SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 4)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
McKESSON CORPORATION
(Name of Subject Company)
McKESSON CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, par value $2.00 per share
(Title of Class of Securities)
581556 10 7
(CUSIP number of Class of Securities)
Ivan D. Meyerson, Esq.
Vice President and General Counsel
McKESSON CORPORATION
McKesson Plaza
One Post Street
San Francisco, California 94104
(415) 983-8300
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement)
With a copy to:
Peter Allan Atkins, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
This Amendment No. 4 amends the
Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") of McKesson Corporation, a
Delaware corporation (the "Company"), filed with the
Securities and Exchange Commission on July 15, 1994,
relating to the tender offer for all outstanding shares
of common stock, par value $2.00 per share, of the
Company (including all associated preferred stock
purchase rights), by ECO Acquisition Corporation, a
Delaware corporation and a wholly-owned subsidiary of Eli
Lilly and Company, an Indiana corporation, in the manner
set forth below. All capitalized terms not defined
herein shall have the same meanings as set forth in the
Schedule 14D-9.
Item 2. Tender Offer of the Bidder.
Item 2 is hereby amended by replacing in its
entirety the first sentence of the second paragraph of
Item 2 with the following sentence:
"Pursuant to the provisions of the Reorganization
and Distribution Agreement, dated as of July 10,
1994 (as amended, the "Distribution Agreement"),
among the Company and certain of its affiliates,
prior to the time of the stock dividend referred to
in clause (ii) below, the Company intends to (i)
effect the transfer of certain of the businesses of
the Company and its subsidiaries, other than assets
related to the PCS business (as defined below), to
SP Ventures, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("New
McKesson"), and (ii) declare a dividend (which will
not become effective until immediately prior to the
consummation of the Offer) of one share of common
stock, par value $.01 per share, of New McKesson
(the "New McKesson Shares"), for each Share held of
record as of a date determined by the Board."
Item 3. Identity and Background.
Reference is made to the Amendment dated October 10,
1994 (the "Amendment") to the Reorganization and
Distribution Agreement dated July 10, 1994 (the
"Distribution Agreement") among McKesson Corporation, a
Delaware corporation, McKesson Corporation, a Maryland
corporation ("Maryland"), Clinical Pharmaceuticals, Inc.,
PCS Health Systems, Inc. and SP Ventures, Inc. A copy of
the Amendment is filed as Exhibit 21 hereto and is
incorporated herein by reference.
Pursuant to the Amendment, the Distribution
Agreement was amended to, among other things:
(a) provide that the assets and liabilities
being transferred from the Company and its
subsidiaries to New McKesson will be transferred
first from the Company to Maryland, and then from
Maryland to New McKesson, in exchange for the
issuance by New McKesson of New McKesson Shares to
Maryland (which will thereupon distribute such
shares to the Company in order for the Company to
distribute such shares to its stockholders in
connection with the Spin-Off);
(b) provide that the Spin-Off will not occur
until immediately prior to the consummation of the
Offer, and in any event will not occur (i) until all
of the conditions to the Offer set forth in Exhibit
F to the Merger Agreement have been satisfied or
waived in accordance with the provisions of the
Merger Agreement, (ii) until the Purchaser shall
have notified the Company that the Purchaser has
irrevocably agreed to acquire, as of the date of
such notice and immediately following the Spin-Off,
the Shares pursuant to the terms and conditions of
the Offer as set forth in the Merger Agreement,
(iii) prior to such time as the Form 10 shall have
been declared effective by the SEC and (iv) prior to
such time as the New McKesson Shares shall have been
accepted for listing or quotation on the New York
Stock Exchange or any other national securities
exchange selected by New McKesson; and
(c) clarify certain of the indemnification
provisions of the Distribution Agreement.
Accordingly, Item 3 is hereby amended by replacing
in its entirety the first sentence of the second
paragraph of Item 2 with the following sentence:
"The following summary of the Distribution Agreement
does not purport to be complete and is qualified in
its entirety by reference to the text of the
Distribution Agreement (the original version of
which is filed as Exhibit 4 hereto and the amended
version of which is filed as Exhibit 21 hereto)
which is incorporated herein by reference."
