Document:

Forbearance Agreement

 Exhibit 10.40 
  
 FORBEARANCE AGREEMENT 
  

THIS FORBEARANCE AGREEMENT (“Agreement”), dated as of December 9, 2003, is entered into by and among, McKESSON CORPORATION, a Delaware
corporation (“McKesson”), ACCENTIA, INC., a Florida corporation (“Accentia”), and Accent Rx, Inc., a Florida corporation (“Accent Rx”), with reference to the following facts and circumstances: 

 
 A. Accentia, Inc. is a domestic corporation duly formed under the laws of
the state of Florida, which currently owns 100% of the stock in Accent Rx, a Florida corporation (“Accent Rx”). The majority interest in Accentia is owned by Hopkins Capital Group, LLC (“HCG”) and MOAB Investments, LP
(“MOAB”). The principals of HCG and MOAB are Francis E. O’Donnell, Jr., M.D. and Dennis L. Ryll, M.D. 
  
 B. On or about October 11, 2002, Accent Rx acquired the assets and liabilities of American Prescription Providers, Inc., a Delaware corporation
(“APP”), which was formerly a customer of, and borrower from, McKesson, pursuant to a “Purchase Agreement” between Accent Rx and APP. In connection with the Purchase Agreement, Accent Rx, as “Debtor,” executed
and delivered to McKesson that certain “Assumption of Debt and Security Agreement” dated as of October 29, 2002 (the “Accent Rx Assumption Agreement”) pursuant to which Accent Rx assumed all obligations owing by APP to
McKesson. Among the liabilities of APP assumed by Accent Rx under the Accent Rx Assumption Agreement were all obligations owed by APP to McKesson pursuant to that certain Credit Agreement executed on or about November 30, 1998 by APP and McKesson
(the “Credit Agreement”), and pursuant to each of the other “Loan Documents” (as defined in the Credit Agreement) executed pursuant thereto or concurrently therewith, including a “McKesson Health Systems Agreement to
Serve American Prescription Providers, Inc. as Prime Vendor of Pharmaceuticals” dated as of November 30, 1998 (the “Supply Agreement” also sometimes referred to in certain of the Loan Documents as a “Wholesale Supply
Agreement”). The Credit Agreement, Loan Documents and Supply Agreement were duly modified and amended from time to time from and after November 30, 1998, including by a “Third Amendment to Credit Agreement” dated as of May 2, 2000.

  
 C. Among the “Loan Documents” executed in connection
with the Credit Agreement (as amended from time to time) is a third party pledge agreement dated as of November 19, 1999, and executed by Regent Court Technologies (a limited liability company of which Francis E. O’Donnell, Jr., M.D. is the
managing member) pledging a minimum of 1,000,000 shares of stock in Star Scientific, lnc. (or such greater number of shares as may be necessary to ensure that the value of the pledged shares is at all times at least equal to $2,250,000). The
security interest in the collateral described in said third party pledge agreement was granted to McKesson for the purpose of securing all obligations of Regent Court Technologies (hereafter, “RCT”), Francis E. O’Donnell, Jr., M.D.,
and/or APP (or its successor, Accent Rx) to McKesson. The third party pledge agreement signed by RCT remains in full force and effect, excepting that references therein to APP (by any name or designation, whether “borrower” or
“debtor”, etc.) currently refers to Accent Rx as the successor of APP. 
  

 D. The indebtedness of Accent Rx evidenced by the Credit Agreement and the other Loan Documents has
matured and all obligations owing thereunder and under the Supply Agreement are now due and payable. The indebtedness and obligations assumed or incurred by Accent Rx under the Accent Rx Assumption Agreement is referred to herein as the
“Assumed Accent Rx Indebtedness.” 
  
 E. As of
November 30, 2003, the components of the Accent Rx Assumed Indebtedness evidenced by the Credit Agreement and other Loan Documents (excluding the Supply Agreement) equaled the following: 
  

													
	 DEBT

	  	PRINCIPAL

	  	INTEREST

	  	FEES & LATE
CHARGES

	  	TOTAL

	 1. Revolver
	  	$	2,202,182.36	  	$	103,294.93	  	$	30,005.05	  	$	2,335,482.34
	 2. Term Loan
	  	$	3,900,000.00	  	$	222,587.63	  	$	385,217.29	  	$	4,507,804.92
	 TOTAL:
	  	$	6,102,182.36	  	$	325,882.56	  	$	415,222.79	  	$	6,843,287.26

  
 Interest has accrued since November
30, 2003 on the principal amounts of the foregoing obligations at a per diem rate of $791.49, and will continue to do so until paid in full, assuming that the LIBOR rate stays at 1.1694%. 
  
 F. The trade debt owing to McKesson by Accent Rx pursuant to the Supply Agreement totaled $4,610,073 as of November 30, 2003
and is currently all due and payable. 
  
 G. In mid-2003, Accentia
approached McKesson and requested that McKesson loan to Accentia the sum of $2,500,000 with which Accentia would purchase not less than 81% of the “outstanding shares in BioVest International, Inc. (“BioVest”). McKesson loaned
to Accentia $2,500,000.00 (the “Bridge Loan”), which Bridge Loan is evidenced by a promissory note dated as of June 12, 2003 (the “Bridge Note”), in order to fund Accentia’s purchase of an 81% stake in BioVest.
Concurrently with the execution of the Bridge Note, Accentia and certain of its affiliates executed in favor of McKesson certain security documents (together with the Bridge Note, the “Bridge Loan Documents”), including a “Third Party Pledge Agreement” executed by Hopkins Capital Group II, LLC (i.e., “HCG
II”) as of June 12, 2003 and a “Stock Pledge Agreement” executed by Accentia as of June 12, 2003. The collateral described in the Bridge Loan Documents is defined as the “Bridge Loan Collateral.” The Bridge Loan
matured by its own terms on August 10, 2003 and Accentia has failed to repay the amounts owing to McKesson under the Bridge Note and other Bridge Loan Documents. 
  
 H. As of November 30, 2003, the principal owing by Accentia to McKesson in connection with the Bridge Loan was $2,500,000
and accrued and unpaid interest aggregated $51,607.24 for a total of $2,551,607.24. Interest has continued to accrue
since November 30, 2003 on the unpaid principal of the Bridge Loan at a rate per annum of 10% (based on a 360 day year for actual days elapsed). 
  

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 I. Accentia and Accent Rx have asked that McKesson (i) forbear from exercising its creditors’ rights
and remedies with regard to the Assumed Accent Rx Indebtedness and the Bridge Loan and the collateral therefor, (ii) consent to the sale of the assets of Accent Rx to a third party for net sales proceeds of at least $4,000,000, (iii) release its
liens on the assets of Accent Rx notwithstanding that the Assumed Accent Rx Indebtedness will not be paid in full as of the closing of the sale of the Accent Rx assets, and (iv) modify the repayment terms of the Assumed Accent Rx Indebtedness and
the Bridge Loan, in exchange for certain consideration, including the assumption by Accentia of all indebtedness owing by Accent Rx to McKesson, including, but not limited to the Assumed Accent Rx Indebtedness. Although its has and had no obligation
to do so, McKesson is willing to make certain accommodations to Accentia as expressly set forth herein and in the other documents executed concurrently herewith or pursuant hereto, in each case subject to the satisfaction of various terms and
conditions as set forth below. 
  
 NOW, THEREFORE, for fair and
valuable consideration the receipt and adequacy of which are hereby acknowledged, McKesson, Accentia, and Accent Rx hereby agree as follows: 
  
 SECTION 1 Acknowledgement of Accentia and Accent Rx. Accentia and Accent Rx hereby acknowledge and agree and represent and warrant to McKesson
that: 
  
 a. Incorporation of Recitals.
Each of the Recitals set forth above is true and correct, and each is incorporated herein by this reference, excepting only that Accentia and Accent Rx retain the limited ability to disagree with the debt owing as described in Recitals “E”
and “F” based solely on mathematical or manifest error, such as the failure of McKesson to apply a payment actually made by Accentia or Accent Rx and received by McKesson in good funds. 
  
 b. Additional Payment Obligations. In addition to the
amounts set forth in the Recitals, each of Accentia and Accent Rx is obligated to pay all late fees and other charges now due or arising hereafter under the terms of the respective documents which evidence the indebtedness owed by them to McKesson,
plus all legal fees and expenses incurred by McKesson as a result of Accentia or Accent Rx’s defaults described herein, including, without limitation, attorneys’ fees and costs attributable to in-house counsel. 
  
 c. No Defenses, Etc. 
  
 i. Accentia has no defenses, counter claims, or rights of
off set, in law or in equity, to the full payment and performance of its obligations and indebtedness evidenced by the Bridge Loan Documents, each of which is enforceable in accordance with its express written terms and McKesson has performed all
conditions and obligations on its part to be preformed with respect to the Bridge Loan Documents. 
  
 ii. Accent Rx has no defenses, counter claims, or rights of off set, in law or in equity, to the full payment and performance of its
obligations and indebtedness evidenced by the Accent Rx Assumption Agreement, the Credit Agreement (as amended, including by the Third Amendment to Credit Agreement), the other Loan Documents, and/or the Supply Agreement, each of which is
enforceable in accordance with its express written terms and 

  

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McKesson has performed all conditions and obligations on its part to be preformed with respect to such documents and agreements (collectively, the
“Accent Rx Debt Documents”). 
  
 d. No Waiver. Accentia is in default of its obligations to McKesson under the Bridge Loan Documents and that Accent Rx is in default of its obligations to McKesson under the Accent Rx Debt Documents and nothing in this Agreement
constitutes a waiver of any defaults or defined Events of Default under either the Bridge Loan Documents or the Accent Rx Debt Documents. Consequently (among other things), the interest rate applicable to the indebtedness owing to McKesson is the
interest rate applicable after default, if any such default interest rate is specified in the applicable documents. 
  
