Exhibit 10.1

 

Execution Version

 

First Amendment to Credit Agreement

 

This First Amendment dated as of July 19, 2019 (this “Amendment”), is among DIPLOMAT PHARMACY, INC., JPMORGAN CHASE BANK, N.A., as Administrative Agent and a Majority in Interest of the Revolving Lenders and Term A Lenders, and amends that certain Credit Agreement, dated as of December 20, 2017, (as amended, supplemented or otherwise modified up to the date hereof, the “Existing Credit Agreement”, as amended by this Amendment and as further amended, restated, modified or supplemented from time to time, the “Credit Agreement”). Terms used but not defined herein shall have the respective meanings ascribed thereto in the Existing Credit Agreement.

 

ARTICLE I. Amendment to the Existing Credit Agreement. Upon the satisfaction of the conditions set forth in ARTICLE III and ARTICLE IV below, the Existing Credit Agreement is hereby amended as follows:

 

a)             Section 6.12(a) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:

 

“The Company will not permit the Total Net Leverage Ratio as of the last day of any fiscal quarter of the Company ending after the Closing Date to exceed 5.75 to 1.00, (a) provided such ratio shall step up to (i) 6.00 to 1.00 on and after September 30, 2019 and (ii) 6.75 to 1.00 on and after December 31, 2019, and (b) such ratio shall step down to (i) 6.50 to 1.00 on and after June 30, 2020, (ii) 6.25 to 1.00 on and after September 30, 2020, (iii) 6.00 to 1.00 on and after December 31, 2020 and (iv) 4.00 to 1.00 on and after March 31, 2021. If a Covenant Trigger Event occurs prior to March 31, 2021, the covenant levels set forth in the previous sentence shall be reduced by 3.00 to 1.00 and (i) compliance with this Section 6.12(a) shall then be tested on the date on which such Covenant Trigger Event occurs, based on the financial statements most recently delivered pursuant to Section 5.01(a) or (b) and the covenant level (reduced by 3.00 to 1.00) applicable to such completed fiscal quarter and calculated on a Pro Forma Basis, and on the last day of each fiscal quarter of the Company ended thereafter, and (ii) the Borrower shall promptly cause a Compliance Certificate to be delivered to the Administrative Agent setting forth the calculation of the financial covenant set forth in this Section 6.12(a).”

 

b)             Section 6.12(b) of the Existing Credit Agreement shall is hereby amended and restated in its entirety as follows:

 

“The Company will not permit the Interest Coverage Ratio as of the last day of any fiscal quarter of the Company ending after the Closing Date to be less than 2.75 to 1.00, (a) provided such ratio shall step down to (i) 2.50 to 1.00 on and after September 30, 2019 and (ii) 2.25 to 1.00 on and after December 31, 2019 and (b) such ratio shall step up to (i) 2.375 to 1.00 on and after June 30, 2020 and (ii) 3.00 to 1.00 on and after March 31, 2021. If a Covenant Trigger Event occurs prior to March 31, 2021, the covenant levels set forth in the previous sentence shall be increased by 3.00 to 1.00 and (i) compliance with this Section 6.12(b) shall then be tested on the date on which such Covenant Trigger Event occurs, based on the financial statements most recently delivered pursuant to Section 5.01(a) or (b) and the covenant level (increased by 3.00 to 1.00) applicable to such completed fiscal quarter and calculated on a Pro Forma Basis, and on the last day of each fiscal quarter of the Company ended thereafter, and (ii) the Borrower shall promptly cause a Compliance Certificate to be delivered to the Administrative Agent setting forth the calculation of the financial covenant set forth in this Section 6.12(b).”

 

c)              New definitions are hereby incorporated to the Defined Terms in Section 1.01 of the Existing Credit Agreement in alphabetical order as follows:

 











 

““First Amendment” means, that certain First Amendment to this Agreement dated as of July 19, 2019.”

 

““Covenant Trigger Event” has the meaning assigned to such term in Exhibit A to the First Amendment.”

 

d)             Clause (a)(ix)(a) of the definition of “Consolidated EBITDA” is hereby amended by adding “, and, solely for purposes of calculating compliance with the Financial Covenants, the First Amendment” immediately after “Dispositions” therein.

