Exhibit 10.6

FORM OF

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
effective as of                  , 2016, among Valeritas Holdings, Inc.
(formerly known as Cleaner Yoga Mat, Inc.), a Delaware corporation (the
“Company”), each of the persons who have purchased the Offering Shares (as
defined below) and have executed omnibus or counterpart signature page(s) hereto
(each, a “Purchaser” and collectively, the “Purchasers”), the persons or
entities identified on Schedule 1 hereto holding Placement Agent Warrants (as
defined below) (collectively, the “Placement Agent Holders”), the persons or
entities identified on Schedule 2 hereto holding Merger Shares (as defined
below) and the persons or entities identified on Schedule 3 hereto holding
Registrable Pre-Merger Shares (as defined below).

RECITALS:

WHEREAS, the Company has offered and sold in compliance with Rule 506 of
Regulation D promulgated under the Securities Act to accredited investors in a
private placement offering (the “Offering”) shares of the common stock of the
Company, par value [$0.001] per share, pursuant to that certain Subscription
Agreement entered into by and between the Company and each of the subscribers
for the Offering Shares set forth on the signature pages affixed thereto (the
“Subscription Agreement”);

WHEREAS, the Company has agreed to enter into a registration rights agreement
with each of the Purchasers in the Offering who purchased the Offering Shares
(as defined below) and with the Placement Agent Holders who hold Placement Agent
Warrants and certain other investors; and

WHEREAS, simultaneously with the Initial Closing of the Offering, a wholly-owned
subsidiary of the Company will merge with and into Valeritas, Inc., a Delaware
corporation (“Valeritas”) (the “Merger”);

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 OTC Markets Group, the Nasdaq Stock Market, the New
York Stock Exchange or the NYSE MKT.

“Blackout Period” means, with respect to a registration, a period 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, or the filing of an amendment
to such registration statement in the circumstances described in Section 4(g),
would be seriously detrimental to the Company and its stockholders, in each case
commencing on the day the Company notifies the Holders that they are required,
because of the determination described above, to suspend offers and sales of
Registrable Securities and ending on the earlier of (1) the date upon which the
material non-public information resulting in 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.

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“Business Day” means any day of the year, other than a Saturday, Sunday, or
other day on which banks in the State of New York are 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.

“Effective Date” means the date of the final closing of the Offering.

“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.

“Holder” means the holder or holders, as the case may be, from time to time of
Registrable Securities and any Permitted Assignees who acquire rights in
accordance with this Agreement with respect to any Registrable Securities.

“Majority Holders” means, at any time, Holders of a majority of the Registrable
Securities then outstanding.

“Merger Shares” means the shares of Common Stock issued in exchange for all of
the capital stock of Valeritas that are outstanding immediately prior to the
closing of the Merger.

“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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“Piggyback Registration” means, in any registration of Common Stock referenced
in Section 3(b), the right of each Holder to include the Registrable Securities
of such Holder in such registration.

“Placement Agents” shall have the meaning set forth in the Subscription
Agreement.

“Placement Agent Warrants” shall have the meaning set forth in the Subscription
Agreement.

“Offering Shares” means the shares of Common Stock issued to the Purchasers
pursuant to the Subscription Agreement (including any Shares of Common Stock
issued pursuant to Section 22 of the Subscription Agreement) and any shares of
Common Stock issued or issuable with respect to such shares upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing.

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 by the Commission.

“Registrable Pre-Merger Shares” means all shares of Common Stock of the Company
held by any person who was a shareholder of the Company and beneficially owned
10% or more of the Company’s outstanding Common Stock at any time prior to the
Merger.

“Registrable Pre-Merger Stockholder” means a person holding Registrable
Pre-Merger Shares.