Item 3 is also hereby amended by replacing in its
entirety the first sentence of the first paragraph on
page 18 with the following sentence:
"The Distribution Agreement provides that prior to
the time of the stock dividend referred to in clause
(ii) below, the Company will (i) effect the transfer
of certain of the businesses of the Company and its
subsidiaries, other than assets related to the PCS
business, to New McKesson, and (ii) declare a
dividend (which will not become effective until
immediately prior to the consummation of the Offer)
of one New McKesson Share for each Share held of
record as of the Record Date (as defined below)."
Item 3 is also hereby amended by replacing in its
entirety the third and fourth sentences of the second
paragraph on page 18 with the following two sentences:
"In addition, the Spin-Off will not occur until
immediately prior to the consummation of the Offer,
and in any event will not occur (i) until all of the
conditions to the Offer set forth in Exhibit F to
the Merger Agreement have been satisfied or waived
in accordance with the provisions of the Merger
Agreement, (ii) until the Purchaser shall have
notified the Company that the Purchaser has
irrevocably agreed to acquire, as of the date of
such notice and immediately following the Spin-Off,
the Shares pursuant to the terms and conditions of
the Offer as set forth in the Merger Agreement,
(iii) prior to such time as the Form 10 shall have
been declared effective by the SEC and (iv) prior to
such time as the New McKesson Shares shall have been
accepted for listing or quotation on the New York
Stock Exchange or any other national securities
exchange selected by New McKesson in its sole
discretion. In the Merger Agreement, the Company
has agreed to establish the Record Date and the
Distribution Date at the earliest practicable
dates."
Item 3 is also hereby amended by replacing in its
entirety the first sentence of the third paragraph on
page 18 with the following sentence:
"New McKesson will issue to Maryland,
contemporaneously with the transfer by the Company
and its subsidiaries of certain assets and
liabilities to New McKesson as contemplated in the
Distribution Agreement, a number of New McKesson
Shares equal to the number of Shares outstanding on
the Record Date (excluding Shares held by the
Company in its treasury or held by certain
affiliates of the Company); Maryland will thereupon
distribute such New McKesson Shares to the Company
in order for the Company to distribute such shares
to its stockholders in connection with the Spin-
Off."
Item 3 is also hereby amended by adding the
following sentence to the end of the carryover paragraph
on top of page 19:
"In the event that Parent or any of its subsidiaries
(other than, following the consummation of the
Offer, the Company and its subsidiaries) has a
contractual or other obligation, which is
independent of any obligation arising under the
Distribution Agreement, the Merger Agreement or any
of the Ancillary Agreements (as defined in the
Merger Agreement), to indemnify, reimburse or pay
New McKesson or any of its subsidiaries, then the
indemnification provisions described in this
paragraph will not supersede, affect or diminish
such independent obligation."
Item 3 is also hereby amended by adding the
following sentence to the end of the first full paragraph
on page 19:
"In the event that New McKesson or any of its
subsidiaries has a contractual or other obligation,
which is independent of any obligation arising under
the Distribution Agreement, the Merger Agreement or
any of the Ancillary Agreements (as defined in the
Merger Agreement), to indemnify, reimburse or pay
Parent or any of its subsidiaries (other than,
following the consummation of the Offer, the Company
and its subsidiaries), then the indemnification
provisions described in this paragraph will not
supersede, affect or diminish such independent
obligation."
