Document:

Registration Rights Agreement

 Exhibit 10.4 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This Registration Rights Agreement (this “Agreement”) is made and entered into as of March 21, 2005, among DrugMax, Inc., a Nevada
corporation (the “Company”), and AmerisourceBergen Drug Corporation, a Delaware corporation (“Purchaser”). 
  
 The Company and the Purchaser hereby agree as follows: 
  
 1. Definitions 
  
 Capitalized terms used and not otherwise defined herein that are defined in the Convertible Debenture shall have the meanings given such
terms in the Convertible Debenture. As used in this Agreement, the following terms shall have the following meanings: 
  
 “Advice” shall have the meaning set forth in Section 6(d). 
  
 “Convertible Debenture” means the Subordinated Unsecured Convertible Debenture in the
original principal amount of $11,500,000 issued by the Company to Purchaser. 
  
 “Effectiveness Date” means, with respect to the initial Registration Statement required to be filed hereunder, the 90th calendar day following the date hereof (120th calendar day in the event of a “full review” by the Commission) 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 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. 
  
 “Effectiveness Period” shall have the meaning set forth in Section 2(a).  
  
 “Event” shall have the meaning set forth in Section 2(b). 
  
 “Event Date” shall have the meaning set forth in Section 2(b). 
  
 “Filing Date” means, with respect to the
initial Registration Statement required hereunder, the 45th calendar day following the earlier of the date the
Company files its current Form 10-k or April 15, 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.

  

 “Holder” or “Holders” means the holder or holders, as
the case may be, from time to time of Registrable Securities. 
  
 “Indemnified Party” shall have the meaning set forth in Section 5(c) hereof. 
  
 “Indemnifying Party” shall have the meaning set forth in Section 5(c) hereof. 
  
 “Losses” shall have the meaning set forth
in Section 5(a). 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included
in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means, as of the date in question, (i) all of the shares of Common Stock issuable upon
conversion in full by Purchaser of the shares of the Convertible Debenture, (ii) all shares issuable as interest or principal repayment on the Convertible Debenture assuming all permissible interest and principal payments are made in shares of
Common Stock and the Convertible Debenture is held until maturity, (iii) any securities issued or issuable upon any stock split, dividend or other distribution recapitalization or similar event with respect to the foregoing and (iv) any additional
shares issuable in connection with any anti-dilution provisions associated with the Convertible Debenture. 
  
 “Registration Statement” means the registration statements required to be filed hereunder and any additional registration
statements contemplated by Section 3(c), including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such registration statement. 
  
 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from
time to time, or any similar rule or 

  

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regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
  
 2. Shelf Registration 
  
 (a) On or prior to each Filing Date, the Company shall
prepare and file with the Commission a “Shelf” Registration Statement covering the resale of 100% of the Registrable Securities on such Filing Date for an offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith) and shall contain
(unless otherwise directed by the Holders) substantially the “Plan of Distribution” attached hereto as Annex A. Subject to the terms of this Agreement, the Company shall use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement
continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144(k) as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness Period”). The Company shall immediately notify the Holders via
facsimile or email of the effectiveness of the Registration Statement on the same day that the Company receives notification of the effectiveness from the Commission. Failure to so notify the Holder within 1 Trading Day of such notification shall be
deemed an Event under Section 2(b). 
  
 (b) If:
(i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a), the Company shall
not be deemed to have satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five Trading Days of the date that the
Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be “reviewed,” or not subject to further review, or (iii) prior to its Effectiveness Date, the Company fails to file
a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within 10 calendar days after the receipt of comments by or notice from the Commission that such amendment is
required in order for a Registration Statement to be declared effective, or (iv) a Registration Statement filed or required to be filed hereunder is not declared effective by the Commission by its Effectiveness Date, or (v) after the Effectiveness
Date, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or the Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities for 30 consecutive calendar days but no more than an aggregate of 45 calendar days during any 12-month period (which need not be consecutive Trading Days) provided, however, that in the event that the Company is negotiating a
merger, consolidation, acquisition or sale of all or substantially all of its assets or a similar transaction and in the written opinion of counsel to the Company, the Registration Statement, would be required to be amended to include information
concerning such 

  

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transactions or the parties thereto that is not available or may not be publicly disclosed at the time, the Company shall be permitted an additional ten (10)
consecutive Trading Days during any 12 month period relating to such an event (any such failure or breach being referred to as an “Event,” and for purposes of clause (i) or (iv) the date on which such Event occurs, or for purposes
of clause (ii) the date on which such five Trading Day period is exceeded, or for purposes of clause (iii) the date which such 30 calendar day period is exceeded, or for purposes of clause (v) the date on which such 30 or 45 calendar day period, as
applicable, is exceeded being referred to as “Event Date”), then in addition to any other rights the Holders may have hereunder or under applicable law, interest under the Convertible Debenture shall accrue at the rate of 18% per
annum. 
  
