1
Exhibit 10.23
OMNIBUS AMENDMENT
This OMNIBUS AMENDMENT, dated as of May 25, 1999 (this "AMENDMENT"), is
among CARDINAL SOUTHEAST, INC. (formerly known as Cardinal Mississippi, Inc. and
successor by merger with Cardinal Florida, Inc.), a Mississippi corporation,
XXXXXXXX DISTRIBUTION CORPORATION, a Delaware corporation, RENLAR SYSTEMS, INC.,
a Kentucky corporation, and PYXIS CORPORATION, a Delaware corporation (each a
"LESSEE" and, collectively, "Lessees"), CARDINAL HEALTH INC., an Ohio
corporation ("Guarantor"), the financial institutions parties hereto as lenders
(the "LENDERS"),SUNTRUST BANKS, INC., a Georgia corporation ("LESSOR"), and
SUNTRUST BANK, ATLANTA, a Georgia banking corporation, as agent for the Lenders
(in such capacity, the "AGENT").
BACKGROUND
1. Certain of the Lessees, Guarantor, Lessor, certain of the Lenders
and the Agent are parties to that certain Master Agreement, dated as of July 16,
1996 (as amended, the "MASTER AGREEMENT") as amended by an Amendment to MASTER
AGREEMENT, dated as of May 19, 1998 (the "1998 AMENDMENT").
2. The parties hereto desire to further amend the Master Agreement and
certain other Operative Documents (as defined below) in certain respects as set
forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. DEFINITIONS. Capitalized terms used in this Amendment and
not otherwise defined herein shall have the meanings assigned thereto in the
Master Agreement.
Section 2. AGREEMENT TO ACQUIRE LAND; AGGREGATE LIMIT ON FUNDED
AMOUNTS. (a) SECTION 2.1(b) of the Master Agreement is hereby amended by adding
the following phrase at the end of such Section: "; PROVIDED, HOWEVER, that no
Closing Date with respect to any parcel of Land that does not have a completed
Building at the time of acquisition by the Lessor shall occur after May 25,
2002".
(b) SECTION 2.2(c) of the Master Agreement is hereby amended by
deleting the number "$75,000,000" where it appears in CLAUSE (y) of the first
sentence thereof and substituting therefor the number "$160,000,000".
Section 3. COMMITMENTS. (a) SCHEDULE 2.2 to the Master Agreement is
hereby amended by deleting it in its entirety and substituting therefor SCHEDULE
2.2 to this Amendment. Each of Wachovia Bank, N.A., The Fifth Third Bank and
Firstar Bank, N.A. (the "NEW LENDERS")
2
is hereby made a party to the Master Agreement and the Loan Agreement, and shall
have all the rights and obligations of a "Lender" under the Master Agreement,
the Loan Agreement and the other Operative Documents as if it were an original
signatory thereto to the extent of its Commitment. Each of the New Lenders
agrees to be bound by the terms and conditions applicable to a "Lender" set
forth in the Master Agreement, the Loan Agreement and the other Operative
Documents as if it were an original signatory thereto. Each of the New Lenders
hereby acknowledges and confirms that it has received a copy of each of the
Operative Documents and that in becoming a Lender and in making its Commitment
and Loans under the Loan Agreement, such actions have and will be made without
recourse to, or representation or warranty by, the Agent, any other Lender or
the Lessor. The Lessees and the Agent hereby consent to the addition of the New
Lenders. On the date hereof, certain of the Lenders, including the New Lenders,
shall make payments to the Agent, who shall distribute such payments to the
other Lenders, such that, after giving effect to such payment and distributions,
each Lender's outstanding Loans shall be equal to the product of (i) the
aggregate outstanding Funded Amounts on such date TIMES (ii) such Lender's
Commitment Percentage. Such payment shall be made in immediately available funds
to such account as the Agent shall specify to the Lenders.
(b) SECTION 2.3(a) is hereby amended by deleting the phrase "0.44475"
per annum" where it appears in CLAUSE (x) thereof and substituting therefor the
phrase "the Applicable Margin."
(c) SECTION 2.3(d) is hereby amended by deleting the percentage
"0.125%" where it appears in CLAUSE (x) thereof and substituting therefor the
phrase "the Applicable Fee Rate".
Section 4. PRICING SCHEDULE. The Pricing Schedule attached to this
Agreement is hereby made the Pricing Schedule to the Master Agreement.
Section 5. BASE TERM; FUNDING TERMINATION DATE; REQUIRED LENDERS;
REQUIRED FUNDING PARTIES. (a) The definition of "A Percentage" that appears in
APPENDIX A is hereby amended by deleting the percentage "84%" where it appears
therein and substituting therefore the percentage "85%".
(b) The definition of "B Percentage" that appears in APPENDIX A is
hereby amended by deleting the percentage "16%" where it appears therein and
substituting therefore the percentage "15%".
(c) The definition of "Base Term" that appears in APPENDIX A is hereby
amended by deleting the phrase "the sixth (6th) anniversary of such Closing
Date" where it appears therein and substituting therefore the date "May 25,
2004."
(d) The definition of "Funding Termination Date" that appears in
APPENDIX A is hereby amended by deleting the date "July 16, 2002" where it
appears therein and substituting therefor the date "May 25, 2004".
3
(e) The definition of "Required Lenders" that appears in APPENDIX A is
hereby amended by deleting the percentage "66-2/3%" where it appears therein and
substituting therefor the percentage "51%".
(f) The definition of "Required Funding Parties" that appears in
APPENDIX A is hereby amended by deleting the percentage "66-2/3%" where it
appears therein and substituting therefor the percentage "51%".
Section 6. CERTAIN DEFINITIONS. (a) APPENDIX A is hereby amended by
deleting the definitions of "Change in Control", "Indebtedness", "Material
Adverse Effect" and "Subsidiary" as they appear therein.
(b) APPENDIX A is hereby amended by adding the following definitions
thereto in appropriate alphabetical order:
As used in this Agreement:
"364-DAY CREDIT AGREEMENT" means the 364-Day Credit Agreement dated
March 31, 1999 between the Guarantor, the Subsidiaries of the Guarantor listed
as "Subsidiary Borrowers" on Schedule 1 thereto, the lenders party thereto and
The First National Bank of Chicago, as administrative agent, as such agreement
may be amended, restated or extended from time to time.
"ADJUSTED TANGIBLE NET WORTH" means, as of any date, (i) the amount of
any capital stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings of the
Guarantor and its consolidated Subsidiaries, but excluding the amount of any
foreign currency translation adjustment account shown as a capital account, less
(ii) the net book value of all items of the following character which are
included in the assets of the Guarantor and its consolidated Subsidiaries: (a)
goodwill, including, without limitation, the excess of cost over book value of
any asset, (b) organization or experimental expenses, (c) unamortized debt
discount and expense, (d) patents, trademarks, trade names and copyrights, (e)
treasury stock, (f) franchises, licenses and permits, and (g) other assets which
are deemed intangible assets under Agreement Accounting Principles.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in the United States of America in effect from time to time, applied
in a manner consistent with that used in preparing the financial statements
referred to in SECTION 6.11 of the Guaranty; PROVIDED, HOWEVER, that if any
change in Agreement Accounting Principles from those applied in preparing such
financial statements affects the calculation of any financial covenant contained
in the Guaranty or any other Operative Document, the Guarantor, the Lessees and
the Agent hereby agree to negotiate in good faith towards making appropriate
amendments acceptable to the
4
Required Lenders to the provisions of this Agreement to reflect as nearly as
possible the effect of the financial covenants as in effect on the date hereof.
