UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 8-K

________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

September 30, 2019

Date of report (Date of earliest event reported)

_______________________

Valeritas Holdings, Inc.

(Exact name of registrant as specified in its charter)

________________________

Delaware 001-38038 46-5648907(State or other jurisdiction

of incorporation)(CommissionFile Number)

(IRS EmployerIdentification No.)

750 Route 202, Suite 600

Bridgewater, NJ(Address of principal executive offices)

08807

(Zip Code)

Registrant's telephone number, including area code (908) 927-9920

(Former name or former address, if changed since last report)________________________

Check the appropriate box below if the Form 8‑K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

☐ Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

☐ Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registeredCommon stock, par value $0.001 per value VLRX The Nasdaq Capital Market

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or

Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Item 1.01 Entry into a Material Definitive Agreement.

Exchange of Outstanding Debt

On September 30, 2019, Valeritas Holdings, Inc. (the “Company”) exchanged $25.0 million of its outstanding debt (the “Debt Exchange ”), consisting ofapproximately $22.7 million under the Company’s Term Loan with CRG (each as defined below) and approximately $2.3 million under the Company’s amendedand restated promissory note with WCAS (as defined below), for an aggregate of 17,123,284 shares of newly created Series B Convertible Preferred Stock, parvalue $0.001 per share (“Series B Preferred Stock”). The details of the Debt Exchange are provided below.

Series B Preferred Stock Purchase Agreement

On September 30, 2019, the Company, CRG (as defined below) and WCAS Capital Partners IV, L.P. (“WCAS” and, together with CRG, the “Lenders”) enteredinto a Series B Preferred Stock Purchase Agreement (the “Series B Purchase Agreement”) pursuant to which the Lenders agreed to exchange their pro rata portionof an aggregate $25.0 million of Company’s outstanding debt for an aggregate of 17,123,284 newly created shares of Series B Preferred Stock at the MinimumPrice as defined under Nasdaq Listing Rule 5635(d). Accordingly, the outstanding debt was exchanged for shares of Series B Preferred Stock at price equal to$1.46 per share, which was the lower of the closing price of the Company’s common stock, par value $0.001 per share (the “Common Stock”), on September 27,2019 or the average closing price of the Common Stock for the five trading days immediately preceding the date of the Series B Purchase Agreement. The terms ofthe Series B Purchase Agreement are substantially the same as the Company’s previously disclosed Series A Preferred Stock Purchase Agreement, which it enteredinto with the Lenders in February 2017, pursuant to which the Lenders converted approximately $27.5 million of debt for newly created shares of the Company’sSeries A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). The exchange of debt for the Series B Preferred Stock wasconditioned upon amending the terms of the Series A Preferred Stock to reflect the terms of the Series B Preferred Stock where permissible under applicableNasdaq Stock Market rules. A copy of the Series B Purchase Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated byreference herein.

Amendment No. 2 to Term Loan

In connection with the Debt Exchange, on September 30, 2019, Valeritas, Inc., a Delaware corporation and a wholly-owned subsidiary the Company, entered into asecond amendment (the “Amendment”) to its Second Amended and Restated Term Loan Agreement (the “Term Loan”) with Capital Royalty Partners II L.P.,Capital Royalty Partners II-Parallel Fund “A” L.P., Parallel Investment Opportunities Partners II L.P., Capital Royalty Partners II - Parallel Fund “B” (Cayman)L.P., and Capital Royalty Partners II (Cayman) L.P. (collectively referred to as “CRG”). The Amendment (i) increases the interest rate of the Term Loan from11.00% to 13.00% per annum; (ii) reduces the threshold for a Change of Control (as defined in the Term Loan) to 30% from 50%; and (iii) provides for anadditional backend facility fee on the outstanding principal balance of the Term Loan immediately following the Debt Exchange, payable by the Company uponcompletion of the Term Loan. CRG was also granted the right to designate a board observer to attend all meetings of the Company’s board of directors and receiveany related board meeting materials for so long as CRG holds any shares of the Company’s Series A Preferred Stock, or Series B Preferred Stock, or any debt isoutstanding under the Term Loan, to the extent CRG does not already have designated representation on the Company’s board of directors. A copy of theAmendment is filed as Exhibit 10.2 to this Current Report on Form 8-K, and is incorporated by reference herein.

Registration Rights Agreement Amendment No. 1

Contemporaneously with the execution of the Series B Purchase Agreement, the Company also entered into an amendment (the “Registration Rights Amendment”)to its existing Registration Rights Agreement, dated as of February 14, 2017 by and among the Company and the Lenders (the “Registration Rights Agreement”),pursuant to which the Company agreed to amend the definition of Preferred Stock (as defined in the Registration Rights Agreement) to include the Series BPreferred Stock, such that at any time after 90 days following the Debt Exchange, the Lenders may require the Company to file a registration statement for theresale of the shares of Common Stock issuable upon conversion of the Series B Preferred Stock then held by the Lenders. The rights of the Lenders to require theCompany to file a registration statement to register the resale of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock held by theLenders remains unchanged. A copy of the Registration Rights Amendment is filed as Exhibit 10.3 to this Current Report on Form 8-K, and is incorporated byreference herein.

Series B Certificate of Designation; Description of Series B Preferred Stock

On September 30, 2019, as required by the Series B Purchase Agreement, the Company filed with the Secretary of State of Delaware a certificate of designation(the “Series B Certificate of Designation”), setting forth the rights, preferences and privileges of the Series B Preferred Stock.

The shares of Series B Preferred Stock, which rank pari passu with the Series A Preferred Stock, are convertible at the option of the holder at any time into sharesof Common Stock at a conversion rate determined by dividing the Series B Original Issue Price by the Series B Conversion Price (each as defined in the Series BCertificate of Designation) in effect at the time of conversion. This formula initially results in a one-to-one conversion ratio. The Series B Conversion Price issubject to adjustment for stock splits and the like subsequent to the date of issuance of the Series B Preferred Stock. On or after January 1, 2021, at the Company’soption, if the Company has achieved an average market capitalization of at least $300 million for its most recent fiscal quarter, the Company may elect toautomatically convert all of the outstanding shares of Series B Preferred Stock into Common Stock at the then applicable conversion rate.

The holders of shares of Series B Preferred Stock are entitled to receive preferred dividends at a rate of $8.00 per every $100.00 of Series B Preferred Stock,compounded annually from and after the issuance date, payable either in cash or in additional shares of Series B Preferred Stock, at the Company’s election, whichare payable annually in arrears on December 31st of each year (commencing December 31, 2020). The shares of Series B Preferred Stock are also entitled toreceive participating dividends. The shares of Series B Preferred Stock have no voting rights. The Company has the right to redeem all or less than all of the SeriesB Preferred Stock, at any time, at a price equal to the Series B Original Issue Price, as adjusted, plus any accrued but unpaid dividends.

In the event of a Deemed Liquidation Event (as defined in the Series B Certificate of Designation) the holders of Series B Preferred Stock are eligible to receive thegreater of (i) an amount equal to the Series B Original Issue Price, plus any dividends unpaid thereon, plus an amount equal to accrued and unpaid dividends anddistributions thereon, or (ii) such amount per share as would have been payable had all shares of Series B Preferred Stock been converted into Common Stockimmediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event.

The Series B Preferred Stock contains certain protective provisions, and requires the consent of a majority of the holders of the Series B Preferred Stock prior tothe Company liquidating, dissolving, effecting any merger or Deemed Liquidation Event (as defined in the Series B Certificate of Designation) or consenting to theforegoing; amending its governing documents in a manner that affects the rights of the Series B Preferred Stock; authorizing shares of capital stock (or amendingterms of capital stock) on parity or senior to the Series B Preferred Stock; purchasing or redeeming shares of capital stock, or declaring any dividends other thanpermitted dividends or other limited exceptions; incurring additional indebtedness; issuing shares of capital stock at an effective price per share lower than $1.46per share (subject to certain limited exceptions); or issuing any shares of Series B Preferred Stock to any individual, entity or person other than CRG or WCAS ortheir affiliates or transferees. A copy of the Series B Certificate of Designation is filed as Exhibit 3.1 to this Current Report on Form 8-K, and is incorporated byreference herein

Amended and Restated Series A Certificate of Designation

In connection with the Debt Exchange and as required by the Series B Purchase Agreement, the Company, on September 30, 2019, filed with the Secretary of Stateof Delaware an amended and restated certificate of designation for the Series A Preferred Stock (the “Amended and Restated Series A Certificate of Designation”),amending and restating the rights, preferences and privileges of the Series A Preferred Stock. The shares of Series A Preferred Stock were amended to (i) providethe Company with the option to pay dividends on the Series A Preferred Stock in cash or shares of Common Stock, whereas previously it was the holder’s optionto choose the form of dividend payment, and (ii) otherwise conform the terms of the Series A Preferred Stock to the terms of the Series B Preferred Stock in allother material respects where permitted under applicable Nasdaq Listing Rules. Accordingly, similar to the Series B Preferred Stock, the Series A Preferred Stockcontains certain protective provisions, and requires the consent of a majority of the holders of the Series A Preferred Stock prior to the Company liquidating,dissolving, effecting any merger or Deemed Liquidation Event (as defined in the Amended and Restated Series A Certificate of Designation) or consenting to theforegoing; amending its governing documents in a manner that affects the rights of the Series A Preferred Stock; authorizing shares of capital stock (or amendingterms of capital stock) on parity or senior to the Series A Preferred Stock; purchasing or redeeming shares of capital stock, or declaring any dividends other thanpermitted dividends or other limited exceptions; incurring additional indebtedness; or issuing any shares of Series A Preferred Stock to any individual, entity orperson other than CRG or WCAS or their affiliates or transferees. A copy of the Amended and Restated Series A Certificate of Designation is filed as Exhibit 3.2to this Current Report on Form 8-K, and is incorporated by

reference herein.

The foregoing summaries of the Series B Purchase Agreement, Registration Rights Amendment, Series B Certificate of Designation and Amended and RestatedSeries A Certificate of Designation do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement, Registration RightsAmendment, Series B Certificate of Designation and Amended and Restated Series A Certificate of Designation, all of which are filed as exhibits to this currentreport on Form 8-K and incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

The issuance of shares of Series B Preferred Stock pursuant to the Series B Purchase Agreement is exempt from registration under Section 4(a)(2) of the SecuritiesAct of 1933, as amended, as a transaction not involving any public offering. The information contained in Item 1.01 above regarding the Series B Preferred Stockis incorporated herein by reference into this Item 3.02.

Item 3.03 Material Modification to the Rights of Security Holders.

The information contained in Item 1.01 above regarding the Amended and Restated Series A Certificate of Designation, Series A Preferred Stock, Series BCertificate of Designation and Series B Preferred Stock is incorporated herein by reference into this Item 3.03.

Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information contained in Item 1.01 above regarding the Amended and Restated Series A Certificate of Designation, Series A Preferred Stock, Series BCertificate of Designation and Series B Preferred Stock is incorporated herein by reference into this Item 5.03.

Item 8.01 Other Events.

Debt Exchange Press Release

On October 2, 2019, the Company issued a press release announcing the Debt Exchange and preliminary revenue guidance for the third quarter of 2019.

The Company announced the following preliminary guidance for the third quarter of 2019: revenue for the third quarter ended September 30, 2019 is projected tobe approximately $8.5 million, and as previously stated, annual revenue for 2019 is expected to be between $31.0 million and $33.0 million. The Company expectsgross margin and operating expenses to be approximately 50% and between $17.2 million and $17.7 million for the third quarter 2019, respectively. Cash and cashequivalents are expected to be approximately $23 million at September 30, 2019 and total liabilities are expected to be approximately $40 million at September 30,2019, down $20 million from June 30, 2019, primarily due to the reduction in long-term debt. Total liabilities at September 30, 2019 are inclusive of a backendfacility fee associated with the restructured debt.

Set forth above are certain preliminary financial results for the three months ended September 30, 2019. These preliminary results represent the Company’sestimates only based on currently available information and do not present all necessary information for an understanding of the Company’s financial condition asof September 30, 2019 or the Company’s results of operations for the three and nine months ended September 30, 2019. As the Company completes its quarter-endclose process and finalizes its third quarter 2019 unaudited financial statements, the Company will be required to make significant judgments in a number of areas.This financial information has been prepared by and is the responsibility of the Company’s management. The Company’s independent registered public accountingfirm has not audited, reviewed or performed any procedures with respect to this preliminary data or the accounting treatment thereof and does not express anopinion or any other form of assurance with respect thereto.

The full text of the press release is filed as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01 Exhibits.

(d) Exhibits. 3.1 Series B Certificate of Designation. 3.2 Amended and Restated Series A Certificate of Designation. 10.1 Series B Purchase Agreement, dated as of September 30, 2019, by and among the Company, CRG and WCAS. 10.2 Amendment No. 2 to Term Loan, dated as of September 30, 2019, by and among Valeritas, Inc. and CRG. 10.3 Amendment No. 1 to Registration Rights Agreement, dated as of September 30, 2019, by and among the Company, CRG and WCAS. 99.1 Press release dated October 2, 2019.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersignedhereunto duly authorized.

VALERITAS HOLDINGS, INC. Date: October 2, 2019 By: /s/ John E. Timberlake Name: John E. Timberlake Title: Chief Executive Officer

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CERTIFICATE OF DESIGNATIONOF

SERIES B CONVERTIBLE PREFERRED STOCKOF

VALERITAS HOLDINGS, INC.

(Pursuant to Section 151 of the Delaware General Corporation Law)

Valeritas Holdings, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of the Delaware, as amended(the “DGCL”), hereby certifies that, pursuant to the authority granted by Article IV of the Amended and Restated Certificate of Incorporation of the Corporation(the “Certificate of Incorporation”), and in accordance with Section 151 of the DGCL, the Board of Directors of the Corporation (hereinafter being referred to asthe “Board of Directors” or the “Board”), at a meeting duly called and held on September 24, 2019, has adopted the following resolution with respect to thedesignations, number of shares, preferences, voting powers and other rights and the restrictions and limitations thereof, of the Series B Convertible Preferred Stock:

RESOLVED, that, pursuant to the authority granted to and vested in the Board of Directors in accordance with the provisions of the Certificate of Incorporation,the designations, number of shares, preferences, voting powers and other rights and the restrictions and limitations thereof of the Series B Convertible PreferredStock are as follows:

1. Designation and Amount. The shares of such series shall be designated as “Series B Convertible Preferred Stock”, par value $0.001 per share (the “Series BPreferred Stock”), and the number of shares constituting the Series B Preferred Stock shall be 30,000,000. Such number of shares may be increased or decreasedby resolution of the Board of Directors prior to issuance; provided, that no decrease shall reduce the number of shares of the Series B Preferred Stock to a numberless than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or uponthe conversion of any outstanding securities issued by the Corporation convertible into the Series B Preferred Stock.

2. Dividends and Distributions.

(a) The holders of the Series B Preferred Stock shall be entitled to receive:

(i) on each share of Series B Preferred Stock, dividends at a rate per annum of $8.00 for every $100.00 of Series B Preferred Stock held by the holder ofsuch Series B Preferred Stock, compounded annually (on any accrued dividends that remain unpaid after each applicable Dividend Payment Date, asdefined below) from and after the Issuance Date of any such share of Series B Preferred Stock, which shall be payable as set forth, and out of any fundslegally available therefor (the “Preferred Dividends”); and

(ii) when, as and if declared by the Board, out of any funds legally available therefor, dividends per share of Series B Preferred Stock in an amount equalto the aggregate amount of any dividends or other distributions, whether paid in cash, in kind or other property (including for the avoidance of doubt, anysecurities), on the issued and outstanding common stock, par value $0.001 per share of the Corporation (the “Common Stock”) on a per share basis basedon the number of shares of Common Stock into which such shares of Series B Preferred Stock could be converted on the applicable record date for suchdividends or distributions (the “Participating Dividends” and, together with the Preferred Dividends, the “Dividends”). The Corporation will not declareor pay any dividends or other distributions on any Junior Stock that would require a Participating Dividend unless it concurrently therewith declares andsets aside for payment or distribution, as applicable, such Participating Dividend for all shares of Series B Preferred Stock then outstanding. For purposesof this Certificate of Designation, “Series B Original Issue Price” shall mean $1.46 per share, subject to appropriate adjustment in the event of any stockdividend, stock split, combination or other similar recapitalization with respect to the Series B Preferred Stock; and “Junior Stock” means the CommonStock and any other classes or series of capital stock ranking junior to the Series B Preferred Stock with respect to the distribution of assets on theliquidation, dissolution or winding up of the Corporation or upon a Deemed Liquidation Event, or in respect of the payment of dividends or rights ofredemption (and, in each case, any rights or options to acquire any Junior Stock). For the avoidance of doubt, the Series B Preferred Stock ranks paripassu with the Corporation’s Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”).

(b) Preferred Dividends shall be cumulative and shall accrue and accumulate annually commencing on the Issuance Date and be payable annually in arrears onDecember 31st of each year commencing on December 31, 2020 (each, a “Preferred

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Dividend Payment Date,”) and the period from the Issuance Date to the first Preferred Dividend Payment Date and from the day after a Preferred DividendPayment Date to the subsequent Preferred Dividend Payment Date being a “Preferred Dividend Period”). Participating Dividends shall be payable as and whenpaid to the holders of Junior Stock (each such date being a “Participating Dividend Payment Date,” and, together with each Preferred Dividend Payment Date, a“Dividend Payment Date”). Preferred Dividends that are payable on Series B Preferred Stock in respect of any Preferred Dividend Period shall be computed onthe basis of a 360-day year consisting of twelve 30-day months. The amount of Preferred Dividends payable on Series B Preferred Stock on any date prior to theend of a Preferred Dividend Period, and for the initial Preferred Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve 30-daymonths, and actual days elapsed over a 30-day month, and for the period that the Series B Preferred Stock is outstanding. Preferred Dividends shall accumulatewhether or not in any Preferred Dividend Period there have been funds of the Corporation legally available for the payment of such Preferred Dividends.Participating Dividends are payable on a cumulative basis once declared, whether or not there shall be funds legally available for the payment thereon.

(c) In lieu of the payment in cash of the Preferred Dividend otherwise payable on any Dividend Payment Date, Preferred Dividends may be paid by issuance anddelivery of a number of additional fully paid and nonassessable shares of Series B Preferred Stock (“PIK Shares”) (including, at the Corporation’s option, thepayment of cash in lieu of the issuance of fractional PIK Shares) for each holder of the Series B Preferred Stock equal to (i) the aggregate dollar amount of thePreferred Dividend payable to such holder with respect to the Series B Preferred Stock held by such holder as of the Preferred Dividend Payment Date, divided by(ii) the Series B Original Issue Price. Participating Dividends shall be paid when and in a manner consistent with payments of dividends in respect of Junior Stock.No later than fifteen (15) calendar days prior to each Preferred Dividend Payment Date (each, a “Preferred Dividend Election Date”), the Corporation shall makeits election to pay the holders of the Series B Preferred Stock in either cash or PIK Shares. The Corporation will send written notice to each holder of Series BPreferred Stock stating its election no later than five (5) calendar days following each Preferred Dividend Election Date, and if it elects to issue PIK Shares, shallinclude the amount of PIK Shares that will be issued and delivered to the holders of the Series B Preferred Stock.

(d) From and after the time, if any, that the Corporation shall have failed to pay all accrued, but unpaid, Preferred Dividends for all prior Preferred DividendPeriods, or failed to pay or distribute, as applicable, any unpaid Participating Dividends in accordance with this Section 2, no dividends shall be declared or paid orset apart for payment, or other distribution declared or made, upon any Junior Stock, nor shall any Junior Stock be redeemed, purchased or otherwise acquired forany consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption or other purchase of any such Junior Stock), directly orindirectly, by the Corporation or any of its subsidiaries until (i) all such Dividends have been paid in full or (ii) all such Dividends have been or contemporaneouslyare declared and a sum sufficient for the payment thereof has been or is set aside for the benefit of the holders of the Series B Preferred Stock.

(e) Dividends paid on the shares of Series B Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on suchshares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for thedetermination of holders of shares of Series B Preferred Stock entitled to receive payment of a dividend or distribution declared thereon.

3. Reacquired Shares. Any shares of Series B Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired andcancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may bereissued, without designation as to series until such shares are once more designated as part of a particular series of Preferred Stock by resolution or resolutions ofthe Board of Directors, subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other certificate ofdesignations creating a series of Preferred Stock or any similar stock or as otherwise required by law.

4. Liquidation, Dissolution or Winding Up.

(a) Upon any liquidation, dissolution, Deemed Liquidation Event (as defined below) or winding up of the Corporation, no distribution shall be made to the holdersof any Junior Stock unless, prior thereto, the holders of shares of Series B Preferred Stock shall have received the greater of (i) an amount equal to the Series BOriginal Issue Price, plus any dividends unpaid thereon, plus an amount equal to accrued and unpaid dividends and distributions thereon, or (ii) such amount pershare as would have been payable had all shares of Series B Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution,winding up or Deemed Liquidation Event (as defined in Section 6 below) (the amount payable pursuant to this sentence is hereinafter referred to as the “Series BLiquidation Amount”. In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Preferred Stock LiquidationAmount and Series B Preferred Stock Liquidation Amount, then the holders of shares of the Series A Preferred Stock and Series B Preferred Stock

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shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect ofthe shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

(b) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, after the payment of allpreferential amounts required to be paid to the holders of shares of Series A Preferred Stock and Series B Preferred Stock, the remaining assets of the Corporationavailable for distribution to its stockholders shall be distributed among the holders of shares of Common Stock, pro rata based on the number of shares held byeach such holder.

5. Deemed Liquidation Events.

(a) Each of the following events shall be considered a “Deemed Liquidation Event” unless the holders of at least a majority of the outstanding shares of Series BPreferred Stock elect otherwise by written notice sent to the Corporation at least 30 days prior to the effective date of any such event:

(i) a merger or consolidation in which:

(A) the Corporation is a constituent party or

(B) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger orconsolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of theCorporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for sharesof capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of(1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporationimmediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or

(ii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or anysubsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole or the sale ordisposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of theCorporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusivelicense or other disposition is to a wholly owned subsidiary of the Corporation; or

(iii) any breach of Section 7(f) or Section 7(g) and such breach remains uncured after thirty (30) days.

(b) The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in this Section 5 unless the agreement or plan of merger orconsolidation for such transaction (the “Merger Agreement”) provides that the consideration payable to the stockholders of the Corporation shall be allocatedamong the holders of capital stock of the Corporation in the manner specified in Section 4 hereof.

(c) In the event of a Deemed Liquidation Event referred to in this Section 5, if the Corporation does not effect a dissolution of the Corporation under the DGCLwithin ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall send a written notice to each holder of Series B Preferred Stock nolater than the ninetieth (90th) day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right)pursuant to the terms of the following clause; (ii) to require the redemption of such shares of Series B Preferred Stock, and (iii) if the holders of at least a majorityof the then outstanding shares of Series B Preferred Stock so request in a written instrument delivered to the Corporation not later than one hundred twenty (120)days after such Deemed Liquidation Event, the Corporation shall use the consideration received by the Corporation for such Deemed Liquidation Event (net of anyretained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation), together withany other assets of the Corporation available for distribution to its stockholders, all to the extent permitted by Delaware law governing distributions to stockholders(the “Available Proceeds”), on the one hundred fiftieth (150th) day after such Deemed Liquidation Event, to redeem all outstanding shares of Series B PreferredStock at a price per share equal to the Series B Liquidation Amount. Notwithstanding the foregoing, in the event of a redemption pursuant to the precedingsentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Series B Preferred Stock, the Corporation shall ratably redeem eachholder’s shares of Series B Preferred Stock to the fullest extent of such Available Proceeds, and shall redeem the remaining shares as soon as it may lawfully do sounder Delaware law governing distributions to stockholders. Prior to the distribution or redemption provided for in this Section, the Corporation shall not expendor

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dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation.