 SECTION 2 Agreements by McKesson. Subject to the satisfaction of each of the conditions precedent set forth in Section 3 below, McKesson agrees to
undertake the following: 
  
 a. Forbearance
Regarding Bridge Loan. To forbear from exercising its creditors’ rights and remedies with regard to the Bridge Loan and the Bridge Loan Collateral based on the defaults in the Bridge Loan Documents until the date (the “Forbearance End
Date”) upon which the first of the following occurs: (a) December 31, 2003, (b) the closing of the next round of equity financing by Accentia which is referred to as the “Series E round of financing,” and (c) the occurrence of an “Event of Default” as defined herein. On or
before the Forbearance End Date, Accentia shall immediately repay in full the Bridge Loan, and all accrued and unpaid “ interest and fees thereon and any other amounts owing under any of the Bridge Loan Documents, time being of the essence of
such obligation. Should McKesson fail to receive payment in full of all obligations owing under any of the Bridge Loan Documents on or before the Forbearance End Date, McKesson shall be free to exercise any and all of its creditors’ rights and
remedies with regard to the Bridge Loan and the Bridge Loan Collateral, without further notice to Accentia or to any pledgor of Bridge Loan Collateral. McKesson’s execution of this Agreement is only intended as a temporary and limited
forbearance of rights as expressly set forth herein. Accentia is not entitled to (nor is McKesson obligated to provide Accentia with) any further accommodations or additional forbearance periods. (Upon the payment in full of the indebtedness owing
under the Bridge Loan Documents, the Bridge Loan Collateral shall secure all other unpaid indebtedness owing by Accentia Inc. to McKesson, whether now existing or hereafter arising, including, without limitation, any and all indebtedness assumed by
Accentia, Inc. which was previously owed to McKesson by AccentRx.) 
  
 b. Limited Forbearance Regarding Accent Rx Indebtedness. To forbear from exercising its creditors’ rights and remedies with regard to the Accent Rx Assumed Indebtedness and the Accent Rx Debt Documents
until December 15, 2003, provided that by such date McKesson shall have received from Accentia an “Accentia Assumption Agreement” in substantially the form of Exhibit A attached hereto and duly executed by Accentia, and provided
further that all conditions precedent to the obligations of McKesson under the Accentia Assumption Agreement shall have been satisfied or waived in writing by McKesson. Upon the execution and delivery of the Accentia Assumption Agreement, and
notwithstanding the assumption of the Accent Rx Indebtedness by Accentia, Accent Rx shall remain indebted for the Accent Rx Assumed Indebtedness and the collateral therefor shall remain subject to McKesson’s security interests. Pursuant to the
Accentia Assumption Agreement, and upon satisfaction of the conditions set forth below, the payment obligations of Accentia (and Accent Rx) with regard to 

  

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the Accent Rx Assumed Indebtedness shall be modified to provide for a new payment schedule and interest rate as set forth below: 
  
 i) On the earlier to occur of December 15, 2003, and the
closing date of the sale of all assets of Accent Rx, McKesson shall have received a payment equal to the greater of (x) the entire proceeds received as of that date by Accentia from the sale of the assets of Accent Rx, and (y) $4,000,000, for
application (so long as no Event of Default has occurred) first, to the payment of any unpaid costs and expenses incurred by McKesson through the date of such payment, second, to payment of any and all sums owing to McKesson (or any affiliate of
McKesson) under the Supply Agreement (at which point, no further orders may be placed under the Supply Agreement), third to pay off the revolving credit facility (which no longer revolves), fourth to pay off the term loan and any other unpaid
indebtedness at any time owed by Accent Rx to McKesson (or owed to any affiliate of McKesson), and last to any other unpaid indebtedness owed by Accentia to McKesson (or owed to any affiliate of McKesson). Should an Event of Default have occurred
hereunder prior to the payment specified above hi this subparagraph 2(b)(i), the payment may be applied to any indebtedness of Accent Rx or Accentia owed to McKesson or to any affiliate of McKesson as McKesson in its discretion may determine. The
payment described hi this sub-clause (i) shall be in addition to the sums paid to McKesson to pay off the Bridge Loan and the other amounts set forth in Section 2(a) above. 
  
 ii) By no later than February 28, 2004, all other indebtedness relating to the Accent Rx Debt Documents (all
of which obligations shall have been assumed by Accentia) and any other indebtedness of Accentia of any kind owed to McKesson (or any affiliate of McKesson) shall have been paid down in full, with the exception of no more than $3,900,000 which
amount shall constitute the remaining principal of the term debt obligations assumed by Accentia and, which remaining debt shall be referred to herein as the “Remaining Term Debt.” 
  
 iii) The Remaining Term Debt, plus accrued and unpaid
interest on the principal portion thereof, together with fees and costs incurred by McKesson in connection with the Accent Rx Assumed Indebtedness, or the Accentia Assumption Agreement, or any other indebtedness of Accentia (or Accent Rx) to
McKesson (or to any affiliate of McKesson), shall be paid in full on or before September 1, 2004 (unless and to the extent McKesson converts any portion thereof to equity, which McKesson may elect to do in its sole and absolute discretion on terms
on less favourable than the proposed Series E financing that Accentia expects to obtain in 2003). 
  
 iv) All indebtedness incurred under the Supply Agreement on or after October 29,2003 shall have been, and shall continue to be for so long
as such indebtedness continues to be incurred, paid on a current and timely basis either by Accentia or Accent Rx in accordance with the terms of the Supply Agreement, provided that as of the date that Accent Rx is sold no further orders shall be
placed by Accent Rx (or Accentia) under the Supply Agreement and no orders shall be accepted by McKesson under the Supply Agreement. 
  

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 v) The principal portion of the Assumed Accent Rx Indebtedness shall bear interest from
and after the date hereof at a rate per annum of 10% (Based on a 360-day year for actual days elapsed) unless or until the occurrence of an Event of Default, in which case interest shall accrue on the principal portion of the Assumed Accent Rx
Indebtedness at a rate per annum of 15% (based on a 360-day year for actual days elapsed). 
  
 c. Consent to Sale of Accent Rx. To (I) consent to the sale of all, or substantially all, of the assets of Accent Rx (the
“Asset Sale”) to a third party, in an arm’s-length transaction, and (II) release its security interest in such purchased assets (and cause any applicable UCC financing statements to be terminated), provided that:

  

	 	(i)	No Event of Default, as defined hereafter, has occurred prior to the closing of the Asset Sale; 

  

	 	(ii)	The purchase agreement evidencing the Asset Sale is in form and substance acceptable to McKesson, and the purchase price for the assets of Accent Rx is payable in cash and in an
amount sufficient that the sales proceeds net of ordinary and customary costs of sale (the “Net Proceeds”) are not less than $4,000,000; and 

  

	 	(iii)	All of the Net Proceeds shall be paid to McKesson by wire transfer concurrently with the closing of the Asset Sale through an escrow arrangement that is satisfactory to McKesson.

  
 In the event that the Asset Sale closes before
December 15, 2003, all of the proceeds of the Asset Sale shall be credited to the payment of at least $4,000,000 that is due on or before December 15, 2003, as required in Section 2(b)(i) above, but McKesson shall be entitled to retain any net sales
proceeds in excess of $4,000,000 for application to the indebtedness of Accentia to McKesson. If the Asset Sale does not close by December 15, 2003, the payment required in Section 2(b)(i) will nevertheless be made, and upon the subsequent closing
of the Asset Sale, $4,000,000 of the net proceeds of the Asset Sale may, if and only if no Event of Default has occurred and is continuing, be retained by Accentia to reimburse itself for the $4,000,000 payment made on or before December 15, 2003,
but any proceeds hi excess of $4,000,000 shall be paid to McKesson for application to the indebtedness of Accentia to McKesson. 
  
 (d) Release of Guaranty Signed by Dennis Ryll. To release Dennis L. Ryll, M.D. from any further liability under that certain
“Principal Guaranty” dated as of November 30, 1998 and executed by Francis E. O’Donnell, Jr., M.D. and Dennis L. Ryll, M.D. in favor of McKesson effective on the date that is 91 days after December 31, 2003 provided that on or before
December 31, 2003: 
  

	 	(i)	McKesson has received all net proceeds from the sale of the assets of Accent Rx; 

  

	 	(ii)	the Bridge Loan and all other sums payable to McKesson under the has been paid in full; 

  

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	 	(iii)	all other payments to be made to McKesson on or before December 31, 2003 (including the reimbursement of fees, costs and expenses) that are referred to in this Forbearance Agreement
or which are referred to in the Accentia Assumption Agreement in the form of Exhibit A attached hereto have been made; 

  

	 	(iv)	all conditions to the effectiveness of the Accentia Assumption Agreement have been satisfied; and 

  

	 	(v)	no default or “Event of Default” has occurred under this Agreement or the Assumption Agreement, 

  
 and provided further that at no time on or before the date that is 91 days after December 31, 2003, none of Accent Rx, Accentia, HCG,
HCGII, MOAB, RCT, Biovest, Francis E. O’Donnell, Jr., or Dennis L. Ryll, M.D. has become a debtor in a case under title 11 of the United States Code (the “Bankruptcy Code”). 
  
 SECTION 3 Conditions Precedent to Obligations of McKesson. It shall be
a condition precedent to each and every obligation of McKesson hereunder that each of the following conditions precedent shall be and remain satisfied: 
  
 (a) McKesson shall have received an original counterpart of this Agreement, duly executed by Accentia and Accent Rx; 
  
 (b) Each of Hopkins Capital Group, LLC (“HCG”), Hopkins Capital
Group II, LLC (“HCG II”), MOAB Investments, LP (“MOAB”), Francis E. O’Donnell, Jr., M.D., Dennis L. Ryll, M.D., and Regent Court Technologies shall have duly executed a “Consent, Reaffirmation and Release
Agreement” in substantially the form of Exhibit B attached hereto and delivered it to McKesson. 
  
