Omnicare - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Omnicare, LLC and the other borrowers signatory to the DIP Credit Agreement, as Borrowers
• All DIP Obligations are unconditionally guaranteed by each Borrower and each Borrower's subsidiaries that are debtors in the Chapter 11 Cases (collectively, the Loan Parties)
• Omnicare, LLC acts as Borrower Representative on behalf of each Loan Party

Agent / Lender(s)

• JMB Capital Partners Lending, LLC, a California limited liability company, and its designees or assignees, as Lender

Facility Amount / Type

• Non-amortizing, priming, super-priority senior secured new money term loan facility in an aggregate principal amount of up to $110.0 million
  • Interim Amount: up to $25.0 million, available upon entry of the Interim Order
  • Final Amount: the remaining $85.0 million, available upon entry of the Final Order
• Draws must be at least $5.0 million (and in multiples thereof), on three business days' written notice
• Borrowings permanently reduce the DIP Commitments, and repaid DIP Loans may not be reborrowed
• Proceeds of draws after the Initial Draw are to be funded into a segregated DIP Bank Account, subject to a control agreement in favor of Lender within 30 days after entry of the Final Order (with a 30-day cure period if the Loan Parties are using commercially reasonable efforts)
• The DIP Facility contains no roll-up of prepetition debt and no cross-collateralization provisions; the Debtors have no material secured or unsecured prepetition funded debt

Interest Rate

• 10.0% per annum, payable in cash monthly in arrears on the first business day of each month
• Default Interest: an additional 2.0% per annum, payable in cash, during the continuance of an Event of Default

Fees

• Commitment Fee: 2.0% of the DIP Commitments
  • Initial Commitment Fee: 2.0% of the Interim Amount ($500,000), approved on a final basis in the Interim Order and payable in cash no later than two business days after its entry
  • Additional Commitment Fee: 2.0% of the remaining $85.0 million of DIP Commitments ($1.7 million), payable in cash no later than two business days after entry of the Final Order
  • Payable even if the DIP Facility is never drawn
• Work Fee: $100,000, paid before the Petition Date and received by Lender on September 16, 2025; any unused amount offsets Lender's legal expenses during the case
• Exit Fee: Increased from 6.0% to 6.5% of the Interim Amount and from 6.0% to 6.5% of the Delayed Draw Amount (an increase of $550,000), in consideration for the extension of the Maturity Date
  • Initial Exit Fee: 6.5% of the Interim Amount, fully earned, non-refundable, and allowed on a final basis in the Interim Order
  • Additional Exit Fee: 6.5% of the Delayed Draw Amount, fully earned, non-refundable, and allowed on a final basis in the Final Order
  • Payable in cash upon the earliest of:
    • The DIP Termination Date
    • Payment in Full of the DIP Obligations
    • Any Mandatory Prepayment or Voluntary Prepayment, on a pro rata basis
  • If the DIP Termination Date occurs solely because of an Event of Default, the Exit Fee is not payable until Lender accelerates the DIP Obligations
  • History: originally 5.0% (Initial Exit Fee of $1.25 million; Additional Exit Fee of $4.25 million); increased to 6.0% under the First DIP Amendment (approved February 27, 2026 [Docket No. 624]) and to 6.5% under the Second DIP Amendment
• Expenses: all documented out-of-pocket fees and expenses of Lender, including its counsel Norton Rose Fulbright US LLP, are paid on a current basis
  • Lender's professionals provide summary invoices to the U.S. Trustee and any Committee, which may object in writing within five business days (the Review Period)
  • Undisputed amounts are added to the DIP Obligations, and no fee application is required

Maturity

• The earliest to occur of:
  • November 2, 2026 (extended from September 30, 2026)
  • The effective date of any chapter 11 plan with respect to Borrowers
  • The consummation of any sale or other disposition of all or substantially all of the assets of Borrowers pursuant to Section 363 of the Bankruptcy Code
  • The date of the acceleration of the Loans and the termination of the Commitments following the occurrence and during the continuation of an Event of Default
  • Dismissal of any Chapter 11 Case or conversion of any Chapter 11 Case into a case under chapter 7 of the Bankruptcy Code, or the appointment of a trustee or examiner in any Chapter 11 Case
• The DIP Termination Date terminates:
  • Borrowers' ability to borrow and to use proceeds and Cash Collateral, other than the Carve-Out
  • The DIP Commitments
• History: originally June 30, 2026; extended under the First DIP Amendment to August 31, 2026, subject to a one-month extension option through September 30, 2026, which the Debtors exercised

Use of Proceeds

• Subject to the Budget and Permitted Variance (except for the items in the second through fourth bullets below):
  • Working capital and general corporate purposes of the Loan Parties
  • Professional fees and expenses of the Debtors' estates
  • Fees and expenses under the DIP Facility, including the Commitment Fee, Exit Fee, Work Fee, and Lender's professional fees
  • Interest and other amounts payable under the DIP Documents
• Restricted Use: no DIP Loans, DIP Collateral, or Carve-Out may be used by any party to:
  • Investigate, initiate, or prosecute claims against Lender
  • Challenge the DIP Obligations, DIP Liens, or DIP Claims
  • Prevent, hinder, or delay Lender's enforcement, except to contest whether a DIP Termination Event has occurred
  • Modify Lender's rights and remedies
  • Seek senior or pari passu liens or claims, unless the DIP Obligations are Paid in Full or Lender consents

