EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
     This Registration Rights Agreement (this “Agreement”) is made and entered
into as of August 18, 2005, by NationsHealth, Inc., a Delaware corporation (the
“Company”) and US Bioservices Corporation, a Delaware corporation (“Investor”).
Recitals
     A. The Company and Investor are parties to the Stock Purchase Agreement
dated as of even date herewith (the “Purchase Agreement”), pursuant to which
(i) the Company has agreed to sell, and Investor has agreed to purchase, that
number of shares of the Company’s common stock, par value $0.0001 per share
(“Common Stock”), equal to (a) $1,500,000 divided by (b) the average closing
price per share of Common Stock, as reported by Nasdaq, for the twenty
(20) consecutive trading days immediately prior to the Closing (as such term is
defined in the Purchase Agreement). The shares of Common Stock that Investor is
purchasing under the Purchase Agreement are referred to as the “Shares”.
     B. The respective obligations of the Company and Investor under the
Purchase Agreement are conditioned upon the execution and delivery of this
Agreement.
     C. Investor acknowledges that the Company is a party to Existing
Registration Rights Agreements (as defined below) with Existing Holders (as
defined below) and that any demand registration requested by the Investor will
likely include shares of the Company’s common stock held by such Existing
Holders. In addition, Investor acknowledges that certain provisions contained in
the Existing Registration Rights Agreements may impact the Investor’s ability to
include a requested number of shares of the Common Stock in any particular
registration.
     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
Agreement
Article I
Registration Rights
     1.1 Definitions. For purposes of this Agreement:
     (a) “Affiliate” means, with respect to any Person, (i) any other Person of
which securities or other ownership interests representing more than fifty
percent (50%) of the voting interests are, at the time such determination is
being made, owned, Controlled or held, directly or indirectly, by such Person or
(ii) any other Person which, at the time such determination is being made, is
Controlling, Controlled by or under common Control with, such Person. As used
herein, “Control”, whether used as a noun or verb, refers to the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management or policies of a Person, whether through the ownership of voting
securities or otherwise.

 

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     (b) “Existing Holders” means any holders of shares of common stock, or
securities convertible or exercisable into shares of common stock, of the
Company that are a party to any of the Existing Registration Rights Agreements.
     (c) “Existing Registration Rights Agreements” means (i) the Registration
Rights Agreement relating to the Securities Purchase Agreement dated as of
May 4, 2005, among the Company and the investor parties listed on the signature
pages thereto, (ii) the Registration Rights Agreement dated as of February 28,
2005, among the Company and the investor parties listed on the signature pages
thereto, (iii) the Registration Rights Agreement dated as of March 9, 2004, as
amended as of June 2, 2004, among the Company and the investor parties listed on
the signature pages thereto, and (iv) the Registration Rights Agreement dated as
of July 22, 2003, among the Company and the investor parties listed on the
signature pages thereto.
     (d) “Holder” means a Person that (i) is a party to this Agreement (or a
permitted transferee under Section 1.10 hereof) and (ii) owns Registrable
Securities;.
     (e) “NASD” means the National Association of Securities Dealers, Inc.
     (f) “Person” means any individual, firm, corporation, company, partnership,
trust, incorporated or unincorporated association, limited liability company,
joint venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind, and shall include any
successor (by merger or otherwise) of any such entity.
     (g) “Registrable Securities” means (i) the Shares and (ii) any additional
shares of Common Stock issued or issuable with respect to the Shares by virtue
of any stock split, combination, stock dividend, merger, consolidation or other
similar event; provided, however, that shares of Common Stock that are
considered to be Registrable Securities shall cease to be Registrable Securities
(A) upon the sale thereof pursuant to an effective registration statement or
Rule 144 under the Securities Act, (B) upon the transfer thereof in a private
transaction where the transferor’s rights under this Agreement are not assigned,
(C) when such securities cease to be outstanding, or (D) such Shares may be sold
or transferred by the beneficial owner thereof in a single transaction under
Rule 144.
     (h) “Registration Expenses” mean all expenses (other than underwriting
discounts and commissions ) arising from or incident to the performance of, or
compliance with, this Agreement, including, without limitation, (i) SEC, stock
exchange, NASD and other registration and filing fees, (ii) all fees and
expenses incurred in connection with complying with any securities or blue sky
laws (including, without limitation, fees, charges and disbursements of counsel
in connection with blue sky qualifications of the Registrable Securities),
(iii) all printing, messenger and delivery expenses, (iv) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including, without limitation, any expenses arising
from any special audits or “comfort letters” required in connection with or
incident to any registration), (v) the fees, charges and disbursements of any
special experts retained by the Company in connection with any registration
pursuant to the terms of this Agreement, (vi) all internal expenses of the
Company (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), (vii) the fees
and expenses

