<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1997
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
MCKESSON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 5122 94-3207296
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
INCORPORATION OR CODE NUMBER)
ORGANIZATION)
MCKESSON PLAZA
ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 983-8300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S EXECUTIVE OFFICES)
----------------
NANCY A. MILLER
VICE PRESIDENT AND CORPORATE SECRETARY
MCKESSON CORPORATION
MCKESSON PLAZA, ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 983-8300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPY TO:
IVAN D. MEYERSON GREGG A. NOEL
MCKESSON CORPORATION SKADDEN, ARPS, SLATE, MEAGHER
MCKESSON PLAZA, ONE POST STREET & FLOM LLP
SAN FRANCISCO, CALIFORNIA 94104 300 SOUTH GRAND AVENUE
(415) 983-8300 LOS ANGELES, CALIFORNIA 90071
(213) 687-5000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If any of the Securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING PRICE AGGREGATE
TITLE OF EACH CLASS OF TO BE PER SECURITY OFFERING PRICE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1)(2) (1)(2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6.60% Exchange Notes due
March 1, 2000......... $175,000,000 100% $175,000,000 $ 53,031
- ----------------------------------------------------------------------------------------
6 7/8% Exchange Notes
due March 1, 2002..... $175,000,000 100% $175,000,000 $ 53,031
- ----------------------------------------------------------------------------------------
7.65% Exchange
Debentures due March 1,
2027.................. $175,000,000 100% $175,000,000 $ 53,031
- ----------------------------------------------------------------------------------------
Total.................. $525,000,000 100% $175,000,000 $159,093
========================================================================================
</TABLE>
(1) Estimated solely for the purposes of computing the registration fee in
accordance with Rule 457 of the Securities Act.
(2) Exclusive of accrued interest, if any.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 8, 1997
PROSPECTUS
OFFERS TO EXCHANGE
$175,000,000 6.60% EXCHANGE NOTES DUE MARCH 1, 2000,
$175,000,000 6 7/8% EXCHANGE NOTES DUE MARCH 1, 2002 AND
$175,000,000 7.65% EXCHANGE DEBENTURES DUE MARCH 1, 2027
OF
MCKESSON CORPORATION
THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997, UNLESS EXTENDED.
McKesson Corporation, a Delaware corporation (the "Company" or "McKesson"),
is hereby offering (the "Exchange Offers"), upon the terms and subject to the
conditions set forth in this Prospectus and the accompanying applicable Letter
of Transmittal (the "Letter of Transmittal"), to exchange an aggregate
principal amount of up to $525,000,000 of its 6.60% Exchange Notes due March 1,
2000 (the "Exchange Notes due 2000"), 6 7/8% Exchange Notes due March 1, 2002
(the "Exchange Notes due 2002") and 7.65% Exchange Debentures due March 1, 2027
(the "Exchange Debentures due 2027," and with the Exchange Notes due 2000 and
the Exchange Notes due 2002, collectively, the "Exchange Notes"), which
exchange has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a registration statement of which this
Prospectus is a part, for its 6.60% Notes due March 1, 2000 (the "Private Notes
due 2000," and with the Exchange Notes due 2000, the "Notes due 2000"), 6 7/8%
Notes due March 1, 2002 (the "Private Notes due 2002," and with the Exchange
Notes due 2002, the "Notes due 2002") and 7.65% Debentures due March 1, 2027
(the "Private Debentures due 2027," and with the Private Notes due 2000 and the
Private Notes due 2002, collectively, the "Private Notes"), respectively, which
Private Notes were issued on March 11, 1997 (the "Closing Date"). The forms and
terms of the Exchange Notes and the corresponding Private Notes are identical
in all material respects except that (i) the exchange will have been registered
under the Securities Act, and therefore, the Exchange Notes will not bear
legends restricting the transfer thereof and (ii) holders of the Exchange Notes
will not be entitled to certain rights of holders of the Private Notes
("Holders") under the Registration Rights Agreement (as defined herein), which
rights will terminate upon the consummation of the Exchange Offers. The
Exchange Notes will evidence the same indebtedness as the corresponding Private
Notes (which they replace) and will be entitled to the benefits of an indenture
dated as of March 11, 1997 governing the Private Notes and the Exchange Notes
(the "Indenture"). The Private Notes and the Exchange Notes are sometimes
referred to herein collectively as the "Notes." See "The Exchange Offers" and
"Description of Notes."
The Exchange Debentures due 2027 will be, as are the Private Debentures due
2027 (together with the Exchange Debentures due 2027, the "Debentures due
2027"), redeemable as a whole or in part, at the option of the Company, at any
time at a redemption price equal to the greater of (i) 100% of their principal
amount and (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the date of redemption
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Yield (as defined herein) plus 12.5 basis points, plus
accrued interest to the date of redemption. See "Description of Notes--Optional
Redemption."
(Continued on following page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DESCRIPTION OF CERTAIN RISKS TO
BE CONSIDERED BY HOLDERS WHO TENDER THEIR PRIVATE NOTES IN THE EXCHANGE OFFERS.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is , 1997
<PAGE>
(Continued from previous page)
MCKESSON WILL ACCEPT FOR EXCHANGE ANY AND ALL VALIDLY TENDERED PRIVATE NOTES
NOT WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON 1997, UNLESS ANY
OF THE EXCHANGE OFFERS ARE EXTENDED BY MCKESSON IN ITS SOLE DISCRETION (THE
"EXPIRATION DATES"). TENDERS OF PRIVATE NOTES MAY BE WITHDRAWN AT ANY TIME
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE APPLICABLE EXPIRATION DATE. THE
EXCHANGE OFFERS ARE NOT CONDITIONED UPON ANY MINIMUM PRINCIPAL AMOUNT OF
PRIVATE NOTES BEING TENDERED FOR EXCHANGE. PRIVATE NOTES MAY BE TENDERED ONLY
IN INTEGRAL MULTIPLES OF $1,000. IN THE EVENT MCKESSON TERMINATES THE EXCHANGE
OFFERS AND DOES NOT ACCEPT FOR EXCHANGE ANY PRIVATE NOTES, MCKESSON WILL
PROMPTLY RETURN ALL PREVIOUSLY TENDERED PRIVATE NOTES TO THE HOLDERS THEREOF.
Prior to the Exchange Offers, there has been no public market for the Notes.
McKesson does not intend to list the Notes on any securities exchange or to
seek approval for quotation through any automated quotation system. There can
be no assurance that an active market for the Notes will develop. To the
extent that a market for the Notes does develop, the market value of the Notes
will depend on market conditions (such as yields on alternative investments),
general economic conditions, McKesson's financial condition and certain other
factors. Such conditions might cause the Notes, to the extent that they are
traded, to trade at a significant discount from face value. See "Risk
Factors--Absence of Public Market."
The Exchange Notes are being offered hereunder in order to satisfy certain
obligations of McKesson contained in the Registration Rights Agreement. See
"The Exchange Offers--Consequences of Failure to Exchange" for a discussion of
McKesson's belief, based on interpretations by the staff (the "Staff") of the
Securities and Exchange Commission (the "Commission") as set forth in no
action letters issued to third parties, as to the transferability of the
Exchange Notes upon satisfaction of certain conditions. Each broker-dealer
that receives Exchange Notes for its own account pursuant to the Exchange
Offers must acknowledge that it will deliver a prospectus in connection with
any resale of such Exchange Notes. See "Plan of Distribution." The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Private Notes acquired
by such broker-dealer as a result of market-making activities or other trading
activities. McKesson has agreed that, ending on the close of business on the
180th day following the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
McKesson will not receive any proceeds from, and has agreed to bear the
expenses of, the Exchange Offers. No underwriter is being used in connection
with the Exchange Offers.
THE EXCHANGE OFFERS ARE NOT BEING MADE TO, NOR WILL MCKESSON ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF PRIVATE NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFERS OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
2
<PAGE>
AVAILABLE INFORMATION
This Prospectus constitutes part of a Registration Statement on Form S-4
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act
with respect to the Exchange Notes. This Prospectus omits certain of the
information contained in the Registration Statement, and reference hereby is
made to the Registration Statement and to the exhibits thereto for further
information with respect to the Company and the Exchange Notes offered hereby.
Any statements contained herein concerning the provisions of any document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission or incorporated by reference herein are not necessarily complete,
and, in each instance, reference is made to the copy of such document so filed
for a more complete description of the matter involved. Each such statement
herein is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the Commission's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, or at
the public reference facilities of the regional offices in Chicago and New
York. The addresses of these regional offices are as follows: 500 West Madison
Street, Suite 1400, Chicago, Illinois 66061, and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material also can be obtained
by mail from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the fees prescribed by
the rules and regulations of the Commission. Reports, proxy statements and
other information concerning the Company may also be inspected at the offices
of the New York Stock Exchange, Inc. (the "NYSE") at 20 Broad Street, New
York, New York 10005 and at the offices of the Pacific Exchange, Inc. at 301
Pine Street, San Francisco, California 94104 and 233 South Beaudry Avenue, Los
Angeles, California 90012, on which the Common Stock of the Company is listed.