Prepayments

• Voluntary: permitted at any time in minimum amounts of $1.0 million of principal, together with accrued interest and the ratable portion of the Exit Fee
• Mandatory, within one business day of receipt:
  • 100% of the Net Cash Proceeds of any non-ordinary-course disposition of DIP Collateral, including insurance proceeds and condemnation awards, applied to principal, accrued interest, and the allocable Exit Fee
  • 100% of the Net Cash Proceeds of any indebtedness not permitted under the DIP Documents
• No reinvestment of proceeds is permitted without Lender's prior written consent
• Proceeds of any financing obtained in violation of the DIP Documents before Payment in Full must be applied immediately to the DIP Obligations

Collateral / Priority

• All DIP Obligations are subject only to the Carve-Out and are entitled to:
  • Allowed superpriority administrative expense claims under Section 364(c)(1), with priority over all administrative expenses, including those under Sections 503(b), 506(c), 507(a), and 507(b)
  • First-priority liens under Section 364(c)(2) on all unencumbered assets
  • Priming first-priority liens under Section 364(d)(1) on all encumbered assets, senior to all Prepetition Liens
• DIP Collateral includes substantially all assets of the Loan Parties, including:
  • Cash Collateral
  • Accounts and receivables
  • Inventory
  • Equity interests in subsidiaries
  • Commercial tort claims
  • Intellectual property
  • Leasehold and real property interests
  • Section 549 causes of action
  • Subject to entry of the Final Order, proceeds of Avoidance Actions
• DIP Liens were automatically perfected upon entry of the Interim Order, without the need for filings
• Existing Liens listed on Schedule 1 to the DIP Term Sheet are subordinate to the DIP Liens; these are UCC filings by B. Braun Medical, SunTrust Bank, Cardinal Health, The Harvard Drug Group, ParMed Pharmaceuticals, Integrated Commercialization Solutions, and McKesson
• Negative pledge on all assets of the Loan Parties, subject to the Carve-Out and permitted liens

Carve-Out

• The Carve-Out is the sum of:
  • Clerk of the Court and U.S. Trustee fees under 28 U.S.C. § 1930(a), plus statutory interest
  • Up to $50,000 of chapter 7 trustee fees and expenses under Section 726(b)
  • Allowed and unpaid fees of Debtor and Committee professionals incurred through the first business day after delivery of a Carve-Out Trigger Notice, subject to the Budget (subject to the Permitted Variance)
  • Up to $3.0 million of allowed professional fees incurred after that date (the Post-Carve-Out Trigger Notice Cap)
• The Debtors fund budgeted weekly professional fees into a segregated Carve-Out Account not subject to Lender's control; Lender holds a reversionary interest in any excess funds
• The Carve-Out is not available for any Restricted Use

Budget / Variance Reporting

• The Initial DIP Budget attached to the Interim Order covers a six-week period
• Updated Budgets are delivered every fifth Thursday
  • Lender may approve or reject an Updated Budget within five business days; if Lender does not reject it in that period, it becomes the Budget
  • If Lender rejects it, the existing Budget continues to apply
• Weekly Variance Reports are tested on a cumulative four-week rolling basis
• Permitted Variance: net operating disbursements may not exceed budget by more than 15.0% in the aggregate; exceeding this is an Event of Default
• Professional fees, restructuring charges, and U.S. Trustee fees are excluded from the variance calculation

Conditions Precedent

• Initial Draws:
  • Entry of the Interim Order within three business days after the Petition Date
  • Delivery of an Initial Budget acceptable to Lender
  • Payment of required fees and expenses
  • Accuracy of representations and warranties
  • No Material Adverse Effect
  • No Event of Default
  • Delivery of a borrowing notice
• Other Draws: the conditions to Initial Draws plus customary conditions, including:
  • Execution of the DIP Credit Agreement
  • No appointment of a trustee, examiner, or receiver
  • No modification of any DIP Order without Lender's consent
  • Compliance with the Milestones
  • Any Acceptable Stalking Horse Purchase Agreement remaining in full force and effect
  • Lender named as additional insured and loss payee within 30 days after entry of the Final Order, extendable by 30 days

