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EXHIBIT 10.3
WAFERGEN BIO-SYSTEMS, INC.
 
PUT OPTION AGREEMENT
 
    THIS PUT OPTION AGREEMENT (this “Agreement”) is entered into as of May
28, 2008, by and among (i) Alnoor Shivji (the “Founder”), the founder and
chairman, chief
executive officer and president of WaferGen Bio-systems, Inc., a Nevada
corporation
(“WaferGen US”), and (ii) Malaysian Technology Development Corporation Sdn Bhd
(the
“Investor”), a purchaser of Series A Redeemable Convertible Preference Shares
(“Series A
Shares”) issued by WaferGen Biosystems (M) Sdn. Bhd. (formerly known as Global
Dupleks
Sdn. Bhd.), a Malaysian corporation (the “Company”), pursuant to that certain
Share
Subscription and Shareholders Agreement dated as of the date hereof (the
“Purchase
Agreement”) between WaferGen US, the Investor and the Company.
 
RECITALS
 
    A.    WHEREAS, the Investor has entered into the Purchase Agreement for the
purchase and subscription of certain Series A Shares of the Company.
 
    B.    WHEREAS, in order to induce the Investor to enter into the Purchase
Agreement,
the Founder has agreed to grant to the Investor an option to put (the “Put
Right”) to the Founder
the Series A Shares purchased by the Investor pursuant to the Purchase Agreement
upon the
occurrence of a Triggering Event, as such term is defined below.
 
    NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties
mutually agree as
follows:
 
AGREEMENT
 
SECTION 1
PUT OPTION
 
    1.1    Grant of Put Option. Upon receipt by the Investor of written notice
by the
Founder of a Triggering Event, the Investor shall have the option (the “Put
Option”) to require
the Founder to purchase from the Investor, subject to the conditions set forth
in this Agreement,
all of the Series A Shares initially purchased by the Investor pursuant to the
Purchase Agreement
or the number of Series A Shares then held by the Investor, whichever is less,
at a per share
purchase price equal to US$2.25 (the “Put Option Price”). In order to exercise
such Put Option,
the Investor must deliver written notice to the Founder of the Investor’s
election to exercise the
Put Option in accordance with Section 1.3 of this Agreement within 15 days of
the date on which
the Investor receives written notice of the Triggering Event from the Founder.
 
    1.2    Notice of Triggering Event. The Founder shall provide the Investor
written notice
of a Triggering Event within seven days of the date on which the Triggering
Event occurs. A
“Triggering Event” shall occur when the Founder sells or transfers, prior to May
15, 2009, in
one or more transactions, greater than 2,185,960 shares of Common Stock of
WaferGen US
(which amount equals approximately 80% of the shares of Common Stock of WaferGen
US
 
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owned by the Founder on the date hereof) to one or more Third Parties (the “Put
Shares”).
“Third Party” means any person or entity other than the Founder’s Affiliates (as
defined
below), or the relatives (by blood or marriage) of the Founder or the Founder’s
Affiliates;
provided, however, that in the event of any transfer or sale of any Put Shares
by the Founder to
the Founder’s Affiliates or the relatives of the Founder or the Founder’s
Affiliates (such person
or entity, a “Transferee”), such Transferee shall agree in writing to be bound
by the terms of this
Agreement with respect to such Put Shares. “Affiliate” means, with respect to a
person or entity,
any other person or entity directly or indirectly controlling, controlled by, or
under common
control with such person or entity.
 
    1.3    Manner of Exercise. The Investor shall exercise the Put Option by
giving an
irrevocable written notice to the Founder, within 15 days of the date on which
the Investor
receives written notice of the Triggering Event from the Founder, that the
Investor elects to
exercise such Put Option upon the terms and subject to the conditions set forth
in this
Agreement.
 
    1.4    Closing and Payment. The closing of the purchase and sale of the Put
Shares
shall occur on the date designated in writing by the Founder to the Investor,
which date shall be
within 120 days following the date upon which the Founder received the written
notice from the
Investor that the Investor was electing to exercise the Put Option. The
aggregate Put Option
Price shall be payable to the Investor by the Founder by wire transfer of
immediately available
funds on the closing date to an account designated in writing by the Investor or
by delivery of a
certified or cashiers’ check by the Founder to the Investor, in each case
against the Founder’s
receipt of the Investor’s share certificates of the Put Shares and share
transfer forms duly
executed by the Investor for the transfer of the Put Shares to the Founder or
any other nominee of
the Founder.
 
    1.5    Rights After Closing. From and after the closing of the purchase of
the Put
Shares by the Founder, all rights of the Investor with respect to the Put Shares
shall cease, and
such shares shall be owned legally and beneficially by the Founder for all
purposes and will be
transferred to the Founder on the books and records of the Company.
 
    1.6    Partial Purchase. The Founder shall not be obligated to purchase the
Put Shares if
the Founder shall be unable to do so without a breach or violation of the
provisions of applicable
law or the certificate of incorporation or bylaws of WaferGen US as in effect on
such date. If the
Founder is unable to purchase all of the Put Shares at one time due to any such
restriction, the
Founder shall purchase such securities as the Founder is able without a breach
or violation of
applicable law or the certificate of incorporation or bylaws of WaferGen US, and
the Founder
shall use reasonable efforts to remove any such limitations upon the Founder’s
ability to effect
such purchase.
 