“Registrable Securities” means (a) the Offering Shares, (b) the shares of Common
Stock issuable upon exercise of the Placement Agent Warrants, (c) the Merger
Shares, and (d) if any, the Registrable Pre-Merger Shares; provided, however,
that any such Registrable Securities shall cease to be Registrable Securities on
the date that is two (2) years from the date the Registration Statement with
respect to the sale of such Registrable Securities is declared effective by the
Commission under the Securities Act or such shorter period ending on the earlier
of the date on which (i) such Registrable Securities have been disposed of by
the Holder in accordance with such Registration Statement, or (ii) all
Registrable Securities held by such Holder may be sold under Rule 144 without
restriction (including, without limitation, volume restrictions and
manner-of-sale) and without the need for current public information required by
Rule 144(c)(1) or rule 144(i)(2).

“Registration Effectiveness Date” means the date that is one hundred and twenty
(120) calendar days after the Effective Date.

“Registration Event” means the occurrence of any of the following events:

(a) the Company fails to file with the Commission the Registration Statement on
or before the Registration Filing Date;

(b) the Registration Statement is not declared effective by the Commission on or
before the Registration Effectiveness Date;

(c) after the SEC Effective Date, the Registration Statement ceases for any
reason to remain continuously effective or the Holders are otherwise not
permitted to utilize the prospectus therein to resell the Registrable Securities
(including a Blackout Period) for a period of more than fifteen (15) consecutive
Trading Days;

 

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(d) the Registrable Securities, if issued, are not listed or included for
quotation on an Approved Market, or trading of the Common Stock is suspended or
halted on the Approved Market, which at the time constitutes the principal
market for the Common Stock, for more than three (3) consecutive Trading Days;
or

(e) the Company does not comply with the information requirements of Rule 144,
so long as the Offering Shares and the Merger Shares are subject to such rule.

“Registration Filing Date” means the date that is sixty (60) calendar days after
the Effective Date.

“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.

“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.

“Trading Day” means any day on which such national securities exchange, the OTC
Markets Group 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.

Capitalized terms used herein without definition have the meanings ascribed to
them in the Subscription Agreement.

2. Term. The registration rights provided to the Holders of Registrable
Securities hereunder, and the Company’s obligation to keep the Registration
Statements effective, shall terminate at the end of the Effectiveness Period
hereinafter defined. Notwithstanding the foregoing, Section 3(d), Section 6,
Section 8, Section 9 and Section 11 shall survive the termination of this
Agreement.

3. Registration.

(a) Registration on Form S-1. The Company shall file with the Commission a
Registration Statement covering the resale of all the Registrable Securities
that are not then registered on an existing and effective Registrable Statement
for an offering to be made on a continuous basis pursuant to Rule 415, 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
resale by the Holders of all

 

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of the Registrable Securities, and the Company shall (i) use its commercially
reasonable efforts to make the initial filing of the Registration Statement no
later than the Registration Filing Date, (ii) use its commercially reasonable
efforts to cause such Registration Statement to be declared effective no later
than the Registration Effectiveness Date or if earlier, the date that is five
(5) Trading Days following the date on which the Company has been notified by
the Commission that the Commission has completed its review of such Registration
Statement or that such Registration Statement will not be reviewed and (iii) use
its commercially reasonable efforts to keep such Registration Statement
effective until the date on which all securities under such Registration
Statement have ceased to be Registrable Securities (the “Effectiveness Period”).
The Registration Statement filed hereunder shall contain (except if otherwise
required pursuant to written comments received from the Commission upon a review
of such Registration Statement) that “Plan of Distribution” in substantially the
form attached hereto as Annex B. Notwithstanding the foregoing, in the event
that the staff (the “Staff”) of the Commission should limit the number of
Registrable Securities that may be sold pursuant to the Registration Statement,
the Company may remove from the Registration Statement such number of
Registrable Securities as specified by the Commission on behalf of all of the
holders of Registrable Securities first from the shares of Common Stock issuable
upon exercise of the Placement Agent Warrants, on a pro-rata basis among the
holders thereof (and on an as-exercised basis with respect to any Placement
Agent Warrants not then exercised), and second, from the other Registrable
Securities, on a pro rata basis among the holders thereof. In such event, the
Company shall give the Purchasers prompt notice of the number of Registrable
Securities excluded therefrom. No liquidated damages shall accrue or be payable
to any Holder pursuant to Section 3(d) with respect to any Registrable
Securities that are excluded by reason of the foregoing sentence.

