Document:

EX-4.14

Exhibit 4.14

BRIDGE LOAN AND SECURITY AGREEMENT

     This Bridge Loan and Security Agreement dated as of April 30, 2009 (this “Agreement”),
is entered into among COMVEST NATIONSHEALTH HOLDINGS, LLC, a Delaware limited liability company
(“Parent”), NATIONSHEALTH, INC., a Delaware corporation (the “Company”), UNITED
STATES PHARMACEUTICAL GROUP, L.L.C. d/b/a NATIONSHEALTH, a Delaware limited liability company
(“USPG”), NATIONSHEALTH HOLDINGS, L.L.C., a Florida limited liability company
(“Holdings”), DIABETES CARE & EDUCATION, INC., a South Carolina corporation
(“Diabetes”), and NATIONAL PHARMACEUTICALS AND MEDICAL PRODUCTS (USA), L.L.C., a Florida
limited liability company (“National” and together with the Company, USPG, Holdings and
Diabetes, “Borrower”).

RECITALS

     WHEREAS, on the date hereof, Parent, NationsHealth Acquisition Corp., a Delaware corporation
and a wholly owned Subsidiary of Parent (“Merger Sub”), and the Company have entered into
that certain Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which the
Merger Sub will merge with and into the Company (the “Merger”) and the separate corporate
existence of Merger Sub shall thereupon cease, and the Company shall be the surviving corporation
in the Merger;

     WHEREAS, in connection with the execution of the Merger Agreement, Borrower and Parent have
entered into this Agreement;

     WHEREAS, in connection with the execution of this Agreement, (a) Parent and the Senior Lender
have entered into the Senior Subordination Agreement dated the date hereof (the “Senior
Subordination Agreement”), (b) Parent and MHR have entered into the Bridge Loan Subordination
Agreement dated the date hereof (the “Bridge Loan Subordination Agreement” and collectively
with the Senior Subordination Agreement, the “Subordination Agreements”), (c) Borrower has
issued to Parent that certain 10% Secured Convertible Subordinated Promissory Note, dated the date
hereof, in the form attached hereto as Exhibit A (the “Note”), and (d) Borrower has
issued to Parent that certain warrant to purchase 1,000,000 shares of Company Common Stock at an
exercise price of $.01 per share of Company Common Stock, dated the date hereof, in the form
attached hereto as Exhibit B (the “Bridge Loan Warrant” and together with this
Agreement, the Note, and the Subordination Agreements, the “Bridge Loan Documents”);

     WHEREAS, the Senior Lender and Borrower are parties to a Third Amended and Restated Revolving
Credit, Term Loan and Security Agreement dated as of April 11, 2007 (as amended, modified, restated
or replaced, the “Senior Loan Agreement”) under which Senior Lender has made or may make
loans and other financial accommodations to Borrower;

     WHEREAS, on the date hereof, the Senior Lender has, among other things, consented to the
execution and delivery by Borrower of the Merger Agreement, this Agreement, and the Note pursuant
to a certain Consent, Waiver, Joinder and Eighth Amendment to Third Amended and Restated Revolving
Credit, Term Loan and Security Agreement dated April 30, 2009 (the “Eighth Amendment”);

 

 

     WHEREAS, pursuant to the Senior Loan Agreement, Borrower has granted in favor of Senior Lender
a first priority lien on and security interest in substantially all of the assets and property of
Borrower as security for their obligations to Senior Lender under the Senior Loan Agreement;

     WHEREAS, pursuant to this Agreement, Borrower has granted in favor of Parent a second priority
lien on and security interest in substantially all of Borrower’s assets and property as security
for the Obligations (as defined below);

     NOW, THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants and agreements contained in this Agreement, and intending to be legally bound hereby,
Parent and Borrower hereby agree as follows:

     1. Bridge Loan and Bridge Loan Warrant.

          (a) Bridge Loan. In reliance upon the representations, warranties, covenants and
agreements of the parties set forth herein and in the Merger Agreement, on the Closing Date (as
defined below), Parent shall lend to Borrower and Borrower shall borrow from Parent an aggregate
principal amount equal to $3,000,000 (the “Bridge Loan”) in immediately available funds,
which Bridge Loan shall be evidenced by the Note.

          (b) Terms of the Note. The terms and conditions of the Note are set forth in the
Note.

          (c) Promise to Pay; Manner of Payment. Borrower absolutely and unconditionally
promises to pay principal, interest and all other amounts payable hereunder, or under any other
Bridge Loan Document, without any right of rescission and without any deduction whatsoever,
including any deduction for any setoff, counterclaim or recoupment, and notwithstanding any damage
to, defects in or destruction of the Collateral (as defined herein) or any other event, including
obsolescence of any property or improvements. All payments made by Borrower shall be made, without
offset or counterclaim, in U.S. Dollars, when due in accordance with the terms of Section 2 of the
Note.

          (d) Interest Rate. Borrower shall pay interest to Parent on the unpaid principal
balance of the Bridge Loan in accordance with the terms of Section 1 of the Note.

          (e) Maturity Date. Borrower shall pay the outstanding principal balance of the Bridge
Loan, together with the balance of any unpaid and accrued interest, in accordance with the terms of
Section 2(b) of the Note.

          (f) Interest Savings Clause. If any interest payment (or other payment which is
deemed by law to be interest) due hereunder or due under the other Bridge Loan Documents is
determined to be in excess of the then legal maximum rate, then the portion of each interest
payment representing an amount in excess of the such legal maximum rate shall be deemed a payment
of principal and applied against the principal amount of the Note.

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          (g) Interest Payments on Bridge Loan. Payments of interest on the outstanding
principal balance of the Bridge Loan shall be made in accordance with Section 2(a) of the Note.

          (h) Use of Proceeds. Subject to the restrictions and limitations set forth in
Section 5, Borrower shall use the proceeds of the Note to pay a portion of the Transaction
Fees pursuant to Section 5.10 of the Merger Agreement, to fund Borrower’s general business
purposes, capital expenditures, growth capital, the Bridge Loan Liquidity Amount (as defined in the
Eighth Amendment), and working capital.

          (i) Forgiveness of Principal and other Obligations. Under the circumstances described
in, and subject to the terms and conditions set forth in, Section 4 of the Note, the outstanding
Obligations under the Note and the other Bridge Loan Documents owed by Borrower shall immediately
be forgiven, and any lien or security interest granted by Borrower to the Parent shall be deemed
released (without any further action of the Parent), and Borrower shall have no further obligations
under this Agreement, the Note and the other Bridge Loan Documents.

          (j) Subordination to Senior Lender. Any and all of the Obligations and the payment
and enforcement thereof under the Bridge Loan Documents shall be subordinated to (i) any and all of
the security interests the Senior Lender has or has a right to pursue with respect to any of
Borrowers’ assets, (ii) any and all obligations owed by Borrower to Senior Lender and (iii) the
contractual rights and remedies granted to the Senior Lender under the Senior Subordination
Agreement.

          (k) Subordination; Rank. Any and all of Borrower’s liabilities and obligations to MHR
shall be subordinated to any and all of the security interests Parent has or has a right to pursue
with respect to any of Borrowers’ assets upon the terms and conditions set forth in the Bridge Loan
Subordination Agreement. All Obligations (including the Note) shall be senior to all Indebtedness
of Borrower owed to MHR upon the terms and conditions set forth in the Bridge Loan Subordination
Agreement.

          (l) Consistency. If any provision of this Agreement is inconsistent with the terms of
the Note, the terms of the Note shall control.

          (m) Bridge Loan Warrant. On the Closing Date, the Company shall issue to Parent the
Bridge Loan Warrant.

     2. Grant of Security Interest; Collateral; Collateral Administration.

          (a) To secure the payment and performance in full of the Obligations, each Borrower hereby
grants to Parent a continuing security interest in and Lien upon, and pledges to Parent, all of its
right, title and interest in and to the following (collectively and each individually, the
“Collateral”), which security interest is intended to be a second priority security
interest and subject to the terms of the Senior Subordination Agreement:

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               (i) all of such Borrower’s tangible personal property, including without limitation all
present and future Inventory and Equipment (including items of equipment which are or become
Fixtures), now owned or hereafter acquired or arising;

               (ii) all of such Borrower’s intangible personal property, including without limitation all
present and future Accounts, contract rights, Permits, General Intangibles, Chattel Paper,
Documents, Instruments, Deposit Accounts, Investment Property, Letter-of-Credit Rights, Supporting
Obligations, rights to the payment of money or other forms of consideration of any kind, tax
refunds, insurance proceeds, now owned or hereafter acquired, and all intangible and tangible
personal property relating to or arising out of any of the foregoing;

               (iii) all of such Borrower’s present and future Government Contracts and rights thereunder and
the related Government Accounts and proceeds thereof, now or hereafter owned or acquired by such
Borrower; provided, however, that Parent shall not have a security interest in any
rights under any Government Contract of such Borrower or in the related Government Account where
the taking of such security interest is a violation of an express prohibition contained in the
Government Contract (for purposes of this limitation, the fact that a Government Contract is
subject to, or otherwise refers to, Title 31, § 203 or Title 41, § 15 of the United States Code
shall not be deemed an express prohibition against assignment thereof) or is prohibited by
applicable law, unless in any case consent is otherwise validly obtained; and

               (iv) any and all additions and accessions to any of the foregoing, and any and all
replacements, products and proceeds (including insurance proceeds) of any of the foregoing.