Item 3 is also hereby amended by adding the
following paragraph after the first full paragraph on
page 19:
"If the Company or Maryland (or any subsidiary
of either other than PCS or CPA) is a party to any
settlement or judgment sharing agreement
("Settlement Agreement") with other defendants in
any legal proceeding that could give rise to a
liability for which New McKesson is responsible (a
"New McKesson Legal Proceeding") and under that
Settlement Agreement it is entitled to rights of
indemnification, contribution or reimbursement in
respect of such New McKesson Legal Proceeding and,
following the Spin-Off, a final judgment is entered
against the Company or Maryland (or the affected
subsidiary), as the case may be, in such New
McKesson Legal Proceeding as to which all appeals
which have the effect of precluding execution on the
judgment have been exhausted or abandoned, then,
notwithstanding any assignment of the Settlement
Agreement to the Company pursuant to the
Distribution Agreement, the Company or Maryland (or
the affected subsidiary), as the case may be, shall
be entitled to enforce the right to receive payments
under such Settlement Agreement to the extent
necessary to avoid or reduce any losses arising out
of such judgment which are subject to
indemnification by New McKesson ("Parent
Indemnifiable Losses"), but only if (a) the Company
or Maryland (or the affected subsidiary), as the
case may be, makes written demand on the Company to
satisfy the judgment to the extent of the Parent
Indemnifiable Loss, (b) the Company fails, within 30
days after receiving such written demand, to satisfy
the judgment to the extent of the Parent
Indemnifiable Loss, and (c) the Company or Maryland
(or the affected subsidiary), as the case may be,
satisfies the judgment. In the event that the
Company or Maryland (or the affected subsidiary), as
the case may be, receives any payments under such
Settlement Agreement, then the Parent Indemnifiable
Losses arising out of such judgment will be reduced
to the extent of the amounts received under such
Settlement Agreement."
Item 9. Material to be Filed as Exhibits.
Item 9 is hereby amended by the addition of the
following exhibit thereto:
Exhibit 21 Amendment dated October 10, 1994 to
the Reorganization and Distribution
Agreement dated July 10, 1994 among
McKesson Corporation (a Delaware
corporation), McKesson Corporation (a
Maryland corporation), Clinical
Pharmaceuticals, Inc., PCS Health
Systems, Inc. and SP Ventures, Inc.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth
in this statement is true, complete and correct.
McKESSON CORPORATION
Dated: October 11, 1994 By:/s/ Nancy A. Miller
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
EXHIBIT INDEX
Exhibit No. Description
Exhibit 21 Amendment dated October 10, 1994 to the
Reorganization and Distribution Agreement dated July
10, 1994 among McKesson Corporation (a Delaware
corporation), McKesson Corporation (a Maryland
corporation), Clinical Pharmaceuticals, Inc., PCS
Health Systems, Inc. and SP Ventures, Inc.
Exhibit 21
AMENDMENT
AMENDMENT, dated as of October 10, 1994 (the
"Amendment"), by and among McKesson Corporation, a Delaware
corporation (the "Company"), McKesson Corporation, a Maryland
corporation and a wholly-owned subsidiary of the Company
("Maryland"), Clinical Pharmaceuticals, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company ("CPA"),
PCS Health Systems, Inc., a Delaware corporation and a wholly-owned
subsidiary of Maryland ("Prescription"), and SP Ventures, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Company
("Spinco").
WHEREAS, the Company, Maryland, CPA, Prescription and
Spinco entered into a Reorganization and Distribution Agreement,
dated as of July 10, 1994 (the "Distribution Agreement");
WHEREAS, the Company, Eli Lilly and Company, an Indiana
corporation ("Parent"), and ECO Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent (the
"Purchaser") entered into an Agreement and Plan of Merger, dated as
of July 10, 1994 and amended as of August 8, 1994 (the "Merger
Agreement"); and
WHEREAS, each of the parties hereto have deemed it
advisable to amend the Distribution Agreement in the manner set
forth herein.
NOW, THEREFORE, in consideration of the foregoing, the
parties hereto hereby agree as follows:
1. The first and second 'WHEREAS' clauses set forth in
the introductory clauses of the Distribution Agreement (which
appear on page 1 of the current version of the Distribution
Agreement) are hereby amended to read, in their entirety, as
follows:
"WHEREAS, the Boards of Directors of the Company,
Maryland and Spinco have determined to cause the transfer to
Spinco of all of the Company Business (as hereafter defined),
the assumption by Spinco of all of the Company Liabilities (as
hereafter defined), and the issuance to Maryland of shares of
Spinco Common Stock (as hereafter defined) (which Spinco
Common Stock will be subsequently transferred to the Company,
either by dividend or otherwise);
WHEREAS, Spinco is willing to accept such transfer
of the Company Business, assume such Company Liabilities and
issue such shares of Spinco Common Stock to Maryland;"
2. The third 'WHEREAS' clause set forth in the
introductory clauses of the Distribution Agreement (which appears
at the top of page 2 of the current version of the Distribution
Agreement) is hereby deleted in its entirety.