 (c) McKesson shall have received an original counterpart of the Accentia Assumption of Debt and Security Agreement (the “Accentia Assumption
Agreement”) in the form of Exhibit A attached hereto, duly executed by Accentia, and all conditions precedent to McKesson’s obligations thereunder shall have been satisfied, provided that in the event that the Assumption
Agreement is not signed and all conditions thereto satisfied at the time all other conditions precedent to McKesson’s obligations hereunder have been satisfied, McKesson will treat the delivery of the duly executed Accentia Assumption Agreement
as a condition subsequent which must be satisfied on or before December 3, 2003 or else McKesson will cease to have any further obligation under this Agreement. 
  

(d) McKesson shall have been reimbursed in cash for all fees and costs incurred by McKesson in the negotiation and drafting of this Agreement, the
Bridge Loan Documents, the Accentia Assumption Agreement, all documentation prepared in connection with any of them, and in the negotiation and drafting of all term sheets and proposal letters leading to the same, and shall likewise have been
reimbursed for all fees and costs incurred in connection with the Assumed Rx Debt Documents, the Bridge Loan Documents, the Supply Agreement, and the collateral for any of them. 
  

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 (e) [Intentionally omitted]. 
  
 (f) McKesson shall have received evidence that all approvals or consents by the respective Boards of Directors of Accentia
and Accent Rx have been obtained. 
  
 (g) No Events of Default
shall have occurred under this Agreement. 
  
 SECTION 4
Representations And Warranties. Accentia and Accent Rx jointly and severally represent and warrant to McKesson as follows: 
  
 (a) Accentia and Accent Rx each are corporations duly organized, validly existing and in good standing under the laws of the state of Florida, and each of
them has all requisite power and authority to execute, deliver and perform their respective obligations under this Agreement. 
  
 (b) The execution, delivery and performance by Accentia and Accent Rx of this Agreement have been duly authorized by all necessary action of their
respective Boards of Directors, and this Agreement constitutes the legal, valid and binding obligation of each of Accentia and Accent Rx, enforceable against them in accordance with its terms. 
  
 (c) The execution, delivery, and performance of this Agreement by Accentia
and Accent Rx do not conflict with, result in a violation of, or constitute a default under: (i) any provision of either of their articles or certificate of incorporation or organization, or bylaws, or any agreement or other instrument binding upon
them, or (ii) any law, governmental regulation, administrative or court decree, or order applicable to Accentia or Accent Rx, or to their assets. 
  
 (d) Accentia currently owns 100% of the stock in Accent Rx which is the successor to APP, formerly a customer of and borrower from McKesson. 

 
 (e) Accentia now owns 81% of the ownership interests (on a fully diluted
basis) in BioVest, all of which was, is, and will be part of the Bridge Loan Collateral. 
  
 (f) Nothing in this Agreement (or the transactions contemplated hereby) gives rise to any claim by Accentia or Accent Rx against McKesson. 
  
 SECTION 5 Events of Default. Should any of the following events occur, each such event shall constitute an
“Event of Default” hereunder: 
  
 (a) The failure to
make any payment as and when due as set forth in this Agreement or in the Assumption Agreement; . 
  
 (b) The breach of any covenant or failure to satisfy any condition set forth in this Agreement or in the Assumption Agreement; 
  
 (c) The breach of any covenant or failure to satisfy any condition set forth
in any of the documents executed pursuant to this Agreement or the Accentia Assumption Agreement; 
  

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 (d) The failure of any representation or warranty made by Accentia under or in connection with this
Agreement, the Accentia Assumption Agreement, or any other Document (as defined in the Accentia Assumption Agreement) to be and remain true in any material respect as and when made or deemed made; 
  
 (e) Any “Event of Default” shall occur under the Accentia
Assumption Agreement, under any other Document (as defined in the Accentia Assumption Agreement), or under any of the Accent Rx Debt Documents or the Supply Agreement; or 
  
 (f) Any “Event of Default,” other than payment defaults currently in existence as of the date hereof, shall occur
under any of the Bridge Loan Documents. 
  
 SECTION 6 Release
of Claims Against McKesson. 
  
 (a) In consideration of the
covenants and promises of McKesson hereunder, each of Accentia and Accent Rx (collectively, the “Releasing Parties”) hereby forever releases and discharges McKesson and its predecessors-in-interest, and their respective officers,
directors, shareholders, employees, agents, attorneys, advisors, and successors-in-interest (the “Released Parties”) from any and all claims, demands, controversies, actions, causes of action, obligations, liabilities, expenses,
costs, attorneys’ fees and damages of any nature or character, or any kind, at law or in equity, past, present, or future, known or unknown, suspected or unsuspected, now owned or hereafter acquired, arising out of or relating in any way to
APP, Accent Rx, Accentia, the Assumed Accent Rx Indebtedness, any of the Assumed Accent Rx Debt Documents, the Supply Agreement, and/or the Bridge Loan Documents, or any other matter whatsoever, save and except only McKesson’s obligations to be
performed after the date hereof under this Agreement or the Accentia Assumption Agreement. 
  
 (b) It is the intention of Accentia and Accent Rx that the foregoing release shall be effective as a bar to all actions, fees, damages, losses, claims, liabilities, demands or debts whatsoever, of any kind or nature,
known or unknown, suspected or unsuspected. Accentia and Accent Rx each expressly waive any and all rights and benefits conferred upon them by virtue of California Code of Civil Procedure section 1542 (or any similar law) which provides as follows:

  
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. 
  
 (c) Accentia and Accent Rx each expressly acknowledges that McKesson has
separately bargained for the foregoing waiver of the provisions of California Code of Civil Procedure section 1542 and they have been advised of the full legal consequences of this release and waiver. 
  

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 SECTION 7 Costs and Expenses; Indemnification. 
  
 (a) Accentia and Accent Rx agree to pay on demand (i) the out-of-pocket
costs and expenses of McKesson and the fees and disbursements of counsel to McKesson (including allocated costs and expenses of internal legal services), in connection with the negotiation, preparation, execution and delivery of this Agreement, and
any other agreements executed in connection herewith or pursuant hereto; and (ii) all costs and expenses of McKesson and fees and disbursements of counsel (including allocated costs and expenses for internal legal services), in connection with any
amendments, modifications or waivers of the terms of this Agreement, any default, the enforcement or attempted enforcement of, and preservation of any rights or interests under this Agreement, including any fees incurred n connection with any
bankruptcy proceeding of Accentia, Accent Rx, HCG, MOAB, Regent Court Technologies, Biovest, Francis E. O’Donnell, Dennis Ryll, or any affiliate of any of them. 
  
 (b) Whether or not the transactions contemplated hereby shall be consummated, each of Accentia and Accent Rx hereby agrees
to indemnify McKesson and its predecessors-in-interest, and their respective officers, directors, shareholders, employees, agents, attorneys, advisors, and successors-in-interest (each an “Indemnified Person”) against, and hold each
of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including the fees and disbursements of counsel to an
Indemnified Person (including allocated costs and expenses for internal legal services), which may be imposed on, incurred by, or asserted against any Indemnified Person, in any way relating to or arising out of this Agreement, the Accentia
Assumption Agreement, the Bridge Loan Documents, the Assumed Accent Rx Indebtedness or any collateral with respect to any of the foregoing, including with respect to any investigation, litigation or other proceeding relating to any of the foregoing
irrespective of whether the Indemnified Person shall be designated a party thereto (the “Indemnified Liabilities”); provided that neither Accentia nor Accent Rx shall be liable to any Indemnified Person for any portion of such
Indemnified Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted from such Indemnified Person’s gross negligence or willful misconduct. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, each of Accentia and Accent Rx agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

  
 (c) Any amounts payable to McKesson under this Section 7 or
otherwise under this Agreement if not paid upon demand, shall bear interest from the date of such demand until paid in full, at the rate of 10% per annum (based on a 360 day year for actual days elapsed). 
  

 10 

 SECTION 8 Miscellaneous. 
  
 (a) Limitation of Liability. Under no circumstances shall McKesson or any of its predecessors-in-interest, and their
respective officers, directors, shareholders, employees, agents, attorneys, advisors, and successors-in-interest be liable for (and neither Accentia nor Accent Rx nor any affiliate of either of them shall assert any claims against any of them for)
punitive, exemplary, consequential or indirect damages which may be alleged to result in connection with this Agreement or any of the Indemnified Liabilities. 
  

(b) Confidentiality. Except as required by applicable law, neither this Agreement nor its contents may be disclosed without McKesson’s
prior written consent by Accentia, Accent Rx, or any of their affiliates, publicly or privately except to those individuals who are officers, employees or advisors of Accentia, Accent Rx, or Hopkins Capital Group II, LLC who have a need to know as a
result of being involved in the negotiation and discussion of the matters set forth herein and then only on the condition that such matters may not be further disclosed. No one shall, except as required by law, use the name of, or refer to,
McKesson, or any of its affiliates in any correspondence, discussions, advertisement or disclosure made in connection with the matters set forth herein without the prior written consent of McKesson. 
  
 (c) Notices. All notices or other communications hereunder shall be in
writing (including by facsimile transmission or by email) and mailed, sent or delivered to the respective parties hereto at or to their respective addresses, facsimile numbers or email addresses set forth below their names on the signature pages
hereof, or at or to such other address, facsimile number or email address as shall be designated by any party in a written notice to the other parties hereto. All such notices and other communications shall be deemed to be delivered when a record
(within the meaning of the California Uniform Commercial Code) has been: (i) delivered by hand, (ii) sent by mail upon the earlier of the date of receipt or five business days after deposit in the mail, first class (or air mail as to communications
sent to or from the United States), (iii) sent by facsimile transmission, or (iv) sent by email. 
  