          (b) Notwithstanding the foregoing provisions of this Section 2, such grant of a
security interest shall not extend to, and the term “Collateral” shall not include, any General
Intangibles, now or hereafter held or owned by Borrower to the extent that (i) such General
Intangibles are not assignable or capable of being encumbered as a matter of law or under the terms
of any license or other agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law) without the consent of the licensor thereof
or other applicable party thereto, and (ii) such consent has not been obtained; provided,
however, that the foregoing grant of a security interest shall extend to, and the term
“Collateral” shall include, each of the following: (a) any General Intangible which is in the
nature of an Account or a right to the payment of money or a proceed of, or otherwise related to
the enforcement or collection of, any Account or right to the payment of money, or goods which are
the subject of any Account or right to the payment of money, (b) any and all proceeds of any
General Intangible that is otherwise excluded to the extent that the assignment, pledge or
encumbrance of such proceeds is not so restricted, and (c) upon obtaining the consent of any such
licensor or other applicable party with respect to any such otherwise excluded General Intangible,
such General Intangible as well as any and all proceeds thereof that might theretofore have been
excluded from such grant of a security interest and from the term “Collateral.”

          (c) Upon the execution and delivery of this Agreement, and upon the proper filing of the
necessary financing statements, recordation of the Collateral Patent, Trademark and Copyright
Assignment in the United States Patent and Trademark Office and/or the United States Copyright
Office without any further action, Parent will have a good, valid and perfected second
priority Lien and security interest in the Collateral, subject to no transfer or other
restrictions or Liens of any kind in favor of any other Person except Permitted Indebtedness
secured by Permitted Liens or otherwise approved by Parent. No financing statement relating to any
of the Collateral is on file in any public office except those (i) on behalf of Parent, (ii) in
connection with Permitted Liens and/or (iii) those being terminated.

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          (d) All Collateral (except Deposit Accounts) will at all times be kept by Borrower at the
locations set forth on Schedule 5.18B to the Senior Loan Agreement and shall not, without
thirty (30) calendar days prior written notice to Parent, be moved therefrom unless Parent has
entered into the necessary documents to perfect and enforce its security interest therein at such
new location, and in any case shall not be moved outside the continental United States.

          (e) Subject to the terms of the Senior Subordination Agreement, following an occurrence and
during the continuance of an Event of Default, any of Parent’s officers, employees, representatives
or agents shall have the right, at any time during normal business hours, in the name of Parent,
any designee of Parent or Borrower, to verify the validity, amount or any other matter relating to
any Accounts or Inventory of Borrower. Borrower shall cooperate fully with Parent in an effort to
facilitate and promptly conclude such verification process.

          (f) To expedite collection, subject to the terms of the Senior Subordination Agreement,
Borrower shall endeavor in the first instance to make collection of its Accounts for Parent.
Parent shall have the right at all times after the occurrence and during the continuance of an
Event of Default to notify (i) Account Debtors owing Accounts to Borrower other than
Medicaid/Medicare Account Debtors that their Accounts have been assigned to Parent and to collect
such Accounts directly in its own name and to charge collection costs and expenses, including
reasonable attorney’s fees, to Borrower, and (ii) Medicaid/Medicare Account Debtors that Borrower
has waived any and all defenses and counterclaims it may have or could interpose in any such action
or procedure brought by Parent to obtain a court order recognizing the collateral assignment or
security interest and lien of Parent in and to any Account or other Collateral and that Parent is
seeking or may seek to obtain a court order recognizing the collateral assignment or security
interest and lien of Parent in and to all Accounts and other Collateral payable by
Medicaid/Medicare Account Debtors.

          (g) As and when determined by Parent in its sole discretion but not more often than two (2)
times per year prior to the occurrence and continuance of an Event of Default, Parent will perform
the searches described in clauses (i) and (ii) below against Borrower (the results of which are to
be consistent with Borrower’s representations and warranties under this Agreement), all at
Borrower’s expense: (i) UCC searches with the Secretary of State of the jurisdiction of
organization of each Borrower and Guarantor and the Secretary of State and local filing offices of
each jurisdiction where each Borrower and/or any Guarantors maintain their respective executive
offices, a place of business or assets; (ii) lien searches with the United States Patent and
Trademark Office and the United States Copyright Office; and (iii) judgment, federal tax lien and
corporate and partnership tax lien searches, in each jurisdiction searched under clause (i) above.

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          (h) Subject to the terms of the Senior Subordination Agreement, Borrower shall following the
occurrence and continuance of an Event of Default (i) provide prompt written notice to its current
bank to transfer all items, collections and remittances to the Concentration Account, (ii) provide
prompt written notice to each Account Debtor (other than Medicaid/Medicare Account Debtors) that
Parent has been granted a lien and security interest in, upon and to all Accounts applicable to
such Account Debtor, and Borrower hereby authorizes Parent, upon any failure to send such notices
and directions within ten (10) calendar days after the date of this Agreement (or ten (10) calendar
days after the Person becomes an Account Debtor), to send any and all similar notices and
directions to such Account Debtors, and (iii) do anything further that may be lawfully required by
Parent to create and perfect Parent’s lien on any collateral and effectuate the intentions of the
Loan Documents. At Parent’s request, subject to the terms of the Senior Subordination Agreement,
Borrower shall immediately deliver or make arrangements to deliver to Parent all items for which
Parent must receive possession to obtain a perfected security interest and all notes, certificates,
and documents of title, Chattel Paper, warehouse receipts, Instruments, and any other similar
instruments constituting Collateral.

          (i) Subject to the terms of the Senior Subordination Agreement, Parent is hereby irrevocably
made, constituted and appointed the true and lawful attorney for Borrower (without requiring Parent
to act as such) with full power of substitution to do the following after the occurrence and
continuance of an Event of Default: (i) endorse the name of any such Person upon any and all
checks, drafts, money orders, and other instruments for the payment of money that are payable to
such Person and constitute collections on its or their Accounts; (ii) execute in the name of such
Person any financing statements, schedules, assignments, instruments, documents, and statements
that it is or they or are obligated to give Parent under any of the Loan Documents; and (iii) do
such other and further acts and deeds in the name of such Person that Parent may deem necessary or
desirable to enforce any Account or other Collateral or to perfect Parent’s security interest or
lien in any Collateral.

     3. Closing; Conditions to Closing; and Deliveries.

          (a) Closing. The closing of the Bridge Loan (the “Closing”) shall take place
simultaneously with the execution of the Merger Agreement on the date hereof subject to the
satisfaction or waiver of the conditions set forth in Section 3(b), other than those
conditions that by their nature are to be satisfied at the Closing at such time at the offices of
McDermott, Will & Emery, 201 South Biscayne Boulevard, Suite 2200, Miami, Florida 33131, unless
another time, date or place is agreed to in writing by the parties hereto (the “Closing
Date”).

          (b) Conditions to Closing. The obligations of Parent to make the Bridge Loan is
subject to satisfaction (or wavier, if permissible under applicable Law) on or prior to the Closing
Date of the following conditions:

               (i) Each of the representations and warranties made by Borrower in Section 4 shall be
true and correct in all material respects on and as of the Closing Date (or, if given as of a
specific date, at and as of such date);

               (ii) Borrower shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date;

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          (iii) Borrower shall have obtained all applicable approvals and consents required to
consummate the transactions contemplated by this Agreement, the Note, the Bridge Loan Warrant, and
the other Bridge Loan Documents, and shall have provided Parent with a true and correct copy of
such approvals and consents;

          (iv) Each Borrower shall have executed and delivered the Bridge Loan Documents (including the
Note and the Bridge Loan Warrant) to which it is a party;

          (v) The Company shall have executed and delivered the Merger Agreement;

          (vi) No temporary restraining order, preliminary or permanent injunction or other judgment or
order issued by any Governmental Authority or other Law, rule, legal restraint or prohibition shall
be in effect preventing or rendering illegal the consummation of the Bridge Loan;

          (vii) Parent shall have received (i) the Charter and Good Standing Documents, all in form and
substance acceptable to Parent and (ii) a certificate of the corporate secretary or assistant
secretary of each Borrower dated the Closing Date, as to the incumbency and signature of the
Persons executing this Agreement, in form and substance acceptable to Parent; and

          (viii) The Company shall file with the Secretary of State of the State of Delaware a
Certificate of Designation in the form attached hereto as Exhibit C (the “Certificate
of Designation”), pursuant to which the Company shall create the Series A-1 Convertible
Preferred Stock (the “Series A-1 Preferred Stock”).

          (c) Delivery of Bridge Loan Documents and Bridge Loan Proceeds. Subject to the terms
and conditions of this Agreement, on the Closing Date, (i) Borrower shall deliver to Parent each of
the Bridge Loan Documents to which it is a party, (ii) Parent shall deliver to Borrower each of the
Bridge Loan Documents to which it is a party, (iii) Borrower and Parent shall execute a funds flow
and closing statement with respect to funding the Bridge Loan and to paying the fees, costs and
expenses related thereto, including, but not limited to, Parent’s management fee (not to exceed
three percent (3%) of the principal amount of the loan made hereunder), and the reasonable fees and
expenses of Borrowers’ and Parent’s attorneys, accountants, consultants, financial advisors, and
investment bankers (the “Funds Flow and Closing Statement”), (iv) the Company shall file
the Certificate of Designation with the Secretary of State of the State of Delaware, and (v) Parent
shall loan and deliver to Borrower an amount equal to $3,000,000 less the fees, costs and expenses
set forth in the Funds Flow and Closing Statement by wire transfer of immediately available funds
to an account or accounts designated in writing by Borrower.