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incurred in connection with the listing of the Registrable Securities on any
securities exchange or Nasdaq and (viii) Securities Act liability insurance (if
the Company elects to obtain such insurance), regardless of whether any
Registration Statement filed in connection with such registration is declared
effective. Registration expenses shall also include fees, charges and
disbursements of one (1) firm of counsel to the Holder participating in any
underwritten public offering pursuant to this Agreement, not to exceed $15,000
in connection with a Demand Registration or $5,000 in connection with a
Piggyback Registration.
     (i) “Registration Statement” shall mean any Registration Statement of the
Company filed with the SEC on the appropriate form pursuant to the Securities
Act that covers any of the Registrable Securities pursuant to the provisions of
this Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
prospectus contained therein, all exhibits thereto and all materials
incorporated by reference therein.
     (j) “SEC” or “Commission” means the United States Securities and Exchange
Commission.
     (k) “Securities Act” means the Securities Act of 1933, as amended.
     (l) “Selling Expenses” shall mean the underwriting fees, discounts, selling
commissions and stock transfer taxes applicable to the Registrable Securities
registered by the Holder.
     1.2 Demand Registration..
     (a) Request by Holder. If the Company receives at any time within two years
of the date of this Agreement a written request from the Holder that the Company
register the Registrable Securities held by Holder (a “Demand Request”), which
Demand Request shall (x) specify the number of Registrable Securities that the
Holder intends to sell or dispose of, (y) state the intended method or methods
of sale or disposition of the Registrable Securities and (z) specify the
expected price range (net of underwriting discounts and commissions) acceptable
to the Holder to be received for such Registrable Securities, then the Company
shall:
          (i) cause to be filed, as soon as practicable, but within ninety
(90) days of the date of delivery to the Company of the Demand Request, a
Registration Statement covering such Registrable Securities that the Company has
been so requested to register by the Holder and other Persons, providing for the
registration under the Securities Act of such Registrable Securities to the
extent necessary to permit the disposition of such Registrable Securities in
accordance with the intended method of distribution specified in the Demand
Request;
          (ii) use its best efforts to have such Registration Statement declared
effective by the SEC as soon as practicable thereafter; and
          (iii) refrain from filing any other Registration Statements, other
than pursuant to a Registration Statement on Form S-4 or S-8 (or similar or
successor forms) or Registration Statements pursuant to Existing Registration
Rights Agreements, with respect to any other

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securities of the Company until such date which is sixty (60) days following
effectiveness of the Registration Statement filed in response to the Demand
Request.
     (b) Effective Registration Statement. A registration requested pursuant to
this Agreement shall not be deemed to have been effected (i) unless a
Registration Statement with respect thereto has become effective and remained
effective in compliance with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such Registration
Statement for 180 days after it has become effective or until such time as all
of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the Holder thereof set forth in such
Registration Statement, whichever is shorter; (ii) if, after it has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or court and
has not thereafter become effective, or if the offering of Registrable
Securities is not consummated for any reason other than the Holder unilaterally
deciding not to sell the Registrable Securities for a reason other than those
set forth in Section 1.2(f), including, without limitation, if the underwriters
of an underwritten public offering advise the Holder that the Registrable
Securities cannot be sold at a net price per share equal to or above the net
price disclosed in the preliminary prospectus; (iii) if the conditions to
closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived; or (iv) if the
Holder is cut back regarding the Registrable Securities requested to be
registered by more than 50%.
     (c) Selection of Underwriters. In the event that the Company is required to
file a Registration Statement covering any Registrable Securities of the Holder
pursuant to Section 1.2(a) hereof and the proposed public offering is to be an
underwritten public offering, the managing underwriter shall be one or more
reputable nationally recognized investment banks selected by a the Holder and
reasonably acceptable to the Company, which consent shall not be unreasonably
withheld, delayed or conditioned.
     (d) Priority for Demand Registration.
          (i) In any Registration Statement filed as a result of Demand Request,
the Investor acknowledges that some or all of the Existing Holders are entitled
to include shares of common stock in such Registration Statement pro rata with
the Investor based on the number of shares requested to be included in the
Registration Statement, on a basis no less favorable to the Existing Holders
than that of the Holder.
          (ii) In addition to the limitations set forth in Section 1.2(d)(i)
above, if the managing underwriter of an underwritten public offering determines
and advises the Holder and the Company in writing that the inclusion of all
securities proposed to be included by the Company, the Holder and any other
stockholders who may be exercising piggyback registration rights in the
underwritten public offering would materially and adversely interfere with the
successful marketing of the Holder’s Registrable Securities, then the Company
shall not be permitted to include any securities in excess of the amount, if
any, of securities which the managing underwriter of such underwritten public
offering shall reasonably and in good faith agree in writing to include in such
public offering in addition to the amount of Registrable Securities to be
registered for the Holder. It is acknowledged by the parties hereto that the

