Document:

EXHIBIT
10.60

     

    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
2,666,667 units (the “Units”) and a maximum of
5,333,334 Units of the Company’s securities, plus up to an additional 1,333,333
Units to cover over subscriptions, if any, at the purchase price of $1.50
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 25% of one share of Common
Stock for five (5) years at the exercise price of $2.50 per whole share of
Common Stock; and in the event the PPO is oversubscribed, the Company may, in
its discretion, sell up to 1,333,333 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.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “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.

    
      
         

      

      
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    “Effectiveness
Deadline” means, with respect to the Initial Registration Statement, the
90th day following the filing date 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.

    
      
         

      

      
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    “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.

     

    
      
        
        

      

      
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     “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.

    
      
         

      

      
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    (b)           Penalties.  If:
(i) the Initial Registration Statement is not filed on or prior to its Filing
Deadline, or (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
(any such failure being referred to as an “Event”, and for purposes of
clauses (i) and (ii), the date on which such Event occurs 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.

     

    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:

    
      
         

      

      
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    (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.

    
      
         

      

      
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    (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;

     

    (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.

    
      
         

      

      
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    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.  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.

     

    (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.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (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.

     

    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.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (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.

     

    (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:  Hector
Brush, Principal Financial Officer

    Facsimile:   (510)
651-4599

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    with copy
to:

    

    Morrison
& Foerster LLP

    425
Market Street

    San
Francisco, CA 94105

    Attention:  John
M. Rafferty, 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.

     

    (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.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    [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):

              
	 	 	 
	 	 	 
	 	 	 

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      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:

              
	 	 	 
	 	 	 
	 	 	 

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      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)
268-7522METROPOLITAN
HEALTH NETWORKS, INC.

     

    Non-Qualified Stock Option
Agreement

     

    This
Non-Qualified Stock Option Agreement
certifies that, pursuant to the Metropolitan Health Networks, Inc. (the
“Company”) Omnibus Equity
Compensation Plan (the “Plan”), the Compensation Committee has granted an
option to purchase shares of common stock, par value $.001 per share (the
“Common Stock”) of Metropolitan Health Networks, Inc. as stated
below.  Capitalized terms used herein and not defined shall have the
meaning ascribed to such terms in the Plan.

     

    
    

     

    
      	 	Optionee:  	 	__________________________________________
	 	 	 	 
	 	Address: 	 	__________________________________________
	 	 	 	__________________________________________
	 	 	 	 
	 	Number of
      Shares  	 	_______ shares of
      the Common Stock (the Subject to the Option“Option Shares”)
	 	 	 	 
	 	Option Exercise
      Price: 	 	US$_______ per share
      of Common Stock (the “PerShare Exercise Price”), which is equal to the
      marketprice of the Common Stock at [the end of businesson the day
      preceding the Grant Date][the end of business on __________]
	 	 	 	 
	 	 Grant
      Date:   	 	___________
      ________, 200___ (the “Grant Date”)

    

     

    
      
        	 	METROPOLITAN
      HEALTHNETWORKS, INC.
	 	 
	 Dated:  As
      of _________ ____, 200__  	
                By:___________________________________

                    Michael
      M. Earley

                    Chairman and
      Chief Executive Officer

              
	 	 

      

    

                                                                                

    The
undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof as described in Exhibit A attached
hereto and made a part hereof.  The undersigned hereby acknowledges
receipt of a copy of the Metropolitan Health Networks, Inc. Omnibus Equity Compensation Plan,
a copy of which is attached hereto as Exhibit B, and agrees
to be bound by the terms of such Plan.

    
       

      
        
          	 	OPTIONEE
	 	 
	 Dated:  As
      of _________ ____, 200__  	
                  ___________________________________

                  Name:

                
	 	 

        

      

                            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
A

    

    Terms and conditions of the
Non-Qualified Stock Option Agreement for Directors

    

    1. Grant of
Option.  Metropolitan Health Networks, Inc., a Florida
corporation (the “Company”), hereby grants to the Optionee, as of the Grant Date
an option (the “Option”), pursuant to the Plan, to purchase the Option Shares at
the Per Share Exercise Price, purchasable as set forth in and subject to the
terms and conditions of this Option and the Plan.  Except where the
context otherwise requires, the term “Company” shall include all future
subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time (the
“Code”).

