EXHIBIT 2.2
FIRST AMENDMENT AND WAIVER TO THE ASSET PURCHASE AGREEMENT
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THIS FIRST AMENDMENT AND WAIVER ("First Amendment"), dated as of November
7, 1996, by and among FoxMeyer Health Corporation, a Delaware corporation,
FoxMeyer Corporation, a Delaware corporation, FoxMeyer Drug Company, a Delaware
corporation, Healthcare Transportation System, Inc., a Delaware corporation,
FoxMeyer Software, Inc., a Delaware corporation, FoxMeyer Funding, Inc., a
Delaware corporation, Health Mart, Inc., a Colorado corporation, Merchandise
Coordinator Services Corporation, a Delaware corporation d/b/a FoxMeyer Trading
Company, and McKesson Corporation, a Delaware corporation.
RECITALS
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A. The Fox Parties and Purchaser have entered into an Asset Purchase
Agreement dated as of October 3, 1996 (the "Agreement").
B. Capitalized terms used herein and not defined shall have the
respective meanings ascribed to such terms in the Agreement.
C. The Fox Parties and Purchaser have agreed to amend the Agreement and
to waive compliance with certain provisions thereof as set forth below.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth and for other good and valuable
consideration the receipt and adequacy of which is hereby acknowledged,
the Fox Parties and Purchaser hereby agree as follows:
1. Section 1.1 of the Agreement shall be amended to include the following
defined terms where such defined terms would appear in correct alphabetical
order:
"Accommodation Fee" means the accommodation fee that Purchaser has
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agreed to pay to GECC, pursuant to the Participation Agreement, dated as of
October 8, 1996, between GECC and Purchaser, if GECC agreed to accept the
McKesson Note in partial satisfaction of the outstanding Obligations under
and as defined in the GECC Credit Agreement upon the Closing.
"Chase" means The Chase Manhattan Bank.
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"Chase Commitment" means the commitment dated October 25, 1996 of
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Chase to purchase GECC's right to receive the McKesson Note and the
Accommodation Fee contemporaneously with the Closing.
"CGSFC" means California Golden State Finance Company, a California
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corporation and a wholly owned subsidiary of Purchaser.
"First Amendment" means that certain First Amendment and Waiver to
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Asset Purchase Agreement dated as of November 7, 1996, by and among
McKesson and the Fox Parties.
"Inventory Accommodation" has the meaning ascribed to such term in the
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Second Amendment to the GECC Credit Agreement dated as of October 8, 1996.
"MCPI" means McKesson Corporate Properties, Inc., a California
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corporation and a wholly owned subsidiary of Purchaser.
"Post Closing Chargeback Receipts" means any cash received by or
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credit memoranda or notes issued to the Debtor Subsidiaries or Purchaser
after the Closing Date in respect of Post Petition Chargebacks other than
Transferred Chargebacks.
"Post Petition Chargebacks" means all Chargebacks arising from sales
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of inventory by the Sellers from and after the Petition Date through the
Closing Date.
"trade vendor claim" means any claim against the Debtor Subsidiaries
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held or otherwise possessed by a trade vendor, including any claim
described on Schedule A to this First Amendment, but excluding any claim
relating to a Contract assumed and assigned to Purchaser pursuant to the
365 Order.
"trade vendors" means, collectively, all providers of goods and
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services to the Debtor Subsidiaries, or any other Person that holds or
otherwise possesses a trade vendor claim.
"Transferred Chargebacks" means all Chargebacks arising from the sales
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of Inventory acquired by Purchaser hereunder.
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2. Section 1.1 of the Agreement shall be further amended by deleting in
its entirety (i) the defined term "EBTDA" and (ii) clause (b) of the definition
of "Material Adverse Change".
3. Section 1.1 of the Agreement shall be further amended by amending the
definition of "Chargebacks" therein by deleting the word "to" appearing in the
third line of such definition and replacing it with the word "of".
4. Clause (a) (iv) of Section 2.2 of the Agreement shall be deleted in
its entirety.