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Existing Registration Rights Agreements may require specific methods for
determining the reduction of shares included in a Registration Statement. To the
extent not inconsistent with Existing Registration Rights Agreements, the
securities to be included in a registration requested by the Holder pursuant to
Section 1.2 shall be allocated:
               (1) first, to the Holder; and
               (2) second, to the Company and any other stockholders of the
Company requesting piggyback registration of securities of the Company.
     (e) Limitations on Demand Registration.
          (i) The Company may delay making a filing of a Registration Statement
or taking action in connection therewith by not more than ninety (90) days in
addition to the 90 days permitted by paragraph 1.5(a) if (A) the Company
provides a written certificate signed by the President or Chief Executive
Officer of the Company to the Holder, prior to the time it would otherwise have
been required to file such Registration Statement or take such action pursuant
to this Section 1.2, stating that the Board of Directors of the Company has
determined in good faith that the filing of such Registration Statement would be
seriously detrimental to the Company or would otherwise materially adversely
affect a financing, acquisition, disposition, merger or other material
transaction (collectively, a “Valid Business Reason”) and that it is therefore
essential to defer the filing of the Registration Statement; provided, however,
that such right to delay a Demand Request shall be exercised by the Company not
more than once in any twelve (12) month period and the Company shall only have
the right to delay a Demand Request so long as such Valid Business Reason
exists, and during such time, the Company may not file a Registration Statement
for securities to be issued and sold for its own account or for that of anyone
other than the Holder; or (B) the Company has filed a registration statement
(other than on Form S-4 or S-8) within ninety (90) days prior to the date of
such Demand Request.
          (ii) The Company shall only be obligated to effect one (1) Demand
Request pursuant to this Section 1.2.
          (iii) The Company shall not be required to comply with a Demand
Request unless the reasonably anticipated aggregate gross proceeds to be raised
(before any underwriting discounts and commissions) would be equal to or exceed
$1,000,000.
     (f) Cancellation of Registration. The Holder shall have the right to cancel
a proposed registration of Registrable Securities pursuant to this Section 1.2
when, (i) in its discretion, market conditions are so unfavorable as to be
seriously detrimental to an offering pursuant to such registration or (ii) the
request for cancellation is based upon material adverse information relating to
the Company that is different from the information known to the Holder at the
time of the Demand Request. Such cancellation of a registration shall not be
counted as the one (1) Demand Request and notwithstanding anything to the
contrary in the Agreement, the Company shall be responsible for the Registration
Expenses of the Holder incurred in connection with the registration prior to the
time of cancellation.
     1.3 Piggyback Registrations.

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     (a) Right to Include Registrable Securities. Each time that the Company
proposes for any reason to register any of its Common Stock under the Securities
Act, either for its own account or for the account of a stockholder or
stockholders exercising demand registration rights other than Demand Request
pursuant to Section 1.2 hereof (“Other Stockholders”) other than pursuant to a
Registration Statement on Forms S-4 or S-8 (or similar or successor forms) (a
“Proposed Registration”), the Company shall promptly give written notice of such
Proposed Registration to the Holder (which notice shall be given not less than
thirty (30) days prior to the expected effective date of the Company’s
Registration Statement) and shall offer the Holder the right to request
inclusion of any of the Holder’s Registrable Securities in the Proposed
Registration. No registration pursuant to this Section 1.3 shall relieve the
Company of its obligation to register Registrable Securities pursuant to a
Demand Request, as contemplated by Section 1.2 hereof. The rights to piggyback
registration may be exercised an unlimited number of occasions.
     (b) Piggyback Procedure. The Holder shall have twenty (20) days from the
date of receipt of the Company’s notice referred to in Section 1.3(a) above to
deliver to the Company a written request specifying the number of Registrable
Securities the Holder intends to sell and the Holder’s intended method of
disposition. The Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any Registration Statement pursuant
to this Section 1.3 by giving written notice to the Company of such withdrawal.
Subject to Section 1.3(d) below, the Company shall use its best efforts to
include in such Registration Statement all such Registrable Securities so
requested to be included therein; provided, however, that the Company may at any
time withdraw or cease proceeding with registration of the Registrable
Securities if it shall at the same time withdraw or cease proceeding with the
Proposed Registration.
     (c) Selection of Underwriters. The managing underwriter for any Proposed
Registration that involves an underwritten public offering shall be one or more
reputable nationally recognized investment banks selected by the Company.
     (d) Priority for Piggyback Registration. Notwithstanding any other
provision of this Agreement, if the managing underwriter of an underwritten
public offering determines and advises the Company and the Holder in writing
that the inclusion of all Registrable Securities proposed to be included by the
Holder in the underwritten public offering would materially and adversely
interfere with the successful marketing of the Company’s securities, then the
Holder shall not be permitted to include any Registrable Securities in excess of
the amount, if any, of Registrable Securities that the managing underwriter of
such underwritten public offering shall reasonably and in good faith agree in
writing to include in such public offering in addition to the amount of
securities to be registered for the Company and/or the Other Stockholders. The
Company will be obligated to include in such Registration Statement, as to the
Holder, only a portion of the Registrable Securities the Holder has requested be
registered equal to the ratio which such Holder’s requested Registrable
Securities bears to the total shares of Common Stock requested to be included in
such Registration Statement by all Persons other than the Company and the Other
Stockholders who have requested that their shares of Common Stock be included in
such Registration Statement. The Holder acknowledges that pursuant to the
foregoing provision, the securities to be included in a registration initiated
by the Company shall be allocated:

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          (i) first, to the Company and/or the Other Stockholders; and
          (ii) second, among the Holder and all other holders of securities of
the Company with piggyback registration rights.
     If as a result of the provisions of this Section 1.3(d), the Holder shall
not be entitled to include all of its Registrable Securities in a registration
that it has requested to be so included, the Holder may withdraw its request to
include Registrable Securities in such Registration Statement.
     (e) Underwritten Offering. In the event that the Proposed Registration by
the Company is, in whole or in part, an underwritten public offering of
securities of the Company, any request under this Section 1.3 shall specify that
the Registrable Securities be included in the underwriting on the same terms and
conditions as the shares, if any, otherwise being sold through underwriters
under such registration.
     1.4 Form S-3 Registration. The Holder may make a one time request at any
time that the Company file a Registration Statement under the Securities Act on
Form S-3 (or similar or successor form), within thirty (30) days of such demand,
covering the sale or other distribution of all or any portion of the Registrable
Securities held by the Holder pursuant to Rule 415 under the Securities Act
(“Form S-3 Demand”) if (i) the reasonably anticipated aggregate gross proceeds
would equal or exceed $5,000,000, (ii) the Company is a registrant qualified to
use Form S-3 (or any similar or successor form) to register such Registrable
Securities and (iii) the plan of distribution of the Registrable Securities is
other than pursuant to an underwritten public offering. If such conditions are
met, the Company shall use its best efforts to register under the Securities Act
on Form S-3 (or any similar or successor form) at the earliest practicable date,
for sale in accordance with the method of disposition specified in the Form S-3
Demand, the number of Registrable Securities specified in such Form S-3 Demand.
In connection with a Form S-3 Demand, the Company agrees to include in the
prospectus included in any Registration Statement on Form S-3, such material
describing the Company and intended to facilitate the sale of securities being
so registered as is reasonably requested for inclusion therein by the Holder,
whether or not the rules applicable to preparation of Form S-3 require the
inclusion of such information. In any Registration Statement filed on Form S-3
(or similar or successor form), the Investor acknowledges that some or all of
the Existing Holders are entitled to include shares of common stock in such
Registration Statement pro rata with the Investor based on the number of shares
requested to be included in the Registration Statement, on a basis no less
favorable to the Existing Holders than that of the Holder. Notwithstanding the
foregoing, if the Company shall furnish to the Holder a certificate signed by
the Chief Executive Officer and Chief Financial Officer of the Company stating
that in the good faith opinion of the Board of Directors of the Company, a Valid
Business Reason exists, the Company shall have the right to delay or defer
taking action with respect to such filing for a period of ninety (90) days after
receipt of the Form S-3 Demand; provided, however, that such right to delay or
defer a Form S-3 Demand shall be exercised by the Company not more than once in
any twelve (12) month period, the Company shall only have the right to delay a
Form S-3 Demand so long as such Valid Business Reason exists, and during such
time the Company may not file a Registration Statement for securities to be
issued and sold for its own account or for that of anyone other than the Holder.
A Form S-3 Demand will not be deemed to be a Demand Request as described in
Section 1.2 hereof.

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     Notwithstanding the foregoing, the Company shall not be obligated to file
more than one (1) Registration Statement on Form S-3 pursuant to this
Section 1.4 in any given one (1) year period.
     1.5 Registration Procedures.
     (a) Obligations of the Company. Whenever registration of Registrable
Securities is required pursuant to this Agreement, the Company shall use its
best efforts to effect the registration and sale of such Registrable Securities
in accordance with the intended method of distribution thereof as promptly as
possible, and in connection with any such request, the Company shall, as
expeditiously as possible:
          (i) Preparation of Registration Statement; Effectiveness. Prepare and
file with the SEC (in any event not later than ninety (90) days after receipt of
a Demand Request to file a Registration Statement with respect to Registrable
Securities, except as set forth in Section 1.2 (e)) a Registration Statement on
any form on which the Company then qualifies, which counsel for the Company
shall deem appropriate and pursuant to which such offering may be made in
accordance with the intended method of distribution thereof (except that the
Registration Statement shall contain such information as may reasonably be
requested for marketing or other purposes by the managing underwriter), and use
its best efforts to cause any registration required hereunder to become
effective as soon as practicable after the initial filing thereof and remain
effective for a period of not less than one hundred and eighty (180) days (or
such shorter period in which all Registrable Securities have been sold in
accordance with the methods of distribution set forth in the Registration
Statement); provided, however, that, in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such one hundred eighty (180) day period shall be
extended, if necessary, to keep the Registration Statement effective until all
such Registrable Securities are sold, provided that Rule 415, or any successor
rule under the Securities Act, permits an offering on a continuous or delayed
basis;
          (ii) Participation in Preparation. Provide the Holder, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other agent retained by the Holder or underwriter in
connection with the Registration Statement (each, an “Inspector” and,
collectively, the “Inspectors”), the opportunity to reasonably participate
(including, but not limited to, reviewing, commenting on and attending all
meetings) in the preparation of such Registration Statement, each prospectus
included therein or filed with the SEC and each amendment or supplement thereto
(each Inspector shall act without unreasonable delay in connection with its
participation of the Registration Statement);
          (iii) Due Diligence. For a reasonable period prior to the filing of
any Registration Statement pursuant to this Agreement, make available for
inspection and copying by the Inspectors such financial and other information
and books and records, pertinent corporate documents and properties of the
Company and its subsidiaries and cause the officers, directors, employees,
counsel and independent certified public accountants of the Company and its
subsidiaries to respond to such inquiries and to supply all information
reasonably requested by any such Inspector in connection with such Registration
Statement, as shall be reasonably necessary, in the judgment of the respective
counsel referred to in Section 1.5(a)(ii), to conduct a reasonable investigation
within the meaning of the Securities Act;

