FIRST AMENDMENT TO AMENDED AND RESTATED
WARRANT PURCHASE AGREEMENT
This First Amendment to Amended and Restated Warrant Purchase
Agreement (this "Amendment") is entered into as of March 30, 2000, between
HORIZON Pharmacies, Inc., a Delaware corporation ("Company") and McKesson HBOC,
Inc., a Delaware corporation formerly known as McKesson Corporation
("McKesson").
RECITALS
WHEREAS, Company and McKesson are parties to that certain
Amended and Restated Warrant Purchase Agreement dated as of May 14, 1999 (the
"Warrant Purchase Agreement"). Capitalized terms used herein without definition
shall have the same meanings herein as ascribed thereto pursuant to the Warrant
Purchase Agreement.
WHEREAS, Company has requested that McKesson grant Company
certain waivers and consents with respect to matters in the Credit Agreement and
the Warrant Purchase Agreement, and McKesson is willing to do so upon certain
terms and conditions, including but not limited to certain amendments being made
in the Warrant Purchase Agreement and an additional Warrant being issued to
McKesson.
NOW, THEREFORE, in consideration of the promises and
agreements, provisions and covenants herein contained, and McKesson's concurrent
waiver and consent as to certain matters under the Credit Agreement, the parties
hereto agree as follows:
SECTION 1. THE ISSUANCE OF NEW WARRANT; AMENDMENTS TO WARRANT PURCHASE
AGREEMENT AND WARRANTS.
A. The Company hereby agrees to issue a new Warrant under the Warrant
Purchase Agreement (as amended pursuant hereto) for 10,000 shares of Company's
Common Stock with an exercise price of $5.5625 per share. The date of issuance
of such new Warrant shall be deemed to be the "Third Warrant Issue Date", and
the definition of "Warrant Issue Dates" in Section 5 of the Warrant Purchase
Agreement is hereby amended to mean the Initial Warrant Issue Date, the Second
Warrant Issue Date, and the Third Warrant Issue Date.
B. Section 3 of the Warrant Purchase Agreement is hereby amended to
read in full as follows:
SECTION 3. SALE AND PURCHASE OF WARRANTS.
Subject to the terms and conditions of this
Agreement, Company will issue and sell to McKesson, and
McKesson will purchase from Company, at the relevant Warrant
Issue Date, the following installments of Warrants:
(i) On the Initial Warrant Issue Date,
Warrants for 101,500 shares of Common Stock of Company with an
initial Exercise Price of $5.71 in exchange for and upon
surrender of the Warrants issued on July 2, 1998;
(ii) On the Initial Warrant Issue Date,
additional Warrants for 100,000 shares of Common Stock of
Company with an initial Exercise Price of $5.71;
(iii) On the Second Warrant Issue Date,
Warrants for 50,000 shares of Common Stock of Company with an
Exercise Price equal to the average closing price of Common
Stock of Company for the five business day period commencing
on the date of the Approval Notice; and
(iv) On the Third Warrant Issue Date,
Warrants for 10,000 shares of Common Stock of Company with an
Initial Exercise Price of $5.5625.
The aggregate purchase price for the Warrants described in clauses (i),
(ii) and (iii) above shall be McKesson's execution and delivery of the
Credit Agreement. The purchase price for the Warrant described in
clause (iv) above shall be McKesson's execution and delivery of the
Limited Waiver and Consent dated the Third Warrant Issue Date.
Company and McKesson agree that the per share value of the
Warrants for tax purposes is $2.55. Company and McKesson agree to
report the transaction in a manner consistent with this paragraph.
C. Section 7.4 of the Warrant Purchase Agreement is hereby amended by
substituting in clause (a) thereof the phrase "more than two (2) times" for the
phrase "more than one (1) time".
D. The form of Exhibit A to the Warrant Purchase Agreement is hereby
amended by inserting the following sentence at the end of Section 3.3 thereof.
If the price per share at which any holder of Convertible
Securities may purchase Additional Shares of Common Stock is
modified because of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices
or otherwise, then the occurrence of any such change shall be
deemed to be a reissuance of such Convertible Securities and
such reissuance shall be subject to the provisions of this
Section 3.3.
Any of the Warrants already issued shall be deemed hereby amended to include
such additional sentence.
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SECTION 2. MISCELLANEOUS
A. Reference to and Effect on the Warrant Purchase Agreement and the
Other Loan Agreements.
(i) On and after the date hereof, each reference in the
Warrant Purchase Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of like import referring to the Warrant Purchase Agreement, and each
reference in the other Loan Documents to the "Warrant Purchase Agreement",
"thereunder", "thereof" or words of like import referring to the Warrant
Purchase Agreement shall mean and be a reference to the Warrant Purchase
Agreement as amended by this Amendment.
(ii) Except as specifically amended by this Amendment, the
Warrant Purchase Agreement, the Warrants and the other Loan Documents shall
remain in full force and effect and are hereby ratified and confirmed.
B. COSTS AND EXPENSES. The Company covenants to pay to or reimburse
McKesson, upon demand, for all costs, out-of-pocket expenses and reasonable
attorneys' fees expended or incurred by McKesson in connection with the
development, preparation, negotiation, execution and delivery of this Amendment
and the documents and transactions contemplated hereby.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by a party of a facsimile transmitted document purportedly bearing
the signature of the other party shall bind the other party with the same force
and effect as the delivery of a hard copy original. Any failure by a party to
receive the hard copy executed original of such document shall not diminish the
binding effect of receipt of the facsimile transmitted executed original of such
document of the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
HORIZON PHARMACIES, INC.
By: /s/ Xxxxx X. XxXxxx
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Title: CEO & President
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McKESSON HBOC, INC.
By: /s/ Xxxx Xxxxxx
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Title: Senior Vice President Financial Services
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