EXHIBIT 4.2
- --------------------------------------------------------------------------------
FIRST,
SECOND
&
THIRD AMENDMENTS
To The
$350 MILLION
CREDIT AGREEMENT
- --------------------------------------------------------------------------------
[LOGO] SCHEIN
P H A R M A C E U T I C A L
-EXECUTION COPY-
December 17, 1996
Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, New Jersey 07932
Gentlemen:
Reference is made to that certain General Shareholders Agreement (the
"Agreement") dated September 30, 1994 among Schein Pharmaceutical, Inc.
(formerly Schein Holdings, Inc.) (hereinafter "you" or the "Company"), Bayer
Corporation (formerly Miles Inc.) (hereinafter "we" or "Bayer"), each of the
family shareholders listed as such on Schedule A to the Agreement, each of the
other shareholders listed as such on Schedule A to the Agreement, and Martin
Sperber as trustee under the Voting Trust Agreement dated September 30, 1994.
1. You have advised Bayer that the Company proposes to refinance (the
"Refinancing") a portion of its indebtedness substantially in accordance with
the attached Senior Subordinated Credit Facility Term Sheet.
2. You have also requested that the references in the attached letter dated
June 14, 1995 between Bayer and the Company (the "Letters) to "1996" and "1997,"
be changed to "1997" and "l998", respectively.
3. You have further requested that "stockholders equity" as determined
under the Agreement be deemed to include the amount of any charge by the Company
for acquired in process research and development expenses of the Company
resulting from the acquisition of Marsam Pharmaceuticals Inc. to the extent such
charge is less than $35,000,000.
On the terms and subject to the fulfillment of the conditions set forth
below, and for the purposes of Section 2.3 of the Agreement, Bayer hereby
consents to the Refinancing (including the Conversion Notes thereunder) so that
upon and after such Refinancing the ratio of the sum of all Funded Debt plus the
redemption price of all Redeemable Preferred Stock of the Company and its
consolidated subsidiaries to the Company's consolidated stockholders' equity
(excluding any Redeemable Preferred Stock), determined in accordance with GAAP
(subject to the adjustment described in paragraph 3, above) (the "Ratio"),
Schein Pharmaceutical, Inc.
December 17, 1996
Page 2
shall forthwith be as described in the Letter as modified by paragraph 2, above.
Notwithstanding the foregoing, if for any reason (a) any Post-Merger
Facility (as defined by the Letter) that has not been refinanced and/or (b) any
credit facility entered into in connection with the Refinancing is prepaid in
whole, again refinanced (unless such refinancing is accomplished on terms no
less favorable to Company, as determined solely by Bayer in its reasonable
discretion) or otherwise terminated, then the applicable Ratio shall thereafter
be 1.50 to 1.
This consent shall become effective upon the execution and delivery of
definitive documentation regarding the Refinancing.
Please indicate your acceptance of the foregoing terms and conditions
imposed by this consent by executing both of the enclosed copies of this letter
and returning one copy to the undersigned.
BAYER CORPORATION
By: /s/ Jon R. Wyne
---------------------------
Name: Jon R. Wyne
------------------------
Title: Senior Vice President
------------------------
And Treasurer
Accepted and agreed to
this 17 day of December, 1996
SCHEIN PHARMACEUTICAL, INC.
By: /s/ Dariush Ashrafi
----------------------
Name: DARIUSH ASHRAFI
---------------------------
Title: EXECUTIVE VICE PRESIDENT
---------------------------
& CHIEF FINANCIAL OFFICER
Schein Pharmaceutical, Inc.
$100,000,000 Senior Subordinated Loan and Conversion Notes
SUMMARY OF TERMS
Issuer of Notes: Schein Pharmaceutical, Inc. (the "Company" or the
"Issuer").
Lender and Conversion Notes
Underwriter: Societe Generale or Societe Generale Securities
Corporation ("SocGen"), as determined by Societe
Generale.
Structure: Structured as a single facility with two parts,
the Initial Loan and its subsequent conversion
(the "Conversion") into the Conversion Notes under
certain circumstances as described in more detail
below. The Company expects that prior to the
issuance of the Conversion Notes, the Initial Loan
will be refinanced by any or all of the following:
bank debt, a public offering or private placement
of high yield senior subordinated or subordinated
securities or an initial public or private
offering of common equity of the Company or one of
its subsidiaries (the "Refinancing"). The Initial
Loan will convert to the Conversion Notes if such
Refinancing is not consummated and the Initial
Loan is outstanding as of January 31, 1998 (the
"Maturity Date") pursuant to the terms set forth
below.
Initial Loan
Title of Initial Loan: Senior Subordinated Loan.
Principal Amount: $100,000,000 aggregate principal amount.
Closing: Closing of the Initial Loan (the "Closing Date")
is expected to occur on or before December 20,
1996.
Maturity: The Initial Loan will mature on January 31, 1998
unless the Conversion has occurred. If the
Conversion occurs, the Initial Loan will be
converted to the Conversion Notes described below
on such date, provided that (i) there shall be no
default under the Initial Loan or any senior
indebtedness of the Issuer; (ii) all fees and
interest payable in connection with the Initial
Loan shall have been paid in full; and (iii) no
order shall be in effect enjoining the issuance of
the Conversion Notes.
Ranking: Senior subordinated, pursuant to subordination
provisions customary for high yield securities and
acceptable to SocGen. The Initial Loan will be
junior only to (i) the Company's existing senior
indebtedness as of the Closing Date and any
indebtedness which refinances such senior
indebtedness on substantially similar terms (the
"Senior Debt") and (ii) a basket of other senior
indebtedness in form, amount and terms
satisfactory to SocGen in all respects, and any
other future indebtedness will be junior to the
Initial Loan.
1
It is understood and agreed that the obligations
in respect of the Initial Loan and the Conversion
Notes, as the case may be, will be and remain
obligations of the same corporate entity as the
Senior Debt and that the Initial Loan and the
Conversion Notes will have the benefit of
subordinated guarantees from each entity
guaranteeing senior debt.
Interest Payment Dates: Quarterly, in arrears, commencing the three-month
after the Closing Date.
Interest Rate: LIBOR from time to time in effect plus 400 basis
points.
Interest on any overdue interest and principal
payments and on other amounts overdue on the
Initial Loan shall accrue at a rate of 200 basis
points in excess of the applicable rate determined
as provided above.
All interest shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
Upfront Fee: 1.5% of the principal amount of the Initial Loan
shall be earned at Closing; however, 1.0% shall be
paid at Closing and the other 0.5% shall be paid
at the earlier of (i) the repayment of the Initial
Loan and (ii) the Maturity Date.
Drawdowns: On the Closing Date, the Company shall draw down
the entire $100,000,000 principal amount of the
Initial Loan.
Mandatory Redemption: Subject to the requirements of the Senior Debt
(including, without limitation, certain carveouts
to be agreed upon with respect to asset
sales and permitted investments), the Company
must repay the Initial Loan at 100% of principal
amount redeemed plus accrued interest to the
redemption date with proceeds from the Refinancing
or from certain asset sales to be mutually agreed
upon.
Principal amounts repaid under this mandatory
redemption provision may not be drawn down again.
Conversion Notes
Amount: Principal amount of the Conversion Notes will
equal 103.5% of the principal amount of the
Initial Loan for which they are converted.
Maturity: Five (5) years following the original issuance of
the Conversion Notes.
Interest Payment Dates: Semi-annually, in arrears, commencing six-months
after the issuance of the Conversion Notes.
2
Interest Rate: A rate fixed at the time of the issuance of the
Conversion Notes equal to the higher of (i) five
(5) year Treasuries plus 600 basis points and (ii)
the Bear Stearns High Yield Single B Index plus
175 basis points.
Interest on any overdue interest and principal
payments and on other amounts overdue on the
Conversion Notes shall accrue at a rule of 200
basis points in excess of the applicable rate
determined as provided above.
All interest shall be computed on the basis of a
360 day year consisting of twelve 30-day months.
Ranking: Same as the Initial Loan.
General Terms Applicable to the Initial Loan and the Conversion Notes
Optional Prepayment: The Initial Loan may be prepaid at the option of
the Company in whole or in part up to an aggregate
principal amount equal to $25 million plus accrued
interest to the prepayment date (see above).
Partial prepayments will be allowed only in whole
dollar amounts of at least $1,000,000 of principal
up to $25 million.
Principal amounts prepaid may not be drawn down
again.
The Conversion Notes will be non-callable for the
life of the issue.
Transferability: The Initial Loan and the Conversion Notes shall be
transferable, without restriction, by the
lender(s) or holder(s) thereof. See "Registration
Rights".
Registration Rights: The Issuer is required to file a registration
statement for the Conversion Notes by the date
that is 60 days prior to the Maturity Date. The
Issuer will then use its best efforts to cause to
become effective such registration statement for
the Conversion Notes as soon as practicable after
filing.
Representations: The Initial Loan agreement (the "Agreement") and
the Conversion Note indenture (which terms
includes any agreement, security documents or
other documents as SocGen may determine to be
appropriate to effect the transactions
contemplated hereby) will contain representations
and warranties by the Issuer to SocGen, including
affirmation of its intention to take all necessary
and deliberate actions to effect a Refinancing of
the Initial Loan as soon as practicable pursuant
to a securities offering or otherwise.
Covenants: The Agreement (and, if executed, the indenture for
the Conversion Notes) will contain affirmative and
negative covenants satisfactory to SocGen,
including those customary for financings of high
yield
3
securities of this type.
Affirmative covenants will include, but not be
limited to, compliance with law, maintenance of
existence, insurance, payment of taxes, reporting
and delivery of financial statements.
