Contents | WaferGen Bio-systems, Inc. | Business Contracts

EX-10.1 2 v165703_ex10-1.htm

EXHIBIT 10.1

Dated 1 July 2009

Between

Wafergen Bio-Systems Inc

and

Kumpulan Modal Perdana Sdn Bhd

and

Wafergen Biosystems (M) Sdn Bhd

Share Subscription
Agreement

Proposed subscription of shares in Wafergen Biosystems (M) Sdn Bhd

Share Subscription Agreement |

Contents

Recitals			1
1	Definitions and Interpretations		2
	1.1	Definitions	2
	1.2	Interpretation	4
2.	Conditions		4
	2.1	Conditions Precedent	4
	2.2	Undertaking by the Company	5
	2.3	Waiver	5
	2.4	Non-fulfillment	5
3.	Share Capital		5
	3.1	Subscription for Preference Shares	5
4.	Subscription Completion Date		6
4A.	Utilisation of Funds		6
5.	Undertakings, Warranties and Representations by the Parties		7
6	Put Options		7
	6.1	Investor’s Put Right for shares in the Existing Shareholder	7
	6.2	Investor’s Put Option for Series B RCPS or Conversion Shares	8
7.	Previous Agreements and Prevalence of Agreement		8
8.	Remedy on an Event of Default		8
9.	Confidentiality		9
10.	Further Assurance		9
	12.1	Rights not affected	10
	12.2	Cumulative rights and remedies	10
	12.3	Variation	10
13.	Severability		10
14.	Continuing Effect		10
15.	Time		10
16.	Legal Relationship		10
17.	Costs and Expenses		11
18.	Assignment; Successors		11
	18.1	Assignment	11
	18.2	Successors and assigns	11
19.	Notices		11
20.	Entire agreement		11
21.	Counterparts		11
22.	Governing Law and Jurisdiction		13
SCHEDULE 1			14
	1.	Subscription Price and par value	14
	2.	Premium	14
	3.	Dividend Provision	14

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	4.	Liquidation Preference	14
	5.	Conversion	14
	6.	[Deleted]	16
	7.	Redemption Rights	16
	8.	Voting Rights	16
	9.	Protective Provisions	16
	10.	No Variation	17
SCHEDULE 2			18
	1.	Representations and Warranties by the Investor	18
	2.	Representations and Warranties by the Existing Shareholder and the Company	18
SCHEDULE 3			20

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Share Subscription Agreement |

This Agreement is made on 1 July 2009 between:

(1)	Wafergen Bio-Systems, Inc (WGBS.OB), a Nevada USA incorporated company with a registered address and place of business at Bayside Technology Center, 46531 Fremont Blvd, Fremont, CA 94538, USA (“Existing Shareholder”);

and

(2)	Kumpulan Modal Perdana Sdn Bhd (Company No. 547734-D), a company incorporated in Malaysia with a registered address at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur (“KMP”);

and

(4)	Wafergen Biosystems (M) Sdn Bhd (Company No 795066-H), a company incorporated in Malaysia with a registered address at Unit C-12-4, Megan Avenue 11, No 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur (“Company”).

Recitals

(A)	The Company is a private company limited by shares incorporated under the laws of Malaysia and has at the date of this Agreement an authorised share capital of RM10,000,000 divided into 8,000,000 ordinary shares of RM1.00 each and 200,000,000 redeemable convertible preference shares of RM0.01 each.

(B)	The Existing Shareholder is the legal and beneficial owner of 300,000 ordinary shares of RM1.00 each in the Company, representing 100% of the issued and paid-up ordinary share capital of the Company.

(C)

The Existing Shareholder, the Company and Malaysian Technology Development Corporation Sdn Bhd (“MTDC”) have entered into a Share Subscription and Shareholders’ Agreement dated 8 May 2008 (“SSSA”) where MTDC agreed to subscribe for 888,888 Series A Redeemable Convertible Preference Shares (“Series A RCPS”) in the Company, pursuant to the terms and conditions in the SSSA.

(D)	MTDC is, as at the date of this Agreement, the legal and beneficial owner of 888,888 Series A RCPS in the Company, representing 100% of the issued and paid up preference share capital of the Company.

