Document:

EX-4.26

Exhibit 4.26

SUBORDINATION AGREEMENT

     This SUBORDINATION AGREEMENT, dated as of April 30, 2009 (this “Agreement”), by MHR CAPITAL
PARTNERS MASTER ACCOUNT LP (as assignee of MHR CAPITAL PARTNERS (500) LP (f/k/a MHR CAPITAL
PARTNERS LP)), MHR CAPITAL PARTNERS (100) LP and OTQ LLC (collectively, the “Junior Lender”) and
MHR CAPITAL PARTNERS (500) LP in its capacity as Collateral Agent for the Junior Lender under the
Junior Agreement referred to below (in such capacity, the “Junior Collateral Agent”), in favor of
COMVEST NATIONSHEALTH HOLDINGS, LLC, a Delaware limited liability company (“ComVest”) and MSL
FAMILY LLC, a Delaware limited liability company, in their capacity as the holders of the Bridge
Loan referred to below (“MSL” and, collectively with ComVest, the “Senior Lender”).

W I T N E S S E T H :

     WHEREAS, CapitalSource Finance LLC (together with its successors and assigns, “CapitalSource”)
and UNITED STATES PHARMACEUTICAL GROUP, L.L.C. d/b/a NATIONSHEALTH (“USPG”), a Delaware limited
liability company, NATIONSHEALTH HOLDINGS, L.L.C., (“NHH”) a Florida limited liability company,
NATIONSHEALTH, INC. (“NationsHealth”), a Delaware corporation, DIABETES CARE & EDUCATION, INC.
(“DCE”), a South Carolina corporation, and NATIONAL PHARMACEUTICALS AND MEDICAL PRODUCTS (USA),
LLC, a Florida limited liability company (“National”, together with USPG, NHH, NationsHealth, and
DCE, collectively, the “Borrower”) are parties to a certain Fourth Amended and Restated Revolving
Credit, Term Loan and Security Agreement dated as of April 30, 2009 (as amended, restated,
supplemented, replaced or otherwise modified from time to time, the “CapitalSource Loan Agreement”)
under which CapitalSource has made or may make loans and other financial accommodations to
Borrower;

     WHEREAS, pursuant to the CapitalSource Loan Agreement, Borrower has granted in favor of
CapitalSource a first priority lien on and security interest in (collectively, the “CapitalSource
Lien”) substantially all of the assets and property of Borrower as security for their obligations
to CapitalSource under the CapitalSource Loan Agreement;

     WHEREAS, the Junior Lender and Borrower are parties to a certain Investment Unit Purchase
Agreement, dated February 28, 2005 (as amended, supplemented or otherwise modified from time to
time, the “Junior Agreement”) under which the Junior Lender purchased certain convertible secured
promissory notes issued by Borrower (as amended, supplemented or otherwise modified from time to
time, collectively, the “Junior Notes”) and 1,785,714 shares of common stock issued by
NationsHealth.

     WHEREAS, concurrently with the execution of this Agreement, the Junior Lender is entering into
a Limited Waiver and Consent (the “Junior Lender Waiver”) pursuant
to which the Junior Lender is consenting to the execution and delivery by the Borrower of the
Merger Agreement making certain other waivers relating thereto, among other matters;

 

 

     WHEREAS, pursuant to the Junior Agreement and the Junior Note, Borrower has granted in favor
of the Junior Lender a lien on and security interest in (collectively, the “Junior Lien”)
substantially all of Borrower’s assets and property as security for its obligations to the Junior
Lender under the Junior Agreement;

     WHEREAS, Junior Lender and CapitalSource are parties to that certain Amended and Restated
Senior Subordination Agreement, dated as of April 30, 2009 (as amended, supplemented or otherwise
modified from time to time, the “Junior Lender Subordination Agreement”) pursuant to which Junior
Lender has agreed to subordinate its rights with respect to the Junior Obligations (as defined
below) to the rights of CapitalSource with respect to the CapitalSource Obligations (as defined
below);

     WHEREAS, NationsHealth intends to merge with NationsHealth Acquisition Corp. (“NAC”), a
Delaware corporation and a wholly owned subsidiary of the Senior Lender, subject to the terms of
that certain Agreement and Plan of Merger dated April 30, 2009 (the “Merger Agreement”), pursuant
to which NAC shall be merged with and into NationsHealth, the separate corporate existence of NAC
shall thereupon cease, and NationsHealth shall be the surviving corporation (such transaction, the
“Merger”);

     WHEREAS, in connection with the execution and delivery of the Merger Agreement, the Senior
Lender has agreed to provide a bridge loan to Borrower in the principal amount of $3,000,000 (the
“Bridge Loan”) in accordance with the terms of that certain Bridge Loan Agreement dated April 30,
2009 by and between the Senior Lender and Borrower (as amended, supplemented or otherwise modified
from time to time, the “Senior Loan Agreement”), which Bridge Loan is evidenced by that certain 10%
Secured Convertible Subordinated Promissory Note in the principal amount of $3,000,000 dated April
30, 2009 (the “Senior Note”);

     WHEREAS, upon the consummation of the Merger, the Bridge Loan shall be converted into
25,000,000 shares of Series A Preferred Stock of NationsHealth;

     WHEREAS, Borrower has granted in favor of the Senior Lender a lien on and security interest
(collectively, the “Senior Lien”) in substantially all of Borrower’s assets and property as
security for its obligations to the Senior Lender under the Senior Loan Agreement;

     WHEREAS, Senior Lender and CapitalSource are parties to that certain Senior Subordination
Agreement, dated as of April 30, 2009 (as amended, supplemented or otherwise modified from time to
time, the “Senior Lender Subordination Agreement”) pursuant to which Senior Lender has agreed to
subordinate its rights with respect to the Senior Obligations (as defined below) to the rights of
CapitalSource with respect to the CapitalSource Obligations; and

     WHEREAS, it is a condition precedent to the effectiveness of the Senior Loan Agreement and the
Senior Note that, among other things, the Junior Lender shall have executed
and delivered this Agreement subordinating its rights with respect to the Junior Obligations
to the rights of Senior Lender with respect to the Senior Obligations and that Borrower shall have
acknowledged this Agreement.

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     NOW, THEREFORE, in consideration of the promises contained herein and to induce the Senior
Lender to enter into the Bridge Loan and the Junior Lender to enter into the Junior Lender Waiver,
the parties hereto hereby agree as follows:

          SECTION 1. Definitions. Capitalized terms used but not defined herein shall have
the meanings given to them in the Senior Loan Agreement, and the rules of usage set forth therein
shall apply hereto.

          SECTION 2. Subordination.

               (a) All Junior Obligations, and all rights and remedies of the Junior Lender with respect
thereto, are and shall continue at all times to be subject, subordinate and junior in right of
payment to the Senior Obligations including, without limitation, all interest on the Senior
Obligations at the rate stated in the Senior Loan Agreement from the date of the filing by or
against Borrower of a petition under any bankruptcy, insolvency or similar law to the date of the
indefeasible payment in full of the Senior Obligations (“Postpetition Interest”). The term “Junior
Obligations,” as used in this Agreement, shall mean and include the principal amount of and the
premium, if any, and interest on all indebtedness and other monetary obligations of Borrower to the
Junior Lender under the Junior Agreement and the Junior Note, together with all fees, costs and
expenses relating thereto, whether direct or contingent, now or hereafter existing, due or to
become due to, or held or to be held by the Junior Lender, whether created directly or acquired by
assignment or otherwise, including, without limitation, all principal of and premium, if any, and
interest on the Junior Note (including extensions, modifications, refinancings, renewals and
refundings thereof). For the avoidance of doubt, the obligation of Borrower to issue equity or
equity related securities to the Junior Lender pursuant to the Junior Note, any payments on or in
respect of any equity or equity related securities and any exercise of rights by the Junior Lender
with respect to any equity or equity related securities as the holder thereof (as long as such
rights do not constitute an Enforcement Action) shall not constitute Junior Obligations. The term
“Senior Obligations,” as used in this Agreement, shall mean and include the principal amount of and
interest (including Postpetition Interest) on the Bridge Loan (but not any refinancing thereof) and
obligations to reimburse expenses of the Senior Lender in respect of enforcing the payment of the
Bridge Loan; provided that the principal amount of the Bridge Loan in excess of the limitation
thereon set forth in Section 2(g), and any interest or other monetary obligations with respect to
such excess, shall not constitute Senior Obligations. For the avoidance of doubt, (i) the
obligations of the Borrower with respect to the Series A Preferred Stock of NationsHealth, (ii) any
fees, costs and/or expenses owed or owing to the Senior Lender under or by reason of the Merger
Agreement, including but not limited to the Termination Fee (as defined in the Merger Agreement),
the Transaction Fees (as defined in the Merger Agreement) and (iii) any other Parent Damages (as
defined in the Merger Agreement) shall not constitute Senior Obligations. The term “CapitalSource
Obligations,” shall mean the “Senior Obligations” as such term is defined in the Junior Lender
Subordination Agreement.

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          (b) Except as provided in Section 2(c), the Junior Lender shall not receive, demand or accept
any payment (of any kind or character) on the Junior Obligations, whether as principal, premium,
interest or otherwise, unless and until all the Senior Obligations including, without limitation,
all Postpetition Interest, have been indefeasibly paid in full in cash or have been converted into
shares of Series A Preferred Stock of NationsHealth.

          (c) The Junior Lender may receive, accept and retain (i) regularly scheduled monthly interest
payments under the Junior Note at a rate per annum equal to 7 3/4%, (ii) payments for redemptions
or puts as contemplated by Section 5 of the Junior Note, and (iii) all expenses required to be paid
or reimbursed by Borrower as contemplated by Section 4(d)(v) of the Junior Note unless:

     (A) (i) an Event of Default has occurred and is continuing under Section 7.1(a) of
the Senior Loan Agreement (a “Senior Payment Default”) and (ii) the Junior Lender has
not received a written notice from the Senior Lender informing the Junior Lender that
such Senior Payment Default has been waived or cured; or

     (B) (i) an Event of Default has occurred and is continuing under the Senior Loan
Agreement (other than under Section 7.1(a) thereof) (a “Senior Non-Payment Default”)
with respect to which the Junior Lender has received from the Senior Lender a notice (a
“Senior Non-Payment Default Notice”) prohibiting the Junior Lender from receiving,
collecting or accepting any of the foregoing payments and from commencing any
Enforcement Action (as defined below) and (ii) either (x) the Junior Lender has not
received a written notice from the Senior Lender informing the Junior Lender that such
Senior Non-Payment Default has been waived or cured, or (y) less than one hundred eighty
(180) days have passed since the earlier of (1) the date of the Junior Lender’s receipt
of such Senior Non-Payment Default Notice and (2) the date of the Junior Lender’s
receipt of a “Senior Non-Payment Default Notice” under the Junior Lender Subordination
Agreement based on the same underlying event, circumstance or condition giving rise to
such Senior Non-Payment Default (such notice under the Junior Lender Subordination
Agreement, a “CapitalSource Non-Payment Default Notice”; provided that there shall be no
more than one hundred eighty (180) days during which one or more Senior Non-Payment
Default Notices or CapitalSource Non-Payment Default Notices are in effect during any
period of three hundred sixty (360) consecutive days.