(b) Piggyback Registration. 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 (i) 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 its then
equivalent form) or any of their Family Members (including a registration on
Form S-8 (or its then equivalent form)), (ii) a registration relating solely to
a Securities Act Rule 145 transaction or a registration on Form S-4 (or its then
equivalent form) in connection with a merger, acquisition, divestiture,
reorganization or similar event, or (iii) a transaction relating solely to the
sale of debt or convertible debt instruments, then the Company shall promptly
give to each Holder written notice thereof (the “Registration Rights Notice”)
(and in no event shall such notice be given less than twenty (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 (including any Registrable Securities that are removed from the
Registration Statement as a result of a requirement by the Staff), other than
the Merger Shares (for which there are no piggyback registration rights
hereunder), specified in a written request delivered by the Holder thereof
within ten (10) calendar days after delivery to the Holder of such written
notice from the Company. However, the Company may, without the consent of such
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. The
Holders acknowledge and agree that the stockholders of the Company prior to the
consummation of the Merger and Offering (the “Pre-Merger Stockholders”) shall
have “piggyback” registration rights identical to the foregoing for inclusion in
any such registration together with the Holders.

(c) Underwriting. For purposes of this subsection (c), the term “Holders” shall
include the Pre-Merger Stockholders but exclude the holders of the Merger
Shares. 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 as part
of the Registration Rights Notice. 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.

 

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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 3(c), 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 persons exercising piggyback registration
rights (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, 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 to the
extent of their demand registration rights, subject to obligations and
commitments existing as of the date hereof, to all persons exercising piggyback
registration rights (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 then, subject to obligations and commitments existing
as of the date hereof, to the Company.

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.

(d) Liquidated Damages. If a Registration Event occurs, then the Company will
make payments to each Holder of Registrable Securities, as liquidated damages to
such Holder by reason of the Registration Event, a cash sum calculated at a rate
of twelve percent (12%) per annum of the aggregate purchase price paid by such
Holder pursuant to the Subscription Agreement or upon exercise of Placement
Agent Warrants (or in the case of unexercised Placement Agent Warrants, of the
exercise price thereof) with respect to such Holder’s Registrable Securities
that are affected by such Registration Event, for the period during which such
Registration Event continues to affect such Registrable Securities (the
“Registration Default Period”). Notwithstanding the foregoing, the maximum
amount of liquidated damages that may be paid by the Company pursuant to this
Section 3(d) shall be an amount equal to five percent (5%) of the applicable
foregoing aggregate purchase price with respect to such Holder’s

 

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Registrable Securities that are affected by all Registration Events in the
aggregate. Each payment of liquidated damages pursuant to this Section 3(d)
shall be due and payable in arrears within five (5) days after the end of each
full 30-day period of the Registration Default Period until the termination of
the Registration Default Period and within five (5) days after such
termination. The Registration Default Period shall terminate upon the earlier of
such time as the Registrable Securities that are affected by the Registration
Event cease to be Registrable Securities or (i) the filing of the Registration
Statement in the case of clause (a) of the definition of Registration Event,
(ii) the SEC Effective Date in the case of clause (b) of the definition of
Registration Event, (iii) the ability of the Holders to effect sales pursuant to
the Registration Statement in the case of clause (c) of the definition of
Registration Event, and (iv) the listing or inclusion and/or trading of the
Common Stock on an Approved Market, as the case may be, in the case of clause
(d) of the definition of Registration Event. The amounts payable as liquidated
damages pursuant to this Section 3(d) shall be payable in cash in lawful money
of the United States. Notwithstanding the foregoing, the Company will not be
liable for the payment of liquidated damages described in this Section 3(d) for
any delay in registration of Registrable Securities that would otherwise be
includable in the Registration Statement solely as a result of a comment
received by the Staff requiring a limit on the number of Registrable Securities
included in such Registration Statement in order for such Registration Statement
to be able to avail itself of Rule 415 (a “Cutback Comment”). In the event of
any such Cutback Comment, the Company will use its commercially reasonable
efforts at the first opportunity that is permitted by the Commission to register
for resale the Registrable Securities that have been cut back from being
registered pursuant to Cutback Comment only with respect to that portion of the
Holders’ Registrable Securities that are then Registrable Securities.