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     4. Representations and Warranties of Borrower. Each Borrower, jointly and severally,
hereby represents and warrants to Parent as follows:

          (a) Authority. The execution, delivery and performance by each Borrower of the Bridge
Loan Documents to which such Borrower is a party have been duly authorized and approved by its
Board of Directors (or similar governing body), and no other corporate or limited
liability company action on the part of any Borrower is necessary to authorize the execution,
delivery and performance by such Borrower of the Bridge Loan Documents to which it is a party which
has not been taken. Each of the Bridge Loan Documents to which a Borrower is a party has been duly
executed and delivered by such Borrower and, assuming due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms, except for the Bankruptcy and Equity
Exception.

          (b) Consent. Except as set forth in the Company Disclosure Schedule, the execution,
delivery and performance of the Bridge Loan Documents by each Borrower to which such Borrower is a
party and the consummation by each Borrower of the transactions contemplated by this Agreement and
the other Bridge Loan Documents to which such Borrower is a party do not and will not require any
consent, approval, or other authorization of, or filing with, or notification to any Governmental
Authority by any Borrower which has not been obtained or made.

          (c) Representations and Warranties in Merger Agreement. The representations and
warranties of the Company contained in Article 3 of the Merger Agreement (including the exceptions
to such representations and warranties set forth therein) are true and correct and are hereby
incorporated herein and made a part hereof.

     5. Affirmative Covenants of Borrower. Each Borrower, jointly and severally, covenants
and agrees that, following the termination of the Merger Agreement, until full performance and
satisfaction, and indefeasible payment in full in cash, of all the Obligations, or forgiveness of
any and all outstanding Obligations pursuant to Section 1(i) following the termination of
the Merger Agreement:(a) Financial Statements, Financial Reports and Other Information.

               (i) Financial Reports. Borrower shall furnish to Parent (i) as soon as available and
in any event within ninety (90) calendar days after the end of each fiscal year of Borrower (or
such earlier date required by the laws, regulations and rules of the Securities and Exchange
Commission), audited annual consolidated financial statements of Borrower, including the notes
thereto, consisting of a consolidated balance sheet at the end of such completed fiscal year and
the related consolidated statements of income, retained earnings, cash flows and owners’ equity for
such completed fiscal year, which financial statements shall be prepared and certified without
qualification by an independent certified public accounting firm satisfactory to Parent and
accompanied by related management letters, if available, and (ii) as soon as available and in any
event within thirty (30) calendar days after the end of each calendar month, unaudited consolidated
financial statements of Borrower consisting of a balance sheet and statements of income, retained
earnings, cash flows and owners’ equity as of the end of the immediately preceding calendar month.
All such financial statements shall be prepared in accordance with GAAP consistently applied with
prior periods.

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               (ii) Other Materials. Borrower shall furnish to Parent as soon as available, and in
any event within ten (10) calendar days after the preparation or issuance thereof or at such other
time as set forth below (1) copies of such financial statements (other than those required to be
delivered pursuant to Section 5(a)(i)) prepared by, for or on behalf of Borrower
and any other notes, reports and other materials related thereto, including, without
limitation, any pro forma financial statements, (2) any reports, returns, information, notices and
other materials that Borrower shall send to its stockholders, members, partners or other equity
owners at any time, (3) all Medicare and Medicaid cost reports and other documents and materials
filed by Borrower and any other reports, materials or other information regarding or otherwise
relating to Medicaid or Medicare prepared by, for or on behalf of Borrower, including, without
limitation, (A) copies of licenses and permits required by any applicable Law or Governmental
Authority for the operation of its business, (B) Medicare and Medicaid provider numbers and
agreements, (C) state surveys pertaining to any healthcare facility operated, owned or leased by
Borrower, and (D) participating agreements relating to medical plans, (4) (A) within thirty (30)
calendar days following the request of Parent, a summary report of the status of all payments,
denials and appeals of all Medicare and/or Medicaid Accounts and accounts receivable and account
payable aging schedule, and (B), within thirty (30) calendar days following the request of Parent,
a sales and collection report for the most recent calendar month, including a report of sales,
credits issued and collections received, all such reports showing a reconciliation to the amounts
reported in the monthly financial statements, (5) promptly upon receipt thereof, copies of any
reports submitted to Borrower by its independent accountants in connection with any interim audit
of the books of Borrower and copies of each management control letter provided by such independent
accountants, and (6) such additional information, documents, statements, reports and other
materials as Parent may reasonably request with respect to Parent’s rights and interests granted
under the Bridge Loan Documents.

          (b) Operating Budget. Borrower shall furnish to Parent on or prior to the date hereof
and for each fiscal year of Borrower thereafter not later than the earlier of (i) thirty (30)
calendar days after the end of each fiscal year or (ii) thirty (30) calendar days after the same is
available, consolidated month by month projected operating budgets, annual projections, profit and
loss statements, balance sheets and cash flow reports of and for Borrower for such upcoming fiscal
year (including an income statement for each month and a balance sheet as at the end of the last
month in each fiscal quarter), in each case prepared in accordance with GAAP consistently applied
with prior periods.

          (c) Payment of Obligations. Borrower shall make full and timely indefeasible payment
in cash of the principal of and interest on the Bridge Loan and all other Obligations in accordance
with the terms of the Note.

          (d) True Books. Borrower shall (i) keep true, complete and accurate books of record
and account in accordance with commercially reasonable business practices in which true and correct
entries are made of all of its dealings and transactions in all material respects; and (ii) set up
and maintain on its books such reserves as may be required by GAAP with respect to doubtful
accounts and all Taxes, assessments, charges, levies and claims and with respect to its business,
and include such reserves in its quarterly as well as year end financial statements.

          (e) Inspection; Periodic Audits. Borrower shall permit the representatives of Parent,
at the expense of Borrower, from time to time during normal business hours upon reasonable notice,
to (i) visit and inspect any of its offices or properties or any other place where the Collateral
is located to inspect the Collateral and/or examine or audit all of its books of account, records,
reports and other papers (but not more often than four (4) times per year so
long as no Default or Event of Default exists), (ii) make copies and extracts therefrom, and
(iii) discuss its business, operations, prospects, properties, assets, liabilities, condition
and/or Accounts and Inventory (as such term is defined in the UCC) with its officers and
independent public accountants (and by this provision such officers and accountants are authorized
to discuss the foregoing).

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          (f) Collateral Documents; Security Interest in Collateral. Borrower shall (i)
execute, obtain, deliver, file, register and/or record any and all financing statements,
continuation statements, instruments and other documents, or cause the execution, filing,
registration, recording or delivery of any and all of the foregoing, that are necessary or required
under Law or reasonably requested by Parent to be executed, filed, registered, obtained, delivered
or recorded to create, maintain, perfect, preserve, validate or otherwise protect the pledge of the
Collateral to Parent and Parent’s perfected Lien on the Collateral (and Borrower irrevocably grants
Parent the right, at Parent’s option, to file any or all of the foregoing), (ii) within two (2)
Business Days of learning thereof, report to Parent any reclamation, return or repossession of
goods in excess of $10,000 (individually or in the aggregate), (iii) defend the Collateral and
Parent’s perfected Lien thereon against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to Parent, and pay all reasonable costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses) in connection with such
defense, which may at Parent’s discretion be added to the Obligations.

          (g) Further Assurances; Post Closing. At Borrower’s cost and expense, Borrower shall
take such further actions, obtain such consents and approvals and duly execute and deliver such
further agreements, assignments, instructions or documents as Parent may reasonably request with
respect to the purposes, terms and conditions of the Bridge Loan Documents and the consummation of
the transactions contemplated thereby.

          (h) Payment of Indebtedness. Except as otherwise provided in the Bridge Loan
Documents, Borrower shall pay, discharge or otherwise satisfy at or before maturity (subject to
applicable grace periods and, in the case of trade payables, to ordinary course payment practices)
all of its material obligations and liabilities, except when the amount or validity thereof is
being contested in good faith by appropriate proceedings.

          (i) Liens. If any Liens exist, other than any Permitted Liens, Borrower immediately
shall take all actions and execute and deliver all documents and instruments necessary to release
and terminate such Liens.

          (j) Use of Proceeds. Borrower shall use the proceeds from the Bridge Loan only for
the purposes set forth in Section 1(h).

          (k) Taxes and Other Charges.

               (i) All payments to Parent made under any Bridge Loan Document shall be free and clear of and
without deduction for all Taxes, levies, imposts, deductions, assessments, charges or withholdings,
and all liabilities with respect thereto of any nature whatsoever, excluding Taxes to the extent
imposed on Parent’s net income or franchise. If Borrower shall be required by Law to deduct any
such amounts from or in respect of any sum
payable under any Bridge Loan Document to Parent, then the sum payable to Parent shall be
increased as may be necessary so that, after making all required deductions, Parent receives an
amount equal to the sum it would have received had no such deductions been made. If Parent becomes
entitled to claim any additional amounts pursuant to this Section 5(k)(i) it shall promptly
(but in any event within ninety (90) days of becoming aware thereof) notify Borrower of the event
by reason of which Parent has become so entitled and a detailed calculation thereof, and each such
notice of additional amounts payable pursuant to this Section 5(k)(i) submitted by Parent
to Borrower shall, absent manifest error, be final, conclusive and binding for all purposes.