3. The definition of "Asset" set forth in Section 1.1 of
the Distribution Agreement is hereby amended by deleting the word
"and" set forth immediately prior to clause (xviii) of such
definition, and by adding the following new language to the end of
such definition:
"and (xix) all policies of insurance as well as proceeds
payable pursuant to those policies"
4. Section 2.1(a) of the Distribution Agreement is
hereby amended to read, in its entirety, as follows:
"(a) Subject to the terms and conditions of this
Agreement, prior to the Distribution:
(i) the Company shall contribute and deliver to
Maryland all of its right, title and interest in and to
all of its Assets, other than (A) the Prescription
Assets, (B) the capital stock of Spinco, (C) the capital
stock of Maryland and (D) the rights of the Company under
this Agreement; and Maryland shall assume, pay, perform
and discharge, or cause to be assumed, paid, performed
and discharged, in due course, all of the Company
Liabilities;
(ii) following the contribution and delivery
referred to in clause (i) above, Maryland shall transfer
and deliver to Spinco all of its right, title and
interest in and to all of its Assets (including, without
limitation, the Assets previously contributed to Maryland
pursuant to clause (i) above) other than the Prescription
Assets; and Spinco shall (A) assume, pay, perform and
discharge, or cause to be assumed, paid, performed and
discharged, in due course, all of the Company Liabilities
(including, without limitation, the Company Liabilities
of the Company previously assumed by Maryland pursuant to
clause (i) above) and (B) issue to Maryland the number of
shares of Spinco Common Stock which are required to be
issued to Maryland pursuant to the provisions of Section
2.3(a) hereof. "Company Assets" shall mean the Assets of
the Company, Maryland and their subsidiaries, other than
(A) the Prescription Assets, (B) the capital stock of
Spinco, (C) the capital stock of Maryland and (D) the
rights of the Company under this Agreement; the term
"Company Assets" shall include, without limitation, (A)
all shares of capital stock, partnership interests and
other equity or ownership interests or ownership rights
in all subsidiaries and other entities owned directly or
indirectly by the Company or Maryland (including, without
limitation, the general partnership interest in
Technology Assessment Group, a California general
partnership, held by McKesson Outcomes Research
Corporation, a Delaware corporation, but excluding all
shares of capital stock of Maryland, Prescription, CPA,
Spinco and IMS), and all rights to Assets held by such
subsidiaries and entities, (B) except as provided in
Section 4.1 hereof, all cash and cash equivalents held by
the Company or any of its subsidiaries, including,
without limitation, the Spinco Cash Amount (as defined in
the Merger Agreement), (C) any shares of Spinco Common
Stock distributed in the Spin-Off in respect of Shares
owned by the Company or its subsidiaries; (D) the Company
Names and Company Proprietary Names, and (E) the Company
Actions (to the extent such actions constitute Assets).
Subject to the terms and conditions set forth in this
Agreement, the Company shall, or shall cause Prescription
or CPA to, assume, pay, perform and discharge in due
course all Prescription Liabilities."
5. Section 2.1(b) of the Distribution Agreement is
hereby amended to read, in its entirety, as follows:
"(b) Subject to the provisions of Section 6.2 hereof and
except with respect to the Company Indebtedness as provided in
Section 2.4 hereof, to the extent that any such contributions
and transfers shall not have been so consummated prior to the
Distribution, the parties shall cooperate to effect such
consummation as promptly thereafter as shall be practicable,
and as between the Company, Maryland and Spinco, as of the
time of the Distribution, Maryland shall be deemed to have
transferred to Spinco, and Spinco shall have and be deemed to
have obtained, complete and sole beneficial ownership over all
of the Company Assets, together with all of the Company's and
Maryland's rights, powers and privileges incident thereto, and
Spinco shall be deemed to have assumed in accordance with the
terms of this Agreement all of the Company Liabilities and all
of the Company's and Maryland's duties, obligations and
responsibilities incident thereto, whether or not all
instruments of transfer and assumption shall have been
executed and delivered."