Nothing in this Section 2(c) shall prohibit the accrual (but not the payment to the Junior Lender)
of interest on the Junior Obligations at the default rate in accordance with the terms of the
Junior Agreement or the Junior Note following the occurrence of an event of default under the
Junior Agreement or the Junior Note.

          (d) After the CapitalSource Obligations shall have been indefeasibly paid in full in cash and
the obligation of CapitalSource to make loans and advances under the CapitalSource Loan Agreement
(the “Commitment”) has been terminated, if the Junior Lender shall receive any payment or
prepayment (including from any account debtor under any accounts receivable of Borrower) on the
Junior Obligations that it is not entitled to receive under this Agreement, the Junior Lender or
the Junior Collateral Agent, as applicable, will hold any amount
so received in trust for the Senior Lender and shall, as soon as possible, turn over such
payment to the Senior Lender in the form received (together with any necessary endorsements) to be
applied to the Senior Obligations.

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          (e) Unless and until the Senior Obligations have been indefeasibly paid in full in cash or
have been converted into shares of Series A Preferred Stock of NationsHealth, the Junior Lender
will not accelerate the maturity of the Junior Obligations or commence any action or proceeding
against Borrower to recover all or any part of the Junior Obligations, or join with any other
creditor in doing so, unless (i) in the case of the acceleration of the Junior Obligations, (A)
only if the Senior Lender has accelerated the Senior Obligations or (B) an event of default has
occurred and is continuing under Section 2(d) of the Junior Note (a “Junior Default”), written
notice of which the Junior Lender has delivered to the Senior Lender (the “Junior Default Notice”),
and thirty (30) days (or one hundred eighty (180) days from the earlier of (1) the date of delivery
by the Senior Lender of a Senior Non-Payment Default Notice or (2) the date of delivery by
CapitalSource of a CapitalSource Non-Payment Default Notice, in each case if delivered during such
thirty-day period) have expired since the date of the Senior Lender’s receipt of the Junior Default
Notice, and such Junior Default has not been cured or waived during such time periods, or (ii) in
the case of any action or proceeding brought against Borrower under any bankruptcy, insolvency or
similar law or any other proceeding the result of which could give rise to an Insolvency Event (as
defined below), the Senior Lender shall have joined therein, or (iii) in the case of any other
action or proceeding that does not involve an Enforcement Action (which shall be governed
exclusively by Section 2(q) hereof), a Junior Default has occurred and is continuing with respect
to which the Junior Lender has delivered a Junior Default Notice to the Senior Lender, and thirty
(30) days (or one hundred eighty (180) days from the earlier of (1) the date of delivery by the
Senior Lender of a Senior Non-Payment Default Notice or (2) the date of delivery by CapitalSource
of a CapitalSource Non-Payment Default Notice, in each case if delivered during such thirty-day
period) have expired since the date of the Senior Lender’s receipt of the Junior Default Notice,
and such Junior Default has not been cured or waived during such time periods. For purposes of the
foregoing clauses (i) and (iii), any Junior Default which arises solely because of the existence of
a breach or violation of the CapitalSource Loan Agreement or the Senior Loan Agreement shall be
deemed to be cured or waived for purposes of this Agreement (and shall not serve as the basis for a
Junior Default) if the breach or violation under the CapitalSource Loan Agreement or the Senior
Loan Agreement is waived or cured or if the CapitalSource Loan Agreement or the Senior Loan
Agreement is amended to remove such breach or violation. For purposes of Section 2(c) above, any
Senior Non-Payment Default which arises solely because of the existence of a breach or violation of
the CapitalSource Loan Agreement or the Junior Note shall be deemed to be cured or waived for
purposes of this Agreement (and shall not serve as the basis for a Senior Non-Payment Default) if
the breach or violation under the CapitalSource Loan Agreement or the Junior Note is waived or
cured or if the CapitalSource Loan Agreement or the Junior Note is amended to remove such breach or
violation. For purposes of this Agreement, the term “Insolvency Event” shall mean, with respect to
any Borrower, the occurrence of any of the following: (i) such Borrower shall be adjudicated
insolvent or bankrupt or institutes proceedings to be adjudicated insolvent or bankrupt, or shall
generally fail to pay or admit in writing its inability to pay its debts as they become due, (ii)
such Borrower shall seek dissolution or reorganization or the appointment of a receiver, trustee,
custodian, or liquidator for it or a substantial portion of its property, assets or business or to
effect a plan or other arrangement with its creditors, (iii) such Borrower shall
make a general assignment for the benefit of its creditors, or consent to or acquiesce in the
appointment of a receiver, trustee, custodian, or liquidator for a substantial portion of its
property, assets or business, (iv) such Borrower shall file a voluntary petition under any
bankruptcy, insolvency, or similar law, (v) such Borrower shall take any corporate or similar act
in furtherance of any of the foregoing, or (vi) such Borrower, or a substantial portion of its
property, assets or business, shall become the subject of an involuntary proceeding or petition for
(A) its dissolution or reorganization or (B) the appointment of a receiver, trustee, custodian or
liquidator , and (I) such proceeding shall not be dismissed or stayed within sixty (60) days, (II)
such receiver, trustee, custodian or liquidator shall be appointed or (III) such Person fails to
contest in a timely or appropriate manner any such proceeding or petition.

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          (f) Upon the occurrence of any Insolvency Event of Borrower or in the event of a sale of all
or substantially all of the assets, or any other marshaling of the assets and liabilities, or any
recapitalization, refinancing or reorganization, of Borrower, the Senior Obligations shall first be
indefeasibly paid in full in cash and the Commitment terminated before the Junior Lender shall be
entitled to receive any money, distributions or other assets in any such proceeding. In any such
event, the Junior Lender shall demand, sue for, collect or receive every such payment or
distribution of cash, property, stock or obligations, give acquittance therefor, file claims and
proofs of claim in any statutory or nonstatutory proceeding, exercise the rights of the Junior
Lender arising under or relating to the Junior Agreement or the Junior Note and vote the claim of
the Junior Lender under the Junior Agreement or the Junior Note in its sole discretion in
connection with any such event, including, without limitation, the right to participate in any
composition of creditors and to vote at creditors’ meetings for the election of trustees,
acceptances of plans of reorganization and any other matter upon which the Junior Lender would be
otherwise entitled to vote. In the event that the Junior Lender shall fail to take any such action
following the written request of the Senior Lender or fail to vote its claim in any proceedings
prior to 5 days before the expiration of the time to vote, the Senior Lender may (but shall not be
obligated) demand, sue for, collect or receive every such payment or distribution of cash,
property, stock or obligations, give acquittance therefor, file claims and proofs of claim in any
statutory or nonstatutory proceeding, exercise the rights of the Junior Lender arising under or
relating to the Junior Agreement or the Junior Note and vote the claim of the Junior Lender under
the Junior Agreement or the Junior Note in its sole discretion in connection with any such event,
including, without limitation, the right to participate in any composition of creditors and to vote
at creditors’ meetings for the election of trustees, acceptances of plans of reorganization and any
other matter upon which the Junior Lender would be otherwise entitled to vote. In such an event,
the Junior Lender hereby irrevocably authorizes the Senior Lender and grants to the Senior Lender,
effective upon the indefeasible payment in full in cash of the CapitalSource Obligations and the
termination of the Commitment, an exclusive power of attorney (which power of attorney is coupled
with an interest and is irrevocable), but without imposing any obligation upon the Senior Lender,
to demand, sue for, collect or receive every such payment or distribution of cash, property, stock
or obligations, to give acquittance therefor, to file claims and proofs of claim in any statutory
or nonstatutory proceeding, to exercise the rights of the Junior Lender arising under or relating
to the Junior Agreement or the Junior Note and to vote the claim of the Junior Lender under the
Junior Agreement or the Junior Note in its sole discretion in connection with any such event,
including, without limitation, the right to participate in any composition of creditors and to vote
at creditors’ meetings for the election of trustees, acceptances of plans of reorganization and any
other matter upon which the Junior Lender would
be otherwise entitled to vote. In furtherance of the foregoing, at the request of the Senior
Lender, the Junior Lender shall execute and deliver to the Senior Lender a separate power of
attorney and such further powers and instruments as the Senior Lender may request to enable the
Senior Lender to enforce its rights under this subsection.

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          (g) The Senior Lender may, at any time and from time to time, without the consent of or notice
to the Junior Lender, without incurring responsibility or liability to the Junior Lender and
without impairing or releasing any right or remedy of the Senior Lender hereunder:

	 	(i)	 	change the manner, place or terms of payment of,
change or extend the time of payment of, or renew, increase or alter the
Senior Obligations, or waive defaults under or amend the Senior Loan
Agreement, the Senior Note, or any of the other documents executed in
connection with the transactions contemplated thereby in any manner or
enter into or amend in any manner or waive defaults under any other
agreement relating to the Senior Obligations;
	 
	 	(ii)	 	sell, exchange, release or otherwise deal with any
property by whomsoever at any time pledged to secure, or howsoever
securing, the Senior Obligations;
	 
	 	(iii)	 	release any Person liable in any manner for the
payment or collection of any of the Senior Obligations;
	 
	 	(iv)	 	exercise or refrain from exercising any rights
against Borrower or any other Person; or
	 
	 	(v)	 	apply any sums by whomsoever paid or however
realized to the Senior Obligations.

Notwithstanding anything to the contrary in the foregoing, the Senior Lender agrees not to (i)
increase the outstanding aggregate principal amount of the Senior Obligations to an aggregate
amount greater than $3,000,000, (ii) change the final scheduled maturity date of the Bridge Loan to
an earlier date than that in effect on the date hereof, (iii) increase the per annum rate of
interest applicable to the Bridge Loan or (iv) add or increase any call premium or prepayment
penalty/fee or other fee with respect to the Bridge Loan; provided, however, that the foregoing
shall not affect the Senior Lender’s ability to make loans other than the Bridge Loan to the
Borrower so long as such loans are not considered Senior Obligations. The immediately preceding
sentence shall not be construed to limit or otherwise affect the Senior Lender’s right to accrue
and receive payment of interest (including at the default rate and including Postpetition Interest)
comprising part of the Senior Obligations.

          (h) The Junior Lender waives notice of acceptance of this Agreement.

          (i) The Junior Lender will cause each note or other instrument that evidences any Junior
Obligations (including, without limitation, the Junior Agreement and the
Junior Note) to bear upon its face a statement or legend to the effect that such note or other
instrument is subordinated to the Senior Obligations in the manner and to the extent set forth in
this Agreement. The Junior Lender shall mark its books and records, including any financial
statements, to show that the Junior Obligations are so subordinated to the Senior Obligations.