(E)

The Existing Shareholder, the Company, Prima Mahawangsa Sdn Bhd (“PMSB”) and Expedient Equity Ventures Sdn Bhd (“EEV”) have entered into a Share Subscription Agreement (“Subscription Agreement”) and Deed of Adherence (“DA”) both dated 3 April 2009 where PMSB agreed to subscribe for 444,444 Series B Redeemable Convertible Preference Shares (“Series B RCPS”) in the Company and EEV agreed to subscribe for 222,222 Series B RCPS, pursuant to the terms and conditions in the Subscription Agreement and Deed of Adherence.

(F)	The Existing Shareholder and the Company intend to raise a further RM1,500,000, in addition to the USD3,500,000 to be raised pursuant to the SSSA and Subscription Agreement.

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Share Subscription Agreement |

(G)	The Existing Shareholder and the Company have requested KMP to, and KMP has agreed to, participate in the Company by way of subscription for the Series B RCPS upon the terms and subject to the conditions set out in this Agreement.

(H)	KMP has entered or will enter into a deed of adherence and has agreed to accede to the relevant terms and conditions of the SSSA and the Share Subscription Agreement effective from the Closing Date.

It is agreed as follows:

1	Definitions and Interpretations

1.1

Definitions

In this Agreement, unless the context otherwise requires:

Act	means the Companies Act 1965;

Articles	means the articles of association of the Company;

Board	means the board of directors of the Company;

Closing	means completion of the subscription by KMP of the Series B Shares in accordance with Clauses 3 and 4;

Closing Date	means within twenty one (21) days from the date of this Agreement or such later date as KMP, the Existing Shareholder and the Company may mutually agree on;

Conversion Shares	means the Shares resulting from the conversion of the RCPS, such Conversion Shares to rank pari passu in all respects with all other then existing Shares, and “Conversion Share” means one of the Conversion Shares;

Deed of Adherence	means the Deed of Adherence dated 3 April 2009 entered into between the Existing Shareholder, the Company, MTDC, PMSB and EEV;

Director	means any director of the Company appointed on the Board including, where applicable, any alternate director;

Encumbrance	means any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention, right of first refusal, pre-emption right, option, preferential right or trust arrangement or other security arrangement or agreement conferring a right to a priority of payment;

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Share Subscription Agreement |

Investor	Means KMP;

Parties	means the Existing Shareholder, the Investor and the Company, and “Party” refers to any one (1) of them;

RCPS	means the Series A RCPS and/or the Series B RCPS;

Series A RCPS	means Series A Redeemable Convertible Preference Shares of the Company with principal terms as set out in Schedule 1 of the SSSA including the amendments as set out in the Deed of Adherence;

Series B RCPS	means Series B Redeemable Convertible Preference Shares of the Company with principal terms as set out in Schedule 1 of this Agreement;

Shares	means ordinary shares of RM1.00 each in the share capital of the Company, and “Share” refers to any one (1) of them;

Subscription Agreement	means the Share Subscription Agreement entered into between the Existing Shareholder, the Company, PMSB and EEV dated 3 April 2009;

Subscription Notice	means the subscription notice to be issued by the Investor to the Company from time to time in accordance with this Agreement in the form as annexed herewith in Schedule 3

Subscription Price	means the RM7.9763, payable by the Investor for each Series B RCPS under this Agreement, out of which RM0.01 is to be paid towards the par value of each Series B RCPS and the difference between the Subscription Price and the par value of RM0.01 (constituting the subscription premium) is to be credited to the share premium account of the Company;

Warranties	means the representations and warranties made by the Investor, the Existing Shareholder and the Company, as set out in Schedule 2; and

USD	means United States Dollar, the lawful currency of the United States of America;

1.2

Interpretation

In this Agreement, unless the context otherwise requires:

(a)

headings and underlining are for convenience only and do not affect the interpretation of this Agreement;

(b)

words importing the singular include the plural and vice versa;

(c)

words importing a gender include any gender;

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Share Subscription Agreement |

(d)

an expression importing a natural person includes any corporation or other body corporate, partnership, association, governmental agency, two or more persons having a joint or common interest, or any other legal or commercial entity or undertaking;

(e)

a reference to a party to a document includes that party's successors and permitted assigns;

(f)

any part of speech or grammatical form of a word or phrase defined in this Agreement has a corresponding meaning; and

(g)

a warranty, representation, covenant or agreement on the part of two or more persons binds them jointly and severally.