6. Section 2.2(a) of the Distribution Agreement is
hereby amended by deleting the phrase "the contribution and
transfer of the Company Assets contemplated pursuant to Section 2.1
hereof shall be effected by delivery by Maryland to the Company,
and by the Company to Spinco, as the case may be," in its entirety
and replacing such phrase with the phrase "the contribution and
transfer of the Company Assets contemplated pursuant to Section 2.1
hereof shall be effected by delivery by the Company to Maryland,
and by Maryland to Spinco, as the case may be,".
7. Section 2.2(b) of the Distribution Agreement is
hereby amended by deleting the phrase "the assumption of the
Company Liabilities contemplated pursuant to Section 2.1 hereof
shall be effected by delivery by the Company to Maryland, and by
Spinco to the Company, as the case may be," in its entirety and
replacing such phrase with the phrase "the assumption of the
Company Liabilities contemplated pursuant to Section 2.1 hereof
shall be effected by delivery by Maryland to the Company, and by
Spinco to Maryland, as the case may be,".
8. Section 2.3 of the Distribution Agreement is hereby
amended to read, in its entirety, as follows:
"Section 2.3. Issuance of Spinco Stock.
(a) In consideration of the transactions contemplated
pursuant to this Article II, Spinco agrees to issue to
Maryland, contemporaneously with the transfer of Company
Assets and the assumption of Company Liabilities contemplated
pursuant to Section 2.1 hereof, the number of shares of Spinco
Common Stock equal to (i) the number of shares of Company
Common Stock outstanding on the Record Date (excluding shares
of Company Common Stock held by the Company in its treasury
or, subject to applicable law, held by any subsidiary of the
Company), minus (ii) the number of shares of Spinco Common
Stock for which the Company is the holder of record on the
business day prior to the Record Date (without counting any
shares which may be issued pursuant to paragraph (d) below).
In addition, Spinco agrees to issue to Maryland on or after
the Record Date such additional shares of Spinco Common Stock
as may be required in order for the Company to fulfill its
obligations pursuant to Section 3.2 hereof.
(b) Spinco agrees to issue to Maryland, prior to the
transfer of the Company Assets and the assumption of the
Company Liabilities contemplated herein, such additional
shares of Spinco Common Stock as may be requested by either
Maryland or the Company in order for the Company to effect the
distribution of shares referred to in Section 3.2(d) hereof.
(c) Immediately upon the issuance of the shares of
Spinco Common Stock to Maryland pursuant to either paragraph
(a) or (b) above, Maryland agrees to transfer to the Company,
either by dividend or otherwise, all such shares of Spinco
Common Stock.
(d) Spinco agrees that if, prior to the Record Date, the
Company elects to enter into the Preferred Stock Purchase
Agreement (as defined herein), Spinco shall authorize and
issue to the Company, contemporaneously with the transfer of
Company Assets and assumption of Company Liabilities
contemplated herein, 100,000 shares of Spinco Preferred
Stock."
9. Section 2.4(a) of the Distribution Agreement is
hereby amended by deleting the phrase "applicable to the Company
under" in its entirety and replacing such phrase with the phrase
"applicable to the Company and its subsidiaries under".