Negative covenants will include, but not be
limited to, the following:
o limitations on liens securing debt that is
pari passu with or subordinate to the Initial
Loan or the Conversion Notes
o limitations on sale/leasebacks
o limitations on additional indebtedness,
contingent obligations and preferred stock of
the Company
o limitations on indebtedness and the issuance
of preferred stock by any subsidiary
o limitations on dividends or any payments on
the capital stock of the Company and for its
subsidiaries
o limitations on the redemption or repurchase of
capital stock
o limitations on the sale of assets and
subsidiary stock and transactions with
affiliates
o limitations on distributions from any
non-wholly owned subsidiaries
o limitations on mergers and/or consolidations
o limitations on investments and joint ventures
o financial covenants satisfactory to SocGen and
customary for privately held high yield
securities, except that certain of such
covenants as the Company and SocGen shall
mutually agree shall no longer apply
following the resale of the Conversion Notes
in a registered offering to more than fifteen
holders
Events of Default: The Agreement (and, if executed, the indenture for
the Conversion Notes) will contain default
provisions satisfactory to SocGen, including, but
not limited to:
o failure to pay principal or interest on the
Initial Loan or the Conversion Notes, as the
case may be, or any other amount due under
the Agreement (or, if applicable, the
indenture) when and as due
o failure to comply with any of the covenants or
other terms of the Agreement (or, if
applicable, the indenture)
4
o material breach of any representation or
warranty in the Agreement (or, if applicable,
the indenture)
o cross-payment default and cross-acceleration
on material obligations of the Company or any
material subsidiary
o certain events of bankruptcy of the Company or
any material subsidiary
o change of control of the Company
o material judgment against the Company or any
material subsidiary not waived or stayed
Certain of the foregoing will be subject to grace
periods to be agreed upon.
Governing Law: The Agreement (and, if applicable, the indenture),
and all other documents related to the
transactions contemplated hereby (to the extent
determined to be appropriate by SocGen) shall be
governed by and construed in accordance with the
laws of the State of New York, without giving
effect to conflicts of law principles.
Underwriting
Advisory Fee: The Company shall pay to SocGen an advisory fee
equal to 1.5% of the principal amount of the
Initial Loan upon the occurrence of a Refinancing.
Underwriting Commission: In the event the Company selects SocGen to
participate as an underwriter in a Refinancing,
SocGen's underwriting commission (to be
determined at the time of Refinancing) shall be
reduced by an amount equal to the lesser of (i)
SocGen's total underwriting commission earned from
such Refinancing and (ii) the Advisory Fee. In the
event such underwriting commission exceeds
$1,500,000, the Company selects SocGen to act as
lead manager of such an underwriting, and SocGen
earns at least 70% of the total commissions paid
for such underwriting, and SocGen shall reimburse
the Company for expenses incurred by the Company
in connection with the Refinancing in an amount
equal to the lesser of (i) SocGen's total
underwriting commission earned from such
Refinancing minus $1,500,000 and (ii) $500,000.
5
Bayer [LOGO]
================================================================================
June 14, 1995
Schein Holdings, Inc.
c/o Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, New Jersey 07932
Gentlemen:
Reference is made to that certain General Shareholders Agreement (the
"Agreement") dated September 30, 1994 among Schein Holdings, Inc. (hereinafter
"you" or the "Company"), Bayer Corporation (formerly Miles Inc.) (hereinafter
"we" or "Bayer"), each of the family shareholders listed as such on Schedule A
to the Agreement, each of the other shareholders listed as such on Schedule A to
the Agreement, and Martin Sperber as trustee under the Voting Trust Agreement
dated September 30, 1994.
You have advised Bayer that the Company proposes to make an Acquisition (as
such term is defined in a commitment letter dated June 6, 1995 from Chemical
Bank and Chemical Securities Inc. to the Company in the form attached hereto
(the "Commitment Letter") and that, in connection with the Acquisition, you will
require the Facilities (as such term is defined in the Commitment Letter). In
order to obtain the Facilities, you have requested that Bayer consent, as set
forth below, to the Incurrence of the indebtedness under the Facilities on the
terms and subject to the conditions provided for in the Commitment Letter (the
"Indebtedness").
Defined terms not otherwise defined herein shall have the meanings
specified in the Agreement.
On the terms and subject to the fulfillment of the conditions set forth
below, and for the purposes of Section 2.3 of the Agreement, Bayer hereby
consents to the incurrence of the Indebtedness so that upon and after such
incurrence the ratio of the sum of all Funded Debt plus the redemption price of
all Redeemable Preferred Stock of the Company and its consolidated subsidiaries
to the Company's consolidated stockholders' equity (excluding any Redeemable
Preferred Stock), determined in accordance with GAAP (the "Ratio"), shall
forthwith be as follows:
Bayer Corporation
One Mellon Center
500 Grant Street
Pittsburgh, PA 15219-2507
Phone: 412 394-5566
Schein Holdings, Inc.
June 14, 1995
Page 2
Until but excluding
the last day of fiscal
year 1996 2.50 to 1
From the last day of fiscal year
1996 until but excluding
the last day at fiscal year 1997 1.90 to 1
From and after ths last day of fiscal
year 1997 1.50 to 1
; provided, however, if for any reason (a) the Pre-Merger Facilities (as defined
in the Commitment Letter) are terminated or prepaid prior to the Merger Data tan
defined in the Commitment Letter) without refinancing (i) pursuant to the
Post-Merger Facilities (as defined in the Commitment Letter) or (ii) on terms no
less favorable to Company (as determined solely by Bayer in its reasonable
discretion), or (b) either of the Post-Merger Facilities are prepaid in whole,
refinanced (unless such refinancing is accomplished on terms no less favorable
to Company, as determined by solely by Bayer in its reasonable discretion) or
otherwise terminated, then the applicable Ratio shall thereafter be 1.50 to 1.
In the event that the initial borrowing uncles the Facilities does not
occur on or before October 31, 1995, this letter and the consent contained
herein shall cease to have any effect and the Ratio shall thereafter be 1.50 to
l.
Please indicate your acceptance of the foregoing terms and conditions
imposed by this consent by executing both of the enclosed copies of this letter
and returning one copy to the undersigned.
BAYER CORPORATION
By: /s/ Gerd D. Mueller
------------------------------
Name: Gerd D. Mueller
----------------------------
Title: E.V.P., Chief Admin.
---------------------------
and Financia1 Officer
Accepted and agreed to
this _ day of June, l995
SCHEIN HOLDINGS, INC.
By: [ILLEGIBLE]
--------------------------
Name:
-------------------------
Title:
------------------------
December 17, 1996
Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, New Jersey 07932
Gentlemen:
Reference is made to that certain General Shareholders Agreement (the
"Agreement") dated September 30, 1994 among Schein Pharmaceutical, Inc.
(formerly Schein Holdings, Inc.) (hereinafter "you" or the "Company"), Bayer
Corporation (formerly Miles Inc.) (hereinafter "we" or "Bayer"), each of the
family shareholders listed as such on Schedule A to the Agreement, each of the
other shareholders listed as such on Schedule A to the Agreement, and Martin
Sperber as trustee under the Voting Trust Agreement dated September 30, 1994.
1. You have advised Bayer that the Company proposes to refinance (the
"Refinancing") a portion of its indebtedness substantially in accordance with
the attached Senior Subordinated Credit Facility Term Sheet.
2. You have also requested that the references in the attached letter dated
June 14, less between Bayer and the Company (the Letter) to "1996," and "1997,"
be changed to "1997" and "1998," respectively.
3. You have further requested that "stockholders equity" as determined
under the Agreement be deemed to include the amount of any charge by the Company
for acquired in process research and development expenses of the Company
resulting from the acquisition of Marsam Pharmaceuticals Inc. to the extent such
charge is less than $35,000,000.
On the terms and subject to the fulfillment of the conditions set forth
below, end for the purposes of Section 2.3 of the Agreement, Bayer hereby
consents to the Refinancing (including the Conversion Notes thereunder) so that
upon and after such Refinancing the ratio of the sum of all Funded Debt plus the
redemption price of all Redeemable Preferred Stock of the Company and its
consolidated subsidiaries to the Company's consolidated stockholders' equity
(excluding any Redeemable Preferred Stock), determined An accordance with GAAP
(subject to the adjustment described in paragraph 3, above) (the "Ratio"),
FIRST AMENDMENT dated as of February 26,
1996 (this "Amendment"), to the CREDIT AGREEMENT
dated as of September 1, 1995, among SCHEIN
PHARMACEUTICAL, INC., a Delaware corporation (the
"Borrower"); the LENDERS (as defined in Article I
of the Credit Agreement); and CHEMICAL BANK, a New
York banking corporation as issuing bank (in such
capacity, the "Issuing Bank"), as administrative
agent (in such capacity, the "Administrative
Agent") and as collateral agent (in such capacity,
the "Collateral Agent") for the Lenders.
The Borrower has requested that the Credit Agreement be amended as
hereinafter set forth and the Lenders have agreed to such amendment, upon the
terms and subject to the conditions set forth herein. Accordingly, the Borrower
and the Lenders hereby agree as follows:
ARTICLE I
Defined Terms
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement.
ARTICLE II
Amendments to the Credit Agreement
The Credit Agreement is amended, effective as of the date hereof, as set
forth below:
SECTION 2.01. Amendment to Section 1.01. The definition of "Net Income" is
hereby amended by (1) deleting the period at the end of clause (d) and (ii)
adding at the end thereof the following:
"; provided that, solely for the purpose of determining Net Income for the
third fiscal quarter of 1995 (and for any fiscal period including the third
fiscal quarter of 1995), the amount of any charge by the Borrower for
acquired in process research and
development expenses of the Company for the Marsam acquisition, to the
extent such charge is less than $35,000,000, and tax adjustments related
thereto shall be excluded."
SECTION 2.02. Amendment to Section 1.01. The definition of "Net Worth" is
hereby amended by (i) deleting the period at the end thereof and (ii) adding at
the end thereof the following:
"plus the amount of any charge by the Borrower for acquired in process
research and development expenses of the Company for the Marsam acquisition
to the extent such charge is less than $35,000,000."