Such material may also be accessed electronically by means of the Commission's
home page on the Internet at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents previously filed or to be filed by the Company with the Commission
pursuant to the Exchange Act:
1. Annual Report on Form 10-K for the fiscal year ended March 31, 1997,
filed on June 19, 1997 (the "Form 10-K").
2. Current Reports on Form 8-K dated November 22, 1996 (as amended by
Amendment No. 1 on Form 8-K/A, filed on January 21, 1997 as further amended by
Amendment No. 2 on Form 8-K/A, filed on April 28, 1997), April 7, 1997, June
13, 1997 and June 24, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
PERSON, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL
OF THE FOREGOING DOCUMENTS INCORPORATED HEREIN BY REFERENCE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR SUCH DOCUMENTS SHALL BE
DIRECTED TO NANCY A. MILLER, VICE PRESIDENT AND CORPORATE SECRETARY, MCKESSON
CORPORATION, MCKESSON PLAZA, ONE POST STREET, SAN FRANCISCO, CALIFORNIA 94104
(TELEPHONE NUMBER (415) 983-8301). IN ORDER TO INSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY 5 BUSINESS DAYS PRIOR TO THE
APPLICABLE EXPIRATION DATE.
3
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the matters discussed under the captions "Risk Factors,"
"Financial Review," "The Company" and elsewhere in this Prospectus or in the
information incorporated by reference herein may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 and as such may involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of McKesson to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such statements. McKesson also undertakes no obligation to update
these forward-looking statements.
4
<PAGE>
PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in its
entirety by the detailed information appearing elsewhere in the Prospectus or
incorporated by reference herein.
THE COMPANY
McKesson is the largest health care supply management company in North
America. The Company also develops and manages innovative marketing programs
for drug manufacturers and, through McKesson Water Products Company, processes
and markets pure drinking water.
The Company's objective is to become the world leader in health care supply
and comprehensive pharmaceutical management across the entire supply chain,
from manufacturer to patient. In pursuit of this goal, the Company has
completed a number of acquisitions in its core health care business. Since late
1995, the Company has acquired General Medical Inc., a leading distributor of
medical and surgical supplies to the acute care, physician care and extended
care markets, the drug distribution business of FoxMeyer Corporation, Automated
Healthcare, Inc., a manufacturer of automated drug dispensing equipment for
hospitals, and Ogden BioServices Corporation (now McKesson BioServices
Corporation), a provider of support services to government and commercial
organizations engaged in drug research and development. For a more complete
discussion of the Company and its recent acquisitions, see "The Company."
THE EXCHANGE OFFERS
Securities Offered ......... The Company is offering to exchange pursuant to
the Exchange Offers up to (i) $175,000,000
principal amount of Exchange Notes due 2000 for
$175,000,000 principal amount of Private Notes
due 2000, (ii) $175,000,000 principal amount of
Exchange Notes due 2002 for $175,000,000
principal amount of Private Notes due 2002 and
(iii) $175,000,000 principal amount of Exchange
Debentures due 2027 for $175,000,000 principal
amount of Private Debentures due 2027, all of
which have been registered under the Securities
Act. The forms and terms of the Exchange Notes
and the corresponding Private Notes are identical
in all material respects, except for certain
transfer restrictions and registration rights
relating to the Private Notes and except that
Holders of Private Notes of Exchange Offers that
have not been consummated by October 22, 1997
will be entitled to liquidated damages in an
amount equal to 0.25% per annum on the Private
Notes held by such Holders. Liquidated damages,
if any, will accrue from and including October
23, 1997 and will cease to accrue from the
consummation of the applicable Exchange Offer.
The Exchange Offers......... The Exchange Notes are being offered in exchange
for a like principal amount of corresponding
Private Notes. The issuance of the Exchange Notes
is intended to satisfy obligations of the Company
contained in the Registration Rights Agreement.
The Exchange Notes evidence the same debt as the
Private Notes and will be issued, and Holders
thereof are entitled to the same benefits as
Holders of the Private Notes, under the
Indenture. See "The Exchange Offers."
5
<PAGE>
Tenders, Expiration Date,
Withdrawals................. The Exchange Offers will expire at 5:00 p.m., New
York City time, on , 1997, or such later time
and date to which any of them may be extended by
the Company in its sole discretion. Tenders of
Private Notes may be withdrawn at any time prior
to 5:00 p.m., New York City time on the
applicable Expiration Date. Private Notes not
accepted for exchange for any reason will be
returned without expense to the tendering holder
thereof as promptly as practicable after the
expiration or termination of the applicable
Exchange Offer. See "The Exchange Offers."
Procedures for Tendering
Private Notes .............. Brokers, dealers, commercial banks, trust
companies and other nominees who hold Private
Notes through the Depository Trust Company
("DTC") must effect tenders by book-entry
transfer in accordance with DTC's Automated
Tender Offer Program ("ATOP"). Beneficial owners
of Private Notes registered in the name of a
broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person
promptly if they wish to tender Private Notes
pursuant to the Exchange Offers. Tendering
Holders of Private Notes that do not use ATOP
must complete and sign the applicable Letter of
Transmittal (the YELLOW Letter of Transmittal for
the Private Notes due 2000, the BLUE Letter of
Transmittal for the Private Notes due 2002 and
the PINK Letter of Transmittal for the Private
Debentures due 2027) in accordance with the
instructions contained therein and forward the
same by mail, facsimile or hand delivery,
together with any other required documents, to
the Exchange Agent, either with the certificates
of the Private Notes to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Private Notes. Tendering
holders of Private Notes that use ATOP will, by
so doing, acknowledge that they are bound by the
terms of the applicable Letter of Transmittal.
See "The Exchange Offers--Procedures for
Tendering Private Notes."
Letters of Transmittal and certificates
representing Private Notes should not be sent to
the Company. Such documents should only be sent
to the Exchange Agent.
Federal Income Tax
Consequences ............... The exchange pursuant to the Exchange Offers will
not be a taxable transaction for Federal income
tax purposes. See "Certain United States Federal
Tax Consequences."
Exchange Agent ............. The First National Bank of Chicago is serving as
Exchange Agent (the "Exchange Agent") in
connection with the Exchange Offers.
6
<PAGE>
CONSEQUENCES OF FAILURE TO EXCHANGE PRIVATE NOTES
PURSUANT TO THE EXCHANGE OFFERS AND CERTAIN REQUIREMENTS FOR TRANSFER OF
EXCHANGE NOTES
Holders of Private Notes who do not exchange their Private Notes for the
corresponding Exchange Notes pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of the Private Notes and the restrictions on transfer of such Private Notes as
set forth in the legend thereon as a consequence of the issuance of the Private
Notes pursuant to exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, the Private Notes may not be offered or sold, unless
registered under the Securities Act, except pursuant to an exemption from, or
in a transaction not subject to, the Securities Act and applicable state
securities laws. The Company does not currently anticipate that it will
register Private Notes under the Securities Act. See "Description of Notes--
Registration Rights." Based on existing interpretations by the Staff, as set
forth in several no-action letters to third parties, and subject to the
immediately following sentence, the Company believes that Exchange Notes issued
pursuant to the Exchange Offers in exchange for Private Notes may be offered
for resale, resold and otherwise transferred by the holders thereof (other than
holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act. However,
any purchaser of Private Notes who is an affiliate of the Company within the
meaning of Rule 405 under the Securities Act ("affiliate") or who intends to
participate in the Exchange Offers for the purpose of distributing the Exchange
Notes, or any broker-dealer who purchased the Private Notes from the Company to
resell pursuant to Rule 144A under the Securities Act ("Rule 144A") or any
other available exemption under the Securities Act, (i) will not be able to
rely on the interpretations of the Staff set forth in the above-mentioned no-
action letters, (ii) will not be entitled to tender its Private Notes in the
Exchange Offers and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
transfer of the Private Notes unless such sale or transfer is made pursuant to
an exemption from such requirements. The Company does not intend to request the
Commission to consider, and the Commission has not considered, the Exchange
Offers in the context of a no-action letter and there can be no assurance that
the Staff would make a similar determination with respect to the Exchange
Offers as in such other circumstances.
Each Holder of the Private Notes who wishes to exchange the Private Notes for
Exchange Notes in the Exchange Offers will be required to represent that (i) it
is not an affiliate of the Company, (ii) the Exchange Notes to be received by
it were acquired in the ordinary course of its business and (iii) at the time
of the Exchange Offers, it has no arrangement with any person to participate in
the distribution within the meaning of the Securities Act ("distribution") of
the Exchange Notes. Each broker-dealer that receives Exchange Notes for its own
account in exchange for Private Notes, where such Private Notes were acquired
by such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution." The
information set forth above concerning certain interpretations of and positions
taken by the Staff is not intended to constitute legal advice, and prospective
investors should consult their own legal advisors with respect to such matters.