10. Section 3.2(a) of the Distribution Agreement is
hereby amended to read, in its entirety, as follows:
"(a) The Company's Board of Directors (or any duly
appointed committee thereof) shall in its sole discretion
establish the Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution
(subject in each case to the provisions of applicable law);
provided that in no event shall the Distribution occur (i)
until all of the conditions to the Offer set forth in Exhibit
F to the Merger Agreement have been satisfied or waived in
accordance with the provisions of the Merger Agreement, (ii)
until the Purchaser shall have notified the Company that the
Purchaser has irrevocably agreed to acquire, as of the date of
such notice and immediately following the Distribution, shares
of Company Common Stock pursuant to the terms and conditions
of the Offer as set forth in the Merger Agreement, (iii) prior
to such time as the Form 10 (or the registration statement
referred to in Section 3.1(a) hereof) shall have been declared
effective by the SEC and (iv) prior to such time as the Spinco
Common Stock shall have been accepted for listing or quotation
in accordance with Section 3.1(d) hereof. Notwithstanding
anything in this Agreement to the contrary, the Distribution
shall occur (subject to the provisos set forth in clauses (i)
through (iv) above) immediately prior to the time at which the
Purchaser acquires shares of Company Common Stock pursuant to
the terms and conditions of the Offer as set forth in the
Merger Agreement.
11. The first sentence of Section 3.2(b) of the
Distribution Agreement is hereby amended to read, in its entirety,
as follows:
"Subject to Section 10.1 hereof, following the Record Date but
prior to the time of the Distribution, the Company shall
deliver to the Agent one or more share certificates
representing all of the outstanding shares of Spinco Common
Stock to be distributed in the Distribution and shall instruct
the Agent, subject to Section 8.2(d) hereof, to distribute,
following the satisfaction of the conditions set forth in
clauses (i) through (iv) of Section 3.2(a) hereof, one share
of Spinco Common Stock for each share of Company Common Stock
held to holders of record of Company Common Stock on the
Record Date.
12. Section 3.2 of the Distribution Agreement is hereby
amended by adding the following new paragraph (d) to the end of
such Section 3.2:
"(d) The Company may elect, at its option, to transfer
shares of Spinco Common Stock, upon such terms and conditions
as the Company may determine in its sole discretion, to
certain present and former directors, officers and employees
of the Company and its subsidiaries who are insured parties
under the corporate-owned life insurance programs of the
Company and its subsidiaries. Spinco agrees to provide all
share certificates that Maryland or the Company may request in
order to effect any of the foregoing transfers."
13. Section 3.4 of the Distribution Agreement is hereby
amended to read, in its entirety, as follows:
"Section 3.4. Termination of Certain Claims. Following
the consummation of the Offer, Spinco shall have no claims
against the Company or its Affiliates based on any breach by
the Company or its Affiliates of any obligations under this
Agreement that occurred prior to the consummation of the
Offer, all of such claims being hereby irrevocably waived and
terminated as of the consummation of the Offer; provided that
the foregoing shall not limit the liability of the Company or
its Affiliates for any breach by the Company or its Affiliates
of any obligations under this Agreement that occurs following
the consummation of the Offer, including, without limitation,
the Company's obligation to indemnify Spinco as set forth
herein."
14. Section 5.2(b) of the Distribution Agreement is
hereby amended by adding the following new clause (vi) to the end
of such Section 5.2(b):
"(vi) In the event that Parent or any of its
subsidiaries (other than, following the Offer Purchase Date,
the Company and its subsidiaries) has an obligation (whether
by law, contract or otherwise), which is independent of any
obligation arising under this Agreement, the Merger Agreement
or any of the Ancillary Agreements (as defined in the Merger
Agreement), to indemnify, reimburse or pay Spinco or the
Company or any of their respective subsidiaries, then the
indemnification provisions of this Agreement shall in no way
supersede, affect or diminish such independent obligation;
provided that, with respect to those matters referred to in
the last sentence of Section 5.5 hereof, payments by Parent or
its subsidiaries pursuant to any such independent obligation
shall be made to the Company or Maryland (or a subsidiary of
either) in the manner specified in such Section 5.5."
15. Section 5.3(b) of the Distribution Agreement is
hereby amended by adding the following new clause (vi) to the end
of such Section 5.3(b):
"(vi) In the event that Spinco or any of its
subsidiaries has an obligation (whether by law, contract or
otherwise), which is independent of any obligation arising
under this Agreement, the Merger Agreement or any of the
Ancillary Agreements (as defined in the Merger Agreement), to
indemnify, reimburse or pay Parent or any of its subsidiaries
(other than, following the Offer Purchase Date, the Company
and its subsidiaries), then the indemnification provisions of
this Agreement shall in no way supersede, affect or diminish
such independent obligation."