ARTICLE III
Representations and Warranties
The Borrower hereby represents and warrants to each Lender that;
(a) The representations and warranties set forth in Article III of the
Credit Agreement are true and correct in all material respects as of the
date hereof with the same effect as made on and as of such date, except to
the extent such representations and warranties expressly relate to an
earlier date.
(b) After giving effect to Article II hereof, no Default or Event of
Default has occurred and is continuing.
(c) The charge by the Borrower for acquired in process research and
development expenses of the Company for the Marsam acquisition is not
expected to exceed $35,000,000.
ARTICLE IV
Effectiveness
This Amendment shall become effective as of September 1, 1995, upon
satisfaction of each of the following conditions precedent.
(a) The Administrative Agent shall have received duly executed
counterparts hereof which, when taken together, bear the authorized
signatures of the Borrower and the Required Lenders.
(b) The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the date hereof, confirming (i)
that the representations and warranties set forth in the Credit Agreement
are true and correct in all material respects as of the date hereof, with
the same effect as though made on and as of such date, except to the extent
that such representations and warranties expressly relate to an earlier
dare, (ii) that, after giving effect to Article II hereof, no Event of
Default or Default has occurred and is continuing and (iii) that the charge
by the Borrower of purchased research and development expenses of the
Company for the Marsam acquisition is not expected to exceed $35,000,000
ARTICLE V
Miscellaneous
SECTION 5.01. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 5.02. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall constitute but one instrument. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 5.03. Headings. The headings of this Amendment are for reference
only and shall not limit or otherwise affect the meaning hereof.
THE BANK OF NOVA SCOTIA,
by ______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
by ______________________________
Name:
Title:
CITICORP USA, INC.,
by ______________________________
Name:
Title:
CREDIT LYONNAIS, NEW YORK BRANCH,
by ______________________________
Name:
Title:
CREDIT LYONNAIS, CAYMAN ISLAND BRANCH,
by ______________________________
Name:
Title:
DEUTSCHE BANK, A.G., NEW YORK
AND/OR CAYMAN ISLAND BRANCHES,
by ______________________________
Name:
Title:
MELLON BANK, N.A.,
by ______________________________
Name:
Title:
NATWEST BANK, N.A.,
by ______________________________
Name:
Title:
THE BANK OF TOKYO TRUST COMPANY,
by ______________________________
Name:
Title:
BAYERISCHE HYPOTHEKEN-UND WECHSEL-
BANK AKTIENGESSELLSCHAFT, NEW YORK
BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
COMERICA BANK,
by ______________________________
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEIFEN-
BOERENLEENBANK, B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
CREDIT SUISSE,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
SOCIETY NATIONAL BANK,
by ______________________________
Name:
Title:
MIDLANTIC BANK, N. A .,
by ______________________________
Name:
Title:
SOCIETE GENERALE, NEW YORK BRANCH,
by ______________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
ABN AMRO BANK N.V., NEW YORK
BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
BANK OF MONTREAL,
by ______________________________
Name:
Title:
THE BANK OF NEW YORK,
by ______________________________
Name:
Title:
COMMERZBANK AKTIENGESELLSHATT, NEW
YORK BRANCH
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN ISLAND
BRANCH,
by ______________________________
Name:
Title:
by ______________________________
Name:
Title:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA,
by ______________________________
Name:
Title:
THE NIPPON CREDIT BANK, LTD.,
by ______________________________
Name:
Title:
UNITED JERSEY BANK,
by ______________________________
Name:
Title:
THE YASUDA TRUST AND BANKING CO.,
LIMITED, NEW YORK BRANCH,
by ______________________________
Name:
Title:
[LETTERHEAD OF CRAVATH, SWAINE & MOORE
(212) 474-1942
MEMORANDUM
Schein Pharmaceuticals
October 3, 1996
I enclose execution and conformed copies of the Schein Pharmaceutical
Second Amendment and Waiver. If you have any questions, please call.
Best regards,
Srinivasan Soundararajan
Ms. Dawn Lee Lum
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Mr. James A. Meer
Schein Pharmaceuticals
100 Campus Drive
Florham Park, NJ 07932
The Lenders party to
the Credit Agreement
Encl.
SECOND AMENDMENT AND WAIVER dated as of
September 27, 1996 (this "Amendment"), to the
CREDIT AGREEMENT dated as of September 1, 1995,
among SCHEIN PHARMACEUTICAL, INC., a Delaware
corporation (the "Borrower"); the LENDERS (as
defined in Article I of the Credit Agreement); and
THE CHASE MANHATTAN BANK, a New York banking
corporation as issuing bank (in such capacity, the
"Issuing Bank"), as administrative agent (in such
capacity, the "Administrative Agent") and as
collateral agent (in such capacity, the
"Collateral Agent") for the Lenders.
The Borrower has requested that the Credit Agreement be amended and waived
as hereinafter set forth, and the Lenders have agreed to such amendments and
waivers, upon the terms and subject to the conditions set forth herein.
Accordingly, the Borrower and the Lenders hereby agree as follows:
ARTICLE I
Defined Terms
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement.
ARTICLE II
Amendments to the Credit Agreement
The Credit Agreement is amended, effective as of the date hereof, as set
forth below:
SECTION 2.01. Amendment to Section 1.01. The definition of "Applicable
Percentage" is hereby amended by (i) replacing the existing Category 5 with the
following new Category 5 and (ii) inserting the following two new categories,
Category 6 and Category 7, at the end of the table contained therein:
2
Category 5
- ----------
Leverage Ratio greater than or equal to
4.5 to 1.0 but less than 5.0 to 1.0;
Interest Expense Coverage Ratio less
than or equal to 3.0 to 1.0 but greater
than 2.5 to 1.0 1.5000 0.5000 0.5000
Category 6
- ----------
Leverage Ratio greater than or equal to
5 to 1.0 but less than 5.5 to 1.0;
Interest Expense Coverage Ratio less
than or equal to 2.5 to 1.0 but greater
than 2.0 to 1.0 2.0000 1.0000 0.5000
Category 7
- ----------
Leverage Ratio greater than or equal to
5.5 to 1.0; or Interest Expense Coverage
Ratio less than or equal to 2.0 to 1.0 2.5000 1.5000 0.5000
SECTION 2.02. Waivers. (a) The Lenders hereby waive any Event of Default
resulting from a failure to comply with the provisions of Sections 6.14 and 6.15
of the Credit Agreement for the period from and including the last day of the
third fiscal quarter of 1996 to but excluding the last day of fiscal 1996.
(b) The waivers provided for by paragraph (a) above shall terminate and
expire at 12:01 a.m., New York time, December 31, 1996, and at all times
thereafter the Credit Agreement shall apply in all respects, and the
Administrative Agent, the Collateral Agent and the Lenders shall have all such
rights and remedies, as if such waiver had never been granted.
SECTION 2.03. Maximum Utilization of Post-Merger Revolving Facility. The
Borrower hereby agrees that, from the date hereof until December 31, 1996, the
aggregate Post-Merger Revolving Credit Exposures will not exceed $75,000,000,
irrespective of the amount of the Post-Merger Revolving Credit Commitments
available during such period. The Borrower further agrees that any failure to
comply with this Section 2.03 shall constitute an Event of Default under the
Credit Agreement.
3
ARTICLE III
Representations and Warranties
The Borrower hereby represents and warrants to each Lender that:
(a) After giving effect to this Amendment, the representations and
warranties set forth in Article III of the Credit Agreement are true and correct
in all material respects as of the date hereof with the same effect as made on
and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date.
(b) After giving effect to Article II hereof, no Default or Event of
Default has occurred and is continuing.
ARTICLE IV
Effectiveness
This Amendment shall become effective as of the date hereof, upon
satisfaction of each of the following conditions precedent.
(a) The Administrative Agent shall have received duly executed counterparts
hereof which, when taken together, bear the authorized signatures of the
Borrower and the Required Lenders.
(b) The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the date hereof, confirming that after
giving effect to this Amendment (i) the representations and warranties set forth
in Article III of the Credit Agreement are true and correct in all material
respects on and as of the date hereof, with the same effect as though made on
and as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date and (ii) no Event of Default or
Default has occurred and is continuing.
(c) Each of the Lenders executing this Amendment shall have received from
the Borrower, through the Administrative Agent, on the Effective Date, in
4
immediately available funds, a fee equal to 0.10% of the sum of (x) its
Post-Merger Revolving Credit Commitment as in effect on the date hereof plus (y)
its portion of Term Facility Loans outstanding as of the date hereof.
ARTICLE V
Miscellaneous
SECTION 5.01. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 5.02. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall constitute but one instrument. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 5.03. Headings. The headings of this Amendment are for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 5.04. Effect of Amendment. Except as specifically amended hereby,
the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof. As used therein, the terms "Agreement", "herein",
"hereunder", "hereinafter", "hereto", "hereof", and words of similar import
shall, unless the context otherwise requires, refer to the Credit Agreement as
amended hereby.
