company of a record date of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or right or option to acquire
securities of the Company, or any other right, or (b) any capital
reorganization, reclassification, recapitalization, merger or consolidation of
the Company with or into any other corporation, any transfer of all or
substantially all the assets of the Company, or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, or the sale, in a single
transaction, of a majority of the Company’s voting equity securities (whether
newly issued, or from treasury, or previously issued and then outstanding, or
any combination thereof), the Company shall mail to the Holder at least ten (10)
Business Days, or such longer period as may be required by law, prior to the
record date specified therein, a notice specifying (i) the date established as
the record date for the purpose of such dividend, distribution, option or right
and a description of such dividend, option or right, (ii) the date on which any
such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up, or sale is expected to become effective
and (iii) the date, if any, fixed as to when the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization,
reclassification, transfer, consolation, merger, dissolution, liquidation or
winding up. 

        

      

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
          12

          
            

          

        

        
           

        

      

       

      17.           RESERVATION
OF SHARES

      

      The
Company has reserved and shall keep available out of its authorized but unissued
shares of Common Stock for issuance upon the exercise of this Warrant, free from
pre-emptive rights, such number of shares of Common Stock for which this Warrant
shall from time to time be exercisable.  The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation. Without limiting the generality of the foregoing, the Company
covenants that it will use best efforts to take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable Warrant Shares upon the exercise of this Warrant
and use best efforts to obtain all such authorizations, exemptions or consents,
including but not limited to consents from the Company’s shareholders or Board
of Directors or any public regulatory body, as may be necessary to enable the
Company to perform its obligations under this Warrant.

      

      
        	
                18.

              	
                HEADINGS

              

      

      

      The headings used in this Warrant are
for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.

      

      
        	
                19.

              	
                AMENDMENT
      AND WAIVERS

              

      

      

      Any term of this Warrant may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holders of a majority of the Warrant
Shares issuable upon exercise of the Warrants; provided, however, that no such
amendment or waiver shall be effective unless consented to by the Holder if such
amendment or waiver would (i) modify the exercise period in Section 1(a) hereof
or (ii) modify the Exercise Price.

      

      
        	
                20.

              	
                NO
      THIRD PARTY RIGHTS

              

      

      

      This
Warrant is not intended, and will not be construed, to create any rights in any
parties other than the Company and the Holder, and no person or entity may
assert any rights as third-party beneficiary hereunder.

      

      SIGNATURE
PAGE FOLLOWS

      
        
          
            {00103924.1
\ 0891-002}

          

           

        

        
          13

          
            

          

        

        
           

        

      

                    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of
the date first set forth above.

      

      

                                                             WAFERGEN
BIO-SYSTEMS, INC.

      

      

                                                                          By:
____________________________________

                                                                                Name:                     Alnoor
Shivji

                                                                                Title:                       Chief
Executive Officer, President

                           
and Chairman of the Board

      

      

      

      

      
        
          
            {00103924.1 \ 0891-002} 

          

           

        

        
          14

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      NOTICE OF
EXERCISE

      

      (To be
executed by the Holder of Warrant if such Holder desires to exercise
Warrant)

      

      To WaferGen Bio-systems, Inc.:

      

      The
undersigned hereby irrevocably elects to exercise this Warrant and to purchase
thereunder, ___________________ full shares of WaferGen Bio-systems, Inc. common stock issuable
upon exercise of the Warrant and delivery of:

      

      (1)                 $__________
(in cash as provided for in the foregoing Warrant) and any applicable taxes
payable by the undersigned pursuant to such Warrant; and

      

      (2)                 __________
shares of Common Stock (pursuant to a Cashless Exercise in accordance with
Section 1(b)(ii) of the Warrant) (check here if the undersigned desires to
deliver an unspecified number of shares equal the number sufficient to effect a
Cashless Exercise [___]).

      

          The
undersigned requests that certificates for such shares be issued in the name
of:

      

      _________________________________________

      (Please
print name, address and social security or federal employer

      identification
number (if applicable))

      

      _________________________________________

      

      _________________________________________

      

                    If
the shares issuable upon this exercise of the Warrant are not all of the Warrant
Shares which the Holder is entitled to acquire upon the exercise of the Warrant,
the undersigned requests that a new Warrant evidencing the rights not so
exercised be issued in the name of and delivered to:

      

      _________________________________________

      (Please
print name, address and social security or federal employer

      identification
number (if applicable))

      

      _________________________________________

      

      _________________________________________

      

      
 

                                                            Name
of Holder (print): 

      

                                                             (Signature):   ___________________________________

                     (By:) _________________________________________

       

                    
(Title:)
                                                                                      

                                                            
Dated:                                                                                     

      
        
          
            {00103924.1
\ 0891-002} 

          

           

        

        
          15

          
            

          

        

        
           

        

      

      

      EXHIBIT
B

      

      FORM OF
ASSIGNMENT

      

      FOR VALUE
RECEIVED, ___________________________________ hereby sells, assigns and
transfers to each assignee set forth below all of the rights of the undersigned
under the Warrant (as defined in and evidenced by the attached Warrant) to
acquire the number of Warrant Shares set opposite the name of such assignee
below and in and to the foregoing Warrant with respect to said acquisition
rights and the shares issuable upon exercise of the Warrant:

      

      
 

      
        	
                Name
      of Assignee

              	
                Address

              	
                Number
      of Warrant
      Shares

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

      

      

      If the
total of the Warrant Shares are not all of the Warrant Shares evidenced by the
foregoing Warrant, the undersigned requests that a new Warrant evidencing the
right to acquire the Warrant Shares not so assigned be issued in the name of and
delivered to the undersigned.