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          (j) The Junior Lender will not (i) increase the per annum rate of interest applicable to the
Junior Obligations or (ii) make any covenant or event of default under the Junior Agreement or the
Junior Note more restrictive than such covenants and events of default thereunder as of the date
hereof.

          (k) Subject to the indefeasible payment in full of the Senior Obligations in cash or
conversion of the Senior Obligations into shares of Series A Preferred Stock of NationsHealth, the
Junior Lender shall be subrogated to the Senior Lender’s rights to receive payments or
distributions in cash or property applicable to the Senior Obligations, and no payment or
distribution made to the Senior Lender by virtue of this Agreement that otherwise would have been
made to the Junior Lender shall be deemed to be a payment by Borrower on account of the Junior
Obligations.

          (l) The Junior Lender will not sell, assign, transfer or otherwise dispose of all or any part
of, or any interest in, the Junior Obligations to any Person without having first obtained (i) such
Person’s agreement in writing to be bound as the Junior Lender’s successor by the terms of this
Agreement or, in the case of an interest in the Junior Obligations, an acknowledgment by such
interest holder of the terms hereof, or (ii) the Senior Lender’s prior written consent.

          (m) The Junior Lender agrees that it will not exercise any right of setoff it may have against
the Junior Obligations in respect of any obligation owed by the Junior Lender to Borrower.

          (n) If Borrower shall become subject to a case under the Bankruptcy Code, and if the Senior
Lender desires to permit the use of cash collateral or to provide (or to permit another Person to
provide) financing to Borrower under either Section 363 or Section 364 of the Bankruptcy Code, the
Junior Lender agrees as follows: (i) adequate notice to the Junior Lender shall be deemed to have
been given to the Junior Lender if the Junior Lender receives notice at least five (5) Business
Days prior to the hearing held by the applicable bankruptcy court to consider entry of an order
approving such use or financing, provided that nothing in this subsection shall be deemed to
entitle the Junior Lender to any notice not required by the Bankruptcy Code and that no such notice
need be given with respect to an interim order approving such use or financing so long as the
conditions in clause (ii) hereof to avoid an objection by the Junior Lender have been met, and (ii)
no objection will be raised by the Junior Lender to any such use or financing on the grounds of a
failure to provide “adequate protection” of the Junior Lien or any other ground (except such ground
as an unsecured creditor shall have to make a permitted objection under law) if (w) the aggregate
principal amount of the DIP financing plus the aggregate principal amount of any other “Senior
Debt” as defined in the Junior Note as of the date hereof does not exceed the amount of “Senior
Debt” (as so defined) permitted under Section 6(c) of the Junior Note, (x) the Junior Lender is
granted, with the approval of the applicable bankruptcy court, a lien on and security interest in
the post-petition Collateral, which
lien shall be (A) subordinate to the Lien of the Senior Lender and any Liens to which the Lien
of the Senior Lender is subordinate and (B) have the same priority vis a vis the Senior Obligations
as existed prior to the commencement of such case, (y) the Lien granted to the Person providing
such financing ranks prior to or pari passu with the pre-petition Lien of the Senior Lender and (z)
any cash collateral order or DIP financing documentation does not expressly require the liquidation
of the Collateral prior to a default under the cash collateral order or DIP financing
documentation. For purposes of this subsection, “Lien” shall mean any liens granted to the Senior
Lender pursuant to the Senior Loan Agreement or the Senior Note together with any post-petition
liens and/or super-priority claims for Post-Petition Financing and adequate protection of the
Senior Lender’s pre-petition liens. For purposes of this subsection, notice of a proposed
financing or use of cash collateral shall be deemed given when made in the manner prescribed by
this Agreement, or as the applicable bankruptcy court may approve, or, actual notice is given to
the Junior Lender or its counsel, whichever is soonest.

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          (o) All liens, pledges, and security interests of any nature upon or in any Collateral held by
the Junior Lender, including, without limitation, the Junior Lien, shall be and are hereby made
inferior and junior to the liens, pledges and security interests of any nature upon or in any
Collateral held by or in favor of the Senior Lender, regardless of the failure to perfect or the
order or manner of perfection of any such liens, pledges and security interests. The priorities
set forth in this Agreement are applicable irrespective of any priority available to the Senior
Lender or the Junior Lender under contract or applicable law or any representation or warranty of
Borrower to the contrary in any agreement, instrument, or other document to which the Junior Lender
is a party.

          (p) The Senior Lender may take any judicial or nonjudicial action, including any action to
enforce its liens on or security interests in any or all of the Collateral, including, without
limitation, to foreclose, execute, levy upon, or collect or dispose of any or all of the Collateral
(each, an “Enforcement Action”) as it shall determine in its sole and exclusive judgment.

          (q) The Junior Lender agrees that, until all the Senior Obligations have been indefeasibly
paid in full in cash or have been converted into shares of Series A Preferred Stock of
NationsHealth, the Junior Lender shall not commence or continue to prosecute or otherwise proceed
with an Enforcement Action, contact any account debtor of Borrower, or otherwise take any action
that will impede, interfere with, restrict or restrain the exercise by the Senior Lender of its
right and remedies under the Senior Loan Agreement or the Senior Note or which is contrary,
prejudicial or inconsistent with the Senior Lender’s secured position in the Collateral unless (i)
a Junior Default has occurred and is continuing, the Junior Lender has delivered a Junior Default
Notice to the Senior Lender and either (A) thirty (30) days have expired since the date of the
Junior Lender’s delivery of such Junior Default Notice and the Junior Lender has not received a
Senior Non-Payment Default Notice from the Senior Lender or (B) the Junior Lender has received a
Senior Non-Payment Default Notice from the Senior Lender and one hundred eighty (180) days have
expired since the earlier of (x) the date of such receipt and (y) the date of receipt of any
CapitalSource Non-Payment Default Notice and at the end of the relevant time period described in
(A) and (B), CapitalSource or the Senior Lender have not commenced or are not continuing to
prosecute or otherwise proceed with an Enforcement Action, it being understood that (1) the Junior
Lender shall not commence any Enforcement
Action if no Junior Default has occurred and is continuing (or if there exists no basis for
such Junior Default as set forth in Section 2(e) hereof), (2) the Junior Lender shall discontinue
any Enforcement Action commenced by it at any time thereafter if CapitalSource or the Senior Lender
shall have commenced an Enforcement Action with respect to any Collateral, and (3) in no event
shall the Junior Lender have the right to instruct any bank holding proceeds of any Collateral in a
lockbox or blocked account as to the disposition of such proceeds. After the CapitalSource
Obligations shall have been indefeasibly paid in full in cash and the Commitment has been
terminated, the Senior Lender (to the exclusion of the Junior Lender and the Junior Collateral
Agent) shall have (whether or not any default or event of default under the Senior Loan Agreement,
the Senior Note, the Junior Agreement, the Junior Note, or any agreement relating thereto shall
have occurred and be continuing, and both before and after the occurrence of any Insolvency Event
of Borrower) the sole and exclusive right to administer, enforce and consent to all matters in
respect of the Collateral, including the right (A) to release, or direct or consent to the release
of, with or without consideration, the Collateral from the lien of the Senior Loan Agreement or the
Junior Note, and (B) to direct or consent to the sale, transfer, lease, or other disposition of the
Collateral, the foreclosure or forbearance from foreclosure in respect of the Collateral
(including, without limitation, seeking or not seeking relief from any stay against foreclosure in
respect of the Collateral upon the occurrence of any Insolvency Event), and the acceptance of the
Collateral in full or partial satisfaction of the Senior Obligations.

9

 

          (r) After the CapitalSource Obligations shall have been indefeasibly paid in full in cash and
the Commitment has been terminated, upon the sale of any Collateral by or on behalf of the Senior
Lender (whether in connection with any Enforcement Action by the Senior Lender or otherwise), the
Junior Lender and the Junior Collateral Agent shall be deemed to have consented (and does hereby
consent) to such sale and to have released (and does hereby release) any Junior Lien in the
Collateral being sold in such sale and shall, at the request of the Senior Lender, take all action
and, if required, execute and deliver all documents requested by the Senior Lender in connection
therewith. Each of the Junior Lender and the Junior Collateral Agent hereby appoints and
constitutes the Senior Lender as its attorney-in-fact and authorizes the Senior Lender to make any
payment on or take any act necessary or desirable to protect or preserve any of the Collateral.
This power of attorney is coupled with an interest and is irrevocable.

          (s) Each of the Junior Lender and the Junior Collateral Agent agrees not to seek to avoid,
contest or bring (or join in) any action or proceeding to contest the validity of any rights of the
Senior Lender with respect to the Collateral, or the validity or reasonableness of any actions
taken or omitted to be taken by the Senior Lender hereunder or in connection herewith, under the
Senior Loan Agreement or the Senior Note, or in respect of any of the Collateral including, without
limitation, (i) the timing, method, or manner of collecting, disposing of or liquidating any of the
Collateral, (ii) the terms, including the price and percentage of consideration received in cash,
of any such disposition or liquidation, or (iii) the failure to dispose of or liquidate any of the
Collateral, except that the Junior Lender or Junior Collateral Agent may object on the basis of
objections available to an unsecured creditor. Without limitation of the foregoing, the Junior
Lender hereby waives, to the fullest extent permitted by law, (A) any right under Section 9-615(a)
of the Code with respect to the application of disposition proceeds to the Senior Obligations, (B)
any right to notice and objection under Section 9-620 of the Code, promptness, diligence, notice of
acceptance, and any other notice
with respect to any of the obligations under the Junior Agreement or the Junior Note, and (C)
any requirement that the Senior Lender exhaust any right or take any action against Borrower, any
other Person, the Collateral, or any other collateral, in each case except that the Junior Lender
or Junior Collateral Agent may object on the basis of objections available to an unsecured
creditor. In addition, the Junior Lender agrees that the Senior Lender shall have no obligation to
marshal any Collateral or to seek recourse against or satisfaction of any of the Senior Obligations
from one source before seeking recourse against or satisfaction from another source. The Junior
Lender further agrees that the net cash proceeds resulting from the Senior Lender’s exercise of any
right to liquidate all or substantially all of the Collateral (after deducting all of the Senior
Lender’s expenses related thereto), may be applied by the Senior Lender to such of the Senior
Obligations and in such order as the Senior Lender may elect in its sole and absolute discretion,
whether due or to become due. The Junior Lender further agrees that all of the Senior Lender’s
remedies under the Senior Loan Agreement and the Senior Note shall be cumulative, may be exercised
simultaneously against any Collateral and any Borrower or in such order and with respect to such
Collateral or such Borrower as the Senior Lender may deem desirable, and are not intended to be
exhaustive.

10

 

          (t) Notwithstanding the lack of perfection of any of the liens or security interests of the
Senior Lender with respect to any or all of the Collateral or any priority in time of perfection of
any of the liens or security interests of the Junior Lender over the liens or security interests of
the Senior Lender with respect to any or all of the Collateral, the liens and security interests of
the Senior Lender with respect to the Collateral shall be superior and prior in right of payment
and enforcement to the liens and security interests of the Junior Lender and/or the Junior
Collateral Agent with respect to the Collateral.

