EXHIBIT 10.39
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of
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November 4, 1996, is entered into by and among McKesson Corporation, a Delaware
corporation (the "Company"), Medis Health and Pharmaceutical Services Inc., an
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Ontario corporation and indirect wholly-owned subsidiary of the Company
("Medis"), the several financial institutions party to the Credit Agreement (the
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"Banks"), Bank of America Canada, as administrative agent with respect to the
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Tranche B Canadian Loans and the Bankers' Acceptance Facility (the "Canadian
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Administrative Agent"), The Chase Manhattan Bank, as co-agent for the Banks (the
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"Co-Agent"), and Bank of America National Trust and Savings Association, as
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agent for the Banks (the "Agent").
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RECITALS
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A. The Company, Banks, Canadian Administrative Agent, the Co-Agent and
Agent are parties to a Credit Agreement dated as of March 31, 1995, as amended
by a First Amendment to Credit Agreement dated as of August 31, 1995 and a
Second Amendment to Credit Agreement dated as of April 10, 1996 (as so amended,
the "Credit Agreement") pursuant to which the Banks have extended certain credit
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facilities to the Company and Medis (the "Borrowers").
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B. The obligations of Medis under the Loan Documents are guaranteed by the
Company pursuant to a Guaranty dated as of March 31, 1995 by the Company in
favor of the Agent and the Banks (the "Guaranty").
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C. The obligations of the Company under the Credit Agreement, the Guaranty
and the other Loan Documents are secured by that certain Pledge and Security
Agreement dated as of August 31, 1995 among MacFor International Finance
Company, a Delaware corporation and a Wholly-Owned Subsidiary of the Company
("MacFor"), and the Agent (the "Pledge Agreement").
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D. The Borrowers have requested that the Banks agree to certain amendments
of the Credit Agreement.
E. The Banks are willing to amend the Credit Agreement, subject to the
terms and conditions of this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
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herein shall have the meanings, if any, assigned to them in the Credit
Agreement, as applicable.
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2. Amendments to Credit Agreement.
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(a) The following defined terms in Section 1.01 of the Credit
Agreement shall be restated in their entirety to read as follows:
"Applicable Facility Fee Margin" means, on any date (subject to
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clauses (b) through (d) of the definition of "Applicable Rating Level"),
the applicable margin set forth below based on the Applicable Rating Level
on such date:
Applicable
Rating Level Margin
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Level I 0.0700%
Level II 0.1250%
Level III 0.1750%
"Applicable Margin" means, on any date and with respect to each Loan
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or Bankers' Acceptance (subject to clauses (b) through (d) of the
definition of "Applicable Rating Level"), the applicable margin set forth
below based on the Type of Loan or, in the case of Bankers' Acceptances,
under the heading Bankers' Acceptances and the Applicable Rating Level on
such date:
Applicable Offshore Rate CD Rate Bankers'
Rating Level Loans Loans Acceptances
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Level I 0.1300% 0.2550% 0.1300%
Level II 0.2000% 0.3250% 0.2000%
Level III 0.2750% 0.4000% 0.2750%
(b) Section 7.01 of the Credit Agreement shall be amended by:
(i) deleting the word "and" at the end of subsection (h)
thereof;
(ii) relettering subsection (i) thereof as subsection (j); and
(iii) inserting the following as new subsection (i) thereof in
appropriate alphabetical order:
(i) Liens on inventory, proceeds thereof and replacement inventory
securing debt to GE Capital Corporation, incurred in connection with
the acquisition by the Company of certain assets of FoxMeyer
Corporation and its Affiliates, in an aggregate principal amount
outstanding at any time not to exceed $400,000,000; provided that such
Liens shall have been released on or before the date which is 45 days
after the incurrence of such debt and shall no
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longer constitute Permitted Liens after such date; and
3. Representations and Warranties. Each Borrower represents and warrants
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(which representations and warranties in the case of Medis, shall be limited to
Medis and its Subsidiaries and other facts and circumstances known to Medis and
its Subsidiaries) to the Agent and the Banks as follows:
(a) No Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by each Borrower of this
Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
notice to or action by, any Person (including any Governmental Authority) in
order to be effective and enforceable. The Credit Agreement, as amended by this
Amendment, constitutes the legal, valid and binding obligations of each
Borrower, enforceable against it in accordance with its respective terms,
without defense, counterclaim or offset.