 3. Registration Procedures 
  
 In connection with the Company’s registration obligations hereunder, the
Company shall: 
  
 (a) Not less than five Trading
Days prior to the filing of each Registration Statement or any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall, (i)
furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning of the Securities Act. The
Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is
notified of such objection, including the substance of such objection, in writing no later than 5 Trading Days after the Holders have been so furnished copies of such documents. Each Holder agrees to furnish to the Company a completed Questionnaire
in the form attached to this Agreement as Annex B (a “Selling Holder Questionnaire”) not less than two Trading Days prior to the Filing Date or by the end of the fourth Trading Day following the date on which such Holder receives
draft materials in accordance with this Section. 
  
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable
Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly
as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and as promptly as reasonably possible provide the Holders true and complete copies of all correspondence from and
to the Commission relating to a Registration Statement; and (iv) comply in all material respects with the provisions 

  

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of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the
applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented. 
  
 (c) Intentionally Omitted. 
  
 (d) Notify the Holders of Registrable Securities to be sold
(which notice shall, pursuant to clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than five Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission or
any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the
Prospectus, as the case may be, it will not contain any 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, in light of the circumstances under which they
were made, not misleading; and (vi) the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best
interest of the Company to allow continued availability of the Registration Statement or Prospectus; provided that any and all of such information shall remain confidential to each Holder until such information otherwise becomes public, unless
disclosure by a Holder is required by law; provided, further, notwithstanding each Holder’s agreement to keep such information confidential, the Holders make no acknowledgement that any such information is material, non-public
information. 
  
 (e) Use its best efforts to
avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any 

  

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suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment. 
  
 (f) Furnish to each
Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the
extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
  
 (g) Promptly deliver to each Holder, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request in connection with resales by the Holder of Registrable Securities. Subject to the terms of
this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto, except after the giving on any notice pursuant to Section 3(d). 
  
 (h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not
then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction. 
  
 (i) If requested by the Holders, cooperate with the Holders
to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free of all restrictive legends, subject,
however, to any applicable terms of the Convertible Debenture, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request. 
  
 (j) Upon the occurrence of any event contemplated by this
Section 3, as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a
supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document
so that, as thereafter delivered, neither a Registration Statement nor such 

  

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Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (ii) through (v) of Section 3(d) above to suspend the use of any Prospectus until the
requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company
shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages pursuant to Section 2(b), for a period not to exceed 60 days
(which need not be consecutive days) in any 12 month period. 
  
 (k) Comply with all applicable rules and regulations of the Commission. 
  
 (l) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the person thereof that has voting and dispositive control over the Shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the
registration of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be
tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company. 
  
 4 Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by
the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Trading Market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination
of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in a Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without
limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the 

  

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Company be responsible for any broker or similar commissions or, except to the extent provided for in the Transaction Documents, any legal fees or other
costs of the Holders. 
  
 5. Indemnification 
  
 (a) Indemnification by the Company. The Company
shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any
failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable
attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that
the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any
Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. 
  
 (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s failure to comply with the prospectus delivery requirements of the
Securities Act or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or
omission is 

  

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contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or such
Prospectus or (ii) to the extent that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement (it being understood
that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(d)(ii)-(vi), the
use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). In no
event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 

 
 (c) Conduct of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party. 
  
 An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement 

  

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includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  
 Subject to the terms of this Agreement, all reasonable fees
and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable
to such actions for which such Indemnified Party is not entitled to indemnification hereunder, determined based upon the relative faults of the parties. 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such
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 of a material fact,
has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party
in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud by such Holder.

  
 The indemnity and contribution agreements
contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
  

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 6. Miscellaneous 
  
 (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) No Piggyback on Registrations. Except as set forth on Schedule 6(b) attached hereto, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement other than the Registrable Securities. The Company shall not file any other registration statements until
the initial Registration Statement required hereunder is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from (i) filing amendments to registration statements already filed and (ii) fulfilling
existing registration obligations to stockholders, warrant holders and option holders existing as of the date of, or granted in connection with, the merger of Familymeds Group, Inc. into DrugMax, Inc. 
  
 (c) Compliance. Each Holder covenants and agrees that
it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. 
  
 (d) Discontinued Disposition. Each Holder agrees by
its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d), such Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement, or until it is advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company will
use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as it practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section 2(b). 
  
 (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in 

  

 11 

 
connection with the stock option or other employee benefit plans, then the Company shall send to each Holder a written notice of such determination and, if
within fifteen days after the date of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered; provided,
that, the Company shall not be required to register any Registrable Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144(k) promulgated under the Securities Act or that are the subject of a then effective
Registration Statement. 
  
 (f) Amendments and
Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and each Holder of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights
of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. 
  
 (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be
delivered to the Company as set forth in the Convertible Debenture. 
  
 (h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The
Company may not assign its rights or obligations hereunder without the prior written consent of all of the Holders of the then-outstanding Registrable Securities. Each Holder may assign its respective rights hereunder to its affiliates and any
permitted assignee under the Convertible Debenture. 
  
 (i) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor any
of its subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full. 
  
 (j) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid
binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  

 12 

 (k) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined with the provisions of the Convertible Debenture. 
  
 (l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 

 
 (m) Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable. 
  
 (n) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 (o) Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder
hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. 
  