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               (ii) Borrower shall promptly, and in any event within five (5) Business Days after Borrower or
any Senior Manager obtains knowledge thereof, notify Parent in writing of any oral or written
communication from the IRS or otherwise with respect to any (i) Tax investigations, relating to
Borrower directly, or relating to any consolidated Tax Return which was filed on behalf of
Borrower, (ii) notices of tax assessment or possible tax assessment, (iii) years that are
designated open pending tax examination or audit, and (iv) information that could give rise to an
IRS tax liability or assessment.

     6. Negative Covenants. Each Borrower, jointly and severally, covenants and agrees
that, until full performance and satisfaction, and indefeasible payment in full in cash, of all of
the Obligations and termination of this Agreement or forgiveness of any and all outstanding
Obligations under the Bridge Loan Documents pursuant to Section 1(h):

          (a) Charter Modification. Borrower shall not (i) amend, modify, restate or change its
certificate of incorporation or formation or bylaws or similar charter documents or the Certificate
of Designation.

          (b) Investments; New Facilities or Collateral; Subsidiaries. Borrower, directly or
indirectly, shall not (i) purchase, own, hold, invest in or otherwise acquire obligations or stock
or securities of, or any other interest in, or all or substantially all of the assets of, any
Person or any joint venture, or (ii) make or permit to exist any loans, advances or guarantees to
or for the benefit of any Person or assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable for or upon or incur any obligation of any other Person (other than those
created by the Loan Documents and Permitted Indebtedness and other than (A) trade credit extended
in the ordinary course of business, (B) advances for business travel and similar temporary advances
made in the ordinary course of business to officers, directors and employees, and (C) the
endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business). Borrower, directly or indirectly, shall not purchase, own, operate,
hold, invest in or otherwise acquire any facility, property or assets or allow the warehousing,
location or storage of any Collateral other than at the locations set forth on Schedule 5.18B of
the Senior Loan Agreement unless Borrower shall provide to Parent at least thirty (30) Business
Days prior written notice. Borrower shall have no Subsidiaries other than those Subsidiaries, if
any, existing on the Closing Date and set forth in Schedule 5.3 of the Senior Loan Agreement.

          Notwithstanding any provision of this Section 6(b) to the contrary, Borrower may make a
Permitted Acquisition to the extent permitted by the Senior Loan Agreement.

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          (c) Transactions with Affiliates. Borrower shall not enter into or consummate any
transaction of any kind with (i) any of its Affiliates or (ii) any Guarantor or any of their
respective Affiliates other than: (a) salary, bonus, severance, employee stock option and other
compensation and employment arrangements with directors or officers in the ordinary course of
business, provided, that no payment of any bonus or severance shall be permitted if a Default or
Event of Default has occurred and remains in effect or would be caused by or result from such
payment and provided further that, regardless of whether a Default or Event of Default shall have
occurred and remain in effect or would be caused by or result from such payment, bonus and
severance payments may be paid from the proceeds of Qualified Equity Investments specifically
allocated for such purposes, (b) Distributions and dividends (including any Management Fee Payment)
permitted pursuant to Section 7.5 of the Senior Loan Agreement, (c) transactions with Parent or any
Affiliate of Parent, (d) payments permitted under and pursuant to written agreements entered into
by and between Borrower and one or more of its Affiliates that both (A) reflect and constitute
transactions on overall terms at least as favorable to Borrower as would be the case in an
arm’s-length transaction between unrelated parties of equal bargaining power, and (B) are subject
to such terms and conditions as determined by Parent in its sole discretion; provided, that
notwithstanding the foregoing clauses (A) and (B) above Borrower shall not (Y) enter into or
consummate any transaction or agreement pursuant to which it becomes a party to any mortgage, note,
indenture or guarantee evidencing any Indebtedness of any of its Affiliates or otherwise to become
responsible or liable, as a guarantor, surety or otherwise, pursuant to an agreement for any
Indebtedness of any such Affiliate, or (Z) make any payment to any of its Affiliates in excess of
$10,000 without the prior written consent of Parent, (e) additional Qualified Equity Investments,
and (f) subject to the Bridge Loan Subordination Agreement, transactions with MHR contemplated by
the MHR Subordinated Note, the Investment Unit Purchase Agreement, dated as of February 28, 2005,
by and among MHR and Borrower and the other “Transaction Documents” as defined therein, the
Acknowledgment, dated as of April 15, 2009, by and among MHR and Borrower, each as amended, and
transactions with MHR contemplated by the Limited Waiver and Consent to Convertible Secured Notes
dated April 30, 2009 by and among Borrower, MHR and the other parties thereto.

          (d) Transfer of Assets. Notwithstanding any other provision of this Agreement or any
other Bridge Loan Document, Borrower shall not sell, lease, transfer, assign or otherwise dispose
of any interest in any properties or assets (other than obsolete equipment or excess equipment no
longer needed in the conduct of the business in the ordinary course of business and sales of
Inventory in the ordinary course of business), or agree to do any of the foregoing at any future
time, unless permitted by the terms of the Senior Loan Agreement.

     7. Events of Default. The occurrence of any one or more of the following shall
constitute an “Event of Default”:

          (a) Borrower shall fail to pay any amount on the Obligations or provided for in any Bridge
Loan Document when due (whether on any payment date, at maturity, by reason of acceleration, by
notice of intention to prepay, by required prepayment or otherwise);

          (b) any representation, statement or warranty made by Borrower in any Bridge Loan Document
shall not be true and correct in any material respects or shall have been false or misleading in
any material respect on the date when made or deemed to have been made
(except to the extent already qualified by materiality, in which case it shall be true and
correct in all respects and shall not be false or misleading in any respect);

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          (c) Borrower shall be in violation, breach or default of, or shall fail to perform, observe or
comply with any covenant, obligation or agreement set forth in, any Bridge Loan Document and such
violation, breach, default or failure shall not be cured within the applicable period set forth in
the applicable Bridge Loan Document; provided that, with respect to the affirmative
covenants set forth in Section 5, there shall be a fifteen (15) calendar day cure period
commencing from receipt by Borrower of written notice of such breach, default, violation or
failure;

          (d) (i) any of the Bridge Loan Documents ceases to be in full force and effect, or (ii) any
Lien created thereunder ceases to constitute a valid perfected second priority Lien on the
Collateral in accordance with the terms thereof (other than as a result of the action or inaction
of Parent), or Parent ceases to have a valid perfected second priority security interest in any of
the Collateral;

          (e) one or more tax assessments, judgments or decrees is rendered against Borrower not covered
by insurance of a financially sound and reputable insurer that has not declined coverage in an
amount in excess of $50,000 individually or $100,000 in the aggregate, which is/are not satisfied,
stayed, vacated or discharged of record within thirty (30) calendar days of being rendered;

          (f) (i) any default occurs, which is not cured or waived, (x) in the payment of any amount
with respect to any Indebtedness of Borrower (other than the Obligations) of Borrower in excess of
$100,000 or (y) in the performance, observance or fulfillment of any provision contained in any
agreement, contract, document or instrument to which Borrower is a party or to which any of their
properties or assets are subject or bound under or pursuant to which any Indebtedness was issued,
created, assumed, guaranteed or secured and such default continues for more than any applicable
grace period or permits the holder of any Indebtedness to accelerate the maturity thereof, which
breach or violation is not waived or otherwise cured hereunder or under the document(s) evidencing
such Indebtedness, or (ii) any Indebtedness of Borrower is declared to be due and payable or is
required to be prepaid (other than by a regularly scheduled payment) prior to the stated maturity
thereof, or any obligation of Borrower for the payment of Indebtedness (other than the Obligations)
is not paid when due or within any applicable grace period, or any such obligation becomes or is
declared to be due and payable before the expressed maturity thereof, or there occurs an event
which, with the giving of notice or lapse of time, or both, would cause any such obligation to
become, or allow any such obligation to be declared to be, due and payable, which breach or
violation is not waived or otherwise cured hereunder or under the document(s) evidencing such
Indebtedness;

          (g) Borrower shall (i) be unable to pay its debts generally as they become due, (ii) have
total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) that
exceed its assets, (iii) have an unreasonably small capital base with which to engage in its
anticipated business, (iv) file a petition under any insolvency statute, (v) make a general
assignment for the benefit of its creditors, (vi) commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or any
substantial part of its property, or (vii) file a petition seeking reorganization or
liquidation or similar relief under the Bankruptcy Code of the United States of America and all
other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization or similar debtor relief laws from time to time in effect affecting the
rights of creditors generally, as amended from time to time (“Debtor Relief Law”);

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          (h) (i) a court of competent jurisdiction shall (1) enter an order, judgment or decree
appointing a custodian, receiver, trustee, liquidator or conservator of Borrower, which shall
continue unstayed and in effect for a period of thirty (30) calendar days, (2) approve a petition
filed against Borrower seeking reorganization, liquidation or similar relief under the any Debtor
Relief Law or any other applicable law or statute, which is not dismissed within thirty (30)
calendar days, or (3) under the provisions of any Debtor Relief Law or other applicable law or
statute, assume custody or control of Borrower which is not irrevocably relinquished within thirty
(30) calendar days, or (ii) there is commenced against Borrower any proceeding or petition seeking
reorganization, liquidation or similar relief under any Debtor Relief Law or any other applicable
Law and either (1) any such proceeding or petition is not unconditionally dismissed within thirty
(30) calendar days after the date of commencement, or (2) Borrower takes any action to indicate its
approval of or consent to any such proceeding or petition;

          (i) (i) any Change of Control (as defined in the Senior Loan Agreement) occurs or any
agreement or commitment to cause or that may result in any such Change of Control is entered into,
(ii) a Material Adverse Effect occurs or is reasonably expected to occur, or (iii) Borrower ceases
a material portion of its business operations as currently conducted;

          (j) an Event of Default occurs under any other Bridge Loan Document;

          (k) uninsured damage to, or loss, theft or destruction of, any portion of the Collateral
occurs that exceeds $100,000 in the aggregate;

          (l) the issuance of any process for levy, attachment or garnishment or execution upon or prior
to any judgment against Borrower or any of their properties or assets which is/are not satisfied,
stayed, vacated or discharged of record within thirty (30) calendar days of being issued;

then, and in any such event, notwithstanding any other provision of any Bridge Loan Document,
Parent may, without notice or demand, declare all or any of the Bridge Loan, all interest thereon
and all other Obligations to be due and payable immediately (except in the case of an Event of
Default under Section 7(d), (g), or (h), in which event all of the foregoing shall automatically
and without further act by Parent be due and payable), without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by Borrower; provided,
however, that Parent shall have the right to convert the outstanding Obligations under this
Agreement and the Note in accordance with Section 6(b) of the Note.