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          (iv) General Notifications. Promptly notify in writing the Holder, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold, (A) when such Registration Statement or the prospectus
included therein or any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to any such Registration Statement
or any post-effective amendment, when the same has become effective, (B) when
the SEC notifies the Company whether there will be a “review” of such
Registration Statement and (C) of any comments (oral or written) by the SEC and
by the blue sky or securities commissioner or regulator of any state with
respect thereto or (D) of any request by the SEC for any amendments or
supplements to such Registration Statement or the prospectus or for additional
information;
          (v) 10b-5 Notification. Promptly notify in writing the Holder, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold pursuant to any Registration Statement at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
upon discovery that, or upon the happening of any event as a result of which,
any prospectus included in such Registration Statement (or amendment or
supplement thereto) contains an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, and the Company shall promptly prepare a supplement or amendment to
such prospectus and file it with the SEC (in any event no later than ten
(10) days following notice of the occurrence of such event to the Holder, the
sales or placement agent and the managing underwriter) so that after delivery of
such prospectus, as so amended or supplemented, to investors of such Registrable
Securities, such prospectus, as so amended or supplemented, shall not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made;
          (vi) Notification of Stop Orders; Suspensions of Qualifications and
Exemptions. Promptly notify in writing the Holder, the sales or placement agent,
if any, therefor and the managing underwriter of the securities being sold of
the issuance by the SEC of (A) any stop order issued or threatened to be issued
by the SEC or (B) any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and the Company agrees to use commercially
reasonable best efforts to (x) prevent the issuance of any such stop order, and
in the event of such issuance, to obtain the withdrawal of any such stop order
and (y) obtain the withdrawal of any order suspending or preventing the use of
any related prospectus or suspending the qualification of any Registrable
Securities included in such Registration Statement for sale in any jurisdiction
at the earliest practicable date;
          (vii) Amendments and Supplements; Acceleration. Prepare and file with
the SEC such amendments, including post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable time period required hereunder and if
applicable, file any Registration Statements pursuant to Rule 462(b) under the
Securities Act; cause the related prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act;
and comply with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all

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securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement as so amended or in such prospectus as so
supplemented. If the Holder so requests, to request acceleration of
effectiveness of the Registration Statement from the SEC and any post-effective
amendments thereto, if any are filed; provided that at the time of such request,
the Company does not in good faith believe that it is necessary to amend further
the Registration Statement in order to comply with the provisions of this
subparagraph. If the Company wishes to further amend the Registration Statement
prior to requesting acceleration, it shall have five (5) days to so amend prior
to requesting acceleration;
          (viii) Copies. Furnish as promptly as practicable to the Holder and
Inspector prior to filing a Registration Statement or any supplement or
amendment thereto, copies of such Registration Statement, supplement or
amendment as it is proposed to be filed, and after such filing such number of
copies of such Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the prospectus included in such
Registration Statement (including each preliminary prospectus) and such other
documents as the Holder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by the Holder;
          (ix) Blue Sky. Use commercially reasonable efforts to, prior to any
public offering of the Registrable Securities, register or qualify (or seek an
exemption from registration or qualifications) such Registrable Securities under
such other securities or blue sky laws of such jurisdictions as the Holder or
underwriter may request, and to continue such qualification in effect in each
such jurisdiction for as long as is permissible pursuant to the laws of such
jurisdiction, or for as long as the Holder or underwriter requests or until all
of such Registrable Securities are sold, whichever is shortest, and do any and
all other acts and things which may be reasonably necessary or advisable to
enable the Holder to consummate the disposition in such jurisdictions of the
Registrable Securities;
          (x) Other Approvals. Use commercially reasonable efforts to obtain all
other approvals, consents, exemptions or authorizations from such governmental
agencies or authorities as may be necessary to enable the Holder and
underwriters to consummate the disposition of Registrable Securities;
          (xi) Agreements. Enter into customary agreements (including any
underwriting agreements in customary form), and take such other actions as may
be reasonably required in order to expedite or facilitate the disposition of
Registrable Securities;
          (xii) “Cold Comfort” Letter. Obtain a “cold comfort” letter from the
Company’s independent public accountants in customary form and covering such
matters of the type customarily covered by “cold comfort” letters as the
managing underwriter may reasonably request, and reasonably satisfactory to the
Holder;
          (xiii) Legal Opinion. Furnish, at the request of any underwriter of
Registrable Securities on the date such securities are delivered to the
underwriters for sale pursuant to such registration, an opinion, dated such
date, of counsel representing the Company for the purposes of such registration,
addressed to the Holder, and the placement agent or sales agent, if any,