7. Limitations on the Sale of Registrable Securities. Notwithstanding anything in this Agreement, the Holders shall not 
  
 (a) on or before December 31, 2005, sell on any Trading Day
a number of Registrable Securities in excess of 25% of the volume of Common Stock traded in the previous ten (10) Trading Days as reported by the applicable Trading Market; 
  
 (b) in any calendar quarter, sell a number of Registrable Securities in excess of 2% of the outstanding
shares of Common Stock at the beginning of such calendar quarter. 
  
 ******************** 
  

 13 

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

			
	DRUGMAX, INC.
		
	By:	 	/s/ 
	 Name:
	 	 
	 Title:
	 	 

  
 [SIGNATURE PAGE
OF HOLDERS FOLLOWS] 
  

 14 

  
 PURCHASER’S SIGNATURE
PAGE TO DRUGMAX, INC. 
 REGISTRATION RIGHTS AGREEMENT 
  

			
	Name of Investing Entity: AmerisourceBergen Drug Corporation
		
	Signature of Authorized Signatory of Investing Entity:	 	/s/ 
	 Name of Authorized Signatory:
	 	 
	 Title of Authorized Signatory:
	 	CEO

  

 15Subordination Agreement

 Exhibit 10.5 
  
 SUBORDINATION AGREEMENT 
  
 THIS AGREEMENT, dated as of March 21, 2005, is made and entered into by and among DRUGMAX, INC., a Nevada corporation
(“DrugMax”), VALLEY DRUG COMPANY, an Ohio corporation (“Valley”); VALLEY DRUG COMPANY SOUTH, a Louisiana corporation (“Valley South”), FAMILYMEDS, INC., a Connecticut
corporation (“Familymeds”; DrugMax, Valley, Valley South and Familymeds each a “Company” and, collectively, the “Companies”), GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (“GECC”), as Agent (the “Agent”) for the Lenders referenced below, and AMERISOURCEBERGEN DRUG CORPORATION, a Delaware (the “Subordinated Creditor”). 
  
 In consideration of the loans or other extensions of credit made and to be
made to Familymeds and the other Borrowers under the Credit Agreement (as defined below), as well as for other good and valuable consideration, the parties do hereby agree as follows: 
  

	1.	Definitions. When used herein, the following terms shall have the following meanings (terms defined in the singular to have the same meaning when used in the plural
and vice versa): 

  
 “Bankruptcy
Code” shall mean 11 U.S.C. §§ 101-1330 and any amendment, supplement or successor of such provision. 
  
 “Borrower” means each Borrower under and as defined in the Credit Agreement. 
  
 “Collateral” has the meaning assigned to such term in
Section 8 hereof. 
  
 “Company” and
“Companies” shall have the meanings assigned to such terms in the preamble to this Agreement, and shall include each of their successors and assigns. 
  
 “Credit Agreement” means the Second Amended and Restated Credit Agreement, dated as of December 9, 2004,
among Familymeds, the other Borrowers signatory thereto, the other Credit Parties signatory thereto, the Lenders signatory thereto and Agent, as the same may be amended, modified, supplemented or replaced with a new credit facility from time to
time, including, without limitation, amendments, modifications, supplements, restatements and replacements thereof giving effect to increases, renewals, extensions, refundings, deferrals, restructurings, replacements or refinancings of, or additions
to, the credit arrangements originally provided in such Second Amended and Restated Credit Agreement, whether or not GECC or any other Lenders originally party to such Second Amended and Restated Credit Agreement continue to be agent or lenders
under any such replacement credit facility. 
  
 “Default” shall have the meaning assigned to such term in the Credit Agreement. 

 “Guaranty” shall mean that certain Guaranty, dated as of March 21, 2005, executed by
Valley South and Familymeds in favor of the Subordinated Creditor with respect to the Subordinated Debt. 
  
 “Loan Documents” shall have the meaning assigned to such term in the Credit Agreement. 
  
 “Lenders” shall mean the Lenders from time to time party to
the Credit Agreement, any other holder of the Senior Debt and their respective successors and assigns. 
  
 “Notes” means each of (a) that certain Subordinated Unsecured Convertible Debenture, dated as of March 21, 2005, in the amount of
$11,500,000 issued by DrugMax in favor of the Subordinated Creditor (the “Subordinated Debenture”), and (b) that certain Subordinated Promissory Note, dated as of March 21, 2005, in the amount of $11,500,000 issued by DrugMax in
favor of the Subordinated Creditor (the “Subordinated Note”), as each may be amended or modified from time to time in accordance with the express provisions of this Agreement. 
  
 “Payment in full” or “Paid in full” shall
mean, with respect to the Senior Debt, the indefeasible payment in full in cash or cash equivalents of 100% of the principal, interest, fees, expenses and other amounts due or to become due to the Agent and Lenders under the Credit Agreement and the
other Loan Documents in the manner provided under the terms of such documents or in such other manner to which the Agent and Lenders shall have consented in writing; provided, however, that any payment in full of the Senior Debt in connection
with a refinancing or replacement of the Senior Debt with new senior financing of any Company shall not constitute “payment in full” hereunder. 
  