(d) The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license,other disposition or redemption shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or theacquiring person, firm or other entity.

(e) In the event of a Deemed Liquidation Event pursuant to this Section 5, if any portion of the consideration payable to the stockholders of the Corporation ispayable only upon satisfaction of contingencies (the “Additional Consideration”), the Merger Agreement shall provide that (i) the portion of such considerationthat is not Additional Consideration (such portion, the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation as if theInitial Consideration were the only consideration payable in connection with such Deemed Liquidation Event; and (ii) any Additional Consideration whichbecomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of theCorporation after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Section,consideration placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such DeemedLiquidation Event shall be deemed to be Additional Consideration.

(f) For the avoidance of doubt, the insolvency of the Corporation or the institution of bankruptcy or similar proceedings on account of Corporation indebtednessshall not constitute a Deemed Liquidation Event.

6. Voting and Seniority. The shares of Series B Preferred Stock shall not have voting rights. The Series B Preferred Stock shall be senior to the Common Stock andpari passu with the Series A Preferred Stock.

7. Protective Provisions. So long as any shares of Series B Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment,merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the writtenconsent of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock, given in writing or by vote at a meeting, consenting orvoting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of noforce or effect:

(a) liquidate, dissolve or wind-up the business and affairs of the Corporation, effect any merger, consolidation or Deemed Liquidation Event, or consent to any ofthe foregoing;

(b) amend, alter or repeal any provision of this Certificate of Designation or the Certificate of Incorporation or Bylaws of the Corporation in a manner thatadversely affects the powers, preferences or rights of the Series B Preferred Stock;

(c) create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock unless the same ranks junior to theSeries B Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Corporation or upon a Deemed LiquidationEvent, the payment of dividends and rights of redemption, or increase the authorized number of shares of Series B Preferred Stock or increase the authorizednumber of shares of any additional class or series of capital stock of the Corporation unless the same ranks junior to the Series B Preferred Stock with respect to thedistribution of assets on the liquidation, dissolution or winding up of the Corporation or upon a Deemed Liquidation Event, the payment of dividends and rights ofredemption;

(d) (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with the Series B Preferred Stock in respect of the distribution of assetson the liquidation, dissolution or winding up of the Corporation or upon a Deemed Liquidation Event, the payment of dividends or rights of redemption, if suchreclassification, alteration or amendment would render such other security senior to the Series B Preferred Stock in respect of any such right, preference, orprivilege or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to the Series B Preferred Stock in respect of the distribution ofassets on the liquidation, dissolution or winding up of the Corporation or upon a Deemed Liquidation Event, the payment of dividends or rights of redemption, ifsuch reclassification, alteration or amendment would render such other security senior to or pari passu with the Series B Preferred Stock in respect of any suchright, preference or privilege;

(e) purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock (orany rights or options to acquire any capital stock) of the Corporation other than (i) redemptions of or dividends or distributions on the Series A Preferred Stock orthe Series B Preferred Stock as expressly authorized herein, (ii) dividends or other distributions payable on the Common Stock solely in the form of additionalshares of Common Stock (and in connection therewith any participating dividends on any other Junior Stock in the form of additional shares of Common Stock),(iii) the repurchase of Common Stock pursuant to, and in accordance with restricted stock agreements, stock option plans or other benefit plans for management,directors, employees or consultants of the

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Corporation and its subsidiaries, (iv) the payment of cash in lieu of the issuance of fractional shares, (v) the retention of Common Stock in payment of withholdingtaxes in connection with equity-based compensation plans, and (vi) conversions or exchanges of Junior Stock into or for Common Stock;

(f) create, incur, assume, or permit to incur any indebtedness, or issue any debt securities, or assume, guarantee or endorse, or otherwise become responsible for,the obligations of any person, or make any loans or advances or capital contribution to, any person;

(g) issue or sell (or be deemed to have issued or sold) any equity securities for an effective consideration per share (calculated in accordance with applicable rulesof the Nasdaq Stock Market LLC) that is less than the Series B Conversion Price (as defined below) in effect immediately prior to such issuance or sale or deemedissuance or sale, other than issuances of Exempted Securities. For purposes of this Certificate of Designation, “Exempted Securities” shall mean the followingshares of Common Stock and shares of Common Stock deemed issued pursuant to the following Options (as defined below) and Convertible Securities (as definedbelow):

(i) shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on the Series A Preferred Stock of the Series BPreferred Stock;

(ii) shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiariespursuant to the Corporation’s equity incentive plans, including upon the exercise, vesting or other settlement of awards granted under such equityincentive plans;

(iii) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options outstanding as of the time of filing of this Certificateof Designation, or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities outstanding as of the time of filingof this Certificate of Designation, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security as in effect as of thetime of filing of this Certificate of Designation;

(iv) shares of Common Stock issued pursuant to the Corporation’s at-the-market sales agreement with B. Riley FBR, Inc., or the Corporation’s equity lineof credit agreement with Aspire Capital Fund, LLC, each as in effect at the time of filing of this Certificate of Designation;

(v) shares of Common Stock, Options or Convertible Securities issued by reason of a stock split or split-up or other distribution or dividend on shares ofCommon Stock as otherwise permitted by this Certificate of Designation; or

(vi) As used in this Section 7(g), (A) “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock orConvertible Securities; and (B) “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectlyconvertible into or exchangeable for Common Stock, but excluding Options; or

(h) Issue any shares of Series B Preferred Stock to any individual, entity or other person other than to the original holders and their affiliates, and any transfereesthereof.

8. Redemption. The shares of Series B Preferred Stock (in whole or in part) shall be redeemable from any holder at the Corporation’s option at any time for cash inthe amount of the Series B Original Issue Price per share, plus all accrued but unpaid dividends thereon, unless prohibited by Delaware law governing distributionsto stockholders. The Corporation shall send written notice of such redemption (the “Redemption Notice”) to each holder of record of Series B Preferred Stock notless than thirty (30) days prior to the date of redemption (the “Redemption Date”). Each Redemption Notice shall state: (a) the number of shares of Series BPreferred Stock held by the holder that the Corporation shall redeem on the Redemption Date specified in the Redemption Notice; (b) the Redemption Date and theRedemption Price; (c) in the case of any holder, the date upon which the holder’s right to convert such shares terminates (as determined in accordance with Section9 hereof); and (d) for holders of shares in certificated form, that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her orits certificate or certificates representing the shares of Series B Preferred Stock to be redeemed. On or before the applicable Redemption Date, each holder ofshares of Series B Preferred Stock to be redeemed on such Redemption Date, unless such holder has exercised his, her or its right to convert such shares asprovided in Section 9, shall, if a holder of shares in certificated form, surrender the certificate or certificates representing such shares (or, if such registered holderalleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify theCorporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation,in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the personwhose name appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Series B Preferred Stock represented by acertificate are redeemed, a new certificate, instrument, or book entry

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representing the unredeemed shares of Series B Preferred Stock shall promptly be issued to such holder. If the Redemption Notice shall have been duly given, andif on the applicable Redemption Date the Redemption Price payable upon redemption of the shares of Series B Preferred Stock to be redeemed on suchRedemption Date is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor in a timely manner, thennotwithstanding that any certificates evidencing any of the shares of Series B Preferred Stock so called for redemption shall not have been surrendered, dividendswith respect to such shares of Series B Preferred Stock shall cease to accrue after such Redemption Date and all rights with respect to such shares shall forthwithafter the Redemption Date terminate, except only the right of the holders to receive the Redemption Price without interest upon surrender of any such certificate orcertificates therefor.

9. Optional Conversion

(a) Each holder of Series B Preferred Stock shall have the following rights to covert its shares of Series B Preferred Stock (the “Conversion Rights”):

(i) Each share of Series B Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment ofadditional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the SeriesB Original Issue Price by the Series B Conversion Price (as defined below) in effect at the time of conversion. The “Series B Conversion Price” shall initially beequal to the Series B Original Issue Price. Such initial Series B Conversion Price, and the rate at which shares of Series B Preferred Stock may be converted intoshares of Common Stock, shall be subject to adjustment as provided below. (ii) In the event of a Redemption Notice with respect to any shares of Series BPreferred Stock pursuant to Section 8, the Conversion Rights of the shares designated for redemption shall terminate at the close of business on the last full daypreceding the Redemption Date, unless the redemption price is not fully paid on such Redemption Date, in which case the Conversion Rights for such shares shallcontinue until such price is paid in full. In the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the ConversionRights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to theholders of Series B Preferred Stock. (iii) No fractional shares of Common Stock shall be issued upon conversion of the Series B Preferred Stock. In lieu of anyfractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the Fair Market Value of ashare of Common Stock as determined in good faith by the Board of Directors of the Corporation. The payment referred to in the previous sentence shall accrueand be made at the time of a dissolution, sale or other Deemed Liquidation Event, along with any cash dividends, as provided in Section 2 hereof. Whether or notfractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Series B Preferred Stock the holder is atthe time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion. As used in this Certificate ofDesignation, “Fair Market Value” shall mean (i) if the Common Stock is at the time listed on any stock exchange, then the Fair Market Value per share ofCommon Stock on any relevant date shall be the average of the closing selling price per share of Common Stock at the close of regular trading hours (i.e., beforeafter-hours trading begins) over a period of 30 calendar days following the date specified by the Board of Directors on the stock exchange determined by the Boardof Directors to be the primary market for the Common Stock, as such price is reported by the National Association of Securities Dealers (if primarily traded on theNasdaq Capital Market, Global Market or Global Select Market) or as officially quoted in the composite tape of transactions on any other stock exchange on whichthe Corporation’s common stock is then primarily traded; or (ii) if the Common Stock is not at the time listed on any stock exchange, then the Fair Market Valueshall be determined by the Board of Directors through the reasonable application of a reasonable valuation method that takes into account the applicable valuationfactors set forth under applicable securities laws, including regulations of the U.S. Department of the Treasury (the “Treasury Regulations”), issued under Section409A of the Internal Revenue Code (the “Code”). (b) In order for a holder of Series B Preferred Stock to voluntarily convert shares of Series B Preferred Stockinto shares of Common Stock, such holder shall (i) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Series BPreferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent) that such holder elects to convert all or any numberof such holder’s shares of Series B Preferred Stock and, if applicable, any event on which such conversion is contingent and (ii), if such holder’s shares arecertificated, surrender the certificate or certificates for such shares of Series B Preferred Stock (or, if such registered holder alleges that such certificate has beenlost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim thatmay be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Series BPreferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent). Such notice shall state such holder’s name or thenames of the nominees in which such holder wishes the shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered forconversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by theregistered holder or his, her or its attorney duly authorized in writing. The close of

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business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such notice and, if applicable,certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable uponconversion of the specified shares shall be deemed to be outstanding of record as of such date.

(c) The Corporation shall, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Series B Preferred Stock, or to his, her or itsnominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion (or a notice of such issuance if uncertificatedshares are issued) in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Series B Preferred Stock represented by thesurrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Section 9(a)(iii) hereof in lieu of any fraction of ashare of Common Stock otherwise issuable upon such conversion and (iii) pay all declared but unpaid dividends on the shares of Series B Preferred Stockconverted as provided in Section 2 hereof.

(d) The Corporation shall at all times when the Series B Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capitalstock, for the purpose of effecting the conversion of the Series B Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time totime be sufficient to effect the conversion of all outstanding Series B Preferred Stock; and if at any time the number of authorized but unissued shares of CommonStock shall not be sufficient to effect the conversion of all then outstanding shares of the Series B Preferred Stock, the Corporation shall take such corporate actionas may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including,without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. Beforetaking any action that would cause an adjustment reducing the Series B Conversion Price below the then par value of the shares of Common Stock issuable uponconversion of the Series B Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary in order that theCorporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Series B Conversion Price.

(e) All shares of Series B Preferred Stock that shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and allrights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares ofCommon Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 9(a)(iii)hereof and to receive payment of any dividends declared but unpaid thereon as provided in Section 2 hereof. Any shares of Series B Preferred Stock so convertedshall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the needfor stockholder action) as may be necessary to reduce the authorized number of shares of Series B Preferred Stock accordingly.

(f) Upon any such conversion, no adjustment to the Series B Conversion Price shall be made for any declared but unpaid dividends on the Series B Preferred Stocksurrendered for conversion or on the Common Stock delivered upon conversion. The holder shall be credited for any accrued but unpaid dividends at the time ofconversion to be paid in the form of, and at the time prescribed by, Section 2(a) above.

(g) The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock uponconversion of shares of Series B Preferred Stock. The Corporation shall not, however, be required to pay any tax that may be payable in respect of any transferinvolved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Series B Preferred Stock so converted wereregistered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount ofany such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

10. Certain Adjustments

(a) If the Corporation shall at any time or from time to time after the Issue Date effect a subdivision of the outstanding Common Stock, the Series B ConversionPrice in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion ofeach share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shallat any time or from time to time after the Issue Date combine the outstanding shares of Common Stock, the Series B Conversion Price in effect immediately beforethe combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall bedecreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall becomeeffective at the close of business on the date the subdivision or combination becomes effective.

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(b) In the event the Corporation at any time or from time to time after the Issue Date shall make or issue, or fix a record date for the determination of holders ofCommon Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each suchevent the Series B Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record dateshall have been fixed, as of the close of business on such record date, by multiplying the Series B Conversion Price then in effect by a fraction: (A) the numeratorof which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business onsuch record date, and (B) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time ofsuch issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.Notwithstanding the foregoing (C) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the datefixed therefor, the Series B Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Series BConversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (D) that no such adjustmentshall be made if the holders of Series B Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal tothe number of shares of Common Stock as they would have received if all outstanding shares of Series B Preferred Stock had been converted into Common Stockon the date of such event.

(c) In the event the Corporation at any time or from time to time after the Series B Original Issue Date shall make or issue, or fix a record date for thedetermination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution ofshares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 2 hereof do not apply to suchdividend or distribution, then and in each such event the holders of Series B Preferred Stock shall receive, simultaneously with the distribution to the holders ofCommon Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as theywould have received if all outstanding shares of Series B Preferred Stock had been converted into Common Stock on the date of such event.

(d) Subject to the provisions of Section 5, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving theCorporation in which the Common Stock (but not the Series B Preferred Stock) is converted into or exchanged for securities, cash or other property (other than atransaction covered by Sections 10(b) and 10(c), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share ofSeries B Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount ofsecurities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series BPreferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant tosuch transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in theapplication of the provisions hereof with respect to the rights and interests thereafter of the holders of the Series B Preferred Stock, to the end that the provisionsset forth herein (including provisions with respect to changes in and other adjustments of the Series B Conversion Price) shall thereafter be applicable, as nearly asreasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series B Preferred Stock.

(e) Upon the occurrence of each adjustment or readjustment of the Series B Conversion Price, the Corporation at its expense shall, as promptly as reasonablypracticable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish toeach holder of Series B Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or otherproperty into which the Series B Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. TheCorporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Series B Preferred Stock (but in any event not laterthan ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Series B Conversion Price then in effect, and (ii) thenumber of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of Series BPreferred Stock.

11. Mandatory Conversion.

(a) On or after January 1, 2021, at the option of the Corporation, provided that the Corporation’s average market capitalization is equal to at least $300,000,000 forthe most recent fiscal quarter as determined by the Board of Directors based on the volume-weighted average closing price per share for the most recent quartermultiplied by the number of shares of the Company on a fully diluted basis as of the last business day of such quarter (the time of such closing or the date and timespecified, the “Mandatory Conversion Time”), then (i) the Corporation may elect to have all outstanding shares of

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Series B Preferred Stock automatically converted into shares of Common Stock, at the then effective conversion rate as calculated pursuant to Section 9(a)(i), and(ii) such shares may not be reissued by the Corporation.

(b) All holders of record of shares of Series B Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated formandatory conversion of all such shares of Series B Preferred Stock pursuant to this Section 11. Such notice need not be sent in advance of the occurrence of theMandatory Conversion Time. Upon receipt of such notice, each holder of shares of Series B Preferred Stock in certificated form shall surrender his, her or itscertificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit andagreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of thealleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, any certificatessurrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, dulyexecuted by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Series B Preferred Stock converted pursuantto this Section 11, including the rights, if any, to receive notices, will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder orholders thereof to surrender any certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates ofsuch holders (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 11. As soon as practicableafter the Mandatory Conversion Time and, if applicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for Series BPreferred Stock, the Corporation shall (a) issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares ofCommon Stock issuable on such conversion (or a notice of such issuance if uncertificated) in accordance with the provisions hereof and (b) pay cash as provided inSection 2 hereof in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any unpaid dividends on theshares of Series B Preferred Stock converted. Such converted Series B Preferred Stock shall be retired and cancelled and may not be reissued as shares of suchseries, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorizednumber of shares of Series B Preferred Stock accordingly.

12. Amendment; Waivers. At such time as any shares of Series B Preferred Stock are outstanding, any proposed waiver of or amendment to the Certificate ofIncorporation (including this Certificate of Designation) that would materially alter, change or repeal any of the preferences, powers or special rights given to theSeries B Preferred Stock so as to affect the Series B Preferred Stock adversely, requires the approval by the Corporation and the affirmative vote of a majority ofthe outstanding shares of the Series B Preferred Stock, in addition to such other vote as may be required by the DGCL. Any provision in this Certificate ofDesignation may be waived, in lieu of a formal amendment, with the same vote as required for an amendment.

13. Notices. Any notice required or permitted to be given to a holder of shares of Series B Preferred Stock shall be mailed, postage prepaid, to the post officeaddress last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the DGCL, and shall be deemedsent upon such mailing or electronic transmission.

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IN WITNESS WHEREOF, the undersigned have signed and attested this Certificate of Designation on the 30th day of September, 2019.

VALERITAS HOLDINGS, INC. By: /s/ John E. Timberlake Name: John E. Timberlake Title: Chief Executive Officer

Attest: /s/ Erick Lucera Erick Lucera, Secretary

[Signature Page to the Certificate of Designation for Series B Convertible Preferred Stock]

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AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONOF

SERIES A CONVERTIBLE PREFERRED STOCKOF

VALERITAS HOLDINGS, INC.

(Pursuant to Section 242 of the Delaware General Corporation Law)

Valeritas Holdings, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of the Delaware, as amended(the “DGCL”), hereby certifies as follows:

That, pursuant to the authority granted by Article IV of the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate ofIncorporation”), the Board of Directors of the Corporation (hereinafter being referred to as the “Board of Directors” or the “Board”), at a meeting duly calledand held on March 22, 2017, adopted resolutions with respect to the designations, number of shares, preferences, voting powers and other rights and the restrictionsand limitations thereof, of the Series A Preferred Stock (as defined below), of which 2,750,000 shares have heretofore been issued;

That, the Certificate of Designation of the Series A Preferred Stock (the “Original Certificate of Designation”) was filed with the Secretary of State of the State ofDelaware and became effective on March 22, 2017; and

That, pursuant to the authority granted by the Certificate of Incorporation, and in accordance with Section 242(b) of the DGCL, the holders of at least a majority ofthe shares of Series A Preferred Stock (as defined below), on September 30, 2019, approved by written consent, and pursuant to Section 242 of the DGCL, theBoard, at a meeting duly called and held on September 24, 2019, adopted the following resolution amending and restating the Original Certificate of Designation:

RESOLVED, that, pursuant to the authority granted to and vested in the Board of Directors in accordance with the provisions of the Certificate of Incorporation,the designations, number of shares, preferences, voting powers and other rights and the restrictions and limitations thereof of the Series A Convertible PreferredStock are as follows:

1. Designation and Amount. The shares of such series shall be designated as “Series A Convertible Preferred Stock”, par value $0.001 per share (the “Series APreferred Stock”), and the number of shares constituting the Series A Preferred Stock shall be 2,750,000. Such number of shares may be increased or decreasedby resolution of the Board of Directors prior to issuance; provided, that no decrease shall reduce the number of shares of the Series A Preferred Stock to a numberless than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or uponthe conversion of any outstanding securities issued by the Corporation convertible into the Series A Preferred Stock.

2. Dividends and Distributions.

(a) The holders of the Series A Preferred Stock shall be entitled to receive:

(i) on each share of Series A Preferred Stock, dividends at a rate per annum of $8.00 for every $100.00 of Series A Preferred Stock held by the holder ofsuch Series A Preferred Stock, compounded annually (on any accrued dividends that remain unpaid after each applicable Dividend Payment Date, asdefined below) from and after the Issuance Date of any such share of Series A Preferred Stock, which shall be payable as set forth, and out of any fundslegally available therefor (the “Preferred Dividends”); and

(ii) when, as and if declared by the Board, out of any funds legally available therefor, dividends per share of Series A Preferred Stock in an amount equalto the aggregate amount of any dividends or other distributions, whether paid in cash, in kind or other property (including for the avoidance of doubt, anysecurities), on the issued and outstanding common stock, par value $0.001 per share of the Corporation (the “Common Stock”) on a per share basis basedon the number of shares of Common Stock into which such shares of Series A Preferred Stock could be converted on the applicable record date for suchdividends or distributions (the “Participating Dividends” and, together with the Preferred Dividends, the “Dividends”). The Corporation will not declareor pay any dividends or other distributions on any Junior Stock that would require a Participating Dividend unless it concurrently therewith declares andsets aside for payment or distribution, as applicable, such Participating Dividend for all shares of Series A Preferred Stock then outstanding. For purposesof this Certificate of Designation, “Series A Original Issue Price” shall mean $10.00 per share, subject to appropriate adjustment in the event of anyfuture stock dividend, stock split,

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combination or other similar recapitalization with respect to the Series A Preferred Stock; and “Junior Stock” means the Common Stock and any otherclasses or series of capital stock ranking junior to the Series A Preferred Stock with respect to the distribution of assets on the liquidation, dissolution orwinding up of the Corporation or upon a Deemed Liquidation Event, or in respect of the payment of dividends or rights of redemption (and, in each case,any rights or options to acquire any Junior Stock). For the avoidance of doubt, the Series A Preferred Stock ranks pari passu with the Corporation’snewly-designated Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”).

(b)Preferred Dividends shall be cumulative and shall accrue and accumulate annually commencing on the Issuance Date. For clarity, Preferred Dividends thataccrued prior to the effective date of this Certificate of Designation shall be payable in accordance with the terms of the Original Certificate of Designation, whilePreferred Dividends that accrue after the date that this Certificate of Designation first becomes effective shall be payable annually in arrears on December 31st ofeach year commencing on December 31, 2020 (each, a “Preferred Dividend Payment Date,”) and the period from the date of effectiveness to the first PreferredDividend Payment Date and from the day after a Preferred Dividend Payment Date to the subsequent Preferred Dividend Payment Date being a “PreferredDividend Period”). To the extent the Corporation elects to pay any Preferred Dividends in cash, such amounts shall only be paid to the holders of the Series APreferred Stock upon a Deemed Liquidation Event. Participating Dividends shall be payable as and when paid to the holders of Junior Stock (each such date beinga “Participating Dividend Payment Date,” and, together with each Preferred Dividend Payment Date, a “Dividend Payment Date”). Preferred Dividends thatare payable on Series A Preferred Stock in respect of any Preferred Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-daymonths. The amount of Preferred Dividends payable on Series A Preferred Stock on any date prior to the end of a Preferred Dividend Period, and for the initialPreferred Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and actual days elapsed over a 30-day month, andfor the period that the Series A Preferred Stock is outstanding. Preferred Dividends shall accumulate whether or not in any Preferred Dividend Period there havebeen funds of the Corporation legally available for the payment of such Preferred Dividends. Participating Dividends are payable on a cumulative basis oncedeclared, whether or not there shall be funds legally available for the payment thereon.

