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...
EXHIBIT
10.3
THIS
PUT OPTION
AGREEMENT (this
“Agreement”)
is entered into as of
May
28,
2008, by and among (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇ (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;
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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:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇
▇.
▇▇▇▇▇▇▇▇ (Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇).
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:
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By:
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇
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▇▇▇▇▇▇
▇▇▇▇▇▇
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Address:
Bayside
Technology Center
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇▇
Facsimile:
▇▇▇ ▇▇▇ ▇▇▇▇
INVESTOR:
Maylaysian
Technology Development Corporation Sdn Bhd
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By: /s/
Dato' ▇▇▇▇▇ b. Alias
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Dato'
▇▇▇▇▇ b.
Alias
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Address:
▇▇▇▇▇
▇-▇, ▇▇▇▇▇▇ Yayasan Tun Razak,
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile:
▇▇-▇▇▇▇ ▇▇▇▇
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