 “Senior Debt” shall mean any and all indebtedness, obligations or liabilities that now or hereafter may be owing by any Company or any
Subsidiary of any Company to the Agent and Lenders under the Credit Agreement or any of the other Loan Documents, whether for principal, interest, fees or other amounts, and whether such indebtedness, obligations or liabilities are from time to time
reduced and thereafter increased or entirely extinguished and thereafter reincurred, and whether such indebtedness, obligations or liabilities are absolute, joint or several, or due or to become due, as well as all indebtedness, obligations or
liabilities of the Companies to the Agent and Lenders now or hereafter existing under this Agreement, and any extension, renewal, refinancing, modification or replacement of or for any of the foregoing, and including without limitation any interest
which, but for the filing by or against any Company or any affiliate thereof, of a petition in bankruptcy, would accrue on any of the foregoing indebtedness, obligations or liabilities as well as any other indebtedness, obligations or liabilities of
any Company or any Subsidiary of any Company to the Agent and Lenders which may be incurred in any bankruptcy proceeding of any Company whether or not recoverable by the Agent or Lenders from any Company or any affiliate thereof or 
  

 -2- 

 its estate under 11 U.S.C. § 506. “Senior Debt” shall also include any indebtedness owing
by any Company to a new Senior Lender and incurred in connection with the payment in full or re-financing in full of the indebtedness under the Credit Agreement and the other Loan Documents. 
  
 “Senior Lender” means the Agent on behalf of itself and the
other Lenders under the Credit Agreement or any other replacement senior lender who refinances or extends Senior Debt to the Companies. 
  
 “Subordinated Creditor” shall have the meaning assigned to such term in the preamble to this Agreement, and shall include each of its
successors and assigns. 
  
 “Subordinated
Debenture” has the meaning given such term in the definition of “Notes.” 
  
 “Subordinated Debt” shall mean and include any and all indebtedness, liabilities or obligations of any Company to the Subordinated Creditor arising under or in connection with the Notes, the Guaranty
or any other Subordinated Debt Document, whether for principal, interest, fees or other amounts, and whether such indebtedness, obligations or liabilities are from time to time reduced and thereafter increased or entirely extinguished and thereafter
reincurred, and whether such indebtedness, obligations or liabilities are absolute, joint or several, or due or to become due, and any extension, renewal, refinancing, modification or replacement related to the foregoing in whole or in part.

  
 “Subordinated Debt Documents” shall mean the
Notes, the Guaranty, the Subordinated Security Agreement and any other agreement or document evidencing or relating to the Subordinated Debt. 
  
 “Subordinated Note” has the meaning given such term in the definition of “Notes.” 
  
 “Subordinated Security Agreement” means that certain
Security Agreement among Subordinated Creditor and the Companies dated March 21, 2005, as in effect on the date hereof. 
  
 “Subsidiary” means any person of which securities or other ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time directly or indirectly owned by DrugMax, Inc., a Nevada corporation. 
  
 “Termination Date” shall mean the date ninety-one (91) days following the date on which (i) all Senior Debt has been paid in full, and
(ii) the Lenders are under any obligation to make any further loans or extend any further credit to or for the benefit of any Company pursuant to the Credit Agreement or any other Loan Document. 
  

 -3- 

	2.	Payment Subordination Provisions. 

  

	 	a.	No Payments. From and after the date of this Agreement and thereafter until the Termination Date, and unless the Agent expressly consents in writing to the contrary, no
payment on the Subordinated Debt (including without limitation any payment by any Company under the Guaranty) shall be made or given by or on behalf of any Company, any Subsidiary or any affiliate thereof and no payment on account thereof shall be
received, accepted or retained by the Subordinated Creditor, nor shall the Subordinated Creditor accelerate, make any demand for, or attempt to receive, collect or retain the same from any Company, whether by collection, set-off, foreclosure,
counterclaim or otherwise. Notwithstanding the foregoing, so long as no Default or Event of Default under the Credit Agreement or any other Loan Document shall occur and be continuing at the time of or after giving effect to a payment, payments of
principle and interest in either cash or common stock of DrugMax pursuant to the preamble and Section 1 of the Subordinated Note and pursuant to Sections 2.1 and 3.1 of the Subordinated Debenture may be made by DrugMax or Familymeds, as applicable,
and may be received and retained by the Subordinated Creditor; provided, however, that DrugMax may make, and the Subordinated Creditor may receive, payments of principle and interest in common stock of DrugMax notwithstanding the existence of
a Default or Event of Default under the Credit Agreement. In addition, Subordinated Creditor may at any time after giving prior written notice to Agent make demand for and collect or attempt to collect through the exercise of its remedies as an
unsecured creditor any amounts permitted to be paid in accordance with the immediately preceding sentence, or which were so permitted to be paid when accrued; provided, however, that the Subordinated Creditor shall not exercise any rights or
remedies with respect to any Collateral or take possession of, sell or otherwise realize (judicially or non judicially) upon any of the Collateral (including, without limitation, through the notification of account debtors or any right with respect
to any deposit account) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure) or take any action to enforce a judgment lien obtained by the Subordinated Creditor on the assets of DrugMax
or any Subsidiary. 