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     8. RIGHTS AND REMEDIES AFTER DEFAULT

          (a) In addition to the acceleration provisions set forth in Section 7 above, upon the
occurrence and continuation of an Event of Default, Parent shall have the right to exercise any and
all rights, options and remedies provided for in the Bridge Loan Documents,
under the UCC or at law or in equity, including, without limitation, the right to (i) apply
any property of any Borrower held by Parent to reduce the Obligations, (ii) foreclose the Liens
created hereunder, (iii) realize upon, take possession of and/or sell any Collateral or securities
pledged (other than Collateral consisting of Accounts owed or owing by Medicaid/Medicare Account
Debtors absent a court order or compliance with applicable law) with or without judicial process
(subject, in the case of the Diabetes Customer Lists only, to the provisions of this subsection
(a)), (iv) exercise all rights and powers with respect to the Collateral as any Borrower, as
applicable, might exercise (other than with respect to Collateral consisting of Accounts owed or
owing by Medicaid/Medicare Account Debtors absent a court order or compliance with applicable law),
(v) collect and send notices regarding the Collateral (other than with respect to Collateral
consisting of Accounts owed or owing by Medicaid/Medicare Account Debtors absent a court order or
compliance with applicable law), with or without judicial process, (vi) by its own means or with
judicial assistance, enter any premises at which Collateral and/or pledged securities are located,
or render any of the foregoing unusable or dispose of the Collateral and/or pledged securities on
such premises without any liability for rent, storage, utilities, or other sums, and no Borrower
shall resist or interfere with such action, and/or (vii) at Borrower’s expense, require that all or
any part of the Collateral be assembled and made available to Parent at any place designated by
Parent. Borrower agrees that notice received by it at least ten (10) calendar days before the time
of any intended public sale, or the time after which any private sale or other disposition of
Collateral (fifteen (15) calendar days in the case of any intended public sale, or the time after
which any private sale or other disposition of the Diabetes Customer List) is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted by applicable law,
any perishable Collateral which threatens to speedily decline in value or which is sold on a
recognized market may be sold immediately by Parent without prior notice to Borrower. At any sale
or disposition of Collateral or securities pledged, Parent may (to the extent permitted by
applicable law) purchase all or any part thereof free from any right of redemption by any Borrower
which right is hereby waived and released. Borrower covenants and agrees not to, and not to permit
or cause any of its Subsidiaries to, interfere with or impose any obstacle to Parent’s exercise of
its rights and remedies with respect to the Collateral so long as such rights and remedies are
exercised in a commercially reasonable manner and otherwise in accordance with applicable laws.
Parent, in dealing with or disposing of the Collateral or any part thereof, shall not be required
to give priority or preference to any item of Collateral or otherwise to marshal assets or to take
possession or sell any Collateral with judicial process.

          (b) In addition to any other rights, options and remedies Parent has under the Loan Documents,
the UCC, at law or in equity, all dividends, interest, rents, issues, profits, fees, revenues,
income and other proceeds collected or received from collecting, holding, managing, renting,
selling, or otherwise disposing of all or any part of the Collateral or any proceeds thereof upon
exercise of its remedies hereunder shall be applied in the following order of priority: (i) first,
to the payment of all costs and expenses of such collection, storage, lease, holding, operation,
management, sale, disposition or delivery and of conducting Borrower’s business and of maintenance,
repairs, replacements, alterations, additions and improvements of or to the Collateral, and to the
payment of all sums which Parent may be required or may elect to pay, if any, for taxes,
assessments, insurance and other charges upon the Collateral or any part thereof, and all other
payments that Parent may be required or authorized to make under any provision of this Agreement
(including, without limitation, in each such case, in-house documentation and diligence fees and
legal expenses, search, audit, recording, professional and filing fees and
expenses and reasonable attorneys’ fees and all expenses, liabilities and advances made or
incurred in connection therewith); (ii) second, to the payment of all Obligations as provided
herein; (iii) third, to the satisfaction of Indebtedness secured by any subordinate security
interest of record in the Collateral if written notification of demand therefor is received before
distribution of the proceeds is completed, provided, that, if requested by Parent, the holder of a
subordinate security interest shall furnish reasonable proof of its interest, and unless it does
so, Parent need not address its claims; and (iv) fourth, to the payment of any surplus then
remaining to Borrower, unless otherwise provided by law or directed by a court of competent
jurisdiction, provided that Borrower shall be liable for any deficiency if such proceeds are
insufficient to satisfy the Obligations or any of the other items referred to in this section.

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          (c) Parent shall have the right in its sole discretion to determine which rights, Liens and/or
remedies Parent may at any time pursue, relinquish, subordinate or modify, and such determination
will not in any way modify or affect any of Parent’s rights, Liens or remedies under any Bridge
Loan Document, applicable law or equity. The enumeration of any rights and remedies in any Bridge
Loan Document is not intended to be exhaustive, and all rights and remedies of Parent described in
any Bridge Loan Document are cumulative and are not alternative to or exclusive of any other rights
or remedies which Parent otherwise may have. The partial or complete exercise of any right or
remedy shall not preclude any other further exercise of such or any other right or remedy.

     9. Definitions. Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms, as the case may be, in the Merger Agreement, the Senior Loan Agreement, or
in Article 9 of the UCC in effect on the date hereof to the extent the same are used or defined
therein. 

     10. Registration, Exchange, Substitution of Note

          (a) Registration of Note. Borrower shall keep at its principal executive office a
register for the registration and registration of transfers of the Note. The name and address of
the holder of the Note, each transfer thereof and the name and address of each transferee of the
Note shall be registered in such register. Prior to due presentment for registration of transfer,
the Person in whose name the Note shall be registered shall be deemed and treated as the owner and
holder thereof for all purposes hereof, and Borrower shall not be affected by any notice or
knowledge to the contrary.

          (b) Transfer and Exchange of Note. Upon surrender of the Note to Borrower at the
address and to the attention of the designated officer (as specified in Section 11(h) below), for
registration of transfer or exchange (and in the case of a surrender for registration of transfer
accompanied by a written instrument of transfer duly executed by the registered holder of such Note
or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address
and other information for notices of each transferee of such Note or part thereof), within ten (10)
Business Days thereafter, Borrower shall execute and deliver, at Borrower’s expense, one or more
new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in the
form of the Note. Each such new Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note.

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          (c) Replacement of Note. Upon receipt by Borrower at the address and to the attention
of the designated officer (as specified in Section 11(h) below) of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of the Note and of
indemnity or security reasonably satisfactory to it, upon surrender and cancellation thereof,
within ten (10) Business Days thereafter, Borrower at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note.

     11. Miscellaneous.

          (a) Waivers. Except as expressly provided for herein, Borrower hereby waives setoff,
counterclaim, demand, presentment, protest, all defenses with respect to any and all instruments
and all notices and demands of any description, and the pleading of any statute of limitations as a
defense to any demand under any Bridge Loan Document. With respect to any action hereunder, Parent
conclusively may rely upon, and shall incur no liability to Borrower in acting upon, any request or
other communication that Parent reasonably believes to have been given or made by a person
authorized on Borrower’s behalf. In each such case, Borrower hereby waives the right to dispute
Parent’s action based upon such request or other communication, absent manifest error.

          (b) Delay; No Waiver of Defaults. No course of action or dealing, renewal, release or
extension of any provision of any Bridge Loan Document, or single or partial exercise of any such
provision, or delay, failure or omission on Parent’s part in enforcing any such provision shall
affect the liability of Borrower or operate as a waiver of such provision or affect the liability
of Borrower or preclude any other or further exercise of such provision. No waiver by any party to
any Bridge Loan Document of any one or more defaults by any other party in the performance of any
of the provisions of any Bridge Loan Document shall operate or be construed as a waiver of any
future default, whether of a like or different nature, and each such waiver shall be limited solely
to the express terms and provisions of such waiver. Notwithstanding any other provision of any
Bridge Loan Document, by executing this Agreement on or after the date hereof, Parent does not
waive any breach of any representation or warranty under any Bridge Loan Document, and all of
Parent’s claims and rights resulting from any such breach or misrepresentation are specifically
reserved.