(c) In lieu of the payment in cash of the Preferred Dividend otherwise payable on any Dividend Payment Date, Preferred Dividends may be paid by issuance anddelivery of a number of additional fully paid and nonassessable unrestricted shares of Common Stock (including, at the Corporation’s option, the payment of cashin lieu of the issuance of fractional Common Stock) for each holder of the Series A Preferred Stock equal to (i) the aggregate dollar amount of the PreferredDividend payable to such holder with respect to the Series A Preferred Stock held by such holder as of the Preferred Dividend Payment Date, divided by (ii) theFair Market Value of the Common Stock on the applicable Preferred Dividend Payment Date. Participating Dividends shall be paid when and in a mannerconsistent with payments of dividends in respect of Junior Stock. No later than fifteen (15) calendar days prior to each Preferred Dividend Payment Date (each, a“Preferred Dividend Election Date”), the Corporation shall make its election to pay the holders of the Series A Preferred Stock in either cash or shares ofunrestricted Common Stock. The Corporation will send written notice to each holder of Series A Preferred Stock stating its election no later than five (5) calendardays following each Preferred Dividend Election Date, and if it elects to issue Common Stock, shall include the amount of Common Stock that will be issued anddelivered to the holders of the Series A Preferred Stock on each applicable Preferred Dividend Payment Date.

(d) From and after the time, if any, that the Corporation shall have failed to pay all accrued, but unpaid, Preferred Dividends for all prior Preferred DividendPeriods, or failed to pay or distribute, as applicable, any unpaid Participating Dividends in accordance with this Section 2, no dividends shall be declared or paid orset apart for payment, or other distribution declared or made, upon any Junior Stock, nor shall any Junior Stock be redeemed, purchased or otherwise acquired forany consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption or other purchase of any such Junior Stock), directly orindirectly, by the Corporation or any of its subsidiaries until (i) all such Dividends have been paid in full or (ii) all such Dividends have been or contemporaneouslyare declared and a sum sufficient for the payment thereof has been or is set aside for the benefit of the holders of the Series A Preferred Stock.

(e) Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on suchshares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for thedetermination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon.

3. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired andcancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may bereissued, without designation as to series

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until such shares are once more designated as part of a particular series of Preferred Stock by resolution or resolutions of the Board of Directors, subject to theconditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other certificate of designations creating a series of PreferredStock or any similar stock or as otherwise required by law.

4. Liquidation, Dissolution or Winding Up.

(a) Upon any liquidation, dissolution, Deemed Liquidation Event (as defined below) or winding up of the Corporation, no distribution shall be made to the holdersof any Junior Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received the greater of (i) an amount equal to the Series AOriginal Issue Price, plus any dividends unpaid thereon, plus an amount equal to accrued and unpaid dividends and distributions thereon, or (ii) such amount pershare as would have been payable had all shares of Series A Preferred Stock been converted into Common Stock immediately prior to such liquidation, dissolution,winding up or Deemed Liquidation Event (as defined in Section 6 below) (the amount payable pursuant to this sentence is hereinafter referred to as the “Series ALiquidation Amount”. In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Preferred Stock LiquidationAmount and Series B Preferred Stock Liquidation Amount, then the holders of shares of the Series A Preferred Stock and Series B Preferred Stock shall shareratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the sharesheld by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

(b) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, after the payment of allpreferential amounts required to be paid to the holders of shares of Series A Preferred Stock and Series B Preferred Stock, the remaining assets of the Corporationavailable for distribution to its stockholders shall be distributed among the holders of shares of Common Stock, pro rata based on the number of shares held byeach such holder.

5. Deemed Liquidation Events.

(a) Each of the following events shall be considered a “Deemed Liquidation Event” unless the holders of at least a majority of the outstanding shares of Series APreferred Stock elect otherwise by written notice sent to the Corporation at least 30 days prior to the effective date of any such event:

(i) a merger or consolidation in which:

(A) the Corporation is a constituent party or

(B) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger orconsolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of theCorporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for sharesof capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of(1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporationimmediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or

(ii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or anysubsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole or the sale ordisposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of theCorporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusivelicense or other disposition is to a wholly owned subsidiary of the Corporation; or

(iii) any breach of Section 7(f) or Section 7(g) and such breach remains uncured after thirty (30) days.

(b) The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in this Section 5 unless the agreement or plan of merger orconsolidation for such transaction (the “Merger Agreement”) provides that the consideration payable to the stockholders of the Corporation shall be allocatedamong the holders of capital stock of the Corporation in the manner specified in Section 4 hereof.

(c) In the event of a Deemed Liquidation Event referred to in this Section 5, if the Corporation does not effect a dissolution of the Corporation under the DGCLwithin ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall

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send a written notice to each holder of Series A Preferred Stock no later than the ninetieth (90th) day after the Deemed Liquidation Event advising such holders oftheir right (and the requirements to be met to secure such right) pursuant to the terms of the following clause; (ii) to require the redemption of such shares of SeriesA Preferred Stock, and (iii) if the holders of at least a majority of the then outstanding shares of Series A Preferred Stock so request in a written instrumentdelivered to the Corporation not later than one hundred twenty (120) days after such Deemed Liquidation Event, the Corporation shall use the considerationreceived by the Corporation for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determinedin good faith by the Board of Directors of the Corporation), together with any other assets of the Corporation available for distribution to its stockholders, all to theextent permitted by Delaware law governing distributions to stockholders (the “Available Proceeds”), on the one hundred fiftieth (150th) day after such DeemedLiquidation Event, to redeem all outstanding shares of Series A Preferred Stock at a price per share equal to the Series A Liquidation Amount. Notwithstanding theforegoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Series APreferred Stock, the Corporation shall ratably redeem each holder’s shares of Series A Preferred Stock to the fullest extent of such Available Proceeds, and shallredeem the remaining shares as soon as it may lawfully do so under Delaware law governing distributions to stockholders. Prior to the distribution or redemptionprovided for in this Section, the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to dischargeexpenses incurred in connection with such Deemed Liquidation.

(d) The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license,other disposition or redemption shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or theacquiring person, firm or other entity.

(e) In the event of a Deemed Liquidation Event pursuant to this Section 5, if any portion of the consideration payable to the stockholders of the Corporation ispayable only upon satisfaction of contingencies (the “Additional Consideration”), the Merger Agreement shall provide that (i) the portion of such considerationthat is not Additional Consideration (such portion, the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation as if theInitial Consideration were the only consideration payable in connection with such Deemed Liquidation Event; and (ii) any Additional Consideration whichbecomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of theCorporation after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Section,consideration placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such DeemedLiquidation Event shall be deemed to be Additional Consideration.

(f) For the avoidance of doubt, the insolvency of the Corporation or the institution of bankruptcy or similar proceedings on account of Corporation indebtednessshall not constitute a Deemed Liquidation Event.

6. Voting and Seniority. The shares of Series A Preferred Stock shall not have voting rights. The Series A Preferred Stock shall be senior to the Common Stock andpari passu with the Series B Preferred Stock.

7. Protective Provisions. So long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment,merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the writtenconsent of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, given in writing or by vote at a meeting, consenting orvoting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of noforce or effect:

(a) liquidate, dissolve or wind-up the business and affairs of the Corporation, effect any merger, consolidation or Deemed Liquidation Event, or consent to any ofthe foregoing;

(b) amend, alter or repeal any provision of this Certificate of Designation or the Certificate of Incorporation or Bylaws of the Corporation in a manner thatadversely affects the powers, preferences or rights of the Series A Preferred Stock;

(c) create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock unless the same ranks junior to theSeries A Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Corporation or upon a Deemed LiquidationEvent, the payment of dividends and rights of redemption, or increase the authorized number of shares of Series A Preferred Stock or increase the authorizednumber of shares of any additional class or series of capital stock of the Corporation unless the same ranks junior to the Series A Preferred Stock with respect tothe distribution of assets on the liquidation, dissolution or winding up of the Corporation or upon a Deemed Liquidation Event, the payment of dividends and rightsof redemption;

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(d) (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with the Series A Preferred Stock in respect of the distribution of assetson the liquidation, dissolution or winding up of the Corporation or upon a Deemed Liquidation Event, the payment of dividends or rights of redemption, if suchreclassification, alteration or amendment would render such other security senior to the Series A Preferred Stock in respect of any such right, preference, orprivilege or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to the Series A Preferred Stock in respect of the distribution ofassets on the liquidation, dissolution or winding up of the Corporation or upon a Deemed Liquidation Event, the payment of dividends or rights of redemption, ifsuch reclassification, alteration or amendment would render such other security senior to or pari passu with the Series A Preferred Stock in respect of any suchright, preference or privilege;

(e) purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock (orany rights or options to acquire any capital stock) of the Corporation other than (i) redemptions of or dividends or distributions on the Series A Preferred Stock orthe Series B Preferred Stock as expressly authorized herein, (ii) dividends or other distributions payable on the Common Stock solely in the form of additionalshares of Common Stock (and in connection therewith any participating dividends on any other Junior Stock in the form of additional shares of Common Stock),(iii) the repurchase of Common Stock pursuant to, and in accordance with restricted stock agreements, stock option plans or other benefit plans for management,directors employees or consultants of the Corporation and its subsidiaries, (iv) the payment of cash in lieu of the issuance of fractional shares, (v) the retention ofCommon Stock in payment of withholding taxes in connection with equity-based compensation plans, and (vi) conversions or exchanges of Junior Stock into or forCommon Stock;

(f) create, incur, assume, or permit to incur any indebtedness, or issue any debt securities, or assume, guarantee or endorse, or otherwise become responsible for,the obligations of any person, or make any loans or advances or capital contribution to, any person;

(g) Issue any shares of Series A Preferred Stock to any individual, entity or other person other than to the original holders and their affiliates, and any transfereesthereof.

8. Redemption. The shares of Series A Preferred Stock (in whole or in part) shall be redeemable from any holder at the Corporation’s option at any time for cash inthe amount of the Series A Original Issue Price per share, plus all accrued but unpaid dividends thereon, unless prohibited by Delaware law governing distributionsto stockholders. The Corporation shall send written notice of such redemption (the “Redemption Notice”) to each holder of record of Series A Preferred Stock notless than thirty (30) days prior to the date of redemption (the “Redemption Date”). Each Redemption Notice shall state: (a) the number of shares of Series APreferred Stock held by the holder that the Corporation shall redeem on the Redemption Date specified in the Redemption Notice; (b) the Redemption Date and theRedemption Price; (c) in the case of any holder, the date upon which the holder’s right to convert such shares terminates (as determined in accordance with Section9 hereof); and (d) for holders of shares in certificated form, that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her orits certificate or certificates representing the shares of Series A Preferred Stock to be redeemed. On or before the applicable Redemption Date, each holder ofshares of Series A Preferred Stock to be redeemed on such Redemption Date, unless such holder has exercised his, her or its right to convert such shares asprovided in Section 9, shall, if a holder of shares in certificated form, surrender the certificate or certificates representing such shares (or, if such registered holderalleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify theCorporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation,in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the personwhose name appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Series A Preferred Stock represented by acertificate are redeemed, a new certificate, instrument, or book entry representing the unredeemed shares of Series A Preferred Stock shall promptly be issued tosuch holder. If the Redemption Notice shall have been duly given, and if on the applicable Redemption Date the Redemption Price payable upon redemption of theshares of Series A Preferred Stock to be redeemed on such Redemption Date is paid or tendered for payment or deposited with an independent payment agent so asto be available therefor in a timely manner, then notwithstanding that any certificates evidencing any of the shares of Series A Preferred Stock so called forredemption shall not have been surrendered, dividends with respect to such shares of Series A Preferred Stock shall cease to accrue after such Redemption Dateand all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Pricewithout interest upon surrender of any such certificate or certificates therefor.

9. Optional Conversion

(a) Each holder of Series A Preferred Stock shall have the following rights to covert its shares of Series A Preferred Stock (the “Conversion Rights”):

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(i) Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment ofadditional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the SeriesA Original Issue Price by the Series A Conversion Price (as defined below) in effect at the time of conversion. The “Series A Conversion Price” shall initially beequal to $200.00, which is the Series A Original Issue Price as adjusted to reflect the Corporation’s 1-for-20 reverse stock split effected on May 20, 2019. Suchinitial Series A Conversion Price, and the rate at which shares of Series A Preferred Stock may be converted into shares of Common Stock, shall be subject tofurther adjustment as provided below.

(ii) In the event of a Redemption Notice with respect to any shares of Series A Preferred Stock pursuant to Section 8, the Conversion Rights of the sharesdesignated for redemption shall terminate at the close of business on the last full day preceding the Redemption Date, unless the redemption price is not fully paidon such Redemption Date, in which case the Conversion Rights for such shares shall continue until such price is paid in full. In the event of a liquidation,dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full daypreceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Preferred Stock.

(iii) No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares to which the holderwould otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the Fair Market Value of a share of Common Stock as determinedin good faith by the Board of Directors of the Corporation. The payment referred to in the previous sentence shall accrue and be made at the time of a dissolution,sale or other Deemed Liquidation Event, along with any cash dividends, as provided in Section 2 hereof. Whether or not fractional shares would be issuable uponsuch conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock the holder is at the time converting into Common Stockand the aggregate number of shares of Common Stock issuable upon such conversion. As used in this Certificate of Designation, “Fair Market Value” shall mean(i) if the Common Stock is at the time listed on any stock exchange, then the Fair Market Value per share of Common Stock on any relevant date shall be theaverage of the closing selling price per share of Common Stock at the close of regular trading hours (i.e., before after-hours trading begins) over a period of 30calendar days following the date specified by the Board of Directors (or if the Corporation elects to pay Preferred Dividends in additional shares of Common Stockpursuant to Section 2(c), the 30 calendar day period preceding each applicable Preferred Dividend Election Date) on the stock exchange determined by the Boardof Directors to be the primary market for the Common Stock, as such price is reported by the National Association of Securities Dealers (if primarily traded on theNasdaq Capital Market, Global Market or Global Select Market) or as officially quoted in the composite tape of transactions on any other stock exchange on whichthe Corporation’s common stock is then primarily traded; or (ii) if the Common Stock is not at the time listed on any stock exchange, then the Fair Market Valueshall be determined by the Board of Directors through the reasonable application of a reasonable valuation method that takes into account the applicable valuationfactors set forth under applicable securities laws, including regulations of the U.S. Department of the Treasury (the “Treasury Regulations”), issued under Section409A of the Internal Revenue Code (the “Code”). (b) In order for a holder of Series A Preferred Stock to voluntarily convert shares of Series A Preferred Stockinto shares of Common Stock, such holder shall (i) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Series APreferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent) that such holder elects to convert all or any numberof such holder’s shares of Series A Preferred Stock and, if applicable, any event on which such conversion is contingent and (ii), if such holder’s shares arecertificated, surrender the certificate or certificates for such shares of Series A Preferred Stock (or, if such registered holder alleges that such certificate has beenlost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim thatmay be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Series APreferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent). Such notice shall state such holder’s name or thenames of the nominees in which such holder wishes the shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered forconversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by theregistered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if theCorporation serves as its own transfer agent) of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time ofconversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the specified shares shall be deemed to be outstanding ofrecord as of such date.

(c) The Corporation shall, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Series A Preferred Stock, or to his, her or itsnominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion (or a notice of such issuance if uncertificatedshares are issued) in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Series A Preferred Stock represented by the

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surrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Section 9(a)(iii) hereof in lieu of any fraction of ashare of Common Stock otherwise issuable upon such conversion and (iii) pay all declared but unpaid dividends on the shares of Series A Preferred Stockconverted as provided in Section 2 hereof.

(d) The Corporation shall at all times when the Series A Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capitalstock, for the purpose of effecting the conversion of the Series A Preferred Stock, such number of its duly authorized shares of Common Stock as shall from timeto time be sufficient to effect the conversion of all outstanding Series A Preferred Stock; and if at any time the number of authorized but unissued shares ofCommon Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred Stock, the Corporation shall take suchcorporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for suchpurposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate ofIncorporation. Before taking any action that would cause an adjustment reducing the Series A Conversion Price below the then par value of the shares of CommonStock issuable upon conversion of the Series A Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessaryin order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Series A Conversion Price.

(e) All shares of Series A Preferred Stock that shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and allrights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares ofCommon Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 9(a)(iii)hereof and to receive payment of any dividends declared but unpaid thereon as provided in Section 2 hereof. Any shares of Series A Preferred Stock so convertedshall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the needfor stockholder action) as may be necessary to reduce the authorized number of shares of Series A Preferred Stock accordingly.

(f) Upon any such conversion, no adjustment to the Series A Conversion Price shall be made for any declared but unpaid dividends on the Series A Preferred Stocksurrendered for conversion or on the Common Stock delivered upon conversion. The holder shall be credited for any accrued but unpaid dividends at the time ofconversion to be paid in the form of, and at the time prescribed by, Section 2(a) above.

(g) The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock uponconversion of shares of Series A Preferred Stock. The Corporation shall not, however, be required to pay any tax that may be payable in respect of any transferinvolved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Series A Preferred Stock so converted wereregistered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount ofany such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

10. Certain Adjustments

(a) If the Corporation shall at any time or from time to time after the Issue Date effect a subdivision of the outstanding Common Stock, the Series A ConversionPrice in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion ofeach share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shallat any time or from time to time after the Issue Date combine the outstanding shares of Common Stock, the Series A Conversion Price in effect immediately beforethe combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall bedecreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall becomeeffective at the close of business on the date the subdivision or combination becomes effective.

(b) In the event the Corporation at any time or from time to time after the Issue Date shall make or issue, or fix a record date for the determination of holders ofCommon Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each suchevent the Series A Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record dateshall have been fixed, as of the close of business on such record date, by multiplying the Series A Conversion Price then in effect by a fraction: (A) the numeratorof which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business onsuch record date, and (B) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time ofsuch issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such

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dividend or distribution. Notwithstanding the foregoing (C) if such record date shall have been fixed and such dividend is not fully paid or if such distribution isnot fully made on the date fixed therefor, the Series A Conversion Price shall be recomputed accordingly as of the close of business on such record date andthereafter the Series A Conversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (D)that no such adjustment shall be made if the holders of Series A Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stockin a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Preferred Stock had been convertedinto Common Stock on the date of such event.

(c) In the event the Corporation at any time or from time to time after the Series A Original Issue Date shall make or issue, or fix a record date for thedetermination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution ofshares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 2 hereof do not apply to suchdividend or distribution, then and in each such event the holders of Series A Preferred Stock shall receive, simultaneously with the distribution to the holders ofCommon Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as theywould have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.

(d) Subject to the provisions of Section 5, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving theCorporation in which the Common Stock (but not the Series A Preferred Stock) is converted into or exchanged for securities, cash or other property (other than atransaction covered by Sections 10(b) and 10(c), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share ofSeries A Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount ofsecurities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series APreferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant tosuch transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in theapplication of the provisions hereof with respect to the rights and interests thereafter of the holders of the Series A Preferred Stock, to the end that the provisionsset forth herein (including provisions with respect to changes in and other adjustments of the Series A Conversion Price) shall thereafter be applicable, as nearly asreasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series A Preferred Stock.

(e) Upon the occurrence of each adjustment or readjustment of the Series A Conversion Price, the Corporation at its expense shall, as promptly as reasonablypracticable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish toeach holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or otherproperty into which the Series A Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. TheCorporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Series A Preferred Stock (but in any event not laterthan ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Series A Conversion Price then in effect, and (ii) thenumber of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of Series APreferred Stock.

11. Mandatory Conversion.

(a) On or after January 1, 2021, at the option of the Corporation, provided that the Corporation’s average market capitalization is equal to at least $300,000,000 forthe most recent fiscal quarter as determined by the Board of Directors based on the volume-weighted average closing price per share for the most recent quartermultiplied by the number of shares of the Company on a fully diluted basis as of the last business day of such quarter (the time of such closing or the date and timespecified, the “Mandatory Conversion Time”), then (i) the Corporation may elect to have all outstanding shares of Series A Preferred Stock automaticallyconverted into shares of Common Stock, at the then effective conversion rate as calculated pursuant to Section 9(a)(i), and (ii) such shares may not be reissued bythe Corporation.

(b) All holders of record of shares of Series A Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated formandatory conversion of all such shares of Series A Preferred Stock pursuant to this Section 11. Such notice need not be sent in advance of the occurrence of theMandatory Conversion Time. Upon receipt of such notice, each holder of shares of Series A Preferred Stock in certificated form shall surrender his, her or itscertificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit andagreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of thealleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, any certificatessurrendered for conversion shall be endorsed or

Execution Version

accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or itsattorney duly authorized in writing. All rights with respect to the Series A Preferred Stock converted pursuant to this Section 11, including the rights, if any, toreceive notices, will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender any certificates at orprior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates of such holders (or lost certificate affidavit andagreement) therefor, to receive the items provided for in the next sentence of this Section 11. As soon as practicable after the Mandatory Conversion Time and, ifapplicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for Series A Preferred Stock, the Corporation shall (a) issueand deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion (ora notice of such issuance if uncertificated) in accordance with the provisions hereof and (b) pay cash as provided in Section 2 hereof in lieu of any fraction of ashare of Common Stock otherwise issuable upon such conversion and the payment of any unpaid dividends on the shares of Series A Preferred Stock converted.Such converted Series A Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter takesuch appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Preferred Stockaccordingly.

12. Amendment; Waivers. At such time as any shares of Series A Preferred Stock are outstanding, any proposed waiver of or amendment to the Certificate ofIncorporation (including this Certificate of Designation) that would materially alter, change or repeal any of the preferences, powers or special rights given to theSeries A Preferred Stock so as to affect the Series A Preferred Stock adversely, requires the approval by the Corporation and the affirmative vote of a majority ofthe outstanding shares of the Series A Preferred Stock, in addition to such other vote as may be required by the DGCL. Any provision in this Certificate ofDesignation may be waived, in lieu of a formal amendment, with the same vote as required for an amendment.

13. Notices. Any notice required or permitted to be given to a holder of shares of Series A Preferred Stock shall be mailed, postage prepaid, to the post officeaddress last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the DGCL, and shall be deemedsent upon such mailing or electronic transmission.

[Signature Page to Follow]

Execution Version

IN WITNESS WHEREOF, the undersigned have signed and attested this Certificate of Designation on the 30th day of September, 2019.

VALERITAS HOLDINGS, INC. By: /s/ John E. Timberlake Name: John E. Timberlake Title: Chief Executive Officer

Attest: /s/ Erick Lucera Erick Lucera, Secretary

[Signature Page to the Certificate of Designation for Series A Convertible Preferred Stock]

Execution Version

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of September 30, 2019, by and amongCAPITAL ROYALTY PARTNERS II L.P., CAPITAL ROYALTY PARTNERS II—PARALLEL FUND “A” L.P., PARALLEL INVESTMENTOPPORTUNITIES PARTNERS II L.P., CAPITAL ROYALTY PARTNERS II – PARALLEL FUND “B” (CAYMAN) L.P., AND CAPITAL ROYALTYPARTNERS II (CAYMAN) L.P. (together, “CRG”), WCAS CAPITAL PARTNERS IV, L.P. (“WCAS”, and together with CRG, the “Purchasers”, witheach of the purchasing entities, a “Purchaser”) and VALERITAS HOLDINGS, INC., a Delaware corporation (the “Company”).