(e) Other Limitations. Notwithstanding the provisions of Section 3(d) above, if
(i) the Commission does not declare the Registration Statement effective on or
before the Registration Effectiveness Date, or (ii) the Commission allows the
Registration Statement to be declared effective at any time before or after the
Registration Effectiveness Date, subject to the withdrawal of certain
Registrable Securities from the Registration Statement, and the reason for (i)
or (ii) is the Commission’s determination that (x) the offering of any of the
Registrable Securities constitutes a primary offering of securities by the
Company, (y) Rule 415 may not be relied upon for the registration of the resale
of any or all of the Registrable Securities, and/or (z) a Holder of any
Registrable Securities must be named as an underwriter, the Holders understand
and agree that in the case of (ii) the Company may (notwithstanding anything to
the contrary contained herein) reduce, on a pro rata basis, the total number of
Registrable Securities to be registered on behalf of each such Holder, and in
the case of (i) or (ii) the Holder shall not be entitled to liquidated damages
with respect to the Registrable Securities not registered for the reason set
forth in (i) or so reduced on a pro rata basis as set forth above.

(f) Other Registrations. Until the Registration Statement required hereunder is
declared effective by the Commission, the Company shall not take any action to
facilitate registration under the Securities Act or enter into any agreement
granting any registration rights with respect to any of its securities to any
Person without the written consent of Holders representing no less than a
majority of the then outstanding Registrable Securities.

4. Registration Procedures. 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:

(a) prepare and file with the Commission with respect to the Registrable
Securities, a Registration Statement in accordance with Section 3(a) hereof, and
use its commercially reasonable efforts to cause such Registration Statement to
become effective and to remain effective for the Effectiveness Period;

 

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(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) not less than five (5) Trading Days prior to filing a Registration Statement
or any related prospectus or any amendment or supplement thereto, the Company
shall furnish to the Holders copies of all such documents proposed to be filed
(other than those incorporated by reference) and duly consider any comments
received by the Holders;

(e) 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 reasonably require to
consummate the disposition of the Registrable Securities owned by such Holder,
but only during the Effectiveness Period;

(f) use its commercially reasonable efforts to register or qualify such
registration under such other applicable securities laws of such jurisdictions
within the United States 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 other than to the extent relating to the
registration or sale of securities in such jurisdiction;

(g) 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 (and
for the avoidance of doubt, the Company will not provide the Holders with any
material non-public information);

 

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(h) 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;

(i) 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;

(j) use its commercially reasonable efforts to cause all the Registrable
Securities covered by the Registration Statement to be quoted on the OTC Markets
Group or such other principal securities market or quotation system on which
securities of the same class or series issued by the Company are then listed or
traded or quoted;

(k) provide a transfer agent and registrar, which may be a single entity, for
the shares of Common Stock at all times and cooperate with the Holders to
facilitate the timely preparation and delivery of the Registrable Securities to
be delivered to a transferee pursuant to the Registration Statement (whether
electronically or in certificated form) which Registrable Securities shall be
free, to the extent permitted by the Subscription Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request;

(l) 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;

(m) notify the Holders or the Placement Agents and their counsel as promptly as
reasonably possible and (if requested by any such Person) confirm such notice in
writing no later than one (1) Trading Day following the day: (i)(A) when a
Prospectus or any prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a “no review,” “review” or a “completion of a
review” of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (in which case the Company shall provide
true and complete copies thereof and all written responses thereto to each of
the Holders that pertain to the Holders as a selling stockholder or to the Plan
of Distribution, but not information which the Company believes would constitute
material and non-public information); and (C) with respect to each Registration
Statement or any post-effective amendment, when the same has been declared
effective, provided, however, that such notice under this clause (C) shall be
delivered to each Holder; (ii) of any request by the Commission or any other
federal or state governmental authority for amendments or supplements to a
Registration Statement or prospectus or for additional information that pertains
to the Holders as selling stockholders or the Plan of Distribution; or (iii) of
the receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose;

(n) 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

(o) take all other commercially reasonable actions necessary to enable,
expedite, or facilitate the Holders to dispose the Registrable Securities by
means of the Registration Statement during the term of this Agreement.