 

e)              The reference to “Pro Forma Compliance with the Financial Covenants” in Section 5.17 shall be deemed to be such Financial Covenants prior to giving effect to this Amendment.

 

ARTICLE II. Representations. The Company makes the representations and warranties in Article III of the Credit Agreement and confirms that such representations and warranties are true and correct (i) in the case of the representations and warranties qualified as to materiality, in all respects and (ii) otherwise, in all material respects, in each case on and as of the date hereof, except in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall be so true and correct on and as of such prior date. Additionally, the Company represents and warrants that immediately before and after giving effect to this Amendment on the date hereof, no Default or Event of Default has occurred and is continuing.

 

ARTICLE III. Condition to Effectiveness. This Amendment (other than the amendments to be effectuated pursuant to Article I of this Amendment) shall become effective on the first date on which the following condition is satisfied (the date on which such condition is satisfied, the “Effective Date”):

 

a)             the Administrative Agent shall have received counterparts of this Amendment from the Company, the Administrative Agent and a Majority in Interest of the Revolving Lenders and Term A Lenders.

 

ARTICLE IV. Conditions to Effectiveness of Article I. Article I of this Amendment shall become effective on the first date on which the following conditions are satisfied (the date on which such conditions are satisfied, the “Article I Effective Date”):

 

a)             the Company shall have paid to the Administrative Agent, for the account of each Lender party to this Amendment that has provided its signature to the Administrative Agent by 5:00 p.m. New York City time on July 19, 2019, a consent fee equal to 0.50% of such Lender’s outstanding, without duplication, Loans and Commitments on the Effective Date (but, solely for such purposes, calculated after giving effect to the Revolving Commitment Reduction pursuant to Article IV(b) as if that occurred on the Effective Date;

 

b)             the Company shall have voluntarily permanently reduced the Revolving Commitments pursuant to Section 2.08 of the Credit Agreement by an amount equal to or greater than $50,000,000 (the “Revolving Commitment Reduction”); and

 

c)              the Administrative Agent shall have received all separately agreed fees owing by the Company on the Article I Effective Date and expenses, in each case invoiced and, in the case of expenses, required to be reimbursed to the Administrative Agent by the Company on the Article I Effective Date under the Existing Credit Agreement (including the reasonable and out of pocket fees, charges and disbursements of counsel for the Administrative Agent).

 

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ARTICLE V. Miscellaneous.

 

5.1                               On and after the date hereof, references in the Credit Agreement or in any other Loan Document to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby and as further amended, restated, modified or supplemented from time to time. This Amendment shall constitute a Loan Document. This Amendment does not constitute a novation of any Obligations.

 

5.2                               Except as expressly amended hereby, the Company agrees that the Credit Agreement and the other Loan Documents are ratified and confirmed and shall remain in full force and effect in accordance with their terms and that it is not aware of any set off, counterclaim, defense or other claim or dispute with respect to any of the foregoing. Except as expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. Nothing herein shall be deemed to entitle the Company to any future consent to, or 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.

 

5.3                               This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or electronic mail message shall be effective as delivery of a manually executed counterpart of this Amendment.

 

5.4                               This Amendment shall be construed in accordance with and governed by the law of the State of New York.

 

5.5                               Any provision in this Amendment that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Amendment are declared to be severable.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

 

	
 
    	
DIPLOMAT PHARMACY, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
by
    	
/s/ Daniel Davison
    
	
 
    	
 
    	
Name:
    	
Daniel Davison
    
	
 
    	
 
    	
Title:
    	
CFO
    


 

DPLO Amendment

 











 

	
 
    	
JPMORGAN CHASE BANK,   N.A., as Administrative Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul E. Flynn
    
	
 
    	
Name:
    	
Paul E. Flynn
    
	
 
    	
Title:
    	
Authorized Officer
    


 

DPLO Amendment

 











 

	
 
    	
Capital One, National   Association, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Karen M. Dahlquist
    
	
 
    	
Name:
    	
Karen M. Dahlquist
    
	
 
    	
Title:
    	
Senior Vice President
    


 

DPLO Amendment

 











 

	
 
    	
Citizens Bank, N.A., as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael D. Monte
    