      

      

                                                            Name
of Holder (print): 

      

                                                             (Signature):   ___________________________________

                                                             (By:) _________________________________________

       

                            
(Title:)
                                                                                     

                                                            
Dated:                                                                                     

      

       

       

      
16ex10-7.htm

    

      EXHIBIT 10.7

       

      REGISTRATION RIGHTS
AGREEMENT

       

      This
Registration Rights Agreement (this “Agreement”) is made and
entered into effective as of _____________, 2009, between WaferGen Bio-systems, Inc., a
Nevada corporation (the “Company”) and the persons who
have executed the signature page(s) hereto (each, a “Purchaser” and collectively,
the “Purchasers”).

       

      RECITALS:

       

      WHEREAS,
the Company is offering in compliance with Rule 506 of Regulation D and/or Rule
903 of Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), to
accredited investors and non-U.S. persons in a private placement offering (the
“PPO”), a minimum (the
“Minimum Amount”) of
3,200,000 units (the “Units”) and a maximum of
6,400,000 Units of the Company’s securities, plus up to an additional 1,600,000
Units to cover over subscriptions, if any, at the purchase price of $1.25
per Unit (the “Purchase
Price”), each Unit consisting of one (1) share  (the “Purchaser Shares”) of the
Company’s common stock, par value $0.001 per share (the “Common Stock”) and a warrant
(the “Purchaser
Warrants”), entitling the holder to purchase 30% of one share of Common
Stock for five (5) years at the exercise price of $2.00 per whole share of
Common Stock; and in the event the PPO is oversubscribed, the Company may, in
its discretion, sell up to 1,600,000 additional Units at the same purchase price
per Unit;

       

      WHEREAS,
the initial closing of the PPO will occur upon the receipt of subscriptions and
payment for at least the Minimum Amount, and other conditions to closing of the
PPO are satisfied; and

       

      WHEREAS,
the Purchasers, in connection with their intent to purchase Units in the PPO,
shall execute and deliver Subscription Agreements (the “Subscription Agreements”) and
Investor Certifications (the “Investor Certifications”)
memorializing each Purchaser’s agreement to purchase and the Company’s agreement
to sell the number of Units set forth therein at the Purchase Price, and this
Agreement, pursuant to which the Company will provide certain registration
rights related to (a) the shares of Common Stock underlying the Units (including
the shares of Common Stock issuable upon exercise of the Purchaser Warrants) on
the terms set forth herein (the Subscription Agreements, Investor Certifications
and this Agreement are collectively referred to as the “Transaction Documents”); and

       

      NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants, and conditions set forth herein, the parties mutually agree as
follows:

       

      1. Certain
Definitions.  As used in this Agreement, the following terms
shall have the following respective meanings:

       

      “Approved Market”
means the Over-the-Counter Bulletin Board, the Nasdaq Stock Market, the New York
Stock Exchange or the American Stock Exchange.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      

       

      “Affiliate” means,
with respect to any specified Person, any other Person that, directly or
indirectly through one or more intermediaries, Controls, is Controlled by or is
under common Control with such specified Person.

      

      “Blackout Period”
means, with respect to a registration, a period, in each case commencing on the
day immediately after the Company notifies the Purchasers that they are
required, because of the occurrence of an event of the kind described in Section
4(f) hereof, to suspend offers and sales of Registrable Securities during which
the Company, in the good faith judgment of its board of directors, determines
(because of the existence of, or in anticipation of, any acquisition, financing
activity, or other transaction involving the Company, or the unavailability for
reasons beyond the Company’s control of any required financial statements,
disclosure of information which is in its best interest not to publicly
disclose, or any other event or condition of similar significance to the
Company) that the registration and distribution of the Registrable Securities to
be covered by such Registration Statement, if any, would be seriously
detrimental to the Company and its stockholders and ending on the earlier of (1)
the date upon which the material non-public information commencing the Blackout
Period is disclosed to the public or ceases to be material and (2) such time as
the Company notifies the selling Holders that sales pursuant to such
Registration Statement or a new or amended Registration Statement may
resume.

      

      “Business Day” means
any day of the year, other than a Saturday, Sunday, or other day on which the
Commission is required or authorized to close.

       

      “Commission” means the
U. S. Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.

       

      “Common Stock” means
the common stock, par value $0.001 per share, of the Company and any and all
shares of capital stock or other equity securities of: (i) the Company which are
added to or exchanged or substituted for the Common Stock by reason of the
declaration of any stock dividend or stock split, the issuance of any
distribution or the reclassification, readjustment, recapitalization or other
such modification of the capital structure of the Company; and (ii) any other
corporation, now or hereafter organized under the laws of any state or other
governmental authority, with which the Company is merged, which results from any
consolidation or reorganization to which the Company is a party, or to which is
sold all or substantially all of the shares or assets of the Company, if
immediately after such merger, consolidation, reorganization or sale, the
Company or the stockholders of the Company own equity securities having in the
aggregate more than 50% of the total voting power of such other
corporation.