 

9

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5. Obligations of the Holders.

(a) 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(g) 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(g) hereof or notice of the end of the Blackout Period.

(b) Each Holder agrees, by acquisition of the Registrable Securities, that no
Holder shall be entitled to sell any of such Registrable Securities pursuant to
a Registration Statement or to receive a prospectus relating thereto, unless
such Holder has furnished the Company with all material information required to
be set forth in the Selling Securityholder Questionnaire attached to this
Agreement as Annex A. Any sale of any Registrable Securities by any Holder shall
constitute a representation and warranty by such Holder pursuant to a
Registration Statement that such prospectus does not as of the time of such sale
contain any untrue statement of a material fact regarding such Holder or omit to
state any material fact regarding such Holder necessary to make the statements
in such prospectus, in the light of the circumstances under which they were
made, not misleading, solely to the extent such facts are based upon, and in
conformity with, the information regarding such Holder furnished in writing to
the Company by such Holder expressly for use in such prospectus.

(c) Each Holder, by its acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Holder has notified the Company in writing of its election to exclude all
of its Registrable Securities from such Registration Statement.

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 federal and state securities laws, the
fees and disbursements of counsel for the Company and of the Company’s
independent accountants and reasonable fees and disbursements of a single
counsel of the Holders, in an amount not to exceed $[35,000]; provided, that, in
any underwritten registration, the Company shall have no obligation to pay any
underwriting discounts, selling commissions or transfer taxes attributable to
the Registrable Securities being sold by the Holders thereof, which underwriting
discounts, selling commissions and transfer taxes shall be borne by such
Holders. Except as provided in this Section 6 and Section 8 of this Agreement,
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
(a) to a Permitted Assignee as long as (i) such transfer or assignment is
effected in accordance with applicable securities laws; (ii) such transferee or
assignee agrees in writing to become bound by and subject to the terms of this
Agreement; and (iii) 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; or (b) as otherwise permitted under
the Subscription Agreement or the Placement Agent Warrants. The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party hereto (other than by merger or consolidation
or to an entity which acquires the Company including by way of acquiring all or
substantially all of the Company’s assets).

 

10

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8. 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, employees and agents, and each other person, if any, who controls or
is under common control with such Holder within the meaning of Section 15 of the
Securities Act, and the directors, officers, partners, employees and agents of
such controlling persons (collectively, the “Holder Indemnified Parties”), from
and, against any losses, claims, damages or liabilities, joint or several, and
expenses to which the Holder Indemnified Party 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 (i) any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement prepared and filed by the Company under which Registrable
Securities were included or in any amendment thereof, or in any prospectus or in
any amendment thereof or supplement thereto, or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus, in the
light of the circumstances under which they were made) not misleading, and the
Company shall reimburse the Holder Indemnified Party 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, however, that the Company shall not be liable in any such case (i) to
the extent, but only to the extent, that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense is solely based upon
(x) 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 a Holder to the Company expressly for use in the preparation thereof, (y) the
failure of a Holder to comply with the covenants and agreements contained in
Section 5(a) hereof with respect to the sale of Registrable Securities or (z)
any fraud by the Holder as determined by a court of competent jurisdiction; 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 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 Holder Indemnified
Party 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 agrees, severally and
not jointly, to be bound by the terms of this Section 8 and to indemnify and
hold harmless, to the fullest extent permitted by law, the Company, each of its
directors, officers, partners, 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 (collectively the “Company Indemnified Parties”), from and
against any losses, claims, damages or liabilities, joint or several, to which a
Company Indemnified Party may become subject under the Securities Act , insofar
as such losses, claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise solely out of or are
based solely upon any untrue statement of a material fact or any omission of a
material fact required to be stated in any registration statement, any
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement thereto or necessary to make the

 

11

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statements therein not misleading, to the extent, but only to the extent, that
such untrue statement or omission is included or omitted in reliance upon and in
conformity with the information included in the Selling Securityholder
Questionnaire attached hereto as Annex A furnished by the Holder to the Company
expressly for use in the preparation thereof, and such Holder shall reimburse
the Company Indemnified Party 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 8(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 Indemnified Party and
shall survive the transfer by any Holder of such shares.