Acceptable Stalking Horse Purchase Agreement

• Borrowers are required to execute and deliver, in accordance with bid procedures approved by the Bankruptcy Court (in form and substance acceptable to Lender), an Acceptable Stalking Horse Purchase Agreement on or before March 31, 2026
  • The Acceptable Stalking Horse Purchase Agreement must be one or more stalking horse purchase agreements (in form and substance acceptable to Lender), which in the aggregate are for all or substantially all of Borrowers' assets, that is executed, effective, and binding on all parties thereto and either:
    • Approved by Lender in its discretion, or
    • Would generate cash proceeds sufficient for the Payment in Full of the Obligations upon the closing date of such sale, closes on or before November 2, 2026 (extended from August 31, 2026), and requires, pursuant to an order of the Bankruptcy Court, the Payment in Full of the Obligations
  • An Acceptable Stalking Horse Purchase Agreement may not be withdrawn, cancelled, terminated, amended, modified, or supplemented on or after March 31, 2026 without Lender's consent in its sole discretion
  • Lender consents, pursuant to Section 7.1(b) of the Credit Agreement, to the amendment of the Acceptable Stalking Horse Purchase Agreement pursuant to the Amended and Restated Asset Purchase Agreement between the Borrowers party thereto and GenieRx Holdings LLC, and waives any Default or Event of Default resulting therefrom; the consent and waiver do not extend to any other changes or actions requiring Lender's consent
  • History: the original DIP Term Sheet required an Acceptable Stalking Horse Purchase Agreement by January 31, 2026, with a closing on or before June 30, 2026

Commercial Tort Claims

• Borrowers shall deliver to Lender an updated Schedule 4.6 with respect to commercial tort claims any Borrower has against another Person known to any Borrower not later than March 31, 2026 (or such later date as agreed by Lender in its discretion)

Covenants

• Affirmative: customary for debtor-in-possession financings; no audited financial statements are required
• Negative: customary limitations, with exceptions and baskets to be agreed, on:
  • Indebtedness
  • Liens, subject to a $1.0 million aggregate materiality threshold
  • Investments
  • Asset sales
  • Restricted payments
  • Affiliate transactions
• Permitted:
  • Sale processes for all or substantially all of Borrowers' assets, provided they require Payment in Full of the DIP Obligations
  • Contract rejections
  • Employment arrangements and capital expenditures within agreed thresholds
• Any non-ordinary-course sale, transfer, or encumbrance of DIP Collateral without Lender's consent or a court order is an Event of Default

Events of Default

• Include, among others:
  • Payment and covenant defaults
  • Judgments in excess of $1.0 million
  • Failure to enter the Interim Order by September 24, 2025 or the Final Order within 45 days after the Petition Date
  • Failure to meet the Milestones
  • Modification of the Acceptable Stalking Horse Purchase Agreement without Lender's consent
  • Dismissal or conversion of any Chapter 11 Case, or appointment of a trustee, receiver, or examiner with expanded powers
  • Stay relief permitting enforcement against assets with an aggregate value above $1.0 million
  • Any surcharge of the DIP Collateral or any priming or pari passu claim
  • Any challenge to the DIP Obligations, DIP Liens, or DIP Claims
  • Unconsented third-party financing that does not Pay in Full the DIP Obligations
  • Unauthorized payments of prepetition obligations
  • Termination of plan exclusivity without Lender's consent
  • Filing of a plan not acceptable to Lender
  • Filing of a settlement motion materially adverse to the DIP Collateral
  • Filing of a sale motion not acceptable to Lender, other than an Acceptable Stalking Horse Purchase Agreement or a sale that Pays in Full the DIP Obligations

Remedies

• Upon a DIP Termination Event and delivery of a Remedies Notice, Lender may:
  • Deliver a Carve-Out Trigger Notice
  • Terminate or reduce the DIP Commitments
  • Accelerate the DIP Obligations
  • Charge default interest
  • Terminate use of Cash Collateral
• These remedies are subject to a five-day Waiting Period, during which:
  • The Debtors may seek an emergency hearing, at which the Court may consider only whether an Event of Default has occurred or is continuing
  • The Debtors may use Cash Collateral only to preserve going-concern value or to contest the Event of Default
• If no contrary order is entered before the Waiting Period expires, the automatic stay lifts without further order

Other Provisions

• Waivers: subject to entry of the Final Order, waiver of Section 506(c) surcharge and of the equitable doctrine of marshaling
• Releases: the Debtors release Lender and its related parties from claims relating to the negotiation of and entry into the DIP Documents and waive defenses to the DIP Liens and DIP Obligations; the release excludes bad faith, fraud, gross negligence, and willful misconduct
• Credit Bid: subject to Section 363(k), Lender may credit bid all or any portion of the DIP Obligations in any sale of the Debtors' assets, whether under Section 363, a plan, or Section 725
• Good Faith: Lender is entitled to the protections of Section 364(e)
• Indemnification: customary indemnification of Lender and related parties, excluding gross negligence, bad faith, or willful misconduct
• Discharge: the DIP Obligations are not discharged by plan confirmation unless Paid in Full on or before the plan effective date
• Proofs of Claim: Lender is not required to file a proof of claim
• Modifications: material modifications to the DIP Term Sheet require a court order on three days' notice to the U.S. Trustee and any Committee
• Governing Law: New York law, except as governed by the Bankruptcy Code