       

      “Control” means, as to
any Person, the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
Contract or otherwise. The term “Controlled” shall
have a correlative meaning.

      

      “Effective Date” means
the date on which the Registration Statement is declared effective by the
Commission.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

       

      “Effectiveness
Deadline” means, with respect to the Initial Registration Statement, the
90th day following the earlier of the actual filing date or the Filing Deadline
of the Initial Registration Statement (or in the event the Commission reviews
the Registration Statement, the 120th day following such filing date); provided,
that, if the Effectiveness Deadline falls on a Saturday, Sunday or any other day
which shall be a legal holiday or a day on which the Commission is authorized or
required by law or other government actions to close, the Effectiveness Deadline
shall be the following Business Day.

      

      “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.

       

      “Family Member” means
(a) with respect to any individual, such individual’s spouse, any descendants
(whether natural or adopted), any trust all of the beneficial interests of which
are owned by any of such individuals or by any of such individuals together with
any organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, the estate of any such individual, and any corporation,
association, partnership or limited liability company all of the equity
interests of which are owned by those above described individuals, trusts or
organizations and (b) with respect to any trust, the owners of the beneficial
interests of such trust.

       

      “Filing Deadline”
means, with respect to the Initial Registration Statement required hereunder,
the 75th
calendar day following the earlier of the final closing of the PPO or the
Termination Date (as defined in the PPM) of the PPO; provided, that, if the
Filing Deadline falls on a Saturday, Sunday or any other day which shall be a
legal holiday or a day on which the Commission is authorized or required by law
or other government actions to close, the Filing Deadline shall be the following
Business Day..

       

      “Holder” means (i)
each Purchaser or any of such Purchaser’s respective successors and Permitted
Assignees who acquire rights in accordance with this Agreement with respect to
any Registrable Securities directly or indirectly from a Purchaser or from any
Permitted Assignee.

       

      “Initial Registration
Statement” means in the initial Registration Statement filed pursuant to
this Agreement.

       

       “Initial Shares” means
a number of Registrable Securities equal to one-third of the number of issued
and outstanding shares of Common Stock that are held by Non-Affiliates of the
Company on the date immediately prior to the filing date of the Initial
Registration Statement.

       

      “Majority Holders”
means at any time Holders representing a majority of the Registrable
Securities.

       

      “Non-Affiliates” means
as to the Person specified, any Person who is not an Affiliate of such
Person.

      

      “Permitted Assignee”
means (a) with respect to a partnership, its partners or former partners in
accordance with their partnership interests, (b) with respect to a corporation,
its stockholders in accordance with their interest in the corporation, (c) with
respect to a limited liability
company, its members or former members in accordance with their interest in the
limited liability company, (d) with respect to an individual party, any Family
Member of such party, (e) an entity that is controlled by, controls, or is under
common control with a transferor, or (f) a party to this
Agreement.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

       

      “Person” means any
natural person, general or limited partnership, trust, corporation, limited
liability company, firm, association, governmental authority or other legal
entity.

      

      “Piggyback
Registration” means, in any registration of Common Stock referenced in
Section 3(c), the right of each Holder to include the Registrable Securities of
such Holder in such registration.

       

      “PPM” means the
Company’s Confidential Private Placement Memorandum dated May 15, 2009, relating
to the PPO.

       

      “Purchaser Shares” has
the meaning given it in the recitals of this Agreement.

       

      “Purchaser Warrants”
has the meaning given it in the recitals of this Agreement.

       

      “Purchaser Warrant
Shares” means the shares of Common Stock issuable upon exercise of the
Purchaser Warrants.

       

      The terms
“register,”
“registered,”
and “registration” refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

       

      “Registrable
Securities” means the Purchaser Shares and the Purchaser Warrant Shares,
but excluding (i) any otherwise Registrable Securities that have been publicly
sold or may be immediately sold under the Securities Act either pursuant to Rule
144 of the Securities Act or otherwise during any ninety (90) day period; (ii)
any otherwise Registrable Securities sold by a person in a transaction pursuant
to a registration statement filed under the Securities Act, and (iii) any
otherwise Registrable Securities that are at the time subject to an effective
registration statement under the Securities Act.

       

      “Registration
Statement” means the registration statement that the Company is required
to file pursuant to Section 3(a) of this Agreement to register the Registrable
Securities.

       

      “Rule 144” means Rule
144 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.

       

      “Rule 145” means Rule
145 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.

       

      “Rule 415” means Rule
415 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

       

       “Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute
promulgated in replacement thereof, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.

       

      “SEC Effective Date”
means the date the Registration Statement is declared effective by the
Commission.

       

      “SEC Guidance” means
(i) any publicly-available or oral guidance of the Commission staff, or any
comments, requirements or requests of the Commission staff and (ii) the
Securities Act.

       

      “Trading Day” means
any day on which such national securities exchange, the OTC Bulletin Board or
such other securities market or quotation system, which at the time constitutes
the principal securities market for the Common Stock, is open for general
trading of securities.

       

      2. Term.  This
Agreement shall terminate on the earlier of: (i) two years from the Effective
Date; (ii) such date on
which all Registrable Securities held or entitled to be held upon exercise by
every Holder may immediately be sold under Rule 144 during any ninety (90)
day period; or (iii) the date otherwise terminated as provided
herein.