WHEREAS, the Purchasers (or Affiliates thereof) and the Company have executed that certain non-binding term sheet, dated as ofAugust 28, 2019 (as the same may be amended or supplemented, the “Term Sheet”), whereby the parties agree that each of CRG and WCAS shallexchange a portion of their currently outstanding debt in the amounts set forth on Schedule A hereto (the “Exchange”, with such converted amount,the “Exchange  Amount”) for newly created shares of the Company’s Series B Preferred Stock, par value $0.001 per share (the “Series  BPreferred”) in the amounts set forth on Schedule A hereto (the “Series B Shares”);

WHEREAS, the Series B Preferred shall have the rights and preferences as set forth in that certain Certificate of Designation of theCompany (the “Series B COD”), substantially in the form attached hereto as Exhibit A,

WHEREAS, in connection with the Exchange, the Company shall amend the rights and preferences of the Company’s Series A PreferredStock, par value $0.001 per share (the “Series A Preferred”), all of which issued and outstanding shares of Series A Preferred are held by thePurchasers, as set forth in that certain Amended and Restated Certificate of Designation of the Company (the “Amended and Restated Series ACertificate”) substantially in the form attached hereto as Exhibit B;

WHEREAS, the offering of the Series B Preferred in exchange for the outstanding debt is being made to “accredited investors,” as definedin Regulation D (“Regulation D”) as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) in a private placement under theSecurities Act in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the“Securities Act”); and

WHEREAS, prior to or contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing anddelivering (i) an amendment to that certain Registration Rights Agreement dated as of February 14, 2017 by and among the parties hereto (the“Registration Rights Agreement”), substantially in the form attached hereto as Exhibit C (the “Registration Rights Amendment”), pursuant towhich, among other things, the Company agrees to provide certain registration rights with respect to the shares of the Company’s common stock,par value $0.001 (the “Common Stock”) issuable upon conversion of the Series B Shares in accordance with their terms (the “Underlying Shares”and together with the Series B Shares, the “Shares”)), and (ii) an Amendment No.2 to Second Amended and Restated Term Loan Agreement,attached hereto as Exhibit D (the “Second Loan  Amendment”), which further modifies the terms of the Company’s outstanding debt to eachPurchaser;

NOW THEREFORE, in consideration of the foregoing premises and the respective representations and warranties, covenants andagreements contained herein, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. Purchase. The Purchasers hereby purchase the number of Series B Shares in consideration for the Exchange, equal to theExchange Amount divided by $1.46, subject to the terms and conditions of this Agreement and on the basis of the representations, warranties,covenants and agreements contained herein.

2. Closing; Delivery.

(a) Closing. The purchase and sale of the Series B Shares shall take place simultaneously with the satisfaction of each ofthe conditions set forth in Section 6 and Section 7 (to the extent not waived in accordance therewith), at the offices of DLA Piper LLP (U.S.), 51John F. Kennedy Parkway, Suite 120, Short Hills, New Jersey 07078, or such other time and place as is mutually agreed to by the Companyand CRG (a “Closing,” and the date on which such Closing occurs hereinafter referred to as the “Closing Date”).

(b) Transaction Documents. On or before the Closing Date, the Purchasers and the Company shall execute thisAgreement, the Registration Rights Amendment and the Second Loan Amendment, and the Company shall have filed the Series B COD andthe Amended and Restated Series A Certificate with the Secretary of State of the State of Delaware (this Agreement, together with theRegistration Rights Amendment, the Second Loan Amendment, the Series B COD and the Amended and Restated Series A Certificate,collectively, the “Transaction Documents”).

(c) Exchange. Immediately upon the Closing, the Exchange shall be effected.

3. Representations and Warranties of the Company. Except as set forth on the Disclosure Schedule delivered to the Purchasersconcurrently with the execution of this Agreement, the Company hereby represents and warrants to each Purchaser, as of the Closing Date, thefollowing:

(a) Organization and Qualification. The Company and each of its subsidiaries is a corporation or other business entity dulyorganized, validly existing and in good standing under the laws of the jurisdiction of its formation, and has the requisite corporate power to ownits properties and to carry on its business as now being conducted. The Company and each of its subsidiaries is duly qualified as a foreigncorporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes suchqualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effecton the assets, business, conditions (financial or otherwise), results of operations or future prospects of the Company and its subsidiaries takenas a whole (a “Material Adverse Effect”). Each subsidiary of the Company is identified on Schedule 3(a) attached hereto.

(b) Authorization, Enforcement, Compliance with Other Instruments.

(i) The Company has the requisite corporate power and authority to enter into and perform its obligations under thisAgreement, the Registration Rights Amendment, and the Registration Rights Agreement as amended thereby, and each of the other agreementsand documents that are exhibits hereto or thereto or are contemplated hereby or thereby or necessary or desirable to effect the transactionscontemplated hereby or thereby and to issue the Shares in accordance with the terms hereof and thereof;

(ii) the execution and delivery by the Company of each of the Transaction Documents and the consummation by it of thetransactions contemplated hereby and thereby, including, without limitation, the issuance of the Shares, has been, or will be at the time of executionof such Transaction Document, duly authorized by the Company’s Board of Directors, and no further consent or authorization

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is, or will be at the time of execution of such Transaction Document, required by the Company, its respective Board of Directors or its stockholders;

(iii) each of the Transaction Documents will be duly executed and delivered by the Company; and

(iv) the Transaction Documents when executed will constitute the valid and binding obligations of the Companyenforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity orapplicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement ofcreditors’ rights and remedies.

(c) Capitalization. The authorized capital stock of the Company consists of 300,000,000 shares of Common Stock and50,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”). All of the outstanding shares of Common Stock, theoutstanding shares of the Company’s Preferred Stock, par value $0.0001 per share (the “Preferred Stock”) and all of the outstanding sharesof capital stock of each of the Company’s subsidiaries have been duly authorized, validly issued and are fully paid and nonassessable. Boththe pre-transaction and pro forma outstanding capitalization of the Company (immediately after giving effect to the Closing) is as set forth onSchedule 3(c).

(i) no shares of capital stock of the Company or any of its subsidiaries are subject to preemptive rights or any othersimilar rights or any liens or encumbrances suffered or permitted by the Company;

(ii) except as set forth on Schedule 3(c)(ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls orcommitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of itssubsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become boundto issue additional shares of capital stock of the Company or any of its subsidiaries;

(iii) there are no outstanding debt securities other than indebtedness as set forth in Schedule 3(c)(iii);

(iv) other than pursuant to the Registration Rights Agreement, or as set forth in Schedule 3(c)(iv), there are noagreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities under theSecurities Act;

(v) there are no outstanding registration statements, and there are no outstanding comment letters from the SEC or anyother regulatory agency;

(vi) except as provided in this Agreement or as set forth in Schedule 3(c)(vi), there are no securities or instrumentscontaining anti-dilution or similar provisions, including the right to adjust the exercise, exchange or reset price under such securities, triggered by theissuance of the Series B Shares, the amendment of the Series A Preferred, or that will be triggered by the issuance of the Underlying Shares uponconversion of the Series B Shares, as described in this Agreement and the terms of the Series B Preferred;

(vii) no co-sale right, right of first refusal or other similar right exists with respect to the Shares or the issuance and salethereof. Upon request, the Company will make available to the

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Purchasers true and correct copies of the Company’s Certificate of Incorporation, as in effect as of the date hereof (the “Certificate  ofIncorporation”), and the Company’s Bylaws, as in effect as of the date hereof (the “Bylaws”), and the terms of all securities exercisable forCommon Stock or Preferred Stock and the material rights of the holders thereof in respect thereto other than stock options issued to officers,directors, employees and consultants.

(d) Issuance of Shares. The Series B Shares are duly authorized and, upon issuance in accordance with the terms hereof,shall be duly issued, fully paid and nonassessable, and are free and clear from all taxes, liens and charges with respect to the issue thereof.The Underlying Shares to be issued upon conversion of the Series B Shares have been duly authorized and reserved for issuance and, uponconversion of the Series B Shares into shares of Common Stock, will be validly issued, fully paid and nonassessable, and are free and clearfrom all taxes, liens and charges with respect to the issue thereof.

(e) No Conflicts. The execution, delivery and performance of each of the Transaction Documents by the Company, and theconsummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the Certificate ofIncorporation or the Bylaws (or equivalent constitutive document) of the Company or any of its subsidiaries or (ii) violate or conflict with, orresult in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default)under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to whichthe Company or any subsidiary is a party, except for those that would not reasonably be expected to have a Material Adverse Effect, or (iii)result in a material violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws andregulations) applicable to the Company or any subsidiary or by which any property or asset of the Company or any subsidiary is bound oraffected. Neither the Company nor any of its subsidiaries is in violation of any term of or in default under its Certificate of Incorporation, Bylawsor any other constitutive documents. Except for those violations or defaults that would not reasonably be expected to have a Material AdverseEffect, neither the Company nor any subsidiary is in violation of any term of or in default under any contract, agreement, mortgage,indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or any subsidiary.The business of the Company and its subsidiaries is not being conducted, and shall not be conducted in violation of any law, ordinance orregulation of any governmental entity, except for any violation that would not reasonably be expected, individually or in the aggregate, to havea Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicablestate securities laws, neither the Company nor any of its subsidiaries is required to obtain any consent, authorization or order of, or make anyfiling or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under orcontemplated by this Agreement or the other Transaction Documents in accordance with the terms hereof or thereof. Except as set forth onSchedule 3(e), neither the execution and delivery by the Company of the Transaction Documents, nor the consummation by the Company ofthe transactions contemplated hereby or thereby, will require any notice, consent or waiver under any contract or instrument to which theCompany or any subsidiary is a party or by which the Company or any subsidiary is bound or to which any of their assets is subject. TheCompany is unaware of any facts or circumstance, which might give rise to any of the foregoing.

(f) Absence of Litigation. Except as set forth on Schedule 3(f), there is no action, suit, claim, inquiry, notice of violation,proceeding (including any partial proceeding such as a deposition) or investigation before or by any court, public board, governmental oradministrative agency, self-regulatory organization, arbitrator, regulatory authority, stock market, stock exchange or trading facility (an“Action”) now pending or, to the knowledge of the Company, threatened, against or affecting the

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Company or any of its subsidiaries. For the purpose of this Agreement, the knowledge of the Company means the knowledge of the officers ofthe Company (both actual or knowledge that they would have had upon reasonable investigation).

(g) Acknowledgment Regarding Purchaser’s Purchase of the Series B Shares. The Company acknowledges andagrees that each Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and thetransactions contemplated hereby and thereby.

(h) No General Solicitation. Neither the Company, nor any of its Affiliates, nor, to the knowledge of the Company, anyperson acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D)in connection with the offer or sale of the Series B Shares. With respect to a Purchaser, any investment fund or managed account that ismanaged on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.For purposes of this Agreement, “Affiliate” means, with respect to any person, any other person that, directly or indirectly through one or moreintermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule144 under the Securities Act (“Rule 144”).

(i) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor to the knowledge of the Company, any personacting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, undercircumstances that would require registration of the offering of the Shares under the Securities Act or cause this offering of the Series B Sharesto be integrated with prior offerings by the Company for purposes of the Securities Act.

(j) Employee Relations. Neither Company nor any subsidiary is involved in any labor dispute nor, to the knowledge of theCompany, is any such dispute threatened. Neither Company nor any subsidiary is party to any collective bargaining agreement. TheCompany’s and/or its subsidiaries’ employees are not members of any union, and the Company believes that its and its subsidiaries’relationship with their respective employees is good.

(k) Intellectual Property Rights. Except as set forth on Schedule 3(k), the Company and each of its subsidiaries owns,possesses, or has rights to, all Intellectual Property necessary for the conduct of the Company’s and its subsidiaries’ business as nowconducted, except as such failure to own, possess or have such rights would not reasonably be expected to result in a Material Adverse Effectand (ii) there are no unreleased liens or security interests which have been filed, or which the Company has received notice of, against any ofthe patents owned or licenses to the Company. Furthermore, (A) to the Company’s knowledge, there is no infringement, misappropriation orviolation by third parties of any such Intellectual Property, except as such infringement, misappropriation or violation would not result in aMaterial Adverse Effect; (B) there is no pending or, to the Company’s knowledge, threatened, action, suit, proceeding or claim by otherschallenging the Company’s or any of its subsidiaries’ rights in or to any such Intellectual Property, and the Company is unaware of any factswhich would form a reasonable basis for any such claim; (C) the Intellectual Property owned by the Company and its subsidiaries, and to theCompany’s knowledge, the Intellectual Property licensed to the Company and its subsidiaries, has not been adjudged invalid or unenforceable,in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challengingthe validity, enforceability or scope of any such Intellectual Property, and, to the Company’s knowledge, there are no facts which would form areasonable basis for any such claim; (D) there is no pending or, to the Company’s knowledge, threatened action, suit,

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proceeding or claim by others that the Company or any of its subsidiaries infringes, misappropriates or otherwise violates any IntellectualProperty or other proprietary rights of others, neither the Company nor any of its subsidiaries has received any notice of such claim and, to theCompany’s knowledge, there are no other facts which would form a reasonable basis for any such claim, except for any action, suit,proceeding or claim as would not be reasonably expected to have a Material Adverse Effect; and (E) to the Company’s knowledge, noemployee of the Company or any of its subsidiaries is in or has ever been in violation of any term of any employment contract, patentdisclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement orany restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with theCompany or any of its subsidiaries or actions undertaken by the employee while employed with the Company or any of its subsidiaries, exceptas such violation would not reasonably be expected to have a Material Adverse Effect. Except as would not reasonably be expected to have aMaterial Adverse Effect, (A) the Company and its subsidiaries have disclosed to the U.S. Patent and Trademark Office (USPTO) all informationknown to the Company to be relevant to the patentability of its inventions in accordance with 37 C.F.R. Section 1.56, and (B) neither theCompany nor any of its subsidiaries made any misrepresentation or concealed any information from the USPTO in any of the patents or patentapplications owned or licensed to the Company, or in connection with the prosecution thereof, in violation of 37 C.F.R. Section 1.56. Except aswould not reasonably be expected to have a Material Adverse Effect and to the Company’s knowledge, (A) there are no facts that arereasonably likely to provide a basis for a finding that the Company or any of its subsidiaries does not have clear title or valid license orsublicense rights to the patents or patent applications owned or licensed to the Company or other proprietary information rights as being ownedby, or licensed or sublicensed to, as the case may be, the Company or any of its subsidiaries, (B) no valid issued U.S. patent is or would beinfringed by the activities of the Company or any of its subsidiaries relating to products currently or proposed to be manufactured, used or soldby the Company or any of its subsidiaries and (C) there are no facts with respect to any issued patent owned or licensed to the Company thatwould cause any claim of any such patent not to be valid and enforceable in accordance with applicable regulations. “Intellectual Property”shall mean all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses,inventions, trade secrets, domain names, technology and know-how.

(l) Environmental Laws.

(i) The Company and each subsidiary has complied with all applicable Environmental Laws (as defined below), except forviolations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a MaterialAdverse Effect. There is no pending or, to the knowledge of the Company, threatened civil or criminal litigation, notice of violation, formaladministrative proceeding, or investigation, inquiry or information request, relating to any Environmental Law involving the Company or anysubsidiary, except for litigation, notices of violations, formal administrative proceedings or investigations, inquiries or information requests that,individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. For purposes of thisAgreement, “Environmental Law” means any national, state, provincial or local law, statute, rule or regulation or the common law relating to theenvironment or occupational health and safety, including without limitation any statute, regulation, administrative decision or order pertaining to (i)treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii)air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxicor hazardous materials or substances, or solid or hazardous waste, including without limitation emissions, discharges, injections, spills, escapes ordumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangeredand threatened species; (vi) storage tanks, vessels, containers, abandoned

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or discarded barrels, and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacturing, processing,using, distributing, treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic orhazardous materials or substances or oil or petroleum products or solid or hazardous waste. As used above, the terms “release” and “environment”shall have the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

(ii) To the knowledge of the Company, there is no material environmental liability with respect to any solid or hazardouswaste transporter or treatment, storage or disposal facility that has been used by the Company or any subsidiary.

(iii) The Company and its subsidiaries (i) have received all permits, licenses or other approvals required of them underapplicable Environmental Laws to conduct their respective businesses except to the extent that the failure to have such permits, licenses or otherapprovals would not have a Material Adverse Effect, and (ii) are in compliance, in all material respects, with all terms and conditions of any suchpermit, license or approval.

(m) Authorizations; Regulatory Compliance. The Company and each of its subsidiaries holds, and is operating incompliance with, all authorizations, licenses, permits, approvals, clearances, registrations, exemptions, consents, certificates and orders of anygovernmental authority and supplements and amendments thereto (collectively, “Authorizations”) required for the conduct of its business andall such Authorizations are valid and in full force and effect and neither the Company nor any of its subsidiaries is in material violation of anyterms of any such Authorizations, except, in each case, such as would not reasonably be expected to have a Material Adverse Effect; andneither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such Authorization, or has reasonto believe that any such Authorization will not be renewed in the ordinary course, except to the extent that any such revocation, modification, ornon-renewal would not be reasonably expected to have a Material Adverse Effect. The Company and each of its subsidiaries is in compliancewith all applicable federal, state, local and foreign laws, regulations, orders and decrees, except as would not reasonably be expected to havea Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any unresolved FDA Form 483, notice of adversefiling, warning letter, untitled letter or other correspondence or notice from the U.S. Food and Drug Administration (“FDA”), or any other federal,state, local, or foreign governmental or regulatory authority, alleging or asserting noncompliance with the Federal Food, Drug and Cosmetic Act(21 U.S.C. § 301 et seq.). The Company and each of its subsidiaries, and to the Company’s knowledge, each of their respective directors,officers, employees and agents, is and has been in material compliance with applicable health care laws, including, to the extent applicable,without limitation, the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the criminal False Claims Law (42 U.S.C. § 1320a-7b(a)), the Civil MonetaryPenalties Law (42 U.S.C. § 1320a-7a), the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), asamended by the Health Information Technology for Economic and Clinical Health Act of 2009 (42 U.S.C. § 17921 et seq.), the exclusion laws(42 U.S.C. § 1320a-7), Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), and the PatientProtection and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, includingwithout limitation the Physician Payments Sunshine Act (42 U.S.C. § 1320a-7h), and the regulations promulgated pursuant to such laws, andcomparable state laws (collectively, “Health Care Laws”). Neither the Company nor any of its subsidiaries has received notice of any ongoingclaim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Authority or third partyalleging that any product operation or activity is in material violation of any Health Care Laws or

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Authorizations and has no knowledge that any such Governmental Authority or third party is considering any such claim, litigation, arbitration,action, suit, investigation or proceeding. Neither the Company nor any of its subsidiaries has received notice that any governmental authorityhas taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any suchgovernmental authority is considering such action. The Company and each of its subsidiaries has filed, obtained, maintained or submitted allreports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments thereto as required by anyHealth Care Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions andsupplements or amendments were complete, correct and not misleading on the date filed (or were corrected or supplemented by a subsequentsubmission). Neither the Company nor any of its subsidiaries has, either voluntarily or involuntarily, initiated, conducted, or issued or caused tobe initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post sale warning, “dear doctor” letter, or othernotice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company’sknowledge, no third party has initiated or conducted any such notice or action. Neither the Company nor any of its subsidiaries is a party to anycorporate integrity agreement, deferred prosecution agreement, monitoring agreement, consent decree, settlement order, or similaragreements, or has any reporting obligations pursuant to any such agreement, plan or correction or other remedial measure entered into withany Governmental Authority. Neither the Company, its subsidiaries nor their officers, directors, employees, agents or contractors has been or iscurrently excluded from participation in the Medicare and Medicaid programs or any other state or federal health care program.

(n) Title. Neither the Company nor any of its subsidiaries owns any real property. Except as set forth on Schedule 3(n), eachof the Company and its subsidiaries has good and marketable title to all of its personal property and assets, free and clear of any restriction,mortgage, deed of trust, pledge, lien, security interest or other charge, claim or encumbrance which would have a Material Adverse Effect.Except as set forth on Schedule 3(n), with respect to properties and assets it leases, each of the Company and its subsidiaries is in compliancewith such leases and holds a valid leasehold interest free of any liens, claims or encumbrances which would have a Material Adverse Effect.

(o) No Material Restrictions, Breaches, etc. Neither Company nor any subsidiary is subject to any charter, corporate orother legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has had, or isreasonably expected in the future to have, a Material Adverse Effect. Neither Company nor any subsidiary is in breach of any contract oragreement which breach, in the judgment of the Company’s officers, has had, or is reasonably expected to have a Material Adverse Effect.

(p) Tax Status. The Company and each subsidiary has made and filed (taking into account any valid extensions) all federaland state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (unless and only to theextent that the Company or such subsidiary has set aside on its books provisions reasonably adequate for the payment of all unpaid andunreported taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to bedue on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonablyadequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. To theknowledge of the Company, there are no unpaid taxes in any material amount claimed to be due from the Company or any subsidiary by thetaxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

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(q) Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any subsidiary makespayments in the ordinary course of business upon terms no less favorable than it could obtain from third parties, none of the officers, directors,or employees of the Company or any subsidiary is a party to any transaction with the Company or any subsidiary (other than for services asemployees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by,providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or,to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has asubstantial interest or is an officer, director, trustee or partner.

(r) Rights of First Refusal. Except as set forth on Schedule 3(c)(i) or Schedule 3(r), the Company is not obligated to offerthe securities offered hereunder on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or formerstockholders of the Company, underwriters, brokers, agents or other third parties.

(s) Insurance. The Company has insurance policies of the type and in amounts customarily carried by organizationsconducting businesses or owning assets similar to those of the Company and its subsidiaries. There is no material claim pending under anysuch policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy.

(t) SEC Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filedby the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 15(d) thereof(collectively, the “SEC Reports”) for the two (2) years preceding the date hereof.

(u) Financial Statements. The financial statements of the Company included in the SEC Reports comply in all materialrespects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved, except asmay be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain allfootnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiariestaken as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case ofunaudited statements, to normal, year-end audit adjustments. The pro forma financial information and the related notes, if any, included in theSEC Reports have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and theregulations promulgated thereunder and fairly present in all material respects the information shown therein, and the assumptions used in thepreparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstancesreferred to therein.

(v) Material Changes. Since the respective date of the latest balance sheet of the Company included in the financialstatements contained within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there have been no events, occurrencesor developments that have had or would reasonably be expected to have a Material Adverse Effect with respect to the Company, (ii) theCompany has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilitiesincurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the financial statementsof the Company pursuant to GAAP or to be disclosed in filings made with the SEC, (iii) the Company has not materially altered its method ofaccounting or the manner in which it keeps its accounting books

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and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased,redeemed or made any agreements to purchase or redeem any shares of its capital stock (other than in connection with repurchases ofunvested stock issued to employees of the Company), (v) the Company has not issued any equity securities to any officer, director or Affiliate,except Common Stock issued in the ordinary course pursuant to existing Company stock option or stock purchase plans or executive anddirector corporate arrangements disclosed in the SEC Reports, (vi) there has not been any change or amendment to, or any waiver of anymaterial right under, any material contract under which the Company, or any of its assets are bound or subject, and (vii) except for the issuanceof the Series B Shares contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company,its businesses, properties, operations or financial condition, as applicable, that would be required to be disclosed by the Company underapplicable securities laws at the time this representation is made that has not been publicly disclosed in the SEC Reports.

(w) Transactions With Affiliates and Employees. None of the officers or directors of the Company and, to the Company’sknowledge, none of the employees of the Company, is a party to any transaction with the Company or to a transaction contemplated by theCompany (other than for services as employees, officers and directors) that would be required to be disclosed by the Company pursuant toItem 404 of Regulation S-K promulgated under the Securities Act, except as contemplated by the Transaction Documents or set forth in theSEC Reports.

(x) Sarbanes-Oxley. The Company is in compliance in all material respects with all of the provisions of the Sarbanes-OxleyAct of 2002 which are applicable to it.