5. Paragraph (b) of Section 2.2 of the Agreement shall be deleted and
replaced in its entirety as follows:
(b) In addition to the payments provided for in Section 2.2(a)
hereof, at the Closing Purchaser shall pay to Sellers $20 million in cash.
The first $20 million of cash or cash proceeds realized from Post Closing
Chargeback Receipts and 50% of cash or cash proceeds realized from the Post
Closing Chargeback Receipts in excess of $20 million and less than $30
million shall be paid promptly upon receipt by the Debtor Subsidiaries to
Purchaser. The remaining 50% of cash or cash proceeds realized from the
Post Closing Chargeback Receipts in excess of $20 million and less than $30
million and any Post Closing Chargeback Receipts in excess of $30 million
shall be retained by the Debtor Subsidiaries. For purposes of this
paragraph, Post Closing Chargeback Receipts which are able to be assigned
to Purchaser and used by Purchaser for the purchase of inventory in the
normal course without discount or impairment, shall be treated as cash and
Purchaser shall purchase all such Post Closing Chargeback Receipts from
Seller for cash at the full face amount thereof (it being understood that
any such Post Closing Chargeback Receipts which are able to be used by
Purchaser at a discount shall be purchased at such discounted value). The
Debtor subsidiaries shall use their Reasonable Best Efforts to collect Post
Closing Chargeback Receipts.
6. Paragraph (c) of Section 2.2 of the Agreement shall be deleted in its
entirety.
7. Paragraph (d) of Section 2.2 of the Agreement shall be deleted in its
entirety.
8. Paragraph (n) of Section 2.3 of the Agreement shall be deleted and
replaced in its entirety as follows:
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(n) all Transferred Chargebacks; and.
9. Paragraph (b) of Section 2.4 of the Agreement shall be deleted and
replaced in its entirety as follows:.
(b) all Chargebacks other than Transferred Chargebacks;
10. Section 2.4 of the Agreement shall be further amended by adding new
clauses (f) and (g) thereto as follows:
(f) all of Sellers' rights, title and interests in the real property
located at 950 Grand, Beaumont, Texas; and
(g) the OTC supply agreement between Fox Drug and Giant Eagle Inc.
11. Item 1.A of the Schedule 2.4(b) to the Agreement shall be deleted in
its entirety.
12. Section 2.5 of the Agreement shall be deleted and replaced in its
entirety as follows:
Section 2.5 Assumed Liabilities. Subject to Section 2.6, effective as
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of the Closing, Purchaser shall assume and pay, perform and discharge all
debts, claims, liabilities, obligations, damages and expenses
(collectively, the "Liabilities") of Sellers of every kind and nature,
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whether contingent, absolute, determined, indeterminable or otherwise, (i)
incurred in the ordinary course of business or with the approval of the
Bankruptcy Court since the Petition Date or (ii) listed on Schedule B to
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this First Amendment (collectively, the "Assumed Liabilities").
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Notwithstanding the foregoing, the Assumed Liabilities shall include (x)
all Liabilities with respect to the Contracts being transferred to
Purchaser hereunder (to the extent such Liabilities remain unsatisfied or
are required to be performed on or after the Closing Date), including,
without limitation, all cure amounts required to be paid under section
365(b) of the Bankruptcy Code for Contracts assumed and assigned to
Purchaser, (y) subject to Section 12.14, all Liabilities excluding trade
vendor claims of the Debtor Subsidiaries resulting from the rejection of
any Contracts (other than Contracts with Employees), except as such claims
may be limited or disallowed pursuant to section 502(b)(6) of the
Bankruptcy Code, in accordance with the 365 Order or Section 12.14, and (z)
except as otherwise specifically provided herein, all Liabilities with
respect to Employees and Retirees.
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13. A new Section 2.7 will be added to the Agreement as follows:
Section 2.7 Assignment of Certain Obligations of Purchaser. Subject
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to Purchaser's continuing obligations set forth in Section 13.15,
Purchaser's right to purchase the Receivables of Sellers under Section
2.3(d) is assigned to and such Receivables shall be purchased by and
conveyed to CGSFC and Purchaser's right to purchase (i) the Equipment under
Section 2.3(a) and (ii) all of Sellers' rights, title and interests in the
Owned Real Property and certain Leased Real Property, including all
buildings located thereon, under Section 2.3(e) is assigned to and such
Assets shall be purchased by and conveyed to MCPI.