       

      3. Registration.

       

      (a) Registration on Form
S-1.  On or prior to the Filing Deadline, the Company shall
prepare and file with the Commission the Initial Registration Statement covering
the resale of all or such maximum portion of the Registrable Securities as
permitted by SEC
Guidance on an effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415.  The Initial Registration
Statement filed hereunder shall be on Form S−1, or other applicable
form.  Subject to the terms of this Agreement, the Company shall use
its reasonable best efforts to cause the Initial Registration Statement filed
hereunder to be declared effective under the Securities Act as promptly as
reasonably possible after the filing thereof, but in any event prior to the
Effectiveness Deadline. Notwithstanding any other provision of this Agreement
and subject to the payment of liquidated damages pursuant to Section 3(b), if
any SEC Guidance sets forth a limitation on the number of Registrable Securities
permitted to be registered on any Registration Statement, unless otherwise
directed in writing by a Holder as to its Registrable Securities, the number of
Registrable Securities to be registered on such Registration Statement will
first be reduced by Registrable Securities represented by Warrant Shares
(applied, in the case that some Warrant Shares may be registered, to the Holders
on a pro rata basis based on the total number of unregistered Warrant Shares
held by such Holders), and second by Registrable Securities represented by
Purchaser Shares (applied, in the case that some Purchaser Shares may be
registered, to the Holders on a pro rata basis based on the total number of
unregistered Purchaser Shares held by such Holders).  Notwithstanding
any other provision of this Agreement, the Company shall not be obligated to
effect any such registration, qualification or compliance pursuant to this
Section, or keep such registration effective pursuant to the terms hereunder, in
any particular jurisdiction in which the Company would be required to qualify to
do business as a foreign corporation or as a dealer in securities under the
securities laws of such jurisdiction
or to execute a general consent to service of process in effecting such
registration, qualification or compliance, in each case where it has not already
done so.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      (b) Penalties.  If:
(i) the Initial Registration Statement is not filed on or prior to its Filing
Deadline, (ii) as to, in the aggregate among all Holders on a pro-rata basis
based on their purchase of the Securities pursuant to the Subscription
Agreement, a Registration Statement registering for resale all of the Initial
Shares is not declared effective by the Commission by the Effectiveness
Deadline, (iii) after the effectiveness of the Initial Registration Statement,
the Holders are not permitted to utilize the Prospectus therein to resell all of
the Initial Shares as a result of a Blackout Period for more than forty-five
(45) consecutive Trading Days or more than an aggregate of sixty (60) Trading
Days (which need not be consecutive Trading Days) during any 12−month period or
(iv) the Company fails to file with the Commission a request for acceleration of
the Initial Registration Statement in accordance with Rule 461 promulgated by
the Commission pursuant to the Securities Act, within five Trading Days of the
date that the Company is notified (orally or in writing, whichever is earlier)
by the Commission that such Initial Registration Statement will not be
“reviewed” or will not be subject to further review (any such failure being
referred to as an “Event”, and for purposes of
clauses (i) and (ii), the date on which such Event occurs, and for purposes of
clause (iii), the date on which such forty-five (45) or sixty (60) Trading Day
period, as applicable, is exceed, and for purposes of clause (iv), the date on
which such five (5) Trading Day period is exceeded, being referred to as “Event Date”), then, in
addition to any other rights the Holders may have hereunder or under applicable
law, on each such Event Date and on each monthly anniversary of each such Event
Date (if the applicable Event shall not have been cured by such date) until the
applicable Event is cured, the Company shall pay to each Holder an amount in
cash, as partial liquidated damages and not as a penalty, equal to 1.0% of the
aggregate purchase price paid by such Holder pursuant to the Subscription
Agreement for any unregistered Initial Shares then held by such Holder. The
parties agree that the maximum aggregate liquidated damages payable to a Holder
under this Agreement shall be 5.0% of the aggregate purchase price paid by such
Holder pursuant to the Subscription Agreement. If the Company fails to pay any
partial liquidated damages pursuant to this Section in full within seven (7)
Business Days after the date payable, the Company will pay interest thereon at a
rate of 15.0% per annum (or such lesser maximum amount that is permitted to be
paid by applicable law) to the Holder, accruing daily from the date such partial
liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The partial liquidated damages pursuant to the terms hereof
shall apply on a daily pro rata basis for any portion of a month prior to the
cure of an Event.

       

      

      (c) Piggyback
Registration.    Piggyback Registration rights shall
apply to any Registrable Securities that are removed from the Registration
Statement as a result if a requirement by the Commission.  If, after
the SEC Effective Date, the Company shall determine to register for sale for
cash any of its Common Stock, for its own account or for the account of others
(other than the Holders), other than (x) a registration relating solely to
employee benefit plans or securities issued or issuable to employees,
consultants (to the extent the securities owned or to be owned by such
consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (y) a registration relating solely to
a Securities Act Rule 145 transaction or a registration on Form S-4 in
connection with a merger, acquisition, divestiture, reorganization or similar
event, then the Company shall promptly give to the
Holders written notice thereof (and in no event shall such notice be given less
than 20 calendar days prior to the filing of such registration statement), and
shall, subject to Section 3(c), include as a Piggyback Registration all of the
Registrable Securities specified in a written request delivered by the Holder
thereof within 10 calendar days after delivery to the Holder of such written
notice from the Company. However, the Company may, without the consent of the
Holders, withdraw such registration statement prior to its becoming effective if
the Company or such other selling stockholders have elected to abandon the
proposal to register the securities proposed to be registered
thereby.