  

	 	b.	Turnover of Payments. Should any payment or prepayment be received by the Subordinated Creditor in violation of this Agreement, the Subordinated Creditor forthwith shall
deliver the same to the Agent in precisely the form received (but with the endorsement of the Subordinated Creditor where necessary for the collection thereof by the Agent) for application on the Senior Debt, and the Subordinated Creditor agrees
that, until so delivered, the same shall be deemed received by the Subordinated Creditor as agent for the Agent and such payment or prepayment shall be held in trust by the Subordinated Creditor as property of the Agent for the benefit of itself and
the Lenders. 

  

	3.	Modification of Subordinated Debt. None of the terms of the Subordinated Debt, the Notes, the Guaranty, the Subordinated Security Agreement or the other Subordinated
Debt Documents shall be modified, and there shall be no additions to or modifications of the Collateral described in the Notes or the Subordinated Security Agreement, without the express prior written consent of the Agent. 

 

 -4- 

	4.	Insolvency Proceedings. The Agent shall have the right and is hereby empowered to vote the full amount of the Subordinated Debt in any insolvency or receivership
proceeding, any proceeding under the Bankruptcy Code or any other proceeding under any bankruptcy or insolvency law or laws relating to the relief of debtors, readjustment of indebtedness, reorganizations, compositions or extensions which may be
brought by or against any Company and at any meeting of creditors of any Company whether or not such meeting is held in a proceeding under any insolvency, bankruptcy or similar laws. In any of the foregoing proceedings or at any of the foregoing
meetings, the Agent shall be entitled to vote the Subordinated Debt as the Agent in its sole good faith discretion shall determine without regard to the interests of anyone other than the Agent. In any of the foregoing proceedings, the Agent shall
be entitled to collect and enforce the Subordinated Debt and to receive any distributions, dividends or other payments upon the Subordinated Debt by filing such claim, proof of debt or proof of claim as appropriate in the proceeding, in the
Agent’s name or the Subordinated Creditor’s name. The Agent and any officer or employee designated by the Agent for such purpose is hereby constituted and appointed attorney-in-fact for the Subordinated Creditor with full power (which
power, being coupled with an interest, shall be irrevocable so long as this Agreement is in effect) to vote the Subordinated Debt in any of the foregoing proceedings and at any meeting of either Company’s creditors and to file any claim, proof
of debt or proof of claim in any such proceeding, and to compromise, settle and to give releases for any of the Subordinated Debt, and to endorse the Subordinated Creditor’s name upon any instruments given as a payment on or distribution in
connection with the Subordinated Debt. Without limiting the generality of the foregoing, the Subordinated Creditor agrees that in any of the foregoing proceedings it shall have no right to seek relief from the automatic stay, seek adequate
protection, or request the marshalling of assets of any of the Companies. 

  

	5.	Consent to Incurrence of Senior Debt and Subordinated Debt. The Subordinated Creditor by its execution hereof, hereby consents to each Company’s and its
affiliates’ execution and delivery of the Credit Agreement and each of the Loan Documents to which such person is a party and to the incurrence by each such person of its obligations thereunder and to the performance thereof. Agent, on behalf
of the Senior Lenders, acknowledges the Subordinated Debt and agrees that the incurrence of the Subordinated Debt and the issuance of the Notes and the execution of the Subordinated Security Agreement and the Guaranty will not violate or cause a
default under the Loan Documents, provided the Subordinated Creditor and the Companies comply with terms and conditions of this Agreement. 

  

	6.	Pledge or Transfer of Subordinated Debt. The Subordinated Creditor agrees not to assign, transfer, pledge, or grant a security interest in all or any part of the
Subordinated Debt unless (i) such assignment, transfer, pledge or grant is made expressly subject to this Agreement and (ii) the Subordinated Creditor’s assignee, transferee, pledgee or grantee expressly agrees in writing to assume the
Subordinated Creditor’s obligations hereunder. The Subordinated Creditor will place the following legend on the Notes and any other instrument or certificate evidencing the Subordinated Debt. 

  

 -5- 

 “THIS INSTRUMENT OR CERTIFICATE AND THE RIGHT EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF THAT
CERTAIN SUBORDINATION AGREEMENT, DATED MARCH 21, 2005 AMONG FAMILYMEDS, INC., DRUGMAX, INC., VALLEY DRUG COMPANY AND VALLEY DRUG COMPANY SOUTH AS THE COMPANIES, AMERISOURCEBERGEN DRUG CORPORATION AS THE SUBORDINATED CREDITOR AND GENERAL ELECTRIC
CAPITAL CORPORATION AS AGENT, AND ANY FUTURE SENIOR LENDERS, AS SENIOR LENDERS (THE “SUBORDINATION AGREEMENT”). ANY TRANSFEREE BY ACCEPTANCE OF SUCH TRANSFER AGREES TO BE BOUND BY THE TERMS THEREOF.” 
  