"APPLICABLE FEE RATE" means, at any time, the percentage rate per annum
at which the Commitment Fee is accruing at such time as set forth in the Pricing
Schedule.
"APPLICABLE MARGIN" means, at any time, the percentage rate per annum
which is applicable at such time as set forth in the Pricing Schedule; provided
that, upon the occurrence and during the continuation of an Event of Default,
the Applicable Margin shall be the highest Applicable Margin set forth in the
Pricing Schedule.
"CAPITALIZED LEASE" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CASH EQUIVALENT INVESTMENTS" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000, (v) banker's acceptances,
(vi) money-market funds, PROVIDED that such funds invest solely in securities
otherwise described in this definition, (vii) variable rate demand notes, (viii)
municipal preferred stock, (ix) cash market preferred stock, and (x) short term
municipal notes; PROVIDED in each case that the same provides for payment of
both principal and interest (and not principal alone or interest alone) and is
not subject to any contingency regarding the payment of principal or interest.
"CHANGE IN CONTROL" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of the
Guarantor, provided, however, that the acquisitions by or on behalf of a Plan,
an employee stock purchase plan of the Guarantor, or by Persons who before such
acquisition were officers, directors, employees or who held in the aggregate not
less than 5% of the outstanding shares of voting stock of the Guarantor shall
not be included in determining whether a Change in Control shall have occurred.
"CONSOLIDATED OR "consolidated" means, when used with reference to any
financial term in the Master Agreement, the aggregate for two or more Persons of
the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with Agreement Accounting Principles.
5
"CONSTRUCTION BUDGET" is defined in Section 2.4 of the Construction
Agency Agreement.
"CONSTRUCTION FAILURE PAYMENT" with respect to any Second Group
Property means the amount equal to the sum of (i) 89.9% of the acquisition cost
of the related Land, if the cost of the related Land is less than 25% of the
total expected cost of such Second Group Property or 100% of the acquisition
cost of the related Land, if the cost of the related Land is equal to or more
than 25% of the total expected cost of such Second Group Property, PLUS (ii)
89.9% of the Construction costs (including development and transaction costs)
related to such Second Group Property that have been incurred through the date
of payment, PLUS (iii) any amounts owed with respect to such Second Group
Property pursuant to Section 3.4 of the Construction Agency Agreement or Section
7.2 of the Master Agreement, PLUS (iv) the cost of tenant improvements not paid
by a Construction Agent that were not part of the Construction Budget for such
Second Group Property.
"CONTINGENT OBLIGATION" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person for
Indebtedness, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor or
such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or the obligations of any such
Person as general partner of a partnership with respect to the liabilities of
the partnership, PROVIDED, HOWEVER, that any assumption, guaranty, endorsement
or undertaking with respect to any liability of any of its Subsidiaries to any
other of its Subsidiaries shall not be a Contingent Obligation of the Guarantor.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Guarantor or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
"INDEBTEDNESS" of a Person means, as of any date, such Person's (i)
obligations for borrowed money or evidenced by bonds, notes, acceptances,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or bankers' acceptances, (ii) obligations
representing the deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person's business
payable on terms customary in the trade), (iii) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or production from
Property now or hereafter owned or acquired by such Person, (iv) obligations of
such Person to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or
Property, (v) Capitalized Lease Obligations, (vi) any other obligation for
borrowed money or other financial accommodation which in accordance with
Agreement Accounting Principles would be shown as a liability on the
consolidated balance sheet of such Person, (vii) any Rate Hedging Obligations of
such Person,
6
and (viii) all Contingent Obligations of such Person with respect to or relating
to the indebtedness, obligations and liabilities of others similar in character
to those described in CLAUSES (i) through (vii) of this definition.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations or
prospects of the Guarantor and its subsidiaries taken as a whole, (ii) the
ability of the Guarantor or any Lessee to perform in any material respect under
the Operative Documents, (iii) the value, utility or useful life of any Leased
Property, (iv) the validity, enforceability or legality of any of the Operative
Documents, or (v) the priority, perfection or status of the Funding Party's
interest in any Leased Property.
"NET WORTH" means at any time the consolidated stockholder's equity of
the Guarantor and its Subsidiaries calculated on a consolidated basis as of such
time in accordance with Agreement Accounting Principles.
"PRICING SCHEDULE" means the schedule attached to the Master Agreement
identified as such.
"PROPERTY" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned
or leased by such Person.
"RATE HEDGING AGREEMENT" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"RATE HEDGING OBLIGATIONS" of any Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Hedging Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, PROVIDED, HOWEVER, that a failure to
7
meet the minimum funding standard of Section 412 of the Code and of Section 302
of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"SECOND GROUP PROPERTY" means each Leased Property with respect to
which the related Land was acquired by the Lessor after May 21, 1998.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary of the Guarantor that
would be a "significant subsidiary" within the meaning of Rule 1-02 of the
Securities and Exchange Commission's Regulation S-X if 5% were substituted for
10% wherever it occurs in such Rule.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Guarantor or any
member of the Controlled Group for employees of the Guarantor or any member of
the Controlled Group.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Guarantor.
"SUBSTANTIAL PORTION" means, with respect to the Property of the
Guarantor and its Subsidiaries, Property which (i) represents more than 20% of
the consolidated assets of the Guarantor and its Subsidiaries as would be shown
in the consolidated financial statements of the Guarantor and its Subsidiaries
as at the beginning of the twelve-month period ending with the month in which
such determination is made or (ii) is responsible for more than 20% of the
consolidated net sales or of the consolidated net income of the Guarantor and
its Subsidiaries as reflected in the financial statements referred to in CLAUSE
(i) above.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"YEAR 2000 ISSUES" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications of the Guarantor
and its Subsidiaries, and of the Guarantor's and its Subsidiaries' material
customers, suppliers and vendors, to function on and after January 1, 2000 as
they do on the date hereof, including handling of applications involving dates,
as such inability affects the business, operations and financial condition of
the Guarantor and its Subsidiaries.
"YEAR 2000 PROGRAM" is defined in SECTION 6.17 of the Guaranty.
8
Section 7. FUNDINGS. SECTION 2.2(e) of the Master Agreement is hereby
amended by deleting the phrase "the Lessee reasonably believes will be due in
the 90 days following such Funding from the Lessee" where it appears in the
first sentence thereof and substituting therefor the phrase "are then due".
Section 8. APPRAISALS. (a) SECTION 3.1(a)(vii) is hereby amended by adding the
following phrase at the end of the last sentence thereof: "; PROVIDED, HOWEVER,
that no Appraisal shall be required pursuant to this SECTION 3.1(a)(vii) for any
Land or any Building if (i) the initial Funding therefor shall have occurred on
or after May 25, 1999, and (ii) such Land or such Building shall be reasonably
consistent, in the reasonable judgment of the Agent, with the Land and Buildings
for which Fundings have been made pursuant to SECTION 2.2 hereof prior to such
date".