          (u) Notwithstanding any provision of this Agreement to the contrary, this Agreement shall not
limit the right of the Junior Lender to exercise any right of conversion set forth in the Junior
Note (as in effect on the date hereof).

          (v) Notwithstanding any provision of this Agreement to the contrary, this Agreement shall not
limit the right of the Junior Lender to receive any Reorganized Securities. For purposes hereof,
“Reorganized Securities” shall mean securities of Borrower or any other Person (including those of
Borrower as reorganized) issued to the Junior Lender in respect of all or a part of the Junior
Obligations and provided for by a plan of reorganization in a proceeding under the Bankruptcy Code
or in connection with an Insolvency Event of Borrower, provided, that (i) such securities are (a)
equity securities or (b) debt securities subordinated to the Senior Obligations (and any debt
securities received by the holders of the Senior Obligations in such proceeding) at least to the
same extent as the Junior Obligations are subordinated to the Senior Obligations pursuant to this
Agreement and (ii) such securities are authorized by a court of competent jurisdiction in a final
order or decree which, in the case of debt securities, gives effect to this proviso and the
subordination of such debt securities to the Senior Obligations (and any debt securities received
by the holders of the Senior Obligations in such proceeding) on the terms set forth in this
Agreement.

          (w) The Junior Lender agrees to provide written notice to the Senior Lender within three (3)
Business Days following the appointment of a successor to the Junior
Collateral Agent pursuant to the Junior Agreement, such notice to set forth the name, address
and other contact information of such successor.

11

 

     SECTION 3.  Further Assurances. The Junior Lender and/or the Junior Collateral Agent
shall, at any time and from time to time, at Borrower’s expense, promptly execute and deliver all
further instruments and documents and take all further action that the Senior Lender may request to
protect any right or interest granted or purported to be granted hereby or to enable the Senior
Lender to exercise and enforce its rights and remedies hereunder.

     SECTION 4.  Obligations Unimpaired. Nothing in this Agreement shall impair as
between Borrower, on the one hand, and the Senior Lender or the Junior Lender, on the other hand,
the obligations of Borrower to the Senior Lender or the Junior Lender, as the case may be.

     SECTION 5.  Termination; Reinstatement.

          (a) This Agreement shall terminate and cease to be of any further force or effect at the time
when all the Senior Obligations including, without limitation, all Postpetition Interest, have been
indefeasibly paid in full in cash or have been converted into shares of Series A Preferred Stock of
NationsHealth.

          (b) If, at any time, all or part of any payment with respect to the Senior Obligations
theretofore made by Borrower or any other Person is rescinded or must otherwise be returned by the
Senior Lender for any reason whatsoever (including, without limitation, as a result of Borrower or
any other Person becoming the subject of an Insolvency Event), this Agreement shall continue to be
effective or be reinstated, as the case may be, all as though such payment had not been made.

     SECTION 6.  Benefit of Agreement. Except as expressly provided in Section 4, nothing
in this Agreement, express or implied, shall give or be construed to give to any Person including,
without limitation, Borrower (but excluding the Senior Lender) any legal or equitable right, remedy
or claim under this Agreement or under any covenant or provision contained herein, all such
covenants and provisions being for the sole and exclusive benefit of the Senior Lender.

12

 

     SECTION 7. Notices.

          (a) 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 the Senior Lender, 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

If to the Junior Collateral Agent or the Junior Lender, to:

MHR Fund Management LLC

40 West 57th Street, 24th Floor,

New York, NY 10019

Attention: Hal Goldstein and Emily Fine

Facsimile: (212) 262-9356

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

			
		 	O’Melveny & Myers LLP

7 Times Square

Times Square Tower

New York, NY 10036

Attention: Patricia M. Perez, Esq.

Facsimile: (212) 408-2419

If to the Borrower, to:

NationsHealth, Inc.

13630 NW 8th Street

Suite 210

Sunrise, Florida 33325

Attention: Chief Executive Officer

Facsimile: (954) 903-5005

13

 

	 	 	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.

and

Foley & Lardner LLP

100 North Tampa Street

Suite 2700

Tampa, FL 33602

Attention: Steven W. Vazquez

Facsimile: (813) 221-4210

          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 7, 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.

          (b) The Senior Lender shall provide the Junior Lender and the Junior Lender shall provide the
Senior Lender with a copy of each notice of default (to the extent permitted hereunder) sent to
Borrower concurrently with the sending thereof and promptly notify the Junior Lender or the Senior
Lender, respectively, in the event that the default which is the subject of such default notice is
cured or waived, provided that the failure to give any such notice shall not limit or otherwise
affect any party’s rights under this Agreement. The Senior Lender and the Junior Lender, as
applicable, shall use its best efforts to provide Borrower with a copy of any Senior Payment
Default Notice, Senior Non-Payment Default Notice and Junior
Default Notice, as applicable, concurrently with the sending thereof and promptly notify
Borrower of any cure or waiver thereof, provided that the failure to give any such notice shall
not limit or otherwise affect any party’s rights under this Agreement.

14

 

          (c) The Junior Lender shall provide the Senior Lender with a copy of each notice sent by the
Junior Lender to CapitalSource pursuant to the Junior Lender Subordination Agreement concurrently
with the sending thereof. The Junior Lender shall provide the Senior Lender with a copy of each
notice received by the Junior Lender from CapitalSource pursuant to the Junior Lender Subordination
Agreement within two (2) Business Days of Junior Lender’s receipt thereof.

     SECTION 8. Amendments and Waivers. No amendment or waiver of any provision of this
Agreement, or consent to any departure by the Junior Lender, the Junior Collateral Agent or
Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed
by the Senior Lender (and if such amendment, waiver or consent affects the Collateral Agent, by the
Junior Collateral Agent), Borrower and the Junior Lender.

     SECTION 9. Delays; Partial Exercise of Remedies. No delay or omission of the Senior
Lender to exercise any right or remedy hereunder shall impair any such right or operate as a waiver
thereof. No single or partial exercise by the Senior Lender of any right or remedy shall preclude
any other or further exercise thereof, or preclude any other right or remedy.

     SECTION 10. Counterparts; Telecopied Signatures. This Agreement and any waiver or
amendment related hereto may be executed in counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. This Agreement may be executed and delivered
by telecopier or other facsimile transmission all with the same force and effect as if the same
were a fully executed and delivered original manual counterpart.

     SECTION 11. Severability. If any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

     SECTION 12. Entire Agreement; Successors and Assigns. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof, supersedes any prior
written and verbal agreements among them with respect to the subject matter hereof, and shall bind
and benefit the parties (including, without limitation, the Senior Lender and the Junior Collateral
Agent) and their respective successors and permitted assigns. Borrower and Junior Lender each
acknowledge and agree that Senior Lender, at any time and from time to time may sell, assign or
grant participating interests in or transfer all or any part of its rights and obligations under
this Agreement, the Senior Obligations, the Collateral, the Senior Agreement and/or the Senior Note
to one or more other Persons, including, without limitation, financial institutions (each such
transferee, assignee or purchaser, a “Transferee”). In such case, the Transferee shall have all of
the rights and benefits with respect to the portion of such Senior Obligations, the Collateral,
this Agreement and/or the Loan Documents, as the case may be, held
by it as fully as if such Transferee were the original holder thereof (including, without
limitation, rights of set off and recoupment), and shall become vested with all of the powers and
rights given to Senior Lender and all of the obligation of Senior Lender hereunder with respect
thereto, and shall be deemed to be the “Senior Lender” for all purposes hereunder, the predecessor
Senior Lender shall thereafter be forever released and fully discharged from any liability or
responsibility hereunder with respect to the rights and interests so assigned, and either the
Senior Lender or any Transferee may be designated as the sole agent to manage the transactions and
obligations contemplated herein.

15

 

     SECTION 13. Conflict. In the event of any express conflict between any term,
covenant or condition of this Agreement and any term, covenant or condition of any of the Senior
Loan Agreement, the Senior Note, the Junior Agreement or the Junior Note, the provisions of this
Agreement shall control.

     SECTION 14. Statement of Indebtedness. Upon demand by the Senior Lender, the Junior
Lender will furnish to the Senior Lender a statement of indebtedness owing from Borrower to the
Junior Lender. The Senior Lender may rely without further investigation upon any such statement.

     SECTION 15. SPECIFIC PERFORMANCE. THE SENIOR LENDER IS HEREBY AUTHORIZED TO DEMAND
SPECIFIC PERFORMANCE OF THIS AGREEMENT AT ANY TIME WHEN THE JUNIOR LENDER OR THE JUNIOR COLLATERAL
AGENT SHALL HAVE FAILED TO COMPLY WITH ANY OF THE PROVISIONS OF THIS AGREEMENT APPLICABLE TO IT.
EACH OF THE JUNIOR LENDER AND THE JUNIOR COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES ANY DEFENSE
BASED ON THE ADEQUACY OF A REMEDY AT LAW THAT MIGHT BE ASSERTED AS A BAR TO SUCH REMEDY OF SPECIFIC
PERFORMANCE.

     SECTION 16. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER SOUNDING IN
CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS AND DECISIONS (AS
OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.

     SECTION 17. SUBMISSION TO JURISDICTION. ALL DISPUTES BETWEEN OR AMONG ANY OF THE
PARTIES HERETO, WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY
BY STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK AND THE COURTS TO WHICH AN APPEAL
THEREFROM MAY BE TAKEN; PROVIDED , HOWEVER, THAT THE SENIOR LENDER SHALL HAVE THE RIGHT,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE JUNIOR LENDER OR THE
JUNIOR COLLATERAL AGENT TO ENFORCE THE PROVISIONS HEREOF IN ANY OTHER COURT OF COMPETENT
JURISDICTION OR VENUE. EACH OF THE JUNIOR LENDER, THE JUNIOR COLLATERAL AGENT AND BORROWER WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF ANY SUCH COURT IN WHICH THE SENIOR LENDER HAS
COMMENCED A PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON
CONVENIENS.

16

 

     SECTION 18. JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO (I) THIS AGREEMENT OR (II) ANY CONDUCT, ACT OR
OMISSION OF THE JUNIOR LENDER, THE JUNIOR COLLATERAL AGENT, BORROWER, THE SENIOR LENDER OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER AFFILIATE, IN EACH CASE
WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE.

     SECTION 19. SERVICE OF PROCESS. THE JUNIOR LENDER HEREBY IRREVOCABLY DESIGNATES THE
JUNIOR COLLATERAL AGENT AS THE DESIGNEE AND AGENT OF THE JUNIOR LENDER TO RECEIVE, FOR AND ON
BEHALF OF THE JUNIOR LENDER, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS
WILL BE PROMPTLY FORWARDED BY MAIL TO THE JUNIOR LENDER, BUT THE FAILURE OF THE JUNIOR LENDER TO
RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE SENIOR LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

[SIGNATURE PAGES FOLLOW]

17

 

     IN WITNESS WHEREOF, the undersigned has caused this Agreement to be executed by its proper and
duly authorized officer as of the date first set forth above.