2.	Conditions

2.1

Conditions Precedent

2.1.1

The subscription for the Series B RCPS by KMP is subject to, and conditional upon, the fulfilment of the following conditions precedent within 21 days from the date of this Agreement (subject to extension by agreement of KMP, the Existing Shareholder and the Company):

(a)

the approval and agreement of the investment committee of KMP;

(b)

the successful completion of the due diligence exercise and KMP being satisfied with the results of their investigation or due diligence exercise on the Company;

(c)

the Company secretarial forms and documents (including the register of members) having been updated and filed with the relevant authorities or bodies to reflect the change in directorship, shareholder and shareholding in the Company, in accordance with the terms and conditions of this Agreement;

(d)

KMP being satisfied that all internal resolutions regarding the Company and its activities are up to date and in order (where confirmation of satisfaction shall not be unreasonably withheld);

(e)

amendments to the Articles as are necessary to reflect in full the terms of this Agreement;

(f)

statutory declaration signed by the Existing Shareholder;

(g)

confirmation from the Existing Shareholder that there is no outstanding advance from directors or shareholders and any future advance from the Existing Shareholder will be subordinated to the RCPS;

(h)

there being no material adverse change in the financial condition or operations of the Company or the Existing Shareholder; and

(i)

execution of the deed of adherence referred to in Recital H.

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Share Subscription Agreement |

2.2 Undertaking by the Company

Subject to the Closing, the Company undertakes to KMP to carry out the following within 1 year from the Closing Date (subject to extension by agreement with KMP):

(a)

to provide to KMP (as the case may be) a clear arrangement on the ownership of future intellectual property developed by the Company;

(b)

to put in place a comprehensive training programme to transfer the know-how from US experts to the Malaysian team; and

(c)

the Company entering into a research and development agreement or understanding to pursue agrobiotechnology research and development with a reputable Malaysian entity.

2.3 Waiver

To the extent permitted by law, KMP may waive the fulfilment of any condition precedent in Clause 2.1.1 and any undertaking in Clause 2.2.

2.4 Non-fulfillment

Unless specifically waived under Clause 2.3, if the condition precedents in Sub -clauses 2.1.1 are not fulfilled within 21 days after the date of this Agreement (or such later date as the relevant Parties may mutually agree on):

(a)

this Agreement shall automatically cease and terminate;

(b)

all obligations and liabilities of the Parties under this Agreement shall cease to have effect;

(c)

if in relation to the condition precedents in Sub - clauses 2.1.1(a), (b), (d) and (i), KMP shall not have any claim against any other party in relation to this Agreement and KMP shall pay the Existing Shareholder all costs and fees incurred by the Existing Shareholder in relation to the preparation of this Agreement; and

(d)

if in relation to the condition precedents in Sub-clauses 2.1.1(c), (e), (f), (g) and (h), the Existing Shareholder shall not have any claim against any other party in relation to this Agreement and the Existing Shareholder shall pay KMP all costs and fees incurred by KMP in relation to the preparation of this Agreement;

but notwithstanding anything to the contrary in this Clause, a party shall be liable for any antecedent breach of this Agreement and continue to be liable in relation to Clause 9.

3. Share Capital

3.1 Subscription for Preference Shares

3.1.1

Subject to the terms and conditions of this Agreement, KMP shall subscribe in cash amounting to RM1,500,000 for 188,057 Series B RCPS at the Closing Date and the Company will allot and issue 188,057 Series B RCPS to KMP, free from any Encumbrance. The principal terms of the Series B RCPS are set out in Schedule 1.

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Share Subscription Agreement |

3.1.2

The subscription for the Series B RCPS by KMP is not dependant or interconditional on completion or performance of the SSSA and Subscription Agreement.

3.1.3

In respect of the subscription for Series B RCPS under this Agreement, the Company will issue a Subscription Notice to the Investor. The Subscription Notice will specify the number of Series B RCPS to be subscribed by the Investor at the Closing and the Subscription Price.

3.1.4

The Existing Shareholder irrevocably confirms its waiver of all rights of pre-emption whatsoever that it may have in connection with the issue and conversion of the Series B RCPS to the Investor pursuant to the terms of this Agreement.

4. Subscription Completion Date

4.1

Subject to fulfilment or waiver of all conditions precedent in Clause 2.1.1, the completion of the allotment and issue of the Series B RCPS to KMP pursuant to this Agreement shall take place at the registered office of the Company at the Closing Date or such other date and time as may be mutually agreed by the Company and KMP in writing.