SECTION 5.05. Effect of Waiver Generally. Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders under the Credit Agreement or any Loan Document, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan
Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle the
Borrower to a consent to, or a waiver, amendment, modification or other
5
change of, any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement or any other Loan Document in similar or
different circumstances. This Amendment shall apply and be effective only with
respect to the provisions of the Credit Agreement specifically referred to
herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SCHEIN PHARMACEUTICAL, INC.,
by /s/ [ILLEGIBLE]
-------------------------------
Name:
Title: Vice President &
Treasurer
THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), individually
and as Administrative Agent,
Collateral Agent and Issuing Bank,
by /s/ Dawn Lee Lum
-------------------------------
Name: Dawn Lee Lum
Title: Vice President
6
THE BANK OF NOVA SCOTIA,
by
-------------------------------
Name:
Title:
CITICORP USA, INC.,
by
-------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
by /s/ Mary E. Collier
-------------------------------
Name: Mary E. Collier
Title: VICE PRESIDENT
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH,
by /s/ Mary E. Collier
-------------------------------
Name: Mary E. Collier
Title: AUTHORIZED SIGNATURE
DEUTSCHE BANK, A.G., NEW YORK
AND/OR CAYMAN ISLAND BRANCHES,
by /s/ Iain Stewart
-------------------------------
Name: Iain Stewart
Title: Assistant Vice President
by /s/ Alka Goyal
-------------------------------
Name: Alka Goyal
Title: Assistant Vice President
7
MELLON BANK, N.A.,
by /s/ Caroline R. Walsh
-------------------------------
Name: Caroline R. Walsh
Title: Assistant Vice President
FLEET BANK, N.A. (formerly
known as NatWest Bank, N.A. ),
by /s/ Pauline McHugh
-------------------------------
Name: Pauline McHugh
Title: Vice President
Bank of Tokyo-Mitsubishi Trust THE BANK OF TOKYO TRUST
Company, successor by merger to: COMPANY,
by /s/ Michael C. Irwin
-------------------------------
Name: Michael C. Irwin
Title: Vice President
BAYERISCHE HYPOTHEKEN-UND WECHSEL-
BANK AKTIENGESSELLSCHAFT, NEW YORK
BRANCH
by /s/ Gisela Kroess
-------------------------------
Name: Gisela Kroess
Title: VP
by /s/ David Rockwell
-------------------------------
Name: David Rockwell
Title: SVP
COMERICA BANK,
by [ILLEGIBLE]
-------------------------------
Name: [ILLEGIBLE]
Title: VICE PRESIDENT
8
COOPERATIVE CENTRALE RAIFFEIFEN-
BOERENLEENBANK, B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
by /s/ Angel R. Reilly
-------------------------------
Name: Angel R. Reilly
Title: Vice President
by /s/ Ian Reece
-------------------------------
Name: Ian Reece
Title: Vice President &
Manager
CREDIT SUISSE,
by /s/ Christopher J. Eldin
-------------------------------
Name: CHRISTOPHER J. ELDIN
Title: MEMBER OF SENIOR
MANAGEMENT
by /s/ Thomas G. Muoio
-------------------------------
Name: THOMAS G. MUOIO
Title: ASSOCIATE
KeyBank National Association
by /s/ Marianne T. Meil
-------------------------------
Name: Marianne T. Meil
Title: Vice President
MIDLANTIC BANK, N.A.,
by /s/ Michael Nardo
-------------------------------
Name: Michael Nardo
Title: Vice President
9
SOCIETE GENERALE, NEW YORK BRANCH,
by /s/ Michelle Martin
-------------------------------
Name: Michelle Martin
Title: Assistant Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
by /s/ [ILLEGIBLE]
-------------------------------
Name: [ILLEGIBLE]
Title: Vice President
by /s/ R. Cechura
-------------------------------
Name: R. CECHURA
Title: VP
ABN AMRO BANK N.V., NEW YORK
BRANCH
by /s/ George M. Dugan
-------------------------------
Name: George M. Dugan
Title: Vice President
by /s/ David W. Stack
-------------------------------
Name: David W. Stack
Title: Assistant Vice President
BANK OF MONTREAL
by /s/ Thomas H. Peer
-------------------------------
Name: Thomas H. Peer
Title: Director
10
THE BANK OF NEW YORK,
by /s/ Walter C. Parelli
-------------------------------
Name: Walter C. Parelli
Title: Assistant Vice President
COMMERZBANK AKTIENGESELLSHAFT, NEW
YORK BRANCH,
by /s/ [ILLEGIBLE]
-------------------------------
Name:
Title:
by /s/ Jurgen Boysen
-------------------------------
Name: Jurgen Boysen
Title: Senior Vice President
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN ISLAND
BRANCH,
by /s/ [ILLEGIBLE]
-------------------------------
Name: [ILLEGIBLE]
Title:
by /s/ Leo Von Reissig
-------------------------------
Name: LEO VON REISSIG
Title: Assistant Vice President
FIRST UNION NATIONAL BANK
by /s/ Robert H. Waters, Jr.
-------------------------------
Name: Robert H. Waters, Jr.
Title: Senior Vice President
11
THE NIPPON CREDIT BANK, LTD.,
by /s/ Clifford Abramsky
-------------------------------
Name: Clifford Abramsky
Title: Senior Manager
SUMMIT BANK,
by /s/ Bruce A. Gray
-------------------------------
Name: BRUCE A. GRAY,
Title: VICE PRESIDENT
THE YASUDA TRUST AND BANKING CO.,
LIMITED, NEW YORK BRANCH,
by /s/ Patrick J. Owens
-------------------------------
Name: Patrick J. Owens
Title: First Vice President
SCHEIN PHARMACEUTICAL, INC.
CERTIFICATE OF THE FINANCIAL OFFICER
To: The Chase Manhattan Bank (formerly known as Chemical Bank), as Issuing Bank,
Administrative Agent and Collateral Agent pursuant to the Credit Agreement
dated as of September 1, 1995 among Schein Pharmaceutical, Inc. (the
"Borrower"), Chase Manhattan Bank (in such capacities) and the Lenders party
thereto ("Credit Agreement").
1. This Certificate is furnished pursuant to the Second Amendment and
Waiver, dated as of September 27, 1996 to the Credit Agreement. Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. On and as of the date hereof after giving effect to the Second
Amendment, the representations and warranties contained in the Credit Agreement
are true and correct in ail material respects with the same effect as though
such representations and warranties had been made on and as of the date hereof,
unless stated to relate to a specific earlier date, in which case such
representations and warranties were true and correct in all material respects as
of such earlier date.
3. On the date hereof after giving effect to Article III of the Second
Amendment, no Default or Event of Default has occurred and is continuing.
Dated: 9/27/96 By: /s/ James A. Meer
------------------------------
James A. Meer
Vice President & Treasurer
CONFORMED COPY
SECOND AMENDMENT AND WAIVER dated as of
September 27, 1996 (this "Amendment"), to the
CREDIT AGREEMENT dated as of September 1, 1995,
among SCHEIN PHARMACEUTICAL, INC., a Delaware
corporation (the "Borrower"); the LENDERS (as
defined in Article I of the Credit Agreement); and
THE CHASE MANHATTAN BANK, a New York banking
corporation as issuing bank (in such capacity, the
"Issuing Bank"), as administrative agent (in such
capacity, the "Administrative Agent") and as
collateral agent (in such capacity, the
"Collateral Agent") for the Lenders.
The Borrower has requested that the Credit Agreement be amended and waived
as hereinafter set forth, and the Lenders have agreed to such amendments and
waivers, upon the terms and subject to the conditions set forth herein.
Accordingly, the Borrower and the Lenders hereby agree as follows:
ARTICLE I
Defined Terms
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement.
ARTICLE II
Amendments to the Credit Agreement
The Credit Agreement is amended, effective as of the date hereof, as set
forth below:
SECTION 2.01. Amendment to Section 1.01. The definition of "Applicable
Percentage" is hereby amended by (i) replacing the existing Category 5 with the
following new Category 5 and (ii) inserting the following two new categories,
Category 6 and Category 7, at the end of the table contained therein:
2
Category 5
- ----------
Leverage Ratio greater than or equal
to 4.5 to 1.0 but less than 5.0 to
1.0; Interest Expense Coverage Ratio
less than or equal to 3.0 to 1.0 but
greater than 2.5 to 1.0 1.5000 0.5000 0.5000
Category 6
- ----------
Leverage Ratio greater than or equal
to 5 to 1.0 but less than 5.5 to 1.0;
Interest Expense Coverage Ratio less
than or equal to 2.5 to 1.0 but
greater than 2.0 to 1.0 2.0000 1.0000 0.5000
Category 7
- ----------
Leverage Ratio greater than or equal
to 5.5 to 1.0; or Interest Expense
Coverage Ratio less than or equal to
2.0 To 1.0 2.5000 1.5000 0.5000
SECTION 2.02. Waivers. (a) The Lenders hereby waive any Event of Default
resulting from a failure to comply with the provisions of Sections 6.14 and 6.15
of the Credit Agreement for the period from and including the last day of the
third fiscal quarter of 1996 to but excluding the last day of fiscal 1996.
(b) The waivers provided for by paragraph (a) above shall terminate and
expire at 12:01 a.m., New York time, December 31, 1996, and at all times
thereafter the Credit Agreement shall apply in all respects, and the
Administrative Agent, the Collateral Agent and the Lenders shall have all such
rights and remedies, as if such waiver had never been granted.
SECTION 2.03. Maximum Utilization of Post-Merger Revolving Facility. The
Borrower hereby agrees that, from the date hereof until December 31, 1996, the
aggregate Post-Merger Revolving Credit Exposures will not exceed $75,000,000,
irrespective of the amount of the Post-Merger Revolving Credit Commitments
available during such period. The Borrower further agrees that any failure to
comply with this Section 2.03 shall constitute an Event of Default under the
Credit Agreement.
3
ARTICLE III
Representations and Warranties
The Borrower hereby represents and warrants to each Lender that:
(a) After giving effect to this Amendment, the representations and
warranties set forth in Article III of the Credit Agreement are true and
correct in all material respects as of the date hereof with the same effect
as made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
(b) After giving effect to Article II hereof, no Default or Event of
Default has occurred and is continuing.
ARTICLE IV
Effectiveness
This Amendment shall become effective as of the date hereof, upon
satisfaction of each of the following conditions precedent.
(a) The Administrative Agent shall have received duly executed
counterparts hereof which, when taken together, bear the authorized
signatures of the Borrower and the Required Lenders.
(b) The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the date hereof, confirming that
after giving effect to this Amendment (i) the representations and
warranties set forth in Article III of the Credit Agreement are true and
correct in all material respects on and as of the date hereof, with the
same effect as though made on and as of such date, except to the extent
that such representations and warranties expressly relate to an earlier
date and (ii) no Event of Default or Default has occurred and is
continuing.