    1.7    Termination of Put Option Agreement. This Agreement shall terminate
immediately prior to the earlier to occur of the following (the “Put Option
Termination Date”):
 
        (a)    May 15, 2009;
 
        (b)    an IPO (as defined in the Purchase Agreement) of the Company;
 
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        (c)    the sale of all or substantially all of the assets of the Company
or
WaferGen US, or the consolidation or merger of the Company or WaferGen US with
or into any
other business entity pursuant to which shareholders of the Company or WaferGen
US, as
applicable, prior to such consolidation or merger hold less than 50% of the
voting equity of the
surviving or resulting entity;
 
        (d)    the liquidation, dissolution or winding up of the business
operations of the
Company or WaferGen US;
 
        (e)    the execution by the Company or WaferGen US of a general
assignment
for the benefit of creditors or the appointment of a receiver or trustee to take
possession of the
property and assets of the Company or WaferGen US; and
 
      (f)    the termination of the Founder’s employment with WaferGen US by the
board of directors of WaferGen US for any reason.
 
    1.8    No Re-Exercise of Put Right. In the event the Investor fails to
exercise the Put
Option pursuant to the requirements of this Agreement in connection with a
Triggering Event,
the Investor shall not thereafter have the ability to re-exercise such Put
Option to the extent a
subsequent Triggering Event occurs.
 
SECTION 2
MISCELLANEOUS
 
    2.1    Governing Law. This Agreement and all acts and transactions pursuant
hereto
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted
in accordance with the laws of the State of California in the United States of
America, without
giving effect to the choice of law provisions thereof.
 
    2.2    Arbitration. The parties agree that any and all disputes, claims or
controversies
arising out of or relating to this Agreement that are not resolved by their
mutual agreement shall
be submitted to final and binding arbitration in San Francisco, California
before JAMS, or its
successor, pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et
seq. Any party may
commence the arbitration process called for in this agreement by filing a
written demand for
arbitration with JAMS, with a copy to the other party. The arbitration will be
conducted in
accordance with the provisions of JAMS’ Streamlined Arbitration Rules and
Procedures in effect
at the time of filing of the demand for arbitration. The parties will cooperate
with JAMS and
with one another in selecting an arbitrator from JAMS’ panel of neutrals, and in
scheduling the
arbitration proceedings. The parties covenant that they will participate in the
arbitration in good
faith, and that they will share equally in its costs. The provisions of this
Section 2.2 may be
enforced by any court of competent jurisdiction, and the party seeking
enforcement shall be
entitled to an award of all costs, fees and expenses, including attorneys fees,
to be paid by the
party against whom enforcement is ordered.
 
    2.3    Assignment of Put Option. The Put Option granted in this Agreement
may not be
assignable or transferable by the Investor.
 

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    2.4    Successors and Assigns. Except as otherwise provided herein, the
terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as
expressly provided in this Agreement.
 
    2.5    Severability. In 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.
 
    2.6    Amendment and Waiver. Except as otherwise expressly provided, the
obligations
of the Founder and the rights of the Investor under this Agreement may be
amended, modified or
waived only with the written consent of the Founder and the Investor.
 
    2.7    Delays or Omissions. It is agreed that no delay or omission to
exercise any right,
power, or remedy accruing to either party, upon any breach, default or
noncompliance of the
other party under this Agreement, shall impair any such right, power, or remedy,
nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
either party’s
part of any breach, default or noncompliance under the Agreement or any waiver
on either
party’s part 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, by law, or otherwise afforded to either party shall be cumulative and
not alternative.
 
    2.8    Notices. All notices required or permitted hereunder shall be in
writing and shall
be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent
by confirmed telex or facsimile if sent during normal business hours of the
recipient; if not, then
on the next business day, (iii) five (5) days after having been sent by
registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a United States
recognized overnight courier, specifying next-day delivery, with written
verification of receipt.
All communications shall be sent to the party to be notified at the address as
set forth on the
signature pages hereof or at such other address as such party may designate by
ten (10) days’
advance written notice to the other parties hereto. All notices sent to the
Founder shall also be
sent to: Morrison & Foerster LLP, 425 Market Street, San Francisco, CA 94105,
Attention: John
M. Rafferty (Telecopier: (415) 268-7305).
 
    2.9    Attorneys’ Fees. In the event that any dispute among the parties to
this
Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to
recover from the losing party all fees, costs and expenses of enforcing any
right of such
prevailing party under or with respect to this Agreement, including without
limitation, such
reasonable fees and expenses of attorneys and accountants, which shall include,
without
limitation, all fees, costs and expenses of appeals.
 
'    2.10    Titles and Subtitles. The titles of the sections and subsections of
this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.
 
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    2.11    Counterparts. This Agreement may be executed in any number of
counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
 
    2.12    Representation of Financial Sophistication. The Investor represents
that it is an
“accredited investor” within the meaning of Securities and Exchange Commission
Rule 501 of
Regulation D, as presently in effect.
 
    2.13    Transfer Taxes. All excise, transfer, stamp, documentary, filing,
recordation and
other similar taxes which may be imposed or assessed as the result of any
payment related to the
Put Option, together with any interest, additions or penalties with respect
thereto and any interest
in respect of such additions or penalties, shall be borne by the Investor.

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IN WITNESS WHEREOF, the parties hereto have executed this PUT OPTION AGREEMENT
as of the date set forth in the first paragraph hereof.

FOUNDER:

 
 By: /s/ Alnoor Shivji
     
 Alnoor Shivji
     
 
   

Address:
WaferGen Bio-systems, Inc.
Bayside Technology Center
46531 Fremont Blvd.
Fremont, CA 94538, USA
Facsimile: 510 651 4599

INVESTOR:
 
Maylaysian Technology Development Corporation Sdn Bhd

 
 By: /s/ Dato' Azlin b. Alias
     
 Dato' Azlin b. Alias
           

 
 
Address:
Level 8-9, Menara Yayasan Tun Razak,
Jalan Bukit Bintang,
55100 Kuala Lumpur
Facsimile: 03-2163 7570

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