       

      
        
           

        

        
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      (d) Underwriting.  If
a Piggyback Registration is for a registered public offering that is to be made
by an underwriting, the Company shall so advise the Holders of the Registrable
Securities eligible for inclusion in such Registration Statement pursuant to
Section 3(c).  In that event, the right of any Holder to Piggyback
Registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to sell any of
their Registrable Securities through such underwriting shall (together with the
Company and any other stockholders of the Company selling their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter selected for such underwriting by the Company or such
other selling stockholders, as applicable.  Notwithstanding any other
provision of this Section, if the underwriter or the Company determines that
marketing factors require a limitation on the number of shares of Common Stock
or the amount of other securities to be underwritten, the underwriter may
exclude some or all Registrable Securities from such registration and
underwriting.  The Company shall so advise all Holders (except those
Holders who failed to timely elect to include their Registrable Securities
through such underwriting or have indicated to the Company their decision not to
do so), and indicate to each such Holder the number of shares of Registrable
Securities that may be included in the registration and underwriting, if any.
The number of shares of Registrable Securities to be included in such
registration and underwriting shall be allocated among such Holders as
follows:

       

      (i) If the
Piggyback Registration was initiated by the Company, the number of shares that
may be included in the registration and underwriting shall be allocated first to
the Company and then, subject to obligations and commitments existing as of the
date hereof, to all selling stockholders, including the Holders, who have
requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein; and

       

      (ii) If the
Piggyback Registration was initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company (other than the Holders),
then the number of shares that may be included in the registration and
underwriting shall be allocated first to such selling stockholders who exercised
such demand and then, subject to obligations and commitments existing as of the
date hereof, to all other selling stockholders, including the Holders, who have
requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein.

       

      No
Registrable Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of
any such underwriting, such Holder may elect to withdraw such Holder’s
Registrable Securities therefrom by delivering a written notice to the Company
and the underwriter.  The Registrable Securities so withdrawn from
such underwriting shall also be withdrawn from such registration; provided, however, that, if by
the withdrawal of such Registrable Securities, a greater number of Registrable
Securities held by other Holders may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Company shall
offer to all Holders who have included Registrable Securities in the
registration the right to include additional Registrable Securities pursuant to
the terms and limitations set forth herein in the same proportion used above in
determining the underwriter limitation.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      4. Registration Procedures for
Registrable Securities.  The Company will keep each Holder
reasonably advised as to the filing and effectiveness of the Registration
Statement.  At its expense with respect to the Registration Statement,
the Company will:

       

      (a) prepare
and file with the Commission with respect to the Registrable Securities, a
Registration Statement on Form S-1, or any other form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities in accordance with
the intended methods of distribution thereof, and use its commercially
reasonable efforts to cause such Registration Statement to become effective and
to remain effective for a period of two years or for such shorter period ending
on the sale of all Registrable Securities (the “Effectiveness
Period”).  Each Holder agrees to furnish to the Company a
completed questionnaire in the form attached to this Agreement as Annex A (a “Selling Shareholder
Questionnaire”) not later than three (3) Business Days following the date
on which such Holder receives draft materials of such Registration
Statement;

       

      (b) if the
Registration Statement is subject to review by the Commission, promptly respond
to all comments and diligently pursue resolution of any comments to the
satisfaction of the Commission;

       

      (c) prepare
and file with the Commission such amendments and supplements to such
Registration Statement as may be necessary to keep such Registration Statement
effective during the Effectiveness Period;

       

      (d) furnish,
without charge, to each Holder of Registrable Securities covered by such
Registration Statement (i) a reasonable number of copies of such Registration
Statement (including any exhibits thereto other than exhibits incorporated by
reference), each amendment and supplement thereto as such Holder may reasonably
request, (ii) such number of copies of the prospectus included in such
Registration Statement (including each preliminary prospectus and any other
prospectus filed under Rule 424 of the Securities Act) as such Holders may
reasonably request, in conformity with the requirements of the Securities Act,
and (iii) such other documents as such Holder may require to consummate the
disposition of the Registrable Securities owned by such Holder, but only during
the Effectiveness Period;

       

      (e) use its
commercially reasonable efforts to register or qualify such registration under
such other applicable securities laws of such jurisdictions as any Holder of
Registrable Securities covered by such Registration Statement reasonably
requests and as may be necessary
for the marketability of the Registrable Securities (such request to be made by
the time the applicable Registration Statement is deemed effective by the
Commission) and do any and all other acts and things necessary to enable such
Holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Holder; provided, that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii)
consent to general service of process in any such jurisdiction.