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thereof and the underwriters, if any, thereof, covering such legal matters with
respect to the registration in respect of which such opinion is being given as
such underwriter may reasonably request and as are customarily included in such
opinions, and reasonably satisfactory to the Holder;
          (xiv) SEC Compliance, Earnings Statement. Use its best efforts to
comply with all applicable rules and regulations of the SEC and make available
to its shareholders, as soon as reasonably practicable, but no later than
fifteen (15) months after the effective date of any Registration Statement, an
earnings statement covering a period of twelve (12) months beginning after the
effective date of such Registration Statement, in a manner which satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
          (xv) Certificates, Closing. Provide officers’ certificates and other
customary closing documents reasonably necessary in connection with the
Registration Statement, and in the event of an underwritten offering, in
connection with the delivery of the shares;
          (xvi) NASD. Cooperate with the Holder and each underwriter
participating in the disposition of such Registrable Securities and
underwriters’ counsel in connection with any filings required to be made with
the NASD;
          (xvii) Listing. Use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar securities
issued by the Company are then listed and if not so listed, to be listed on the
NASD automated quotation system;
          (xviii) Transfer Agent, Registrar and CUSIP. Provide a transfer agent
and registrar for all Registrable Securities registered pursuant hereto and a
CUSIP number for all such Registrable Securities, in each case, no later than
the effective date of such registration;
          (xix) Private Sales. Use its best efforts to assist the Holder in
facilitating private sales of Registrable Securities by, among other things,
providing officers’ certificates and other customary closing documents; and
          (xx) Commercially Reasonable Efforts. Use commercially reasonable
efforts to take all other actions necessary to effect the registration of the
Registrable Securities contemplated hereby.
     (b) Seller Information. The Company may require the Holder as to which any
registration of the Holder’s Registrable Securities is being effected to furnish
to the Company with such information regarding the Holder and the Holder’s
method of distribution of such Registrable Securities as the Company may from
time to time reasonably request in writing.
     (c) Notice to Discontinue. The Holder whose Registrable Securities are
covered by a Registration Statement filed pursuant to this Agreement agrees
that, upon receipt of written notice from the Company of the happening of any
event of the kind described in Section 1.5(a)(v), the Holder shall forthwith
discontinue the disposition of Registrable Securities until the Holder’s receipt
of the copies of the supplemented or amended prospectus contemplated by Section
1.5(a)(v) or until it is advised in writing by the Company that the use of the
prospectus may be resumed and has received copies of any additional or
supplemental filings

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which are incorporated by reference into the prospectus, and, if so directed by
the Company in the case of an event described in Section 1.5(a)(v), such
Participating Holder shall deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies then in the Holder’s possession, of the
prospectus covering such Registrable Securities which is current at the time of
receipt of such notice. If the Company shall give any such notice, the Company
shall extend, if necessary to sell any remaining Registrable Securities, the
period during which such Registration Statement is to be maintained effective by
the number of days during the period from and including the date of the giving
of such notice pursuant to Section 1.5(a)(v) to and including the date when the
Holder shall have received the copies of the supplemented or amended prospectus
contemplated by, and meeting the requirements of, Section 1.5(a)(v).
     1.6. Registration Expenses. Except as otherwise provided herein, all
Registration Expenses shall be borne by the Company. All Selling Expenses
relating to Registrable Securities registered by the Holder shall be borne by
the Holder.
     1.7. Indemnification.
     (a) Indemnification by the Company. The Company agrees, notwithstanding
termination of this Agreement, to indemnify and hold harmless to the fullest
extent permitted by law, the Holder, each of its directors, officers, employees,
advisors, agents and general or limited partners (and the directors, officers,
employees, advisors and agents thereof), their respective Affiliates and each
Person who controls (within the meaning of the Securities Act or the Exchange
Act) any of such Persons, and each underwriter and each Person who controls
(within the meaning of the Securities Act or the Exchange Act) any underwriter
(collectively, “Holder Indemnified Parties”) from and against any and all
losses, claims, damages, expenses (including, without limitation, reasonable
costs of investigation and fees, disbursements and other charges of counsel, any
amounts paid in settlement effected with the Company’s consent, which consent
shall not be unreasonably withheld or delayed and any costs incurred in
enforcing the Company’s indemnification obligations hereunder) or other
liabilities (collectively, “Losses”) to which any such Holder Indemnified Party
may become subject under the Securities Act, Exchange Act, any other federal
law, any state or common law or any rule or regulation promulgated thereunder or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereof) are resulting from or arising out of or based
upon (i) any untrue, or alleged untrue, statement of a material fact contained
in any Registration Statement, prospectus or preliminary prospectus (as amended
or supplemented) or any document incorporated by reference in any of the
foregoing or resulting from or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a prospectus, in
light of the circumstances under which they were made), not misleading or
(ii) any violation by the Company of the Securities Act, Exchange Act, any other
federal law, any state or common law or any rule or regulation promulgated
thereunder or otherwise incident to any registration, qualification or
compliance and in any such case, the Company will promptly reimburse each such
Holder Indemnified Party for any legal and any other Losses reasonably incurred
in connection with investigating, preparing or defending any such claim, loss,
damage, liability, action or investigation or proceeding (collectively, a
“Claim”); provided, however, that the Company shall not be liable to any Holder
Indemnified Party for any Losses that arise out of or are based upon written
information provided by a Holder Indemnified Party for use in the