16. Section 5.5 of the Distribution Agreement is hereby
amended by adding the following new sentence to the end of such
Section 5.5:
"If the Company or Maryland (or any subsidiary of either other
than PCS or CPA) is now or hereafter becomes a party to any
settlement or judgment sharing agreement ("Settlement
Agreement") with other defendants in any legal proceeding that
could give rise to a Company Liability (a "Legal Proceeding")
and under that Settlement Agreement it is entitled to rights
of indemnification, contribution or reimbursement in respect
of such Legal Proceeding and, following the Distribution, a
final judgment is entered against the Company or Maryland (or
the affected subsidiary), as the case may be, in such Legal
Proceeding as to which all appeals which have the effect of
precluding execution on the judgment have been exhausted or
abandoned, then, notwithstanding any assignment of the
Settlement Agreement to Spinco pursuant to this Agreement, the
Company or Maryland (or the affected subsidiary), as the case
may be, shall be entitled to enforce the right to receive
payments under such Settlement Agreement to the extent
necessary to avoid or reduce any Indemnifiable Losses arising
out of such judgment, but only if (a) the Company or Maryland
(or the affected subsidiary), as the case may be, makes
written demand on Spinco to satisfy the judgment to the extent
of the Indemnifiable Loss, (b) Spinco fails, within 30 days
after receiving such written demand, to satisfy the judgment
to the extent of the Indemnifiable Loss, and (c) the Company
or Maryland (or the affected subsidiary), as the case may be,
satisfies the judgment. In the event that the Company or
Maryland (or the affected subsidiary), as the case may be,
receives any payments under such Settlement Agreement, then
the Indemnifiable Losses arising out of such judgment shall be
reduced to the extent of the amounts received under such
Settlement Agreement."
17. Section 10.1 of the Distribution Agreement is hereby
amended to read, in its entirety, as follows:
"Section 10.1. Condition to Obligations. With the
exception of the transfer of Company Assets and Company
Liabilities contemplated in Section 2.1 hereof, the respective
obligations of each party hereto to consummate the
Distribution and to perform all other obligations set forth
herein is subject to the satisfaction, following the Record
Date, of each of the conditions set forth in clauses (i)
through (iv) of Section 3.2(a) hereof."
18. In the event of a conflict between the terms and
conditions of this Amendment and the terms and conditions of the
Distribution Agreement, the terms and conditions of this Amendment
shall prevail and govern. Except as otherwise expressly set forth
herein, the Distribution Agreement shall remain unaffected and in
full force and effect in accordance with the terms and conditions
thereof.
19. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
20. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of
conflicts of law.
IN WITNESS WHEREOF, each of the parties set forth below
has caused this Amendment to be executed on its behalf by a duly
authorized officer as of the date first set forth above.
MCKESSON CORPORATION,
a Delaware corporation
By: /s/ Garret A. Scholz
Name: Garret A. Scholz
Title: Vice President Finance
MCKESSON CORPORATION,
a Maryland corporation
By: /s/ Ivan D. Meyerson
Name: Ivan D. Meyerson
Title: Vice President and
General Counsel
CLINICAL PHARMACEUTICALS, INC.
By: /s/ David L. Mahoney
Name: David L. Mahoney
Title: Vice President
PCS HEALTH SYSTEMS, INC.
By: /s/ Garret A. Scholz
Name: Garret A. Scholz
Title: Vice President Finance
SP VENTURES, INC.
By: /s/ Ivan D. Meyerson
Name: Ivan D. Meyerson
Title: Executive Vice President
and General Counsel
Consented to in accordance
with the provisions of Section
10.3 of the Distribution Agree-
ment as of this 10th day of
October, 1994:
ELI LILLY AND COMPANY
By: /s/ James M. Cornelius
Name: James M. Cornelius
Title: Vice President, Finance and
Chief Financial Officer