	7.	Waivers. The Subordinated Creditor agrees and consents (a) to waive, and does hereby waive, any and all notice of the creation, renewal, extension, modification,
compromise or release of any of the Senior Debt or any collateral therefor or guaranties thereof, in whole or in part; (b) that without further notice to or further assent by the Subordinated Creditor, the liability of the Companies or any other
party or parties for or upon any of the Senior Debt may, from time to time, in whole or in part, be renewed, extended, modified, replaced, compromised or released by the Agent and Lenders as they may deem advisable; and (c) that any collateral for
or guaranties of the Senior Debt, or any part of the Senior Debt, may, from time to time, in whole or in part, be modified, released, collected, sold or otherwise disposed of by the Agent, as it may deem advisable, and that any balance of funds with
the Agent at any time standing to the credit of any Company may, from time to time, in whole or in part, be surrendered or released by the Agent, as it may deem advisable. 

  

	8.	Collateral; Lien Subordination and Guaranty Subordination. 

  

	 	a.	The Subordinated Creditor hereby subordinates and makes inferior any and all of its now existing or hereafter acquired security interests in, security titles to, and other liens and
encumbrances on any of the present or future, real or personal, tangible or intangible, property of each Company and any of their Subsidiaries (collectively, the “Collateral”), including without limitation any security interests,
security titles or other liens and encumbrances on such Collateral arising under the Notes or the Subordinated Security Agreement or any other security agreement respecting such Collateral, to the security interests, security titles, and other liens
and encumbrances of the Agent, whether now existing or hereafter acquired, in, to and on the Collateral. The provisions of the immediately preceding sentence shall apply notwithstanding the date, time, method, manner or order of grant, attachment or
perfection of any security interests, security titles and other liens securing the Subordinated Debt granted on the Collateral or of any security interests, security titles and other liens securing the Senior Debt granted on the Collateral and
notwithstanding any provision of the Uniform Commercial Code, or any other applicable law or any defect or deficiencies in, or failure to perfect, the security interests, security titles and other liens of the Agent securing the Senior Debt or any
other circumstance whatsoever. 

  

 -6- 

	 	b.	If any Company shall default under any Senior Debt secured by any of the Collateral, the Agent may exercise any or all of its rights and remedies with respect to such
Collateral without any obligation to give the Subordinated Creditor notice of such exercise and without regard to any interest of the Subordinated Creditor in such Collateral. 

  

	 	c.	The Subordinated Creditor will not (and hereby waives any right to) contest or support any other person in contesting in any proceeding (including without limitation any
proceeding under the Bankruptcy Code) the validity, perfection, priority or enforceability of any lien or security interest granted to the Agent in any of the Collateral. 

  

	 	d.	Until the Termination Date, the Subordinated Creditor will not exercise or seek to exercise any rights or remedies with respect to any Collateral or take possession of, sell
or otherwise realize (judicially or non judicially) upon any of the Collateral (including, without limitation, through the notification of account debtors or the exercise of any right of setoff) or institute any action or proceeding with respect to
such rights or remedies (including any action of foreclosure) or file any involuntary bankruptcy petition against any Company. 

  

	 	e.	The parties hereto agree, and the Subordinated Creditor acknowledges that the Subordinated Security Agreement provides, that (i) a security interest in the Collateral in
favor of the Subordinated Creditor shall only attach under the Subordinated Security Agreement, if at all, if a “Condition” (as such term is defined in the Subordinated Security Agreement) has occurred and is continuing, and (ii) such
security interest in the Collateral under the Subordinated Security Agreement shall be automatically released without any further action by the Subordinated Creditor, any Company or any other entity if the event creating the “Condition”
(as defined in the Subordinated Security Agreement) is cured within 45-days after the occurrence thereof; provided, however, that such release upon a Condition being cured or ceasing to exist may only occur once in any period of 365 consecutive
days. Without limiting the generality of Section 3 hereof, the Subordinated Creditor agrees that the Subordinated Security Agreement shall not be modified in any manner, including without limitation to alter the provisions described in the
immediately preceding sentence, without the prior written consent of the Agent. The Subordinated Creditor agrees that it will give prompt written notice to Agent of (a) the occurrence of an “Event of Default” under Section 8.1(a) of the
Subordinated Debenture, (b) the occurrence of any “Condition” (as defined in the Subordinated Security Agreement), (c) the attachment of a security interest in favor of Subordinated Creditor under the Subordinated Security Agreement and
(d) the release of any security interest pursuant to the terms of the Subordinated Security Agreement and this paragraph; provided that no “Condition” (as defined in the Subordinated Security Agreement) shall occur until Subordinated
Creditor gives written notice to Agent of the circumstances constituting such “Condition” and a period of fifteen (15) days has passed since receipt of such notice. 

  

 -7- 

	 	f.	The Subordinated Creditor subordinates and makes inferior any and all of its now existing or hereafter acquired guaranties of the Subordinated Debt from whomever received and in
whatever form to the rights of the Agent on the same terms and conditions as apply to the subordination of the Subordinated Debt to the Senior Debt hereunder. 

  

	 	g.	The Subordinated Creditor hereby agrees that if it shall obtain possession of any Collateral (other than payments made pursuant to the terms and conditions of Section 2(a)), it
shall deliver such Collateral to the Agent in precisely the form received, and the Subordinated Creditor agrees that, until so delivered, such Collateral shall be held in trust by the Subordinated Creditor as property of the Agent for the benefit of
itself and the Lenders. 