(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 8
(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 not or is not permitted to assume the defense
of an action pursuant to Sections 8(c) or in the case of the expense
reimbursement obligation set forth in Sections 8(a) and 8(b), the
indemnification required by Sections 8(a) and 8(b) shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expenses, losses, damages, or
liabilities are incurred.

(e) If the indemnification provided for in Section 8(a) or 8(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

 

12

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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. Notwithstanding the provisions of this
Section 8(e), no Holder shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the proceeds actually received by such
Holder from the sale of the Registrable Securities subject to the proceeding
exceeds the amount of any damages that such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission.

(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.

(h) The indemnity and contribution agreements contained in this Section 8 are in
addition to any liability that the indemnifying parties may have to the
indemnified parties and are not in diminution or limitation of the
indemnification provisions under the Subscription Agreement.

9. Rule 144. The Company shall file with the Commission “Form 10 information”
(as defined in Rule 144(i)(3) under the Securities Act) reflecting its status as
an entity that is no longer an issuer described in Rule 144(i)(1)(i) promptly
following the closing of the Merger. For a period of at least two (2) years
following the date on which Rule 144(i) is available to the Purchasers (or such
extended period to reflect any period during which the Company fails to comply
with this Section 9), 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.

10. Independent Nature of Each Purchaser’s Obligations and Rights. The
obligations of each Purchaser and each Placement Agent Holder under this
Agreement are several and not joint with the obligations of any other Purchaser
or Placement Agent Holder, and each Purchaser and each Placement Agent Holder
shall not be responsible in any way for the performance of the obligations of
any other Purchaser or any Placement Agent Holder under this Agreement. Nothing
contained herein and no action taken by any Purchaser or Placement Agent Holder
pursuant hereto, shall be deemed to constitute such Purchasers and/or Placement
Agent Holders as a partnership, an association, a joint venture, or any other
kind of entity, or create a presumption that the Purchasers and/or Placement
Agent Holders are in any way acting in concert or as a group with respect to
such obligations or the transactions contemplated by this

 

13

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Agreement. Each Purchaser and each Placement Agent Holder 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 or Placement Agent Holder to be joined as an additional party in
any proceeding for such purpose.

11. 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.

(b) Remedies. Except as otherwise specifically set forth herein with respect to
a Registration Event, 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. Except as otherwise specifically set forth herein with respect to a
Registration Event, 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 and the documents, instruments and other
agreements specifically referred to herein or delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof.

(f) Notices, etc. All notices, consents, waivers, and other communications which
are required or permitted under this Agreement shall be in writing will be
deemed given to a party (a) upon receipt, when personally delivered; (b) one (1)
Business Day after deposit with an nationally recognized overnight courier
service with next day delivery specified, costs prepaid) on the date of
delivery, if delivered to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (c) the date of
transmission if sent by facsimile or e-mail with confirmation of transmission by
the transmitting equipment if such notice or communication is delivered prior to
5:00 P.M., New York City time, on a Trading Day, or the next Trading Day after
the date of transmission, if such notice or communication is delivered on a day
that is not a Trading Day or later than 5:00 P.M., New York City time, on any
Trading Day, provided confirmation of facsimile is mechanically or
electronically generated and kept on file by the sending party and confirmation
of email is kept on file, whether electronically or

 

14

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otherwise, by the sending party and the sending party does not receive an
automatically generated message from the recipients email server that such
e-mail could not be delivered to such recipient; (d) the date received or
rejected by the addressee, if sent by certified mail, return receipt requested,
postage prepaid; or (e) seven days after the placement of the notice into the
mails (first class postage prepaid), to the party at the address, facsimile
number, or e-mail address furnished by the such party,

If to the Company, to:

Valeritas Holdings, Inc.