(y) Disclosure Controls. The Company has established and maintains disclosure controls and procedures (as defined inRules 13a-14 and 15d-14 under the Exchange Act) and such controls and procedures are effective in ensuring that material informationrelating to the Company, including its subsidiaries, is made known to the principal executive officer and the principal financial officer.

(z) Off-Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Companyand an unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company in its SEC Reports (including, forpurposes hereof, any that are required to be disclosed in a Form 10) and is not so disclosed or that otherwise would have a Material AdverseEffect.

(aa) Foreign Corrupt Practices. Neither the Company and its subsidiaries, nor to the Company’s knowledge, any agent orother person acting on behalf of the Company and its subsidiaries, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts,entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domesticgovernment officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fullyany contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of lawor (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

(bb) Brokers’ Fees. Neither of the Company nor any of its subsidiaries has any liability or obligation to pay any fees orcommissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

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(cc) Disclosure Materials. The SEC Reports and the Disclosure Materials taken as a whole do not contain an untruestatement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein notmisleading.

(dd) Investment Company. The Company is not required to be registered as, and is not an Affiliate of, and immediatelyfollowing the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940,as amended.

(ee) Reliance. The Company acknowledges that the Purchaser is relying on the representations and warranties made by theCompany hereunder and that such representations and warranties are a material inducement to the Purchaser purchasing the Series BShares. The Company further acknowledges that without such representations and warranties of the Company made hereunder, thePurchasers would not enter into this Agreement.

(ff) Historical Dividends. The Company agrees that, as of the date of this Agreement, Schedule 4(s) accurately reflects thetotal amount of historical dividends owed to each of the Purchasers by the Company by virtue of each Purchaser’s ownership of shares ofSeries A Preferred and the terms of such Series A Preferred in effect prior to the filing of the Amended and Restated Series A Certificate, all ofwhich will be paid in cash per the terms of the Series A Preferred in effect prior to the filing of the Amended and Restated Series A Certificate..

4. Representations, Warranties and Agreements of the Purchasers. Each Purchaser represents and warrants to, and agrees with, theCompany, severally and not jointly, the following:

(a) The Purchaser has the knowledge and experience in financial and business matters necessary to evaluate the merits andrisks of its prospective investment in the Company, and has carefully reviewed and understands the risks of, and other considerations relatingto, the purchase of Series B Shares and the tax consequences of the investment.

(b) The Purchaser is acquiring the Series B Shares for investment for its own account and not with the view to, or for resalein connection with, any distribution thereof. The Purchaser understands and acknowledges that the Exchange and sale of the Series B Shareshave not been registered under the Securities Act or any state securities laws, by reason of a specific exemption from the registrationprovisions of the Securities Act and applicable state securities laws, which depends upon, among other things, the bona fide nature of theinvestment intent as expressed herein. The Purchaser further represents that it does not have any contract, undertaking, agreement orarrangement with any person to sell, transfer or grant participation to any third person with respect to any of the Series B Shares. ThePurchaser understands and acknowledges that the offering of the Series B Shares pursuant to this Agreement will not be registered at the timeof their acquisition by the Purchaser, and may never be registered, under the Securities Act nor under the state securities laws on the groundthat the sale provided for in this Agreement and the issuance of securities hereunder is exempt from the registration requirements of theSecurities Act and any applicable state securities laws.

(c) The Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D as promulgated by the SEC under theSecurities Act.

(d) The Purchaser represents that such entity was not formed for the specific purpose of acquiring the Series B Shares, suchentity is duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, the consummation ofthe transactions contemplated hereby is authorized by, and will not result in a violation of state law or its

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charter or other organizational documents, such entity has full power and authority to execute and deliver this Agreement and all other relatedagreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Series B Shares, the execution anddelivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf ofsuch entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a representative or fiduciary capacity,represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribingindividual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Purchaser isexecuting this Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or otherentity has full right and power to perform pursuant to this Agreement and make an investment in the Company, and represents that thisAgreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this Agreement will not violate or be inconflict with any order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound.

(e) The Purchaser understands that the Series B Shares are being offered and sold to it in reliance on specific exemptionsfrom the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracyof, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of suchPurchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire suchsecurities. The Purchaser further acknowledges and understands that the Company is relying on the representations and warranties made bythe Purchaser hereunder and that such representations and warranties are a material inducement to the Company to sell the Series B Sharesto the Purchaser. The Purchaser further acknowledges that without such representations and warranties of the Purchaser made hereunder, theCompany would not enter into this Agreement with the Purchaser.

(f) The Purchaser understands that no public market exists for the Preferred Stock and only a limited public market exists forthe Common Stock and that there can be no assurance that any public markets for the Preferred Stock or Common Stock will exist or continueto exist.

(g) The Purchaser has received and reviewed information about the Company, including all Disclosure Materials, and hashad an opportunity to discuss the Company’s business, management and financial affairs with the Company’s management. The Purchaserunderstands that such discussions, as well as any Disclosure Materials provided by the Company, were intended to describe the aspects of theCompany’s business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description,and except as expressly set forth in this Agreement, the Company makes no representation or warranty with respect to the completeness ofsuch information and makes no representation or warranty of any kind with respect to any information provided by any entity other than theCompany. Some of such information may include projections as to the future performance of the Company, which projections may not berealized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control.Additionally, the Purchaser understands and represents that it is purchasing the Series B Shares notwithstanding the fact that the Companymay disclose in the future certain material information the Purchaser has not received, including (without limitation) financial statements of theCompany for the current or prior fiscal periods, and any subsequent period financial statements that will be filed with the SEC, that it is notrelying on any such information in connection with its purchase of the Series B Shares and that it waives any right of action with respect to thenondisclosure to it prior to its purchase of the Series B Shares of any such information. The Purchaser

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has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to itsacquisition of the Series B Shares.

(h) The Purchaser acknowledges that the Company or is not acting as a financial advisor or fiduciary of the Purchaser (or inany similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and no investmentadvice has been given by the Company or any of its representatives or agents in connection with the Transaction Documents and thetransactions contemplated hereby and thereby. The Purchaser further represents to the Company that the Purchaser’s decision to enter intothe Transaction Documents has been based solely on the independent evaluation by the Purchaser and its representatives.

(i) As of the Closing, all actions on the part of Purchaser, and its officers, directors and partners, if applicable, necessary forthe authorization, execution and delivery of this Agreement and the Registration Rights Amendment and the performance of all obligations ofthe Purchaser hereunder and thereunder shall have been taken, and this Agreement and the Registration Rights Amendment, assuming dueexecution by the parties hereto and thereto, constitute valid and legally binding obligations of the Purchaser, enforceable in accordance withtheir respective terms, subject to: (i) judicial principles limiting the availability of specific performance, injunctive relief, and other equitableremedies and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to oraffecting creditors’ rights.

(j) Purchaser represents that neither it nor, to its knowledge, any person or entity controlling, controlled by or under commoncontrol with it, nor any person having a beneficial interest in it, nor any person on whose behalf the Purchaser is acting: (i) is a person listed inthe Annex to Executive Order No. 13224 (2001) issued by the President of the United States (Executive Order Blocking Property andProhibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism); (ii) is named on the List of SpeciallyDesignated Nationals and Blocked Persons maintained by the U.S. Office of Foreign Assets Control; (iii) is a non-U.S. shell bank or is providingbanking services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S. political figure or an immediate family member or close associateof such figure; or (v) is otherwise prohibited from investing in the Company pursuant to applicable U.S. anti-money laundering, anti-terrorist andasset control laws, regulations, rules or orders (categories (i) through (v), each a “Prohibited Purchaser”). The Purchaser agrees to providethe Company, promptly upon request, all information that the Company reasonably deems necessary or appropriate to comply with applicableU.S. anti-money laundering, anti-terrorist and asset control laws, regulations, rules and orders. The Purchaser consents to the disclosure toU.S. regulators and law enforcement authorities by the Company and its Affiliates and agents of such information about the Purchaser as theCompany reasonably deems necessary or appropriate to comply with applicable U.S. anti-money laundering, anti-terrorist and asset controllaws, regulations, rules and orders. If the Purchaser is a financial institution that is subject to the USA Patriot Act, the Purchaser represents thatit has met all of its obligations under the USA Patriot Act. The Purchaser acknowledges that if, following its investment in the Company, theCompany reasonably believes that the Purchaser is a Prohibited Purchaser or is otherwise engaged in suspicious activity or refuses topromptly provide information that the Company requests, the Company has the right or may be obligated to prohibit additional investments,segregate the assets constituting the investment in accordance with applicable regulations or immediately require the Purchaser to transfer theSeries B Shares. The Purchaser further acknowledges that the Purchaser will have no claim against the Company or any of its Affiliates oragents for any form of damages as a result of any of the foregoing actions.

(k) The Purchaser or its duly authorized representative realizes that because of the inherently speculative nature ofbusinesses of the kind conducted and contemplated by the

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Company, the Company’s financial results may be expected to fluctuate from month to month and from period to period and will, generally,involve a high degree of financial and market risk that could result in substantial or, at times, even total losses for investors in securities of theCompany.

(l) The Purchaser has adequate means of providing for its current and anticipated financial needs and contingencies, is ableto bear the economic risk for an indefinite period of time and has no need for liquidity of the investment in the Series B Shares and could affordcomplete loss of such investment.

(m) The Purchaser is not subscribing for Series B Shares as a result of or subsequent to any advertisement, article, notice orother communication, published in any newspaper, magazine or similar media or broadcast over television, radio, or the internet, or presentedat any seminar or meeting, or any solicitation of a subscription by a person not previously known to the Purchaser in connection withinvestments in securities generally.

(n) The Purchaser acknowledges that no U.S. federal or state agency or any other government or governmental agency haspassed upon the Series B Shares or made any finding or determination as to the fairness, suitability or wisdom of any investments therein.

(o) Other than consummating the transactions contemplated hereunder, the Purchaser has not directly or indirectly, nor hasany individual or entity acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or sales, includingShort Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet(written or oral) from the Company or any other individual or entity representing the Company setting forth the material terms of thetransactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of aPurchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’sassets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing otherportions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by theportfolio manager that made the investment decision to purchase the Series B Shares covered by this Agreement. Other than to otherindividuals or entities party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection withthis transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing containedherein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securingof, available shares to borrow in order to effect Short Sales or similar transactions in the future. For purposes of this Agreement, “Short Sales”means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the locationand/or reservation of borrowable shares of Common Stock).

(p) The Purchaser agrees to be bound by all of the terms and conditions of the Registration Rights Agreement, as amendedby the Registration Rights Amendment, and to perform all obligations thereby imposed upon it.

(q) The Purchaser is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales ofthe Series B Shares and other activities with respect to the Series B Shares by the Purchasers.

(r) All of the information that the Purchaser has heretofore furnished or that is set forth herein is true, correct and completeas of the date of this Agreement, and, if there should be any

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material change in such information prior to the admission of the undersigned to the Company, the Purchaser will promptly furnish revised orcorrected information to the Company.

(s) The Purchaser agrees that, as of the date of this Agreement, Schedule 4(s) accurately reflects the total amount ofhistorical dividends owed to such Purchaser by the Company by virtue of such Purchaser’s ownership of shares of Series A Preferred and theterms of such Series A Preferred in effect prior to the filing of the Amended and Restated Series A Certificate, all of which will be paid in cashper the terms of the Series A Preferred in effect prior to the filing of the Amended and Restated Series A Certificate.

5. Transfer Restrictions. The Purchaser acknowledges and agrees as follows:

(a) The Shares have not been registered for sale under the Securities Act, in reliance on the private offering exemption inSection 4(a)(2) thereof; other than as expressly provided in the Registration Rights Agreement as amended by the Registration RightsAmendment, the Company does not currently intend to register the Shares under the Securities Act at any time in the future; and theundersigned will not immediately be entitled to the benefits of Rule 144 with respect to the Shares.

(b) The Purchaser understands that there are substantial restrictions on the transferability of the Shares that the certificatesrepresenting the Shares shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed againsttransfer of such certificates or other instruments):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,AS AMENDED (THE “SECURITIES  ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTERESTTHEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENTWITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) ANEXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLYSATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED INTHE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLESTATE SECURITIES LAWS..

In addition, if any Purchaser is an Affiliate of the Company, certificates evidencing the Series B Shares issued to such Purchaser shall beara customary “Affiliates” legend.

The legends set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Sharesupon which it is stamped, if (a) such Shares are sold pursuant to a registration statement under the Securities Act, or (b) such holder delivers to theCompany an opinion of counsel, reasonably acceptable to the Company, that a disposition of the Shares is being made pursuant to an exemptionfrom such registration and that the Shares, after such transfer, shall no longer be “restricted securities” within the meaning of Rule 144.

6. Conditions to Company’s Obligations at Closing. The Company’s obligation to complete the sale and issuance of the Series BShares and deliver the Series B Shares to each Purchaser, individually shall be subject to the following conditions to the extent not waived by theCompany:

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(a) Representations and Warranties. The representations and warranties made by the Purchasers in Section 4 hereof shallbe true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the sameforce and effect as if they had been made on and as of said date.

(b) Performance. Each Purchaser shall have performed in all material respects all obligations and covenants hereinrequired to be performed by them on or prior to such Closing Date.

(c) Receipt of Executed Documents. Each Purchaser shall have executed and delivered to the Company each of theTransaction Documents.

7. Conditions to Purchasers’ Obligations at Closing. Each Purchaser’s obligation to accept delivery of the Series B Shares and toeffect the Exchange shall be subject to the following conditions to the extent not waived by CRG:

(a) Representations and Warranties Correct. The representations and warranties made by the Company in Section 3hereof shall be true and correct in all material respects (except to the extent any such representation and warranty is qualified by materiality orreference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects as so qualified)as of, and as if made on, the date of this Agreement and as of the Closing Date, except to the extent any such representation or warrantyexpressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date.

(b) Performance. The Company shall have performed in all material respects all obligations and covenants herein requiredto be performed by it on or prior to such Closing Date.

(c) Receipt of Executed Transaction Documents. (i) The Company shall have executed and delivered to the Purchaserseach of the Transaction Documents, and (ii) each of CRG and WCAS shall have executed and delivered to the Company each of theTransaction Documents.

(d) Certificate. The Chief Executive Officer of the Company shall execute and deliver to the Purchasers to the effect that therepresentations and warranties of the Company in Section 3 hereof are true and correct (except to the extent any such representation andwarranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true andcorrect in all respects as so qualified) as of, and as if made on, the date of this Agreement and as of the Closing Date and that the Companyhas satisfied in all material respects all of the conditions set forth in this Section 7.

(e) Good Standing. The Company and each of its subsidiaries is a corporation or other business entity duly organized,validly existing, and in good standing under the laws of the jurisdiction of its formation.

(f) Judgments. No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate,including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceedingshall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby.

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(g) No Suspension. No suspension of trading shall have been imposed by The Nasdaq Capital Market, the SEC or anyother governmental regulatory body with respect to public trading in the Common Stock.

(h) Certificate of Designation; Certificate of Amendment. The Company shall have filed the Series B COD and theAmended and Restated Series A Certificate with the State of Delaware.

8. Indemnification.

(a) The Company agrees to indemnify and hold harmless each Purchaser, and its directors, officers, shareholders,members, partners, employees and agents (and any other persons with a functionally equivalent role of a person holding such titlesnotwithstanding a lack of such title or any other title), each person who controls such Purchaser (within the meaning of Section 15 of theSecurities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (andany other persons with a functionally equivalent role of a person holding such titles notwithstanding a lack of such title or any other title) of suchcontrolling person, from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to,any and all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened) based upon or arisingout of the Company’s actual or alleged false acknowledgment, representation or warranty, or misrepresentation or omission to state a materialfact, or breach by the Company of any covenant or agreement made by the Company, contained herein or in any other any other DisclosureMaterials; provided, however, that the Company will not be liable in any such case to the extent and only to the extent that any such loss,liability, claim, damage, cost, fee or expense arises out of or is based upon the inaccuracy of any representations made by such indemnifiedparty in this Agreement.

(b) Each Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Company and its directors, officers,shareholders, members, partners, employees and agents (and any other persons with a functionally equivalent role of a person holding suchtitles notwithstanding a lack of such title or any other title), each person who controls such indemnified person (within the meaning of Section15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners oremployees (and any other persons with a functionally equivalent role of a person holding such titles notwithstanding a lack of such title or anyother title) of such controlling person, from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including,but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened, andincluding in settlement of any litigation, but only if such settlement is effected with the written consent of Purchaser) insofar as such losses,liabilities, claims, damages, costs, fees and expenses are primarily based upon or primarily arise out of the Purchaser’s actual or alleged falseacknowledgment, representation or warranty, or misrepresentation or omission to state a material fact, or material breach by the Purchaser ofany covenant or agreement made by the Purchaser, contained herein or in any other document delivered by the Purchaser in connection withthis Agreement.

(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any Action, suchindemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifyingparty in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which itmay have to any indemnified party otherwise than under this Section 8. In case any such Action is brought against any indemnified party, and itnotifies the indemnifying party of the

17.

commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent that it may elect by written noticedelivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof,with counsel satisfactory to such indemnified party; provided, however, if the defendants in any such Action include both the indemnified partyand the indemnifying party and either (i) the indemnifying party or parties and the indemnified party or parties mutually agree or (ii)representation of both the indemnifying party or parties and the indemnified party or parties by the same counsel is inappropriate underapplicable standards of professional conduct due to actual or potential differing interests between them, the indemnified party or parties shallhave the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such Action on behalf ofsuch indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume thedefense of such Action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified partyunder this Section 8 for any reasonable legal or other expenses subsequently incurred by such indemnified party in connection with thedefense thereof unless (i) the indemnified party shall have employed counsel in connection with the assumption of legal defenses inaccordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for theexpenses of more than one separate counsel in such circumstance), (ii) the indemnifying party shall not have employed counsel satisfactory tothe indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the Action or (iii) theindemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. Noindemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settleor compromise or consent to the entry of any judgment with respect to any pending or threatened Action in respect of which indemnification orcontribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such Action) unless suchsettlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such Action, or (ii)be liable for any settlement of any such Action effected without its written consent (which consent shall not be unreasonably withheld), but ifsettled with its written consent or if there be a final judgment of the plaintiff in any such Action, the indemnifying party agrees to indemnify andhold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.

9. Binding Effect. The Purchaser hereby acknowledges and agrees that this Agreement shall be binding upon and inure to the benefit ofthe parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

10. Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreement are severaland not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations ofany other Purchaser under this Agreement. Nothing contained herein and no action taken by any Purchaser pursuant hereto, shall be deemed toconstitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasersare in any way acting in concert or as a group, or are deemed affiliates (as such term is defined under the Exchange Act) with respect to suchobligations 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 anadditional party in any proceeding for such purpose.

11. No Third-Party Beneficiaries. This Agreement is intended only for the benefit of the parties hereto and their respective successorsand permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

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12. Amendments and Waivers. Except as set forth in in Section 6 and Section 7, any term of this Agreement may be amended,terminated or waived only with the written consent of the Company and each of the Purchasers. Any amendment or waiver effected in accordancewith this Section 12 shall be binding upon each Purchaser and each transferee of the Series B Shares, each future holder of all such securities, andthe Company.

13. Notices. Any notice, consents, waivers or other communication required or permitted to be given hereunder shall be in writing and willbe deemed to have been delivered: (i) upon receipt, when personally delivered; (ii) upon receipt when sent by certified mail, return receiptrequested, postage prepaid; (iii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronicallygenerated and kept on file by the sending party); (iv) when sent, if by e-mail, (provided that such sent e-mail is kept on file (whether electronically orotherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server thatsuch e-mail could not be delivered to such recipient); or (v) one (1) Business Day after deposit with an overnight courier service with next daydelivery specified, in each case, properly addressed to the party to receive the same. For purposes of this Agreement, “Business Day” means aday, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business. The addresses, facsimilenumbers and email addresses for such communications shall be:

(a) if to the Company, at

Valeritas Holdings, Inc.750 Route 202 South, Suite 600Bridgewater, NJ 08807Attention: Chief Executive OfficerFacsimile: 908-927-9927E-mail: JTimberlake@valeritas.com

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

DLA Piper LLP (US)51 John F. Kennedy Parkway, Suite 120Short Hills, NJ 07078-2704Attention: Emilio RagosaFacsimile: (973) 215-2804Email: emilio.ragosa@us.dlapiper.com

or

(b) if to CRG, at

CRG1000 Main Street, Suite 2500Houston, TX 77002Attention: General CounselFacsimile: 713-209-7351Email: adorenbaum@crglp.com

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

19.

Cooley LLP101 California StreetSan Francisco, CA 94111-5800Attention: [Mischi] a’MarcaFacsimile: (415) 693-2222Email: gmamarca@cooley.com

or

(c) if to WCAS, at

Welsh, Carson, Anderson & Stowe320 Park Avenue, 25th FloorNew York, NY 10022Attn: Sean TraynorFax 1-212-735-0845Email: straynor@wcas.com

(or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 13).Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing aparty’s address which shall be deemed given at the time of receipt thereof.

14. Assignability. This Agreement and the rights, interests and obligations hereunder are not transferable or assignable by thePurchaser, and the transfer or assignment of the Series B Shares shall be made only in accordance with all applicable laws.

15. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, withoutreference to the principles thereof relating to the conflict of laws.

16. Arbitration. The parties agree to submit all controversies to arbitration in accordance with the provisions set forth below andunderstand that:

(a) Arbitration shall be final and binding on the parties.

(b) The parties are waiving their right to seek remedies in court, including the right to a jury trial.

(c) Pre-arbitration discovery is generally more limited and different from court proceedings.

(d) The arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to appeal or toseek modification of rulings by arbitrators is strictly limited.

(e) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry.

(f) All controversies which may arise between the parties concerning this Agreement shall be determined by arbitrationpursuant to the rules then pertaining to the Financial Industry Regulatory Authority in New York City, New York. Judgment on any award of anysuch arbitration

20.

may be entered in the Supreme Court of the State of New York or in any other court having jurisdiction of the person or persons against whomsuch award is rendered. Any notice of such arbitration or for the confirmation of any award in any arbitration shall be sufficient if given inaccordance with the provisions of this Agreement. The parties agree that the determination of the arbitrators shall be binding and conclusiveupon them. The prevailing party, as determined by such arbitrators, in a legal proceeding shall be entitled to collect any costs, disbursementsand reasonable attorney’s fees from the other party. Prior to filing an arbitration, the parties hereby agree that they will attempt to resolve theirdifferences first by submitting the matter for resolution to a mediator, acceptable to all parties, and whose expenses will be borne equally by allparties. The mediation will be held in the County of New York, State of New York, on an expedited basis. If the parties cannot successfullyresolve their differences through mediation within sixty (60) days from the receipt of the written notice of a matter from the notifying party, thematter will be resolved by arbitration. The arbitration shall take place in the County of New York, State of New York, on an expedited basis.

17. Form D; Blue Sky Qualification. The Company agrees to timely file a Form D with respect to the Securities and to provide a copythereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary inorder to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at such Closing under applicable securities or “Blue Sky” lawsof the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

18. Use of Pronouns. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter,singular or plural as the identity of the person or persons referred to may require.

19. Securities Laws Disclosure; Publicity. The Company shall not publicly disclose the name of any Purchaser or an Affiliate of anyPurchaser, or include the name of any Purchaser or an Affiliate of any Purchaser in any press release or filing with the SEC (other than theRegistration Statement) or any regulatory agency or principal trading market, without the prior written consent of such Purchaser, except (i) asrequired by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) thefiling of final Transaction Documents with the SEC or (ii) to the extent such disclosure is required by law, request of the staff of the SEC or of anyregulatory agency or principal trading market regulations, in which case the Company shall provide the Purchasers with prior written notice of suchdisclosure permitted under this sub-clause (ii) from and after the issuance of the Press Release, no Purchaser shall be in possession of anymaterial, non-public information received from the Company or any of its respective officers, directors, employees or agents, that is not disclosed inthe Press Release unless a Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. EachPurchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreementare publicly disclosed by the Company as described in this Section 19, such Purchaser will maintain the confidentiality of all disclosures made to it inconnection with such transactions (including the existence and terms of such transactions).