	 	 	 	 	 
	 	JUNIOR LENDER:

MHR CAPITAL PARTNERS MASTER ACCOUNT LP

 	 
	 	By:  	/s/ Hal Goldstein
 	 
	 	 	Name:  	Hal Goldstein 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	MHR CAPITAL PARTNERS (100) LP

 	 
	 	By:  	/s/ Hal Goldstein
 	 
	 	 	Name:  	Hal Goldstein 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	OTQ LLC

 	 
	 	By:  	/s/ Hal Goldstein
 	 
	 	 	Name:  	Hal Goldstein 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	JUNIOR COLLATERAL AGENT:

MHR CAPITAL PARTNERS (500) LP

 	 
	 	By:  	/s/ Hal Goldstein
 	 
	 	 	Name:  	Hal Goldstein 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	SENIOR LENDER:

COMVEST NATIONSHEALTH HOLDINGS, LLC

 	 
	 	By:  	/s/ Jose Gordo
 	 
	 	 	Name:  	Jose Gordo 	 
	 	 	Title:  	President 	 
	 
	 	MSL FAMILY LLC

 	 
	 	By:  	/s/ Mark Lama
 	 
	 	 	Name:  	Mark Lama 	 
	 	 	Title:  	President 	 
	 

18

 

ACKNOWLEDGMENT

     Each of the undersigned hereby acknowledges the provisions of the foregoing Subordination
Agreement and agrees to abide by the terms thereof.

	 	 	 	 	 
	 	BORROWER:

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 	 
	 
	 	NATIONSHEALTH, INC.

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

 	 
	 	By:  	/s/ Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	CEO 	 
	 
	 	NATIONAL PHARMACEUTICALS AND
MEDICAL PRODUCTS (USA), LLC

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

19EX-4.27

Exhibit
4.27

EXCHANGE AND ROLLOVER AGREEMENT

     This Exchange and Rollover Agreement (this “Agreement”), dated as of April 30, 2009,
is made by and among ComVest NationsHealth Holdings, LLC, a Delaware limited liability company
(“Parent”), NationsHealth Acquisition Corp., a Delaware corporation and a wholly owned
Subsidiary of Parent (“Merger Sub”), NationsHealth, Inc., a Delaware corporation (the
“Company”), and the undersigned stockholders (each a “Stockholder” and
collectively, the “Stockholders”) of the Company. Capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement (as defined below).

RECITALS

     WHEREAS, concurrently with the execution of this Agreement, Parent, Merger Sub, and the
Company have entered into that certain Agreement and Plan of Merger (the “Merger
Agreement”);

     WHEREAS, pursuant to the Merger Agreement, 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 (the “Surviving
Corporation”);

     WHEREAS, immediately prior to the Effective Time, each Stockholder desires to contribute all
issued and outstanding shares of Company Common Stock and Company Restricted Stock owned,
beneficially and of record, by such Stockholder (the “Rollover Shares”) in exchange for the
same number of shares of the Merger Sub Non-Voting Common Stock at a price per share equal to $0.12
(the “Exchange”) in accordance with the terms of this Agreement;

     WHEREAS, the Stockholders, Merger Sub and Parent intend that the Exchange be treated for
United States federal income tax purposes as a tax-free exchange of the Rollover Shares for the
Merger Sub Non-Voting Common Stock under the Internal Revenue Code of 1986, as amended (the
“Code”);

     WHEREAS, on the date hereof, each of the Company, Parent, and the Stockholders shall have
entered into the Preferred Stock Investment Documents, as applicable, each of which shall be
effective as of the Closing Date and in which the rights, preferences, privileges and restrictions
of the Preferred Stock issued upon conversion of the Bridge Loan and in connection with the
Preferred Stock Investment and the Preferred Stock Investment Option (if exercised), and the
Surviving Corporation Common Stock issued in connection with the Rollover (as defined below) shall
be set forth in the Preferred Stock Investment Documents.

     WHEREAS, at the Closing and before the Effective Time, (a) the outstanding principal amount
under the Bridge Loan shall be converted into shares of Preferred Stock at a price per share equal
to $0.12, (b) any remaining accrued and unpaid interest on the Bridge Loan shall be paid in cash by
the Company to Parent, and (c) Parent shall make the Preferred Stock Investment pursuant to which
Parent shall purchase and the Company shall sell shares of Preferred Stock at a price per share
equal to $0.12; and

 

 

     WHEREAS, in connection with the Merger and at the Effective Time, (a) each share of issued and
outstanding Company Common Stock, including shares of Company Restricted Stock (other than shares
to be canceled in accordance with Section 2.1(c) of the Merger Agreement, the Dissenting Shares,
and the shares of Preferred Stock issued at or immediately prior to the Effective Time in
connection with the Preferred Stock Investment and the Preferred Stock Investment Option (if
exercised)) shall be converted into the right to receive from the Surviving Corporation a cash
amount equal to $0.12 per share(the “Conversion”), (b) each share of Merger Sub Non-Voting
Common Stock owned, beneficially or of record, by each of the Stockholders shall be converted into
and become one share of Surviving Corporation Common Stock in accordance with the terms and
conditions of Section 2.1(a) of the Merger Agreement and Section 1.2(a) of this Agreement,
and (c) each share of Merger Sub Voting Common Stock owned, beneficially or of record, by Parent
shall be converted into and become one share of Surviving Corporation Common Stock in accordance
with the terms and conditions of Section 2.1(a) of the Merger Agreement and Section 1.2(a)
of this Agreement (collectively, clause (b) and (c) shall be referred to as the
“Rollover”).

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto do hereby mutually covenant and agree as follows:

ARTICLE 1

EXCHANGE AND ROLLOVER

     1.1 The Exchange.

          (a) Immediately prior to the Effective Time and in connection with the Exchange, each
Stockholder shall assign, contribute and transfer to Merger Sub and the Merger Sub shall accept all
of the Rollover Shares set forth opposite such Stockholder’s name on Schedule 1.1(a)
attached hereto free and clear of any mortgage, lien, pledge, charge, claim, security interest,
agreement, and encumbrance whatsoever (any of the foregoing, an “Encumbrance”).

          (b) In connection with each Stockholder’s contribution of its Rollover Shares to Merger Sub,
Merger Sub shall issue to such Stockholder the number of shares of Merger Sub Non-Voting Common
Stock set forth opposite such Stockholder’s name on Schedule 1.1(b) attached hereto free
and clear of any Encumbrance

          (c) At the Effective Time, all of the Rollover Shares held by Parent or Merger Sub after the
Exchange shall be cancelled in accordance with Section 2.1(c) of the Merger Agreement and, when so
cancelled, shall no longer be issued and outstanding and shall automatically cease to exist, and
each Stockholder holding a certificate representing any such Rollover Shares shall not have any
rights with respect thereto, except the right to receive the shares of Merger Sub Non-Voting Common
Stock as set forth in Section 1.1(b).

2

 

     1.2 The Rollover.

          (a) At the Effective Time and in connection with the Rollover, (i) each share of Merger Sub
Non-Voting Common Stock set forth opposite each Stockholder’s name on Schedule 1.1(b)
attached hereto and held by such Stockholder and each share of Merger Sub Voting Common Stock set
forth opposite Parent’s name on Schedule 1.2(a) attached hereto, and (ii) held by Parent
shall be converted into the number of shares of Surviving Corporation Common Stock set forth
opposite such Person’s name on Schedule 1.2(b) attached hereto free and clear of any
Encumbrance.

          (b) As of the Effective Time, all such shares of Merger Sub capital stock held by Parent
and/or any Stockholder after the Rollover shall be cancelled in accordance with Section 2.1(a) of
the Merger Agreement, when so cancelled, shall no longer be issued and outstanding and shall
automatically cease to exist, and each holder of a certificate representing any such shares of
Merger Sub capital stock shall not to have any rights with respect thereto, except the right to
receive shares of the Surviving Corporation Common Stock as set forth in Section 1.2(a).

          (c) All certificates representing Surviving Corporation Common Stock issued pursuant to
Section 1.2(a) shall be endorsed with the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
STATE SECURITIES LAWS AND CANNOT BE OFFERED, SOLD, OR TRANSFERRED IN THE
ABSENCE OF REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS AND REGULATIONS PROMULGATED
THEREUNDER. THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
BY THE REGISTERED OWNER HEREOF FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR
SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF IN VIOLATION OF THE
SECURITIES ACT. THE SHARES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE
PROVISIONS OF THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION
OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

THE COMPANY IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OR SERIES OF STOCK.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS
A STATEMENT OF THE PROVISIONS AND THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF
STOCK OR SERIES THEREOF AND THE
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS. ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE SECRETARY OF THE
COMPANY.
THESE SHARES SHALL NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THAT CERTAIN
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT BY AND AMONG THE COMPANY AND
CERTAIN OF ITS STOCKHOLDERS.

3

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

     Parent and Merger Sub, jointly and severally, represent and warrant to the Company and the
Stockholders as of the date hereof and as of the Closing Date:

     2.1 Organization and Standing; Authority; Noncontravention.

          (a) Parent is a limited liability company, duly formed, validly existing and in good standing
under the laws of the State of Delaware. Merger Sub is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.

          (b) Each of Parent and Merger Sub has all necessary corporate or limited liability company
power and authority to execute and deliver this Agreement and to perform its obligations hereunder.
The execution, delivery and performance by each of Parent and Merger Sub of this Agreement, and
the consummation by it of the transactions contemplated herein, have been duly authorized and
approved by its Board of Directors or board of managers and stockholders or equity holders and, no
other corporate action on the part of Parent and Merger Sub or the equity holders thereof is
necessary to authorize the execution, delivery and performance by Parent and Merger Sub of this
Agreement and the consummation by it of transactions contemplated herein. This Agreement has been
duly executed and delivered by Parent and Merger Sub and, assuming due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub, enforceable against each of them in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general application affecting or relating to
the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity,
whether considered in a proceeding at law or in equity (the “Bankruptcy and Equity
Exception”).

          (c) Neither the execution and delivery of this Agreement by Parent and Merger Sub, nor
compliance by Parent or Merger Sub with any of the terms or provisions hereof, will (i) conflict
with or violate any material provision of the organizational or governing documents of Parent or
Merger Sub or (ii) assuming that the authorizations, consents and approvals referred to in Section
4.3 of the Merger Agreement have been received and the waiting periods referred to therein have
expired, and any condition to the effectiveness of such consent, approval, authorization, or waiver
has been satisfied and the filings referred to in Section 4.3 of the Merger Agreement are made, (A)
violate any Law, judgment, writ or injunction of any Governmental Authority applicable to Parent or
Merger Sub or any of their respective properties or assets, or (B) violate, conflict with, result
in the loss of any benefit under, constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a default) under,
result in the termination of or a right of termination or cancellation under, accelerate the
performance required by, or result in the creation of any Lien, other than any Permitted Liens,
upon any of the respective properties or assets of, Parent or Merger Sub under, any of the terms,
conditions or provisions of any Contract to which Parent or Merger Sub is a party, or by which they
or any of their respective properties or assets may be bound or affected, other than, in each case,
any such violation, conflict, default, termination, cancellation, acceleration or Lien that would
not have, individually or in the aggregate, a Parent Material Adverse Effect and no other
authorizations, consents, approvals or waivers are required other than those referred to in Section
4.3 of the Merger Agreement.