         

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (f) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Securities, the disposition of which requires delivery of a
prospectus relating thereto under the Securities Act, of the happening of any
event, which comes to the Company’s attention, that will after the occurrence of
such event cause the prospectus included in such Registration Statement, if not
amended or supplemented, to contain an untrue statement of a material fact or an
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and the Company shall promptly
thereafter prepare and furnish to such Holder a supplement or amendment to such
prospectus (or prepare and file appropriate reports under the Exchange Act) so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, unless suspension of the use of such
prospectus otherwise is authorized herein or in the event of a Blackout Period,
in which case no supplement or amendment need be furnished (or Exchange Act
filing made) until the termination of such suspension or Blackout
Period;

       

      (g) comply,
and continue to comply during the Effectiveness Period, in all material respects
with the Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission with respect to the disposition of all securities
covered by such Registration Statement;

       

      (h) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Securities being offered or sold pursuant to the Registration
Statement of the issuance by the Commission of any stop order or other
suspension of effectiveness of the Registration Statement;

       

      (i) use its
commercially reasonable efforts to cause all the Registrable Securities covered
by the Registration Statement to be quoted on the OTC Bulletin Board or such
other principal securities market on which securities of the same class or
series issued by the Company are then listed or traded;

       

      (j) provide a
transfer agent and registrar, which may be a single entity, for the shares of
Common Stock at all times;

       

      (k) cooperate
with the Holders of Registrable Securities being offered pursuant to the
Registration Statement to issue and deliver, or cause its transfer agent to
issue and deliver, certificates representing Registrable Securities to be
offered pursuant to the Registration Statement within a reasonable time after
the delivery of certificates representing the Registrable Securities to the
transfer agent or the Company, as applicable, and enable such certificates
to be in such denominations or amounts as the Holders may reasonably request and
registered in such names as the Holders may request;

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      (l) during
the Effectiveness Period, refrain from bidding for or purchasing any Common
Stock or any right to purchase Common Stock or attempting to induce any person
to purchase any such security or right if such bid, purchase or attempt would in
any way limit the right of the Holders to sell Registrable Securities by reason
of the limitations set forth in Regulation M of the Exchange Act;
and

       

      (m) take all
other reasonable actions necessary to expedite and facilitate the disposition by
the Holders of the Registrable Securities pursuant to the Registration Statement
during the term of this Agreement.

       

      5. Suspension of Offers and
Sales.  Each Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
4(f) hereof or of the commencement of a Blackout Period, such Holder shall
discontinue the disposition of Registrable Securities included in the
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(f) hereof or notice
of the end of the Blackout Period, and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company’s expense) all copies
(including, without limitation, any and all drafts), other than permanent file
copies, then in such Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.

       

      6. Registration
Expenses.  The Company shall pay all expenses in connection
with any registration obligation provided herein, including, without limitation,
all registration, filing, stock exchange fees, printing expenses, all fees and
expenses of complying with applicable securities laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided, that,
in any underwritten registration, each party shall pay for its own underwriting
discounts and commissions and transfer taxes. Except as provided in this Section
and Section 9, the Company shall not be responsible for the expenses of any
attorney or other advisor employed by a Holder.

       

      7. Assignment of
Rights.  No Holder may assign its rights under this Agreement
to any party without the prior written consent of the Company; provided, however, that any
Holder may assign its rights under this Agreement without such consent to a
Permitted Assignee as long as (a) such transfer or assignment is effected in
accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement; and (c) such
Holder notifies the Company in writing of such transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
Registrable Securities with respect to which such rights are being transferred
or assigned.

       

      8. Information by
Holder.  Holders included in any registration shall furnish to
the Company such information as the Company may reasonably request in writing
regarding such Holders and the distribution proposed by such Holders including
an updated Selling Shareholder Questionnaire if requested by the
Company.

       

      
        
           

        

        
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      9. Indemnification.

       

      (a) In the
event of the offer and sale of Registrable Securities under the Securities Act,
the Company shall, and hereby does, indemnify and hold harmless, to the fullest
extent permitted by law, each Holder, its directors, officers, partners, each
other person who participates as an underwriter in the offering or sale of such
securities, and each other person, if any, who controls or is under common
control with such Holder or any such underwriter within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, and expenses to which the Holder or any such director,
officer, partner or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any registration statement prepared
and filed by the Company under which Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any omission to state therein a material fact required to be stated or necessary
to make the statements therein in light of the circumstances in which they were
made not misleading, and the Company shall reimburse the Holder, and each such
director, officer, partner, underwriter and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating,
defending or settling any such loss, claim, damage, liability, action or
proceeding; provided, that the
Company shall not be liable in any such case (i) to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement in or omission from
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Holder specifically
for use in the preparation thereof or (ii) if the person asserting any such
loss, claim, damage, liability (or action or proceeding in respect thereof) who
purchased the Registrable Securities that are the subject thereof did not
receive a copy of an amended preliminary prospectus or the final prospectus (or
the final prospectus as amended or supplemented) at or prior to the written
confirmation of the sale of such Registrable Securities to such person because
of the failure of such Holder or underwriter to so provide such amended
preliminary or final prospectus and the untrue statement or omission of a
material fact made in such preliminary prospectus was corrected in the amended
preliminary or final prospectus (or the final prospectus as amended or
supplemented). Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Holders, or any such director,
officer, partner, underwriter or controlling person and shall survive the
transfer of such shares by the Holder.