     

    2. Non-Qualified Stock
Option.  The Option shall constitute and be treated at all
times by the Optionee and the Company as a "non-qualified stock option" for U.S.
Federal income tax purposes and shall not constitute and shall not be treated as
an "incentive stock option" as defined under Section 422(b) of the
Code.

     

    3. Exercise of Option and
Provisions for Termination;Vesting
Schedule.  The Option shall [fully vest on the Grant Date][vest
as follows:____% of the Option Shares will vest and become exercisable on the
___ anniversary of the Grant Date, ____% of the Option Shares will vest and
become exercisable on the ___ anniversary of the Grant Date, :____% of the
Option Shares will vest and become exercisable on the ___ anniversary of the
Grant Date, :____% of the Option Shares will vest and become exercisable on the
___ anniversary of the Grant Date].  Except as otherwise provided in
this Agreement, this Option may be exercised at any time during the period (the
“Exercise Period”) [commencing on the Grant Date and terminating on the ten year
(10th)
anniversary of the Grant Date (the “Expiration Date”).]  This Option
may not be exercised at any time on or after the Expiration Date.

     

    (a) Exercise
Procedure.  Subject to the conditions set forth in this
Agreement and the Plan, this Option shall be exercised by the Optionee’s
delivery of written notice of exercise to the General Counsel of the Company,
specifying the number of Option Shares to be purchased and the purchase price to
be paid therefor (the “Purchase Price”).  Such notice must be signed
and dated and be accompanied by payment in full of the Purchase Price in
accordance with Section 4 of this Agreement.  Such exercise shall be
effective upon receipt by the General Counsel of the Company of such written
notice together with the Purchase Price.  The Optionee may purchase
less than the number of Shares covered hereby, provided that no partial exercise
of this Option may be for any fractional Share.

     

    4. Payment of Purchase
Price.  Payment of the Purchase Price for the Shares purchased
upon the exercise of this Option shall be made by delivery to the Company of one
or some combination of the following items of consideration with a value on the
date of exercise equal to the Purchase Price of the subject Shares:

     

    (a) cash;

     

    (b) a
certified check or bank check;

     

    
      
         

      

      
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    (c) a cash
equivalent instrument that is reasonably acceptable to the Company;
or

     

    (d) shares of
Common Stock (provided that the such shares of Common Stock have been held by
the Optionee (or any other person or persons exercising the Option) for at least
six months).

     

    5. Delivery of Option
Shares:  Compliance with Securities Law, Etc.

     

    (a) General.  The
Company shall, upon payment of the option price for the number of Option Shares
purchased and paid for, make prompt delivery of such Option Shares to the
Optionee, provided
that if any law or regulation require the Company to take any action with
respect to such Option Shares before the issuance thereof, then the date of
delivery of such Option Shares shall be extended for the period necessary to
complete such action.

     

    (b) Listing Qualifications,
Securities Law Compliance, Etc.  Notwithstanding anything to
the contrary in this Agreement, no shares of Common Stock purchased upon
exercise of the Option, and no certificate representing such shares, shall be
issued or delivered if (a) such shares have not been admitted to listing upon
official notice of issuance on each stock exchange, if any, upon which shares of
that class are then listed, or (b) in the opinion of counsel to the
Company, such issuance or delivery would (i) cause the Company to be in
violation of or to incur liability under any federal, state or other securities
law, or any other requirement of law or any requirement of any stock exchange
regulations or listing agreement to which the Company is a party, or of any
administrative or regulatory body having jurisdiction over the Company or
(ii) require registration (apart from any registrations as have been
theretofore completed by the Company covering such shares) under any federal,
state, or other securities or similar law.

     

    6. No Special Employment or
Similar Rights.  Nothing contained in the Plan or this Option
shall be construed or deemed by a person under any circumstances to bind the
Company to continue the relationship of the Optionee with the Company for the
period within which this Option may be exercised or otherwise.

     

    7. Rights as a
Shareholder.  The Optionee shall have no rights as a
shareholder with respect to any Option Shares which may be purchased by exercise
of this Option (including, without limitation, any rights to receive dividends
or non-cash distributions with respect to such Option Shares) unless and until a
certificate representing such Option Shares is duly issued and delivered to the
Optionee.  No adjustment shall be made for dividends or other rights
for which the record date is prior to the date such certificate is
issued.