20. Non-Public Information. Except for information (including the terms of this Agreement and the transactions contemplated hereby)that will be disclosed in any filing with the SEC within four (4) Business Days of the Closing, the Company shall not and shall cause each of itsofficers, directors, employees and agents, not to, provide any Purchaser with any material, non-public information regarding the Company withoutthe express written consent of such Purchaser.

21. Miscellaneous.

21.

(a) This Agreement, together with the Registration Rights Agreement and any confidentiality agreement between thePurchaser and the Company, constitute the entire agreement between the Purchaser and the Company with respect to the Exchange andsupersede all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. The terms and provisions of thisAgreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to thebenefits of such terms or provisions.

(b) The representations and warranties of the Company and the Purchasers made in this Agreement shall survive theexecution and delivery hereof and delivery of the Series B Shares.

(c) If the Series B Shares are certificated and any certificate or instrument evidencing any Series B Shares is mutilated, lost,stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu ofand substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and theCompany’s transfer agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit ofthat fact and an agreement to indemnify and hold harmless the Company and the Company’s transfer agent for any losses in connectiontherewith or, if required by the transfer agent, a bond in such form and amount as is required by the transfer agent. The applicants for a newcertificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of suchreplacement Series B Shares. If a replacement certificate or instrument evidencing any Series B Shares is requested due to a mutilationthereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of areplacement.

(d) Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants,appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, whether or not thetransactions contemplated hereby are consummated.

(e) This Agreement may be executed in one or more original or facsimile or by an e-mail which contains a portable documentformat (.pdf) file of an executed signature page counterparts, each of which shall be deemed an original, but all of which shall togetherconstitute one and the same instrument and which shall be enforceable against the parties actually executing such counterparts. The exchangeof copies of this Agreement and of signature pages by facsimile transmission or in .pdf format shall constitute effective execution and deliveryof this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted byfacsimile or by e-mail of a document in pdf format shall be deemed to be their original signatures for all purposes.

(f) Each provision of this Agreement shall be considered separable and, if for any reason any provision or provisions hereofare determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the operation of or affect the remainingportions of this Agreement.

(g) Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forthin the text.

(h) Each Purchaser hereby agrees to furnish the Company such other information as the Company may request prior to theClosing with respect to its purchase of Shares hereunder.

22.

22. Public Disclosure. No Purchaser nor any officer, manager, director, member, partner, stockholder, employee, Affiliate, affiliatedperson or entity of a Purchaser shall make or issue any press releases or otherwise make any public statements or make any disclosures to anythird person or entity with respect to the transactions contemplated herein and will not make or issue any press releases or otherwise make anypublic statements of any nature whatsoever with respect to the Company without the Company’s express prior approval. The Company has the rightto withhold such approval in its sole discretion.

[SIGNATURE PAGE TO FOLLOW]

23.

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Agreement as of the date first above written.

COMPANY:

VALERITAS HOLDINGS, INC.

By /s/ John Timberlake Name: John TimberlakeTitle: Chief Executive Officer

[SIGNATURE PAGE TO THE SERIES B PREFERRED STOCK PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Agreement as of the date first above written.

CRG:

CAPITAL ROYALTY PARTNERS II L.P.

By CAPITAL ROYALTY PARTNERS II GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II L.P.

By PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II GP L.P., its General Partner

By PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

CAPITAL ROYALTY PARTNERS II–PARALLEL FUND “A” L.P.

By CAPITAL ROYALTY PARTNERS II–PARALLEL FUND “A” GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II–PARALLEL FUND “A” GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

[SIGNATURE PAGE TO THE SERIES B PREFERRED STOCK PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Agreement as of the date first above written.

CAPITAL ROYALTY PARTNERS II (CAYMAN) L.P.

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

CAPITAL ROYALTY PARTNERS II – PARALLEL FUND “B” (CAYMAN) L.P.

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

[SIGNATURE PAGE TO THE SERIES B PREFERRED STOCK PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Agreement as of the date first above written.

WCAS:

WCAS CAPITAL PARTNERS IV, L.P.

By: WCAS CP IV Associates LLC, its General Partner

By /s/ Sean Traynor

Name: Sean Traynor

Title: General Partner

[SIGNATURE PAGE TO THE SERIES B PREFERRED STOCK PURCHASE AGREEMENT]

Schedule A

Schedule A-1

SCHEDULE 3(C)

Schedule 3(C)

SCHEDULE 4(S)

Schedule 4(S)

EXHIBIT A SERIES B PREFERRED STOCK – CERTIFICATE OF DESIGNATIONS

Exhibit A-1

EXHIBIT B SERIES A PREFERRED STOCK – AMENDED AND RESTATED CERTIFICATE

Exhibit A

Exhibit B-1

EXHIBIT C FORM OF REGISTRATION RIGHTS AMENDMENT

Exhibit C-1

EXHIBIT D AMENDMENT NO.2 TO SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

EXECUTION VERSION

AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT

THIS AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED TERM LOAN AGREEMENT (this“Amendment”), dated as of September 30, 2019, is made among VALERITAS, INC., a Delaware corporation (“Borrower”),VALERITAS HOLDINGS, INC., a Delaware corporation (“Holdings”), VALERITAS SECURITY CORPORATION, aMassachusetts corporation (“Valeritas Security”, together with Holdings, the “Guarantors”), and the Lenders listed on the signaturepages hereof under the heading “LENDERS” (each a “Lender” and, collectively, the “Lenders”).

RECITALS

WHEREAS, the Borrower, the Guarantors, and the Lenders are parties to the Second Amended and Restated Term LoanAgreement, dated as of May 3, 2016 (as amended by Amendment No. 1 to Second Amended and Restated Term Loan Agreement,dated as of February 9, 2017, and as further amended, restated, modified or otherwise supplemented from time to time, the “LoanAgreement”).

WHEREAS, the parties hereto desire to amend the Loan Agreement on the terms and subject to the conditions set forthherein.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the partieshereto agree as follows:

SECTION 1 Definitions; Interpretation.

(a) Terms Defined in Loan Agreement. All capitalized terms used in this Amendment (including in the recitals hereof)and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

(b) Interpretation. The rules of interpretation set forth in Section 1.03 of the Loan Agreement shall be applicable to thisAmendment and are incorporated herein by this reference.

SECTION 2Amendments. Subject to Section 3:

(a) Section 1.01 of the Loan Agreement is hereby amended as follows:

(i) The following definitions are hereby amended and restated in their entireties as follows:

“Change of Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record,by any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Securities Exchange Actof 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entityacting in its capacity as trustee, agent

1.

or other fiduciary or administrator of any such plan) other than the Specified Equityholders, acting jointly orotherwise in concert, of capital stock representing more than 30% of the aggregate ordinary voting powerrepresented by the issued and outstanding capital stock of the Parent or the Borrower or (b) the acquisition ofdirect or indirect Control of the Parent or the Borrower by any Person or group of Persons other than theSpecified Equityholders, acting jointly or otherwise in concert; in each case whether as a result of a tender orexchange offer, open market purchases, privately negotiated purchases or otherwise.

“Interest-Only Period” means the period from and including the First Borrowing Date and through butexcluding the twenty-fourth (24th) Payment Date after the Closing Date.

“Permitted Subordinated Debt” means (i) Permitted Shareholder Debt in an aggregate outstanding principalamount not to exceed $1,550,579.62 (plus interest paid-in-kind thereon) at any time, and (ii) Indebtedness (a)that is governed by documentation containing representations, warranties, covenants and events of default nomore burdensome or restrictive than those contained in the Loan Documents, (b) that has a maturity date thatis at least one hundred eighty one (181) days later than the Stated Maturity Date, (c) in respect of which nocash payments of principal or interest are required prior to a date that is at least one hundred eighty one (181)days later than the Stated Maturity Date, (d) that converts into equity immediately upon the occurrence of anEvent of Default and (e) in respect of which the holders have agreed in favor of Borrower and Secured Parties(i) that prior to the date on which the Commitments have expired or been terminated and all Obligations (otherthan Warrant Obligations) have been paid in full indefeasibly in cash, such holders will not exercise anyremedies available to them in respect of such Indebtedness, (ii) that such Indebtedness is and shall remainunsecured, and (iii) to terms of subordination in substantially the form attached hereto as Exhibit I orotherwise satisfactory to the Majority Lenders.

“PIK Period” means the period beginning on the First Borrowing Date through and including the earlier tooccur of (i) the twenty fourth (24th) Payment Date after the first Borrowing Date and (ii) the date on whichany Default shall have occurred (provided that if such Default shall have been cured or waived, the PIKPeriod shall resume until the earlier to occur of the next Default and the twenty fourth (24th) Payment Dateafter the first Borrowing Date).

“Specified Equityholders” means CRG Servicing LLC, Capital Royalty Partners II L.P., Capital RoyaltyPartners II - Parallel Fund “A” L.P., Parallel Investment Opportunities Partners II L.P., Capital RoyaltyPartners II –

2.

Parallel Fund “B” (Cayman) L.P., and Capital Royalty Partners II (Cayman) L.P., their respective Affiliatesand any other holders of the Borrower’s Series C Preferred Stock, as determined as of May 24, 2013.

(ii) The following definitions are hereby added thereto in appropriate alphabetical order:

“Back-End Facility Fee” has the meaning set forth in the Fee Letter.

“Fee Letter” means the fee letter agreement dated as of September 30, 2019 between Borrower and theLenders party thereto.

(b) Section 3.02(a) of the Loan Agreement shall be amended and restated in its entirety as follows:

(a) Interest Generally. Subject to Section 3.02(d), Borrower agrees to pay to the Lenders interest on the unpaidprincipal amount of the Loans and the amount of all other outstanding Obligations, in the case of the Loans, for theperiod from the date hereof and in the case of any other Obligation, from the date such other Obligation is due andpayable, in each case, until paid in full, at a rate per annum equal to 13.00%.

(c) Section 3.02(d) of the Loan Agreement shall be amended and restated in its entirety as follows:

(d) Paid In-Kind Interest . Notwithstanding Section 3.02(a), at any time during the PIK Period as of the datehereof, the Borrower may elect to pay the interest on the outstanding principal amount of the Loans payable pursuantto Section 3.02 as follows: 13.00% of the 13.00% per annum interest as compounded interest, added to the aggregateprincipal amount of the Loans on the last day of each Interest Period (the amount of any such compounded interestbeing a “PIK Loan”); If requested by any Lender, each PIK Loan shall be evidenced by a Note delivered pursuant toSection 2.04 for the applicable Borrowing in respect thereof. The principal amount of each PIK Loan shall accrueinterest in accordance with the provisions of this Agreement applicable to the Loans.

(d) A new Section 8.17 is hereby added is hereby added to the Loan Agreement immediately following Section 8.16 ofthe Loan Agreement as follows:

“8.17 Board Observation Rights. Borrower shall, concurrently with delivery to Borrower's Board ofDirectors (the “Board”), give a designated representative of the Lenders (who may change from time to time at thesole discretion of Administrative Agent) (the “Representative”) copies of all notices, minutes, consents and othermaterial that Borrower provides to its directors, and shall permit the Representative to attend all meetings of theBoard as a non-voting

3.

observer, except that the Representative may be excluded from access to any material or meeting or portion thereofif the Board determines in good faith, upon advice of counsel, that such exclusion is reasonably necessary topreserve attorney-client privilege or to protect highly confidential proprietary information. Upon reasonable noticeand at a scheduled meeting of the Board or such other time, if any, as the Board may determine in its sole discretion,the Representative may address the Board with respect to a Lender’s concerns regarding significant business issuesfacing Borrower. Borrower shall pay the Representative’s reasonable out-of-pocket expenses (including the cost oftravel, meals and lodging) in connection with the attendance of such meetings). For clarity, the foregoing provisionsshall not apply to the extent any of Lenders’ Affiliates is currently a director of the Borrower, and all obligationshereunder shall otherwise terminate immediately upon the later to occur of such time as (i) the Commitments haveexpired or been terminated and all Obligations (other than the Warrant Obligations) have been paid in fullindefeasibly in cash and (ii) Lenders no longer hold any of Borrower’s outstanding Series A Preferred Stock orSeries B Preferred Stock.”

(e) Section 11.02 of the Loan Agreement is hereby amended and restated in its entirety as follows:

11.02 Remedies.

(a) Upon the occurrence of any Event of Default, then, and in every such event (other than an Event of Defaultdescribed in Section 11.01(h), (i) or (j)), and at any time thereafter during the continuance of such event, the MajorityLenders may, by notice to Borrower, take either or both of the following actions, at the same or different times: (i) terminatethe Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstandingto be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafterbe declared to be due and payable) (an “acceleration”), and thereupon the principal of the Loans so declared to be due andpayable, together with accrued interest thereon and all fees and other Obligations shall become due and payable immediatelyand the Obligors shall immediately pay all Obligations, including the Back-End Facility Fee, all without presentment,demand, protest or other notice of any kind, all of which are hereby waived by each Obligor.

(b) Upon the occurrence of any Event of Default described in Section 11.01(h), (i) or (j), the Commitments shallautomatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all feesand other Obligations, shall automatically become due and payable immediately (an “acceleration” and, together with anyacceleration defined in Section 11.02(a), each, an “Acceleration”) and the Obligors shall immediately pay all Obligations,including the Back-End Facility Fee, all without presentment, demand, protest or other notice of any kind, all of which arehereby waived by each Obligor.

4.

(c) (i) For the avoidance of doubt, the Back-End Facility Fee that is payable upon Acceleration of the Loans shall bedue and payable at any time the Loans become due and payable prior to the Stated Maturity Date due to Accelerationpursuant to the terms of this Agreement (in which case it shall be due immediately, upon the giving of notice to Borrower inaccordance with Section 11.02(a), or automatically, in accordance with Section 11.02(b)), whether by operation of law orotherwise (including where bankruptcy filings or the exercise of any bankruptcy right or power, whether in any plan ofreorganization or otherwise, ‎results or would result in a payment, discharge, modification or other treatment of the Loans orLoan Documents that would otherwise evade, avoid, or otherwise disappoint the expectations of Lenders in receiving the fullbenefit of their bargained-for Back-End Facility Fee as provided herein and in the Fee Letter). The Obligors and Lendersacknowledge and agree that the Back-End Facility Fee due and payable in accordance with the Loan Documents shall notconstitute unmatured interest, whether under section 502(b)(2) of the Bankruptcy Code or otherwise, but instead isreasonably calculated to ensure that the Lenders receive the benefit of their bargain under the terms of this Agreement,whether in a bankruptcy case or otherwise.

(ii) Each Obligor acknowledges and agrees that, prior to executing this Agreement, it has had theopportunity to review, evaluate and negotiate and the Back-End Facility Fee with its advisors and acknowledges thatthe Back-End Facility Fee is a reasonable approximation of Lenders’ liquidated damages upon Acceleration and,accordingly, each Obligor will not contest or object to the reasonableness thereof. Each Obligor understands andacknowledges that Lenders have entered into this Agreement in reliance upon the Back-End Facility Fee. EachObligor acknowledges and agrees that the Lenders shall be entitled to recover the full amount of the Obligations,including the Back-End Facility Fee in each and every circumstance in which such amount is due pursuant to or inconnection with this Agreement and the Fee Letter, including in the case of any Obligor’s bankruptcy filing, so thatthe Lenders shall receive the benefit of their bargain hereunder and otherwise receive full recovery of the agreed-uponreturn under every possible circumstance, and Borrower hereby waives any defense to payment, whether such defensemay be based in public policy, ambiguity, or otherwise. Each Obligor further acknowledges and agrees, and waivesany argument to the contrary, that payment of such amounts does not constitute a penalty or an otherwiseunenforceable or invalid obligation. Any damages that the Lenders may suffer or incur resulting from or arising inconnection with any breach by Borrower shall constitute secured obligations owing to the Lenders.

(iii) For the avoidance of doubt, in the event of any Acceleration, interest pursuant to Sections 3.02(a) and (b) shallaccrue on all Obligations, including the Back-End Facility Fee, from and after the date such Obligations are due and payableuntil paid in full.

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(f) A new Exhibit I hereby added to the Loan Agreement in the form set forth in Exhibit I to the Loan Agreementattached hereto as Annex A.

SECTION 3Conditions of Effectiveness.

The effectiveness of Section 2 shall be subject to the following conditions precedent:

(a) The Borrower and all of the Lenders shall have duly executed and delivered this Amendment pursuant to Section12.04 of the Loan Agreement.

(b) The Borrower and all of the Lenders shall have entered into (i) that certain Series B Stock Purchase Agreement byand among the Borrower and the Lenders, (ii) that certain Registration Rights Agreement Amendment No. 1 by andamong the Borrower, the Lenders, and WCAS Capital Partners IV, L.P., concurrently with the execution of thisAmendment.

(c) Borrower and the Lenders shall have entered into the Fee Letter.

(d) The Borrower shall have paid or reimbursed Lenders for Lenders’ reasonable out of pocket costs and expensesincurred in connection with this Amendment, including Lenders’ reasonable out of pocket legal fees and costs,pursuant to Section 12.03(a)(i)(z) of the Loan Agreement.

(e) The representations and warranties in Section 4 shall be true and correct on the date hereof.

SECTION 4Representations and Warranties; Reaffirmation.

(a) The Borrower hereby represents and warrants to each Lender as follows:

(i) The Borrower has full power, authority and legal right to make and perform this Amendment. ThisAmendment is within the Borrower’s corporate powers and has been duly authorized by all necessarycorporate and, if required, by all necessary shareholder action. This Amendment has been duly executed anddelivered by the Borrower and constitutes legal, valid and binding obligations of the Borrower, enforceableagainst the Borrower in accordance with its terms, except as such enforceability may be limited by (a)bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting theenforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whethersuch enforceability is considered in a proceeding in equity or at law). This Amendment (x) does not requireany consent or approval of, registration or filing with, or any other action by, any Governmental Authority orany third party, except for such as have been obtained or made and are in full force and effect and the filing ofa copy of this Amendment with the SEC following its effectiveness, (y) will not violate any applicable law orregulation or the

6.

charter, bylaws or other organizational documents of the Borrower and its Subsidiaries or any order of anyGovernmental Authority, other than any such violations that, individually or in the aggregate, could notreasonably be expected to have a Material Adverse Effect, (z) will not violate or result in an event of defaultunder any material indenture, agreement or other instrument binding upon the Borrower and its Subsidiariesor assets, or give rise to a right thereunder to require any payment to be made by any such Person.

(ii) No Default has occurred or is continuing or will result after giving effect to this Amendment.

(iii) The representations and warranties made by or with respect to the Borrower in Section 7 of the LoanAgreement are (A) in the case of representations qualified by “materiality,” “Material Adverse Effect” orsimilar language, true and correct in all respects and (B) in the case of all other representations and warranties,true and correct in all material respects (except that the representation regarding representations andwarranties that refer to a specific earlier date are true and correct on the basis set forth above as of such earlierdate), in each case taking into account any changes made to schedules updated in accordance with Section7.21 of the Loan Agreement or attached.

(iv) There has been no Material Adverse Effect since the date of the Loan Agreement.

(b) The Borrower hereby ratifies, confirms, reaffirms, and acknowledges its obligations under the Loan Documents towhich it is a party and agrees that the Loan Documents remain in full force and effect, undiminished by thisAmendment, except as expressly provided herein. By executing this Amendment, the Borrower acknowledges that ithas read, consulted with its attorneys regarding, and understands, this Amendment.

SECTION5

Release. In consideration of the agreements of Administrative Agent and the Lenders contained herein and for other goodand valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itselfand its successors, assigns and other legal representatives, hereby fully, absolutely, unconditionally and irrevocablyreleases, remises and forever discharges Administrative Agent and each Lender, and their respective successors andassigns, and their respective present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors,officers, attorneys, employees, agents and other representatives (Administrative Agent, each Lender and all such otherpersons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from alldemands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money,accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands andliabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity,which Borrower, or any of its successors, assigns or other legal representatives may now or hereafter own, hold, have orclaim to have

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against the Releasees or any of them for, upon or by reason of any circumstance, action, cause or thing whatsoever whicharises at any time on or prior to the day and date of this Amendment, including, without limitation, for or on account of, or inrelation to, or in any way in connection with the Loan Agreement or any of the other Loan Documents or transactionsthereunder or related thereto (collectively, the “Released Claims”). Borrower understands, acknowledges and agrees that therelease set forth above (the “Release”) may be pleaded as a full and complete defense and may be used as a basis for aninjunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of theprovisions of the Release. Borrower agrees that no fact, event, circumstance, evidence or transaction which could now beasserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of theRelease. Borrower acknowledges that the Release constitutes a material inducement to Administrative Agent and the Lendersto enter into this Amendment and that Administrative Agent and the Lenders would not have done so but for AdministrativeAgent’s and each Lender’s expectation that the Release is valid and enforceable in all events.

SECTION 6Governing Law; Submission To Jurisdiction; Waiver Of Jury Trial.

(a) Governing Law. This Amendment and the rights and obligations of the parties hereunder shall be governed by, andconstrued in accordance with, the law of the State of New York, without regard to principles of conflicts of laws thatwould result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New YorkGeneral Obligations Law shall apply.

(b) Submission to Jurisdiction. The Borrower agrees that any suit, action or proceeding with respect to this Amendmentor any other Loan Document to which it is a party or any judgment entered by any court in respect thereof may bebrought initially in the federal or state courts in Houston, Texas or in the courts of its own corporate domicile andirrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any such suit, action,proceeding or judgment. This Section 5 is for the benefit of the Lenders only and, as a result, no Lender shall beprevented from taking proceedings in any other courts with jurisdiction. To the extent allowed by applicable Laws,the Lenders may take concurrent proceedings in any number of jurisdictions.

(c) Waiver of Jury Trial. The Borrower and each Lender hereby irrevocably waives, to the fullest extent permitted byapplicable law, any and all right to trial by jury in any suit, action or proceeding arising out of or relating to thisAmendment, the other Loan Documents or the transactions contemplated hereby or thereby.

SECTION 7Miscellaneous.

(a) No Waiver. Nothing contained herein shall be deemed to constitute a waiver of compliance with any term orcondition contained in the Loan Agreement or any of the other Loan Documents or constitute a course of conduct ordealing among the parties. Except as expressly stated herein, the Lenders reserve all rights, privileges

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and remedies under the Loan Documents. Except as amended hereby, the Loan Agreement and other LoanDocuments remain unmodified and in full force and effect. All references in the Loan Documents to the LoanAgreement shall be deemed to be references to the Loan Agreement as amended hereby.

(b) Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceablein any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of suchprovision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

(c) Headings. Headings and captions used in this Amendment (including the Exhibits, Schedules and Annexes hereto, ifany) are included for convenience of reference only and shall not be given any substantive effect.

(d) Integration. This Amendment constitutes a Loan Document and, together with the other Loan Documents,incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expressionand agreement of the parties hereto with respect to the subject matter hereof.

(e) Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shallconstitute one and the same instrument and any of the parties hereto may execute this Amendment by signing anysuch counterpart.

(f) Controlling Provisions. In the event of any inconsistencies between the provisions of this Amendment and theprovisions of any other Loan Document, the provisions of this Amendment shall govern and prevail. Except asexpressly modified by this Amendment, the Loan Documents shall not be modified and shall remain in full force andeffect.