       

      (b) As a
condition to including Registrable Securities in any registration statement
filed pursuant to this Agreement, each Holder severally, and not jointly, agrees
to be bound by the terms of this Section 9 and to indemnify and hold harmless,
to the fullest extent permitted by law, the Company, each of its directors,
officers, partners, legal counsel and accountants and each underwriter, if any,
and each other person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director or
officer or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon an
untrue statement in or omission from such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
by the Holder specifically for use in the preparation thereof, and such Holder
shall reimburse the Company, and the Company’s directors, officers, partners,
legal counsel and accountants, persons, underwriters, or control persons, each
such director, officer, and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating, defending, or
settling any such loss, claim, damage, liability, action, or proceeding; provided, however, that
indemnity obligation contained in this Section 9(b) shall in no event exceed the
amount of the net proceeds received by such Holder as a result of the sale of
such Holder’s Registrable Securities pursuant to such registration
statement.  Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer by any
Holder of such shares.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      (c) Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in this Section (including
any governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
indemnifying party of the commencement of such action; provided, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Section, except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice.  In case any such action is brought against an
indemnified party, unless in the reasonable judgment of counsel to such
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of
investigation.  Neither an indemnified nor an indemnifying party shall
be liable for any settlement of any action or proceeding effected without its
consent, which consent shall not be unreasonably withheld or
delayed.  No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement, which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.  Notwithstanding
anything to the contrary set forth herein, and without limiting any of the
rights set forth above, in any event any party shall have the right to retain,
at its own expense, counsel with respect to the defense of a claim. Each
indemnified party shall furnish such information regarding itself or the claim
in question as an indemnifying party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      

       

      (d) If an
indemnifying party does or is not permitted to assume the defense of an action
pursuant to Sections 9(c) or in the case of the expense reimbursement obligation
set forth in Sections 9(a) and (b), the indemnification required by Sections
9(a) and 9(b) shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills received or
expenses, losses, damages, or liabilities are incurred.

       

      (e) If the
indemnification provided for in Section 9(a) or 9(b) is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense (i) in such proportion
as is appropriate to reflect the proportionate relative fault of the
indemnifying party on the one hand and the indemnified party on the other
(determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission relates to information supplied
by the indemnifying party or the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission), or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, then in such
proportion as is appropriate to reflect not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent
misrepresentation.

       

      (f) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with an underwritten
public offering are in conflict with the foregoing provisions, the provisions in
the underwriting agreement shall control.

       

      (g) Other
Indemnification.  Indemnification similar to that specified in
this Section (with appropriate modifications) shall be given by the Company and
each Holder of Registrable Securities with respect to any required registration
or other qualification of securities under any federal or state law or
regulation or governmental authority other than the Securities Act.

       

      10. Rule
144.  For a period of at least 24 months following the
Effective Date, the Company will use its commercially reasonable efforts to
timely file all reports required to be filed by the Company after the date
hereof under the Exchange Act and the rules and regulations adopted by the
Commission thereunder, and if the Company is not required to file reports
pursuant to such sections, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell shares of Common Stock under Rule
144.

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      

       

      11. Independent Nature of Each
Purchaser’s Obligations and Rights.  The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser, and each Purchaser shall not be responsible in any way for
the performance of the obligations of any other Purchaser under this Agreement.
Nothing contained herein and no action taken by any Purchaser pursuant hereto,
shall be deemed to constitute such Purchasers as a partnership, an association,
a joint venture, or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

       

      12. Miscellaneous.

       

      (a) Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
United States of America and the State of New York, both substantive and
remedial, without regard to New York conflicts of law principles. Any judicial
proceeding brought against either of the parties to this Agreement or any
dispute arising out of this Agreement or any matter related hereto shall be
brought in the courts of the State of New York, New York County, or in the
United States District Court for the Southern District of New York and, by its
execution and delivery of this Agreement, each party to this Agreement accepts
the jurisdiction of such courts. The foregoing consent to jurisdiction shall not
be deemed to confer rights on any person other than the parties to this
Agreement.

       

      (b) Remedies.  In
the event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement.  The Company
and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall not assert
or shall waive the defense that a remedy at law would be adequate.

       

      (c) Successors and
Assigns.  Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
Permitted Assignees, executors and administrators of the parties
hereto.

       

      (d) No Inconsistent
Agreements.  The Company has not entered, as of the date
hereof, and shall not enter, on or after the date of this Agreement, into any
agreement with respect to its securities that would have the effect of impairing
the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof.

       

      (e) Entire
Agreement.  This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      

       

      (f) Notices, etc. All
notices or other communications which are required or permitted under this
Agreement shall be in writing and sufficient if transmitted by hand delivery, by
facsimile transmission, by registered or certified mail, postage pre-paid, by
electronic mail, or by nationally recognized overnight carrier, to the persons
at the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered (i) if transmitted by
hand delivery, as of the date delivered, (ii) if transmitted by facsimile or
electronic mail, as of the date so transmitted with an automated confirmation of
delivery, (iii) if transmitted by nationally recognized overnight carrier, as of
the Business Day following the date of delivery to the carrier, and (iv) if
transmitted by registered or certified mail, postage pre-paid, on the third
Business Day following posting with the U.S. Postal Service:

       

      If to the
Company to:

      

      WaferGen
Bio-systems, Inc.