     

    8. Adjustment
Provisions.

     

    (a) General.  If,
through or as a result of any consolidation of shares of Common Stock, merger or
consolidation of the Company or its Subsidiaries or sale or other disposition by
the Company or its Subsidiaries of all or a portion of its assets, any other
change in the Company's or its Subsidiaries' corporate structure, or any
distribution to shareholders other than a cash dividend results in the
outstanding shares of Common Stock, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
shares of Common Stock or other securities of the Company, or for shares of
Common Stock or other securities of any other Company; or new, different or
additional shares or other securities of the Company or of any other Company
being received by the holders of outstanding shares of Common Stock, the
Optionee shall, with respect to this Option or any unexercised portion hereof,
be entitled to the rights and benefits, and be subject to the limitations, set
forth in the Plan.

     

    
      
         

      

      
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    (b) Board Authority to Make
Adjustments.  Any adjustments under this Section 8 will be made
by the Board of Directors and/or the Compensation Committee, whose determination
as to what adjustments, if any, will be made and the extent thereof will be
final, binding and conclusive.  No fractional Shares will be issued
pursuant to this Option on account of any such adjustments.

     

    9. Change of
Control.  In the event of an Acceleration Event (as such term
is defined in the Plan) or upon the occurrence of a Change of Control (as such
term is defined in the Plan) prior to the Expiration Date or termination of this
Option, the Option granted hereunder, to the extent not previously exercisable
and vested, shall become immediately exercisable and fully vested.

     

    10. Withholding
Taxes.  The Company’s obligation to deliver Option Shares upon
the exercise of this Option shall be subject to the Optionee’s satisfaction of
all applicable, federal, state and local income and employment tax withholding
requirements.

     

    11. Financial Restatements Due
to Intentional Misconduct or Gross Negligence.

     

    (a)           In
the event that the disinterested and independent (as determined in accordance
with the NYSE AMEX listing standards) members of the Board of Directors
determine (the “Board Determination”) that the Optionee’s intentional misconduct
or gross negligence directly or indirectly caused or contributed to a
restatement of the Company’s consolidated financial statements due to the
material non-compliance of the Company with any financial reporting requirement
under the U.S. federal securities laws, whether such restatement is required by
law or the Board of Directors determines, in its discretion, such restatement is
necessary or desirable to serve the best interests of the Company, then any
vested and unvested Options then held by the Optionee that were granted during
the three month period prior to or the nine month period following the first
public issuance or filing with the Securities Exchange Commission (whichever
occurs first) of the incorrect financial statements shall be immediately
cancelled and rendered null and void without any payment therefor. In addition,
for any Options that were exercised during the nine month period following the
first public issuance or filing with the Securities Exchange Commission
(whichever occurs first) of the incorrect financial statements (the “Covered
Options”), the Optionee shall be required to repay or otherwise reimburse the
Company, upon demand, an amount in cash or shares of Common Stock having a value
equal to the amount described in clause (i), (ii) or (iii) below, depending on
whether the Optionee still holds the Option Shares acquired upon exercise of the
Covered Options:

     

    (i)           to
the extent that such Option Shares have been sold, the difference between the
aggregate proceeds received from such sale of such Option Shares over the
aggregate Option Exercise Price for such Option Shares,

     

    
      
         

      

      
        - 4
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    (ii)           to
the extent that such Option Shares have been transferred otherwise than for
value (ex. a transfer by gift, a transfer upon death), the difference between:
(x) the greatest of (a) the Fair Market Value (as defined in the Plan) of such
Option Shares on the date the Covered Options were exercised, (b) the Fair
Market Value of such Option Shares on the date the Option Shares underlying the
Covered Options were transferred and (c) the Fair Market Value of such Option
Shares on the date of the Board Determination and (y) the aggregate Option
Exercise Price with respect to such Option Shares; and/or

     

    (iii)           to
the extent that such Option Shares have not been sold or otherwise transferred
at the time the Company demand is made, the difference between: (x) the greater
of (a) the Fair Market Value of such Option Shares on the date the Covered
Options were exercised and (b) the Fair Market Value of such Option Shares on
the date of the Board Determination and (y) the aggregate Option Exercise Price
with respect to such Option Shares.