750 Route 202 South, Suite 600

Bridgewater, NJ 08807

Attention: Chief Executive Officer

Fax: 908-927-9927

E-mail: JTimberlake@valeritas.com

with a copy (which shall not constitute notice) to:

Morgan, Lewis & Bockius LLP

502 Carnegie Center

Princeton, NJ 08540-6241

Attention: Emilio Ragosa

Fax: 609-919-6701

Email: eragosa@morganlewis.com

if to a Purchaser or Placement Agent, to:

such Purchaser or Placement Agent 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 in accordance with this Section 11(f).

(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,
and with respect to any Purchaser, by execution of an Omnibus Signature Page to
this Agreement and the Subscription Agreement, 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 or by an e-mail, which contains a
portable document format (.pdf) file of an executed signature page, 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 or e-mail of a .pdf signature page were an original thereof.

 

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(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. Except as otherwise provided herein, 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 and Placement Agent Holders 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 and/or Placement Agent Holders under this
Agreement.

[SIGNATURE PAGE FOLLOWS]

 

16

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This Registration Rights Agreement is hereby executed as of the date first above
written.

 

THE COMPANY: Valeritas Holdings, Inc. By:  

 

  Name:   Title:

 

PURCHASERS       See Omnibus Signature Pages to Subscription Agreement      
PLACEMENT AGENT HOLDER (INDIVIDUAL):     PLACEMENT AGENT HOLDER (ENTITY):

 

   

 

Print Name     Print Name of Entity

 

    By:  

 

Signature     Name:       Title:   REGISTRABLE PRE-MERGER STOCKHOLDER
(INDIVIDUAL):     REGISTRABLE PRE-MERGER STOCKHOLDER (ENTITY):

 

   

 

Print Name     Print Name of Entity

 

    By:  

 

Signature     Name:       Title:   HOLDER OF MERGER SHARES (INDIVIDUAL):    
HOLDER OF MERGER SHARES (ENTITY):

 

   

 

Print Name     Print Name of Entity

 

    By:  

 

Signature     Name:       Title:  

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Schedule 1

Placement Agent Holders

 

  •   Wedbush Securities, Inc.

 

  •   Roth Capital Partners, LLC

 

  •   Katalyst Securities LLC

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Schedule 2

Holders of Merger Shares

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Schedule 3

Registrable Pre-Merger Shareholders

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Annex A

Valeritas Holdings, Inc.

Selling Securityholder Notice and Questionnaire

The undersigned beneficial owner of Registrable Securities of Valeritas
Holdings, Inc., a Delaware corporation (the “Company”), understands that the
Company has filed or intends to file with the U.S. 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 security holder
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 security holder 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 (holder of record) (if not the same
as (a) above) through which Registrable Securities are held:   

 

  

 

(c)    If you are not a natural person, 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 this
Questionnaire):   

 

  

 

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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” to Section 3(b), 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
purchased 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” to Section 3(d), the Commission’s staff has indicated that you
should be identified as an underwriter in the Registration Statement.

 

2

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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.

(a) Please list the type (common stock, warrants, etc.) and amount of all
securities of the Company (including any Registrable Securities) beneficially
owned1 by the Selling Securityholder:

 

 

 

5. Relationships with the Company:

Except as set forth below, neither you nor (if you are a natural person) any
member of your immediate family, nor (if you are not a natural person) any of
your affiliates2, 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:

 

 

 

1  Beneficially Owned: A “beneficial owner” of a security includes any person
who, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares (i) voting power, including the power to
direct the voting of such security, or (ii) investment power, including the
power to dispose of, or direct the disposition of, such security. In addition, a
person is deemed to have “beneficial ownership” of a security of which such
person has the right to acquire beneficial ownership at any time within 60 days,
including, but not limited to, any right to acquire such security: (i) through
the exercise of any option, warrant or right, (ii) through the conversion of any
security or (iii) pursuant to the power to revoke, or the automatic termination
of, a trust, discretionary account or similar arrangement.

It is possible that a security may have more than one “beneficial owner,” such
as a trust, with two co-trustees sharing voting power, and the settlor or
another third party having investment power, in which case each of the three
would be the “beneficial owner” of the securities in the trust. The power to
vote or direct the voting, or to invest or dispose of, or direct the investment
or disposition of, a security may be indirect and arise from legal, economic,
contractual or other rights, and the determination of beneficial ownership
depends upon who ultimately possesses or shares the power to direct the voting
or the disposition of the security.