4

 

     2.2 Title to Merger Sub Non-Voting Common Stock. Upon each Stockholder’s contribution
of the Rollover Shares to Merger Sub pursuant to the Exchange, (a) the Merger Sub Non-Voting
Common Stock issued in exchange thereof shall be duly authorized, validly issued and
outstanding, fully paid and nonassessable, and free of any preemptive rights, rights of first
refusal or similar rights, and (b) such Stockholder will acquire good, valid, and marketable title
thereto, free and clear of any Encumbrance, other than those imposed by Law, contemplated by this
Agreement or the Merger Agreement or the transactions contemplated herein or therein, or that
result from any actions taken by such Stockholder.

     2.3 Capitalization. The authorized capital stock of Merger Sub consists of 20,000,000
shares of Merger Sub Non-Voting Common Stock, 1 share of Merger Sub Voting Common Stock, and no
shares of preferred stock. As of the date hereof and before the consummation of the Exchange,
there are no issued and outstanding shares of Merger Sub Non-Voting Common Stock, and one (1)
issued and outstanding share of Merger Sub Voting Common Stock, which is held by solely by Parent.
After the consummation of the Exchange and at the Effective Time, there will be 12,517,426 shares
of Merger Sub Non-Voting Common Stock and 1 share of Merger Sub Voting Common Stock outstanding on
a fully diluted basis issued to the persons set forth on Schedule 2.3 attached hereto. Other than
the shares of Merger Sub Voting Common Stock issued to Parent or Merger Sub Non-Voting Common Stock
to be issued in connection with the Exchange, no shares of Merger Sub Voting Common Stock and
Merger Sub Non-Voting Common Stock will be issued. The rights, preferences, privileges and
restrictions of the Merger Sub Voting Common Stock and Merger Sub Non-Voting Common Stock are as
stated in Merger Sub’s Certificate of Incorporation as filed with the Secretary of State of the
State of Delaware. All issued and outstanding shares of capital stock of Merger Sub have been duly
authorized, are validly issued and are fully paid and nonassessable and free of preemptive rights
or other restrictions, other than those imposed by Law, contemplated by this Agreement or the
Merger Agreement or the transactions contemplated herein or therein, or that result from any
actions taken by such Stockholder. Except for the obligations set forth in this Agreement, (a)
there are no outstanding options or other rights of any kind which obligate Merger Sub to issue or
deliver any shares of capital stock or voting securities of Merger Sub or any securities or
obligations convertible into or exercisable for any shares of capital stock or voting securities of
Merger Sub (the “Merger Sub Securities”), (b) there are no outstanding obligations of
Merger Sub to repurchase, redeem or otherwise acquire any Merger Sub Securities, and (c) there are
no other options, calls, warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of Merger Sub to which Merger Sub or
Parent is a party. There are no bonds, debentures, notes or other indebtedness or securities of
Merger Sub having a right to vote (or convertible into or exercisable for securities having
the right to vote) on any matters on which the holders of capital stock of Merger Sub may vote are
issued and outstanding. As of the date hereof and as of the Closing Date, the only obligations and
liabilities of Merger Sub are and will be those which arise in connection with this Agreement, the
Merger Agreement and the transactions contemplated herein and therein. Merger Sub is a
wholly-owned subsidiary of Parent, and no other person or entity owns any security (or any phantom
stock or the like) of Merger Sub and Merger Sub has no obligation to issue any security (or any
phantom stock or the like) to any person or entity.

5

 

     2.4 Approvals. The execution, delivery and performance of this Agreement by Parent
and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated
herein, do not and will not require any consent, approval or other authorization of, or filing with
or notification to, any Governmental Authority, other than as set forth in the Merger Agreement.

     2.5 Legal Proceedings. There is no pending or, to the Knowledge of Parent,
threatened, material legal, administrative, arbitral or other proceeding, claim, suit or action
against, or governmental or regulatory investigation of, Parent or Merger Sub, nor is there any
injunction, order, judgment, ruling or decree imposed (or, to the Knowledge of Parent, threatened
to be imposed) upon Parent or Merger Sub or the assets of Parent or Merger Sub, by or before any
Governmental Authority, in each case, as has had or would reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.

     2.6 History and Operations of Parent and Merger Sub. Each of Parent and Merger Sub
was formed solely for the purpose of engaging in this Agreement and the other Transactions and the
consummation of the transactions contemplated hereby and thereby, and has not engaged and will not
have engaged on or prior to the Closing Date in any other business activities or operations or
otherwise incurred any liability other than as contemplated by this Agreement and the other
Transactions. Other than Merger Sub, Parent does not have any Subsidiaries. Merger Sub does not
have any Subsidiaries.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to Parent, Merger Sub, and the Stockholders as of the date
hereof and as of the Closing Date:

     3.1 Organization and Standing; Authority; Noncontravention.

          (a) The Company is a corporation, validly existing and in good standing under the laws of the
State of Delaware.

          (b) The Company has all necessary corporate power and authority to execute and deliver this
Agreement and, subject to obtaining the Company Stockholder Approval, to perform its obligations
hereunder. The execution, delivery and performance by the Company of this Agreement, and the
consummation by it of the transactions contemplated herein, have been duly authorized and approved
by its Board of Directors, and except for obtaining the Company
Stockholder Approval and the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware and the Third Amended and Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware, no other corporate action on the part of the Company
is necessary to authorize the execution, delivery and performance by the Company of this Agreement
and the consummation by it of transactions contemplated herein. This Agreement has been duly
executed and delivered by the Company and, assuming due authorization, execution and delivery
hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except that such
enforceability may be limited by Bankruptcy and Equity Exception.

6

 

          (c) Except as specifically set forth in Section 3.3(c) of the Company Disclosure Schedule and
for any agreements entered into in connection with the Rollover Financing, the Preferred Stock
Investment and the Bridge Loan, neither the execution and delivery of this Agreement by the Company
nor compliance by the Company with any of the terms or provisions hereof, will (i) conflict with or
violate any material provision of the Company Charter Documents or (ii) assuming that the
authorizations, consents and approvals referred to in Section 3.4 of the Merger Agreement and the
Company Stockholder Approval are obtained and the filings referred to in Section 3.4 of the Merger
Agreement are made, (A) violate in any material respect any Law, judgment, writ or injunction of
any Governmental Authority applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets, or (B) violate, conflict with, result in the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the creation of any Lien, other than
the Permitted Liens, upon any of the respective properties or assets of, the Company or any of its
Subsidiaries, in each case, in any material respect, under, any of the terms, conditions or
provisions of any Contract or Permit, to which the Company or any of its Subsidiaries is a party,
or by which they or any of their respective properties or assets may be bound or affected, other
than, in each case, any such violation, conflict, default, termination, cancellation, acceleration
or Lien that has not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.

     3.2 Title to Surviving Corporation Common Stock. Upon each Stockholder’s conversion
of the Merger Sub Non-Voting Common Stock issued to such Stockholder in connection with the
Exchange and Parent’s conversion of the Merger Sub Voting Common Stock into shares of the Surviving
Corporation Common Stock in connection with the Rollover, (a) the Surviving Corporation Common
Stock issued in exchange thereof shall be duly authorized, validly issued and outstanding, fully
paid and nonassessable, and (b) such Stockholder and Parent will acquire good, valid, and
marketable title thereto, free and clear of any Encumbrance, other than those imposed by Law,
contemplated by this Agreement, the Merger Agreement or the Preferred Stock Investment Documents or
the transactions contemplated herein or therein, or that result from any actions taken by such
Stockholder or Parent. Based in part, on the representations and warranties of the Stockholders
hereunder, the offer and the sale and issuance of the Surviving Corporation Common Stock in
connection with the Rollover are exempt from the registration and prospectus delivery requirements
of the Securities Act and the securities or blue sky laws in any applicable states.

7

 

     3.3 Capitalization. Immediately after the Effective Time and the consummation of the
Conversion and the Rollover and the issuance of the Preferred Stock in connection with the
Preferred Stock Investment and assuming the Preferred Stock Investment Option is not exercised, and
upon conversion of the Bridge Loan into Preferred Stock, (a) the authorized capital stock of the
Surviving Corporation shall consist of 300,000,000 shares of Surviving Common Stock and 150,000,000
shares Preferred Stock and (b) 12,517,427 shares of Surviving Corporation Common Stock and
67,916,667 shares of Preferred Stock shall be outstanding and issued to the Persons set forth on
Schedule 3.3 attached hereto; provided, that the number of outstanding shares of
Surviving Corporation Common Stock and Preferred Stock may increase, based (x) upon and pursuant to
the exercise of the Preferred Stock Investment Option, so long as such investment is at a per share
price equivalent $0.12, and (y) any issuances pursuant to the Surviving Corporation’s 2009 Stock
Incentive Plan, which the Surviving Corporation has reserved up to 24,328,112 shares of Surviving
Corporation Common Stock, representing 20.9% of the Surviving Corporation’s issued and outstanding
capital stock on a fully diluted basis as of the Closing Date, which shall be maintained at 20.9%
in the event the Preferred Stock Investment Option is exercised. The rights, preferences,
privileges and restrictions of the Surviving Corporation Common Stock and Preferred Stock are as
stated in the Surviving Corporation’s Amended and Restated Certificate of Incorporation attached
hereto as Exhibit 3.3 as filed with the Secretary of State of the State of Delaware and in
effect immediately prior to the Effective Time, the Amended and Restated Bylaws, the other
Preferred Stock Investment Documents and applicable law. All issued and outstanding shares of
capital stock of the Surviving Corporation shall be duly authorized, are validly issued and are
fully paid and nonassessable.

     3.4 Governmental Approvals. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions contemplated herein, do not
and will not require any consent, approval or other authorization of, or filing with or
notification to, any Governmental Authority, other than as set forth in the Merger Agreement.

     3.5 Legal Proceedings. Except as set forth in the Company SEC Documents or as set
forth in Section 3.7, Section 3.8 and/or Section 3.21 of the Company Disclosure Schedule of the
Merger Agreement, there is no pending or, to the Knowledge of the Company, threatened, legal,
administrative, arbitral or other proceeding, claim, suit or action against, or governmental or
regulatory investigation of, the Company or any of its Subsidiaries, nor is there any injunction,
order, judgment, ruling or decree imposed (or, to the Knowledge of the Company, threatened to be
imposed) upon the Company, any of its Subsidiaries or the assets of the Company or any of its
Subsidiaries, by or before any Governmental Authority, in each case, as has had or would reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except
as set forth in Section 3.7 of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is subject to any settlement agreement or stipulation, in each case, as has had or
would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect and there is no pending legal, administrative, arbitral, or other proceeding, claim, suit or
action that challenges, or that, if decided adversely to the Company would have the effect of
preventing, delaying, making illegal or otherwise interfering with, the Merger.