     

    (b)           This
section does not constitute the Company’s exclusive remedy for the Optionee’s
commission of intentional misconduct or gross negligence.  The Company
may seek any additional legal or equitable remedy, including injunctive relief,
for any such violations. The provisions in this section are essential economic
conditions to the Company’s grant of Options to the Optionee. By receiving the
grant of Options hereunder, the Optionee agrees that the Company may deduct from
any amounts it owes the Optionee from time to time (such as wages or other
compensation, deferred compensation credits, vacation pay, any severance or
other payments owed following a Termination of Employment, as well as any other
amounts owed to the Optionee by the Company) to the extent of any amounts the
Optionee owes the Company under this section. The provisions of this section and
any amounts repayable by the Optionee hereunder are intended to be in addition
to any rights to repayment the Company may have under Section 304 of the
Sarbanes-Oxley Act of 2002 and other applicable law.

     

    12. Representations.  The
Optionee represents, warrants and covenants that:

     

    (a) Any
Option Shares purchased upon the exercise of this Option shall be acquired for
the Optionee’s account for investment only, and not with a view to, or for sale
in connection with, any distribution of the Option Shares in violation of the
Securities Act, or any rule or regulation under the Securities Act.

     

    (b) The
Optionee has had such opportunity as he or she has deemed adequate to obtain
from representatives of the Company such information as is necessary to permit
the Optionee to evaluate the merits and risks of his or her investment in the
Company.

     

    (c) The
Optionee is able to bear the economic risk of holding such Option Shares
acquired pursuant to the exercise of this Option for an indefinite
period.

     

    (d) The
Optionee understands the tax consequences of the granting of the Option, the
acquisition of rights to exercise the Option with respect to any Option Shares,
the exercise, release or other disposal of the Option and purchase of Option
Shares hereunder, and the subsequent sale or other disposition of any Option
Shares acquired hereunder.  In addition, the Optionee understands that
the Company may be required to pay, or account for taxes in respect of any
compensation income, or other income or gain realized by the Optionee upon
exercise of the Option granted hereunder.  To the extent that the
Company is required to pay, account for or withhold any such taxes, then, unless
both the Optionee and the Committee have otherwise agreed upon alternate
arrangements, the Optionee hereby agrees that the Company may deduct from any
payments of any kind otherwise due to the Optionee an amount equal to the total
taxes required to be so paid, accounted for or withheld (as permitted by law),
or if such payments are inadequate to satisfy such taxes, or if no such payments
are due or to become due to the Optionee, then the Optionee agrees to provide
the Company with cash funds or make other arrangements satisfactory to the
Company regarding such payment.  It is understood that all matters
with respect to the total amount of taxes to be withheld in respect of any such
compensation income shall be determined by the Company in its sole
discretion.

     

    
      
         

      

      
        - 5
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    By making
payment upon exercise of this option, the Optionee shall be deemed to have
reaffirmed, as of the date of such payment, the representations made in this
Section 12.

     

    13. Restrictions on Transfer of
Option Shares.

     

    (a) The
Optionee hereby acknowledges and agrees that the Option shall not be
transferable by the Optionee other than by will or by the laws of descent and
distribution, and shall be exercisable during the lifetime of the Optionee only
by him or by his guardian or legal representative.

     

    (b) The
Optionee hereby acknowledges that in connection with any public offering of the
Company’s Common Stock, the underwriters for the Company may require that the
Company's officers, directors, and/or certain other shareholders not sell their
Shares for a certain period of time before or after the effectiveness of any
registration statement of the Company filed in connection with such
offering.  The Optionee hereby agrees that upon the Company's request
in connection with any such public offering, that the Optionee will not,
directly or indirectly, offer, sell, contract to sell, make subject to any
purchase option, or otherwise dispose of any Option Shares for a period
requested by the underwriter or its representative, not to exceed ten (10) days
before and 90 days after the date of the effectiveness of any such registration
statement, without the prior written consent of the underwriter or its
representative.

     

    14. Legends.  All
stock certificates representing Option Shares issued to the Optionee upon
exercise of this Option shall have affixed thereto legends substantially in the
following form, in addition to any other legends required by applicable state
law:

     

    “The
shares of stock represented by this certificate are subject to certain
restrictions on transfer contained in an Option Agreement, a copy of which will
be furnished upon request by the issuer.” 