4.2

The Investor shall cause or procure a cheque, bank draft or cashier’s order in favour of the Company to be deposited, or a telegraphic or electronic transfer made, to the bank account of the Company held with HSBC Bank Berhad for the total subscription monies payable for the number of Series B RCPS to be subscribed (as set out in the relevant Subscription Notice), in exchange for the delivery by the Company of the following:

(a)

at the Closing Date, the share certificates in respect of the Series B RCPS, a certified extract of the shareholders' resolution of the Company approving the subscription of the Series B RCPS by KMB at the Closing (including amendment of the Articles of the Company where required), pursuant to the terms and subject to the conditions of this Agreement; and

(b)

a certified extract of the resolution of the Board confirming the allotment and issue of the relevant number of the Series B RCPS to be subscribed by the Investor at the Closing, pursuant to the Subscription Notice.

4A.	Utilisation of Funds

The Parties agree that 60% of the total investment raised through the issuance of the Series A RCPS and the Series B RCPS will be utilised for the operations of the Company in Malaysia. The remaining 40% of the total investment raised through the issuance of the Series A RCPS and Series B RCPS shall be utilized in the best interest of the Company.

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Share Subscription Agreement |

5.	Undertakings, Warranties and Representations by the Parties

5.1

Subject to any exceptions expressly and specifically disclosed in any correspondence, communication, document or information in writing prior to or after the execution of this Agreement and prior to the completion of the subscription of the Series B RCPS, the Parties warrant to each other that the information and statements set out in the Warranties are true, accurate and correct in all respects at the date of this Agreement. To this effect, the Warranties will be deemed to be repeated during this period as if they had been entered into afresh during the said period in relation to the facts and circumstances then existing.

5.2	The Parties acknowledge and agree that each of them entered into this Agreement in reliance on the Warranties.

5.3	Each of the Warranties is separate and is to be construed independently of the others and is not limited by reference to any of the other Warranties.

Save as disclosed to the Investor in any correspondence, communication, document or information in writing prior to or after the execution of this Agreement and prior to the completion of this Agreement, no information relating to the Series B RCPS or the Company will limit the nature of the Warranties given by the Company under this Agreement, or will prejudice any claim to be made by the Investor against the Company for any breach of the Warranties.

5.4	Each Party will indemnify and will keep the other Parties indemnified against all losses, damages, costs and expenses which the other Parties may incur or be liable for in respect of any claim, demand, liability, action, proceedings or suits arising out of or in connection with :

(a)

a breach of a Warranty;

(b)

any Warranty not being true and correct in all respects; or

(c)

any Warranty being misleading in any respect,

save and except where any of the matters set out in Clauses 5.1 to 5.3 shall have been apparent in any correspondence, communication, document or information in writing and disclosed or provided to the Investors prior to or after the execution of this Agreement and prior to the completion of this Agreement.

6 Put Options

6.1 Investor’s Put Right for shares in the Existing Shareholder

The Existing Shareholder will grant to the Investor an option to sell all the Series B RCPS held by the Investor to the Existing Shareholder upon the terms and conditions of the Put Agreement to be entered into between the Existing Shareholder and the Investor.

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6.2 Investor’s Put Option for Series B RCPS or Conversion Shares

The Investor shall have the option to require the Existing Shareholder to purchase all (but not less than all) of the Conversion Shares or Series B RCPS held by the Investor, upon thirty (30) days’ notice in writing to the Existing Shareholder. The price payable for each Conversion Share shall be calculated based on the formula for the issue price per Conversion Share set out in paragraph 5 of Schedule 1 of this Agreement whereas the price payable for each Series B RCPS is RM7.9763, such price compounded at the rate of 8% per annum with yearly rests, up to the date of exercise of the option, and at the discretion of the Investor, may be satisfied by either cash or the issuance of shares in the Existing Shareholder. The option shall be exercisable as follows:

(a)

any time after the Closing Date for as long as KMP is the holder of Series B RCPS in the Company, in the event there is a material breach or default by the Company or the Existing Shareholder in any of their representations, warranties, undertakings, covenants and obligations under this Agreement which has not been remedied after 30 days written notice of such material breach or default; or

(b)

any time between 1 January 2011 and 31 December 2011 and subject to the following:

(i)

the share price of the Existing Shareholder’s shares is below USD2.25; or

(ii)

due to any breach or default attributable to the Existing Shareholder, the Investor is unable to exercise its rights under the Put Agreement.

7. Previous Agreements and Prevalence of Agreement

7.1	This Agreement and the documents referred to in its provisions are in substitution for all previous agreements between all or any of the Parties and contain the whole agreement between the Parties relating to the subject matter of this Agreement.