          (c) Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING UNDER THE BRIDGE LOAN DOCUMENTS OR IN ANY WAY
CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH RESPECT TO THE BRIDGE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF
THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY.

17

 

          (d) Indemnity. Borrower shall indemnify Parent, its Affiliates and its and their
respective managers, members, officers, employees, Affiliates, agents, representatives, successors,
assigns, accountants and attorneys (collectively, the “Indemnified Persons”) from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever (including, without
limitation, reasonable fees and disbursements of counsel and, without duplication, in-house
documentation and diligence fees and legal expenses) which may be imposed on, incurred by or
asserted against any Indemnified Person with respect to or arising out of, or in any litigation,
proceeding or investigation instituted or conducted by any Person with respect to any aspect of, or
any transaction contemplated by or referred to in, or any matter related to, any Bridge Loan
Document or any agreement, document or transaction contemplated thereby, whether or not such
Indemnified Person is a party thereto, except to the extent that any of the foregoing arises out of
the gross negligence or willful misconduct of such Indemnified Person. If any Indemnified Person
uses in-house counsel for any purpose for which Borrower is responsible to pay or indemnify,
Borrower expressly agrees that its indemnification obligations include reasonable charges for such
work commensurate with the fees that would otherwise be charged by outside legal counsel selected
by such Indemnified Person in its sole discretion for the work performed. Parent agrees to give
Borrower reasonable notice of any event of which Parent becomes aware for which indemnification may
be required under this Section 10(e), and Parent may elect (but is not obligated) to direct the
defense thereof, provided that the selection of counsel shall be subject to Borrower’s consent,
which consent shall not be unreasonably withheld or delayed. Any Indemnified Person may, in its
reasonable discretion, take such actions as it deems necessary and appropriate to investigate,
defend or settle any event or take other remedial or corrective actions with respect thereto as may
be necessary for the protection of such Indemnified Person. Notwithstanding the foregoing, if any
insurer agrees to undertake the defense of an event (an “Insured Event”), Parent agrees not
to exercise its right to select counsel to defend the event if that would cause Borrower’s insurer
to deny coverage; provided, however, that Parent reserves the right to retain counsel to represent
any Indemnified Person with respect to an Insured Event at its sole cost and expense. To the extent
that Parent obtains recovery from a third party other than an Indemnified Person of any of the
amounts that Borrower has paid to Parent pursuant to the indemnity set forth in this Section 10(d),
then Parent shall promptly pay to Borrower the amount of such recovery.

          (e) Governing Law. The laws of the State of Delaware (without giving effect to its
conflicts of law principles) govern this Agreement and all matters arising out of or relating to
this Agreement and any of the transactions contemplated hereby, including its negotiation,
execution, validity, interpretation, construction, performance and enforcement.

          (f) Jurisdiction. The parties hereto hereby irrevocably submit to the exclusive
jurisdiction of the Chancery Court of the State of Delaware over any action or proceeding arising
out of or relating to this Agreement or any of the transactions contemplated hereby and each party
hereto hereby irrevocably agrees that all claims in respect of such action or proceeding may be
heard and determined in such courts. The parties hereto irrevocably waive any objection which they
may now or hereafter have to the laying of venue of any action or proceeding brought
in such court or any claim that such action or proceeding brought in such court has been
brought in an inconvenient forum. Each of the parties hereto agrees that a judgment in such action
or proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law. Each of the parties hereto irrevocably consents to process being served by any
party to this Agreement in any action or proceeding by delivery of a copy thereof in accordance
with the provisions of Section 10(h).

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          (g) Entire Agreement. This Agreement and the Note constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and thereof.

          (h) Notices, etc. All notices, requests and other communications to any party
hereunder shall be in writing and shall be deemed given if delivered personally, sent by facsimiled
(which is confirmed by an acknowledgement or transmission report generated by the machine from
which the facsimile was sent indicating that the facsimile was sent in its entirety to the
addressee’s facsimile number) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses:

			
		 	If to Parent, to:

ComVest Investment Partners III, L.P.

One North Clematis

Suite 300

West Palm Beach, Florida 33401

Attention: Cecilio Rodriguez

Facsimile: (561) 671-3225

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

Foley & Lardner LLP

100 North Tampa Street

Suite 2700

Tampa, FL 33602

Attention: Steven W. Vazquez

Facsimile: (813) 221-4217

If to Borrower, to:

NationsHealth, Inc.

13630 NW 8th Street

Suite 210

Sunrise, Florida 33325

Attention: Chief Executive Officer

Facsimile: (954) 903-5005

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

McDermott Will & Emery LLP

201 South Biscayne Boulevard

22nd Floor

Miami, Florida 33131

Phone: 305.358.3500

Fax: 305.347.6500

Attention: Ira J. Coleman, Esq.

               Frederic L. Levenson, Esq.

               Harris Siskind, Esq.

and

McDermott Will & Emery LLP

227 West Monroe Street

Chicago, Illinois 60606

Phone: 312.372.2000

Fax: 312.984.7700

Attention: Michael Boykins, Esq.

     or such other address or facsimile number as such party may hereafter specify by like notice
to the other parties hereto. All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5 P.M. in the place
of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the next succeeding
Business Day in the place of receipt. In the event that an addressee of a notice or communication
rejects or otherwise refuses to accept a notice or other communication delivered or sent in
accordance with this Section, or if the notice or other communication cannot be delivered because
of a change in address for which no notice was given, then such notice or other communication is
deemed to have been received upon such rejection, refusal or inability to deliver.

          (i) Validity. If any provision of this Agreement shall be judicially determined to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

          (j) Counterparts. This Agreement may be (a) executed in two (2) or more counterparts,
each of which shall be deemed an original, but which together shall constitute one and the same
instrument, and (b) executed and delivered by telecopier or portable document format (PDF)
transmission with the same force and effect as if the same were a fully executed and delivered
original manual counterpart.

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          (k) Assignment. Neither Parent nor any of its Affiliates shall sell, transfer, assign
or allow any participation in any of the outstanding obligations owed by Borrower to Parent
pursuant to this Agreement, the Note, or under any other Bridge Loan Document to any Person (the
“Bridge Loan Indebtedness Transfer”) before the expiration of Thirty Day Post-Maturity
Period (as defined in the Note) or the Thirty Day Post-Termination Period (as defined in the Note),
as the case may be, (other than to Borrower and/or MHR (pursuant to an agreement
between Borrower and MHR) or any of Parent’s Affiliates). Following the Thirty Day
Post-Maturity Period or the Thirty Day Post-Termination Period, as the case may be, Parent may
consummate a Bridge Loan Indebtedness Transfer without restriction subject to the terms and
conditions of the Note. In addition, concurrently with the Company’s acceptance of a Superior
Proposal (as defined in the Merger Agreement), at the request of the Company, Parent shall assign
all of its rights, interests and obligations under this Agreement, the Note, and the other Bridge
Loan Documents to the party providing the Superior Proposal or its designee (as directed by the
Company) in consideration for the payment of all amounts required to be paid to Parent under the
Merger Agreement in connection with the Company’s acceptance of a Superior Proposal.
Notwithstanding anything to the contrary in this Agreement, the Note or the other Bridge Loan
Documents (i) Parent may sell and/or assign a portion of its rights and interests in and to, as
well as any obligations associated with, this Agreement, the Note, and the other Bridge Loan
Documents to Mark Lama; provided that the aggregate principal amount of the rights and interests
sold or assigned shall not exceed $200,000 and (ii) Parent may repurchase from Mark Lama all or any
portion of his rights and interests in and to, as well as any obligations associated with, this
Agreement, the Note, or the other Bridge Loan Documents, in accordance with the terms of that
certain Agreement for Purchase of Rights Under Bridge Note, dated as of the date hereof, by and
between the Parent and Mark Lama.

[Signature Page Follows]

21

 

IN WITNESS WHEREOF, the parties have caused this Bridge Loan and Security Agreement to be duly
executed as of the date and year first written above.

	 	 	 	 	 
	 	“Parent”

COMVEST NATIONSHEALTH HOLDINGS, LLC

 	 
	 	By:  	/s/
Jose Gordo
 	 
	 	 	Name:  	Jose Gordo 	 
	 	 	Title:  	President 	 
	 
	 	“Borrower”

NATIONSHEALTH, INC.

 	 
	 	By:  	/s/
Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	CEO 	 
	 
	 	UNITED STATES PHARMACEUTICAL
GROUP, L.L.C. d/b/a NATIONSHEALTH

 	 
	 	By:  	/s/ Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	CEO 	 
	 
	 	NATIONSHEALTH HOLDINGS, L.L.C.

 	 
	 	By:  	/s/ Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	CEO 	 
	 
	 	DIABETES CARE & EDUCATION, INC.

 	 
	 	By:  	/s/ Glenn Parker
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	NATIONAL PHARMACEUTICALS AND
MEDICAL PRODUCTS (USA), L.L.C.

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	CEO 	 

22EX-4.15

Exhibit
4.15

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISES OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF EFFECTIVE REGISTRATION STATEMENTS UNDER SUCH SECURITIES
ACT AND LAWS OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER OF THIS WARRANT THAT SUCH
REGISTRATION IS NOT REQUIRED.

NATIONSHEALTH, INC.