8

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

     Except as set forth in any agreement among the Stockholders, including, but not limited to,
any stockholders agreements, proxies or other similar agreements, and, in the case of MHR, except
as set forth in Schedule 4 attached hereto, each Stockholder, severally, and not jointly
represents and warrants to the Company, Parent, and Merger Sub as of the date hereof and as of the
Closing Date:

     4.1 Authority; Noncontravention.

          (a) Such Stockholder is the sole (including any of such Stockholder’s Affiliates) owner of and
has full right, power and authority to sell the Rollover Shares owned, beneficially and of record,
by such Stockholder and will be the sole (including any of such Stockholder’s Affiliates) owner of
and have the full, right, power and authority to sell and vote the Merger Sub Non-Voting Common
Stock issued to such Stockholder in connection with the Exchange. Such Stockholder has full power
and authority to enter into this Agreement and the agreements contemplated hereby and to deliver
the Rollover Shares and the certificates evidencing such Rollover Shares to the Merger Sub as
provided for herein, free and clear of any Encumbrance, and the Merger Sub Non-Voting Common Stock
and the certificate evidencing such Merger Sub Non-Voting Common Stock as provided herein, free and
clear of any Encumbrance, in each case other than any Encumbrance imposed by Law, contemplated by
this Agreement or the Merger Agreement or the transactions contemplated herein or therein, or that
result from any actions taken by such Stockholder. This Agreement and all other agreements
contemplated hereby to be entered into by such Stockholder each constitutes a legal, valid and
binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its
terms, except that such enforceability may be limited by Bankruptcy and Equity Exception.

          (b) Neither the execution and delivery of this Agreement by such Stockholder nor compliance by
such Stockholder with any of the terms or provisions hereof, will conflict with, violate or cause a
breach of any Contract to which such Stockholder is a party or any judgment, order or decree to
which such Stockholder is subject, other than any breach that will not impair in any material
respect the ability of such Stockholder to consummate the transactions contemplated by the Merger
Agreement or hereby and comply with its obligations hereunder and thereunder.

     4.2 Title to Rollover Shares. Such Stockholder has good and valid title to all of its
Rollover Shares free and clear of any Encumbrance, and will have good and valid title to all of its
Merger Sub Non-Voting Common Stock issued in connection with the Exchange, in each case other than
those imposed by Law, contemplated by this Agreement or the Merger Agreement or the transactions
contemplated herein or therein, or that result from any actions taken by such Stockholder. Upon
the consummation of the Exchange, such Stockholder will contribute to Merger Sub and Merger Sub
shall receive good and valid title to all of the Rollover Shares free and clear of any Encumbrance,
other than those imposed by Law, contemplated by this Agreement or the Merger Agreement or the
transactions contemplated herein or therein, or that result from any actions taken by such
Stockholder. Upon the consummation of the Rollover, such Stockholder will contribute to the
Surviving Corporation and the Surviving Corporation
shall receive good and valid title to all of the Merger Sub Non-Voting Common Stock
issued to such Stockholder in the Exchange free and clear of any Encumbrance, other than those
imposed by Law, contemplated by this Agreement or the Merger Agreement or the transactions
contemplated herein or therein, or that result from any actions taken by such Stockholder. Other
than as set forth in the Voting Agreement or the Preferred Stock Investment Documents or the Bridge
Loan Documents or the First and Second Amended and Restated Notes (as defined below in Section
6.17), the MHR Warrants and the Waiver Warrants, there is and will be no outstanding Contract
with any Person to vote, purchase, redeem or otherwise acquire any Rollover Shares or Merger Sub
Non-Voting Common Stock, as the case may be, or securities or obligations of any kind convertible
into any Rollover Shares or Merger Sub Non-Voting Common Stock, as the case may be, owned,
beneficially and of record, by such Stockholder.

9

 

ARTICLE 5

ACCREDITED INVESTOR; PURCHASE SURVIVING CORPORATION COMMON STOCK FOR INVESTMENT

          (a) Each Stockholder and Parent (collectively, the “Investor”) is an “accredited
investor” within the meaning of Regulation D under the Securities Act.

          (b) Each Investor has such knowledge and experience in financial and business matters that
such Investor is capable of evaluating the merits and risks of its investment in the Surviving
Corporation Common Stock, and such Investor understands and is able to bear any economic risks
associated with such investment (including the inherent risk of losing all or part of its
investment in such Surviving Corporation Common Stock).

          (c) Each Investor is familiar with the business that is conducted and is intended to be
conducted by the Surviving Corporation, including financial matters related to such business.

          (d) Each Investor has been given the opportunity to ask questions of and receive answers from
Parent, the Company and their respective representatives, as applicable, concerning (i) the terms
and conditions of the issuance of the Surviving Corporation Common Stock and the Preferred Stock in
connection with the Preferred Stock Investment and the conversion of the Bridge Loan and the other
transactions contemplated in connection with the Rollover and in connection with the Merger
Agreement and (ii) the financial condition, operation and prospects of Parent, the Company and
their Subsidiaries both before and after giving effect to the Merger. Each Investor has had full
access to such other information concerning Parent, the Company and their Subsidiaries, as the case
may be, and their respective operations, assets, and liabilities as it has requested.

          (e) Each Investor understands that the Surviving Corporation Common Stock being purchased by
such Investor hereunder has not been registered under the Securities Act, or under applicable state
securities laws (“Blue Sky Laws”), in reliance upon exemptions contained in the Securities
Act and Blue Sky Laws and any applicable regulations promulgated thereunder or interpretations
thereof, and cannot be offered for sale, sold or otherwise transferred unless, among other things,
such Surviving Corporation Common Stock subsequently is so registered or qualifies for exemption
from registration under the Securities Act and Blue Sky Laws, and that
the certificates representing such Surviving Corporation Common Stock shall bear a legend
noting such restrictions as described in Section 1.2(d). Each Investor acknowledges that
it is able to bear the economic risk of investment in the Surviving Corporation Common Stock for an
indefinite period of time.

10

 

          (f) Each Investor is purchasing the Surviving Corporation Common Stock in good faith solely
for its own (or any of its Affiliate’s) account, for investment and not with a view toward resale
or other distribution in violation of the Securities Act, and such Investor understands that such
Surviving Corporation Common Stock shall not be disposed of by such Investor in contravention of
the Preferred Stock Investment Documents, the Securities Act, any applicable Blue Sky Laws or any
other Law applicable to the Surviving Corporation Common Stock.

          (g) Other than pursuant to the Investor Rights Agreement entered into in connection with the
Preferred Stock Investment Documents, each Investor also understands that the Surviving Corporation
does not have any obligation or intention to register the Surviving Corporation Common Stock for
sale under the Securities Act or any state securities laws; and that such Investor has no right to
require the registration of the Surviving Corporation Common Stock under the Securities Act, any
state securities laws or other applicable securities regulations. Other than pursuant to the
Preferred Stock Investment Documents and pursuant to any transfers under Section 1.6 of the Right
of First Refusal and Co-Sale Agreement, such Investor has no Contract with any Person to sell or
transfer or pledge to such Person or anyone else any of the Surviving Corporation Common Stock and
such Investor represents and warrants that such Investor has no present plans to enter into any
such Contract.

          (h) In connection with the conversion of the Merger Sub Non-Voting Common Stock issued to each
Stockholder in connection with the Exchange and the Merger Sub Voting Common Stock held by Parent
for the Surviving Corporation Common Stock issued in connection with the Rollover, such Stockholder
and Parent, as the case may be, acknowledges, covenants and agrees as follows:

               (i) None of this Agreement (or any term or provision hereof), the issuance of the Surviving
Corporation Common Stock, or any other transaction comprising the Rollover creates any
employee/employer relationship or other similar relationship between the Company or any of its
Subsidiaries or any of the Company’s Affiliates, on the one hand, and such Investor, on the other
hand.

               (ii) All rights and obligations of such Investor with respect to its Surviving Corporation
Common Stock received pursuant to this Agreement, including in respect of voting and transfer
rights, shall be as provided in the Preferred Stock Investment Documents, and the Surviving
Corporation’s Amended and Restated Bylaws, Amended and Restated Certificate of Incorporation and/or
any of its other organizational and governance documents and applicable law.

               (iii) SUCH INVESTOR’S INVESTMENT IN THE SURVIVING CORPORATION COMMON STOCK IS SPECULATIVE AND
RISKY. THERE IS NO PUBLIC OR OTHER MARKET FOR THE SURVIVING CORPORATION COMMON
STOCK NOR IS ANY LIKELY TO DEVELOP. SUCH INVESTOR MAY AND CAN AFFORD TO LOSE ITS ENTIRE
INVESTMENT IN THE SURVIVING CORPORATION COMMON STOCK AND SUCH INVESTOR UNDERSTANDS SUCH INVESTOR
MAY HAVE TO HOLD SUCH INVESTMENT INDEFINITELY. SUCH INVESTOR IS AWARE AND ACKNOWLEDGES THAT,
BECAUSE OF THE SUBSTANTIAL RESTRICTIONS ON THE TRANSFERABILITY OF THE SURVIVING CORPORATION COMMON
STOCK, IT MAY NOT BE POSSIBLE FOR SUCH INVESTOR TO LIQUIDATE ITS INVESTMENT IN THE SURVIVING
CORPORATION READILY, EVEN IN THE CASE OF AN EMERGENCY. SUCH INVESTOR MAY LOSE ANY FEDERAL AND/OR
STATE INCOME TAX BENEFITS WHICH MAY BE AVAILABLE TO SUCH INVESTOR, WHICH MAY BE LOST THROUGH AN
ACTION BY A GOVERNMENTAL AUTHORITY OR BY CHANGES IN EXISTING LAWS AND REGULATIONS, INCLUDING THE
CODE. SUCH INVESTOR, IN CONSUMMATING THE ROLLOVER, IF RELYING ON ANY ADVICE, IS RELYING SOLELY ON
THE ADVICE OF ITS PERSONAL TAX AND LEGAL ADVISOR WITH RESPECT TO THE TAX, INCLUDING THE INTENDED
TAX-FREE EXCHANGE CONTEMPLATED BY THIS AGREEMENT, AND OTHER ASPECTS OF THE INVESTOR’S INVESTMENT IN
THE SURVIVING CORPORATION AND CONSUMMATION OF THE ROLLOVER.

11

 

ARTICLE 6

MISCELLANEOUS

     6.1 Effective Date. The effectiveness of this Agreement and the agreements, covenants
and obligations of the parties hereto are conditioned upon the occurrence of the Effective Time
pursuant to the Merger Agreement in effect as of the date hereof, and in the event the Merger
Agreement is terminated in accordance with its terms this Agreement shall be null and void and have
no force and effect.