8. Remedy on an Event of Default

8.1	Each of the following will be regarded as an Event of Default:

(a)

either of the Parties committing a breach of its obligations under this Agreement and, in the case of a breach capable of remedy, failing to remedy the same within twenty one (21) days of being specifically required in writing so to do by the other Party; or

(b)

any distress, execution, sequestration or other process being levied or enforced upon or sued out against the property of any of the Parties which is not discharged within ten (10) days; or

(c)

any encumbrancer taking possession of or a receiver or trustee being appointed over the whole or any part of the undertaking, property or assets of any of the Parties; or

(d)

the making of an order or the passing of a resolution for the winding up of any of the Parties, otherwise than for the purpose of a reconstruction or amalgamation without insolvency or previously approved by the other Parties (such approval not to be unreasonably withheld).

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8.2	In the event of an Event of Default taking place prior to the Closing,

(a)

where the Company or the Existing Shareholder is the defaulting Party, KMP shall be entitled to terminate this Agreement;

(b)

where KMP is the defaulting Party, the Company and the Existing Shareholder shall be entitled to terminate this Agreement;

without prejudice to any rights or remedies the non-defaulting Parties may have against the defaulting Party for any antecedent breach.

8.3	Notwithstanding any provision in this Agreement to the contrary, this Agreement shall remain in full force and effect for so long as shall be necessary to fulfil and give effect to the arrangements and undertakings contained in this Agreement.

8.4

Termination of this Agreement for any cause in accordance with the provisions of this Agreement shall not release any Party from any liability which at the time of termination has already accrued to the other or which thereafter may accrue in respect of any act or omission prior to such termination or which has accrued in consequence of this clause.

9. Confidentiality

Parties shall :

(a)

ensure the confidentiality of this Agreement and the transactions contemplated in this Agreement;

(b)

not disclose any provision of this Agreement except :

(i)

where required by law or any relevant governmental regulatory body or competent authority;

(ii)

to any financier or professional adviser acting for the party; or

(iii)

the information is public knowledge otherwise than as a consequence of breach of this Clause.

All public announcements where references are made to the Investor or companies related to the Investor shall only be made with the prior written consent of the Investor (which shall not be unreasonably withheld), irrespective of the jurisdiction in which the announcement is made.

This restriction continues to apply after the expiration or sooner termination of this Agreement without limit in point of time but ceases to apply to information or knowledge which may properly come into the public domain through no fault of the Party so restricted.

10. Further Assurance

Each party shall execute and do all such documents and things as are necessary to carry this Agreement into effect or to give full effect to this Agreement.

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11.

Remedies

If a Party does not comply with its obligations under this Agreement, the other Parties are entitled to the remedy of specific performance and injunctive relief (as may be applicable), and monetary compensation by itself is not an adequate remedy.

12.	Waiver and Variation

12.1

Rights not affected

The rights which each Party has under this Agreement shall not be prejudiced or restricted by any delay in exercising or failure to exercise any right or remedy under this Agreement. Unless otherwise agreed in writing, no waiver by any party in respect of a breach shall operate as a waiver in respect of any subsequent breach.

12.2

Cumulative rights and remedies

The rights and remedies provided in this Agreement are in addition to, and do not exclude or limit, any rights or remedies provided by law or equity.

12.3

Variation

This Agreement shall not be varied unless the variation is expressly agreed in writing by each Party.

13.	Severability

If any provision of this Agreement is void or unenforceable, it shall be regarded as deleted from this Agreement, and the remaining provisions shall continue to apply.

14.	Continuing Effect

Notwithstanding the completion of the transaction contemplated in this Agreement, the provisions of this Agreement shall continue to survive or subsist so long as may be necessary for the purpose of giving effect to each of them.

15.

Time

Time wherever mentioned in this Agreement shall be of the essence of this Agreement.

16.	Legal Relationship

Nothing in this Agreement shall create, or be regarded as creating, a partnership or the relationship of employer and employee between the Parties. Neither Party has any authority to bind the other in any way.

The Parties are all separate legal entities and as such no third parties shall have any claim or recourse against the Company for the liabilities and obligations of the Existing Shareholder to the abovementioned third parties.

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17.	Costs and Expenses

The Parties shall be liable for their own respective costs incurred, as follows:

(a) due diligence costs;

(b) fees for the solicitors’, company secretary, tax advisers and accountants; and

18.	Assignment; Successors

18.1

Assignment

Parties may not assign or otherwise deal with its respective rights or benefits under this Agreement without the prior written consent of the other Parties.