7
<PAGE>
THE EXCHANGE NOTES
The forms and terms of the Exchange Notes and the corresponding Private Notes
are identical in all material respects except for certain transfer restrictions
and registration rights relating to the Private Notes and except that Holders
of Private Notes of Exchange Offers that have not been consummated by October
22, 1997 will be entitled to liquidated damages in an amount equal to 0.25% per
annum on the Private Notes held by such Holders. Liquidated damages, if any,
will accrue from and including October 23, 1997 and will cease to accrue from
the consummation of the applicable Exchange Offer. The Exchange Notes will bear
interest from the most recent date to which interest has been paid on the
applicable Private Notes or, if no interest has been paid, from March 1, 1997.
Accordingly, if the relevant record date for interest payment occurs after the
consummation of the applicable Exchange Offer registered holders of such
Exchange Notes on such record date will receive interest accruing from the most
recent date to which interest has been paid or, if no interest has been paid,
from March 1, 1997. If, however, the relevant record date for interest payment
occurs prior to the consummation of the applicable Exchange Offer registered
holders of such Private Notes on such record date will receive interest
accruing from the most recent date to which interest has been paid or, if no
interest has been paid, from March 1, 1997. Holders of Private Notes whose
Private Notes are accepted for exchange will not receive any payment in respect
of accrued interest on such Private Notes otherwise payable on any interest
payment date the record date for which occurs on or after consummation of the
Exchange Offers.
Securities Offered ......... Up to (i) $175,000,000 principal amount of
Exchange Notes due 2000, (ii) $175,000,000
principal amount of Exchange Notes due 2002 and
(iii) $175,000,000 principal amount of Exchange
Debentures due 2027.
Interest Rates; Payment Interest on the Exchange Notes due 2000, the
Dates ...................... Exchange Notes due 2002 and the Exchange
Debentures due 2027 will accrue at the rates of
6.60%, 6 7/8% and 7.65% per annum, respectively,
payable semiannually in arrears on March 1 and
September 1 of each year, commencing September 1,
1997, to the persons in whose name the Exchange
Notes are registered at the close of business on
the immediately preceding February 15th and
August 15th, respectively.
Maturity Dates ............. Exchange Notes due 2000: March 1, 2000.
Exchange Notes due 2002: March 1, 2002.
Exchange Debentures due 2027: March 1, 2027.
Optional Redemption ........ The Exchange Notes due 2000 and the Exchange
Notes due 2002 will not be redeemable prior to
maturity. The Exchange Debentures due 2027 will
be redeemable as a whole or in part, at the
option of the Company, at any time at a
redemption price equal to the greater of (i) 100%
of their principal amount and (ii) the sum of the
present values of the remaining scheduled
payments of principal and interest thereon
discounted to the date of redemption on a semi-
annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Yield
plus 12.5 basis points, plus accrued interest to
the date of redemption.
Ranking .................... The Exchange Notes will constitute unsecured,
unsubordinated obligations of the Company.
Payment of the principal of and interest on the
Exchange Notes will rank pari passu with all
other unsecured, unsubordinated debt of the
Company. The Exchange Notes will rank pari passu
in right of payment to the Private Notes. See
"Description of Notes--General."
8
<PAGE>
Certain Covenants .......... The Indenture contains certain covenants,
including limitations on the ability of the
Company to: (i) incur certain liens; (ii) engage
in certain sale and lease-back transactions; or
(iii) engage in mergers, consolidations or
transfer or lease its assets substantially as an
entirety to another person. See "Description of
Notes--Certain Covenants of the Company."
Use of Proceeds ............
The Company will not receive any proceeds from
the Exchange Offers.
Registration Rights ........ Holders of Exchange Notes are not entitled to any
registration rights with respect to the Exchange
Notes. Pursuant to the Registration Rights
Agreement, McKesson agreed to file, at its
expense, a registration statement with respect to
the Exchange Offers. The Registration Statement
of which this Prospectus is a part constitutes
the registration statement for the Exchange
Offers. See "Description of Notes--Registration
Rights."
RISK FACTORS
Prospective holders of Exchange Notes should consider carefully all of the
information set forth in this Prospectus and, in particular, should evaluate
the specific factors set forth under "Risk Factors" before making a decision to
tender their Private Notes in the Exchange Offers.
9
<PAGE>
RISK FACTORS
Prospective holders of Exchange Notes should consider carefully all of the
information set forth in this Prospectus and, in particular, should evaluate
the following risks before making a decision to tender their Private Notes in
the Exchange Offers.
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE
NOTES
Holders of Private Notes who do not exchange their Private Notes for
corresponding Exchange Notes pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of the Private Notes and the restrictions on transfer of such Private Notes as
set forth in the legend thereon as a consequence of the issuance of the
Private Notes pursuant to exemptions from, or in transactions not subject to,
the registration requirements of the Securities Act and applicable state
securities laws. In general, the Private Notes may not be offered or sold,
unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. The Company does not currently anticipate that it will
register Private Notes under the Securities Act. See "Description of Notes--
Registration Rights." To the extent that Private Notes are tendered and
accepted in the Exchange Offers, the trading market for the remaining
untendered Private Notes could be adversely affected. Based on existing
interpretations by the Staff, as set forth in several no-action letters to
third parties, and subject to the immediately following sentence, the Company
believes that Exchange Notes issued pursuant to the Exchange Offers in
exchange for Private Notes may be offered for resale, resold and otherwise
transferred by the holders thereof (other than holders who are broker-dealers)
without further compliance with the registration and prospectus delivery
provisions of the Securities Act. However, any purchaser of Private Notes who
is an affiliate of the Company or who intends to participate in the Exchange
Offers for the purpose of distributing the Exchange Notes, or any broker-
dealer who purchased the Private Notes from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act, (i) will
not be able to rely on the interpretations of the Staff set forth in the
above-mentioned no-action letters, (ii) will not be entitled to tender its
Private Notes in the Exchange Offers and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Private Notes unless such sale or
transfer is made pursuant to an exemption from such requirements. The Company
does not intend to request the Commission to consider, and the Commission has
not considered, the Exchange Offers in the context of a no-action letter and
there can be no assurance that the Staff would make a similar determination
with respect to the Exchange Offers as in such other circumstances.
Each Holder of the Private Notes who wishes to exchange the Private Notes
for Exchange Notes in the Exchange Offers will be required to represent that
(i) it is not an affiliate of the Company, (ii) the Exchange Notes to be
received by it were acquired in the ordinary course of its business and (iii)
at the time of the Exchange Offers, it has no arrangement with any person to
participate in the distribution of the Exchange Notes. Each broker-dealer that
receives Exchange Notes for its own account pursuant to the Exchange Offers
must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. See "Plan of Distribution." The Letters of
Transmittal state that by so acknowledging and by delivering a Prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Private Notes acquired
by such broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, ending on the close of business on
the 180th day following the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
EXCHANGE OFFERS PROCEDURES
Subject to the conditions set forth under "The Exchange Offers--Certain
Conditions to the Exchange Offers," delivery of Exchange Notes in exchange for
corresponding Private Notes tendered and accepted for exchange pursuant to the
Exchange Offers will be made only after timely receipt by the Exchange Agent
of (i) a
10
<PAGE>
Book-Entry Confirmation (as defined below) evidencing the tender of such
Private Notes through ATOP or (ii) certificates representing such Private
Notes, a properly completed and duly executed applicable Letter of
Transmittal, with any required signature guarantees, and all other required
documents. See "The Exchange Offers--Procedures for Tendering Private Notes."
Therefore, Holders of the Private Notes desiring to tender such Private Notes
in exchange for corresponding Exchange Notes should allow sufficient time to
ensure timely delivery. The Company is under no duty to give notification of
defects or irregularities with respect to tenders of Private Notes for
exchange. Private Notes that are not tendered or that are tendered but not
accepted by the Company for exchange will, following consummation of the
Exchange Offers, continue to be subject to the existing restrictions upon
transfer thereof under the Securities Act and, upon consummation of the
Exchange Offers, certain registration rights under the Registration Rights
Agreement will terminate.
RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS
An element of the Company's growth strategy is to pursue strategic
acquisitions that either expand or complement the Company's business.
Acquisitions involve a number of special risks, including the diversion of
management's attention to the assimilation of the operations from other
business concerns, difficulties in the integration of operations and systems,
the assimilation and retention of the personnel of the acquired companies,
challenges in retaining the acquired businesses' customers and potential
adverse short-term effects on the Company's operating results. In addition,
the Company may require additional debt or equity financing for future
acquisitions, which may not be available on terms favorable to the Company, if
at all. The inability of the Company to successfully finance, complete and
integrate strategic acquisitions in a timely manner could have an adverse
impact on the Company's results of operations and its ability to effect a
portion of its growth strategy.