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Registration Statement. Such indemnity obligation shall remain in full force and
effect regardless of any investigation made by or on behalf of the Holder
Indemnified Parties and shall survive the transfer of Registrable Securities by
such Holder Indemnified Parties.
     (b) Indemnification by Holder. In connection with any proposed registration
in which the Holder is participating pursuant to this Agreement, the Holder
shall furnish to the Company in writing such information with respect to the
Holder as the Company may reasonably request or as may be required by law for
use in connection with any Registration Statement or prospectus or preliminary
prospectus to be used in connection with such registration and the Holder agrees
to indemnify and hold harmless the Company, any underwriter retained by the
Company and their respective directors, officers, employees, advisors, agents
and general or limited partners (and the directors, officers, employees,
advisors and agents thereof), their respective Affiliates and each Person who
controls (within the meaning of the Securities Act or the Exchange Act) any of
such Persons to the same extent as the foregoing indemnity from the Company to
the Holder as set forth in Section 1.7(a) (subject to the exceptions set forth
in the foregoing indemnity, the proviso to this sentence and applicable law),
but only with respect to any such information furnished by the Holder in writing
for use in the Registration Statement; provided, however, that the liability of
the Holder under this Section 1.7(b) shall be limited to the amount of the net
proceeds received by the Holder in the offering giving rise to such liability.
Such indemnity obligation shall remain in full force and effect regardless of
any investigation made by or on behalf of the Holder Indemnified Parties and
shall survive the transfer of Registrable Securities by the Holder.
     (c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder (the “Indemnified Party”) agrees to give prompt
written notice to the indemnifying party (the “Indemnifying Party”) after the
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; provided, however, that, the failure so to notify
the Indemnifying Party shall not relieve the Indemnifying Party of any liability
that it may have to the Indemnified Party hereunder unless and to the extent
such Indemnifying Party is materially prejudiced by such failure. If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense
of such action with counsel satisfactory to the Indemnified Party in its
reasonable judgment or (iii) the named parties to any such action (including,
but not limited to, any impleaded parties) reasonably believe that the
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct. In the case of clause (ii) above and (iii) above, the Indemnifying
Party shall not have the right to assume the defense of such action on behalf of
such Indemnified Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the written consent
of the Indemnified Party,

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effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the Indemnified Party from all liability arising out of such action
or claim and (B) does not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of any Indemnified Party. The
rights afforded to any Indemnified Party hereunder shall be in addition to any
rights that such Indemnified Party may have at common law, by separate agreement
or otherwise.
     (d) Contribution. If the indemnification provided for in this Section 1.7
from the Indemnifying Party is unavailable or insufficient to hold harmless an
Indemnified Party in respect of any Losses referred to herein, then the
Indemnifying Party, in lieu of indemnifying the Indemnified Party, shall
contribute to the amount paid or payable by the Indemnified Party as a result of
such Losses in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and the Indemnified Party, as well as any other
relevant equitable considerations. The relative faults of the Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, was
made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the Indemnifying Party’s and Indemnified Party’s relative
intent, knowledge, access to information and opportunity to correct or prevent
such action; provided, however, that the liability of the Holder under this
Section 1.7(d) shall be limited to the amount of the net proceeds received by
the Holder in the offering giving rise to such liability. The amount paid or
payable by a party as a result of the Losses or other liabilities referred to
above shall be deemed to include, subject to the limitations set forth in
Sections 1.7(a), 1.7(b) and 1.7(c), any legal or other fees, charges or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
     The parties agree that it would not be just and equitable if contribution
pursuant to this Section 1.7(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution pursuant to this Section
1.7(d).
     1.8 Rule 144 and Rule 144A; Other Exemptions. With a view to making
available to the Holder the benefits of Rule 144 and Rule 144A promulgated under
the Securities Act and other rules and regulations of the SEC that may at any
time permit the Holder to sell securities of the Company to the public without
registration, the Company covenants that it shall (i) file in a timely manner
all reports and other documents required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder and (ii) take such further action as the Holder may reasonably
request (including, but not limited to, providing any information necessary to
comply with Rule 144 and Rule 144A, if available with respect to resales of the
Registrable Securities under the Securities Act), all to the extent required
from time to time to enable such Holder to sell Registrable Securities without