(b) SECTION 3.5(d) is hereby amended by adding the following phrase at
the end of the first sentence thereof: "; PROVIDED, HOWEVER, that no Completion
Date Appraisal shall be required pursuant to this SECTION 3.5(d) for any Land
and any Building thereon if the first Funding with respect to such Land occurs
after May 25, 1999".
Section 9. INDEMNITY. SECTION 7.1 of the Master Agreement is hereby
amended by adding the following phrase at the end of the first sentence thereof:
"; and, PROVIDED, FURTHER, that with respect to each Construction Land Interest
that is also a Second Group Property, the Lessee's indemnity obligations with
respect to such Second Group Property shall be governed by Section 3.4 of the
Construction Agency Agreement during the Construction Term therefor." SECTION
7.2 of the Master Agreement is hereby amended by adding the phrase "or Section
3.4 of the Construction Agency Agreement" after the phrase "without limitation
of SECTION 7.1" where it appears in the second line thereof.
Section 10. THE LEASE. (a) ARTICLE XII of the Lease is hereby amended
as follows:
(i) PARAGRAPH (e) and (f) thereof are hereby amended by deleting such
paragraphs in their entirety and substituting therefor the following:
(e) (i) the occurrence of any breach under SECTION 7 of the
Guaranty (other than those Sections listed in CLAUSE (ii) below) and
the continuance thereof for a period of thirty (30) days after the
earlier of(x) written notice thereof from Lessor and (y) knowledge of
such breach by a Responsible Officer of Cardinal, or (ii) the
occurrence of any breach of SECTION 7.3, 7.9, 7.10, 7.14, 7.16 or 7.17
of the Guaranty.
(f) the failure of any Lessee, the Guarantor or any of its
Significant Subsidiaries to pay when due any principal, interest or
other amounts, subject to any applicable grace period, or the default
by any Lessee, the Guarantor or any of its Significant Subsidiaries in
the performance beyond the applicable grace period with
9
respect thereto, if any of any term, provision or condition contained
in the 364-Day Credit Agreement or any agreement or agreements under
which any Indebtedness in excess of 2% of Adjusted Tangible Net Worth
was created or is governed, or any other event shall occur or condition
exist, the effect of which default or event is to cause, or to permit
the holder or holders, of such Indebtedness to cause, such Indebtedness
to become due prior to its stated maturity; or any such Indebtedness of
any Lessee, the Guarantor or any of its Significant Subsidiaries shall
be declared to be due and payable or required to be prepaid or
repurchased (other than by a regularly scheduled payment) prior to the
stated maturity thereof, or any Lessee, the Guarantor or any of its
Significant Subsidiaries shall not pay, or admit in writing its
inability to pay, it debts generally as they become due;
(ii) PARAGRAPH (g) thereof is hereby amended by inserting the phrase
"or any of its Significant Subsidiaries" after the phrase "Lessee or Guarantor"
where such phrase appears in the first line of such paragraph.
(iii) PARAGRAPH (h) thereof is hereby amended by inserting the phrase
"or any of its Significant Subsidiaries" after the phrase "Lessee or Guarantor"
where such phrase appears in the first line of such paragraph.
(iv) PARAGRAPH (j) thereof is hereby amended (i) by deleting the word
"or" where it appears in the second line thereof, and (ii) by inserting the
following at the end of such paragraph: "or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of the Guaranty."
(v) PARAGRAPHS (m) and (n) thereof are hereby amended by deleting such
paragraphs in their entirety and substituting therefor the following:
(m) Any Lessee, the Guarantor or any of its Significant
Subsidiaries shall fail within 60 days to pay, bond or otherwise
discharge one or more (i) judgements or orders for the payment of money
(not covered by insurance) in excess of 2% of Adjusted Tangible Net
Worth (or the equivalent thereof in currencies other than U.S. Dollars)
in the aggregate, or(ii) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect, which judgments(s), in either such case,
is/are not stayed on appeal or otherwise being appropriately contested
in good faith;
(n) Any member of the Controlled Group shall fail to pay when
due an amount or amounts aggregating in excess of $75,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Single Employer Plan with Unfunded Liabilities in
excess of $20,000,000 (a "Material Plan") shall be filed under Section
4041(c) of ERISA by any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or PBGC shall
institute proceedings under which it is likely to prevail under Title
IV of ERISA to terminate, to impose liability
10
(other than for premiums under Section 4007 of ERISA) in respect of, or
to cause a trustee to be appointed to administer any Material Plan; or
a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which causes one or more
members of the Controlled Group to incur a current payment obligation
in excess of $75,000,000;
(vi) PARAGRAPH (o) is hereby amended by deleting the period at the end
of such paragraph and substituting therefor ", and".
(b) The following is inserted at the end of ARTICLE XII:
(p) Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or
any portion of the Property of the Guarantor and its Subsidiaries
which, when taken together with all other Property of the Guarantor and
its Subsidiaries so condemned, seized, appropriated, or taken custody
or control of, during the twelve-month period ending with the month in
which any such action occurs, constitutes a Substantial Portion.
(c) SECTION 14.1(b) of the Lease is hereby amended by deleting the word
"two" where it appears in the fifth line thereof and substituting therefor the
word "three".
Section 11. THE GUARANTY. (a) SECTION 6 of the Guaranty is hereby
amended as follows:
(i) SECTION 6.10 is hereby amended by deleting such Section in its
entirety and substituting therefor the following:
Section 6.10 ERISA.
The Unfunded Liabilities of all Single Employer Plans do not
in the aggregate exceed $75,000,000. Each Single Employer Plan complies
in all material respects with all applicable requirements of law and
regulations where the failure to so comply could reasonably be expected
to have a Material Adverse Effect. No Reportable Event has occurred
with respect to any Plan where such occurrence could reasonably be
expected to have a Material Adverse Effect. Neither any Lessee, the
Guarantor nor any of its Significant Subsidiaries has withdrawn from
any Plan or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Single Employer Plan where in either
instance a liability in excess of $75,000,000 could reasonably be
expected to result.
(ii) SECTION 6.11 is hereby amended by deleting such Section in its
entirety and substituting therefor the following:
11
Section 6.11 FINANCIAL STATEMENTS.
The following consolidated financial statements heretofore
delivered to the Agent and the Lenders were prepared in accordance with
Agreement Accounting Principles in effect on the date such statements
were prepared and fairly present the consolidated financial condition
and operations of the Guarantor and its Subsidiaries at such date and
the consolidated results of their operations for the period then ended,
subject, in the case of such interim statements, to routine year-end
audit adjustments:
(i) June 30, 1998 audited consolidated financial
statements of the Guarantor and its Subsidiaries; December 31,
1997 audited consolidated financial statements of Allegiance
Corporation and its consolidated subsidiaries;
(ii) December 31, 1998 unaudited interim consolidated
financial statements of the Guarantor and its Subsidiaries;
and
(iii) December 31, 1998 unaudited interim
consolidated financial statements of Allegiance Corporation
and its consolidated subsidiaries.
(iii) The following is inserted at the end of SECTION 6:
Section 6.13 MATERIAL AGREEMENTS.
Neither the Guarantor nor any Subsidiary is a party to any
agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Guarantor nor any Subsidiary is in default
in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement to
which it is a party, which default could reasonably be expected to have
a Material Adverse Effect.
Section 6.14 COMPLIANCE WITH LAWS.
