FOURTH AMENDMENT
TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT")
is dated as of August 16, 1999 between HORIZON Pharmacies, Inc., a Delaware
corporation ("BORROWER"), and McKesson HBOC, Inc., a Delaware corporation
formerly known as McKesson Corporation ("MCKESSON").
RECITALS
WHEREAS, Borrower and McKesson are parties to that certain
Credit Agreement dated as of July 2, 1998, as amended by a First Amendment to
Credit Agreement dated as of July 20, 1998, a Second Amendment to Credit
Agreement dated as of August 26, 1998 and a Third Amendment to Credit Agreement
(the "THIRD AMENDMENT") dated as of May 14, 1999 (as so amended, the "CREDIT
AGREEMENT"). Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement.
WHEREAS, Borrower and McKesson wish to amend certain
provisions set forth in the Credit Agreement, upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the promises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
A. Section 1.9 of the Credit Agreement is (as added by the
Third Amendment) hereby amended to read in full as follows:
SECTION 1.9 GUARANTY OF BANK FACILITY. If requested by
Borrower, McKesson will provide a guaranty to Bank One (the "McKesson
Guaranty") of up to $7,000,000 of indebtedness under an unsecured
revolving credit facility from Bank One to Borrower not in excess of
$7,000,000 (the "Bank One Facility"), subject to McKesson's reasonable
approval of the form of McKesson Guaranty and related documentation. If
the McKesson Guaranty is issued by McKesson, the figure "$15,000,000"
in Section 1.1(a) and in clause (i) of Section 1.8 above shall be
reduced by the maximum amount of the McKesson Guaranty and clause (ii)
of Section 1.1(a) shall be amended by adding at the end thereof:
LESS (E) the principal and interest outstanding under
the Bank One Facility.
1.
As a condition to McKesson's issuing the McKesson Guaranty,
Borrower shall execute and deliver to McKesson an Indemnification
Agreement substantially in the form of Exhibit J hereto (the
"Indemnification Agreement") and the Security Documents shall be
amended as appropriate so that Borrower's obligations under the
Indemnification Agreement are secured under the terms of the Security
Documents. If the McKesson Guaranty is issued by McKesson, Borrower
agrees to pay to McKesson a guaranty fee on the maximum dollar amount
guaranteed under the McKesson Guaranty at a rate per annum equal to the
Guaranty Fee Amount, payable quarterly in arrears on the last Business
Day of each calendar quarter (commencing on the first such date after
the McKesson Guaranty is issued) and on the date the McKesson Guaranty
is released or otherwise terminated in accordance with its terms.
B. Section 8.1 of the Credit Agreement as hereby amended by
replacing the definition of "Permitted Acquisition" by the following:
"PERMITTED ACQUISITION" means the acquisition by a Borrower of
a retail pharmacy or pharmacies, durable medical equipment
and/or home medical equipment operations, intravenous infusion
operations, home healthcare agencies, closed door
institutional pharmacies, mail order pharmacies and other
pharmaceutical and healthcare related businesses (including in
each case, at such Borrower's option, the Rx Files thereof)
from an unaffiliated Person or Persons so long as such
business is located in the United States; PROVIDED THAT any
indebtedness by the Seller to McKesson is either assumed by
Borrower or paid as a condition to the closing of the
acquisition.
C. The Credit Agreement is hereby amended by substituting
Exhibit B attached hereto for Exhibit B to the Credit Agreement.
SECTION 2. CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of the first date (the "FOURTH
AMENDMENT DATE") on or before August 25, 1999 upon which the following
conditions have been satisfied:
(i) Borrower and McKesson shall have delivered to one another
duly executed counterparts of this Amendment;
(ii) all the representations and warranties in Section 3 below
(after giving effect to any amendments to the Representation Certificate
delivered to McKesson prior to the date of this Amendment) shall be true and
correct as of the date of this Amendment; and
(iii) no Default shall have occurred and be continuing on the
date of this Amendment or will result from the consummation of this Amendment
(after giving effect to this Amendment).
2.
When and if this Amendment becomes effective, the amendments set forth in
Section 1 shall be deemed effective as of the Fourth Amendment Date.
SECTION 3. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce McKesson to enter into this Amendment, to amend the
Credit Agreement in the manner provided herein and to grant the waivers
contained herein, Borrower represents and warrants to McKesson that the
following statements are true, correct and complete:
A. CORPORATE POWER AND AUTHORITY. Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Borrower.
C. NO CONFLICT. The execution and delivery by Borrower of this
Amendment does not and will not contravene (i) any law or any governmental rule
or regulation applicable to Borrower or any of its Subsidiaries, (ii) the
Certificate of Incorporation or Bylaws of Borrower, (iii) any order, judgment or
decree of any court or other agency of government binding on Borrower or any of
its Subsidiaries or (iv) any material agreement or instrument binding on
Borrower or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by
Borrower of this Amendment and the performance by Borrower of the Amended
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by Borrower and are the binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms, except in each case as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting
creditors' rights.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Article III of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the date of this Amendment to the same extent as though
made on and as of such date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were true,
correct and complete in all material respects on and as of such earlier date.
3.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
as of the date of this Amendment or will result from the consummation of the
transactions contemplated by this Amendment that would constitute a Default or
an Event of Default (as determined after giving effect to the amendments made by
this Amendment).
SECTION 4. RESERVATION OF RIGHTS
Borrower acknowledges and agrees that the execution and delivery by
McKesson of this Amendment shall not be deemed to create a course of dealing or
otherwise obligate McKesson to forebear or execute similar amendments under the
same or similar circumstances in the future.
SECTION 5. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the
Other Loan Agreements.
(i) On and after the Fourth Amendment Date, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy of
McKesson under, the Credit Agreement or any of the other Loan Documents nor to
create any course of dealing or otherwise obligate McKesson to forebear or
execute similar amendments or any waiver in similar circumstances in the future.
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
4.
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.
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/ Xxxx X. Xxxxxxx
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Title: CFO/Treasurer
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McKESSON CORPORATION
By: /s/ Lincoln Walworth
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Title: Assistant Treasurer
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5.
ACKNOWLEDGMENT AND CONSENT OF GUARANTOR
The undersigned in its capacity as a guarantor under that
certain Guaranty dated as of July 2, 1998 made in favor of McKesson hereby (i)
acknowledges and consents to the execution, delivery and performance by Borrower
of the foregoing Fourth Amendment to Credit Agreement (the "Amendment"), (ii)
acknowledges that the undersigned's consent is being sought purely as a
protective measure and understands that the terms of the Credit Agreement dated
as of July 2, 1998 may be amended without prior notice to or consent of the
undersigned and without discharging or otherwise affecting the liability of the
undersigned under the Guaranty, and (iii) reaffirms that it will continue to be
bound by all of the provisions of the Guaranty and that such Guaranty will
remain in full force and effect notwithstanding the execution and delivery by
Borrower of the Amendment referred to above.
HORIZON HOME CARE, INC.
By: /s/ Xxxx X. Xxxxxxx
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Its: CFO/Treasurer
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