Exhibit 10.2

 

AMENDMENT AGREEMENT

 

THIS AMENDMENT AGREEMENT (this “Amendment”) is entered into as of July 7, 2005,
by and among Drugmax, Inc., a Nevada corporation (the “Company”), CD Investment
Partners, Ltd. (“CD”) and EGI-NP Investments, LLC (“EGI” and together with CD,
collectively being the “Investors”).

 

BACKGROUND

 

The Company and each of the Investors are parties to that certain Securities
Purchase Agreement, dated as of December 1, 2004, (as amended, restated,
supplemented or otherwise modified from time to time, the “Purchase Agreement”)
pursuant to which each Investor purchased certain securities of the Company,
including but not limited to shares of series A preferred stock (the “Preferred
Stock”). The rights and preferences of the Preferred Stock were set forth in a
Certificate of Designation filed with the Secretary of State of the State of
Nevada, as amended and restated on January 21, 2005 (as amended, restated,
supplemented or otherwise modified from time to time, the “Certificate of
Designation”)

 

The Company and each Investor are also parties to that certain Registration
Rights Agreement, dated as of December 1, 2004, (as amended, restated,
supplemented or otherwise modified from time to time, the “Registration Rights
Agreement) pursuant to which the Company, among other things, agreed to file a
registration statement covering the Registrable Securities (as therein defined).

 

The Company has requested that each Investor agree to amend the Registration
Rights Agreement, and each Investor, acting individually, is willing to do so on
the terms and conditions hereafter set forth.

 

NOW, THEREFORE, in consideration of the agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each party hereto hereby agrees as follows:

 

1. Definitions. All capitalized terms not otherwise defined herein shall have
the meanings given to them in the Registration Rights Agreement.

 

2. Amendments to Registration Rights Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the following defined terms
set forth in Section 1 of the Registration Rights Agreement are hereby amended
in their entirety to provide as follows:

 

“Effectiveness Date” means, with respect to the initial Registration Statement
required to be filed hereunder, October 1, 2005 and, with respect to any
additional Registration Statements which may be required pursuant to Section
3(c), the 90th calendar day following the date on which the Company first knows,
or reasonably should have known, that such additional Registration Statement is
required hereunder; provided, however, in the event the Company is notified by
the Commission that one

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of the above Registration Statements will not be reviewed or is no longer
subject to further review and comments, the Effectiveness Date as to such
Registration Statement shall be the fifth Trading Day following the date on
which the Company is so notified if such date precedes the dates required above.

 

“Filing Date” means, with respect to the initial Registration Statement required
hereunder, July 8, 2005 and, with respect to any additional Registration
Statements which may be required pursuant to Section 3(c), the 15th day
following the date on which the Company first knows, or reasonably should have
known that such additional Registration Statement is required hereunder.

 

3. Conditions of Effectiveness. This Amendment shall become effective upon
satisfaction of the following conditions precedent: (i) Investors shall have
received (1) a copy of this Amendment executed by the Company and (2) all other
certificates, instruments, documents or agreements as may reasonably be required
by an Investor, each of which shall be in form and substance reasonably
satisfactory to such Investor; and (ii) the Company shall have reduced the
Investors’ Conversion Price (as defined in the Certificate of Designation) to
$2.80, which shall be subject to further adjustment as provided under the
Certificate of Designation.

 

4. Representations and Warranties. The Company hereby represents and warrants as
follows:

 

(a) This Amendment and the Registration Rights Agreement, as amended hereby,
constitute legal, valid and binding obligations of the Company and are
enforceable against the Company in accordance with their respective terms.

 

(b) Upon the effectiveness of this Amendment, the Company hereby reaffirms all
covenants, representations and warranties made in the Purchase Agreement and the
Registration Rights Agreement, as applicable, to the extent the same are not
amended hereby or updated pursuant to the Company’s filings with the Securities
and Exchange Commission and agree that all such covenants, representations and
warranties shall be deemed to have been remade as of the effective date of this
Amendment. Notwithstanding the foregoing, each Investor acknowledges that the
Company filed its Form 10-K for the year ended January 1, 2005 late and the
Company is not currently eligible to use a Form S-3 registration statement.

 

5. Effect on the Registration Rights Agreement.

 

(a) Upon the effectiveness of Section 2 hereof, each reference in the
Registration Rights Agreement to “this Agreement,” “hereunder,” “hereof,”
“herein” or words of like import shall mean and be a reference to the
Registration Rights Agreement, as amended hereby.

 

(b) Except as specifically amended herein, the Purchase Agreement, the
Registration Rights Agreement, and all other documents, instruments and
agreements executed and/or delivered in connection therewith, shall remain in
full force and effect, and are hereby ratified and confirmed.

 

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6. Waiver of Liquidated Damages under Registration Rights Agreement; Waiver of
Defaults Under Certificate of Designation.

 

(a) Each Investor hereby waives all liquidated damages which have accrued prior
to the date hereof and which would otherwise have been payable by the Company to
such Investor under and in accordance with the Registration Rights Agreement or
any other agreement executed in connection therewith.

 

(b) Each Investor hereby waives any event of default under or other right to
accelerate obligations due pursuant to the Certificate of Designation which has
occurred or may exist at any time prior to and including the date hereof but
only to the extent such event of default or acceleration right arose as a result
of any breach of the Registration Rights Agreement.

 

7. Governing Law. This Amendment shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and shall be
governed by and construed in accordance with the laws of the State of New York.

 

8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

 

9. Counterparts; Facsimile. This Amendment may be executed by the parties hereto
in one or more counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission or by an e-mail which
contains a PDF or other similar file copy of such signature shall be deemed to
be an original signature hereto.

 

10. Further Covenant and Agreement. The Company hereby covenants and agrees
that, upon the effectiveness of this Amendment, the Investors shall be entitled
to the Conversion Price of $2.80, which shall be subject to further adjustment
as provided under the Certificate of Designation.

 

[Signature Pages to Follow]

 

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
first written above.

 

DRUGMAX, INC. By:  

 

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Name:     Title:     CD INVESTMENT PARTNERS, LTD. By:   CD Capital Management
LLC Its:   Investment Manager By:  

 

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Name:     Title:     EGI-NP INVESTMENTS, LLC By:  

 

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Name:     Title:    

 

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