     6.2 Termination. This Agreement shall automatically terminate upon the earlier of (a)
the Merger Agreement is terminated in accordance with its terms, or (b) the parties hereto execute
a written agreement to terminate this Agreement.

     6.3 Notices. All notices, requests and other communications to any party hereunder
shall be in writing and shall be deemed given if delivered personally, 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 or Merger Sub, to:

ComVest Investment Partners III, L.P.

One North Clematis

Suite 300

West Palm Beach, Florida 33401

Attention: Mark Lama

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

12

 

			
	               	 	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.

If to the Stockholders, to:

Glenn Parker

530 Carrotwood Terrace

Plantation, Florida 33324

and

Timothy Fairbanks

6605 NW 122nd Avenue

Parkland, Florida 33076

13

 

			
	               	 	and

Lewis Stone

6618 NW 103rd Lane

Parkland, Florida 33076

and

RGGPLS, LLC

13630 NW 8th Street

Suite 210

Sunrise, Florida 33325

If to MHR, to:

c/o MHR Fund Management LLC

40 West 57th Street, 24th Floor

New York, NY 10019

Attn: Hal Goldstein

               Emily Fine

               Janet Yeung

Telephone: (212) 262-0005

Facsimile: (212) 262-9356

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

O’Melveny & Myers LLP

Times Square Tower

7 Times Square

New York, New York 10036

Attention: Doron Lipshitz, Esq.

               Patricia Perez, Esq.

Telephone: (212) 326-2000

Facsimile: (212) 326-2061

               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 6.2, 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.

14

 

     6.4 Amendments; Waivers. Any amendment or modification of or to any provision of this
Agreement, and any consent to any departure of any party from the terms of any provision of this
Agreement, shall be effective only if it is made or given in writing and signed by each party and
shall not be enforceable against any party hereto unless such party has executed such amendment or
modification. Notwithstanding the foregoing sentence, any failure of any of the parties to comply
with any obligation, covenant, agreement or condition herein may be waived by any party entitled to
the benefits thereof only by a written instrument signed by such party granting such waiver, but
such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. The failure of any party to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.

     6.5 Counterparts and Fax Signatures. This Agreement may be executed in two or more
counterparts (including by means of fax or electronically transmitted portable document format
(PDF) signature pages), each of which shall be deemed to be an original, but all of which together
shall constitute and be one and the same instrument; provided, that fax or electronically
transmitted signatures of this Agreement shall be deemed to be originals. Counterpart signatures
need not be on the same page and shall be deemed effective upon receipt. This Agreement shall be
valid upon the execution of the Company, Parent, Merger Sub and one or more Stockholders,
irrespective of whether this Agreement is executed by all of the Stockholders.

     6.6 Headings. All headings set forth in this Agreement are intended for convenience
only and shall not control or affect the meaning, construction or effect of this Agreement or of
any of its provisions.

     6.7 Entire Agreement. This Agreement (including the exhibits and schedules hereto and
any other documents and instruments referred to herein or contemplated hereby), constitute the
entire agreement, and supersede all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter hereof and thereof
(including that certain Letter of Intent).

     6.8 No Third Party Beneficiary. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person other than the parties and their
respective heirs, personal representatives, legal representatives, successors and assigns, any
rights or remedies under or by reason of this Agreement. This Agreement is binding upon and inures
to the benefit of the parties to this Agreement and their respective successors and permitted
assigns.

     6.9 Severability. If any term or other provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other terms, provisions and conditions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the parties as closely
as possible to the fullest extent permitted by applicable law in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.

15

 

     6.10 Schedules, Exhibits, Sections and Articles. All exhibits or schedules attached
to this Agreement shall be deemed part of this Agreement and incorporated into this Agreement, as
if fully contained in it. All references in this Agreement to an exhibit, section, article or
schedule shall mean an exhibit, section, article or schedule to this Agreement (unless otherwise
indicated). All references in this Agreement to this Agreement shall include all of the exhibits
or schedules attached to this Agreement.

     6.11 Governing Law; Jurisdiction. 

          (a) 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.

          (b) The parties hereto hereby irrevocably submit to the jurisdiction of the federal and state
courts located in 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 hereby 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 hereby 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 6.2.

     6.12 Further Assurances. Each Stockholder, the Company, Parent and Merger Sub, at the
closing of the transactions contemplated hereby, or at any time or times thereafter, upon request
of any party hereto, will execute such additional instruments, documents or certificates as either
party deems reasonably necessary in order to effect the transactions contemplated hereby.

     6.13 Efforts. Each party hereto hereby agrees to take, or cause to be taken, all
commercially reasonable actions, and do, or cause to be done, and to assist and cooperate with the
other party hereto in doing all commercially reasonable things necessary, proper or advisable under
applicable Laws, to consummate and make effective, the Exchange, the Rollover and the other
transactions contemplated hereunder.

     6.14 Successors and Assigns. This Agreement shall apply to, be binding in all
respects upon and inure to the benefit of the parties and their respective successors and permitted
assigns.
No party may assign any of its rights under this Agreement without the prior written consent
of each of the other parties.

16

 

     6.15 Transaction Costs. Except as set forth in the Merger Agreement, each party
hereto shall pay its own fees, costs and expenses incurred in connection herewith and the
transactions contemplated hereby, including the fees, costs and expenses of its financial advisors,
accountants and counsel; provided, however, that, notwithstanding the foregoing,
the parties acknowledge that Company shall pay the fees, costs and expenses by the Stockholders
incurred in connection herewith and in connection with the Preferred Stock Investment Documents.

     6.16 Interpretation; Other.

          (a) Unless the context otherwise requires, any reference in this Agreement to gender includes
all genders, and words imparting the singular number only include the plural and vice versa.
Unless the context otherwise requires, all references in this Agreement to any “Article,”
“Section,” “Schedule” or “Exhibit” are to the corresponding Article, Section, Schedule or Exhibit
of this Agreement. Unless the context otherwise requires, the words “hereby,” “herein,”
“hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to the
provision in which such words appear. The word “including,” or any variation thereof, means
“including, without limitation” and does not limit any general statement that it follows to the
specific or similar items or matters immediately following it. All references in this Agreement to
specific Laws or to specific sections or provisions of Laws, apply to the respective federal,
state, local, or foreign Laws that bear the names so specified and to any succeeding or amended
Law, section, or provision corresponding thereto. Any reference in this Agreement to the “parties”
to this Agreement means the signatories to this Agreement and their successors and permitted
assigns, and does not include any third party.

          (b) The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.

17

 

     6.17 “First and Second Amended and Notes” means the (a) First Amended and Restated 7
3/4% Convertible Secured Note issued by NationsHealth, Inc., NationsHealth Holdings, L.L.C., United
States Pharmaceutical Group, L.L.C., Diabetes Care & Education, Inc., and National Pharmaceuticals
and Medical Products (USA), LLC in favor of OTQ LLC, dated as of the Effective Time; (b) First
Amended and Restated 7 3/4% Convertible Secured Note issued by NationsHealth, Inc., NationsHealth
Holdings, L.L.C., United States Pharmaceutical Group, L.L.C., Diabetes Care & Education, Inc., and
National Pharmaceuticals and Medical Products (USA), LLC in favor of MHR Capital Partners Master
Account LP, dated as of the Effective Time; (c) First Amended and Restated 7 3/4% Convertible
Secured Note issued by NationsHealth, Inc., NationsHealth Holdings, L.L.C., United States
Pharmaceutical Group, L.L.C., Diabetes Care & Education, Inc., and National Pharmaceuticals and
Medical Products (USA), LLC in favor of MHR Capital Partners (100) LP; (d) Second Amended and
Restated 7 3/4% Convertible Secured Note issued by NationsHealth, Inc., NationsHealth Holdings,
L.L.C., United States Pharmaceutical Group, L.L.C., Diabetes Care & Education, Inc., and National
Pharmaceuticals and Medical Products (USA), LLC in favor of OTQ LLC, dated as of the Effective
Time; (e) Second Amended and Restated 7 3/4% Convertible Secured Note issued by NationsHealth,
Inc., NationsHealth Holdings, L.L.C., United States Pharmaceutical Group, L.L.C., Diabetes Care &
Education, Inc., and National Pharmaceuticals and Medical Products (USA), LLC in favor of MHR
Capital Partners Master Account LP, dated as of the Effective Time; and (f) Second Amended and
Restated 7 3/4% Convertible Secured Note issued by NationsHealth, Inc., NationsHealth Holdings,
L.L.C., United States Pharmaceutical Group, L.L.C., Diabetes Care & Education, Inc., and National
Pharmaceuticals and Medical Products (USA), LLC in favor of MHR Capital Partners (100) LP, dated as
of the Effective Time, as each may be amended, modified, replaced or refinanced from time to time.

[signature page follows]

18

 

     IN WITNESS WHEREOF, the parties hereto have caused this Exchange and Rollover Agreement to be
duly executed, as of the date first above written.

	 	 	 	 	 
	 	COMVEST NATIONSHEALTH HOLDINGS, LLC

 	 
	 	By:  	/s/
Jose Gordo
 	 
	 	 	Name:  	Jose Gordo 	 
	 	 	Title:  	President 	 
	 
	 	NATIONSHEALTH ACQUISITION CORP.

 	 
	 	By:  	/s/
Glenn Parker
 	 
	 	 	Name:  	Glenn Parker 	 
	 	 	Title:  	CEO 	 
	 
	 	NATIONSHEALTH, INC.

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

 	 
	 	  	/s/ Glenn Parker
 	 
	 	 	 	 
	 	 	 	 
	 
	 	TIMOTHY FAIRBANKS

 	 
	 	  	/s/
Timothy Fairbanks
 	 
	 	 	 	 
	 	 	 	 
	 
	 	LEWIS STONE

 	 
	 	  	/s/
Lewis Stone
 	 
	 	 	 	 
	 	 	 	 

19

 

	 	 	 	 	 

	 	 	 	 	 
	 	MHR CAPITAL PARTNERS MASTER ACCOUNT LP

 	 
	 	By:  	MHR Advisors LLC, its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
/s/ Hal Goldstein
 	 
	 	 	Name:  	Hal Goldstein 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	MHR CAPITAL PARTNERS (100) LP

 	 
	 	By:  	MHR Advisors LLC, its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                              /s/ Hal Goldstein
 	 
	 	 	Name:  	Hal Goldstein 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	OTQ LLC

 	 
	 	By:  	/s/ Hal Goldstein
 	 
	 	 	Name:  	Hal Goldstein 	 
	 	 	Title:  	Authorized Signatory
 	 
	 
	 	MARK H. RACHESKY, M.D.

(as a record holder and as an authorized signatory

for certain other entities)

 	 
	 	  	/s/ Mark H. Rachesky, M.D.
 	 
	 	 	 	 
	 	 	 	 

20

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