The Guarantor and its Subsidiaries have complied with all
applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof
having jurisdiction over the conduct of their respective businesses or
the ownership of their respective Property, except for any failure to
comply with any of the foregoing which could not reasonably be expected
to have a Material Adverse Effect.
Section 6.15 PLAN ASSETS; PROHIBITED TRANSACTIONS.
The Guarantor is not an entity deemed to hold "plan assets"
within the meaning of 29 C.F.R. Section 2510.3-101 of an employee
benefit plan (as defined in Section 3(3) of ERISA) which is subject to
Title I of ERISA or any plan (within the meaning of Section 4975 of
12
the Code), and neither the execution of this Guaranty nor the making of
Fundings under the Master Agreement gives rise to a prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975
of the Code.
Section 6.16 ENVIRONMENTAL MATTERS.
In the ordinary course of its business, the officers of the
Guarantor consider the effect of Environmental Laws on the business of
the Guarantor and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the
Guarantor due to Environmental Laws. On the basis of this
consideration, the Guarantor has concluded that Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect.
Neither the Guarantor nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of
the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse
Effect.
Section 6.17 YEAR 2000.
The Guarantor has substantially completed an assessment of the
Year 2000 Issues and has a realistic and achievable program for
addressing the remediation of Year 2000 Issues on a timely basis to
avoid any impact on the Guarantor and its Subsidiaries which would
reasonably be expected to have a Material Adverse Effect (the "Year
2000 Program"). Based on such assessment and on the Year 2000 Program
the Guarantor does not reasonably anticipate that Year 2000 Issues will
have a Material Adverse Effect.
(b) SECTIONS 7.1 through 7.15 are hereby amended by deleting such
sections in their entirety and substituting the following therefor:
Section 7.1 FINANCIAL REPORTING.
The Guarantor will maintain, for itself and each Subsidiary, a
system of accounting established and administrated in accordance with
Agreement Accounting Principles, and furnish to the Agent:
(i) Within 120 days after the close of each
of its fiscal years, an unqualified (except for
qualifications relating to changes in accounting
principles or practices reflecting changes in
Agreement Accounting Principles and required or
approved by the Guarantor's independent certified
public accountants) audit report certified by
independent certified public accountants reasonably
acceptable to the Agent, prepared in accordance with
Agreement Accounting Principles on a consolidated
basis
13
for itself and its Subsidiaries, including balance
sheets as of the end of such period, related profit
and loss statements, and a statement of cash flows.
(ii) Within 60 days after the close of each
of the first three quarterly periods of each fiscal
year, for itself and its Subsidiaries, consolidated
unaudited balance sheets as at the close of each such
period and consolidated unaudited profit and loss
statements and a consolidated unaudited statement of
cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified
by its Chief Financial Officer, Controller or
Treasurer.
(iii) Together with the financial statements
required under Section 7.1(i) and (ii), a compliance
certificate in substantially the form of EXHIBIT A
signed by its Chief Financial Officer, Controller, or
Treasurer and stating that no Event of Default or
Potential Event of Default exists, or if any Event of
Default or Potential Event of Default exists, stating
the nature and status thereof.
(iv) As soon as possible and in any event
within 10 Business Days after the Guarantor knows
that any Reportable Event has occurred with respect
to any Plan, a statement, signed by the Chief
Financial Officer, Controller, or Treasurer of the
Guarantor, describing said Reportable Event and the
action which the Guarantor proposes to take with
respect thereto.
(v) As soon as possible and in any event
within 10 Business Days after receipt by the
Guarantor, a copy of (a) any notice or claim to the
effect that any Lessee, the Guarantor or any of its
Subsidiaries is or may be liable to any Person as a
result of the release by any Lessee, the Guarantor,
any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any
violation of any federal, state or local
environmental, health or safety law or regulation by
any Lessee, the Guarantor or any of its Subsidiaries,
which, in either case, could reasonably be expected
to have a Material Adverse Effect.
(vi) Such other information (including
non-financial information) as the Agent or any Lender
may from time to time reasonably request.
14
Section 7.2 USE OF PROCEEDS.
The proceeds of the Fundings will be used to purchase
and/or construct Land and Buildings which shall constitute
Leased Property. The Guarantor will not, nor will it permit
any Subsidiary to, use any of the proceeds of the Fundings to
purchase or carry any "margin stock" (as defined in Regulation
U).
Section 7.3 NOTICE OF DEFAULT.
The Guarantor will, and will cause each Significant
Subsidiary and each Lessee to, give prompt notice in writing
to the Agent of the occurrence of (i) any Event of Default or
Potential Event of Default and (ii) any other development,
financial or otherwise (including, without limitation,
developments with respect to Year 2000 Issues) which could
reasonably be expected to have a Material Adverse Effect.
Section 7.4 CONDUCT OF BUSINESS.
The Guarantor will, and will cause each Significant
Subsidiary and each Lessee to, carry on and conduct its
business in substantially the same manner and in substantially
the same fields of enterprise as it is presently conducted or
fields related thereto (except that the Guarantor, its
Significant Subsidiaries and each Lessee shall have no duty to
renew or extend contracts which expire by their terms) and,
subject to the rights set forth in SECTION 7.9 hereof, do all
things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to
such entity) in good standing as a domestic corporation,
partnership or limited liability company in its jurisdiction
of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted, unless
the failure to do so could not reasonably be expected to have
a Material Adverse Effect.
Section 7.5 TAXES.
The Guarantor will, and will cause each Significant
Subsidiary and each Lessee to, timely file complete and
correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all
taxes, assessments and governmental charges and levies upon it
or its income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles, except where
the failure to do so could not reasonably be expected to have
a Material Adverse Effect.
15
Section 7.6 INSURANCE.
The Guarantor will, and will cause each Significant
Subsidiary and each Lessee to, maintain as part of a
self-insurance program or with financially sound and reputable
insurance companies insurance on all their Property in such
amounts (with such customary deductibles, exclusions and
self-insurance) and covering such risks as is consistent with
sound business practice.
Section 7.7 COMPLIANCE WITH LAWS.
The Guarantor will, and will cause each Significant
Subsidiary and each Lessee to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject including, without
limitation, all Environmental Laws, except where the failure
to do so could not reasonably be expected to have a Material
Adverse Effect.
Section 7.8 INSPECTION.
The Guarantor will, and will cause each Significant
Subsidiary and each Lessee to, permit the Agent and the
Lenders, by their respective representatives and agents, to
inspect any of the Property, books and financial records of
the Guarantor, each Lessee and each Significant Subsidiary, to
examine and make copies of the books of accounts and other
financial records of the Guarantor, each Lessee and each
Significant Subsidiary, and to discuss the affairs, finances
and accounts of the Guarantor, each Lessee and each
Significant Subsidiary with, and to be advised as to the same
by, their respective officers upon reasonable prior notice at
such reasonable times and intervals as the Agent or any
Funding Party may designate, PROVIDED that neither the
Guarantor, any Lessee nor any of its Significant Subsidiaries
shall be responsible for the costs and expenses incurred by
the Agent, any Funding Party, or their representatives in
connection with such inspection prior to the occurrence and
continuation of an Event of Default.
Section 7.9 MERGER.