 (d) No Waiver; Cumulative Remedies. No failure on the part of McKesson to exercise, and no delay in exercising, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to McKesson. 
  
 (e) Binding Effect. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by, Accentia,
Accent Rx, McKesson and their respective successors and assigns. Neither Accentia nor Accent Rx may assign, transfer, hypothecate or otherwise convey their respective rights, benefits, obligations or duties hereunder without the prior express
written consent of McKesson. Any such purported assignment, transfer, hypothecation or other conveyance by Accentia or Accent Rx without the prior express written consent of McKesson shall be void. 
  

 11 

 (f) Governing Law; Venue;. This Agreement shall be governed by, and construed in accordance with,
the law of the State of California, except as required by mandatory provisions of law. Accentia and Accent Rx agree that venue for all purposes arising out of this Agreement shall be proper only in the County of San Francisco, State of California,
and each of them consent to such venue. 
  
 (g) Waiver of Trial
by Jury. 
  
 THE PARTIES HEREBY IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL ON ANY CLAIM OR CLAUSE OR ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WAIVER OF A JURY TRAIL AND WRITTEN CONSENT TO A TRIAL BY THE COURT: 
  
 (h) Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and shall
not be amended except by the written agreement of the parties. 
  
 (i) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Agreement shall be
prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so
modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction.

  
 (j) Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. 
  
 (k) Survival. All covenants, agreements, representations and
warranties made herein (including, but not limited to, the obligations set forth in Section 10 hereof) shall, except to the extent otherwise provided herein, survive the execution and delivery of this Agreement, and shall continue in full force and
effect so long as McKesson has any obligation to perform any other act hereunder or any obligation owing by either of Accentia or Accent Rx shall remain unsatisfied. 
  
 (1) Benefits of the Agreement. This Agreement is entered into for the sole benefit of the parties hereto and their
successors and assigns and the Indemnified Persons and the Released Parties referred to herein, and no other person or entity shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection
with this Agreement. 
  

 12 

 IN WITNESS WHEREOF, the parties have executed this Forbearance Agreement as of the date set forth below:

  

			
	 ACCENTIA, INC.

		
	 By
	 	 /s/ Frank O’Donnell

	 	 	 Title: Chairman & CEO

	
	 Accentia, Inc.
 5310 Cypress Center Drive, Suite 101
 Tampa, FL 33609
 Attn: Francis E. O’Donnell, Jr., M.D.
 Fax: 813-287-6642
 email: FEOMDJR@aol.com

	
	 ACCENT RX, INC.

		
	 By
	 	 /s/ Frank O’Donnell

	 	 	 Title: Chairman

	
	 Accentia, Inc.
 5310 Cypress Center Drive, Suite 101
 Tampa, FL 33609
 Attn: Francis E. O’Donnell, Jr., M.D.
 Fax: 813-287-6642
 email: FEOMDJR@aol.com

	
	 McKESSON CORPORATION

		
	 By:
	 	 /s/ Alan Pearce

	 	 	 Alan Pearce

	 Title:
	 	 SVP Financial Services

	
	 McKesson Corporation
 One Post Street
 San Francisco, CA 94104
 Attn: AlanPearce
 Fax; (415) 983-9272
 email: alan.pearce@mckesson.comWarrant Purchase Agreement

 Exhibit 10.41 

  
 WARRANT PURCHASE AGREEMENT 
  
 Among 
  
 AMERICAN PRESCRIPTION PROVIDERS, INC. 
  
 And 
  
 McKESSON CORPORATION 
  
 Dated as of December 1, 1998 
  

  

  
 TABLE OF CONTENTS

  

							
				
	 	 	 	  	 	  	Page

			
	 SECTION 1.
	 	 CERTAIN DEFINITIONS AND TERMS
	  	1
				
	 	 	Section 1.1	  	 Definitions
	  	1
			
	 SECTION 2.
	 	 AUTHORIZATION OF WARRANTS
	  	3
			
	 SECTION 3.
	 	 SALE AND PURCHASE OF WARRANTS
	  	3
			
	 SECTION 4.
	 	 EXERCISE OF WARRANTS AND DETERMINATION OF SHARES
	  	4
			
	 SECTION 5.
	 	 WARRANT ISSUE DATE AND CONDITIONS TO CLOSING DATE
	  	4
			
	 SECTION 6
	 	 REPRESENTATIONS AND WARRANTIES
	  	4
				
	 	 	 Section 6.1
	  	 Purchase for Investment
	  	4
				
	 	 	 Section 6. 2
	  	 Source of Funds
	  	5
			
	 SECTION 7.
	 	 TRANSFER; REGISTRATION RIGHTS
	  	5
				
	 	 	 Section 7.1
	  	 Restrictions on Transferability
	  	5
				
	 	 	 Section 7.2
	  	 Notice of Proposed Transfer; Registration Not Required
	  	5
				
	 	 	 Section 7. 3
	  	 Required Registration
	  	6
				
	 	 	 Section 7.4
	  	 Conditions to Required Registration
	  	11
				
	 	 	 Section 7. 5
	  	 Incidental Registrations
	  	12
				
	 	 	 Section 7. 6
	  	 Underwritten Offerings
	  	13
				
	 	 	 Section 7. 7
	  	 Expenses; Reliance
	  	13
				
	 	 	 Section 7.8
	  	 Indemnification and Contribution
	  	13
				
	 	 	 Section 7. 9
	  	 Additional Registration Rights
	  	15
				
	 	 	 Section 7.10
	  	 Restrictive Legends
	  	16
				
	 	 	 Section 7.11
	  	 Stock Exchange Listing
	  	17
				
	 	 	 Section 7.12
	  	 Miscellaneous
	  	17

  

 i. 

							
			
	 SECTION 8.
	 	 COVENANTS
	  	17
				
	 	 	 Section 8.1
	  	 Observer Rights
	  	17
				
	 	 	 Section 8.2
	  	 Financial Statements
	  	17
			
	 SECTION 9.
	 	 LOST STOLEN WARRANTS, ETC.
	  	18
			
	 SECTION 10.
	 	 RESTRICTIONS ON CAPITAL STRUCTURE
	  	18
			
	 SECTION 11.
	 	 INDEX AND CAPTIONS
	  	18
			
	 SECTION 12.
	 	 MISCELLANEOUS
	  	18
				
	 	 	 Section 12.1
	  	 Notices
	  	18
				
	 	 	 Section 12.2
	  	 Successors and Assigns
	  	19
				
	 	 	 Section 12.3
	  	 Severability
	  	19
				
	 	 	 Section 12.4
	  	 Governing Law
	  	19
				
	 	 	 Section 12.5
	  	 Amendments
	  	19
				
	 Signatures
	 	 	  	 	  	19
			
	 Schedule A
	 	                 Notice and Payment
Instructions
	  	 
			
	 Exhibit A
	 	                 Warrant
	  	 

  

 ii. 

  
 WARRANT PURCHASE AGREEMENT

  
 THIS WARRANT PURCHASE AGREEMENT (this
“Agreement”) is entered into as of December 1, 1998, between AMERICAN PRESCRIPTION PROVIDERS, INC., a Delaware corporation (“Company”), and McKESSON CORPORATION (“McKESSON”), a Delaware corporation.

  
 WHEREAS, concurrently with the execution and delivery hereof,
Company will be issuing its Warrants to purchase shares of Common Stock of Company to McKesson in connection with and as a condition to McKesson’s obligations under a Credit Agreement executed by and between Company and McKesson on or about the
date hereof. 
  
 WHEREAS, in consideration of the purchase by
McKesson of the Warrants and of the credit facilities to be extended to Company, Company is willing to offer McKesson the rights described herein, including, without limitation, registration rights and rights of indemnity and other rights and
privileges relating to the Warrants and the Warrant Shares, all as more specifically set forth herein. 
  
 NOW, THEREFORE, for and in consideration of the foregoing and the mutual covenants herein contained, the parties hereto agree as follows: 
  
 SECTION 1. CERTAIN DEFINITIONS AND TERMS. 
  
 Section 1.1 Definitions. Terms not otherwise defined herein shall
have the respective meanings assigned thereto in the Credit Agreement. As used herein, the following terms have the meanings indicated: 
  
 “Certificate of Incorporation” shall mean the Certificate of Incorporation of Company as filed with the Delaware Secretary of State on
                 , 199   , without further amendment or modification thereto except as permitted pursuant to the terms of this Agreement
or the Warrant. 
  
 “Code” means the Internal
Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time. 
  
 “Commission” means the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act or
the Trust Indenture Act of 1939, as amended, as the case may be. 
  
 “Common Stock” means the shares of common stock, par value of $0.001 per share, of Company described in the Certificate of Incorporation. 
  
 “Convertible Security” shall mean evidences of indebtedness, equity, rights, options, warrants or other
securities which are convertible into or exchangeable for shares of Common 

  

 1. 

 
Stock, either immediately or upon the arrival of a specified date or the happening of a specified event, or otherwise. 
  
 “Credit Agreement” means that certain Credit Agreement dated
as of even date herewith between Company and McKesson, as it may be amended from time to time. 
  
 “Cutback Determination” is defined in Section 7.3(a).  
  
 “Demand Registration” is defined in Section 7.3(a). 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the
rules and regulations promulgated thereunder from time to time in effect. 
  
 “Exercise Period” means the period from but excluding the fifteenth day after the First Anniversary to and including the Expiration Date. 
  
 “Expiration Date” means from and after 5:00 p.m. Eastern Standard, time on the tenth anniversary of the
date of this Agreement. 
  