(c) Each of the Lenders executing this Amendment shall have received
from the Borrower, through the Administrative Agent, on the Effective Date,
in
4
immediately available funds, a fee equal to 0.10% of the sum of (x) its
Post-Merger Revolving Credit Commitment as in effect on the date hereof
plus (y) its portion of Term Facility Loans outstanding as of the date
hereof.
ARTICLE V
Miscellaneous
SECTION 5.01. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 5.02. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall constitute but one instrument. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 5.03. Headings. The headings of this Amendment are for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 5.04. Effect of Amendment. Except as specifically amended hereby,
the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof. As used therein, the terms "Agreement", "herein",
"hereunder", "hereinafter", "hereto", "hereof", and words of similar import
shall, unless the context otherwise requires, refer to the Credit Agreement as
amended hereby.
SECTION 5.05. Effect of Waiver Generally. Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders under the Credit Agreement or any Loan Document, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan
Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle the
Borrower to a consent to, or a waiver, amendment, modification or other
5
change of, any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document in
similar or different circumstances. This Amendment shall apply and be
effective only with respect to the provisions of the Credit Agreement
specifically referred to herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SCHEIN PHARMACEUTICAL, INC.,
by
/s/ James A. Meer
-----------------------
Name: James A. Meer
Title: Vice President &
Treasurer
THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), individually
and as Administrative Agent,
Collateral Agent and Issuing Bank,
by
/s/ Dawn Lee Lum
-----------------------
Name: Dawn Lee Lum
Title: Vice President
6
THE BANK OF NOVA SCOTIA,
by
/s/ Stephen Lockhart
-----------------------
Name: Stephen Lockhart
Title: Vice President
CITICORP USA, INC.,
by
/s/ Margaret Au Brown
-----------------------
Name: Margaret Au Brown
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH,
by
/s/ Mary E. Collier
-----------------------
Name: Mary E. Collier
Title: Vice President
CREDIT LYONNAIS, CAYMAN ISLAND
BRANCH,
by
/s/ Mary E. Collier
-----------------------
Name: Mary E. Collier
Title: Vice President
7
DEUTSCHE BANK, A.G., NEW YORK
AND/OR CAYMAN ISLAND BRANCHES,
by
/s/ Iain Stewart
-------------------------------
Name: Iain Stewart
Title: Assistant Vice President
by
/s/ Alka Goyal
-------------------------------
Name: Alka Goyal
Title: Assistant Vice President
MELLON BANK, N.A.,
by
/s/ Caroline R. Walsh
-------------------------------
Name: Caroline R. Walsh
Title: Assistant Vice President
FLEET BANK, N.A. (formerly
known as NatWest Bank, N.A.),
by
/s/ Pauline McHugh
-------------------------------
Name: Pauline McHugh
Title: Vice President
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, successor by merger
to: THE BANK OF TOKYO TRUST
COMPANY,
by
/s/ Michael C. Irwin
-------------------------------
Name: Michael C. Irwin
Title: Vice President
8
BAYERISCHE HYPOTHEKEN-UND WECHSEL-
BANK AKTIENGESSELLSCHAFT, NEW YORK
BRANCH,
by
/s/ Gisela Kroess
-------------------------------
Name: Gisela Kroess
Title: Vice President
by
/s/ David Rockwell
-------------------------------
Name: David Rockwell
Title: Senior Vice President
COMERICA BANK,
by
/s/ Chris Georvassilis
-------------------------------
Name: Chris Georvassilis
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEIFEN-
BOERENLEENBANK, B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
by
/s/ Angela R. Reilly
-------------------------------
Name: Angela R. Reilly
Title: Vice President
by
/s/ Ian Reece
-------------------------------
Name: Ian Reece
Title: Vice President &
Manager
,
9
CREDIT SUISSE,
by
/s/ Christopher J. Eldin
-------------------------------
Name: Christopher J. Eldin
Title: Member of Senior
Management
by
/s/ Thomas G. Muoio
-------------------------------
Name: Thomas G. Muoio
Title: Associate
KEYBANK NATIONAL ASSOCIATION,
by
/s/ Marianne T. Meil
-------------------------------
Name: Marianne T. Meil
Title: Vice President
PNC BANK, N.A.,
by
/s/ Michael Nardo
-------------------------------
Name: Michael Nardo
Title: Vice President
SOCIETE GENERALE, NEW YORK BRANCH,
by
/s/ Michelle Martin
-------------------------------
Name: Michelle Martin
Title: Assistant Vice
President
10
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
by
/s/ Donald F. Wolf
-------------------------------
Name: Donald F. Wolf
Title: Vice President
by
/s/ R. Cechura
-------------------------------
Name: R. Cechura
Title: Vice President
ABN AMRO BANK N.V., NEW YORK
BRANCH,
by
/s/ George M. Dugan
-------------------------------
Name: George M. Dugan
Title: Vice President
by
/s/ David W. Stack
-------------------------------
Name: David W. Stack
Title: Assistant Vice
President
BANK OF MONTREAL,
by
/s/ Thomas H. Peer
-------------------------------
Name: Thomas H. Peer
Title: Director
THE BANK OF NEW YORK,
by
/s/ Walter C. Parelli
-------------------------------
Name: Walter C. Parelli
Title: Assistant Vice
President
11
COMMERZBANK AKTIENGESELLSHAFT, NEW
YORK BRANCH,
by
/s/ Sean Harrigan
-------------------------------
Name: Sean Harrigan
Title: Senior Vice President
by
/s/ Jurgen Boysen
-------------------------------
Name: Jurgen Boysen
Title: Senior Vice President
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN ISLAND
BRANCH,
by
/s/ Karen A. Brinkman
-------------------------------
Name: Karen A. Brinkman
Title: Vice President
by
/s/ Leo von Reissig
-------------------------------
Name: Leo von Reissig
Title: Assistant Vice
President
FIRST UNION NATIONAL BANK,
by
/s/ Robert H. Waters, Jr.
-------------------------------
Name: Robert H. Waters, Jr.
Title: Senior Vice President
THE NIPPON CREDIT BANK, LTD.,
by
/s/ Clifford Abramsky
-------------------------------
Name: Clifford Abramsky
Title: Senior Manager
12
SUMMIT BANK,
by
/s/ Bruce A. Gray
-------------------------------
Name: Bruce A. Gray
Title: Vice President
THE YASUDA TRUST AND BANKING CO.,
LIMITED, NEW YORK BRANCH,
by
/s/ Patrick J. Owens
-------------------------------
Name: Patrick J. Owens
Title: First Vice President
SCHEIN PHARMACEUTICAL, INC.
CERTIFICATE OF THE FINANCIAL OFFICER
To: The Chase Manhattan Bank (formerly known as Chemical Bank), as Issuing Bank,
Administrative Agent and Collateral Agent pursuant to the Credit Agreement dated
as of September 1, 1995 among Schein Pharmaceutical, Inc. (the "Borrower"),
Chase Manhattan Bank (in such capacities) and the Lenders party thereto ("Credit
Agreement").
1. This Certificate is furnished pursuant to the Second Amendment and
Waiver, dated as of September 27, 1996 to the Credit Agreement. Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. On and as of the date hereof after giving effect to the Second
Amendment, the representations and warranties contained in the Credit Agreement
are true and correct in all material respects with the same effect as though
such representations and warranties had been made on and as of the date hereof,
unless stated to relate to a specific earlier date, in which case such
representations and warranties were true and correct in all material respects as
of such earlier date.
3. On the date hereof after giving effect to Article III of the Second
Amendment, no Default or Event of Default has occurred and is continuing.
Dated: 9/27/96 By: /s/ James A. Meer
--------------------------
James A. Meer
Vice President & Treasurer
[LOGO] SCHEIN
PHARMACEUTICAL
MEMORANDUM
TO: P. Feuerman
FROM: Jim Meer
DATE: January 24, 1997
SUBJECT: Third Amendment to Chase Agreement
- --------------------------------------------------------------------------------
Attached is an execution copy of the Third Amendment to the Chase $350 Million
Credit Agreement along with the exhibits for your permanent flies.
A conformed copy of the amendment only is forwarded to the list below.
cc:
D. Ashrafi
D. Barron
B. Gilesa
C. O'Neill
W. Stearns (2) - BDO
Att
CONFORMED COPY
THIRD AMENDMENT dated as of December 20,
1996 (this "'Amendment")' to the CREDIT AGREEMENT
dated as of September 1, 1995, among SCHEIN
PHARMACEUTICAL, INC., a Delaware corporation (the
"Borrower"); the LENDERS (as defined in Article I
of the Credit Agreement); and THE CHASE MANHATTAN
BANK, a New York banking corporation as issuing
bank (in such capacity, the "Issuing Bank"), as
administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent
(in such capacity, the "Collateral Agent") for the
Lenders.
The Borrower has requested that the Credit Agreement be amended as
hereinafter set forth, and the Lenders have agreed to such amendment, upon the
terms and subject to the conditions set forth herein. Accordingly, the Borrower
and the Lenders hereby agree as follows:
ARTICLE I
Defined Terms
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement, as amended hereby (the
"Amended Credit Aqreement").
ARTICLE II
Amendments to and Waivers under the Credit Agreement
The Credit Agreement is amended, effective as of the date hereof (but
subject to the conditions set forth in Article IV hereof), as set forth below:
SECTION 2.01. Amendments to Article I. (a) The following definitions are
added to Section 1.01 of the Credit Agreement in the proper alphabetical order:
" 'Acceptable Refinancing' shall mean a series of transactions in
which the Borrower (a) completes an issuance and sale of its capital stock
(or rights, warrants or options to acquire its capital stock) or of
Subordinated Debt (which Subordinated Debt, unless it (x) is described in
the second sentence of the definition of "Subordinated Debt" or (y) is on
terms (including, without limitation, maturity, interest rates,
subordination provisions, prepayment, redemption, defeasance or similar
provisions, covenants and events of default) at least as favorable in all
respects to the Borrower or the Lenders as the terms of the Indebtedness
issued (or that would have been issued) under the Conversion Note
Indenture, is on terms approved in writing by the Required Lenders), or any
combination thereof, in either case yielding net cash proceeds to the
Borrower of at least $96,000,000, and (b) applies such net cash proceeds to
prepay Term Loans in the manner contemplated by Sections 2.11 and 2.13."