18.2

Successors and assigns

This Agreement shall be binding upon the parties and their respective successors, permitted assigns and personal representatives.

19.

Notices

Without affecting any other effective mode of service, any notice given under this Agreement :

(a)

must be in writing and may be delivered personally or sent by registered post to the intended recipient at the address shown below or the address last notified by the intended recipient to the sender :

For the Investors :

KMP

Level 7, Menara Milenium, Jalan Damanlela,

Pusat Bandar Damansara, Damansara Heights,

50490 Kuala Lumpur

Attn: Dato' Ramli Abbas (Chairman) / Badrul Hisham Jaafar (Assistant Vice President)

Tel: +603 2264 5288

Fax: +603 2264 5388

For the Existing Shareholder:

Wafergen Bio-Systems Inc

Bayside Technology Center,

46531 Fremont Blvd,

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Fremont, CA 94538, USA

Attn : Alnoor Shivji

Tel : +1 ###-###-####

Fax : +1 ###-###-####

For the Company:

Wafergen Biosystems (M) Sdn Bhd

Suite B.3(2), Ground Floor

KHTP Business Centre

KHTP, 09000 Kulim

Kedah Darul Aman, Malaysia

Tel : +6019 ###-###-####

Fax : +604 ###-###-####

Attn: Nazri Said

(b)

must be signed; and

(c)

will be taken to be duly given or made :

(i)

(in the case of delivery in person) when delivered, received or left at the above address; and

(ii)

(in the case of delivery by registered post) 48 hours after posting, and in proving service it shall only be necessary to prove that the communication was contained in an envelop which was duly addressed and posted in accordance with this Clause,

but if delivery, receipt or service occurs, or will be taken to occur, on a day on which business is not generally carried on in the place to which the communication is sent or is later than 4 p.m. (local time) it will be taken to have been duly given or made at the commencement of business on the next day on which business is generally carried on in the place.

20.	Entire agreement

This Agreement is the entire agreement between the Parties in respect of its subject matter and supersedes all previous agreements with respect to its subject matter.

21.	Counterparts

This Agreement may be executed in any number of counterparts, and all counterparts taken together constitute one and the same instrument.

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22.	Governing Law and Jurisdiction

This Agreement is governed by the laws of Malaysia, and each party submits to the non-exclusive jurisdiction of the courts exercising jurisdiction in Malaysia.

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SCHEDULE 1

Principal Terms of the Series B RCPS

1.	Subscription Price and par value

The subscription price for each Series B RCPS shall be Ringgit Malaysia equivalent to USD2.25 calculated at the prevailing exchange rate on the date of payment of the Subscription Price is effected. Each Series B RCPS shall have a par value of RM0.01.

2.	Premium

Each Series B RCPS shall be issued at a premium being the difference between the Subscription Price and the par value of RM0.01.

3.	Dividend Provision

There is no specific dividend rate attached to the Series B RCPS and the Company is not obliged to declare and pay any dividend while the Investors are holding the Series B RCPS.

4.	Liquidation Preference

In the event of any liquidation, dissolution or winding up of the Company, the holders of the Series B RCPS will be entitled to receive only in preference to the holders of Shares, and not the Series A RCPS (which rank pari passu for the purposes of this provision), the relevant Subscription Price paid for the Series B RCPS plus all accrued but unpaid dividends and dividends in arrears, if any.

5.	Conversion

Each holder of the Series B RCPS will have the right, at the option of the holder at any time, to convert all or part of the Series B RCPS into such number of Shares as may be determined in accordance with the following formula:

represents the aggregate original investment amount in USD (comprising the subscription moneys paid to the Company for subscription for RCPS) of the holder in the Company

represents the aggregate original investment amount in USD (comprising the subscription moneys paid to the Company for subscription for RCPS) of all other holders (past and present) of RCPS in the Company

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The conversion is to be effected by and subject to the redemption of the Series B RCPS from funds legally available for distribution at the redemption price of USD2.25 per Series B RCPS and the issuance of such number of new Shares to the holder with the issue price based on the following formula:

Issue price per Share = A

and applying the redemption monies towards such issue price.

PROVIDED THAT

(i)

where N includes any fractions, N is to be rounded downwards to the nearest whole number

(ii)

where the number of new Shares to be issued includes any fractions, such number of new Shares is to be rounded downwards to the nearest whole number

(iii)

where the issue price includes any fractions of sen, the issue price is to be rounded downwards to the nearest sen

For the purposes of this provision:

(a)

the amount in USD of the investment amount is based on the value in USD of the subscription moneys as at the respective date(s) of the relevant subscription(s).