14. Paragraph (c) of Section 7.6 is hereby waived by Purchaser and shall
be deleted and replaced in its entirety as follows:
(c) An Administrative Agreement as described in the Motion of Debtors
Pursuant to Bankruptcy Code Section 363 and Bankruptcy Rule 6004,
Conditioned on Approval of Sale to McKesson Corporation, for Order
Approving Terms of Transition Arrangement and Sublease of Real Property
Thereunder, dated October 30, 1996 (the "Transition Arrangement Motion"),
shall have been executed containing terms substantially similar to those
described in the Transition Arrangement Motion.
15. Section 7.8 of the Agreement shall be deleted in its entirety.
16. Section 8.7 of the Agreement shall be deleted and replaced in its
entirety as follows:
Section 8.7 Consent of GECC. GECC shall have delivered to Fox Corp
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and the Debtor Subsidiaries, its written consent with respect to the
transactions contemplated by this Agreement, as amended by the First
Amendment, which consent is being delivered simultaneously with the
execution of the First Amendment. Each Fox Party acknowledges that GECC has
expressly reserved its right to withhold its consent to any Alternative
Transaction to the extent that the terms of such Alternative Transaction do
not provide for the satisfaction in full in cash of the Obligations
outstanding under the GECC Credit Agreement upon Closing.
17. Section 8.8 of the Agreement shall be deleted and replaced in its
entirety as follows:
Section 8.8 Satisfaction of GECC Obligations. As of the Closing or
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simultaneously with the Closing: (a) all Obligations (as
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defined in the GECC Credit Agreement) shall have been satisfied in
full by GECC's receipt of good funds by wire transfer (i) from Chase
in the amount of all outstanding principal and accrued interest under
the GECC Credit Agreement as of the Closing (or in the alternative,
the delivery of the McKesson Note), (ii) from Purchaser in an amount
necessary to satisfy all other outstanding Obligations under the GECC
Credit Agreement as of the Closing, and (b) all Borrower Secured
Obligations (as defined in the GECC Receivables Funding and Servicing
Agreement) outstanding as of the Closing shall have been satisfied in
full by GECC's receipt of good funds by wire transfer from Purchaser.
18. Section 9.1(f) of the Agreement shall be deleted in its entirety.
19. Section 9.2(d) of the Agreement shall be deleted in its entirety.
20. A new Section 10.4 of the Agreement shall be added as follows:
10.4 Certain Tax Audits. In the event of the commencement of
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any Audit of Fox Corp or the Subsidiaries or any successor thereto
that could potentially result in liability for Taxes for which
Purchaser could be held liable as purchaser, transferee or otherwise,
Fox Corp, the Subsidiaries, or any successor thereto, as the case may
be, shall promptly provide written notification to Purchaser and shall
allow Purchaser, at Purchaser's sole cost and expense, exclusively to
control all matters relating to such Audit; provided, however, that
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Purchaser may not settle such Audit or any contest relating thereto
without the prior written consent of Fox Corp and the Subsidiaries,
which consent shall not be unreasonably withheld. Fox Corp, the
Subsidiaries, and any successor thereto, as the case may be, shall
take all action necessary to permit Purchaser to control such Audits,
including, without limitation, executing any powers of attorney or
other documents necessary, in Purchaser's sole judgment, to permit
Purchaser to control such Audits. Fox Corp, the Subsidiaries, or any
successor thereto, as applicable, shall be permitted to participate,
at such corporations's own expense, in any such Audits.
