<PAGE> 1
BEAR, STEARNS & CO., INC.
245 PARK AVENUE
NEW YORK, NY 10167
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SCHEIN PHARMACEUTICAL, INC.
AT
$19.50 NET PER SHARE
BY
WS ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
WATSON PHARMACEUTICALS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED.
June 6, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by WS Acquisition Corp., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Watson Pharmaceuticals, Inc., a
Nevada corporation ("Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of common stock, par value
$0.01 per share (the "Shares"), of Schein Pharmaceutical, Inc., a Delaware
corporation (the "Company"), at a price of $19.50 per Share, net to the seller
in cash (subject to applicable withholding of taxes), without interest, upon the
terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase, dated June 6, 2000 (the "Offer to Purchase"), and the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") enclosed herewith. The Offer is made in
connection with the Agreement and Plan of Merger, dated as of May 24, 2000 (the
"Merger Agreement"), among Parent, the Purchaser and the Company.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn on or prior to the Expiration Date (as
hereinafter defined) at least 24,500,000 Shares. The Offer is also subject to
the satisfaction of certain other terms and conditions contained in the Offer to
Purchase. See the Introduction and Sections 1 and 15 of the Offer to Purchase.
The Board of Directors of the Company has approved and found advisable the
Merger Agreement, the Offer and the Merger (as defined in the Offer to
Purchase), determined that the terms of the Offer and the Merger are fair to,
and in the best interests of, the stockholders of the Company and recommends
that stockholders accept the Offer and tender their Shares pursuant to the Offer
and/or vote to adopt the Merger Agreement.
<PAGE> 2
Enclosed for your information and forwarding to your clients are copies of
the following documents:
1. Offer to Purchase, dated June 6, 2000;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares. Facsimile copies of the Letter of
Transmittal may be used to tender Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates evidencing Shares ("Share Certificates") and all other
required documents are not immediately available or cannot be delivered to
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") by the
Expiration Date or if, in the case of book-entry delivery of Shares, the
procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase cannot be completed by the Expiration Date;
4. Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Company;
5. A letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. Return envelope.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JULY 3, 2000, UNLESS THE OFFER IS
EXTENDED (THE "EXPIRATION DATE").
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) Share
Certificates (or, in the case of book-entry delivery of Shares, a timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at The Depositary Trust Company), (ii) the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry delivery of Shares and (iii)
any other documents required by the Letter of Transmittal.
If holders of Shares wish to tender Shares, but cannot deliver their Share
Certificates or other required documents, or cannot comply with the procedures
for book-entry transfer, on or prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures described in Section 3
of the Offer to Purchase.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker, dealer or other person (other than the Dealer Manager, Depositary and
Information Agent, as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. However, the Purchaser
will, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any stock transfer or other similar taxes
payable with respect to the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained by
contacting, Bear, Stearns & Co. Inc., the Dealer Manager, or D.F. King & Co.,
Inc., the Information Agent, at their respective addresses and telephone numbers
set forth on the back cover of the Offer to Purchase.
Very truly yours,
Bear, Stearns & Co. Inc.
<PAGE> 3
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF PARENT, THE
PURCHASER, THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.