The Guarantor will not, nor will it permit any
Significant Subsidiary or any Lessee to, merge or consolidate
with or into any other Person, except that, PROVIDED that no
Event of Default or Potential Event of Default shall have
occurred and be continuing or would result therefrom on a pro
forma basis reasonably acceptable to the Agent, the Guarantor
or any Lessee may merge or consolidate with any other U.S.
corporation and each Significant Subsidiary may merge or
consolidate with any other Person, PROVIDED, FURTHER, that (i)
in the case of any such merger or consolidation involving the
Guarantor, the Guarantor is the surviving corporation and (ii)
in the case of any such merger or consolidation
16
involving a Lessee, the surviving corporation assumes all of
such Lessee's obligations under this Master Agreement and the
other Operative Documents and remains or becomes a Lessee.
Section 7.10 SALE OF ASSETS.
The Guarantor will not, nor will it permit any
Significant Subsidiary or any Lessee to, lease, sell or
otherwise dispose of its Property, to any other Person (other
than the Guarantor, any Lessee or another Subsidiary), except:
(i) Sales of inventory in the ordinary
course of business.
(ii) Sales or other dispositions in the
ordinary course of business of fixed assets for the
purpose of replacing such fixed assets, PROVIDED that
such fixed assets are replaced within 360 days of
such sale or other disposition with other fixed
assets which have a fair market value not materially
less than the fixed assets sold or otherwise disposed
of.
(iii) Sales or other dispositions outside
the ordinary course of business of accounts
receivable, lease receivables, leases or equipment
which had been leased by the Guarantor, such Lessee
or such Significant Subsidiary, PROVIDED that any
such sale or other disposition is for reasonably
equivalent value and could not reasonably be expected
to have a Material Adverse Effect.
(iv) Other leases, sales (including
sale-leasebacks) or other dispositions of its
Property that, together with all other Property of
the Guarantor and its Subsidiaries previously leased,
sold or disposed of (other than as provided in
CLAUSES (i), (ii), and (iii) above) as permitted by
this Section during the twelve-month period ending
with the month prior to the month in which any such
lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the Property of
the Guarantor and its Subsidiaries, or together with
all other Property of the Guarantor and its
Subsidiaries previously leased, sold or disposed of
(other than as provided in CLAUSES (i) and (ii)
above) as permitted by this Section during the period
from the date of this Master Agreement to the end of
the month prior to the month in which any such lease,
sale or other disposition occurs, do not constitute
35% of the consolidated assets of the Guarantor and
its Subsidiaries as would be shown in the
consolidated financial statements of the Guarantor
and its Subsidiaries as at the beginning of the
fiscal year in which any such lease, sale or other
disposition occurs.
17
Notwithstanding anything in this SECTION 7.10 to the
contrary, (a) no such leases, sales or other dispositions of
property may be made (other than pursuant to CLAUSE (i) above)
if any Event of Default or Potential Event of Default has
occurred and is continuing, and (b) all leases, sales and
other dispositions of Property at any time shall be for not
less than the fair market value of such Property as determined
in good faith by the Guarantor.
Section 7.11 INVESTMENTS.
The Guarantor will not, nor will it permit any
Significant Subsidiary or any Lessee to, make or suffer to
exist any Investments, or commitments therefor, or to create
any Subsidiary or to become or remain a partner in any
partnership or joint venture, except:
(i) Cash Equivalent Investments.
(ii) Investments in Subsidiaries.
(iii) Other Investments in existence on the
date hereof.
(iv) Other Investments PROVIDED that the
aggregate amount of such Investments made in any
fiscal year does not exceed 25% of the Adjusted
Tangible Net Worth as of the beginning of such fiscal
year.
Section 7.12 LIENS.
The Guarantor will not, nor will it permit any
Significant Subsidiary or any Lessee to, create, incur, or
suffer to exist any Lien in, of or on the Property of any
Lessee, the Guarantor or any of its Significant Subsidiaries,
except:
(i) Liens for taxes, assessments or
governmental charges or levies on its Property if the
same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being
contested in good faith and by appropriate
proceedings and for which adequate reserves in
accordance with Agreement Accounting Principles shall
have been set aside on its books.
(ii) Liens imposed by law, such as
landlord's, carriers', warehousemen's and mechanics'
liens and other similar liens arising in the ordinary
course of business which secure payment of
obligations not more than 60 days past due or which
are being contested in good faith by appropriate
proceedings and for which adequate reserves in
accordance
18
with Agreement Accounting Principles shall have been
set aside on its books.
(iii) Liens arising out of pledges or
deposits under worker's compensation laws,
unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar
legislation (other than Liens in favor of the PBGC).
(iv) Utility easements, building
restrictions and such other encumbrances or charges
against real property as are of a nature generally
existing with respect to properties of a similar
character and which do not in a material way affect
the marketability of the same or interfere with the
use thereof in the business of the Guarantor or its
Subsidiaries.
(v) Liens existing on the date hereof.
(vi) Liens on any assets which exist at the
time of acquisition of such assets by any Lessee, the
Guarantor, or any of its Subsidiaries, or liens to
secure the payment of all of any part of the purchase
price of such assets upon the acquisition of such
assets by any Lessee, the Guarantor or any of its
Subsidiaries or to secure any Indebtedness incurred
or guaranteed by any Lessee, the Guarantor or any of
its Subsidiaries prior to, at the time, of or within
360 days after, such acquisition (or, in the case of
real property, the completion of construction
(including any improvements on an existing asset) or
commencement of full operation of such asset,
whichever is later), which Indebtedness is incurred
or guaranteed for the purpose of financing all or any
part of the purchase price thereof or, in the case of
real property, construction or improvements thereon,
PROVIDED, HOWEVER, that in the case of any such
acquisition, construction or improvement, the Lien
shall not apply to such assets theretofore owned by
any Lessee, the Guarantor or any of its Subsidiaries
other than, in the case of any such construction or
improvement, any real property on which the property
so constructed, or the improvement, is located,
PROVIDED FURTHER, however, that the aggregate
outstanding principal amount of Indebtedness secured
by Liens permitted by this SECTION 7.12(vi) shall not
at any time exceed $250,000,000.
(vii) Liens in favor of the United States of
America of any State thereof, or any department,
agency or instrumentality or political subdivision of
the United States of America or any State thereof, or
in favor of any other country or any political
subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or
statute or to secure any Indebtedness incurred or
guaranteed for the purpose of financing all or any
part of the purchase price (or, in the case of real
property, the cost of construction), of the assets
subject to such liens
19
(including without limitation liens incurred in
connection with pollution control, industrial revenue
or similar financings).
(viii) Any extension, renewal or replacement
(or successive extensions, renewals or replacements)
in whole or in part of any Lien referred to in the
foregoing clauses, PROVIDED, HOWEVER, that the
principal amount of Indebtedness secured thereby
shall not exceed the principal amount of Indebtedness
so secured prior to such extension, renewal or
replacement and that such extension, renewal or
replacement Lien shall be limited to all or a part of
the assets which secured the Lien so extended,
renewed or replaced (plus improvements and
construction of such real property).
(ix) So long as no Event of Default under
paragraph (m) of Article XII of the Lease would occur
in connection therewith, Liens created by or
resulting from any litigation or other proceeding
which is being contested in good faith by appropriate
proceedings, including Liens arising out of judgments
or awards against any Lessee, the Guarantor or any of
its Subsidiaries with respect to which such Lessee,
the Guarantor or such Subsidiary is in good faith
prosecuting an appeal or proceeding for review or for
which the time to make an appeal has not yet expired;
or final unappealable judgment Liens which are
satisfied within 15 days of the date of judgment; or
Liens incurred by any Lessee, the Guarantor or any of
its Subsidiaries for the purpose of obtaining a stay
or discharge in the course of any litigation or other
proceeding to which such Lessee, the Guarantor or
such Subsidiary is a party.