2
" 'Conversion Note Indenture' shall mean the "Conversion Note
Indenture" referred to in the Senior Subordinated Loan Agreement, in the
form attached as Annex I-B to the Third Amendment."
" 'Refinancing Debt' shall have the meaning assigned to such term in
Section 6.0l(g)."
" 'Senior Subordinated Loan Aareement' shall mean the $100,000,000
Senior Subordinated Loan Agreement dated as of December [ ], 1996, among
the Borrower, certain lenders and Societe Generale, as administrative
agent, in the form attached as Annex I-A to the Third Amendment."
" 'Third Amendment' shall mean the Third Amendment dated as of
December 20, 1996, to this Agreement.'
(b) The definition of "Subordinated Debts" is amended to read as follows:
" 'Subordinated Debt' means unsecured Indebtedness of the Borrower
that (a) does not have any scheduled payments of principal prior to the
180th day following the Post-Merger Facilities Maturity Date, (b) the
principal of which is subordinated to the prior payment in full in cash of
all the Obligations in a manner reasonably satisfactory to the
Administrative Agent and (c) otherwise has terms and conditions reasonably
satisfactory to the Administrative Agent. Notwithstanding any other
provision of this Agreement, Subordinated Debt shall include (i)
Indebtedness incurred under and on the terms set forth in the Senior
Subordinated Loan Agreement or the Conversion Note Indenture, and (ii)
Refinancing Debt; provided that the terms of such Refinancing Debt
(including, without limitation, maturity, interest rates, subordination
provisions, prepayment, redemption, defeasance or similar provisions,
covenants and events of default) shall be in all material respects at least
as favorable to the Borrower and the Lenders as the terms of the
Indebtedness being refinanced (or, if the Indebtedness being refinanced we,
incurred under the Senior Subordinated Loan Agreement or the Conversion
Note Indenture, at least as favorable to the Borrower and the Lenders as
the terms of the Indebtedness issued (or that would have been issued) under
the Conversion Note Indenture) or, in the case of interest rates, shall be
consistent with rates of interest at the time prevailing in the market for
comparable obligations."
SECTION 2.02. Amendments to Article II. (a) Section 2.11(b) of the Credit
Agreement is amended by (i) inserting the phrase "(other than Section 2.13(f))"
between "2.13" and "shall" and (ii) inserting the following at the end of the
second sentence following the word "prepayment":
", and each prepayment of principal of Term Facility Borrowings pursuant to
Section 2.13(f) shall be applied (A) first, to reduce in full the amounts
due on or prior to June 30, 1998, in order of maturity and (B) second, to
reduce pro rata the scheduled payments of principal due under this Section
2.11 after June 30, 1998".
3
(b) Section 2.13 of the Credit Agreement is amended by inserting the
following new subsection (f):
"(f) Notwithstanding anything in paragraph (a), (b) or (c) above, (i)
the Borrower shall apply 100% of the Net Proceeds of any Acceptable
Refinancing promptly upon receipt to prepay outstanding Term Loans in
accordance with Section 2.11(b), and (ii) the Borrower may apply the Net
Proceeds of any Refinancing Debt incurred in compliance with Section
6.01(g) or of any issuance and sale of its capital stock (or rights,
warrants or options to acquire its capital stock) to repay any Indebtedness
incurred as part of an Acceptable Refinancing or any other Refinancing
Debt."
SECTION 2.03. Amendments to Article VI. (a) Clause (g) of Section 6.01 is
amended to read as follows:
"(g) Subordinated Debt issued after the Merger Date (including any
Indebtedness incurred as part of an Acceptable Refinancing, and any
Subordinated Debt the proceeds of which are used to refinance any such
indebtedness or any other Subordinated Debt the proceeds of which have been
so used ("Refinancing Debt"); provided that the terms of such Refinancing
Debt (including, without limitation, maturity, interest rates,
subordination provisions, prepayment, redemption, defeasance or similar
provisions, covenants and events of default) shall be in all material
respects at least as favorable to the Borrower and the Lenders as the terms
of the Indebtedness being refinanced (or, if the Indebtedness being
refinanced was incurred under the Senior Subordinated Loan Agreement or the
Conversion Note Indenture, at least as favorable to the Borrower and the
Lenders as the terms of the Indebtedness issued (or that would have been
issued) under the Conversion Note Indenture) or, in the case of interest
rates, shall be consistent with rates of interest at the time prevailing in
the market for comparable obligations.
(b) Section 6.12 is amended by deleting the text after the word
"Indebtedness" and inserting in place thereof:
"except that the Borrower and the Subsidiaries may (i) make payments in
respect of the Obligations, (ii) make payments in the form of common stock
of the Borrower and (iii) refinance Indebtedness incurred as part of an
Acceptable Refinancing or Refinancing Debt with the proceeds of any
issuance and sale of capital stock (or rights, warrants or options to
acquire capital stock) of the Borrower or of any Refinancing Debt permitted
under Section 6.01(g)."
(c) Section 6.14 of the Credit Agreement is amended by deleting the table
set forth therein and inserting in its place the following:
"From and including the last day of
fiscal 1996 to but excluding the
last day of the second fiscal
quarter of 1997 6.50 to 1.00
4
From and including the last day of
the second fiscal quarter of 1997 to
but excluding the last day of the
third fiscal quarter of 1997 6.00 to 1.00
From and including the last day of
the third fiscal quarter of 1997 to
but excluding the last day of fiscal
1997 5.75 to 1.00
From and including the last day of
fiscal 1997 to but excluding the
last day of the second fiscal
quarter of 1998 5.25 to 1.00
From and including the last day of
the second fiscal quarter of 1998 to
but excluding the last day of the
third fiscal quarter of 1998 5.00 to 1.00
From and including the last day of
the third fiscal quarter of 1998 to
but excluding the last day of the
second fiscal quarter of 1999 4.50 to 1.00
From and including the last day of
the second fiscal quarter of 1999 to
but excluding the last day of fiscal
1999 4.00 to 1.00
Thereafter 3.50 to 1.00"
(d) Section 6.15 of the Credit Agreement is amended by deleting the table
set forth therein and inserting in its place the following:
"From and including the last day of
fiscal 1996 to but excluding the
last day of the second fiscal
quarter of 1997 6.50 to 1.00
5
From and including the last day of
the second fiscal quarter of 1997 to
but excluding the last day of the
third fiscal quarter of 1997 4.50 to 1.00
From and including the last day of
the third fiscal quarter of 1997 to
but excluding the last day of the
second fiscal quarter of 1998 4.00 to 1.00
From and including the last day of
the second fiscal quarter of 1998 to
but excluding the last day of fiscal
1998 3.50 to 1.00
Thereafter 3.00 to 1.00
provided that if the Borrower completes an Acceptable Refinancing not later
than June 30, 1997, the ratio of Senior Debt to EBITDA for the period from
and including the day of the completion of such Acceptable Refinancing to
but excluding the last day of the second fiscal quarter of 1997 shall be
4.75 to 1.00"
(e) Section 6.16 of the Credit Agreement is amended by deleting the table
set forth therein and inserting in its place the following:
"From and including the last day of
fiscal 1996 to but excluding the
last day of the third fiscal charter
of 1998 $155,000,000
From and including the last day of
the third fiscal quarter of 1998 to
but excluding the last day of fiscal
1998 $160,000,000
From and including the last day of
fiscal 1998 to but excluding the
last day of fiscal 1999 $170,000,000
Thereafter $190,000,000"
6
(f) Section 6.18 of the Credit Agreement is deleted and replaced with the
following new Section 6.18:
"SECTION 6.18. Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio as of any date during any period specified below to be less
than the amount set forth below opposite such period; provided that for
purposes of computing the Fixed Charge Coverage Ratio, the scheduled
principal repayments in respect of the Term Facility Loans due on September
30, 1996, and December 31, 1996, shall be excluded:
From and including the last day of
fiscal 1996 to but excluding the
last day of fiscal 1997 1.00 to 1.00
From and including the last day of
fiscal 1997 to but excluding the
last day of fiscal 1999 1.10 to 1.00
From and including the last day of
fiscal 1999 to but excluding the
last day of fiscal 2000 1.25 to 1.00
Thereafter 1.50 to 1.00"
(g) The following new Section 6.19 is inserted at the end of Article VI:
"SECTION 6.19. Amendment of Certain Indebtedness. Amend or modify any
provision of any instrument or agreement evidencing or governing (a) any
Indebtedness incurred as part of an Acceptable Refinancing, (b) any
Refinancing Debt or (c) any other Subordinated Debt, in each case in a
manner adverse in any respect to the Borrower or to the Lenders, without
the consent of the Required Lenders."
SECTION 2.05. FoxMeyer Receivables. The provisions of Sections 5.11 and
6.02 of the Credit Agreement and the provisions of the Security Agreement are
waived to the extent (and only to the extent) necessary to permit the Borrower
to assign the pre-bankruptcy receivables of FoxMeyer Corporation and its
affiliates ("FoxMeyer") to National Union Fire Insurance Company ("National
Union"), as required under the terms of a credit insurance policy issued by
National Union in favor of the Borrower in order to perfect a claim of the
Borrower under such policy (estimated by the Borrower to be in the range of
$3,300,000 to $3,600,000) resulting from the bankruptcy of FoxMeyer. In
connection with such assignment, the Collateral Agent is authorized and directed
to execute, deliver and file all such instruments and other documents as it may
deem necessary to effect or evidence the release of such receivables from the
Lien of the Security Agreement.
7
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to each Lender that:
(a) After giving effect to this Amendment, the representations and
warranties set forth in Article III of the Credit Agreement are true and
correct in all material respects as of the date hereof with the same effect
as if made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(b) After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.