  

	9.	Continuing Agreement and Termination. 

  

	 	a.	This is a continuing agreement, and this Agreement and the subordination of indebtedness (the “Debt Subordination”) and the subordination of security interests,
security titles, liens and encumbrances and guaranties (the “Security Interest Subordination”) provided for herein shall remain in full force and effect until the Termination Date regardless of whether the Senior Debt is from time
to time reduced and thereafter increased or entirely extinguished and thereafter reincurred or incurred anew or replaced. This Agreement, the Debt Subordination and the Security Interest Subordination shall remain in full force and effect and shall
be irrevocable until and shall terminate on the Termination Date. No notice purporting to terminate this Agreement, the Debt Subordination or the Security Interest Subordination which is received by the Agent at any time prior to the Termination
Date shall be effective, in any manner or at any time whatsoever, to terminate this Agreement, the Debt Subordination or the Security Interest Subordination. 

  

	 	b.	This Agreement, the Debt Subordination and the Security Interest Subordination shall continue to be effective regardless of the solvency or insolvency of any Company, any Subsidiary
or any affiliate thereof or the Subordinated Creditor; the liquidation or dissolution of any Company, any Subsidiary or any affiliate thereof or the Subordinated Creditor; the institution by or against any Company, any Subsidiary or any affiliate
thereof or the Subordinated Creditor of any proceeding under the Bankruptcy Code or any similar law; the appointment of a receiver or trustee for any Company, any Subsidiary or any affiliate thereof or any of such Person’s property or for the
Subordinated Creditor any of the Subordinated Creditor’s property or for any guarantor or any guarantor’s property; any reorganization, merger or consolidation of any Company, any Subsidiary or any affiliate thereof or the Subordinated
Creditor or any guarantor; or any other change in the ownership, composition or nature of any Company, any Subsidiary or any affiliate thereof or the Subordinated Creditor or any guarantor. 

  

 -8- 

	 	c.	The Agreement, the Debt Subordination and the Security Interest Subordination shall be reinstated in the event any payment on the Senior Debt is rescinded, disgorged as a preference
or otherwise or must otherwise be returned by the Agent or any Lender. 

  

	10.	Acknowledgments, Consents and Agreements. 

  
 Each Company, on behalf of itself and its Subsidiaries and its affiliates, hereby acknowledges and consents to the execution, delivery and performance of
this Agreement by the Subordinated Creditor and the Agent and further agrees to be bound by the provisions of this Agreement as they relate to the relative rights, remedies and priorities of the Subordinated Creditor and the Agent and the respective
obligations of each Company or any affiliate thereof to them; provided, however that nothing in this Agreement shall amend, modify, change or supersede the respective terms of any of the Senior Debt or the Subordinated Debt as between the
Companies or any Subsidiary or affiliate thereof, on the one hand, and the Agent, Lenders or the Subordinated Creditor, on the other hand, and in the event of any conflict or inconsistency between the terms of this Agreement and those of any
agreement, note or other document evidencing or securing any of the Senior Debt, the Subordinated Debt or the Collateral, the provisions of such other agreement, instrument or document shall govern as between the Companies or any Subsidiary or
affiliate thereof, on the one hand, and the Agent, Lenders or the Subordinated Creditor (as the case may be), on the other hand, and each Company further agrees that this Agreement shall not give any Company any substantive rights relative to the
Agent, Lenders or the Subordinated Creditor and no Company shall be entitled to raise any actions or inactions on the part of the Agent, Lenders or the Subordinated Creditor hereunder as a defense, counterclaim or other claim against such party.
Each Company hereby agrees that it is not a beneficiary of this Agreement and may not enforce any rights or remedies hereunder. 
  

	11.	Miscellaneous. 

  

	 	a.	Wherever possible, each provision of this Agreement is to be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof is prohibited
or invalid under such law, such provision is to be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 

  

	 	b.	This Agreement shall be binding upon each Company, the Subordinated Creditor and their respective heirs, legal representatives, successors and assigns, and shall inure to the
benefit of the Agent, Lenders and their respective successors and assigns. In the event that the Credit Agreement is replaced with another senior credit facility and GECC is no longer the agent thereunder, the Subordinated Creditor hereby agrees
that GECC may assign its rights and remedies hereunder to the new agent or lender(s), as applicable, under such new facility, and such new agent or lender(s), as applicable, shall succeed to the rights and remedies of the Agent specified hereunder.
Upon such assignment by GECC, the assignee shall be a Senior Lender hereunder and all references in this Agreement to “Agent” shall be deemed to be “Senior Lender.” 

  

 -9- 

	 	c.	This Agreement constitutes the sole and entire agreement between the Subordinated Creditor, on the one hand, and the Agent, on the other, with respect to the subject matter hereof
and supersedes and replaces any and all prior or concurrent agreements, understandings, negotiations or correspondence between them with respect thereto. 

  

	 	d.	Time is of the essence of this Agreement. 

  

	 	e.	No amendment or waiver of any provision of this Agreement, nor consent to any departure therefrom, shall be effective or binding upon the Agent unless the Agent shall first have
given its written consent thereto. 

  

	 	f.	This Agreement may be executed in one or more counterparts and each such counterpart shall constitute an original and all such counterparts together shall constitute one and the
same instrument. 