 “First Anniversary”
means the first anniversary of the Closing Date. 
  
 “Holder” means any beneficial owner of (i) any Warrant Share, or (ii) any Warrant, in each case as the context may require. 
  
 “Incidental Cutback Determination” is defined in Section 7.5. 
  
 “Initial SEC Registration Date” means the date on which Company first becomes subject to the reporting
requirements of Section 13 of the Exchange Act. 
  
 “Person” means an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. 
  
 “Pro Forma Shares” means as of the date of any determination thereof, the sum of (i) the total number of
outstanding shares of Common Stock, plus (ii) the total number of shares of Common Stock issuable upon exercise of the Warrants and any other warrants, options or other rights and upon the exercise of any conversion or exchange rights with respect
to Convertible Securities. 
  
 The terms “Register,”
“Registered” and “Registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act (“Registration Statement”), and the declaration or
ordering of the effectiveness of such Registration Statement. 
  
 “Registrable Warrant Shares” means the Warrant Shares, other than (i) those shares previously registered under the Securities Act, (ii) those shares sold under an exemption from 

  

 2. 

 
registration pursuant to Rule 144 of the Commission, and (iii) those shares eligible for sale pursuant to Rule 144 within sixty (60) days of the date of a
request for Registration. 
  
 “Securities Act”
means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations promulgated thereunder, all as the same shall be in effect at the time. 
  
 “Security” or “Securities” shall have the same meaning as in Section 2(1) of the
Securities Act. 
  
 “Third Anniversary” means the
third anniversary of the Closing Date. 
  
 “Warrant Issue
Date” is defined in Section 5. 
  
 “Warrant Percentage” means 7.5%. 
  
 “Warrant Shares” means the shares of Common Stock or other Securities issued upon exercise of the Warrants in accordance with the Warrants and this Agreement, and any references contained herein to a Holder or Holders of
any Warrant Shares shall be deemed to refer to the Holder of the Warrants relating thereto. 
  
 “Warrants” is defined in Section 2. 
  
 SECTION 2. AUTHORIZATION OF WARRANTS. 
  
 In consideration of, and as an inducement to, McKesson’s entering into the Credit Agreement, Company will authorize the issuance and sale of, and
Company agrees to deliver to McKesson on the Warrant Issue Date, one or more warrants (all warrants being delivered to McKesson being referred to collectively as the “Warrants”) substantially in the form attached hereto as Exhibit A
to purchase the number of shares of Common Stock of Company as set forth in Section 4 of this Agreement for the consideration set forth in the Warrants. The number of shares which may be purchased upon the exercise of the Warrants and the price per
share are subject to adjustment in the manner and on the terms and conditions set forth in the Warrants. 
  
 The rights, powers and terms of and relating to the Common Stock will be provided for in the Certificate of Incorporation, and as otherwise provided by
the Delaware General Corporation Law of the State of Delaware. In addition, the Warrants and the shares of Common Stock issuable upon exercise thereof are subject to the terms and provisions specified in this Agreement. 
  
 SECTION 3. SALE AND PURCHASE OF WARRANTS. 
  
 Subject to the terms and conditions of this Agreement, Company will issue
and sell to McKesson, and McKesson will purchase from Company, at the Warrant Issue Date, the entire 

  

 3. 

 
issue of the Warrants. The aggregate purchase price for the Warrants shall be McKesson’s execution and delivery of the Credit Agreement. 
  
 Company and McKesson agree that the per share value of the Warrants for tax
purposes’ is $______. Company and McKesson agree to report the transaction in a manner consistent with this paragraph. 
  
 SECTION 4. EXERCISE OF WARRANTS AND DETERMINATION OF SHARES. 
  
 The Warrants shall be exercisable from time to time during the Exercise Period on an aggregate basis into such number of
shares of Common Stock as is equal as of the time of such exercise of the Warrants to the sum (but not less than zero) of (a) the Pro Forma Shares multiplied by the Warrant Percentage minus (b) the aggregate number of shares of Common Stock
purchased through prior exercises of the Warrants. 
  
 SECTION 5. WARRANT ISSUE DATE AND CONDITIONS TO CLOSING DATE. 
  
 The sale and purchase of the Warrants shall occur simultaneously with the execution and delivery of the Credit Agreement by the parties or on such other Business Day within 30 days thereafter as may be agreed upon by Company and McKesson
(the “Warrant Issue Date”). On the Warrant Issue Date, Company will deliver to McKesson the Warrants, the Warrants to be in the form of a single Warrant (or such greater number of Warrants as McKesson may request) registered in
McKesson’s name (or in the name of its nominee). If on the Warrant Issue Date Company shall fail to deliver to McKesson such documents as provided in the Credit Agreement or Company shall fail to tender to McKesson the Warrants as provided
above in this Section 5, or any of the conditions specified in Section 5 shall not have been fulfilled to its satisfaction, McKesson shall, at its election, be relieved of all further obligations under this Agreement, the Credit Agreement and the
other Loan Documents (including the Supply Agreement), without thereby waiving any rights McKesson may have by reason of such failure or such nonfulfillment. 
  
 McKesson’s obligation to purchase and pay for the Warrants is subject to the fulfillment to its satisfaction (or explicit written waiver by
McKesson), prior to or on the Warrant Issue Date, of the conditions set forth in Article IV of the Credit Agreement, which conditions shall be and are hereby incorporated herein by reference. 
  
 SECTION 6. REPRESENTATIONS AND WARRANTIES. 
  
 Section 6.1 Purchase for Investment. McKesson represents that it is
purchasing the Warrants and the Warrant Shares for its own account and not with a view to the distribution thereof, provided that the disposition of its property shall at all times be within its control. McKesson further represents that it (as well
as any Person to which it may transfer Warrants or any nominee to which it may direct Warrants or Warrant Shares to be issued) is an accredited investor within the meaning of Rule 501(a) promulgated under the Securities Act McKesson understands that
the Warrants have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from 

  

 4. 

 
registration, is available, except under circumstances where neither such registration nor such an exemption is required by law, and that Company is not
required to register the Warrants and the Warrant Shares. In the absence of such registration,’ Company may require McKesson to provide at its expense, an opinion of securities counsel that no registration is required, which would be in form
and substance satisfactory to Company. 
  
 Section. 6.2 Source
of Funds. McKesson represents that the source of funds to be used by it to pay the purchase price of the Warrants does not include assets of any employee benefit plan. As used in this Section 6.2, the term “employee benefit plan” shall
have the meaning assigned to such term in Section 3 of ERISA. 
  
 SECTION 7. TRANSFER; REGISTRATION RIGHTS. 
  
 Section 7.1 Restrictions on Transferability. The Warrants and the Warrant Shares shall not be transferable except upon the conditions hereinafter specified, which conditions are intended to ensure compliance
with the provisions of the Securities Act and any applicable state securities laws. 
  
 (a) Transfer of Rights. Subject to Section 7.10, the rights granted to McKesson under this Section 7 may be
transferred to any person or entity acquiring directly or indirectly any shares of Warrants or Warrant Shares, as the case may be, from McKesson. 
  
 (b) Transferees. Any transferee to whom rights under Section 7 are .transferred shall, as a condition to such transfer,
agree to be bound by the obligations imposed by Section 7 to the same extent as suchtransferee’s transferor was bound hereunder. 
  
 (c) Subsequent Transferees. A transferee to whom rights are transferred pursuant to this Section 7.1 may only transfer such
rights to another person or entity as provided in (a) and (b) of this Section 7.1. 
  
 Section 7.2 Notice of ‘Proposed Transfer; Registration Not Required. The Holder of each Warrant or any Warrant Shares, by acceptance thereof, agrees to give prior written notice to Company of such
Holder’s intention to transfer such Warrant (or the Warrant Shares relating thereto) or such Warrant Shares (or, in each case, any portion thereof), describing briefly the manner and circumstances of the proposed transfer; provided, however,
that no such notice shall be required for a transfer under a registration requested in accordance with the provisions of Section 7.3 or in connection with a transfer made in accordance with the exemptions afforded by Rule 144 or Rule 144A of
the General Rules and Regulations of the Commission (or any other available exemption from the registration requirements of the Securities Act) and exempt from all applicable registration requirements under state securities laws. In connection with
such transfer, Company may require McKesson to provide at its expense, an opinion of securities counsel that no registration is required, which would be in form and substance satisfactory to Company. 
  

 5. 

 Section 7.3 Required Registration, (a) On (and including) or after the twenty-fifth day after the
Third Anniversary, the Holders of at least 51% of the aggregate then outstanding number of Registrable Warrant Shares may, upon written request, require Company to effect the registration (a “Demand Registration”) or qualification
under applicable federal or state securities laws of such Registrable Warrant Shares. Upon receipt of such written request, Company shall promptly give written notice to all Holders of Warrants and Warrant Shares of a proposed registration or
qualification, and shall, subject to the conditions of Section 7.4, as expeditiously as possible, use its best efforts to effect any such registration or qualification of: 
  
 (i) such Registrable Warrant Shares; or 
  
 (ii) all other Registrable Warrant Shares of Holders of Warrants or Warrant Shares which shall have advised
Company in writing within 30 days after the giving of such written notice by Company of their desire to have their Registrable Warrant Shares registered or qualified or exempted, 
  
 with, or notification to or approval of, any governmental authority under any federal or state securities laws, or listing with any
securities exchange, which may be required to permit the sale or other disposition of any such Registrable Warrant Shares which the Holders thereof propose to -make, and Company will keep effective such registration, qualification, exemption,
notification or approval for such period as may be necessary to effect such sales or dispositions up to a |. maximum period of six months after initial effectiveness. 
  