ARTICLE IV
Effectiveness
This Amendment shall become effective as of the date hereof but only upon
satisfaction of each of the following conditions precedent.
(a) The Administrative Agent shall have received duly executed
counterparts hereof which, when taken together, bear the authorized
signatures of the Borrower and the Required Lenders.
(b) The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the date hereof, confirming that
after giving effect to this Amendment (i) the representations and
warranties set forth in Article III of the Credit Agreement are true and
correct in all material respects on and as of the date hereof, with the
same effect as though made on and as of such date, except to the extent
that such representations and warranties expressly relate to an earlier
date and (ii) no Event of Default or Default has occurred and is
continuing.
(c) Each of the Lenders executing this Amendment shall have received
from the Borrower, through the Administrative Agent, on the date hereof, in
immediately available funds, a fee equal to 0.10% of the sum of (x) its
Post-Merger Revolving Credit Commitment as in effect on the date hereof
plus (y) its portion of Term Facility Loans outstanding as of the date
hereof.
ARTICLE V
Miscellaneous
SECTION 5.01. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
8
SECTION 5.02. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall constitute but one instrument. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 5.03. Headings. The headings of this Amendment are for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 5.04. Effect of Amendment. Except as specifically amended hereby,
the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof. As used therein, the terms "Agreement", "herein",
"hereunder", "hereinafter", "hereto",
9
"hereof", and words of similar import shall, unless the context otherwise
requires, refer to the Credit Agreement as amended hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
SCHEIN PHARMACEUTICAL. INC.,
by
/s/ James A. Meer
------------------------------
Name: James A. Meer
Title: Vice President and
Treasurer
THE CHASE MANHATTAN BANK (formerly known
as Chemical Bank), individually and as
Administrative Agent, Collateral Agent
and Issuing Bank,
by
/s/ Dawn Lee Lum
-------------------------------
Name: Dawn Lee Lum
Title: Vice President
10
THE BANK OF NOVA SCOTIA,
by
/s/ Brian Allen
-------------------------------
Name: Brian Allen
Title: Senior Relationship
Manager
CITICORP USA, INC.,
by
/s/ Thomas D. Stott
-------------------------------
Name: Thomas D. Stott
Title: Vice President
CREDIT LYONNAIS, NEW YORK BRANCH,
by
/s/ Robert Ivosevich
-------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
CREDIT LYONNAIS, CAYMAN ISLAND BRANCH,
by
/s/ Robert Ivosevich
-------------------------------
Name: Robert Ivosevich
Title: Authorized Signature
DEUTSCHE BANK, A.G., NEW YORK AND/OR
CAYMAN ISLAND BRANCHES,
by
/s/ Alka Jainigoyal
-------------------------------
Name: Alka Jainigoyal
Title: Assistant Vice President
by
/s/ Iain Stewart
-------------------------------
Name: Iain Stewart
Title: Assistant Vice
President
MELLON BANK, N.A.,
by
/s/ Caroline R. Walsh
-------------------------------
Name: Caroline R. Walsh
Title: Assistant Vice
President
11
FLEET BANK, N.A. (formerly known as
NatWest Bank, N.A.), by
by
-------------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, successor by merger to:
THE BANK OF TOKYO TRUST COMPANY,
by
/s/ George Stewart
-------------------------------
Name: George Stewart
Title: Senior Vice President
BAYERISCHE HYPOTHEKEN-UND WECHSEL-BANK
ARTIENGESSELLSCHAFT, NEW YORK BRANCH,
by
/s/ David A. Rockwell
-------------------------------
Name: David A. Rockwell
Title: Senior Vice President
by
/s/ Yoram Dankner
-------------------------------
Name: Yoram Dankner
Title: Senior Vice President
COMERICA BANK,
by
/s/ Chris Georvassilis
-------------------------------
Name: Chris Georvassilis
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEIFEN-
BOERENLEENBANK, B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
by
/s/ Dana W. Hemenwav
-------------------------------
Name: Dana W. Hemenway
Title: Vice President
by
/s/ W. Jeffrey Vollack
-------------------------------
Name: W. Jeffrey Vollack
Title: Vice President, Manager
12
CREDIT SUISSE,
by
/s/ Christopher J. Eldin
-------------------------------
Name: Christopher J. Eldin
Title: Member of Senior
Management
by
/s/ Thomas G. Muoio
-------------------------------
Name: Thomas G. Muolo
Title: Associate
KEYBANK NATIONAL ASSOCIATION,
by
/s/ Frank J. Jancar
-------------------------------
Name: Frank J. Jancar
Title: Vice President
PNC BANK, N.A.,
by
/s/ Michael Nardo
-------------------------------
Name: Michael Nardo
Title: Vice President
SOCIETE GENERALE, NEW YORK BRANCH,
by
/s/ Michelle Martin
-------------------------------
Name: Michelle Martin
Title: Assistant Vice President
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
by
/s/ Cynthia M. Niesen
-------------------------------
Name: Cynthia M. Niesen
Title: Managing Director
by
/s/ R. Cechura
-------------------------------
Name: R. Cechura
Title: Vice President
13
ABN AMRO BANX N.V., NEW YORK BRANCH,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
BANK OF MONTREAL,
by
/s/ Thomas H. Peer
-------------------------------
Name: Thomas H. Peer
Title: Director
THE BANK OF NEW YORK,
by
/s/ Walter S. Parelli
-------------------------------
Name: Walter S. Parelli
Title: Assistant Vice President
COMMERZBANK AKTIENGESELLSHAFT, NEW YORK
BRANCH,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH,
by
/s/ Norah McCann
-------------------------------
Name: Norah McCann
Title: Senior Vice President
by
/s/ Karen A. Brinkman
-------------------------------
Name: Karen A. Brinkman
Title: Vice President
14
FIRST UNION NATIONAL BANK,
by
/s/ Lance M. Zaremba
-------------------------------
Name: Lance M. Zaremba
Title: Assistant Cashier
THE NIPPON CREDIT BANK, LTD.,
by
/s/ Clifford Abramsky
-------------------------------
Name: Clifford Abramsky
Title: Senior Manager
SUMMIT BANK,
by
/s/ Lawrence F. Zema
-------------------------------
Name: Lawrence F. Zema
Title: Vice President and
Regional Manager
THE YASUDA TRUST AND BANKING CO.,
LIMITED, NEW YORK BRANCH,
by
/s/ Rohn Laudenschlager
-------------------------------
Name: Rohn Laudenschlager
Title: Senior Vice President
EXECUTION COPY
EXHIBIT 4.2
FOURTH AMENDMENT dated as of November 25, 1997
(this "Amendment"), to the CREDIT AGREEMENT dated as of
September 1, 1995, among SCHEIN PHARMACEUTICAL, INC., a Delaware
corporation (the "Borrower"); the LENDERS (as defined in Article
I of the Credit Agreement); and THE CHASE MANHATTAN BANK, a New
York banking corporation as issuing bank (in such capacity, the
"Issuing Bank"), as administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders.
The Borrower has requested that the Credit Agreement be amended
as hereinafter set forth to permit the Borrower to amend certain terms of the
form of Conversion Note Indenture attached as Annex l-B to the Third Amendment
to reflect the issuance of the Senior Floating Rate Notes on the Conversion Date
(as such term is defined in the Senior Floating Rate Note Documents). The
Lenders have agreed to amend the Credit Agreement as set forth herein, upon the
terms and subject to the conditions set forth below. Accordingly, the Borrower
and the Lenders hereby agree as follows:
ARTICLE I
Defined Terms
-------------
Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement. As used herein, the
following terms shall have the meanings assigned to them below (and to the
extent such terms are used in the Credit Agreement after giving effect to this
Amendment and Waiver, the following definitions are hereby added in their proper
alphabetical order to Section 1.01 of the Credit Agreement):
"Senior Subordinated Loan Agreement" shall mean the Senior
----------------------------------
Subordinated Loan Agreement dated as of December 20, 1996, between the Borrower
and Societe Generale, as Lender and administrative agent.
"Senior Floating Rate Note Documents" means the agreements
-----------------------------------
and instruments governing or evidencing the Senior Floating Rate Notes.
"Senior Floating Rate Notes" means Indebtedness of the Borrower
--------------------------
in the amounts and on the terms set forth in Exhibit A hereto and the related
Guarantees of the Subsidiaries referred to in such Exhibit A and shall
include, without limitation, any Indebtedness of the Borrower the terms of
which (including, without limitation, principal amount, maturity, interest
rates, subordination provisions, prepayment or similar provisions, covenants and
events of default) are in all material respects at least as favorable to the
Borrower and the Lenders as the terms set forth in Exhibit A.
ARTICLE II
Amendments to the Credit Agreement
----------------------------------
The Credit Agreement is amended, effective upon the satisfaction
of the conditions set forth in Article IV, as set forth below:
63
SECTION 2.01. Amendment of Section 1.01. The definition of "Loan
-------------------------
Documents" in Section 1.01 of the Credit Agreement is amended by the insertion
immediately prior to the period at the end of such definition of the words ",as
amended and in effect from time to time".
SECTION 2.02. Amendment of Section 6.01. Section 6.01 of the
-------------------------
Credit Agreement is amended by the deletion of the word "and" following clause
(l) thereof, the insertion of a semicolon and the word "and" after clause (m)
thereof and the insertion of the following new clause (n):
"(n) the Senior Floating Rate Notes".
SECTION 2.03. Amendment of Section 6.10. Section 6.10 of the
-------------------------
Credit Agreement is amended by the insertion of the following new paragraph (d):
"(d) Amend or modify the Senior Floating Rate Note Documents in
any respect adverse to the Borrower or any of its Subsidiaries or to the rights
or interests of the Lenders without the prior written consent of the Required
Lenders".