The final determination of the existence of beneficial ownership depends upon
the facts of each case. You may, if you believe the facts warrant it, disclaim
beneficial ownership of securities that might otherwise be considered
“beneficially owned” by you.

 

2  Affiliate: An “affiliate” is a company or person that directly, or indirectly
through one or more intermediaries, controls you, or is controlled by you, or is
under common control with you.

 

3

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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 and any amendments or supplements thereto.

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.

 

BENEFICIAL OWNER (individual)     BENEFICIAL OWNER (entity)

 

   

 

Signature     Name of Entity

 

   

 

Print Name     Signature      

 

    Print Name:  

 

Signature (if Joint Tenants or Tenants in Common)      

    Title:  

 

PLEASE E-MAIL OR FAX A COPY OF THE COMPLETED AND EXECUTED SELLING SECURITYHOLDER
NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

CKR Law LLP

1330 Avenue of the Americas, 14th Floor

New York, NY 10022

Attention: Kathleen Rush

Facsimile: (212) 259-8200

E-mail Address: krush@CKRlaw.com

 

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Annex B

PLAN OF DISTRIBUTION

The selling stockholders and any of their pledgees, donees, transferees,
assignees or other successors-in-interest may, from time to time, sell, transfer
or otherwise dispose of any or all of their shares of common stock or interests
in shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices. The selling stockholders may use one or more
of the following methods when disposing of the shares or interests therein:

 

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

  •   block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

  •   through brokers, dealers or underwriters that may act solely as agents;

 

  •   purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

 

  •   an exchange distribution in accordance with the rules of the applicable
exchange;

 

  •   privately negotiated transactions;

 

  •   through the writing or settlement of options or other hedging transactions
entered into after the effective date of the registration statement of which
this prospectus is a part, whether through an options exchange or otherwise;

 

  •   broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 

  •   a combination of any such methods of disposition; and

 

  •   any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended, or Securities Act, if available, rather than
under this prospectus.

Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

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The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell shares of common stock from time to time under this
prospectus, or under a supplement or amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus.

Upon being notified in writing by a selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of common
stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, we will file a
supplement to this prospectus, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such shares of common stock were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this prospectus,
and (vi) other facts material to the transaction. In addition, upon being
notified in writing by a selling stockholder that a donee or pledge intends to
sell more than 500 shares of common stock, we will file a supplement to this
prospectus if then required in accordance with applicable securities law.

The selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of the shares of common stock or interests in shares
of common stock, the selling stockholders may enter into hedging transactions
after the effective date of the registration statement of which this prospectus
is a part with broker-dealers or other financial institutions, which may in turn
engage in short sales of the common stock in the course of hedging the positions
they assume. The selling stockholders may also sell shares of common stock short
after the effective date of the registration statement of which this prospectus
is a part and deliver these securities to close out their short positions, or
loan or pledge the common stock to broker-dealers that in turn may sell these
securities. The selling stockholders may also enter into option or other
transactions after the effective date of the registration statement of which
this prospectus is a part with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to
such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).

The selling stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act and the rules of the Financial Industry
Regulatory Authority (FINRA).

 

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We have advised the selling stockholders that they are required to comply with
Regulation M promulgated under the Securities and Exchange Act during such time
as they may be engaged in a distribution of the shares. The foregoing may affect
the marketability of the common stock.

The aggregate proceeds to the selling securityholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling securityholders reserves
the right to accept and, together with their agents from time to time, to
reject, in whole or in part, any proposed purchase of common stock to be made
directly or through agents. We will not receive any of the proceeds from this
offering.

We are required to pay all fees and expenses incident to the registration of the
shares. We have agreed to indemnify the selling stockholders against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act or otherwise.

We have agreed with the selling stockholders to keep the registration statement
of which this prospectus constitutes a part effective until the date on which
all securities under such Registration Statement have ceased to be Registrable
Securities.

 

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