CHANGING UNITED STATES HEALTHCARE ENVIRONMENT
In recent years, the healthcare industry has undergone significant change
driven by various efforts to reduce costs, including potential national
healthcare reform, trends toward managed care, cuts in Medicare, consolidation
of pharmaceutical and medical/surgical supply distributors and the development
of large, sophisticated purchasing groups. The Company cannot predict whether
any healthcare reform efforts will be enacted and what effect or to what
extent any such reforms may have on the Company, its practices and products or
its customers and suppliers. Changes in governmental support of healthcare
services, the method by which such services are delivered, the prices for such
services or other legislation or regulations governing such services or
mandated benefits may have a material adverse effect on the Company's results
of operations.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
The Private Notes were issued on March 11, 1997 to QIBs and are eligible for
trading in the Private Offering, Resale and Trading through Automated Linkages
(PORTAL) Market, the National Association of Securities Dealers' screenbased,
automated market for trading of securities eligible for resale under Rule
144A. To the extent that Private Notes are tendered and accepted in the
applicable Exchange Offer, the trading market for the remaining untendered
Private Notes could be adversely affected. There is no existing trading market
for the Exchange Notes. Although Morgan Stanley & Co. Incorporated,
BancAmerica Securities, Inc., Chase Securities Inc. and J.P. Morgan Securities
Inc. (collectively, the "Initial Purchasers") have advised the Company that
they currently intend to make a market in the Exchange Notes, they are not
obligated to do so and may discontinue such market making at any time without
notice. In addition, such market making activity will be subject to the limits
imposed by the Securities Act and the Exchange Act. Accordingly, there can be
no assurance that any market for the Exchange Notes will develop, or, if one
does develop, that it will be maintained. If an active market for the Exchange
Notes fails to develop or be sustained, the trading price of the Exchange
Notes could be materially adversely affected. The Company does not intend to
apply for listing or quotation of the Exchange Notes on any securities
exchange, stock market or interdealer quotation system.
11
<PAGE>
THE COMPANY
McKesson is the largest health care supply management company in
North America. The Company also develops and manages innovative marketing
programs for drug manufacturers and, through McKesson Water Products Company,
processes and markets pure drinking water.
The Company's objective is to become the world leader in health care supply
and comprehensive pharmaceutical management across the entire supply chain,
from manufacturer to patient. In pursuit of this goal, the Company has
completed a number of acquisitions in its core health care business. Since
late 1995, the Company has acquired General Medical Inc. ("General Medical"),
a leading distributor of medical and surgical supplies to the acute care,
physician care and extended care markets, the drug distribution business of
FoxMeyer Corporation ("FoxMeyer"), Automated Healthcare, Inc. ("AHI"), a
manufacturer of automated drug dispensing equipment for hospitals, and Ogden
BioServices Corporation (now "McKesson Bioservices Corporation"), a provider
of support services to government and commercial organizations engaged in drug
research and development.
The Company conducts its operations through two operating business segments
which generated annual sales in fiscal 1997 of $12.9 billion, approximately
98% of which were generated by the Health Care Services segment and
approximately 2% of which were generated primarily by McKesson's Water
Products (as hereinafter defined) business. In fiscal 1997, operating profits
for the Health Care Services business and the Water Products business were
$92.8 million (including charges for restructuring, asset impairment, write-
off of in-process purchased technology and other operating items of $140.0
million) and $34.6 million (including $7.0 million of charges for asset
impairment), respectively.
The principal executive offices of the Company are located at McKesson
Plaza, One Post Street, San Francisco, California 94104, and the telephone
number is (415) 983-8300.
RECENT ACQUISITIONS AND DISPOSITIONS
McKesson has recently undertaken several initiatives to further focus the
Company on its core health care business:
. In March 1997, McKesson disposed of Millbrook Distribution Services Inc.
("Millbrook"), a non-health care business, for an amount on an after-tax
basis which approximated Millbrook's book value.
. In February 1997, McKesson acquired General Medical, the largest multi-
market distributor of medical and surgical supplies, for $775 million.
. In December 1996, the Company disposed of its 55% equity interest in
Armor All Products Corporation ("Armor All"), a non-health care business.
. In November 1996, the Company acquired FoxMeyer out of bankruptcy for
approximately $598 million.
. In April 1996, the Company acquired AHI, a business that specializes in
centralized robotic pharmaceutical dispensing systems for hospitals, for
$65 million.
. In December 1995, the Company acquired McKesson Bioservices Corporation,
a business that provides product marketing and support services for the
pharmaceutical industry, for approximately $20 million.
MCKESSON HEALTH CARE SERVICES
Through its Health Care Services segment, the Company is the largest
distributor of ethical and proprietary drugs and health and beauty care
products in North America, generating approximately 73% of the Company's
operating profits from continuing operations in fiscal 1997. The Company is
the market leader in its core U.S. drug distribution business. U.S. health
care operations also include Healthcare Delivery Systems, Inc. ("HDS") and
McKesson Bioservices Corporation, through which the Company provides marketing
and other support services to drug manufacturers, AHI, a business that
specializes in automated pharmaceutical dispensing systems for hospitals,
12
<PAGE>
Zee Medical, Inc., a distributor of first-aid products and supplies to
industrial and commercial customers and General Medical, the nation's leading
supplier of medical-surgical supplies. International operations include Medis
Health and Pharmaceutical Services Inc., a wholly-owned subsidiary and the
largest drug distributor in Canada, and the Company's 22.7% equity interest in
Nadro, S.A. de C.V., the largest drug distributor in Mexico.
The Company's domestic distribution operations supply drugs and health and
beauty care products to independent and chain drug stores, hospitals,
alternate-site facilities, food stores and mass merchandisers in all 50
states. Using the names "Economost" and "Econolink" and a number of related
service marks, the Company has promoted electronic order entry systems and a
wide range of computerized merchandising and asset management services for
drug retailers and hospitals. The Company also supplies computer-based
practice management systems to drug retailers. The Company believes that its
financial strength, purchasing leverage, nationwide network of distribution
centers, and advanced logistics and information technologies provide
competitive advantages to its drug distribution operations. For example, the
Company uses Acumax(R), a computerized bar-code scanning system, to track
items in its warehouses. Acumax enables the Company to achieve order filling
and inventory accuracy levels of more than 99%, ensuring that the right
product arrives at the right time and place for both the Company's customers
and their patients.
Health Care Services serves three primary customer segments: retail
independent pharmacies, retail chains and institutional providers (including
hospitals, health care facilities and pharmacy service operators) which
represented approximately 37%, 31%, and 32%, respectively, of U.S. Health Care
Services revenues in the fourth fiscal quarter of 1997. A fourth customer
category is pharmaceutical manufacturers, which is managed by McKesson's
Pharmaceutical and Retail Services Business group.
INDEPENDENT PHARMACIES. In addition to distribution services, the Company
provides value added services to independent retail pharmacies through
management information systems, including inventory management, electronic
billing, current pricing and other financial management offerings. In
February 1996, McKesson launched the OmniLinkSM centralized pharmacy
technology platform and the associated CareMaxSM network of independent
pharmacies. The combined offering links independent pharmacies, creating a
"virtual chain" for contracting with pharmaceutical suppliers and managed
care organizations. As of March 31, 1997, OmniLink had been installed in
over 1,800 pharmacies.
OmniLink offers pharmacies streamlined transaction processing through
OmniLink's connectivity with managed care organizations, while promoting
compliance with managed care formularies and appropriate reimbursement from
managed care plans. The service also improves cash flow for pharmacies and
enhances pharmacy revenues through programs such as 24-hour advanced
funding of third-party reimbursements, prescription refill reminders,
patient direct marketing and distribution of coupons and samples for over-
the-counter products.
The Company currently has two pharmacy programs for independent
pharmacies--Valu-Rite(R), a voluntary cooperative program, and Health
Mart(R), a franchise program. Through Valu-Rite, the Company provides its
independent U.S. retail drug store customers with a common marketing
identity, group advertising, purchasing programs, promotional merchandise
and access to a pharmacy provider network. At March 31, 1997, approximately
5,200 stores were participating in the Valu-Rite program. Through Health
Mart, acquired as part of FoxMeyer, the Company provides its community
pharmacists with a franchise program. Currently, Health Mart has
approximately 650 franchisees. Together, Valu-Rite and Health Mart
pharmacies comprise approximately 25% of the nation's independent retail
pharmacies.
RETAIL CHAINS. Retail drug chains do business with the Company mainly
through primary sourcing and secondary sourcing. In primary sourcing, a
chain depends on the Company to supply its logistics, warehousing and
contract administration functions, much as the Company performs primary
distribution for all other retail customers. In secondary sourcing, the
Company "backs up" the chains' own warehouses with deliveries on an as-
needed basis.
13
<PAGE>
INSTITUTIONAL BUSINESS. The Company, through its McKesson Health Systems
unit, provides drug distribution services, and related logistics and
management information systems support, to the institutional market, which
includes hospitals, alternate-sites and integrated health networks. The
acquisition of FoxMeyer strengthened the Company's position in the
institutional marketplace. Similarly, the acquisition of General Medical
further enhanced the Company's competitiveness, particularly in the fast-
growing alternate-site segment.