      Bayside
Technology Center

       46531
Fremont Blvd.

      Fremont,
CA  94538

      Attention:  Amjad
Huda, CFO

      Facsimile:   (510)
651-4599

      

      with copy to:

      

      Morrison
& Foerster LLP

      425
Market Street

      San
Francisco, CA 94105

      Attention:  John
W. Campbell, Esq.

      Facsimile:  (415)
268-7522

      

      if to a
Purchaser:

      

      to such
Purchaser at the address set forth on the signature page hereto;

      

      or at
such other address as any party shall have furnished to the other parties in
writing.

       

      (g) Delays or
Omissions.  No delay or omission to exercise any right, power
or remedy accruing to any Holder, upon any breach or default of the Company
under this Agreement, shall impair any such right, power or remedy of such
Holder nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of any similar breach or default thereunder
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
Holder of any breach or default under this Agreement, or any waiver on the part
of any Holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      

       

      (h) Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.  In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.

       

      (i) Severability. In the
case any provision of this Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

       

      (j) Amendments. The
provisions of this Agreement may be amended at any time and from time to time,
and particular provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and the Majority Holders.
The Purchasers acknowledge that by the operation of this Section, the Majority
Holders may have the right and power to diminish or eliminate all rights of the
Purchasers under this Agreement.

       

      [SIGNATURE
PAGES FOLLOW]

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      This
Registration Rights Agreement is hereby executed as of the date first above
written.

       

      COMPANY:

       

      WAFERGEN
BIO-SYSTEMS, INC.

      

      

      By:                                                                        

      Name:
Alnoor Shivji

      Title:                   Chief
Executive Officer

       

      

       

      

       

      

       

      [SIGNATURE
PAGE OF PURCHASER FOLLOWS]

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      This
Registration Rights Agreement is hereby executed as of the date first above
written.

       

      PURCHASER
(Individual)

       

      

       

      

      (Print
Name)

      

      

      PURCHASER
(Entity)

       

      By:                                                                           

       

      

      (Print
Name)

      

      

      (Print
Title)

      

      

      Address
for notices:

      

      

      

      

      

      

      City                                      State                         Zip
Code

      

      

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      Annex
A

       

      WAFERGEN
BIO-SYSTEMS, INC.

       

      Selling
Securityholder Notice and Questionnaire

       

      The
undersigned beneficial owner of Registrable Securities of WaferGen Bio-systems,
Inc., a Nevada corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended, of the Registrable Securities, in accordance
with the terms of the Registration Rights Agreement (the “Registration Rights
Agreement”) to which this document is annexed.  A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

       

      Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus.  Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling securityholder in the Registration Statement and
the related prospectus.

       

      NOTICE

       

      The
undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Securities hereby elects to include the
Registrable Securities owned by it in the Registration Statement.

       

      The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

       

      QUESTIONNAIRE

       

      
        	
                 
      

              	
                1.  Name:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Full
      Legal Name of Selling
Securityholder

              

      

       

      
        	 
      
	 
      

      

      

      
        	
                 
      

              	
                (b)

              	
                Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities are
held:

              

      

       

      
        	 
      
	 
      

      

      

      
        	
                 
      

              	
                (c)

              	
                Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by the
questionnaire):

              

      

       

      
        	 
      
	 
      

      

      

       

      
        
          
            sf-2681626

          

           

        

        
          19

          
            

          

        

        
           

        

      

      

       

      
        	
                 
      

              	
                2.  Address
      for Notices to Selling
Securityholder:

              

      

       

      
        	 
      
	 
      
	 
      
	
                Telephone:                                                                   Fax:

              
	
                Email:

              
	
                Contact
      Person:

              

      

      

      
        	
                 
      

              	
                3.  Broker-Dealer
      Status:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Are
      you a broker-dealer?

              

      

       

      Yes                         No   

       

      
        	
                 
      

              	
                (b)

              	
                If
      “yes” to Section 3(a), did you receive your Registrable Securities as
      compensation for investment banking services to the
    Company?

              

      

       

      Yes                         No   

       

      
        	
                Note:

              	
                If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Are
      you an affiliate of a
broker-dealer?

              

      

       

      Yes                         No   

       

      
        	
                 
      

              	
                (d)

              	
                If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable
Securities?

              

      

       

      Yes                         No   

       

      
        	
                Note:

              	
                If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

              

      

       

      4.  Beneficial
Ownership of Securities of the Company Owned by the Selling
Securityholder:

       

      Except
as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the securities
issuable pursuant to the PPO.

       

      
        	
                 
      

              	
                (a)

              	
                Type
      and Amount of other securities (other than the Registrable Securities)
      beneficially owned by the Selling
  Securityholder:

              

      

       

      
        	 
      
	 
      

      

      

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                5.  Relationships
      with the Company:

              

      

       

      Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.

       

      
        	
                 
      

              	
                State
      any exceptions here:

              

      

       

      
        	 
      
	 
      

      

       

      The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.

       

      By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto.  The undersigned understands that
such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

       

      IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Selling Securityholder Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

       

      

      Dated:                                                      Beneficial
Owner:                                                                         

      

      By:                                                                         

      Name:

      Title:

      

      

      

      PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

      

      

      Morrison
& Foerster LLP

      425
Market Street

      San
Francisco, CA 94105

      Attention:  John
M. Rafferty, Esq.

      Facsimile:  (415)
268-7522

      

      

21

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