ex10_3.htm


    
      
        

        

      

       

      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

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      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;

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

              (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.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

          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.

      


      
        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

      

       

      
        
          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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