MANUFACTURERS. Pharmaceutical and Retail Services develops innovative
marketing and distribution services to build and sustain sales for
manufacturers' pharmaceutical products. Through its HDS unit, this group
operates integrated systems for specialized delivery of biotech and other
high-cost pharmaceutical therapies. These systems manage manufacturer cost
and information requirements through financial assistance programs for
patients, reimbursement support and patient advocacy programs, product hot-
lines, pharmacy-based sampling and physician and patient information
programs. These services are also provided to manufacturers on a stand-
alone basis outside of integrated service systems. Through McKesson
Bioservices Corporation, this group also provides support services to
commercial, non-profit and governmental organizations engaged in drug
development and biomedical research including biological repository
management, clinical trials support and regulatory process management
services.
McKesson also provides a key service to drug manufacturers with McKesson
Select GenericsSM, an enhancement of the Company's Multi-Source Complete(R)
generic drug program which was launched in May 1996. Through the Select
Generics program, retail customers have access to a broad line of
approximately 1,350 generic items, and single suppliers are chosen for each
item, thereby offering to manufacturers the advantage of exclusivity and
compliance.
GENERAL MEDICAL ACQUISITION
On February 21, 1997, McKesson acquired General Medical for approximately
$775 million, including $347 million for the equity, half in the Company's
Common Stock and half in cash, and the assumption of approximately $428
million in debt. The acquisition of General Medical extends the Company's
product line to include medical and surgical supplies in addition to the drugs
and health and beauty care products it currently distributes. The combination
of McKesson and General Medical creates a strong force to address the
increasingly complex clinical supply needs of physicians, extended-care
facilities and integrated health care networks.
General Medical is the nation's leading supplier of medical-surgical
supplies to the full range of alternate-site health care facilities, including
physicians and clinics (primary care), long-term care and home-care sites
(extended care), and is the third largest distributor of medical-surgical
supplies to hospitals.
FOXMEYER ACQUISITION
Prior to its acquisition by the Company, FoxMeyer's drug distribution
business was the fourth largest in the United States. The acquisition of
FoxMeyer pairs the Company's financial capabilities and information technology
expertise with the substantial customer base of FoxMeyer and strengthens the
Company's position in all three customer segments (health care institutions,
retail independents and retail chains). The acquisition also gives the Company
access to new customers and opportunities for consolidation economics,
particularly cost reduction and distribution network reconfiguration.
MCKESSON WATER PRODUCTS COMPANY
McKesson Water Products Company ("Water Products") is a leading provider in
the $3.4 billion bottled water industry in the United States. It is one of the
largest bottled water companies in most of the geographic markets in which it
competes. In fiscal 1997, Water Products generated $34.6 million in pretax
operating profit, and its operating margin was 13%. Water Products is
primarily engaged in the processing and sale of bottled drinking water
delivered to more than 530,000 homes and businesses under its Sparkletts(R),
Alhambra(R), and Crystal(TM) brands in California, Arizona, Nevada, Oklahoma,
Washington, Texas and New Mexico. It also sells packaged water through retail
stores.
14
<PAGE>
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
as described in this Prospectus, the Company will receive tendered Private
Notes in like principal amount, the terms of which are identical in all
material respect to those of the Exchange Notes. The Private Notes surrendered
in exchange for the Exchange Notes will be retired and cancelled and cannot be
reissued. Accordingly, the issuance of the Exchange Notes will not result in
any change in the indebtedness of the Company.
15
<PAGE>
CAPITALIZATION OF MCKESSON
The following table sets forth short-term borrowings and the total
capitalization of McKesson at March 31, 1997. The capitalization table should
be read in conjunction with the consolidated financial statements of McKesson,
and related notes thereto, which are incorporated by reference from the Form
10-K.
<TABLE>
<CAPTION>
MARCH 31, 1997
-----------------------------
ACTUAL
---------------------
($ IN MILLIONS,
EXCEPT SHARE AMOUNTS)
<S> <C>
Short-term borrowings............................ $ 100.0
=========
Long-term debt and capital lease obligations
(including current portion)(1):
Term debt...................................... $ 188.7
Notes offered hereby........................... 525.0
Exchangeable subordinated debentures........... 160.4
Capital lease obligations (2).................. 4.2
Other.......................................... 6.9
---------
Total........................................ 885.2
---------
McKesson-obligated mandatorily redeemable
preferred securities of subsidiary grantor trust
whose sole assets are junior subordinated
debentures of McKesson.......................... 194.8
---------
Stockholders' equity:
Series Preferred stock, $.01 par value,
100,000,000 shares authorized, no shares
issued and outstanding........................ --
Common stock, $.01 par value, 200,000,000
shares authorized, 46,396,974 shares issued
and outstanding............................... 0.4
Additional paid-in capital..................... 408.2
Other capital.................................. (19.2)
Retained earnings.............................. 1,062.6
Accumulated translation adjustment............. (44.6)
ESOP notes and guarantee....................... (118.3)
Treasury common shares, 612,025 shares, at
cost.......................................... (28.3)
---------
Total stockholders' equity................... 1,260.8
---------
Total Capitalization....................... $ 2,340.8
=========
</TABLE>
- --------
(1) For additional information on long-term debt, see Note 9 of the Financial
Notes in the Form 10-K.
(2) For additional information on capital lease obligations and operating
lease commitments, see Note 11 of the Financial Notes in the Form 10-K.
16
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
OF MCKESSON
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
The selected consolidated financial data of McKesson set forth below at
March 31 and for the years then ended have been derived from McKesson's
consolidated financial statements which are incorporated by reference from the
Form 10-K.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
-----------------------------------------------------------
1997 1996 1995 1994 1993
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(1)
Revenues(2)................ $12,886.7 $9,953.7 $9,438.7 $8,520.8 $7,991.8
Costs and expenses
Cost of sales(2).......... 11,849.4 9,038.2 8,630.5(3) 7,737.2 7,214.6
Selling, distribution and
administration........... 944.5(4) 674.2 817.2(3) 630.0(5) 620.7
Interest.................. 55.7 44.4 44.5 39.3 47.5
--------- -------- -------- -------- --------
Total................... 12,849.6 9,756.8 9,492.2 8,406.5 7,882.8
--------- -------- -------- -------- --------
Income (loss) before income
taxes and dividends on
preferred securities of
subsidiary trust.......... 37.1 196.9 (53.5)(3) 114.3 109.0
Income taxes............... (31.3) (76.2) (96.6)(6) (45.0) (42.2)
--------- -------- -------- -------- --------
Income (loss) before
dividends on preferred
securities of subsidiary
trust..................... 5.8 120.7 (150.1) 69.3 66.8
Dividends on preferred
securities of subsidiary
trust..................... (0.7)
--------- -------- -------- -------- --------
Income (loss) after taxes
Continuing operations..... 5.1 120.7 (150.1)(3)(6) 69.3(5) 66.8
Discontinued operations... 8.6 14.7 (23.1) 55.1 47.9
Discontinued operations--
Gain on sale/donation of
Armor All stock(7)..... 120.2 1.0 32.7
Gain on sale of PCS..... 576.7
Extraordinary item--debt
extinguishment........... (4.2)
Cumulative effects of
accounting changes....... (16.7)
--------- -------- -------- -------- --------
Net income (loss).......... $ 133.9 $ 135.4 $ 404.5 $ 136.2 $ 114.7
========= ======== ======== ======== ========
Fully diluted earnings
(loss) per common share
Continuing operations..... $ 0.13 $ 2.59 $ (3.34) $ 1.49 $ 1.44
Discontinued operations... 0.19 0.31 (0.51) 1.25 1.07
Discontinued operations--
Gain on sale/donation of
Armor All stock........ 2.66 0.02 0.74
Gain on sale of PCS..... 12.69
Extraordinary item--debt
extinguishment........... (0.10)
Cumulative effects of
accounting changes....... (0.38)
--------- -------- -------- -------- --------
Total................... $ 2.98 $ 2.90 $ 8.86 $ 3.00 $ 2.51
========= ======== ======== ======== ========
Fully diluted shares....... 45.1 46.7 45.5 44.1 44.8
Primary earnings (loss) per
common share
Continuing operations..... $ 0.12 $ 2.59 $ (3.52) $ 1.53 $ 1.49
Discontinued operations... 0.19 0.31 (0.53) 1.35 1.20
Discontinued operations--
Gain on sale/donation of
Armor All stock........ 2.70 0.02 0.80
Gain on sale of PCS..... 13.23
Extraordinary item--debt
extinguishment........... (0.10)
Cumulative effects of
accounting changes....... (0.41)
--------- -------- -------- -------- --------
Total................... $ 3.01 $ 2.90 $ 9.20 $ 3.17 $ 2.69
========= ======== ======== ======== ========
Primary shares............. 44.5 46.6 43.6 40.8 40.0
Cash dividends declared per
common share.............. $ 1.00 $ 1.00 $ 1.34 $ 1.66 $ 1.60
Ratio of earnings to fixed
charges (8)............... 1.55x 4.71x (0.01x) 3.42x 2.97x
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
MARCH 31,
-----------------------------------------------
1997 1996 1995 1994 1993
-------- -------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (1)
Cash and cash equivalents....... $ 124.8(9) $ 260.8 $ 363.1 $ 62.7 $ 77.5
Working capital................. 1,123.9 820.5 879.0 301.4 191.4
Total assets.................... 5,172.8 3,360.2 3,260.2 2,676.6 2,458.4
Total debt (10)................. 985.2 398.3 425.1 499.0 397.6
Stockholders' equity............ 1,260.8 1,064.6 1,013.5 678.6 619.4
</TABLE>
- --------
(1) Restated to reflect the Armor All and Millbrook subsidiaries as
discontinued operations.