SECTION 2.04. Amendment of Section 6.12. Section 6.12 of the
-------------------------
Credit Agreement is amended by the insertion immediately prior to the period at
the end of such Section of the words ", and except that (iv) the outstanding
Subordinated Debt issued under the Senior Subordinated Loan Agreement may be
exchanged for the Senior Floating Rate Notes on the Conversion Date (as such
term is defined in the Senior Floating Rate Note Documents) and (v) Indebtedness
outstanding under the Senior Floating Rate Notes may be repaid with the proceeds
of (a) an Equity Issuance or (b) net proceeds of any Subordinated Debt incurred
on terms and conditions acceptable to the Lenders and used to refinance the
Senior Floating Rate Notes.
SECTION 2.05. Amendment of Section 6.15. Section 6.15 of the
-------------------------
Credit Agreement is amended as follows:
From and including the last day of
the second fiscal quarter of 1997 to
but excluding the last day of fiscal
1997 4.50 to 1.00
From and including the last day of
fiscal 1997 to but excluding the last
day of the second fiscal quarter of
1998 4.75 to 1.00
From and including the last day of
the second fiscal quarter of 1998 to
but excluding the last day of fiscal
1998 4.50 to 1.00
From and including the last day of
fiscal 1998 to but excluding the last
day of the second fiscal quarter of
1999 3.75 to 1.00
From and including the last day of
the second fiscal quarter of 1999 to
but excluding the last day of fiscal
1999 3.50 to 1.00
64
From and including the last day of 2.75 to 1.00
fiscal 1999 to but excluding the last
day of the second fiscal quarter of
2000
Thereafter 2.50 to 1.00
ARTICLE III
Representations and Warranties
------------------------------
The Borrower hereby represents and warrants to each Lender that:
(a) After giving effect to this Amendment, the
representations and warranties set forth in Article III of the Credit
Agreement are true and correct in all material respects as of the date
hereof with the same effect as made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier
date.
(b) After giving effect to Article II hereof, no Default or
Event of Default has occurred and is continuing.
ARTICLE IV
Effectiveness
-------------
This Amendment shall become effective on and as of any date
on or prior to December 12, 1997, on which each of the following conditions
precedent shall have been satisfied.
(a) The Administrative Agent shall have received duly
executed counterparts hereof which, when taken together, bear the authorized
signatures of the Borrower and Lenders.
(b) The Administrative Agent shall have received a
certificate of a Financial officer of the Borrower, dated the date hereof,
confirming that after giving effect to this Amendment (i) the representations
and warranties set forth in Article III of the Credit Agreement are true and
correct in all material respects on and as of the date hereof, with the same
effect as though made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and (ii) no
Event of Default or Default has occurred and is continuing.
(c) The Senior Floating Rate Notes Documents shall have been
executed and delivered by the Borrower and the other parties thereto, shall be
consistent in all respects with the summaries of terms set forth in Exhibit A
hereto and shall be satisfactory in form and substance to the Administrative
Agent.
(d) Each of the Lenders executing this Amendment shall have
received from the Borrower, through the Administrative Agent, on or before the
date hereof, in immediately available funds, a fee equal to 0.15% of the sum of
(x) its Post-Merger Revolving Credit Commitment as in effect on the date hereof
plus (y) its portion of Term Facility Loans outstanding as of the date hereof.
- ----
65
ARTICLE V
Miscellaneous
-------------
SECTION 5.01. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 5.02. Counterparts. This Amendment may be executed in
------------
any number of counterparts, each of which shall be an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed counterpart of a signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 5.03. Headings. The headings of this Amendment are for
--------
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 5.04. Effect of Amendment. Except as specifically
-------------------
amended hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms "Agreement",
"herein", "hereunder", "hereinafter", "hereto", "hereof", and words of
similar import shall, unless the context otherwise requires, refer to the Credit
Agreement as amended hereby. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of the Lenders under the
Credit Agreement or any Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full
force and effect. Nothing herein shall be deemed to entitle the Borrower to a
consent to, or a waiver, amendment, modification or other change of, any of the
terms, conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document in similar or different circumstances. This
Amendment shall apply and be effective only with respect to the provisions of
the Credit Agreement specifically referred to herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SCHEIN PHARMACEUTICAL, INC.,
by: /s/ James A. Meer
----------------------------
Name: James A. Meer
Title: Vice President
THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), individually and
as Administrative Agent, Collateral Agent
and Issuing Bank,
by:
------------------------------
Name:
Title:
66
ARTICLE V
Miscellaneous
-------------
SECTION 5.01. Governing Law, THiS AMENDMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 5.02. Counterparts. This Amendment may be executed in any
------------
number of counterparts, each of which shall be an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed counterpart of a signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 5.03. Headings. The headings of this Amendment are for
--------
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 5.04. Effect of Amendment. Except as specifically amended
-------------------
hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms "Agreement",
"herein", "hereunder", "hereinafter", "hereto", "hereof", and words of similar
import shall, unless the context otherwise requires, refer to the Credit
Agreement as amended hereby. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of the Lenders under the
Credit Agreement or any Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect. Nothing herein shall be deemed to entitle the Borrower to a consent
to, or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document in similar or different circumstances. This
Amendment shall apply and be effective only with respect to the provisions of
the Credit Agreement specifically referred to herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SCHEIN PHARMACEUTICAL, INC.,
by: /s/ James A. Meer
------------------------------
Name: James A. Meer
Title: Vice President
THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), individually and
as Administrative Agent, Collateral Agent
and Issuing Bank,
by: /s/ Dawn Lee Lum
------------------------------
Name: Dawn Lee Lum
Title: Vice President
67
THE BANK OF NOVIA SCOTIA,
by: /s/ Stephen Lockhart
------------------------
Name: Stephen Lockhart
Title: VP
CITICORP USA, INC.,
by: /s/ Dennis I. Bermack
------------------------
Name: Dennis I. Bermack
Title: Managing Director
CREDIT LYONNAIS, NEW YORK BRANCH,
by:
------------------------
Name:
Title:
CREDIT LYONNAIS, CAYMAN ISLAND BRANCH,
by:
------------------------
Name:
Title:
DEUTSCHE BANK, A.G., NEW YORK
AND/OR CAYMAN ISLAND BRANCHES,
by: /s/ Iain Stewart
------------------------
Name: Iain Stewart
Title: Vice President
by: /s/ Susan L. Pearson
------------------------
Name: Susan L. Pearson
Title: Vice President
MELLON BANK, N.A.,
by: /s/ Caroline R. Walsh
------------------------
Name: Caroline R. Walsh
Title: AVP
68
FLEET BANK, N.A. (formerly known as
NatWest Bank, N.A.).
by: /s/ Robert Isaksen
------------------------
Name: Robert Isaksen
Title: Vice President
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, successor by merger to: THE
BANK OF TOKYO TRUST COMPANY,
by: /s/ S.E. Goddard
------------------------
Name: S.E. Goddard
Title: AVP
BAYERISCHE HYPOTHEKEN-UND WECHSEL-
BANK AKTIENGESSELLSCHAFT, NEW YORK
BRANCH,
by:
------------------------
Name:
Title:
by:
------------------------
Name:
Title:
COMERICA BANK,
by: /s/ Kimberly S. Kersten
------------------------
Name: Kimberly S. Kersten
Title: Vice President
COOPERATIVE CENTRALE RAIFFEIFEN-
BOERENLEENBANK, BA.,"RABOBANK
NEDERLAND", NEW YORK BRANCH,
by: /s/ Ellen A. Polansky
------------------------
Name: Ellen A. Polansky
Title: Vice President
by: /s/ Robert S. Bucklin
------------------------
Name: Robert S. Bucklin
Title: Chief Corporate Banking Officer
69
CREDIT SUISSE,
by:
---------------------------
Name:
Title:
by:
---------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
by: /s/ Marianne T. Meil
---------------------------
Name: Marianne T. Meil
Title: Vice President
PNC BANK, N.A.
by: /s/ Michael Nardo
---------------------------
Name: Michael Nardo
Title: Vice President
SOCIETE GENERALE, NEW YORK BRANCH
by: /s/ Michelle Martin
---------------------------
Name: Michelle Martin
Title: Assistant Vice President
70
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
by: /s/ D. Wolf
---------------------------
Name: D. Wolf
Title: VP
by: /s/ Catherine Ruhland
---------------------------
Name: Catherine Ruhland
Title: Vice President
ABN AMRO BANK N.V., NEW YORK BRANCH,
by:
---------------------------
Name:
Title:
by:
---------------------------
Name:
Title:
BANK OF MONTREAL,
by:
---------------------------
Name:
Title:
THE BANK OF NEW YORK,
by: /s/ Pandolph E.J. Medrano
---------------------------
Name: Pandolph E.J. Medrano
Title: Vice President
71
COMMERZBANK AKTIENGESELLSHAFT, NEW
YORK BRANCH,
by:
---------------------------
Name:
Title:
by:
---------------------------
Name:
Title:
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN ISLAND
BRANCH,
by: /s/ Norah McCann
---------------------------
Name: Norah McCann
Title: SVP
by: /s/ Sabine Wendt
---------------------------
Name: Sabine Wendt
Title: Asst. Vice President
FIRST UNION NATIONAL BANK,
by: /s/ Richard W. Vieser, Jr.
---------------------------
Name: Richard W. Vieser, Jr.
Title: Sr. Portfolio Manager
THE NIPPON CREDIT BANK, LTD.,
by:
---------------------------
Name:
Title:
SUMMIT BANK,
by: /s/ Wayne R. Trotman
---------------------------
Name: Wayne R. Trotman
Title: Vice President & Regional Manager
72
THE YASUDA TRUST AND BANKING CO.,
LIMITED, NEW YORK BRANCH,
by: /s/ Rohn Laudenschlager
---------------------------
Name: Rohn Laudenschlager
Title: Senior Vice President
COMMERCIAL LOAN FUNDING TRUST I,
by LEHMAN COMMERCIAL PAPER, INC., not
in its individual capacity but solely as
Administrative Agent
by: /s/ Michele A. Awernon
---------------------------
Name: Michele A. Awernon
Title: Authorized Signatory