[Remainder of page intentionally left blank]

9.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.

BORROWER:

VALERITAS, INC.

By: /s/ John Timberlake Name: John TimberlakeTitle: Chief Executive Officer

GUARANTORS:

VALERITAS HOLDINGS, INC.

By: John Timberlake Name: John TimberlakeTitle: Chief Executive Officer

VALERITAS SECURITY CORPORATION

By: John Timberlake Name: John TimberlakeTitle: President

[Signature Page to Amendment No. 2 to Term Loan Agreement]

LENDERS:

CAPITAL ROYALTY PARTNERS II L.P.By: CAPITAL ROYALTY PARTNERS II GPL.P., its General Partner

By: CAPITAL ROYALTY PARTNERS IIGP LLC, its General Partner

By: /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

PARALLEL INVESTMENT OPPORTUNITIESPARTNERS II L.P.

By: PARALLEL INVESTMENTOPPORTUNITIES PARTNERS II GP L.P., itsGeneral Partner

By: PARALLEL INVESTMENTOPPORTUNITIES PARTNERS II GP LLC,its General Partner

By: /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

CAPITAL ROYALTY PARTNERS II –PARALLEL FUND “A” L.P.

By: CAPITAL ROYALTY PARTNERS II—PARALLEL FUND “A” GP L.P., its GeneralPartner

By: CAPITAL ROYALTY PARTNERSII—PARALLEL FUND “A” GP LLC, its General Partner

[Signature Page to Amendment No. 2 to Term Loan Agreement]

By: /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

CAPITAL ROYALTY PARTNERS II (CAYMAN) L.P.By: CAPITAL ROYALTY PARTNERS II(CAYMAN) GP L.P., its General Partner

By: CAPITAL ROYALTY PARTNERS II(CAYMAN) GP LLC, its General Partner

By: /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

WITNESS:

/s/ Nicole Nesson Name: Nicole Nesson

CAPITAL ROYALTY PARTNERS II –PARALLEL FUND “B” (CAYMAN) L.P.

By: CAPITAL ROYALTY PARTNERS II(CAYMAN) GP L.P., its General Partner

By: CAPITAL ROYALTY PARTNERS II

[Signature Page to Amendment No. 2 to Term Loan Agreement]

GP LLC, its General Partner

By: /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

WITNESS:

/s/ Nicole Nesson Name: Nicole Nesson

FORM OF SUBORDINATION AGREEMENT

This Subordination Agreement is made as of [________] (this “Agreement”) among CRG Servicing LLC, a Delawarelimited liability company (“Senior Agent”), and [__________], a [__________] [corporation] (“Subordinated Creditor”).

RECITALS:

A. [INSERT NAME OF BORROWER], a [Delaware] [corporation] (“Borrower”), will, as of the date hereof, issue in favorof Subordinated Creditor the Subordinated Note (as defined below)[, and grant a security interest in the Subordinated Collateral (asdefined below) in favor of Subordinated Creditor].

B. Senior Creditors, Borrower and certain of its subsidiaries have entered into the Senior Loan Agreement (as definedbelow), and Senior Agent, Borrower and certain of its subsidiaries have entered into the Senior Security Agreement (as definedbelow) under which Borrower and such subsidiaries have granted a security interest in the Collateral (as defined below) in favor ofthe Senior Creditors as security for the payment of Borrower’s obligations under the Senior Loan Agreement.

C. To induce the Lenders under and as defined in the Senior Loan Agreement referred to below to make and maintain thecredit extensions to Borrower under the Senior Loan Agreement, Subordinated Creditor is willing to subordinate the SubordinatedDebt (as defined below) to the Senior Debt (as defined below)[, and all liens securing the Subordinated Debt to the Senior Creditors’liens on and security interests in the Collateral] on the terms and conditions herein set forth.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1. Definitions. As used herein, the following terms have the following meanings:

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101 et seq.

“Collateral” has the meaning set forth in the Senior Security Agreement.

“Enforcement Action” means, with respect to any indebtedness, obligation (contingent or otherwise) or Collateral at anytime held by any lender or noteholder, (i) commencing, by judicial or non-judicial means, the enforcement of, or otherwiseattempting to enforce, such indebtedness, obligation or Collateral of any of the default remedies under any of the applicableagreements or documents of such lender or noteholder, the UCC or other applicable law (other than the mere issuance of a notice ofdefault or notice of the right by such lender or noteholder to seek specific performance with respect to any covenants in favor of suchlender or noteholder), (ii) repossessing, selling, leasing or otherwise disposing of all or any part of such Collateral, including withoutlimitation causing any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against orinstitution of other proceedings with respect to any Collateral, or exercising account debtor or obligor notification or collection rightswith respect to all or any portion thereof, or attempting or agreeing to do so, (iii) appropriating, setting off or applying to such lenderor noteholder’s claim any part or all of such Collateral or other property in the possession of, or coming into the possession of, suchlender or noteholder or its agent, trustee or bailee, (iv) asserting any claim or interest in any insurance with respect to suchindebtedness, obligation or Collateral, (v) instituting or commencing, or joining with any Person in commencing, any action orproceeding with respect to any of the foregoing rights or remedies (including any action of foreclosure, enforcement, collection orexecution and any Insolvency Event involving any Obligor), (vi) exercising any rights under any lockbox agreement, account controlagreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which the Subordinated Creditor is a party, (vii)[causing or compelling the pledge or delivery of Subordinated Collateral], or (viii) otherwise enforcing, or attempting to enforce, anyother rights or remedies under or with respect to any such indebtedness, obligation or Collateral.

“Insolvency Event” means that any Obligor or any of its subsidiaries shall have (i) applied for, consented to or acquiesced in

the appointment of a trustee, receiver or other custodian for it or any of its property, or (ii) made a general assignment for the benefitof creditors or similar arrangement in respect of such Obligor’s or subsidiary’s creditors generally or any substantial portion thereof,or (iii) permitted, consented to, or suffered to exist the appointment of a trustee, receiver or other custodian for it or for a substantialpart of its property, or (iv) commenced any case, action or proceeding before any court or other governmental agency or authorityrelating to bankruptcy, reorganization, insolvency, debt arrangement or relief or other case, action or proceeding under anybankruptcy or insolvency law, or any dissolution, winding up or liquidation case, action or proceeding, including without limitationany case under the Bankruptcy Code, in respect of it, or (v) (A) permitted, consented to, or suffered to exist the commencement ofany case, action or proceeding before any court or other governmental agency or authority relating to bankruptcy, reorganization,insolvency, debt arrangement or relief or other case, action or proceeding under any bankruptcy or insolvency law, or anydissolution, winding up or liquidation case, action or proceeding, including without limitation any case under the Bankruptcy Code,in respect of it, or (B) any such case, action or proceeding shall have resulted in the entry of an order for relief or shall haveremained for sixty (60) days undismissed.

“Obligor” has the meaning set forth in the Senior Loan Agreement.

“Person” has the meaning set forth in the Senior Loan Agreement.

“Senior Creditors” means Senior Agent and the Lenders under and as defined in the Senior Loan Agreement.

“Senior Debt” means the Obligations (as defined in the Senior Loan Agreement).

“Senior Discharge Date” means the first date on which all of the Senior Debt (other than contingent indemnificationobligations [and any Warrant Obligations (as defined in the Senior Loan Agreement)]) has been paid indefeasibly in full in cash andall commitments of Senior Lenders under the Senior Loan Documents have been terminated.

“Senior Loan Agreement” means that certain Term Loan Agreement, dated as of [INSERT DATE], by and amongBorrower, the subsidiary guarantors from time to time party thereto, and the Senior Creditors, as amended, restated, supplemented orotherwise modified from time to time.

“Senior Loan Documents” means, collectively, the Loan Documents (as defined in the Senior Loan Agreement), in eachcase as amended, restated, supplemented or otherwise modified from time to time.

“Senior Security Agreement” means that certain Security Agreement, dated as of [__________], among Borrower, the otherObligors party thereto, and Senior Agent, as amended, restated, supplemented or otherwise modified from time to time.

[“Subordinated Collateral” means any property or assets that may at any time be or become subject to a lien or securityinterest in favor of the Subordinated Creditor pursuant to the Subordinated Collateral Documents or otherwise, and all products andproceeds of any of the foregoing.]

[“Subordinated Collateral Documents” means, collectively, each security agreement, deed of trust, mortgage, pledgeagreement and any other agreement pursuant to which any Obligor or any other Person provides a lien on or security interest in itsassets in favor of the Subordinated Creditor, and all financing statements, fixture filings, patent, trademark and copyright filings,assignments, acknowledgments and other filings, documents and agreements made or delivered pursuant thereto.]

“Subordinated Debt” means and includes all obligations, liabilities and indebtedness of Borrower owed to SubordinatedCreditor, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, includingwithout limitation, principal, premium (if any), interest, fees, charges, expenses, costs, professional fees and expenses, andreimbursement obligations.

“Subordinated Debt Documents” means, collectively, the Subordinated Note and each other loan document or agreemententered into by Borrower in connection with the Subordinated Note or any other Subordinated Debt[, including without limitationeach Subordinated Collateral Document], as amended, restated, supplemented or otherwise modified from time to time.

“Subordinated Note” means that certain $[__________] subordinated promissory note, dated [__________], issued byBorrower to Subordinated Creditor, as amended, restated, supplemented or otherwise modified from time to time.

“UCC” means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not haveany Uniform Commercial Code, the Uniform Commercial Code as in effect in the State of New York.

2. Liens. (a) Subordinated Creditor represents and warrants that [the Subordinated Debt is unsecured. Subordinated Creditoragrees that it will not request or accept any security interest in any Collateral to secure the Subordinated Debt; provided that, should

Subordinated Creditor obtain a lien or security interest on any asset or Collateral to secure all or any portion of the SubordinatedDebt for any reason (which action shall be in violation of this Agreement), notwithstanding the respective dates of attachment andperfection of the security interests in the Collateral in favor of the Senior Creditors or Subordinated Creditor, or any contraryprovision of the UCC, or any applicable law or decision to the contrary, or the provisions of the Senior Loan Documents or theSubordinated Debt Documents, and irrespective of whether Subordinated Creditor or the Senior Creditors hold possession of any orall part of the Collateral, all now existing or hereafter arising security interests in the Collateral in favor of Subordinated Creditor inrespect of the Subordinated Debt Documents shall at all times be subordinate to the security interest in such Collateral in favor of theSenior Creditors in respect of the Senior Loan Documents.] [all liens and security interests, if any, now or hereafter existing thatsecure the Subordinated Debt, are hereby subordinated and junior in all respects to the liens and security interests now or hereafterexisting securing the Senior Debt, regardless of the time, manner or order of attachment or perfection of any such liens and securityinterests, the time or order of filing of financing statements, the acquisition of purchase money or other liens or security interests, thetime of giving or failure to give notice of the acquisition or expected acquisition of purchase money or other liens or securityinterests, or any other circumstances whatsoever.]

(b) Subordinated Creditor acknowledges that the Senior Creditors have been granted liens upon the Collateral [(includingthe Subordinated Collateral)], and Subordinated Creditor hereby consents thereto and to the incurrence of the Senior Debt.

(c) Until the Senior Discharge Date, in the event of any private or public sale or other disposition of all or any portion ofthe Collateral, Subordinated Creditor agrees that such Collateral shall be sold or otherwise disposed of free and clear of any liens infavor of Subordinated Creditor. Subordinated Creditor agrees that any such sale or disposition of Collateral shall not require anyconsent from Subordinated Creditor, and Subordinated Creditor hereby waives any right it may have to object to such sale ordisposition.

(d) [Subordinated Creditor agrees that it will not request or accept any guaranty of the Subordinated Debt.]

(e) [Each of the Senior Creditors and Subordinated Creditor agrees to hold all collateral in which a lien may be perfected bypossession or control (“Possessory Collateral”) in its possession, custody, or control (or in the possession, custody, or control ofagents or bailees for any such party) as agent for the other solely for the purpose of perfecting the security interest granted to each insuch Possessory Collateral subject to the terms and conditions of this Agreement. Neither any Senior Creditor nor SubordinatedCreditor shall have any obligation whatsoever to the other to assure that any Possessory Collateral is genuine or owned by anyObligor or any other Person or to preserve its rights or benefits or those of any Person. The duties or responsibilities of the SeniorCreditors and Subordinated Creditor under this Section 2(e) are and shall be limited solely to holding or maintaining control of thePossessory Collateral as agent for the others for purposes of perfecting the lien or security interest held by such others. The SeniorCreditors are not and shall not be deemed to be a fiduciary of any kind for Subordinated Creditor or any other Person.]

3. Payment Subordination. (a) Notwithstanding the terms of the Subordinated Debt Documents, until the Senior Discharge Date,(i) all payments and distributions of any kind or character, whether in cash, property or securities, in respect of the SubordinatedDebt are subordinated in right and time of payment to all payments in respect of the Senior Debt, and (ii) Subordinated Creditor willnot demand, sue for or receive from Borrower (and Borrower will not pay) any part of the Subordinated Debt, whether by payment,prepayment, distribution, setoff, or otherwise, or accelerate the Subordinated Debt.

(b) Subordinated Creditor must deliver to the Senior Agent in the form received (except for endorsement or assignment bySubordinated Creditor) any payment, distribution, security or proceeds it receives on the Subordinated Debt other than according tothis Agreement.

4. Subordination of Remedies. Until the Senior Discharge Date, and whether or not any Insolvency Event has occurred,Subordinated Creditor will not accelerate the maturity of all or any portion of the Subordinated Debt, enforce, attempt to enforce, orexercise any right or remedy with respect to any Collateral [(including the Subordinated Collateral)] or the Subordinated Debt, ortake any other Enforcement Action with respect to the Subordinated Debt [or the Subordinated Collateral].

5. Payments Over. All payments and distributions of any kind, whether in cash, property or securities, in respect of theSubordinated Debt to which Subordinated Creditor would be entitled if the Subordinated Debt were not subordinated pursuant to thisAgreement, shall be paid to the Senior Creditors in respect of the Senior Debt, regardless of whether such Senior Debt, or anyportion thereof, is reduced, expunged, disallowed, subordinated or recharacterized. Notwithstanding the foregoing, if any payment ordistribution of any kind, whether in cash, property or securities, shall be received by Subordinated Creditor on account of theSubordinated Debt [or the Subordinated Collateral] before Senior Discharge Date (whether or not expressly characterized as such),then such payment or distribution shall be segregated by Subordinated Creditor and held in trust for, and shall be promptly paid overto, the Senior Creditors in the same form as received, with any necessary endorsements or as a court of competent jurisdiction mayotherwise direct, in respect of the Senior Debt, regardless of whether such Senior Debt, or any portion thereof, is reduced, expunged,disallowed, subordinated or recharacterized. Subordinated Creditor irrevocably appoints the Senior Agent as Subordinated Creditor’s

attorney-in-fact, and grants to the Senior Creditors a power of attorney with full power of substitution (which power of attorney iscoupled with an interest), in the name of Subordinated Creditor or in the name of the Senior Agent, for the use and benefit of theSenior Creditors, without notice to Subordinated Creditor, to make any such endorsements. This Section 5 shall be enforceable evenif the Senior Creditors’ liens on the Collateral are alleged, determined, or held to constitute fraudulent transfers (whetherconstructive or actual), preferential transfers, or otherwise avoided or voidable, set aside, recharacterized or equitably subordinated.

6. Insolvency Proceedings. (a) This Agreement is intended to constitute and shall be deemed to constitute a “subordinationagreement” within the meaning of Section 510(a) of the Bankruptcy Code and is intended to be and shall be interpreted to beenforceable to the maximum extent permitted pursuant to applicable nonbankruptcy law. All references to Borrower or any otherObligor shall include Borrower or such Obligor as debtor and debtor-in-possession and any receiver or trustee for Borrower or anyother Obligor (as the case may be) in connection with any case under the Bankruptcy Code or in connection with any otherInsolvency Event.

(b) Without limiting the generality of the other provisions of this Agreement, until the Senior Discharge Date, without theexpress written consent of the Senior Agent, Subordinated Creditor shall not institute or commence (nor shall it join with or supportany third party instituting, commencing, opposing, objecting or contesting, as the case may be, or otherwise suffer to exist), anyInsolvency Event involving Borrower or any other Obligor.

(c) The Senior Creditors shall have the right to enforce rights, exercise remedies (including set-off and the right to creditbid its debt) and make determinations regarding the release, disposition, or restrictions with respect to the Collateral without anyconsultation with or consent of Subordinated Creditor.

(d) Subordinated Creditor will not, and hereby waives any right to bring, join in, or otherwise support or take any action to(i) contest the validity, legality, enforceability, perfection, priority or avoidability of any of the Senior Debt, any of the Senior LoanDocuments or any security interests and/or liens of the Senior Creditors on or in any property or assets of Borrower or any otherObligor, including without limitation, the Collateral; (ii) interfere with or in any manner oppose or support any other Person inopposing any foreclosure on or other disposition of any Collateral by the Senior Creditors in accordance with applicable law, orotherwise to contest, protest, object to or interfere with the manner in which the Senior Creditors may seek to enforce the Liens onany Collateral; (iii) provide a debtor-in-possession facility (including on a priming basis) to Borrower or any other Obligor, underSection 362, 363 or 364 of the Bankruptcy Code or any other applicable law, without the consent, in their sole discretion, of theSenior Creditors; or (iv) exercise any rights against the Senior Creditors or the Collateral under Section 506(c) of the BankruptcyCode. [Subordinated Creditor hereby waives any and all rights it may have as a junior lien creditor or otherwise to contest, protest,object to or interfere with the manner in which any Senior Creditor seeks to enforce its liens on or security interests in anyCollateral.]

(e) Subordinated Creditor will not, and hereby waives any right to, oppose, contest, object to, join in, or otherwise supportany opposition to or objection with respect to, (i) any request or motion of the Senior Creditors seeking, pursuant to Section 362(d)of the Bankruptcy Code or otherwise, the modification, lifting or vacating of the automatic stay of Section 362(a) of the BankruptcyCode or from any other stay in connection with any Insolvency Event or seeking adequate protection of the Senior Creditors’interests in the Collateral or with respect to the Senior Debt (whether under Sections 362, 363, and/or 364 of the Bankruptcy Code orother applicable law), and, until Senior Discharge Date, Subordinated Creditor agrees that it shall not seek relief from such automaticstay without the prior written consent of the Senior Agent; (ii) any debtor-in-possession financing (including on a priming basis) oruse of cash collateral (as defined in Section 363(a) of the Bankruptcy Code or other applicable law) arrangement by Borrower,whether from the Senior Creditors or any other third party under Section 362, 363 or 364 of the Bankruptcy Code or any otherapplicable law, if the Senior Creditors, in their sole discretion, consent to such debtor-in-possession financing or cash collateralarrangement, and Subordinated Creditor shall not request adequate protection (whether under Sections 362, 363, and/or 364 of theBankruptcy Code or other applicable law) or any other relief in connection therewith; (iii) any sale or other disposition of theCollateral or substantially all of the assets of Borrower or any other Obligor (include any such sale free and clear of liens or otherclaims) under Section 363 of the Bankruptcy Code or other applicable law if the Senior Creditors, in their sole discretion, consent tosuch sale or disposition; (vii) the Senior Creditors’ exercise or enforcement of its right to make an election under Section 1111(b) ofthe Bankruptcy Code, and Subordinated Creditor hereby waives any claim it may hereafter have against the Senior Creditors arisingout of such election; (viii) the Senior Creditors’ exercise or enforcement of its right to credit bid any or all of its debt claims againstBorrower or any other Obligor, including, without limitation, the Senior Debt; or (ix) any plan of reorganization or liquidation if theSenior Creditors, in their sole discretion, consent to, vote in favor of, or otherwise do not oppose such plan of reorganization orliquidation, and, in furtherance thereof, Subordinated Creditor hereby grants to the Senior Creditors the right to vote SubordinatedCreditor’s claim or claims (as such term is defined in the Bankruptcy Code) arising on account of or in connection with theSubordinated Debt, as Subordinated Creditor’s agent, with respect to any plan of reorganization or liquidation to which SubordinatedCreditor may be entitled to vote in any bankruptcy or liquidation proceeding or in connection with any other Insolvency Event ofBorrower or any other Obligor.

7. Distributions of Proceeds of Collateral. All realizations upon any Collateral pursuant to or in connection with an EnforcementAction, an Insolvency Event or otherwise shall be paid or delivered to the Senior Agent in respect of the Senior Debt until the SeniorDischarge Date before any payment may be made to Subordinated Creditor.

8. Release of Liens. In the event of any private or public sale or other disposition, by or with the consent of the Senior Agent, ofall or any portion of the Collateral, Subordinated Creditor agrees that such sale or disposition shall be free and clear of any liensSubordinated Creditor may have on such Collateral[, and, if the sale or other disposition includes any pledged equity interests in anyObligor, if the Subordinated Collateral includes any such any pledged equity interests, the Subordinated Creditor further agrees torelease the entities whose pledged equity interests are sold from all Subordinated Debt]. Subordinated Creditor agrees that, inconnection with any such sale or other disposition, (i) the Senior Creditors are authorized to file any and all UCC and otherapplicable lien releases and/or terminations in respect of any liens held by Subordinated Creditor in connection with such a sale orother disposition, and (ii) it shall execute any and all lien releases or other documents reasonably requested by the Senior Agent inconnection therewith. In furtherance of the foregoing, Subordinated Creditor hereby appoints the Senior Agent as its attorney-in-fact,with full authority in the place and stead of Subordinated Creditor and full power of substitution and in the name of SubordinatedCreditor or otherwise, to execute and deliver any document or instrument which Subordinated Creditor is required to deliverpursuant to this Section 8, such appointment being coupled with an interest and irrevocable. Subordinated Creditor agrees that theSenior Creditors may release or refrain from enforcing their security interest in any Collateral, or permit the use or consumption ofsuch Collateral by Borrower free of any Subordinated Creditor security interest, without incurring any liability to SubordinatedCreditor.

9. Attorney-In-Fact. Until the Senior Discharge Date, Subordinated Creditor irrevocably appoints the Senior Agent as itsattorney-in-fact, with power of attorney with power of substitution, in Subordinated Creditor’s name or in any Senior Creditor’sname, for the Senior Creditors’ use and benefit without notice to Subordinated Creditor, to do the following during an InsolvencyEvent:

(a) file any claims in respect of the Subordinated Debt on behalf of Subordinated Creditor if Subordinated Creditor doesnot do so at least 30 days before the time to file claims expires; and

(b) vote Subordinated Creditor’s claim or claims (as such term is defined in the Bankruptcy Code) arising on account of orin connection with the Subordinated Debt, as Subordinated Creditor’s agent, with respect to any plan of reorganization or liquidationto which Subordinated Creditor may be entitled to vote in any bankruptcy or liquidation proceeding or in connection with any otherInsolvency Event of Borrower or any other Obligor.

Such power of attorney is irrevocable and coupled with an interest.

10. Legend; Amendment of Debt. (a) Subordinated Creditor will immediately put a legend on or otherwise indicate on theSubordinated Note that the Subordinated Note is subject to this Agreement.