21. Section 12.1 of the Agreement shall be amended to add a new
paragraph at the end of such section as follows:
Except as otherwise set forth in this Section 12.1, from
time to time after the Closing Date, each of the Sellers shall, at the
reasonable request of Purchaser, execute and deliver such other and
further instruments of sale, assignment, transfer and conveyance as
Purchaser may reasonably request in order to vest in Purchaser title
to and
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to put Purchaser in possession of the Assets and to take all other
actions and do all other things to the full extent contemplated by the
363 Order.
22. A new Section 12.14 shall be added to the Agreement as follows:
Section 12.14 Rejection of Contracts Designated by
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Purchaser. Following the Closing, Sellers shall, upon written
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notification by Purchaser, seek approval of the rejection of the
Contracts (other than Contracts with Employees) designated by
Purchaser to Sellers, by the Bankruptcy Court, pursuant to section 365
of the Bankruptcy Code. The Debtor Subsidiaries will use their
Reasonable Best Efforts to assist Purchaser, if so reasonably
requested, in the liquidation of claims before the Bankruptcy Court
arising from the rejection of any Contracts (other than Contracts with
Employees), as such claims may be limited or disallowed pursuant to
section 502(b)(6) of the Bankruptcy Code, which liquidated amount
shall be paid by Purchaser to the Debtor Subsidiaries. If requested by
the Purchaser, the Debtor Subsidiaries shall then pay such liquidated
rejection claim to the non-debtor party to the rejected Contract.
23. A new Section 12.15 shall be added to the Agreement as follows:
Section 12.15 License of Intellectual Property. From and
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after the Closing, Purchaser grants to the Debtor Subsidiaries a
royalty-free license to use the Intellectual Property set forth on
Schedule C to this First Amendment for a reasonable period of time to
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wind-down their remaining affairs after the Closing, including with
respect to obtaining Post Closing Chargeback Receipts, and to close
the Chapter 11 Cases.
24. A new section 12.16 will be added as follows:
Section 12.16 Assignment and Assumption of Contracts. At
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Purchaser's reasonable request after the Closing Date, the Debtor
Subsidiaries will use their Reasonable Best Efforts to seek approval
of the assumption and assignment of any Contract that was not
previously assumed by the Debtor Subsidiaries and assigned to
Purchaser, provided that Purchaser will pay any cure amount due upon
such assignment. The Debtor Subsidiaries will also use their
Reasonable Best Efforts to assist Purchaser, if so reasonably
requested, in the liquidation of disputed Contract cure amounts before
the Bankruptcy Court.
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25. Miscellaneous.
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(a) Counterparts. This First Amendment may be executed in
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identical counterpart copies, each of which shall be an original, but all of
which shall constitute one and the same agreement.
(b) Headings. Section headings used herein are for convenience
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of reference only, are not part of this First Amendment, and are not to be taken
into consideration in interpreting this Amendment.
(c) Recitals. The recitals set forth at the beginning of this
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First Amendment are true and correct, and such recitals are incorporated into
and are a part of this First Amendment.
(d) Governing Law. This First Amendment shall be governed by,
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and construed and enforced in accordance with, the laws of the State of Delaware
applicable to contracts made and performed in such state, without regard to the
principles thereof regarding conflict of laws.
(e) Conflict of Terms. Except as specifically provided herein,
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the Agreement shall remain in full force and effect. In the event of any
inconsistency between the provisions of this First Amendment and any provision
of the Agreement, the terms and provisions of this First Amendment shall govern
and control.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
"Purchaser"
MCKESSON CORPORATION
By:________________________________
Name:
Title:
"Sellers"
FOXMEYER CORPORATION
By:________________________________
Name:
Title:
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FOXMEYER DRUG COMPANY
By:________________________________
Name:
Title:
HEALTH MART, INC.
By:________________________________
Name:
Title:
FOXMEYER SOFTWARE, INC.
By:________________________________
Name:
Title:
FOXMEYER FUNDING, INC.
By:________________________________
Name:
Title:
HEALTHCARE TRANSPORTATION
SYSTEM, INC.
By:________________________________
Name:
Title:
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MERCHANDISE COORDINATOR
SERVICES CORPORATION
By:________________________________
Name:
Title:
FOXMEYER HEALTH CORPORATION
By:________________________________
Name:
Title:
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