COMMON STOCK PURCHASE WARRANT

     NATIONSHEALTH, INC., a Delaware corporation (the “Company”), hereby agrees that COMVEST
NATIONSHEALTH HOLDINGS, LLC, a Delaware limited liability company (the “Holder”), for value
received, is entitled, subject to the provisions of this Common Stock Purchase Warrant (this
“Warrant”), to purchase from the Company, in whole or in part, One Million (1,000,000) fully paid
and non-assessable shares of the Company’s common stock, $0.0001 par value per share (“Common
Stock”), at the Exercise Price set forth below.

     1. Certain Definitions. When used herein, the following terms shall have the
following meanings:

     (a) “Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, or is controlled by, or is under common control with, such Person.
For this purpose, “control” (including, with its correlative meanings, “controlled by” and
“under common control with”) shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of management or policies of a Person, whether
through the ownership of securities or partnership or other ownership interests, by
contract or otherwise.

     (b) “Effective Date” means fifteen (15) days after the date that the Merger Agreement
is terminated pursuant to (i) Section 7.1(c)(i) or Section 7.1(c)(iii) of the Merger
Agreement and the Company’s breach triggering such termination shall have been willful or
(ii) Section 7.1(b)(iii), Section 7.1(c)(ii), or Section 7.1(d)(iii) of the Merger
Agreement.

     (c) “Exercise Notice” means a notice of exercise of all or any portion of this
Warrant, in the form attached hereto as Exhibit A.

     (d) “Exercise Price” means $0.01 per share of Common Stock, as adjusted as provided
herein.

 

 

     (e) “Expiration Date” means the earliest to occur of the following: (i) the exercise
of all of the rights represented by this Warrant, (ii) the ten (10) year anniversary of the
Effective Date, or (iii) the Effective Time (as defined in the Merger Agreement).

     (f) “Merger Agreement” means that certain Agreement and Plan of Merger dated April 30,
2009, by and among Holder, NationsHealth Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of the Holder, and the Company.

     (g) “Person” means and includes an individual, limited liability company, partnership,
corporation, trust, joint venture, incorporated organization and a government or any
department or agency thereof.

     (h) “Securities Act” means the Securities Act of 1933, as amended.

     (i) “Warrant Shares” means the shares of Common Stock issuable to the Holder upon any
exercise of this Warrant.

     2. Warrant Exercise; Issuance of Stock Certificates. This Warrant may be exercised by
the Holder, in whole or in part, at any time on or after the Effective Date until and including the
Expiration Date, as follows:

     (a) This Warrant may be exercised in whole, or in part, by the Holder by delivery of
an Exercise Notice and, promptly thereafter, surrender of this Warrant (properly endorsed
if required), each at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address set forth in
Section 11 hereof), and payment by the Holder of the aggregate Exercise Price for the
Warrant Shares to be purchased. Upon such surrender and payment, the Holder shall be
entitled to receive a certificate or certificates representing the Warrant Shares so
purchased. The Company agrees that the Warrant Shares so purchased shall be deemed to be
issued to the Holder as the record owner of such Warrant Shares as of the close of business
on the date on which this Warrant shall have been surrendered for such Warrant Shares and
payment made for such Warrant Shares as aforesaid. As promptly as practicable on or after
such date, and in any event within five (5) days thereafter, the Company shall, at its
expense, issue and deliver to the person or persons entitled to receive the same (i) a
certificate or certificates for the Warrant Shares; (ii) in the event that this Warrant is
exercised in part, a new Warrant of like tenor representing the portion of the shares of
Common Stock, with respect to which this Warrant will not then have been exercised and
exercisable for the number of shares for which this Warrant may then be exercised; and
(iii) an amount in cash in lieu of any fractional shares as provided in Section 5 hereof.

2

 

     (b) Notwithstanding anything contained herein to the contrary, the Holder may, at its
election exercised in its sole discretion, exercise this Warrant in whole or in part and,
in lieu of making the cash payment otherwise contemplated
to be made to the Company upon such exercise in payment of the Exercise Price, elect
instead to receive upon such exercise a certificate or certificates representing the number
of Warrant Shares (up to the total number of Warrant Shares which are subject to this
Warrant) multiplied by a fraction, the numerator of which shall be the difference between
the then fair market value of one share of the Common Stock and the Exercise Price, and the
denominator of which shall be the then fair market value of one share of the Common Stock
(a “Cashless Exercise”).

     (c) For purposes of the calculation set forth in Section 2(b) above, fair market value
of one share of Common Stock shall be determined by the Company’s Board of Directors in
good faith; provided, however, that where there exists a public market for the Company’s
Common Stock at the time of such exercise, the fair market value per share shall be the
average of the closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter Market Summary or the last reported sale price of the Common Stock or the
closing price quoted on the Nasdaq National Market or on any exchange on which the Common
Stock is listed, whichever is applicable, as published in the Western Edition of The Wall
Street Journal over a five (5) day period ending with the third business day before the
date of determination of fair market value. Notwithstanding the foregoing, in the event
the Warrant is exercised in connection with the Company’s initial public offering of Common
Stock, the fair market value per share shall be the per share offering price to the public
of the Company’s initial public offering.

     (d) In the event that the Holder does not exercise this Warrant prior to the
Expiration Date, to the extent that this Warrant is then exercisable and such exercise
would result in the issuance of shares of Common Stock to the Holder, this Warrant shall be
deemed automatically exercised for all purposes hereof through a Cashless Exercise as
described in Section 2(b) hereof immediately prior to the time at which it would otherwise
expire.

     3. Affirmative Covenants. The Company covenants and agrees that the Warrant Shares
will, upon exercise of this Warrant and issuance of the Warrant Shares in accordance herewith, be
duly authorized, validly issued, fully paid and nonassessable, free from all liens and charges with
respect to the issuance thereof, and will not be subject to preemptive rights other than pursuant
to the Preferred Stock Investment Documents. The Company further covenants and agrees that during
the period within which the rights represented by this Warrant may be exercised, the Company will
use its best efforts to at all times have authorized and reserved a sufficient number of Common
Stock to provide for the exercise of the rights represented by this Warrant, and, from time to
time, will take all steps necessary to amend its Second Restated Certificate of Incorporation (as
may be amended or restated from time to time, the “Certificate”) to provide sufficient reserves of
shares of its capital stock for the Warrant Shares. The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for the Warrant Shares.

3

 

     4. Adjustments of Exercise Price and Warrant Shares.

     (a) If at any time prior to the Expiration Date the Company shall (i) pay a dividend
or make a distribution on its Common Stock in shares of its capital stock of any class,
(ii) subdivide its outstanding shares of Common Stock into a greater number of shares,
(iii) combine its outstanding shares of Common Stock into a smaller number of shares, or
(iv) reclassify, reorganize or effect any similar transaction
with respect to any of its shares of Common Stock, or in substitution or exchange therefor (other than a transaction
referred to in Section 4(b)), then thereafter the number of Warrant Shares (or other class
of capital stock, if applicable) shall be automatically increased or decreased, as the case
may be, in direct proportion to the increase or decrease in the number of shares of Common
Stock (or other class of capital stock, if applicable) by reason of such action, and the
Exercise Price after such action shall, in case of an increase in the number of shares, be
proportionately decreased and, in case of a decrease in the number of shares, be
proportionately increased so that the aggregate Exercise Price of this Warrant shall be
unchanged.

     (b) If at any time prior to the Expiration Date, the Company is a party to (1) a share
exchange or merger of the Company with and into another company (other than the transaction
contemplated by the Merger Agreement) (a “Merger”), (2) any agreement providing for the
sale of substantially all of the Company’s assets (an “Asset Sale”), or (3) a “Stock Sale”,
which means any transaction or series of transactions (related or unrelated) which result
in the person or persons currently owning the shares of Common Stock of the Company no
longer owning, immediately after such transaction or series of transactions, in excess of
fifty percent (50%) of the issued and outstanding shares of Common Stock of the Company,
other than pursuant to a conversion of the outstanding obligations under the Bridge Loan
into shares of Preferred Stock pursuant to the Bridge Loan Documents (any Merger, Asset
Sale or Stock Sale shall be considered a “Sale of the Company”), this Warrant shall pertain
and apply to the Warrant Shares or other securities and/or property to which the Holder
would have otherwise been entitled had this Warrant been exercised in whole immediately
prior to the Sale of the Company. The foregoing provisions of this Section 4(b) shall
similarly apply to successive share exchanges, mergers, asset sales and stock sales, and to
the stock or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per-share consideration payable to
the Holder hereof for shares in connection with any such transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in good faith by the
Company’s Board of Directors. In all events, appropriate adjustment (as determined in good
faith by the Company’s Board of Directors) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any shares or other property
deliverable after that event upon exercise of this Warrant. In addition, if at any time
while this Warrant, or any portion hereof, is outstanding
and unexpired, there shall be a Sale of the Company (including, without limitation,
pursuant to the consummation of the transactions contemplated by a Takeover Proposal), this
Warrant shall be deemed to be automatically exercised in whole through Cashless Exercise as
described in Section 2(b) hereof. The Company agrees that such shares to be issued to the
Holder upon Cashless Exercise as a result of a Sale of the Company shall be deemed to be
issued to the Holder as the record owner of such shares as of the close of business on the
date of such transaction.

4

 

     (c) In case any event shall occur as to which the provisions of Section 4 are not
strictly applicable but failure to make any adjustment would not fairly protect the
purchase rights represented by this Warrant in accordance with the essential intent and
principles of such actions, then, in each such case, the Company shall appoint a firm of
independent certified public accountants of recognized national standing (such firm to be
subject to the approval of the Holder), which shall give their opinion upon the adjustment,
if any, on a basis consistent with the essential intent and principles established in this
Section 4, necessary to preserve, without dilution, the purchase rights represented by this
Warrant. Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the Holder and shall make the adjustments described therein.