 If the managing underwriter engaged in connection with an underwritten public offering of such Registrable Warrant Shares
proposed for registration under this Section 7.3 determines in good faith and for valid business reasons that registration of such Registrable Warrant Shares would have an adverse effect on the marketability or the price of such offering (a
“Cutback Determination”), such managing underwriter shall give prompt written notice of such Cutback Determination to such requesting Holder or Holders. In such event, Company, upon written notice to the Holders of such Registrable
Warrant Shares, shall have the right to limit such Registrable Warrant Shares to be registered, if any, to the largest number which would not result in such adverse effect on marketability or the price of such offering (such limitation being applied
to each such requesting Holder of Registrable Warrant Shares pro rata in respect of the number of shares subject to such request). No Securities of any Person may be included in any registration pursuant to this Section 7.3 without the
written consent of the Holders of at least a majority of the Registrable Warrant Shares participating in such offering if, with the inclusion of such Securities, the Holders are not able to include in the registration at least 80% of the Registrable
Warrant Shares that they initially requested to be included. 
  
 (b) Registration Procedures. In connection with Company’s obligations with respect to a Demand Registration pursuant to Section 7.3(a) hereof, Company shall use its best efforts to effect or cause
the registration or qualification of Registrable Warrant Shares under the Securities Act and applicable state securities laws to permit the sale of such Registrable Warrant 

  

 6. 

 
Shares by the Holders thereof in accordance with the intended method of distribution thereof (if such distribution is possible), and pursuant thereto,
Company shall: 
  
 (i) prepare and, within 60
days after receipt of the request pursuant to Section 7.3(a) hereof, file with the Commission a registration statement or registration statements with respect to a Demand Registration on any form which may be utilized by Company and which shall
permit the disposition of the Registrable Warrant Shares in accordance with the intended method or methods thereof, and use its best efforts to cause such registration statement or registration statements to become effective as expeditiously as
possible, but in any event not later than 120 days after receipt of such request; 
  
 (ii) prepare and file with the Commission such amendments and supplements to a registration statement or statements hereunder and the
prospectus used in connection therewith as may be necessary to maintain the effectiveness of such registration statement for the applicable period specified in Section 7.3(a) hereof, and comply in all material respects with the provisions of the
Securities Act and applicable state securities laws with respect to the disposition of all of the Registrable Warrant Shares to be included in such registration statement during such applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the registration, statement; 
  
 (iii) provide the Holders of the Registrable Warrant Shares to be included in a registration statement hereunder and the underwriters (which term, for purposes of this Agreement, shall include a Person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if any, of the Securities being sold and counsel for such underwriters and not more than one counsel for such Holders the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the Commission, and each amendment or supplement thereto; and make available for inspection by such Persons such financial and other information, books and records of Company,
and cause the officers, directors and employees of Company, and counsel and independent certified public accountants for Company, to respond to such inquiries, as shall be reasonably necessary, in the opinion of the respective counsel to such
Holders and such underwriters, to conduct a reasonable investigation within the meaning of the Securities Act; provided that all such persons shall treat all information to which they have access as confidential and use it solely for the purpose of
registration; 
  
 (iv) promptly notify the
selling Holders of Registrable Warrant Shares to be included in a registration statement hereunder and the managing underwriters, if any, of the Registrable Warrant Shares being sold and (if requested by any such Person) confirm such advice in
writing, (1) when such 

  

 7. 

 
registration statement, the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to such registration
statement or any post-effective amendment, when the same has become effective, (2) of any request by the Commission for amendments or supplements to such registration statement or the prospectus or for additional or supplemental information, (3) of
the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for that purpose, (4) if at any time the representations and warranties of Company contemplated by
paragraph (xi) below cease to be true and correct in all material respects, (5) of the receipt by Company of any notification with respect to the suspension of the qualification of the Registrable Warrant Shares for sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose, or (6) at any time when a prospectus is required to be delivered under the Securities Act, of the happening of any event as a result of which such registration statement, prospectus, any
prospectus supplement, or any document incorporated by reference in any of the foregoing 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 then existing; 
  
 (v) make reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement hereunder or any post-effective amendment thereto at the earliest practicable date;

  
 (vi) if requested by the managing underwriter
or underwriters or the Holders of at least a majority of the Registrable Warrant Shares being sold, promptly incorporate in a prospectus supplement of post-effective amendment such information as such managing underwriter or underwriters or such
Holders of at least a majority of the Registrable Warrant Shares being sold specify should be included therein relating to the sale of the Registrable Warrant Shares, including, without limitation, information with respect to the number of
Registrable Warrant Shares being sold to such underwriters, the purchase price being paid therefor by such underwriters and with respect to any other terms of the underwritten (or best efforts underwritten) offering of the Registrable Warrant Shares
to be sold in such offering, except to the extent that Company is advised in a written opinion of outside counsel that the inclusion of such information is reasonably likely to violate the federal securities laws; and make all required filings of
such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; 
  
 (vii) furnish to each Holder of Registrable Warrant Shares to be included in a registration statement
hereunder and each underwriter, if any, of the Securities being sold such number of copies of such registration statement, each 

  

 8. 

 
such amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in such registration statement and such other
documents as such Holder and underwriter, if any, may reasonably request in order to facilitate the disposition of the Registrable Warrant Shares owned by such Holder; Company consents to the use of the prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Warrant Shares and the underwriters in connection with the offering and sale of the Registrable Warrant Shares covered by the prospectus or any supplement or amendment thereto; 
  
 (viii) use its best efforts to (1) register or qualify the
Registrable Warrant Shares to be included in a registration statement hereunder under such other securities laws or Blue Sky laws of such jurisdictions as any Holder of such Registrable Warrant Shares and each underwriter, if any, of the Securities
being sold shall reasonably request, (2) keep such registrations or qualifications in effect for so long as the registration statement remains in effect and (3) take any and all such actions as may be reasonably necessary or advisable to enable such
Holder and underwriter, if any, to consummate the disposition in such jurisdictions of such Registrable Warrant Shares owned by such Holder; provided, however, that Company shall not be required for any such purpose to (A) qualify generally
to do business as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this paragraph (viii) or (B) consent to general service of process in any such jurisdiction; 
  
 (ix) use its best efforts to cause all of the Registrable
Warrant Shares that are to be included in a registration statement hereunder to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of Company to enable the
Holder or Holders thereof to consummate the disposition of such Registrable Warrant Shares; 
  
 (x) use its best efforts in cooperation with the Holders of the Registrable Warrant Shares to be included in a registration statement
hereunder and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Warrant Shares to be sold and not bearing any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Warrant Shares to be in such denominations and registered in such names as the managing underwriters may request at least two Business Days prior to any sale of the Registrable Warrant Shares; 
  
 (xi) enter into such customary agreements (including an
underwriting agreement, in the event that the shares to be included are to be distributed by means of an underwritten public offering) and take such other actions in connection therewith as the Holders of at least a majority of the Registrable

  

 9. 

 
Warrant Shares to be included in a registration statement hereunder shall reasonably request in order to expedite or facilitate the disposition of such.
Registrable Warrant Shares and in such connection, whether or not an underwriting agreement is entered into and whether or not the disposition is an underwritten offering, (1) make such representations, warranties and indemnities to the Holders of
such Registrable Warrant Shares and the underwriters, if any, in form, substance and scope as are customarily made in an underwritten offering; (2) obtain an opinion of counsel to Company in customary form and covering such matters of the type
customarily covered by such opinion as the Holders of at least a majority of the Registrable Warrant Shares to be included in such registration statement and the underwriters, if any, may reasonably request, addressed to the selling Holders and the
underwriters, if any, and dated the effective date of such registration statement and dated the effective date of a post- effective amendment to the registration statement, if such is filed (or, if such registration statement covers an underwritten
offering, dated the date of the closing as specified in the underwriting agreement); (3) obtain a “cold comfort” or procedures letter from the independent certified public accountants of Company addressed to the selling Holders of
Registrable Warrant Shares and to the underwriters, if any, dated the effective date of such registration statement and dated the effective date of a post-effective amendment to the registration statement, if such is filed (and, if such registration
statement covers an underwritten offering, dated the date of the closing as specified in the underwriting agreement), such letter to be in customary form and covering such matters of the type customarily covered by such letter; and (4) deliver such
documents and certificates as may be reasonably requested by the Holders of at least a majority of the Registrable Warrant Shares being sold and the managing underwriters, if any, to evidence compliance with clause (1) above and with any customary
conditions contained in the underwriting agreement or other agreement entered into by Company; 
  
 (xii) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission thereunder; 

 
 (xiii) provide a transfer agent and registrar for all
Registrable Warrant Shares registered pursuant to such registration statement and a CUSIP number for all such Registrable Warrant Shares, in each case not later than the effective date of such registration; and 
  
 (xiv) use its best efforts to have the Registrable Warrant
Shares listed, subject to notice, on the American Stock Exchange or other applicable national securities exchange as Company shall determine to be appropriate. 
  

 10. 

 Upon the occurrence of any event contemplated by paragraph (iv) above, Company shall, as soon as
reasonably practicable, prepare and furnish to each Holder included in such registration statement and underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of
the Registrable Warrant Shares, such prospectus shall not 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 not misleading in light of the
circumstances then existing. Each Holder of Registrable Warrant Shares agrees that upon receipt of any notice from Company of the happening of any event of the kind described in paragraph (iv) hereof, such Holder shall forthwith discontinue the
disposition of Registrable Warrant Shares pursuant to the registration statement applicable to such Registrable Warrant Shares until such Holder receives copies of such amended or supplemented registration statement or prospectus, and, if so
directed by Company, such Holder shall deliver to Company (at Company’s expense) all copies, other than permanent file copies, then in such Holder’s possession of the prospectus covering such Registrable Warrant Shares at the time of
receipt of such notice. 
  