(2) Reflects the reclassification of sales and cost of sales associated with
sales to customers' warehouses to include only the gross margin on such
sales in revenues.
(3) Includes $59.4 million in compensation costs (classified in
administration expense) related to the sale of PCS, Inc. and $139.5
million in charges for asset impairment, restructuring and other
operating items ($35.9 million included in cost of sales and $103.6
million included in administration expense) resulting from the initiation
of measures designed to streamline operations and improve productivity in
the Company's Health Care Services and Water Products businesses (total
of $130.6 million after-tax).
(4) Includes pre-tax charges of $147.0 million ($109.5 million after-tax),
including $67.4 million in costs primarily associated with the
integration and rationalization of McKesson's distribution operations,
systems, program offerings and administrative functions related to the
FoxMeyer Acquisition and $24.4 million for receivable reserves and other
operating items. In addition, the $147.0 million charge includes $48.2
million for the write-off of in-process technology related to the
acquisition of Automated Healthcare, Inc. and a write-down of $7.0
million for certain assets of the Aqua-Vend unit of the McKesson Water
Products segment.
(5) Includes $13.4 million ($8.2 million after-tax) for the termination of
interest rate swap arrangements.
(6) Includes $107.0 million of income tax expense related to the sale of PCS.
(7) Includes $1.0 million and $0.4 million of income from the contribution of
350,000 and 250,000 shares of Armor All common stock to the McKesson
Foundation in fiscal 1995 and 1994, respectively, $32.3 million from the
sale of 5,175,000 shares of Armor All common stock to the public in
fiscal 1994 and $120.2 million from the sale of the remaining 11,625,000
Armor All shares to The Clorox Company in December 1996.
(8) The ratio of earnings to fixed charges was computed by dividing fixed
charges (interest expense including the interest portion of capital and
operating leases) into earnings available for fixed charges (income from
continuing operations plus taxes on income and fixed charges). The
deficiency of earnings to fixed charges for fiscal 1995 totaled $0.7
million. The ratios of earnings to fixed charges excluding the charges
described in Notes 3, 4 and 5 would have been 3.75x for fiscal 1997,
4.71x for fiscal 1996, 3.75x for fiscal 1995, 3.70x for fiscal 1994 and
2.97x for fiscal 1993.
(9) Includes $13.2 million of after-tax proceeds from the sale of Armor All
shares which were placed in a trust as exchange property for McKesson's
exchangeable debentures.
(10) Total debt includes all interest-bearing debt of McKesson and
consolidated subsidiaries, including the current portion and capital
lease obligations. Amounts related to deferred compensation have been
reclassified as other current and non-current liabilities.
18
<PAGE>
THE EXCHANGE OFFERS
PURPOSE OF THE EXCHANGE OFFERS
The Private Notes were sold by the Company on the Closing Date to the
Initial Purchasers, pursuant to a Placement Agreement entered into by the
Company and the Initial Purchasers on March 6, 1997 (the "Placement
Agreement"). The Initial Purchasers subsequently sold the Private Notes to
QIBs in reliance on Rule 144A. As a condition to the sale of the Private
Notes, the Company and the Initial Purchasers entered into the Registration
Rights Agreement on March 11, 1997 (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, the Company agreed that, unless
the Exchange Offers are not permitted by applicable law or Commission policy,
it would file with the Commission a registration statement under the
Securities Act with respect to the Exchange Notes within 120 days after the
Closing Date and use its reasonable best efforts to cause such registration
statement to become effective under the Securities Act within 180 days after
the Closing Date. A copy of the Registration Rights Agreement has been filed
as an exhibit to the Registration Statement. The Registration Statement is
intended to satisfy certain of the Company's obligations under the
Registration Rights Agreement and the Placement Agreement.
TERMS OF THE EXCHANGE OFFERS
Promptly after the Registration Statement has been declared effective, the
Company will offer Exchange Notes in exchange for surrender of the
corresponding Private Notes. The Company will keep the Exchange Offers open
for not less than 30 calendar days (or longer if required by applicable law)
after the date on which notice of the Exchange Offers is mailed to the holders
of the Private Notes. For each Private Note validly tendered to the Company
pursuant to the Exchange Offers and not withdrawn by the Holder thereof, the
Holder of such Private Note will receive a corresponding Exchange Note having
a principal amount equal to the principal amount of such surrendered Private
Note. The Exchange Notes will bear interest from the most recent date to which
interest has been paid on the applicable Private Notes or, if no interest has
been paid, from March 1, 1997. Accordingly, if the relevant record date for
interest payment occurs after the consummation of the applicable Exchange
Offer registered holders of such Exchange Notes on such record date will
receive interest accruing from the most recent date to which interest has been
paid or, if no interest has been paid, from March 1, 1997. If, however, the
relevant record date for interest payment occurs prior to the consummation of
the applicable Exchange Offer registered holders of such Private Notes on such
record date will receive interest accruing from the most recent date to which
interest has been paid or, if no interest has been paid, from March 1, 1997.
Holders of Private Notes whose Private Notes are accepted for exchange will
not receive any payment in respect of accrued interest on such Private Notes
otherwise payable on any interest payment date the record date for which
occurs on or after consummation of the Exchange Offers. The Exchange Notes
evidence the same debt as the corresponding Private Notes and are issued under
and are entitled to the same benefits under the Indenture as the Private
Notes.
In the event that (i) the Registration Statement is not filed on or prior to
the 120th day following the Closing Date, (ii) the Registration Statement is
not declared effective by the Commission on or prior to the 180th day
following the Closing Date, (iii) the Registration Statement becomes
effective, and the Company fails to consummate any of the Exchange Offers on
or prior to the 225th day following the Closing Date, (iv) the Shelf
Registration Statement (as defined herein) is not declared effective on or
prior to the 225th day following the Closing Date or (v) the Shelf
Registration Statement with respect to the Private Notes is declared effective
but thereafter ceases to be effective or usable under certain circumstances in
connection with resales of Private Notes for the period specified in the
Registration Rights Agreement (each such event referred to in clauses (i)
through (v) above a "Registration Default"), then the Company will pay to each
Holder of any applicable Private Notes, accruing from and including the next
day following such Registration Default (or if such Registration Default has
been cured, from and including the next day following the next Registration
Default), liquidated damages in an amount equal to 0.25% per annum of the
principal amount of the Private Notes held by such Holder, which provision for
liquidated damages will continue until such Registration Default has been
cured. Any amounts of Liquidated Damages due pursuant to the foregoing
paragraphs will be payable in cash on March 1 and September 1 of each year to
the holders of record on the preceding February 15 and August 15,
respectively.
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PERIOD FOR TENDERING PRIVATE NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying applicable Letter of Transmittal (which together
constitute the Exchange Offers), the Company will accept for exchange Private
Notes which are properly tendered on or prior to the Expiration Date and not
withdrawn as permitted below. As used herein, the term "Expiration Date" means
5:00 p.m., New York City time, on , 1997; provided, however, that if the
Company, in its sole discretion, has extended the period of time for which any
of the Exchange Offers are open, the term "Expiration Date" means the latest
time and date to which the applicable Exchange Offer is extended.
As of the date of this Prospectus, $175,000,000 aggregate principal amount
of the Private Notes due 2000, $175,000,000 aggregate principal amount of the
Private Notes due 2002 and $175,000,000 aggregate principal amount of the
Private Debentures due 2027 are outstanding. This Prospectus, together with
the applicable Letter of Transmittal, is first being sent on or about ,
1997, to all holders of Private Notes known to the Company. The Company's
obligation to accept Private Notes for exchange pursuant to the Exchange
Offers are subject to certain conditions as set forth below under "--Certain
Conditions to the Exchange Offers."
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which any of the Exchange Offers are open,
and thereby delay acceptance for exchange of any Private Notes, by giving oral
or written notice of such extension to the Holders thereof as described below.
During any such extension, all Private Notes previously tendered will remain
subject to the Exchange Offers and may be accepted for exchange by the
Company. Any Private Notes not accepted for exchange for any reason will be
returned without expense to the tendering Holder thereof as promptly as
practicable after the expiration or termination of the applicable Exchange
Offer.
Private Notes tendered in the Exchange Offers must be in integral multiples
of $1,000.