     (d) An adjustment made pursuant to this Section 4 shall become effective immediately
after the payment date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination,
reclassification, reorganization, Sale of the Company or similar transaction.

     (e) Whenever the number of Warrant Shares or the Exercise Price is adjusted as herein
provided, the Company shall cause to be mailed to the Holder in accordance with the
provisions of Section 11 a notice (i) stating that an event giving rise to an adjustment
hereunder has occurred, (ii) setting forth the adjusted number of Warrant Shares and the
adjusted Exercise Price and (iii) showing in reasonable detail the computations and the
facts upon which such adjustments are based.

     (f) No adjustment pursuant to this Section 4 shall require the Company to issue
fractional shares and, in lieu thereof, the number of shares to be issued upon the exercise
of this Warrant shall be rounded to the nearest whole number.

     (g) At any time on or after the Effective Date, the Company will not, by amendment of
its Certificate or through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of the Holder
of this
Warrant against dilution or other impairment. Without limiting the generality of the
foregoing, the Company (i) will not permit the par value of any shares of stock receivable
upon the exercise of this Warrant to exceed the amount payable therefor upon such exercise,
(ii) will take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and non-assessable shares of stock on the exercise
of the Warrants from time to time outstanding, and (iii) will not take any action which
results in any adjustment of the Exercise Price if the total number of shares of Common
Stock issuable after the action upon the exercise of the Warrant would exceed the total
number of shares of Common Stock then authorized by the Company’s Certificate and available
for the purpose of issue upon such exercise. The Company shall also give written notice to
the Holder prior to the date on which any such voluntary action described in the first
sentence of this Section 4(h) shall take place.

5

 

     5. Elimination of Fractions. The Company shall not be required to issue certificates
representing fractional shares of Common Stock upon any exercise of this Warrant, but will make a
payment in cash, in lieu of issuing such fractional shares, equal to the Exercise Price per share
at the time multiplied by such fraction.

     6. Notification to Holder. If, (i) at any time, the Board of Directors of the Company
(or any committee thereof) shall authorize or approve any capital reorganization or
reclassification of the Common Stock of the Company, or any Sale of the Company, (ii) at any time,
the Company (or any other party) shall institute any proceeding seeking an order for relief under
the Federal bankruptcy laws or seeking to adjudicate the Company as bankrupt or insolvent, or
seeking dissolution, liquidation or winding up of the Company or seeking reorganization under any
law relating to bankruptcy or insolvency, or (iii) at any time on or after the Effective Date, the
Company shall take a record of the holders of its Common Stock (or other stock or securities at the
time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right, then, and in each such case, the
Company will mail or cause to be mailed to the Holder a notice specifying, as the case may be, (A)
the date on which a record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or (B) the date on
which such reorganization, reclassification, Sale of the company, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which the holders of
record-of Common Stock (or such stock or securities at the time receivable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such reorganization,
reclassification, Sale of the Company, dissolution, liquidation or winding-up. Such notice shall
be mailed by certified or registered mail, postage prepaid prior to the date therein specified.

     7. Term of Warrant. This Warrant shall remain outstanding and exercisable on or after
the Effective Date until and including the Expiration Date. To the
extent not previously exercised, the rights represented by this Warrant shall thereupon
terminate.

6

 

     8. Closing of Books. The Company will at no time close its transfer books in any
manner which interferes with the timely exercise of the rights represented by this Warrant.

     9. No Rights as a Stockholder. The Holder shall not be deemed for any purpose to be a
stockholder of the Company with respect to any Warrant Shares which may be acquired hereunder
except to the extent that the Warrant shall have been properly exercised with respect thereto and
payment has been made therefor in accordance with Section 2, provided, however that at all times on
or after the Effective Date the Company will furnish to Holder, promptly upon their becoming
available and at the request of the Holder, copies of all financial statements, reports, and
notices sent or made available by the Company to any of its stockholders, and copies of any and all
regular and periodic reports, registration statements and prospectuses filed by the Company with
any securities exchange or with the U.S. Securities and Exchange Commission.

     10. Notices. All notices, requests and other communications to any party hereunder
shall be in writing and shall be deemed given if delivered personally, sent by facsimile (which is
confirmed by an acknowledgement or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the addressee’s
facsimile number) or sent by overnight courier (providing proof of delivery) to the parties at the
following addresses:

			
	               	 	If to Holder, to:

ComVest Investment Partners III, L.P.

One North Clematis

Suite 300

West Palm Beach, Florida 33401

Attention: Cecilio Rodriguez

Facsimile: (561) 671-3225

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

			
	               	 	Foley & Lardner LLP

100 North Tampa Street

Suite 2700

Tampa, FL 33602

Attention: Steven W. Vazquez

Facsimile: (813) 221-4210

7

 

			
	               	 	If to the Company, to:

NationsHealth, Inc.

13630 NW 8th Street

Suite 210

Sunrise, Florida 33325

Attention: Chief Executive Officer

Facsimile: (954) 903-5005

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

			
	               	 	McDermott Will & Emery LLP

201 South Biscayne Boulevard

22nd Floor

Miami, Florida 33131

Phone: 305.358.3500

Fax: 305.347.6500

Attention: Ira J. Coleman, Esq.

               Frederic L. Levenson, Esq.

               Harris Siskind, Esq.

and

McDermott Will & Emery LLP

227 West Monroe Street

Chicago, Illinois 60606

Phone: 312.372.2000

Fax: 312.984.7700

Attention: Helen R. Friedli, Esq.

or such other address or facsimile number as such party may hereafter specify by like notice to the
other parties hereto. All such notices, requests and other communications shall be deemed received
on the date of receipt by the recipient thereof if received prior to 5 P.M. in the place of receipt
and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next succeeding Business Day in
the place of receipt. In the event that an addressee of a notice or communication rejects or
otherwise refuses to accept a notice or other communication delivered or sent in accordance with
this Section 10, or if the notice or other communication cannot be delivered because of a change in
address for which no notice was given, then such notice or other communication is deemed to have
been received upon such rejection, refusal or inability to deliver.

     11. Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate
issuable upon exercise of this Warrant and, in the case of loss, theft or destruction, on delivery
of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the
case of mutilation, on surrender and cancellation of this Warrant or stock certificate, the Company
at its expense shall execute and deliver, in lieu of this Warrant or stock certificate, a new
warrant or stock certificate of like tenor and amount.

8

 

     12. Investor Representations. The Holder acknowledges that it is acquiring this
Warrant and Warrant Shares for the Holder’s own account and not as a nominee for any other party
and that the Holder has no present intention of selling this Warrant or the Warrant Shares in a
public distribution in violation of the federal securities laws or any applicable state securities
laws. The Holder is an “accredited investor” as defined in Rule 501(a) under the Securities Act.

     13. Transfer of Warrant.

          (a) Transferability and Nonnegotiability of Warrant. This Warrant may not be
transferred or assigned in whole or in part (i) prior to the Effective Date or (ii) on or after the
Effective Date without compliance with all applicable federal and state securities laws by the
transferor and the transferee (including the delivery of investment representation letters and
legal opinions reasonably satisfactory to the Company, if such are requested by the Company). On
or after the Effective Date and subject to the provisions of this Warrant with respect to
compliance with the Securities Act, title to this Warrant may be transferred by endorsement (by the
Holder executing the Assignment Form annexed hereto (the “Assignment Form”)) and delivery in the
same manner as a negotiable instrument transferable by endorsement and delivery.

          (b) Exchange of Warrant Upon a Transfer. On surrender of this Warrant for exchange,
properly endorsed on the Assignment Form and subject to the provisions of this Warrant with respect
to compliance with the Securities Act and with the limitations on assignments and transfers
contained in this Section 14, the Company at its expense shall issue to or on the order of the
Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder may
direct, for the number of shares issuable upon exercise hereof.

          (c) Legend. This Warrant and any certificates representing the Warrant Shares issued
to the Holder shall bear on the face thereof substantially the following legend and any additional
legends as may be required under state securities laws:

          “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN SOLD IN RELIANCE
UPON AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OR
THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR
SALE, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL OR UPON EVIDENCE THAT SUCH REGISTRATION IS
NOT REQUIRED.”

9

 

     14. Warrant Agent. The Company may, on written notice to the Holder, appoint an agent
for the purposes of issuing Common Stock upon the exercise of this Warrant and of replacing or
exchanging this Warrant, and after that appointment any such issuance, replacement, or exchange
shall be made at that office by that agent.

     15. Governing Law. This Warrant is made under and shall be governed by and construed
in accordance with the internal laws of, and enforced by the courts located within, the State of
Delaware, without giving effect to any principles of conflict of laws.

     16. Successors and Assigns. The provisions of this Warrant shall be binding upon and
inure to the benefit of the parties hereto and their respective successors, assigns and
transferees.

     17. Further Assurances. The Company agrees that it will execute and record such
documents as the Holder shall reasonably request to secure for the Holder any of the rights
represented by this Warrant.

     18. Amendment and Modifications. This Warrant may be amended, modified or
supplemented only by written agreement of the Company and the Holder.

[Signature Page Follows]

10

 

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

	 	 	 	 	 
	 	NATIONSHEALTH, INC.

 	 
	 	By:  	/s/
Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	CEO 	 

11

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