	
 
    	
Name:
    	
Michael D. Monte
    
	
 
    	
Title:
    	
Managing Director
    


 

DPLO Amendment

 











 

	
 
    	
FIFTH THIRD BANK, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Nathaniel E. Sher
    
	
 
    	
 
    	
Nathaniel E. Sher
    
	
 
    	
 
    	
Senior Vice President
    


 

Classification: Internal Use

 

DPLO Amendment

 











 

	
 
    	
CREDIT SUISSE AG,   CAYMAN ISLANDS BRANCH, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ John D. Toronto
    
	
 
    	
Name:
    	
 JOHN D. TORONTO
    
	
 
    	
Title:
    	
AUTHORIZED SIGNATORY
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lingzi Huang
    
	
 
    	
Name:
    	
Lingzi Huang
    
	
 
    	
Title:
    	
Authorized Signatory
    


 

DPLO Amendment

 











 

	
 
    	
DEUTSCHE BANK AG NEW   YORK BRANCH, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yumi Okabe
    
	
 
    	
Name:
    	
Yumi Okabe
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Marguerite Sutton
    
	
 
    	
Name:
    	
Marguerite Sutton
    
	
 
    	
Title:
    	
Vice President
    


 

DPLO Amendment

 












 

	
 
    	
Huntington National   Bank, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Cheryl B. Holm
    
	
 
    	
Name:
    	
Cheryl B. Holm
    
	
 
    	
Title:
    	
Sr. Vice President
    


 

DPLO Amendment

 











 

	
 
    	
KeyBank National   Association, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Suzannah Valdivia
    
	
 
    	
Name:
    	
Suzannah Valdivia
    
	
 
    	
Title:
    	
Senior Vice President
    


 

DPLO Amendment

 











 

	
 
    	
Morgan Stanley Senior   Funding, Inc., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jackson Eng
    
	
 
    	
Name:
    	
Jackson Eng
    
	
 
    	
Title:
    	
Vice President
    


 

DPLO Amendment

 











 

	
 
    	
FLAGSTAR BANK, FSB, as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Elizabeth K.   Hausman
    
	
 
    	
Name:
    	
Elizabeth K. Hausman
    
	
 
    	
Title:
    	
First Vice President
    


 

DPLO Amendment

 











 

	
 
    	
Comerica Bank, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael Cliff
    
	
 
    	
Name:
    	
Michael Cliff
    
	
 
    	
Title:
    	
Vice President
    


 

DPLO Amendment

 











 

	
 
    	
Chemical Bank, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ John R. Hruska
    
	
 
    	
Name:
    	
John R. Hruska
    
	
 
    	
Title:
    	
Sr. Vice President
    


 

DPLO Amendment

 











 

EXHIBIT A

 

Covenant Trigger Events

 

Any one or more of the following occur (a “Covenant Trigger Event”):

 

1.                                      Any Investment is made in reliance on clauses (i) or (iii) of Section 6.04(w).

 

2.                                      Any Indebtedness (including any Incremental Facility or Alternative Incremental Facility Indebtedness) is outstanding in reliance on the Base Incremental Amount (other than up to $50 million that may be outstanding in reliance thereof) or the Maximum Incremental Ratio Amount.

 

3.                                      Any of the Permitted Amount is utilized.

 

4.                                      Any Restricted Payment is made in reliance on Section 6.08(a)(viii) or any payment is made in reliance on Section 6.08(b)(v).

 

5.                                      Any Disposition is made in reliance on Section 6.05(l) and 100% of the Net Proceeds thereof are not utilized to prepay Term Loans in a manner described in Section 2.11(c) (for the avoidance of doubt, without any reinvestment thereof) within 5 Business Days following the date such Net Proceeds are received.

 

6.                                      The Company fails to deliver, within 45 days after the end of each fiscal quarter (including the fourth fiscal quarter) of the Company, to the Revolving Lenders and Term A Lenders (which delivery shall occur by the Company providing such materials to the Administrative Agent for distribution to the Revolving Lenders and Term A Lenders) a projected balance sheet and projected statements of operations, shareholders’ equity and cash flows for each of the subsequent four fiscal quarters ending immediately after such fiscal quarter.