The Company expressly reserves the right to amend or terminate any or all of
the Exchange Offers, and not to accept for exchange any Private Notes not
therefore accepted for exchange, upon the occurrence of any of the events
specified below under "--Certain Conditions to the Exchange Offers." The
Company will give oral or written notice of any extension, amendment, non-
acceptance or termination to the Holders of the Private Notes as promptly as
practicable, such notice in the case of any extension to be issued by means of
a press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
PROCEDURES FOR TENDERING PRIVATE NOTES
The tender to the Company of Private Notes by a Holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering Holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
applicable Letter of Transmittal.
Book-Entry Transfer. For purposes of the Exchange Offers, the Exchange Agent
will establish an account with respect to the Private Notes at DTC within two
business days after the date of this Prospectus. Any tendering financial
institution that is a participant in DTC's book-entry transfer facility system
must make a book-entry delivery of the Private Notes by causing DTC to
transfer such Private Notes into the Exchange Agent's account at DTC in
accordance with DTC's ATOP procedure for transfers. Such holder of Private
Notes using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date (or comply with the guaranteed delivery procedures set forth
below). DTC will verify such acceptance, execute a book-entry transfer of the
tendered Private Notes into the Exchange Agent's account at DTC and then send
to the Exchange Agent confirmation of such book-entry transfer, including an
agent's message confirming that DTC has received an express acknowledgment
from such holder that such holder has received and agrees to be bound by the
applicable Letter of Transmittal and that the Company may enforce the
applicable Letter of Transmittal against such holder (a "Book-Entry
Confirmation").
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A beneficial owner of Private Notes that are held by or registered in the
name of a broker, dealer, commercial bank, trust company or other nominee or
custodian is urged to contact such entity promptly if such beneficial owner
wishes to participate in the Exchange Offers.
Certificates. If the tender is not made through ATOP, certificates
representing Private Notes, as well as the applicable Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any
required signature guarantees, and any other documents required by the
applicable Letter of Transmittal, must be received by the Exchange Agent at
its address set forth under "--Exchange Agent" on or prior to the Expiration
Date in order for such tender to be effective (or the guaranteed delivery
procedures set forth below must be complied with).
If less than all of the Private Notes are tendered, a tendering holder
should fill in the amount of Private Notes being tendered in the appropriate
box on the applicable Letter of Transmittal. The entire amount of Private
Notes delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated.
THE METHOD OF DELIVERY OF PRIVATE NOTES, LETTERS OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH
DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED,
WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR PRIVATE
NOTES SHOULD BE SENT TO THE COMPANY.
Signature Guarantees. Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed unless the Private Notes
surrendered for exchange pursuant thereto are tendered (i) by a registered
holder of the Private Notes who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on such Letter of
Transmittal or (ii) for the account of an Eligible Institution (as defined
herein). In the event that signatures on a Letter of Transmittal or a notice
of withdrawal, as the case may be, are required to be guaranteed, such
guarantees must be by a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or by a commercial bank or trust company having an office or
correspondent in the United States (collectively, "Eligible Institutions"). If
Private Notes are registered in the name of a person other than a signer of a
Letter of Transmittal, the Private Notes surrendered for exchange must be
endorsed by, or be accompanied by a written instrument or instruments of
transfer or exchange, in satisfactory form as determined by the Company in its
sole discretion, duly executed by, the registered Holder with the signature
thereon guaranteed by an Eligible Institution.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of Private Notes
tendered for exchange will be determined by the Company in its sole
discretion, which determination shall be final and binding. The Company
reserves the absolute right to reject any and all tenders of any particular
Private Notes not properly tendered or to not accept any particular Private
Notes which acceptance might, in the judgment of the Company or its counsel,
be unlawful. The Company also reserves the absolute right to waive any defects
or irregularities or conditions of the Exchange Offers as to any particular
Private Notes either before or after the Expiration Date (including the right
to waive the ineligibility of any Holder who seeks to tender Private Notes in
the Exchange Offers). The interpretation of the terms and conditions of the
Exchange Offers as to any particular Private Notes either before or after the
Expiration Date (including the applicable Letter of Transmittal and the
instructions thereto) by the Company shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of Private Notes for exchange must be cured within such reasonable
period of time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give
notification of any defect or irregularity with respect to any tender of
Private Notes for exchange, nor shall any of them incur any liability for
failure to give such notification.
If a Letter of Transmittal is signed by a person or persons other than the
registered holder or holders of Private Notes, such Private Notes must be
endorsed or accompanied by appropriate powers of attorney, in either case
signed exactly as the name or names of the registered holder or holders that
appear on the Private Notes.
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If a Letter of Transmittal or any Private Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted.
By tendering, each Holder of the Private Notes will represent to the Company
that, among other things, (i) it is not an affiliate of the Company, (ii) the
Exchange Notes to be received by it were acquired in the ordinary course of
its business and (iii) at the time of the Exchange Offers, it has no
arrangement with any person to participate in the distribution of the Exchange
Notes. If any Holder is an affiliate of the Company or intends to participate
in the Exchange Offers for the purpose of distributing the Exchange Notes, or
any broker-dealer who purchased the Private Notes from the Company to resell
pursuant to Rule 144A or any other available exemption under the Securities
Act, (i) will not be able to rely on the interpretations of the Staff set
forth in the above-mentioned no-action letters, (ii) will not be entitled to
tender its Private Notes in the Exchange Offers and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Private Notes unless such sale or
transfer is made pursuant to an exemption from such requirements. Each broker-
dealer that receives Exchange Notes for its own account in exchange for
Private Notes, where such Private Notes were acquired by such broker-dealer as
a result of market-making activities or other trading activities, must
acknowledge that it will deliver a Prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution." Each Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
ACCEPTANCE OF PRIVATE NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the applicable
Exchange Offers, the Company will accept, promptly after the applicable
Expiration Date, all applicable Private Notes properly tendered and will issue
the applicable Exchange Notes promptly after acceptance of such Private Notes.
See "--Certain Conditions to the Exchange Offers." For purposes of the
Exchange Offers, the Company shall be deemed to have accepted properly
tendered Private Notes for exchange when, as and if the Company has given oral
or written notice thereof to the Exchange Agent, with written confirmation of
any oral notice to be given promptly thereafter.
In all cases, issuance of Exchange Notes for Private Notes that are accepted
for exchange pursuant to the Exchange Offers will be made only after timely
receipt by the Exchange Agent of (i) a Book-Entry Confirmation with respect to
such Private Notes or (ii) certificates for such Private Notes and a properly
completed and duly executed applicable Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and all other required
documents. If any tendered Private Notes are not accepted for any reason set
forth in the terms and conditions of the Exchange Offers or if Private Notes
are submitted for a greater principal amount than the holder desired to
exchange, such unaccepted or non-exchanged Private Notes will be returned
without expense to the tendering holder thereof (or, in the case of Private
Notes tendered by book-entry transfer into the Exchange Agent's account at DTC
pursuant to the book-entry procedures described above, such non-exchanged
Private Notes will be credited to an account maintained with DTC) as promptly
as practicable after the expiration or termination of the applicable Exchange
Offer.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Private Notes desires to tender such Private
Notes and the Private Notes are not immediately available, or time will not
permit such holder's Private Notes or other required documents to reach the
Exchange Agent before the applicable Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if (i) the tender is made by or through an Eligible Institution, (ii)
prior to the applicable Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Company (by
telegram, telex, facsimile transmission, mail or hand delivery), setting forth
the name and address of the holder of Private Notes and the amount of Private
Notes tendered, stating that the tender
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is being made thereby and guaranteeing that within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Private Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and any other
documents required by the applicable Letter of Transmittal will be deposited
by the Eligible Institution with the Exchange Agent, and (iii) (a) a Book-
Entry Confirmation or (b) the certificates for all physically tendered Private
Notes, in proper form for transfer, and a duly executed applicable Letter of
Transmittal (or facsimile thereof) with any required signature guarantees, and
all other documents required by such Letter of Transmittal, are received by
the Exchange Agent within three NYSE trading days after the date of execution
of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Private Notes may be withdrawn at any time prior to the
applicable Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by telegram, facsimile transaction (receipt confirmed by telephone)
or letter to the Exchange Agent at its address as set forth below under "--
Exchange Agent" on or prior to the applicable Expiration Date. Any such notice
of withdrawal must specify the name of the person having tendered the Private
Notes to be withdrawn, identify the Private Notes to be withdrawn (including
the series and the principal amount of such Private Notes), and (where
certificates for Private Notes have been transmitted) specify the name in
which such Private Notes are registered, if different from that of the
withdrawing holder. If certificates for Private Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing holder must also submit the certificate numbers
of the particular certificates to be withdrawn and signed notice of withdrawal
with signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Private Notes have been tendered pursuant to the
procedure for book entry transfer described above, any notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawn Private Notes and otherwise comply with the procedures of such
facility. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Private Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offers. Any Private Notes which have been tendered
for exchange but which are not exchanged for any reason will be returned to
the Holder thereof without cost to such Holder (or, in the case of Private
Notes tendered by book-entry transfer into the Exchange Agent's account at DTC
pursuant to the book-entry transfer procedures described above, such Private
Notes will be credited to an account maintained with DTC for the Private
Notes) as soon as practicable after withdrawal, rejection of tender or
termination of the applicable Exchange Offer. Properly withdrawn Private Notes
may be retendered by following one of the procedures described under "--
Procedures for Tendering Private Notes" above at any time on or prior to the
applicable Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFERS
Notwithstanding any other provision of the applicable Exchange Offer, the
Company shall not be required to accept for exchange, or to issue Exchange
Notes in exchange for, any applicable Private Notes and may terminate or amend
the applicable Exchange Offer, if at any time before the acceptance of such
Private Notes for exchange or the exchange of the applicable Exchange Notes
for such Private Notes, any of the following events shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order of decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission with respect to the
applicable Exchange Offer; or
(b) such acceptance or issuance would violate applicable law or any
applicable interpretation of the Staff of the Commission; or
(c) there shall have occurred (i) any general suspension of or general
limitation on prices for, or trading in, securities on any national
securities exchange or in the over-the-counter market, (ii) any limitation
by any governmental agency or authority which may adversely affect the
ability of the Company to complete the transactions contemplated by any of
the Exchange Offers, (iii) a declaration of a banking moratorium or
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any suspension of payments in respect of banks in the United States or any
limitation by any governmental agency or authority which adversely affects
the extension of credit or (iv) a commencement of a war, armed hostilities
or other similar international calamity directly or indirectly involving
the United States, or, in the case of any of the foregoing existing at the
time of the commencement of the Exchange Offers, a material acceleration or
worsening thereof; or
(d) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Company and its subsidiaries taken as a whole that, in the
sole judgment of the Company, is or may be adverse to the Company, or the
Company shall have become aware of facts that, in the sole judgment of the
Company, have or may have adverse significance with respect to the value of
any of the Private Notes or the Exchange Notes;
which in the sole judgment of the Company in any case, and regardless of the
circumstances (including any action by the Company) giving rise to any event
described above, prohibits the Company from or makes it inadvisable for the
Company to proceed with any of the Exchange Offers and/or with such acceptance
for exchange or with such exchange.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its sole discretion. The failure by the Company at any
time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Private Notes
tendered, and no Exchange Notes will be issued in exchange for any such Private
Notes, if at such time any stop order shall be threatened or in effect with
respect to the Registration Statement or the qualification of the Indenture
under the Trust Indenture Act of 1939, as amended (the "TIA").