(c) All representations and warranties of each Borrower contained in
the Credit Agreement and of Macfor in the Collateral Documents to which it is a
party are true and correct.
(d) Each Borrower is entering into this Amendment on the basis of its
own investigation and for its own reasons, without reliance upon the Agent and
the Banks or any other Person.
4. Effective Date. This Amendment will become effective as of the date
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first above written (the "Effective Date"), provided that the Agent has received
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from the Borrowers and the Banks a duly executed original (or, if elected by the
Agent, an executed facsimile copy) of this Amendment, together with a duly
executed MacFor Acknowledgment and Consent in the form attached hereto.
5. Reservation of Rights. The Borrowers acknowledge and agree that the
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execution and delivery by the Agent and the Banks of this Amendment shall not be
deemed to create a course of dealing or otherwise obligate the Agent or the
Banks to forbear or execute similar amendments under the same or similar
circumstances in the future.
6. Guarantor Acknowledgement and Consent. The Company, in its capacity
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as Guarantor under the Guaranty, acknowledges and consents to the execution,
delivery and performance hereof by the parties hereto and reaffirms and agrees
that the Guaranty is in full force and effect, without defense, offset or
counterclaim.
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7. Miscellaneous.
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(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein and in the other Loan Documents to such Credit
Agreement shall henceforth refer to the Credit Agreement, as amended by this
Amendment. This Amendment shall be deemed incorporated into, and a part of, the
Credit Agreement.
(b) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and thereto and their respective successors and assigns. No
third party beneficiaries are intended in connection with this Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California.
(d) 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 the Agent of a
facsimile transmitted document purportedly bearing the signature of a party
hereto shall bind such party with the same force and effect as the delivery of a
hard copy original. Any failure by the Agent 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 party whose
hard copy page was not received by the Agent.
(e) This Amendment, together with the Credit Agreement, contains the
entire and exclusive agreement of the parties hereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 10.01 of the Credit
Agreement.
(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.
(g) The Company covenants to pay to or reimburse the Agent, upon
demand, for all reasonable costs and expenses (including allocated costs of in-
house counsel) incurred in connection with the development, preparation,
negotiation, execution and delivery of this Amendment and the documents related
hereto.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
MCKESSON CORPORATION
By: __________________________
Title: _______________________
MEDIS HEALTH AND
PHARMACEUTICAL SERVICES INC.
By: _________________________
Title: ______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Agent
By: _________________________
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a
Bank
By: _________________________
Title: Vice President
BANK OF AMERICA CANADA, as a
Bank
By: _________________________
Title: ______________________
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THE CHASE MANHATTAN BANK, as a Bank and as
Co-Agent
By: ______________________
Title: ___________________
THE CHASE MANHATTAN BANK OF
CANADA
By: ______________________
Title: ___________________
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: _________________________
Title: ______________________
MORGAN BANK OF CANADA
By: ________________________
Title: _____________________
WELLS FARGO BANK, N.A.
(SUCCESSOR TO FIRST INTERSTATE
BANK OF CALIFORNIA)
By: _________________________
Title: ______________________
ABN AMRO BANK N.V.
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By: ABN AMRO North America,
Inc., as agent
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
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ABN AMRO BANK CANADA
MONTREAL BRANCH
By: _________________________
Title: ______________________
By: _________________________
Title: ______________________
THE FIRST NATIONAL BANK OF
CHICAGO
By: _________________________
Title: ______________________
TORONTO DOMINION (TEXAS), INC.
By: _________________________
Title: ______________________
THE TORONTO-DOMINION BANK
By: _________________________
Title: ______________________
Acknowledged as of November 4, 1996
BANK OF AMERICA CANADA,
as Canadian Administrative Agent
By: _______________________________
Title: ____________________________
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MACFOR ACKNOWLEDGMENT
AND CONSENT
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The undersigned hereby (i) acknowledges and consents to the execution,
delivery and performance by Company of the foregoing Third Amendment to Credit
Agreement (the "Amendment"), and (ii) reaffirms and agrees that the Pledge
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Agreement and all other documents and agreements executed and delivered by the
undersigned to the Agent and the Banks in connection with the Credit Agreement
and the other Loan Documents are in full force and effect, without defense,
offset or counterclaim. (Capitalized terms used herein have the meanings
specified in the Amendment.)
MACFOR INTERNATIONAL FINANCE
COMPANY
Dated: November 4, 1996 By:____________________________
Title: ________________________
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