(x) Liens securing Indebtedness described in
SECTION 7.16(iv) and (v).
(xi) Liens securing Indebtedness and not
otherwise permitted by the foregoing provisions of
this SECTION 7.12, PROVIDED that the aggregate
outstanding principal amount of the Indebtedness
secured by all such Liens shall not at any time
exceed 25% of Adjusted Tangible Net Worth.
Section 7.13 YEAR 2000.
The Guarantor will take and will cause each of its
Subsidiaries and each Lessee to take all such actions as are
reasonably necessary to successfully implement the Year 2000
Program and to assure that Year 2000 Issues will not have a
Material Adverse Effect. At the request of the Agent, the
Guarantor will
20
provide a description of the Year 2000 Program, together with
any updates or progress reports with respect thereto.
Section 7.14 SUBSIDIARY INDEBTEDNESS.
The Guarantor will not permit any Subsidiary to
create, incur or suffer to exist any Indebtedness, except:
(i) The Fundings.
(ii) Indebtedness outstanding on May 25,
1999, or incurred pursuant to commitments in
existence on May 25, 1999.
(iii) Indebtedness of any Subsidiary to the
Guarantor or any other Subsidiary.
(iv) Indebtedness of any Person that becomes
a Subsidiary after the date hereof; PROVIDED that
such Indebtedness existed at the time such person
becomes a Subsidiary and is not created in
contemplation of or in connection with such Person
becoming a Subsidiary.
(v) Any refunding or refinancing of any
Indebtedness referred to in CLAUSE (i) through (iv)
above, PROVIDED that any such refunding or
refinancing of Indebtedness referred to in CLAUSE
(ii), (iii) and (iv) does not increase the principal
amount thereof.
(vi) Indebtedness arising from (a) the
endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary
course of business or (b) the honoring by a bank or
other financial institution of a check, draft or
similar instrument inadvertently (except in the case
of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business.
(vii) Indebtedness arising from guarantees
of loans and advances by third parties to employees
and officers of a Subsidiary in the ordinary course
of business for bona fide business purposes, PROVIDED
that the aggregate outstanding principal amount of
such Indebtedness does not at any time exceed
$100,000,000.
(viii) Indebtedness of a Subsidiary arising
from agreements providing for indemnification,
adjustment of purchase price or similar obligations
or from guarantees, letters of credit, surety bonds
or performance bonds securing any obligations of the
Guarantor or any of its
21
Subsidiaries incurred or assumed in connection with
the disposition of any business, property or
Subsidiary.
(ix) Indebtedness arising from Rate Hedging
Obligations.
(x) Contingent Obligations.
(xi) Indebtedness outstanding under
investment grade commercial paper programs.
(xii) Other Indebtedness; PROVIDED that, at
the time of the creation, incurrence or assumption of
such other Indebtedness and after giving effect
thereto, the aggregate amount of all such other
Indebtedness of the Subsidiaries does not exceed an
amount equal to 25% of Adjusted Tangible Net Worth at
such time.
Section 7.15 LIMITATION ON RESTRICTIONS ON SIGNIFICANT
SUBSIDIARY DISTRIBUTIONS.
The Guarantor will not, and will not permit any
Significant Subsidiary to, enter into or suffer to exist or
become effective any consensual encumbrance or restriction on
the ability of any Significant Subsidiary of the Guarantor to
(i) pay dividends or make any other distributions in respect
of any capital stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Guarantor or any other Subsidiary of
the Guarantor, (ii) make loans or advances to the Guarantor or
any other Subsidiary of the Guarantor or (iii) transfer any of
its assets to the Guarantor or any other Subsidiary of the
Guarantor, except for such encumbrances or restrictions
existing under or by reason of (a) any restrictions existing
under the Operative Documents, (b) any restrictions with
respect to a Significant Subsidiary imposed pursuant to an
agreement which has been entered into in connection with the
disposition of all or substantially all of the capital stock
or assets of such Significant Subsidiary, and (c) any
restrictions with respect to assets encumbered by a Lien
permitted by SECTION 7.12 so long as such restriction applies
only to the asset encumbered by such permitted Lien.
Section 7.16 CONTINGENT OBLIGATIONS.
The Guarantor will not, nor will it permit any
Subsidiary to, make or suffer to exist any Contingent
Obligation (including, without limitation, any Contingent
Obligation with respect to the obligations of a Subsidiary),
except (i) by endorsement of instruments for deposit or
collection in the ordinary course of business, (ii) the
Guaranty, (iii) Contingent Obligations of special-purpose
finance Subsidiaries, PROVIDED that no Person has recourse
against the Guarantor or any Significant Subsidiary for such
Contingent Obligations, (iv) Contingent Obligations
22
arising from the sale by Pyxis Corporation of lease
receivables, leases or equipment, PROVIDED that the aggregate
amount of such Contingent Obligations do not at any time
exceed 10% of Adjusted Tangible Net Worth, (v) Contingent
Obligations arising out of operating or synthetic leases
entered into by Subsidiaries of the Guarantor, PROVIDED that
the aggregate amount of such Contingent Obligations do not at
any time exceed 25% of Adjusted Tangible Net Worth, and (vi)
Contingent Obligations in addition to those described in
CLAUSES (i) through (v) above, PROVIDED that the aggregate
amount of such additional Contingent Obligations (without
duplication) do not at any time exceed 25% of Adjusted
Tangible Net Worth.
Section 7.17 MINIMUM NET WORTH.
The Guarantor shall not permit its Net Worth to be
less than $2,550,000,000 at any time.
(c) EXHIBIT A to this Agreement is hereby made EXHIBIT A to the
Guaranty.