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registration under the Securities Act within the limitation of the exemptions
provided by (x) Rule 144 and Rule 144A (if available with respect to resales of
the Registrable Securities) under the Securities Act, as such rules may be
amended from time to time or (y) any other rules or regulations now existing or
hereafter adopted by the SEC. Upon the written request of the Holder, the
Company shall deliver to the Holder a written statement as to whether it has
complied with such requirements.
     1.9 Certain Limitations On Registration Rights. The Holder may not
participate in any Registration Statement hereunder unless the Holder completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents reasonably required under the terms of such
underwriting arrangements and agrees to sell the Holder’s Registrable Securities
on the basis provided in any underwriting agreement approved by the Holder
entitled hereunder to approve such arrangements; provided, however, that the
Holder shall not be required to make any representations or warranties to the
Company or the underwriters in connection with any such registration other than
representations and warranties as to (i) the Holder’s ownership of its
Registrable Securities to be sold or transferred, (ii) the Holder’s power and
authority to effect such transfer and (iii) such matters pertaining to
compliance with securities laws as may be reasonably requested. The Holder of
Registrable Securities to be sold by such underwriters may, at their option,
require that any or all of the representations and warranties by, and the other
agreements on the part of the Company to and for the benefit of such
underwriters, shall also be made to and for the benefit of the Holder and that
any or all of the conditions precedent to the obligations of the underwriters
under the underwriting agreement be conditions precedent to the obligations of
the Holder.
     1.10 Transfer of Registration Rights. The rights of the Holder hereunder
may be transferred or assigned in connection with a transfer of Registrable
Securities to (i) any Affiliate of the Holder, (ii) any successor, subsidiary,
parent, partner, limited partner, shareholder or member of the Holder or
(iii) any single party to a transaction who, after such transaction, holds all
of the Registrable Securities held by the Holder (as adjusted for any stock
dividends, stock splits, combinations and reorganizations and similar events).
Notwithstanding the foregoing, such rights may only be transferred or assigned
provided that all of the following additional conditions are satisfied: (a) such
transfer or assignment is effected in accordance with applicable securities
laws; (b) such transferee or assignee agrees in writing to become subject to the
terms of this Agreement; and (c) the Company is given written notice by the
Holder of such transfer or assignment, stating the name and address of the
transferee or assignee and identifying the Registrable Securities with respect
to which such rights are being transferred or assigned.
     1.11 Restriction on Public Sales. Investor agrees that it shall not effect
any public sale or distribution of any securities of the Company from the date
the Company receives a written demand from any of the Existing Holders to file a
demand registration statement until permitted by the underwriter participating
in such demand registration statement, but not more than ninety (90) days from
the effective date of such demand registration statement, provided that the
Company is subject to such restrictions. The forgoing restriction shall not
apply to the extent that shares of Common Stock owned by the Investor are
included in such demand registration statement.

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Article II
Miscellaneous Provisions
     2.1 Notices. Except as expressly set forth to the contrary in this
Agreement, all notices, requests, or consents provided for or permitted to be
given under this Agreement must be in writing and must be given either by
depositing that writing in the United States mail, addressed to the recipient,
postage paid, and registered or certified with return receipt requested or by
delivering that writing to the recipient in person, by overnight delivery or
courier, or by facsimile transmission; and a notice, request, or consent given
under this Agreement is effective on receipt by the party to receive it. All
notices, requests, and consents to be sent to a party must be sent to or made at
the address previously given by that party or such other address as that party
may specify by notice to the other party. Any notice, request, or consent must
be given at the following addresses:

     
If to the Company:
  NationsHealth, Inc.
Attn: Chief Executive Officer
13650 NW 8th Street
Suite 109
Sunrise, FL 33325
 
   
with a copy to:
  Ira J. Coleman, Esq.
McDermott Will & Emery
201 South Biscayne Boulevard, 22nd Floor
Miami, FL 33131
 
   
If to Investor:
  US Bioservices Corporation
Attn: President
309 Henderson Drive
Sharon Hill, PA 19079
 
   
with a copy to:
  AmerisourceBergen Corporation
Attn: General Counsel
1300 Morris Drive, Suite 100
Chesterbrook, PA 19087

Whenever any notice is required to be given by law or this Agreement, a written
waiver thereof, signed by the party entitled to notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice.
     2.2 Entire Agreement. Each of the parties agrees that this Agreement,
including the other documents referred to herein, (i) constitutes the entire
agreement and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, among the
parties with respect to the subject matter of this Agreement, and (ii) is not
intended to confer any rights or remedies, or impose any obligations, on any
person other than the parties hereto. Each of the parties expressly agrees and
acknowledges that, other than those statements expressly set forth in this
Agreement, it is not relying on any statement, whether oral

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or written, of any person or entity with respect to its entry into this
Agreement or to the consummation of the transactions contemplated by this
Agreement.
     2.3 Effect of Waiver or Consent. A waiver or consent, express or implied,
to or of any breach or default by any party in the performance by that party of
its obligations is not a consent or waiver to or of any other breach or default
in the performance by that party of any other obligations of that party. Failure
on the part of a party to complain of any act of any party or to declare any
party in default, irrespective of how long that failure continues, does not
constitute a waiver by that party of its rights with respect to that default
until the applicable statute of limitations period has run.
     2.4 Amendment or Modification. This Agreement may be amended or modified
from time to time only by a written instrument executed by the Company and
Investor.
     2.5 Governing Law. This Agreement is governed by and shall be construed in
accordance with the law of the State of Delaware, excluding any conflict of laws
rule or principle that might refer the governance or the construction of this
Agreement to the law of another jurisdiction.
     2.6 Illegal or Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable. This Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable
provision, there shall be added automatically, as a part of this Agreement, a
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid and enforceable.
     2.7 Further Assurances. In connection with this Agreement and the
transactions contemplated hereby, each party shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
     2.8 Attorneys’ Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys’ fees, costs and disbursements in addition to
any other relief to which such party may be entitled.
     2.9 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.

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     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective
as of the Closing.

          US Bioservices Corporation
    By:   /s/ Mike Mullen       Name:   Mike Mullen       Title:   President   
 

          NationsHealth, Inc.
    By:   /s/ Glenn M. Parker       Name:   Glenn M. Parker      Title:   CEO   
 

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