  

	 	g.	All sections headings herein are for convenience of reference only and shall not limit or otherwise affect the meaning or interpretation of this Agreement. 

 

	 	h.	All notices, demands and other communications hereunder to the Agent or the Subordinated Creditor shall be effective: 

  

	 	(i)	if given by telecopy, when such communication is transmitted to the telecopy number set forth beneath such Person’s signature below (with such telecopy to be promptly confirmed
by delivery of a copy thereof by personal delivery or United States mail as otherwise provided herein), 

  

	 	(ii)	if given by mail, three (3) Business Days after such communication is deposited in the United States mail with first class postage prepaid, return receipt requested, and addressed
to such Person at its address set forth beneath its signature below, 

  

	 	(iii)	if sent for overnight delivery by Federal Express, United Parcel Service or other reputable national overnight delivery service, one (1) Business Day after such communication is
entrusted to such service for overnight delivery and with recipient signature required, addressed as aforesaid, or 

  

	 	(iv)	if given by any other means, when delivered at the address of such Person shown below. 

  
 The Agent or the Subordinated Creditor may designate a different address or telecopy number for its receipt of such notices
or other communications but no such change shall be effective unless and until the other party actually receives such written notice. 
  

 -10- 

	 	i.	This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York applicable to contracts made and performed in such state.

  

	13.	Waiver of Certain Rights. The Subordinated Creditor expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration or contribution or any
other claim which the Subordinated Creditor may now or hereafter have against any Company or any affiliate thereof or against any property of any Company or any affiliate thereof arising from the existence, performance or enforcement of the
Subordinated Creditor’s obligations and liabilities under this Agreement until such time as the Senior Debt shall have been paid in full. 

  

	14.	No Third Party Beneficiaries. This Agreement does not and is not intended to create any rights in any third party beneficiaries. 

  

	15.	Jury Trial Waiver and Forum Consents. EACH OF THE SUBORDINATED CREDITOR, THE AGENT AND THE COMPANIES HEREBY WAIVES ANY RIGHT SUCH PERSON MAY HAVE UNDER ANY APPLICABLE
LAW TO A TRIAL BY JURY WITH RESPECT TO ANY SUIT OR LEGAL ACTION WHICH MAY BE COMMENCED BY OR AGAINST SUCH PERSON CONCERNING THE INTERPRETATION, CONSTRUCTION, VALIDITY, ENFORCEMENT OR PERFORMANCE OF THIS AGREEMENT. IN THE EVENT ANY SUCH SUIT OR LEGAL
ACTION IS COMMENCED BY THE AGENT, EACH OF THE SUBORDINATED CREDITOR AND THE COMPANIES HEREBY EXPRESSLY AGREES, CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN FULTON COUNTY, GEORGIA, WITH RESPECT TO SUCH
SUIT OR LEGAL ACTION AND FURTHER EXPRESSLY CONSENTS AND SUBMITS TO AND AGREES THAT VENUE IN ANY SUCH SUIT OR LEGAL ACTION IS PROPER IN SAID COURTS AND FURTHER EXPRESSLY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER APPLICABLE LAW OR IN EQUITY TO OBJECT
TO THE JURISDICTION AND VENUE OF SAID COURTS. THE JURISDICTION AND VENUE OF THE COURTS CONSENTED TO AND SUBMITTED TO AND AGREED UPON IN THIS SECTION ARE NOT EXCLUSIVE BUT ARE CUMULATIVE AND IN ADDITION TO THE JURISDICTION AND VENUE OF ANY OTHER
COURT UNDER ANY APPLICABLE LAW OR IN EQUITY. 

  
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 -11- 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly signed, sealed and
delivered, all as of the day and year first above written. 
  

			
	SUBORDINATED CREDITOR:
	
	AMERISOURCEBERGEN DRUG CORPORATION
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	Address For Notices:
	
	1300 Morris Drive
	Chesterbrook, PA 19087
	Attn:	 	John Chou, Esq.
	 	 	Vice President and
	 	 	Deputy General Counsel
	
	Telecopy No.: (610) 727-3612
	
	COMPANIES:
	
	FAMILYMEDS, INC.
		
	By:	 	  

	Name:	 	Edgardo A. Mercadante
	Title:	 	President and CEO

  

 -12- 

			
	VALLEY DRUG COMPANY
		
	By:	 	  

	Name:	 	Edgardo A. Mercadante
	Title:	 	President and CEO
	
	VALLEY DRUG COMPANY SOUTH
		
	By:	 	  

	Name:	 	Edgardo A. Mercadante
	Title:	 	President and CEO
	
	DRUGMAX, INC.
		
	By:	 	  

	Name:	 	Edgardo A. Mercadante
	Title:	 	President and CEO
	
	AGENT:
	
	 GENERAL ELECTRIC CAPITAL
 CORPORATION, as Agent

		
	By:	 	  

	Title:	 	Its Duly Authorized Signatory
	
	Address For Notices:
	2 Bethesda Metro Center, Suite 600
	Bethesda, Maryland 20814
	Attention: DrugMax Account Manager
	Telecopier No.: 301-664-9890

  

 -13-

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