Section 12. CONSTRUCTION AGENCY AGREEMENT. The Construction Agency
Agreement is hereby amended as follows:
(1) SECTION 2.4 is hereby amended by adding a new sentence at the end
thereof as follows: "On or prior to the Funding Date of the first Funding for
Construction of a Building on each parcel of Land related to a Second Group
Property, the Construction Agent shall prepare and deliver to the Lessor and the
Agent a construction budget (the "CONSTRUCTION BUDGET") for the related Second
Group Property, setting forth in reasonable detail the reasonably anticipated
budget for the Construction of the proposed Building on such Land in accordance
with the Plans and Specifications therefor, and all related costs including the
capitalized interest and Yield expected to accrue during the related
Construction Term.";
(2) SECTION 2.5 is hereby amended by (i) deleting the word "and" at the
end of clause (b) thereof, (ii) deleting the period at the end of clause (c)
thereof and substituting therefor a semicolon and (iii) adding the following at
the end hereof:
"(d) the Completion Date for such Leased Property; and
(e) the payment by the Construction Agent of the Leased
Property Balance or, if such Leased Property is a Second Group
Property, the Construction Failure Payment with respect to such Leased
Property pursuant to this Agreement.";
(3) SECTION 2.6 is hereby amended by adding the following sentence at
the end thereof: "Each construction contract for a Second Group Property with a
general contractor shall be with
23
a reputable general contractor with experience in constructing projects that are
similar in scope and type to the proposed Building, and shall provide for a
guarantee maximum project cost and a commercially reasonable amount of
retainage, which shall in no case be less than 5% retainage.";
(4) SECTION 2.8(a) is hereby amended by inserting after the phrase
"Plans and Specifications for such Land" where it appears therein the phrase ",
in accordance with the Construction Budget for such Leased Property(if such
Leased Property is a Second Group Property), subject to CLAUSE (y) of SECTION
3.2,";
(5) SECTION 3.2 is hereby amended by inserting the phrase "or, in the
case of a Second Group Property increase the Construction Budget therefor by
more than 10% in the aggregate" after the phrase "then remaining Commitments"
where it appears in CLAUSE (y) of the proviso therein;
(6) A new SECTION 3.4 shall be added at the end of ARTICLE III as
follows:
3.4 INDEMNITY. During the Construction Term for each Leased
Property, the Construction Agent agrees to assume liability for, and to
indemnify, protect, defend, save and hold harmless the Lessor on an
After-Tax Basis, from and against, any and all Claims that may be
imposed on, incurred by or asserted or threatened to be asserted,
against the Lessor, whether or not the Lessor shall also be indemnified
as to any such Claim by any other Person, in any way relating to or
arising out of (i) the Construction Agent's (or any subcontractor's)
own actions or failures to act while in possession or control of any
Leased Property, (ii) fraud, misapplication of funds, illegal acts or
willful misconduct on the part of the Construction Agent, (iii) any
event described in paragraph (g) or (h) of Article XII of the Lease
with respect to the Construction Agent or (iv) the inaccuracy of any
representation or warranty made by the Construction Agent. The
foregoing indemnities are in addition to, and not in limitation of, the
indemnities with respect to environmental claims set forth in Section
7.2 of the Master Agreement. The provisions of Section 7.3 of the
Master Agreement shall apply to any amounts that the Construction Agent
is requested to pay pursuant to this SECTION 3.4.
(7) SECTION 5.1 is hereby amended by adding the phrase "PROVIDED,
HOWEVER, that this sentence shall not apply to any Second Group Property" at the
end of the last sentence in such section; and
24
(8) SECTION 5.3(a) is hereby amended by adding the following at the end
thereof:
"In the event that the Construction Agent does not exercise
its option to purchase such Leased Property or Properties, if such
Leased Property is a Second Group Property, the Construction Agent
shall pay to the Lessor the Construction Failure Payment(s) therefor
within five (5) Business Days of the demand therefor by the Lessor, and
shall surrender and return such Leased Property or Properties to the
Lessor or its designee in accordance with the terms of Section 14.8 of
the Lease. In the event that the Construction Agent returns any Leased
Property to the Lessor pursuant to the previous sentence, the
Construction Agent shall take such action as the Lessor may reasonably
request in order to transfer to the Lessor (or its designee) all of the
Construction Agent's rights and claims in, to and under the related
Construction Contract(s), Architect's Agreement(s), all agreements,
security deposits, guaranties and surety bonds related thereto and all
governmental permits related to such Construction, and the Construction
Agent shall provide to the Lessor copies of all books, records and
documentation with respect to the foregoing."
SECTION 13. LOAN AGREEMENT. The Loan Agreement is hereby amended as
follows:
(1) SECTION 2.4(a) is hereby amended by deleting the phrase "0.44475%
per annum" where it appears in CLAUSE (ii) thereof and substituting therefor the
phrase "the Applicable Margin".
(2) SECTION 3.2(a) is hereby amended by adding the phrase "or the
Lessee exercise of its option to purchase such Leased Property under Section 5.3
of the Construction Agency Agreement" at the end of such paragraph;
(3) SECTION 3.3 is hereby amended by adding the following sentence at
the end thereof: "With respect to any Second Group Property, the payment by the
Construction Agent of the Construction Failure Payment with respect thereto
pursuant to the Construction Agency Agreement shall be applied by the Agent
first, to the accrued and unpaid interest on, and the outstanding principal of,
the A Loans in respect of such Second Group Property, second, to the accrued and
unpaid interest on, and outstanding principal of, the B Loans related to such
Second Group Property and third, to the accrued and unpaid Yield on, and
outstanding Lessor Invested Amount related to such Second Group Property.";
(4) SECTION 3.4 is hereby amended by inserting the phrase "or sold
after a return to the Lessor pursuant to the Construction Agency Agreement,"
after the phrase "Section 14.6 or 14.7 of the related Lease," where it appears
in the sixth line thereof;
(5) SECTION 4.2 is hereby amended by adding the phrase ", the
Construction Agency Agreement" after the phrase "received under the Leases"
where it appears in the first and third sentences thereof; and
25
(6) SECTION 4 is hereby amended by adding a new Section at the end
thereof as follows:
SECTION 4.4 INDEMNITY BY LESSOR. During the Construction Term
for any Second Group Property, Lessor hereby indemnifies each Lender
and its Affiliates, successors, permitted assigns, permitted
transferees, employees, officers, directors and agents from and against
any and all Claims that may be imposed on, incurred by or asserted or
threatened to be asserted against, any such Person, arising out of or
related to such Second Group Property, or the leasing or financing
thereof; IT BEING UNDERSTOOD that the foregoing provision is subject to
SECTION 4.2.
SECTION 14. LEASE PARTICIPATION AGREEMENT. The Lease Participation
Agreement is hereby amended as follows:
(i) SECTION 2.1 is hereby amended by deleting "58.33%" where it appears
therein and substituting thereof "44.375%";
(ii) SECTION 2.2 is hereby amended by deleting "$43,750,000" where it
appears therein and substituting therefor "$71,000,000":
(iii) SECTION 3(a)(iv) is hereby amended by inserting the phrase "or
sold after a return to the Lessor pursuant to the Construction Agency
Agreement," after the phrase "Section 14.6 or 14.7 of the related Lease" where
it appears therein;
(iv) SECTION 4.2 is hereby amended by adding the phrase ",the
Construction Agency Agreement" after the phrase "received under the Leases"
where it appears in the first and third sentences thereof; and
(v) SECTION 4 is hereby amended by adding a new Section at the end
thereof as follows:
SECTION 4.4 INDEMNITY BY LESSOR. During the Construction Term
for any Second Group Property, Lessor hereby indemnifies the Lease
Participant and its Affiliates, successors, permitted assigns,
permitted transferees, employees, officers, directors and agents from
and against any and all Claims that may be imposed on, incurred by or
asserted or threatened to be asserted against, any such Person, arising
out of or related to such Second Group Property, or the leasing or
financing thereof; IT BEING UNDERSTOOD that the foregoing provision is
subject to SECTION 4.2.
SECTION 15. NOTES. The Notes issued by the Lessor in connection with
the 1998 Amendment shall be replaced with an A Note and a B Note issued by the
Lessor to the Agent, for the ratable benefit of the Lenders, in substantially
the form of EXHIBITS B and C hereto,
26
respectively; upon such replacement, such original Notes shall be deemed to be
canceled. Any reference to the Notes in the Operative Documents shall be deemed
to refer to such replacement Notes.
SECTION 16. GUARANTY; REPRESENTATIONS. The Guarantor hereby affirms its
obligations under the Guaranty Agreement after giving effect to this Amendment.