 Company may require each Holder of
Registrable Warrant Shares as to which any registration is being effected to furnish to Company such information regarding such Holder and the distribution of such Registrable Warrant Shares as Company may from time to time reasonably request in
writing in order to comply with the Securities Act, securities exchange listing requirements and all applicable state securities laws. Each Holder of Registrable Warrant Shares as to which any registration is being effected agrees to notify Company
as promptly as practicable of any inaccuracy or change in information previously furnished by such Holder to Company or of the happening of any event, in either case as a result of which any prospectus relating to such registration contains an
untrue statement of a material fact regarding such Holder or the distribution of such Registrable Warrant Shares or omits to state any material fact regarding such Holder or the distribution of such Registrable Warrant Shares required to be stated
therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and to furnish promptly to Company any additional information required to correct and update any previously furnished information or
required so that such prospectus shall not contain, with respect to such Holder or the intended method of distribution of such Registrable Warrant Shares, 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 not misleading in light of the circumstances then existing. 
  
 Section 7.4 Conditions to Required Registration. Company shall not be required to register or effect any registration or qualification of
Registrable Warrant Shares pursuant to Section 7.3: 
  
 (a) more than one (1) time, provided that no registration shall be included as a required registration pursuant to this Section 7.4(a) until such time, if any, as the registration statement filed in connection therewith shall be declared
effective and remain effective until such time as all Shares (and Warrant Shares, as applicable) have been sold under such registration statement or may be freely sold in the public market without registration in reliance upon Rule 

  

 11. 

 
144(k) and unless the Holders requesting such registration are able to include in such registration all of the Registrable Warrant Shares that they initially
requested to be included; 
  
 (b) unless there
shall have elapsed after a previous registration of Registrable Warrant Shares pursuant to Section 7.3 or a registration of other shares in which the Holders of the Warrant Shares could participate pursuant to Section 7.5 a period of
90 days or such longer period, not to exceed 180 days, as the managing underwriter in any such registration shall have determined to be necessary or desirable in light of then current market conditions; and 
  
 (c) unless the request therefor is to register not less than
51% of the aggregate number of Registrable Warrant Shares. 
  
 The
Company shall be entitled to postpone the filing of any Registration Statement otherwise required to be prepared and filed by it pursuant to this Section if, at the time it receives a registration request, counsel for the Company is reasonably of
the opinion (which opinion shall be expressed in writing) that (a) such registration will require preparation of audited financial information for the Company as of a date or for a period which preparation would not otherwise be required or (b) any
material pending transaction of the Company or any of its subsidiaries renders the effecting of such registrant inappropriate at the time; provided, that in the case of an event referred to in clause (a) above, the duration of such delay
shall not exceed 90 days from the date the Company became aware of such material business information; provided, further, that the Company shall promptly make such filing as soon as the conditions which permit it to delay such filing no
longer exist; and provided, further, that in the event of any such deferral, the Holders shall have the right to withdraw the registration request and such withdrawn request shall not be considered as a demand registration. 
  
 Section 7.5 Incidental Registrations. Company agrees that at any time
it proposes to register any of its Securities in a primary or secondary offering of such Securities under the Securities Act (otherwise than pursuant to Section 7.3) on Form S-l or any other form of registration statement (other than Form S-4
or Form S-8) then available for the registration under the Securities Act of Securities of Company, it will give timely written notice to all Holders of outstanding Warrants and Registrable Warrant Shares of its intention so to do and upon the
written request of the Holder of any such Warrants or Registrable Warrant Shares, given within 30 days after receipt of any such notice from Company, Company will in each instance, subject to the next paragraph of this Section 7.5, use its
best efforts to cause all Registrable Warrant Shares requested to be included in such registration by any such requesting Holder to be registered under the Securities Act and registered or qualified under any state securities laws, all to the extent
necessary to permit the sale or other disposition thereof in the manner stated in such request by the prospective seller of the Securities so registered. Nothing in this Section 7.5 shall be deemed to require Company to proceed with any
registration of its Securities after giving the notice herein provided. Registration pursuant to this Section 7.5 shall be in accordance with, and subject to the provisions of, the “Registration Procedures” set forth in Section
7.3(b). 
  

 12. 

 If the managing underwriter engaged by Company in connection with an underwritten public offering of
Securities proposed for registration as described in this Section 7.5 determines in good faith and for valid business reasons that registration of the Registrable Warrant Shares proposed for inclusion in such registration would, when combined
with the other Securities to be included in such registration, have an adverse effect on the marketability or the price of such offering (an “Incidental Cutback Determination”), such managing underwriter shall give prompt written
notice of such Incidental Cutback Determination to such requesting Holder or Holders. In such event Company, upon written notice to the Holders of such Registrable Warrant Shares, shall have the right to limit such Registrable Warrant Shares to be
registered, if any, to the largest number which would not result in such adverse effect on marketability or the price of such offering (such limitation being applied to each such requesting Holder of Registrable Warrant Shares pro rata in respect of
the number of shares subject to such request). 
  
 Section 7.6
Underwritten Offerings. If the intended method of distributing the Registrable Warrant Shares to be included in a registration pursuant to Section 7.3 or Section 7.5 is an underwritten public offering, then Company shall select the
managing underwriter(s) for such offering, subject to the written consent of the Holders of at least 51% of the Registrable Warrant Shares to be included in such registration, which consent shall not be unreasonably withheld. Each Holder of said
Registrable Warrant Shares shall enter into an underwriting agreement, custody agreement and power of attorney in such forms as the managing underwriter(s) and Company shall reasonably request, provided that such agreements and documents are in
customary form and substance or reasonably acceptable to the Holders of a majority of said Registrable Warrant Shares. Each Holder of the Warrants or Registrable Warrant Shares shall refrain from selling Warrants or Registrable Warrant Shares for a
period not to exceed 90 days from the date of the public offering of any Registrable Warrant Shares which are not included in registration pursuant to Section 7.3 or Section 7.5. 
  
 Section 7.7 Expenses; Reliance. Company will pay all expenses,
including, without limitation, registration fees, qualification fees, legal expenses (including the reasonable fees and expenses of one counsel to the Holders of Warrants or Registrable Warrant Shares being registered), printing expenses and the
costs of special audits, if any, and “cold comfort” letters, expenses of underwriters (excluding underwriting discounts and commissions, but including the reasonable fees and expenses of any necessary special experts) in connection
with the registration and qualification, notification or exemption requested by any Holder or Holders of Warrants or Registrable Warrant Shares pursuant to Section 7.3 or Section 7.5. The Holders of the Registrable Warrant Shares shall
be responsible for applicable transfer taxes, brokerage commissions and their share of the underwriting discounts and commissions. 
  
 Section 7.8 Indemnification and Contribution, (a) In connection with any registration, qualification, notification, or exemption of Securities
under Section 7.3 or Section 7.5, Company hereby indemnifies each Holder of the Warrants, Registrable Warrant Shares, including each Person, if any, who controls each such Holder within the meaning of Section 15 of the Securities Act,
against all losses, claims, damages and liabilities (including, without limitation, any liability of any such Holder or Person to any underwriter participating in any such registration, 

  

 13. 

 
qualification, notification or exemption) caused by any untrue, or alleged untrue, statement of a material fact contained in any registration statement or
prospectus or notification or offering circular (and as amended or supplemented if Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished in writing to Company by such Holder expressly for use therein, and Company and each officer, director and controlling Person of Company shall be indemnified by each Holder of the Registrable Warrant
Shares for all such losses, claims, damages and liabilities caused by any (x) untrue statement or alleged untrue statement or omission or alleged omission based upon information furnished in writing to Company by each such Holder thereof expressly
for any such use or (y) misstatements or omissions that were corrected in an amendment or supplement to the Registration Statement or any prospectus that the Company made available to the Holders prior to the date of the transaction giving rise to a
claim of liability and the Holder seeking indemnification failed to deliver to the person asserting the claim; or (z) claims, losses, damages, liabilities and expenses resulting from transactions involving offers or sales occurring during a period
in which the Company shall have notified the Holders to refrain from making offers or sales due to misstatements or omissions. 
  
 (b) Promptly upon receipt by a party indemnified under this Section 7.8 of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought against any indemnifying party under this Section 7.8, such indemnified party shall notify the indemnifying party in writing of the commencement of such action,
but the failure so to notify the indemnifying party shall not relieve it of any liability which it may have to any indemnified party (i) under this Section 7.8 except to the extent that the indemnifying party is materially prejudiced by such
failure to notify, or (ii) otherwise than under this Section 7.8. In case notice of commencement of any such action shall be 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 one separate counsel in any such action and participate in the defense thereof, and the fees and expenses of such counsel (other than reasonable costs of investigation) shall be paid by the indemnifying party unless the
indemnified party agrees to pay the same. No indemnifying party shall be liable for any settlement entered into without its consent. In addition to its other obligations under this Section 7.8, each indemnifying party agrees that, as an
interim measure during the pendency of any claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or omission, described in this Section 7.8, it will
reimburse each indemnified party on a monthly basis for all reasonable legal and other expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of
a judicial determination as to the propriety and enforceability of the indemnifying party’s obligation to 

  

 14. 

 
reimburse the indemnified party or parties for such expenses and the possibility that such payments might later be held to have been improper by a court of
competent jurisdiction. 
  
 (c) If the
indemnification provided for in this Section 7.8 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities or expenses to which such indemnified party would be
otherwise entitled under Section 7.8(a), then the 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, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties 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, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with any investigation or proceeding. In no event shall any Holder of Warrants, Warrant Shares be required to contribute an amount greater than the dollar amount of the proceeds received by
such Person with respect to the sale of any Warrants or Warrant Shares. 
  
 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7.8(c) 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 from any Person who was not
guilty of such fraudulent misrepresentation. 
  