(b)

for the avoidance of doubt, where any RCPS has been held by more than one holder, such RCPS and investment amount in relation to the RCPS, is to be counted only once.

To effect the above conversion, a conversion notice shall be sent by the holder(s) of the Series B RCPS to the Company not less than thirty (30) days before the intended date of conversion. Such notice shall be in writing and shall fix the date and the time for the conversion.

The Company may from time to time consult with, and make proposals to, the holder(s) of Series B RCPS in relation to the exercise of the holder(s)’ entitlement to convert the Series B RCPS.

Completion of the conversion of the Series B RCPS into Conversion Shares shall be effected at the registered office of the Company unless agreed otherwise by the holder(s) of the Series B RCPS and the Company. On the date fixed for conversion, the holder(s) of the Series B RCPS shall deliver to the Company the share certificate(s) for the relevant Series B RCPS in exchange for share certificates in relation to the relevant amount of Conversion Shares resulting from the conversion of those Series B RCPS. If any share certificate so delivered to the Company relates to any Series B RCPS which are not to be converted on that day, a fresh share certificate for those Series B RCPS shall be immediately issued by the Company to such holder(s).

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6.	[Deleted]

7.	Redemption Rights

The holders of the Series B RCPS may at any time after 31 December 2011, subject to the completion of the PMSB Subsequent Closing or EEV Subsequent Closing (where relevant), by giving a thirty (30) day notice of redemption in such form as may be acceptable to the Company (“Notice of Redemption”), redeem any or all Series B RCPS registered in the name of the holder of the Series B RCPS. The RCPS will be redeemable from funds legally available for distribution at the redemption price (“Redemption Price”) which comprises a par value of RM0.01 with redemption premium equivalent to the difference between (i) the aggregate of the Subscription Price and such price multiplied at the rate of 20% per annum prorated by day, up to the date of the redemption based on a 365-days year (and without any compounding or addition to the principal Subscription Price) and (ii) the par value of RM0.01 per Series B RCPS plus all accrued but unpaid dividends and dividends in arrears, if any.

All redemption of the Series B RCPS shall be effected at the registered office of the Company unless agreed otherwise by the holder(s) of the Series B RCPS and the Company. On the date fixed for redemption, the holder(s) of the Series B RCPS shall deliver to the Company the share certificate(s) for the relevant Series B RCPS in exchange for payment in cash (by way of bank draft or any other manner acceptable to the holder(s)) by the Company of the aggregate Redemption Price for the time being payable for those Series B RCPS. If any share certificate so delivered to the Company relates to any Series B RCPS which are not to be redeemed on that day, a fresh share certificate for those Series B RCPS shall be issued by the Company to such holder(s).

No Series B RCPS redeemed by the Company shall be capable of reissue.

8.	Voting Rights

The holder of the RCPS will be entitled to the voting rights as referred to in Section 148(2) of the Act.

9.	Protective Provisions

Without the approval of the holders of at least a majority of the Series B RCPS, the Company will not take any action, whether by merger, consolidation or otherwise, that:

(a)

effects a sale, lease, license or other disposition of all or substantially all of the Company’s assets, property or business or undertakings in excess of RM250,000.00;

(b)

effects or enters into any agreement regarding any transaction, or series of transactions, which results in the holders of the Series B RCPS prior to the transaction owning less than 50% of the voting power of the Company’s Series B RCPS after the transaction(s),

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(c)

alters or changes the rights, preferences or privileges of the Series B RCPS,

(d)

increases or decreases the number of authorized Series B RCPS,

(e)

authorises the issuance of securities having a preference over or on a parity with the Series B RCPS,

(f)

changes the number of directors,

(g)

amends, modifies or repeals the Memorandum of Association and/or Articles of the Company in a manner which adversely affects the holders of the Series B RCPS,

(h)

effects any recapitalization or reorganization, or any voluntary or involuntary liquidation under applicable bankruptcy or reorganization legislation, or any dissolution, liquidation, or winding up of the Company,

(i)

declares or pays dividends on or makes any distributions with respect to any share capital of the Company.

For purposes of these protective provisions, any reference to the Company will be deemed to include any subsidiary of the Company.

10.

No Variation

The rights attached to the Series B RCPS shall not be varied, modified or deleted unless in accordance with paragraph 9 above.