(b) Until the Senior Discharge Date, Subordinated Creditor shall not, without prior written consent of the Senior Agent,agree to any amendment, modification or waiver of any provision of the Subordinated Debt Documents, if the effect of suchamendment, modification or waiver is to: (i) terminate or impair the subordination of the Subordinated Debt in favor of the SeniorCreditors; (ii) increase the interest rate on the Subordinated Debt or change (to earlier dates) the dates upon which principal, interestand other sums are due under the Subordinated Note; (iii) alter the redemption, prepayment or subordination provisions of theSubordinated Debt; (iv) impose on Borrower or any other Obligor any new or additional prepayment charges, premiums,reimbursement obligations, reimbursable costs or expenses, fees or other payment obligations; (v) alter the representations,warranties, covenants, events of default, remedies and other provisions in a manner which would make such provisions materiallymore onerous, restrictive or burdensome to Borrower or any other Obligor; (vi) [grant a lien or security interest in favor of anyholder of the Subordinated Debt on any asset or Collateral to secure all or any portion of the Subordinated Debt][terminate or impairthe subordination of any security interest or lien securing the Subordinated Debt in favor of the Senior Creditors]; or (vii) otherwiseincrease the obligations, liabilities and indebtedness in respect of the Subordinated Debt or confer additional rights uponSubordinated Creditor, which individually or in the aggregate would be materially adverse to Borrower, any other Obligor or theSenior Creditors. Any such amendment, modification or waiver made in violation of this Section 10(b) shall be void.

(c) At any time without notice to Subordinated Creditor, the Senior Creditors may take such action with respect to theSenior Debt as the Senior Creditors, in their sole discretion, may deem appropriate, including, without limitation, terminatingadvances, increasing the principal, extending the time of payment, increasing interest rates, renewing, compromising or otherwiseamending any documents affecting the Senior Debt and any Collateral securing the Senior Debt, and enforcing or failing to enforceany rights against Borrower or any other person. No action or inaction will impair or otherwise affect any Senior Creditor’s rightsunder this Agreement.

11. Certain Waivers. (a) Subordinated Creditor hereby (i) waives any and all notice of the incurrence of the Senior Debt or anypart thereof; (ii) waives any and all rights it may have to require the Senior Creditors to marshal assets, to exercise rights or remediesin a particular manner, to forbear from exercising such rights and remedies in any particular manner or order, or to claim the benefitof any appraisal, valuation or other similar right that may otherwise be available under applicable law, regardless of whether anyaction or failure to act by or on behalf of the Senior Creditors is adverse to the interest of Subordinated Creditor; (iii) agrees that theSenior Creditors shall have no liability to Subordinated Creditor, and Subordinated Creditor hereby waives any claim against theSenior Creditors arising out of any and all actions not in breach of this Agreement which the Senior Creditors may take or permit oromit to take with respect to the Senior Loan Documents (including any failure to perfect or obtain perfected security interests in theCollateral), the collection of the Senior Debt or the foreclosure upon, or sale, liquidation or other disposition of, any Collateral; and(iv) agrees that the Senior Creditors have no duty, express or implied, fiduciary or otherwise, to them in respect of the maintenanceor preservation of the Collateral, the Senior Debt or otherwise. Without limiting the foregoing, Subordinated Creditor agrees that theSenior Creditors shall have no duty or obligation to maximize the return to any class of creditors holding indebtedness of any type(whether Senior Debt or Subordinated Debt), notwithstanding that the order and timing of any realization, sale, disposition orliquidation of the Collateral may affect the amount of proceeds actually received by such class of creditors from such realization,sale, disposition or liquidation.

(b) Subordinated Creditor confirms that this Agreement shall govern as between the Senior Creditors and the SubordinatedCreditor irrespective of: (i) any lack of validity or enforceability of any Senior Loan Document or any Subordinated Debt Document;(ii) the occurrence of any Insolvency Event in respect of any Obligor; (iii) whether the Senior Debt, or the liens or security interestssecuring the Senior Debt, shall be held to be unperfected, deficient, invalid, void, voidable, voided, unenforceable, subordinated,reduced, discharged or are set aside by a court of competent jurisdiction, including pursuant or in connection with any InsolvencyEvent; (iv) any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Debt or theSubordinated Debt, or any amendment or waiver or other modification, including any increase in the amount thereof, whether bycourse of conduct or otherwise, of the terms of any Senior Loan Document or any Subordinated Debt Document or any guaranteethereof; or (v) any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Obligor inrespect of the Senior Debt or the Subordinated Debt.

12. Representations and Warranties. Subordinated Creditor represents and warrants to the Senior Creditors that:

(a) all action on the part of Subordinated Creditor, its officers, directors, partners, members and shareholders, as applicable,necessary for the authorization of this Agreement and the performance of all obligations of Subordinated Creditor hereunder hasbeen taken;

(b) this Agreement constitutes the legal, valid and binding obligation of Subordinated Creditor, enforceable againstSubordinated Creditor in accordance with its terms;

(c) the execution, delivery and performance of and compliance with this Agreement by Subordinated Creditor will not (i)result in any material violation or default of any term of any of Subordinated Creditor’s charter, formation or other organizationaldocuments (such as Articles or Certificate of Incorporation, bylaws, partnership agreement, operating agreement, etc.) or (ii) violateany material applicable law, rule or regulation; and

(d) Subordinated Creditor has not previously assigned any interest in the Subordinated Debt[ or any SubordinatedCollateral], and no Person other than the Subordinated Creditor owns an interest in the Subordinated Debt[ or SubordinatedCollateral].

13. Term; Reinstatement. This Agreement shall remain in full force and effect until the Senior Discharge Date, notwithstandingthe occurrence of an Insolvency Event. If, after the Senior Discharge Date, the Senior Creditors must disgorge any payments madeon the Senior Debt for any reason (including, without limitation, in connection with the bankruptcy of Borrower or in connectionwith any other Insolvency Event), this Agreement and the relative rights and priorities provided in it, will be reinstated as to alldisgorged payments as though such payments had not been made, and Subordinated Creditor will immediately pay the Senior Agentall payments received in respect of the Subordinated Debt to the extent such payments or retention thereof would have beenprohibited under this Agreement.

14. Successors and Assigns. This Agreement binds Subordinated Creditor, its successors or assigns, and benefits the SeniorCreditors’ successors or assigns. This Agreement is for Subordinated Creditor’s and the Senior Creditors’ benefit and not for thebenefit of Borrower or any other party. Subordinated Creditor shall not sell, assign, pledge, dispose of or otherwise transfer all orany portion of the Subordinated Debt or any related document or any interest in any Collateral therefor unless prior to theconsummation of any such action, the transferee thereof shall execute and deliver to the Senior Agent an agreement of suchtransferee to be bound hereby, or an agreement substantially identical to this Agreement providing for the continued subjection ofthe Subordinated Debt, the interests of the transferee in the Collateral and the remedies of the transferee with respect thereto as

provided herein with respect to Subordinated Creditor and for the continued effectiveness of all of the other rights of the SeniorCreditors arising under this Agreement, in each case in form satisfactory to the Senior Creditors. Any such sale, assignment, pledge,disposition or transfer not made in compliance with the terms of this Section 14 shall be void.

15. Further Assurances. Subordinated Creditor hereby agrees to execute such documents and/or take such further action as theSenior Agent may at any time or times reasonably request in order to carry out the provisions and intent of this Agreement,including, without limitation, ratifications and confirmations of this Agreement from time to time hereafter, as and when requestedby the Senior Agent.

16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original andall of which together shall constitute one instrument. Executed counterparts may be delivered by facsimile.

17. Governing Law; Waiver of Jury Trial. (a) This Agreement and the rights and obligations of the parties hereunder shall begoverned by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of lawsthat would result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New York GeneralObligations Law shall apply.

(b) EACH PARTY HERETO WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTIONBASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.

18. Entire Agreement; Waivers and Amendments. This Agreement represents the entire agreement with respect to the subjectmatter hereof, and supersedes all prior negotiations, agreements and commitments. The Senior Creditors and Subordinated Creditorare not relying on any representations by the other creditor party or Borrower in entering into this Agreement, and each of the SeniorCreditors and Subordinated Creditor has kept and will continue to keep itself fully apprised of the financial and other condition ofBorrower. No amendment, modification, supplement, termination, consent or waiver of or to any provision of this Agreement, norany consent to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the SeniorAgent and Subordinated Creditor. Any waiver of any provision of this Agreement, or any consent to any departure from the terms ofany provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which given.

19. No Waiver. No failure or delay on the part of any Senior Creditor or Subordinated Creditor in the exercise of any power, right,remedy or privilege under this Agreement shall impair such power, right, remedy or privilege or shall operate as a waiver thereof,nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise of any otherpower, right or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies,powers and privileges that may otherwise be available to any Senior Creditor.

20. Legal Fees. In the event of any legal action to enforce the rights of a party under this Agreement, the party prevailing in suchaction shall be entitled, in addition to such other relief as may be granted, all reasonable, invoiced and out-of-pocket costs andexpenses, including reasonable attorneys’ fees, incurred in such action.

21. Severability. Any provision of this Agreement which is illegal, invalid, prohibited or unenforceable in any jurisdiction shall, asto such jurisdiction, be ineffective to the extent such illegality, invalidity, prohibition or unenforceability without invalidating orimpairing the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

22. Notices. All notices, demands, instructions and other communications required or permitted to be given to or made upon anyparty hereto shall be in writing and shall be delivered or sent by first-class mail, postage prepaid, or by overnight courier ormessenger service or by facsimile or electronic mail, message confirmed, and shall be deemed to be effective for purposes of thisAgreement on the day that delivery is made or refused. Unless otherwise specified in a notice mailed or delivered in accordance withthe foregoing sentence, notices, demands, instructions and other communications in writing shall be given to or made upon therespective parties hereto at their respective addresses and facsimile numbers indicated on the signature pages hereto.

23. No Third-Party Beneficiaries; Other Benefits. The terms and provisions of this Agreement are intended solely for thebenefit of each party hereto and their respective successors and permitted assigns, and the parties do not intend to confer third partybeneficiary rights upon any other person. Subordinated Creditor understands that there may be various agreements between theSenior Creditors and Borrower or the other Obligors evidencing and governing the Senior Debt, and Subordinated Creditoracknowledges and agrees that such agreements are not intended to confer any benefits on Subordinated Creditor and that the SeniorCreditors shall have no obligation to Subordinated Creditor or any other Person to exercise any rights, enforce any remedies, or takeany actions which may be available to it under such agreements.

[Signature pages follow]

[Signature Page to Amendment No. 2 to Term Loan Agreement]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

SUBORDINATED CREDITOR:[__________]

By _______________________________________Name:Title:

Address for Notices:

SENIOR AGENT (on behalf of the SENIOR CREDITORS):

CRG SERVICING LLC

By _________________________________Name:Title:

Address for Notices:

1000 Main Street, Suite 2500Houston, TX 77002Attn: Portfolio ReportingTel.: 713.209.7350Fax: 713.209.7351Email: notices@crglp.com

[INSERT NAME OF BORROWER]

By _______________________________________Name:Title:

Address for Notices: [__________][__________][__________]Attn: [__________]Tel.: [__________]Fax: [__________]Email: [__________]]

Exhibit I-15

Execution Version

REGISTRATION RIGHTS AGREEMENT AMENDMENT NO.1

THIS AMENDMENT NO. 1 (this “Amendment”) to that certain Registration Rights Agreement made and entered into effective as ofFebruary 14, 2017 by and among VALERITAS HOLDINGS, INC., a Delaware corporation (the “Company”) and CAPITAL ROYALTY PARTNERSII L.P., CAPITAL ROYALTY PARTNERS II—PARALLEL FUND “A” L.P., PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II L.P.,CAPITAL ROYALTY PARTNERS II – PARALLEL FUND “B” (CAYMAN) L.P., AND CAPITAL ROYALTY PARTNERS II (CAYMAN) L.P.(together, “CRG”), WCAS CAPITAL PARTNERS IV, L.P. (“WCAS”, and together with CRG, the “Purchasers”, with each of the purchasing entities,a “Purchaser”), such agreement the “RRA,” is made and entered into effective as of September 30, 2019. Capitalized terms used but not definedherein shall have the meanings ascribed to them in the RRA.

WHEREAS, the Purchasers and the Company entered into the RRA;

WHEREAS, Section 10(j) provides that that RRA may be amended with the written agreement of the Company and the Majority Holders;

WHEREAS, CRG, as holder of a majority of the outstanding Registrable Securities is the sole Majority Holder;

WHEREAS, the Company and the Purchasers are entering into that certain Series B Preferred Stock Purchase Agreement dated as of thedate hereof (the “Series  B SPA”), pursuant to which, and subject to the terms and conditions contained therein, the Purchasers shall exchangeoutstanding indebtedness for shares of the Company’s Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred”), and theCompany will issue to the Purchasers shares of Series B Preferred, which Series B Preferred is convertible into shares of the Company’s commonstock, par value $0.001 per share (the “Common Stock”);

WHEREAS, in connection therewith, the Company and the Purchasers desire to amend the RRA as provided herein to extend registrationrights to the shares of Common Stock issuable upon conversion of the Series B Preferred;

NOW THEREFORE, in consideration of the foregoing premises and the respective representations and warranties, covenants andagreements contained herein, the receipt and sufficiency of which is hereby acknowledged, the Company and the Purchasers agree as follows:

1. Amendment of Definitions.

(a) Notwithstanding the definition in the recitals to the RRA, the definition of “Shares” in Section 1 of the RRA is hereby amendedby deleting “means the shares of Preferred Stock set forth in the Recitals” and adding “means the shares of Preferred Stock” in place thereof; and

(b) The definition of “Preferred Stock” in Section 1 of the RRA is hereby amended by deleting “means the shares of theCompany’s Series A Convertible Preferred Stock issued to the Purchasers pursuant to the Purchase Agreement” and adding “means the shares ofthe Company’s Series A Convertible Preferred Stock issued to the Purchasers pursuant to the Series A Preferred Stock Purchase Agreement datedFebruary 14, 2017 (the “Series A SPA”) and the shares of the Company’s Series B Convertible Preferred Stock issued to the Purchasers pursuantto the Series B Preferred Stock Purchase Agreement dated September 30, 2019 (the “Series B SPA”) or that may be issued as payment-in-kinddividends on such shares in accordance with the terms of such Series B Convertible Preferred Stock” in place thereof; and

(c) The term “Purchase Agreement” in the last sentence of Section 1, in Section 4(k) and in Section 7, shall be deleted andreplaced with “respective Series A SPA or Series B SPA, as the case may be”; with the intent being to extend the scope to cover the Series A SPAas it relates to the Series A Preferred Stock, and the Series B SPA as it relates to the Series B Preferred Stock.

2. Demand Registration. The first sentence of Section 3(a) is amended and restated as follows: At any time ninety (90) days after (x) theclosing of the Offering (as it relates to the Series A Preferred Stock) or (b) the closing of the Exchange (as it relates to the Series B Preferred Stock),the holders of a majority of the Registrable Securities then outstanding may request registration under the Securities Act of all of the RegistrableSecurities that are not then registered on an existing and effective Registration Statement for an offering to be made on a continuous basis pursuantto 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 andwhich form shall be available for the resale by the Holders of all of the Registrable Securities (each, a “Demand Registration”).

3. Representations and Warranties. Each of the Company and the Purchaser represents and warrants that (a) it has the corporatepower and authority to execute and deliver this Amendment and (b) this Amendment constitutes the legal, valid and binding obligation of each of theabove parties, enforceable against each such party in accordance with its terms.

4. No Other Modifications. The RRA shall not be modified by this Amendment in any respect except as expressly set forth herein.

5. Miscellaneous. Sections 11(a), (b), (c), (d), (g), (h), (i) and (j) of the RRA are hereby incorporated into this Amendment mutatismutandis as if set forth in full herein.

[SIGNATURE PAGES TO FOLLOW]

2.

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Amendment as of the date first above written.

COMPANY:

VALERITAS HOLDINGS, INC.

By /s/ John Timberlake Name: John TimberlakeTitle: Chief Executive Officer

[Signature Page to Registration Rights Agreement Amendment]

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Agreement as of the date first above written.

CRG:

CAPITAL ROYALTY PARTNERS II L.P.

By CAPITAL ROYALTY PARTNERS II GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II L.P.

By PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II GP L.P., its General Partner

By PARALLEL INVESTMENT OPPORTUNITIES PARTNERS II GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

CAPITAL ROYALTY PARTNERS II–PARALLEL FUND “A” L.P.

By CAPITAL ROYALTY PARTNERS II–PARALLEL FUND “A” GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II–PARALLEL FUND “A” GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

[Signature Page to Registration Rights Agreement Amendment]

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Agreement as of the date first above written.

CAPITAL ROYALTY PARTNERS II (CAYMAN) L.P.

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

CAPITAL ROYALTY PARTNERS II – PARALLEL FUND “B” (CAYMAN) L.P.

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP L.P., its General Partner

By CAPITAL ROYALTY PARTNERS II (CAYMAN) GP LLC, its General Partner

By /s/ Nathan Hukill Name: Nathan HukillTitle: Authorized Signatory

[Signature Page to Registration Rights Agreement Amendment]

IN WITNESS WHEREOF, the undersigned have executed, or caused to be executed on their behalf by an agent there unto duly authorized,this Agreement as of the date first above written.

WCAS:

WCAS CAPITAL PARTNERS IV, L.P.

By: WCAS CP IV Associates LLC, its General Partner

By /s/ Sean Traynor

Name: Sean Traynor

Title: General Partner

[Signature Page to Registration Rights Agreement Amendment]

Valeritas Reduces its Long-Term Debt Obligation Nearly 60% by Exchanging $25.0 Million of Debt for Series BConvertible Preferred Stock

- Debt Exchange Expected to Save Approximately $8 Million in Cash Interest Expense -

- Provides Corporate Updates Including Expectation That Third Quarter U.S. Revenue Will Grow 30% Over PriorYear -

 BRIDGEWATER, New Jersey, October 2, 2019 --- Valeritas Holdings, Inc. (NASDAQ: VLRX), a medical technology company

and maker of the V-Go® Wearable Insulin Delivery device, which uses its proprietary h-Patch™ technology, announced today the

restructuring of a substantial portion of its outstanding long-term debt, reducing the total debt balance by an aggregate of $25.0

million.

Under the terms of the debt restructuring, $25.0 million of Valeritas senior secured long-term debt held by CR Group L.P. (CRG)

affiliated funds and another creditor was exchanged for newly created Valeritas Series B Convertible Preferred Stock, the terms

of which are disclosed in a Form 8-K to be filed with the SEC. The debt exchange reduces the outstanding balance of senior

secured debt to approximately $17.0 million. The debt restructuring is expected to save Valeritas approximately $8.0 million in

cash interest expense payments through March 2022.

Valeritas President and CEO, John Timberlake, stated, “As we continue to see strong momentum in V-Go prescriptions from

both our tenured sales representatives and our newly hired sales representatives, we were able to work with our creditors to

significantly reduce our long-term debt obligations. The reduction in our long-term debt obligations by nearly 60% and the

elimination of any cash interest payments until maturity, will result in greater financial flexibility, significant cash savings, and

better positions us to continue to drive sales growth across our 75 territories in the U.S.”

Separately, Valeritas expects to record revenue for the third quarter ended September 30, 2019 of approximately $8.5 million, as

U.S. revenue grew approximately 30% over the third quarter of 2018. The Company also reiterated its 2019 annual revenue

guidance of $31.0 to $33.0 million. The Company expects gross margin and operating expenses to be approximately 50% and

between $17.2 million and $17.7 million for the third quarter of 2019, respectively. Cash and cash equivalents are expected to be

approximately $23 million at September 30, 2019 and total liabilities are expected to be approximately

$40 million at September 30, 2019, down $20 million from June 30, 2019, primarily due to the reduction in long-term debt. Total

liabilities at September 30, 2019 are inclusive of a backend facility fee associated with the restructured debt.

Mr. Timberlake continued, “We remain confident in our revenue expectations for 2019 as V-Go prescription rates continue to

accelerate. Additionally, we are excited by the prospects of regulatory clearance for use of U-100 Regular Human Insulin (RHI)

in V-Go, as well as the results of our pharmacokinetic (PK) studies using our h-Patch™ technology to deliver Cannabidiol (CBD)

and Apomorphine (APO) which will be presented at several industry conferences.”

Based upon recent regulatory feedback from the U.S. FDA, we intend to file a 510K for our V-Go SIMTM blue-tooth AccessoryProduct in the first quarter of 2020, which we expect to launch immediately upon clearance by the FDA.

About Valeritas Holdings, Inc.

Valeritas is a commercial-stage medical technology company focused on improving health and simplifying life for people with

diabetes by developing and commercializing innovative technologies. Valeritas’ flagship product, V-Go® Wearable Insulin

Delivery device, which utilizes the h-Patch™ technology, is a simple, affordable, all-in-one basal-bolus insulin delivery option for

patients with type 2 diabetes that is worn like a patch and can eliminate the need for taking multiple daily shots. V-Go

administers a continuous preset basal rate of insulin over 24 hours, and it provides discreet on-demand bolus dosing at

mealtimes. It is the only basal-bolus insulin delivery device on the market today, specifically designed keeping in mind the needs

of type 2 diabetes patients. Headquartered in Bridgewater, New Jersey, Valeritas operates its R&D functions in Marlborough,

Massachusetts.

More information is available at www.valeritas.com and our Twitter feed @Valeritas_US, www.twitter.com/Valeritas_US.

Forward-Looking Statements

This press release may contain forward-looking statements. Statements in this press release that are not purely historical are

forward-looking statements. Such forward-looking statements include, among other things, references to Valeritas technologies,

business and product development plans and market information. Actual results could differ from those projected in any forward-

looking statements due to numerous factors. Such factors include, among others: the ability to raise the additional funding

needed to continue to pursue Valeritas’ business and product development plans; Valeritas' expected cash burn rate and its

ability to continue to increase new and total prescription growth; the expected benefits of the debt exchange on Valeritas’ cash

runway and its anticipated operating costs following the debt exchange

(the $2 million minimum debt covenant remains in place following the debt exchange, which will continue to limit Valeritas’ ability

to finance its operations); the effects of both the new issuance of Series B Convertible Preferred Stock and the May 2019

reverse stock split on the trading price of Valeritas’ common stock, in both the short and long-term; the ability to continue to

commercialize the V-Go® Wearable Insulin Delivery device with limited resources, competition in the industry in which Valeritas

operates and overall market conditions; the inherent uncertainties associated with developing new products or technologies; the

potential commercial use of the h-Patch™ technology for subcutaneous delivery of Apo or CBD is dependent on Valeritas’ ability

to identify one or more potential collaboration partners and enter into mutually agreeable collaboration agreements (neither the

delivery of Apo or CBD by h-Patch™ is currently cleared for use by the FDA); our statements that (i) subcutaneous Apo

infusions appears to offer qualitatively comparable benefits to that of oral levodopa and (ii) based on initial studies,

subcutaneous infusion of CBD appears to offer several distinct advantages over oral dosing of CBD, and other potential benefits

of the h-Patch™ technology to deliver Apo or CBD is based on third-party clinical studies not conducted by Valeritas; however,

additional studies or research may be needed by our potential partners to demonstrate to the U.S. Food and Drug Administration

(“FDA”) that delivery of Apo or CBD via the h-Patch™ technology will offer consistent results to the initial Valeritas study; and the

FDA or other regulatory agencies may require Valeritas’ collaboration partners to demonstrate the safety or effectiveness of

subcutaneous infusion of Apo or CBD through the h-Patch™ technology before either of those products can be commercialized,

which can be a lengthy, and uncertain process, and the FDA may delay or require additional information to provide clearance for

use with our RHI or our V-Go SIM product. Statements or claims made by third parties regarding the efficacy or functionality of

V-Go as compared to other products are statements made by such individual and should not be taken as evidence of clinical trial

results supporting such statements or claims. Any forward-looking statements are made as of the date of this press release, and

Valeritas assumes no obligation to update the forward-looking statements or to update the reasons why actual results could

differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the

information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents

Valeritas files with the SEC available at www.sec.gov.

Investor Contacts:

Lynn Pieper Lewis or Greg Chodaczek

Gilmartin Group

646-924-1769

ir@valeritas.com

Media Contact:

Kevin Knight

Knight Marketing Communications, Ltd.

206-451-4823

pr@valeritas.com