Each of the Guarantor and each Lessee hereby represents and warrants that, after
giving effect to this Amendment, (i) no Event of Default or Potential Event
Default has occurred and is continuing or will result from this Amendment, (ii)
there shall not have occurred any event that could reasonably be expected to
have a Material Adverse Effect since July 16, 1996 and (iii) each representation
and warranty of each Lessee and the Guarantor contained in the Master Agreement
and the other Operative Documents as amended by this Agreement is true and
correct in all material respects on the date hereof as though made on and as of
the date hereof, except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date.
SECTION 17. CONDITIONS. The effectiveness of this Amendment shall be
conditioned upon the receipt by the Agent of the following documents, each of
which shall be satisfactory in form and substance to the Agent: (i) the
replacement Notes referred to in SECTION 15 of this Amendment executed by the
Lessor; (ii) a certificate of the Secretary or an Assistant Secretary of each
Lessee and the Guarantor attaching to it and certifying as to (A) the Board of
Directors' (or appropriate committee's) resolution duly authorizing the
execution, delivery and performance by it of this Amendment,(B) the incumbency
and signatures of persons authorized to execute and deliver this Amendment on
its behalf and (C) the continued accuracy and completeness of its articles of
incorporation and bylaws previously delivered on the Initial Closing Date; and
(iii) the opinion of Xxxxx & Xxxxxxxxx, substantial in the form set forth in
EXHIBIT D hereto.
SECTION 18. FUNDING. On the date that this Amendment shall become
effective, pursuant to and in accordance with SECTION 2.2 of the Master
Agreement, each Lender shall make available to the Lessor a Loan in an amount
equal to the product of such Lender's Commitment Percentage times the
transaction costs incurred by the Lessees in connection with this Amendment,
which funds the Lessor shall use, together with Lessor funds in an amount equal
to the product of the Lessor's Commitment Percentage times the transaction costs
incurred by such Lessees in connection with this Amendment, to pay to the
related Lessee the amount of such transaction costs.
SECTION 19. MISCELLANEOUS. This Amendment shall be governed by, and
construed in accordance with, the laws of the state of Georgia. This Amendment
may be executed by the parties hereto and separate counterparts, (including by
facsimile), each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one in the same agreement.
The Operative Documents, as amended hereby, remain in full force and effect. Any
reference to any Operative Document from and after the date hereof shall be
deemed or referred to such Operative Documents and amended hereby, unless
otherwise expressly stated.
27
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the year first above
written.
CARDINAL SOUTHEAST, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Title: Corporate Vice President, Treasurer
XXXXXXXX DISTRIBUTION CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Title: Corporate Vice President, Treasurer
RENLAR SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Title: Corporate Vice President, Treasurer
PYXIS CORPORATION
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Title: Corporate Vice President, Treasurer
CARDINAL HEALTH, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Title: Corporate Vice President, Treasurer
28
SUNTRUST BANKS, INC.
By: /s/ Xxxxx X. Dash
---------------------------------------
Title: Vice President
SUNTRUST BANK, ATLANTA, as the Agent
By: /s/ Xxxxx X. Dash
---------------------------------------
Title: Vice President
PNC LEASING CORP., as a Lender
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Title: Vice President
WACHOVIA BANK, N.A., as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Title: Vice President
THE FIFTH THIRD BANK, as a Lender
By: /s/ Xxx Xxxx
---------------------------------------
Title: V.P.
FIRSTAR BANK, N.A., as a Lender
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Title: Vice President
29
SCHEDULE 2.2
AMOUNT OF EACH FUNDING PARTY'S COMMITMENT
Lessor Commitment Percentage: 44.375%
Lessor Commitment: $71,000,000
Lender Commitment Percentages:
PNC Leasing Corp. 18.750%
Wachovia Bank, N.A. 15.00%
The Fifth Third Bank 12.50%
Firstar Bank, N.A. 9.375%
Lender Commitments: A LOANS B LOANS
PNC Leasing Corp. $25,500,000 $4,500,000
Wachovia Bank, N.A. 20,400,000 3,600,000
The Fifth Third Bank 17,000,000 3,000,000
Firstar Bank, N.A. 12,750,000 2,250,000
Total $75,650,000 $13,350,000
----------- ===========
30
PRICING SCHEDULE
The Applicable Fee Rate and the Applicable Margin shall be as
determined by the matrix below:
------------------------------------------------------------------------------------------------------------------------------------
Xxxxx 0 Xxxxx XX Xxxxx XXX Level IV Level V Level VI
Status Status Status Status Status Status
------------------------------------------------------------------------------------------------------------------------------------
Reference Rating greater A+ or A1 A or A2 A- or A3 BBB+ or BBB or less than or
than or equal to Baa1 Baa2 equal to BBB- or Baa3
------------------------------------------------------------------------------------------------------------------------------------
Applicable Margin 0.44475% 0.44475% .50% 0.60% 0.70% 0.80%
------------------------------------------------------------------------------------------------------------------------------------
Applicable Fee Rate 0.07% 0.08% 0.09% 0.10% 0.12% 0.15%
------------------------------------------------------------------------------------------------------------------------------------
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Guarantor's
Moody's Rate is A1 or better or the Guarantor's S&P is A+ or better.
"Level II Status" exists at any date if, on such date, (i) the
Guarantor has not qualified for Level I Status and (ii) the Guarantor's Xxxxx'x
Rating is A2 or better or the Guarantor's S&P Rating is A or better.
"Level III Status" exists at any date if, on such date, (i) the
Guarantor has not qualified for Level I Status or Level II Status and (ii) the
Guarantor's Xxxxx'x Rating is A3 or better or the Guarantor's S&P Rating is A-
or better.
"Level IV Status" exists at any date if, on such date, (i) the
Guarantor has not qualified for Level I Status, Level II Status, or Level III
Status and (ii) the Guarantor's Xxxxx'x Rating is Baa1 or better or the
Guarantor's S&P rating is BBB+ or better.
"Level V Status" exists at any date if, on such date, (i) the Guarantor
has not qualified for Level I Status, Level II Status, Level III Status or Level
IV Status and (ii) the Guarantor's Xxxxx'x Rating is Baa2 or better or the
Guarantor's S&P rating is BBB or better.
"Level VI Status" exists at any date if, on such date, the Guarantor
has not qualified for Level I Status, Level II Status, Level III Status, Level
IV Status or Level V Status.
"Xxxxx'x Rating" means, at any time, the rating issued by Xxxxx'x
Investors Service, Inc. and then in effect with respect to the Guarantor's
senior unsecured long-term debt securities without third-party credit
enhancement.
31
"S&P Rating" means, at any time, the rating issued by Standard & Poor's
Rating Services, a division of The McGraw Hill Companies, Inc., and then in
effect with respect to the Guarantor's senior unsecured long-term debt
securities without third-party credit enhancement.
"Status" means either Level I Status, Level II Status, Level III
Status, Level IV Status, Level V Status or Level VI Status.
The Applicable Margin shall be determined in accordance with the
foregoing table based on the Guarantor's Status as determined from its
then-current Moody's and S&P Ratings. The credit rating in effect on any date
for the purposes of this Schedule is that in effect at the close of business on
such date. If at any time the Guarantor has no Xxxxx'x Rating or no S&P Rating,
Level VI Status shall exist.