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Share Subscription Agreement |

SCHEDULE 2

Representations and Warranties

1.	Representations and Warranties by the Investor

The Investor warrants to the Company and the Existing Shareholder as follows.

1.1

Capacity and Authority

The Investor is duly incorporated and validly exists under the laws of Malaysia and has the power to own its assets and carry on its business as now being conducted.

1.2

Power to execute this Agreement

(a)

The Investor has the right, power and authority, and has taken or will take all action necessary, to validly execute, deliver and exercise its rights and perform its obligation under this Agreement;

(b)

Other than those set out in this Agreement, no other consent, approval, authorization or other order of any court, regulatory body, administrative agency or other order of any other governmental body is required for the execution and delivery by the Investor of this Agreement or the performance by the Investor of the transactions contemplated under this Agreement;

(c)

This Agreement is a valid and binding obligation of the Investor and is enforceable against the Investor in accordance with its terms;

(d)

The execution, delivery and performance of this Agreement will not violate any judgment, order or decree to which the Investor is subject and will not be inconsistent with any constitutional documents or contracts to which the Investor is a party to or otherwise binding on the Investor; and

(e)

There is no action, proceeding, claim or investigation pending against the Investor before any court or administrative authority, which, if determined against the Investor, may reasonably be expected to have a material adverse effect on the Investor’s ability to perform the obligations hereunder.

2.	Representations and Warranties by the Existing Shareholder and the Company

The Existing Shareholder and the Company warrant to the Investors as follows.

2.1

Capacity and Authority

The Company is duly incorporated and validly exists under the laws of Malaysia and has the power to own its assets and carry on the Business.

2.2

Power to execute this Agreement

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(a)

The Existing Shareholder and Company have the right, power and authority, and have taken or will take all action necessary, to validly execute, deliver and exercise their rights, and perform their obligations under this Agreement;

(b)

Other than those set out in this Agreement, no other consent, approval, authorization or other order of any court, regulatory body, administrative agency or other order of any other governmental body is required for the execution and delivery by the Existing Shareholder and the Company of this Agreement or the performance by the Existing Shareholder and the Company of the transactions contemplated under this Agreement;

(c)

This Agreement is a valid and binding obligation of the Existing Shareholder and the Company and after fulfillment of the conditions precedent is enforceable against the Existing Shareholder and the Company in accordance with its terms;

(d)

The execution, delivery and performance of this Agreement will not violate any judgment, order or decree to which the Existing Shareholder and the Company is subject and save as otherwise disclosed, will not be inconsistent with any constitutional documents or contracts to which the Existing Shareholder and/or the Company is a party to or otherwise binding on the Existing Shareholder and/or the Company; and

(e)

There is no action, proceeding, claim or investigation pending against the Existing Shareholder and/or the Company before any court or administrative authority, which, if determined against the Existing Shareholder and/or the Company, may reasonably be expected to have a material adverse effect on the Existing Shareholder and the Company’s ability to perform the obligations hereunder.

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Share Subscription Agreement |

SCHEDULE 3

Subscription Notice

From : Wafergen Biosystems (M) Sdn Bhd

To : Kumpulan Modal Perdana

SHARE SUBSCRIPTION AGREEMENT DATED ** (“Subscription Agreement”)

We refer to the Subscription Agreement made between yourselves, the Existing Shareholder, and us. Terms defined in the Subscription Agreement have the same meanings when used in this notice.

We hereby give you notice, in accordance with the terms and conditions of the Subscription Agreement, of your required subscription for 188,057 of the Series B RCPS at a total Subscription Price of RM1,500,000, such subscription to be completed on [date] at [time], being the Closing Date.

Dated :

Yours faithfully

For and on behalf of

Wafergen Biosystems (M) Sdn Bhd

By:

Name:

Title:

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Execution

Executed as an Agreement.

Signed for and on behalf of WaferGen Bio-systems, Inc (WGBS.OB) in the presence of:

Witness		Signatory
Name:		Name:
NRIC No:		Designation:
		NRIC No:

Signed for and on behalf of Wafergen Biosystems (M) Sdn Bhd (Company No 795066-H) in the presence of:

Witness		Signatory
Name:		Name:
NRIC No:		Designation:
		NRIC No:

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Share Subscription Agreement |

Signed for and on behalf of Kumpulan Modal Perdana Sdn Bhd (Company No 547734-D) in the presence of:

Witness		Signatory
Name:		Name:
NRIC No:		Designation:
		NRIC No:

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