 (a) The indemnification and contribution provided for in this Section 7.8 shall survive, with respect to a Holder of Warrant Shares, the transfer of Warrant Shares by such Holder and with respect to a Holder of Warrant Shares, shall
remain in full force and effect regardless of any investigation made by or on behalf of any indemnified party. 
  
 (b) In connection with any registration pursuant to Section 7.3 or Section 7.5, Company agrees, and each Holder of Warrants
or Warrant Shares (except for McKesson and any other than any such Holder which shall have executed and delivered a counterpart of this Agreement) by acceptance of such Warrants, or Warrant Shares, agrees that it will enter into an agreement
containing substantially the indemnification provisions of this Section 7.8. 
  
 Section 7.9 Additional Registration Rights. Company will not grant to any Person at any time after the date hereof the right to request Company to effect the registration or qualification or filing for
exemption under applicable federal or state securities laws of any 

  

 15. 

 
Securities of Company, unless the agreement or. agreements providing for such rights specifically provide that the holders of such rights may not participate
in any registration requested pursuant to Section 7.3 if such participation would violate the last sentence of Section 7.3(a). 
  
 Section 7.10 Restrictive Legends. Each Warrant initially issued and each Warrant issued in exchange therefor shall, unless otherwise permitted by
the provisions of this Section 7.10, bear on the face thereof a legend reading substantially as follows: 
  
 This Warrant and the shares of Common Stock issuable upon exercise hereof have not been registered or qualified for sale under the Securities Act of 1933,
as amended, or any state securities laws and may not be offered for sale, sold or otherwise transferred unless such offer, sale or transfer is registered or qualified pursuant to the registration requirements of such Securities Act and any
applicable state securities laws, or is preceded by an opinion of counsel addressed to American Prescription Providers, Inc. that such sale or other transfer is exempt from all such registration requirements. This Warrant and the shares of Common
Stock issuable upon exercise hereof are subject to the terms and provisions specified in the Warrant Agreement dated as of December 1,1998, between American Prescription Providers, Inc., and McKesson Corporation. 
  
 Each certificate for shares of Common Stock of Company initially issued upon
the exercise of any Warrant and each certificate for shares of Common Stock of Company issued to a subsequent transferee of such certificate shall, unless otherwise permitted by the provisions of this Section 7.10, bear on the face thereof a
legend reading substantially as follows: 
  
 The shares
represented by this certificate have not been registered under the Securities Act of 1933, as amended or any state securities laws and may not be sold or transferred in the absence of such registration unless such sale or transfer is preceded by an
opinion of counsel addressed to American Prescription Providers, Inc., that such sale or other transfer is exempt from the registration requirements of said Securities Act and any such state securities laws which may be applicable and are subject to
of the terms and provisions specified in that certain Warrant Agreement dated as of December 1,1998, between American Prescription Providers, Inc., and McKesson Corporation. 
  
 In the event that a registration statement covering Registrable Warrant Shares shall become effective under the Securities
Act and under any applicable state securities laws or in the event that Company shall receive an opinion of its counsel (or, at Company’s election, nationally recognized independent counsel to any Holder) that, in the opinion of such counsel,
such legend 

  

 16. 

 
is not, or is no longer, necessary or required (including, without limitation, because of the availability of the exemptions afforded by Rule 144 or Rule
144A of the General Rules and Regulations of the Commission), Company shall, or shall instruct its transfer agents and registrars to, remove such legend from the Warrants and certificates evidencing Warrant Shares or issue new Warrants and
certificates without such legend in lieu thereof. Upon the written request of the Holder or Holders of any Warrants or any Warrant Shares, Company covenants and agrees forthwith to request its counsel to render an opinion with respect to the matters
covered by this Section 7.10 and any legends set forth on the Warrants and Warrant Share certificates and to bear all reasonable expenses in connection with any opinion of counsel contemplated hereinabove. 
  
 Section 7.11 Stock Exchange Listing. In the event Company’s
Common Stock is listed on a national securities exchange at the time of exercise of a Warrant, Company will, at its expense, also list on such exchange, upon exercise of the Warrant, all shares of Common Stock issuable pursuant to such Warrant.

  
 Section 7.12 Miscellaneous. Company shall comply with
all issuer reporting requirements set forth or referred to in Rule 144 or Rule 144A promulgated under the Securities Act and will do all such other things as may be reasonably necessary to permit the expeditious sale at any time of any Warrants or
Warrant Shares by the Holder thereof in accordance with and to the extent permitted by said Rule 144 or Rule 144A, as the case may be, or any other similar Rule or Rules promulgated by the Commission from time to time. 
  
 SECTION 8. COVENANTS. 
  
 Section 8.1 Observer Rights. Until the date on which Company becomes
subject to the periodic reporting requirements of the Exchange Act, Company agrees that one representative of the Holders of the Warrants and Warrant Shares, collectively, shall have the right to receive all notices of and to attend (by any of its
authorized representatives) at such Holders’ expense all meetings of Company’s Board of Directors and any committees thereof. Company shall hold Board of Director meetings no less frequently than quarterly. The Holders shall receive copies
(reasonably promptly) of all minutes of such meetings along with copies of any items distributed to the members of the Board of Directors at such meeting, whether or not a representative attends such meeting. Any information which any Holder obtains
solely as a result of its rights under this Section 8 and by no other means shall be treated in the same manner, including confidentiality, as if such Holder had obtained such information as a member of the Board of Directors of Company. 

 
 Section 8.2 Financial Statements. At all times prior to the Initial
SEC Registration Date, Company shall give to the Holders the reports and rights of inspection granted to McKesson under and pursuant to Sections 5.2 and 5.3 of the Credit Agreement, regardless of whether such Credit Agreement has been amended and
regardless of whether the Obligations are then outstanding. 
  

 17. 

 SECTION 9. LOST, STOLEN WARRANTS, ETC. 
  
 In case any Warrant shall be mutilated, lost, stolen or destroyed, Company
may issue a new Warrant of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of the mutilated Warrant, or in lieu of the lost, stolen or destroyed Warrant, upon receipt of
evidence satisfactory to Company of the loss, theft or destruction of such Warrant, and upon receipt of indemnity satisfactory to Company (which, in the case of McKesson, shall consist of its unsecured agreement to indemnify Company for a loss in
connection with such loss, theft or destruction of such Warrant). 
  
 SECTION 10. RESTRICTIONS ON CAPITAL STRUCTURE. 
  
 Company will not, without the written consent of the Holders of at least 75% of the then outstanding Warrants and Warrant Shares (determined on a Common Stock equivalent basis): 
  
 (i) be bound by or subject to (or permit Company to be bound
by or subject to) any debt or other agreement which restricts the right or ability of Company to perform its obligations hereunder or under the Warrants; or 
  
 (ii) amend or change the Certificate of Incorporation or bylaws (each as currently amended and/or restated) in a manner which could
reasonably be expected to materially and adversely affect this Agreement, the Warrants, the Warrant Shares or the rights of any Holder of any of the foregoing or violate any of the terms or provisions thereof. 
  
 SECTION 11. INDEX AND CAPTIONS. 
  
 The index and the descriptive headings of the various sections of this
Agreement are for convenience only and shall not affect the meaning or construction of the provisions hereof. 
  
 SECTION 12. MISCELLANEOUS. 
  
 Section 12.1 Notices. All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service
(specifying next business day delivery, with charges prepaid). Any such notice must be sent: 
  
 (i) if to McKesson or its nominee, to McKesson at the address specified for such communications in Schedule A, or at such other address as
McKesson shall have specified to Company in writing, or 
  

 18. 

 (ii) if to Company, at Two Huntington Quadrangle, Melville, New York 11747 or to such
other address as Company may designate to the Holders in writing. 
  
 Notices
under this Section 12.1 will be deemed given only when actually received. 
  
 Section 12.2 Successors and Assigns. This Agreement shall be binding upon Company and its respective successors and assigns and shall inure to the benefit of McKesson and its successors and permitted assigns,
including each successive Holder. 
  
 Section 12.3
Severability. Should any part of this Agreement for any reason be declared invalid or unenforceable, such decision will not affect the validity or enforceability of any remaining portion, which remaining portion will remain in force and effect
as if this Agreement had been executed with the invalid or unenforceable portion thereof eliminated and it is hereby declared the intention of the parties hereto that they would have executed the remaining portion of this Agreement without including
therein any such part or portion which may, for any reason, be hereafter declared invalid or unenforceable. 
  
 Section 12.4 Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of California, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state. 
  
 Section 12.5 Amendments. This Agreement may be amended only by an instrument in writing executed by the Holders of
the Warrants and Warrant Shares then outstanding and Company. 
  
 The execution hereof by the undersigned shall constitute a contract between Company and McKesson for the uses and purposes hereinabove set forth. This Agreement may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement. 
  

			
	AMERICAN PRESCRIPTION PROVIDERS, INC.
		
	By	 	/s/    Sam P. Sears
		
	Its	 	Vice Chairman and Treasurer

  

 19. 

 Accepted and agreed to as of December 1, 1998. 
  

			
	McKESSON CORPORATION
		
	By	 	/s/    Ana Schrank
		
	Its	 	Director—Financial Services

  

 20. 

  
 SCHEDULE A 

(to Warrant Agreement) 
  
 NOTICE AND PAYMENT INSTRUCTIONS 
  

			
	 Notices:
	 	McKesson Corporation
One Post Street, 28th Floor
San Francisco, California 94104
Facsimile No.: (415) 732-2967
Attention: Director of Finance
		
	 with a copy to:
	 	McKesson Corporation
One Post Street, 29th Floor
San Francisco, California 94104
Facsimile No.: (415) 983-9369
Attention: Legal Department
		
	 Payment:
	 	McKesson Corporation
Account No.: 12337-53022
Bank of America, N.T.&S.A.
ABA No.: 121000358

  

 Sch. A

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