     

    15. Termination of Service as
Director.  The Option shall lapse and cease to be exercisable
within three months (the “Termination Exercise Period”) following the Optionee’s
termination of service as a director of the Company unless the Optionee is
removed with cause.  The Termination Exercise Period shall be extended
to one year and the Option granted hereunder, to the extent not previously
exercisable and vested, shall become immediately exercisable and fully vested in
accordance with its terms, in the event the Optionee’s service as a director
shall have terminated:

     

    
      
         

      

      
        - 6
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    (a) as a
result of Retirement or Disability; and

     

    (b) as a
result of death, or if death shall have occurred during the Termination Exercise
Period.

     

    Notwithstanding
the foregoing, the Compensation Committee reserves the right to cancel or
suspend the Option granted hereunder if the Optionee is removed with cause or
the Compensation Committee determines that the Optionee is competing or has
competed with the Company as set forth in Sections 3.15 and 14.2 of the
Plan.

    

    16. Effectiveness of the Grant
of the Option.  The grant of the Option by the Company to the
Optionee shall not become effective until the Optionee executes the cover page
of this Agreement and returns this Agreement with the executed cover page to the
Company.  In the event the Optionee fails to execute and return this
Agreement to the Company within one month after the Grant Date, this Agreement
shall immediately terminate in all respects and this Agreement shall immediately
cease to be an operative contract.

     

    17. Plan
Documents.  This Agreement is qualified in its entirety by
reference to the provisions of the Plan, as amended from time to time, which are
hereby incorporated herein by reference.  The interpretation and
construction by the Compensation Committee of the Plan, this Agreement, the
Option granted hereunder, and such rules and regulations as may be adopted by
the Committee for the purpose of administering the Plan, shall be final, binding
and conclusive.  Until the Option shall expire, terminate, or be
exercised in full, the Company shall, upon written request therefor, send a copy
of the Plan, in its then-current form, to the Optionee or any other person or
entity then entitled to exercise the Options.

     

    18. Miscellaneous.

     

    (a) This
Agreement may (except as provided in the Plan) only be amended, altered or
modified by a written instrument signed by the parties hereto, or their
respective successors, and it may not be terminated (except as provided herein
or in the Plan).

     

    (b) All
notices under this Option shall be mailed or delivered by hand to (i) the
Company at the address set forth below, (ii) the Optionee at the address set
forth on the first page of this option, or (iii) at such other address as may be
designated in writing by either of the parties to one another.

     

    If to the
Company:               Metropolitan
Health Networks, Inc.

    250 South Australian Avenue, Suite
400

    West Palm Beach, FL
33401.

    

    If to the
Optionee:                See
address of Optionee on the cover page of this Agreement.

    

    
      
         

      

      
        - 7
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    19. Applicable
Law.  This Option shall be governed by and construed in
accordance with the laws of the State of Florida, but without regard to the
principle of conflict of laws thereof.  If any one or more provisions
of this Agreement shall be found to be illegal or unenforceable in any respect,
the validity and enforceability of the remaining provisions hereof shall not in
any way be affected or impaired thereby.  The parties hereto hereby
submit themselves to the exclusive jurisdiction of the state or Federal courts
located in Palm Beach County, Florida and (a) agree and acknowledge that any
claim, action or pro­ceeding regarding the Company or this Agreement shall
be brought in such courts, and (b) hereby waive any objections to such venue,
including, without limitation, any objections based on such venue being an
inconvenient forum.

     

    20. Entire
Agreement.  This Agreement constitutes the entire agreement
between the Company and the Optionee and supersedes any prior agreements and
understandings, oral or written, between the Company and the Optionee concerning
the subject matter of this Agreement.

     

    21. Construction.  The
section headings contained in this Agreement are for reference only and shall
have no effect on the interpretation of any of the provisions of this
Agreement.

     

    22. Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company and upon the legal
representatives, executors, administrators, heirs, legatees and any permitted
assignee of the Optionee.

     

    

    
      
         

      

      
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    EXHIBIT
B

    

    COMPANY’S
OMNIBUS EQUITY COMPENSATION PLAN

    

    
      	 
      

    

    [See
Attached]

     

     

    
      
         

      

      
        - 9
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