EXCHANGE AGENT
The First National Bank of Chicago has been appointed as the Exchange Agent
for the Exchange Offers. All executed Letters of Transmittal should be directed
to the Exchange Agent as set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the
applicable Letter of Transmittal and requests for Notices of Guaranteed
Delivery should be directed to the Exchange Agent addressed as follows:
By Mail: By Hand or Overnight Delivery:
(Registered or Certified Mail
recommended)
The First National Bank of Chicago The First National Bank of Chicago
c/o First Chicago Trust c/o First Chicago Trust
Company of New York Company of New York
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, New York 10005 New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF LETTERS OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
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FEES AND EXPENSES
The Company will not make any payment to brokers, dealers, or others
soliciting acceptances of the Exchange Offers.
The Company will pay certain other expenses to be incurred in connection
with the Exchange Offers, including the fees and expenses of the Exchange
Agent, accounting and certain legal fees.
TRANSFER TAXES
Holders who tender their Private Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that Holders who
instruct the Company to register Exchange Notes in the name of, or request
that Private Notes not tendered or not accepted in the Exchange Offers be
returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Private Notes who do not exchange their Private Notes for the
corresponding Exchange Notes pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of the Private Notes and the restrictions on transfer of such Private Notes as
set forth in the legend thereon as a consequence of the issuance of the
Private Notes pursuant to exemptions from, or in transactions not subject to,
the registration requirements of the Securities Act and applicable state
securities laws. In general, the Private Notes may not be offered or sold,
unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. The Company does not currently anticipate that it will
register Private Notes under the Securities Act. See "Description of the
Notes--Registration Rights." To the extent that Private Notes are tendered and
accepted in the Exchange Offers, the trading market for the remaining
untendered Private Notes could be adversely affected. Issuance of the Exchange
Notes in exchange for Private Notes pursuant to the Exchange Offers will be
made only after timely receipt by the Exchange Agent of (i) a Book-Entry
Confirmation with respect to such Private Notes or (ii) certificates for such
Private Notes and a properly completed and duly executed applicable Letter of
Transmittal (or facsimile thereof), with any required signature guarantees and
all other required documents. Therefore, Holders of the Private Notes desiring
to tender such Private Notes in exchange for corresponding Exchange Notes
should allow sufficient time to ensure timely delivery. The Company is under
no duty to give notification of defects or irregularities with respect to
tenders of Private Notes for exchange. Private Notes that are not tendered or
that are tendered but not accepted by the Company for exchange will, following
consummation of the applicable Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof under the Securities Act and, upon
consummation of the applicable Exchange Offer, certain registration rights
under the Registration Rights Agreement will terminate.
Based on existing interpretations by the Staff, as set forth in several no-
action letters to third parties, and subject to the immediately following
sentence, the Company believes that Exchange Notes issued pursuant to the
Exchange Offers in exchange for Private Notes may be offered for resale,
resold and otherwise transferred by the holders thereof (other than holders
who are broker-dealers) without further compliance with the registration and
prospectus delivery provisions of the Securities Act. However, any purchaser
of Private Notes who is an affiliate of the Company or who intends to
participate in the Exchange Offers for the purpose of distributing the
Exchange Notes, or any broker-dealer who purchased the Private Notes from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (i) will not be able to rely on the interpretations of the
Staff set forth in the above-mentioned no-action letters, (ii) will not be
entitled to tender its Private Notes in the Exchange Offers and (iii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Private Notes
unless such sale or transfer is made pursuant to an exemption from such
requirements. The Company does not intend to request the Commission to
consider, and the Commission has not considered, the Exchange Offers in the
context of a no-action letter and there can be no assurance that the Staff
would make a similar determination with respect to the Exchange Offers as in
such other circumstances.
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Each Holder of the Private Notes who wishes to exchange the Private Notes
for Exchange Notes in the Exchange Offers will be required to represent that
(i) it is not an affiliate of the Company, (ii) the Exchange Notes to be
received by it were acquired in the ordinary course of its business and (iii)
at the time of the Exchange Offers, it has no arrangement with any person to
participate in the distribution of the Exchange Notes. Each broker-dealer that
receives Exchange Notes for its own account in exchange for Private Notes,
where such Private Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution."
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DESCRIPTION OF NOTES
The Private Notes were issued and the Exchange Notes will be issued pursuant
to an Indenture, dated as of March 11, 1997 (the "Indenture") between the
Company and The First National Bank of Chicago, as trustee (the "Trustee"), a
copy of which is filed as an exhibit to the Registration Statement of which
this Prospectus constitutes a part. Upon the effectiveness of the Registration
Statement, the Indenture will be subject to and governed by the TIA. The
Private Notes and the Exchange Notes are treated as three series of Notes
under the Indenture and holders thereof are entitled to the benefit of the
Indenture. Accordingly, unless specifically stated to the contrary, the
following description applies equally to all Notes. The following summary of
certain provisions of the Indenture and the Notes does not purport to be
complete and such summary is subject to the detailed provisions of the
Indenture to which reference is hereby made for a full description of such
provisions, including the definition of certain terms used herein, and for
other information regarding the Notes. Wherever particular sections or defined
terms of the Indenture are referred to, such sections or defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference. As used under this
caption, the term "Company" means McKesson Corporation and not any of its
subsidiaries unless otherwise expressly stated or the context otherwise
requires. The forms and terms of the Exchange Notes and the corresponding
Private Notes are identical in all material respects, except for certain
transfer restrictions and registration rights relating to the Private Notes
and except that Holders of Private Notes of Exchange Offers that have not been
consummated by October 22, 1997 will be entitled to liquidated damages in an
amount equal to 0.25% per annum on the Private Notes held by such Holders.
Liquidated damages, if any, will accrue from and including October 23, 1997
and will cease to accrue from the consummation of the applicable Exchange
Offer.
GENERAL
The Exchange Notes due 2000 will be unsecured, unsubordinated obligations of
the Company limited in aggregate principal amount to $175 million and will
mature on March 1, 2000. The Exchange Notes due 2002 will be unsecured,
unsubordinated obligations of the Company limited in aggregate principal
amount to $175 million and will mature on March 1, 2002. The Exchange
Debentures due 2027 will be unsecured, unsubordinated obligations of the
Company limited in aggregate principal amount to $175 million and will mature
on March 1, 2027.
Payment of the principal of and interest on the Exchange Notes will rank
pari passu with all other unsecured, unsubordinated debt of the Company. The
Exchange Notes due 2000 and the Exchange Notes due 2002 will not be redeemable
prior to maturity and the Exchange Debentures due 2027 will be redeemable in
whole or in part at any time at the option of the Company. See "--Optional
Redemption." The Exchange Notes will not be entitled to the benefit of any
mandatory redemption or sinking fund. The Indenture does not limit the amount
of additional indebtedness the Company or any of its subsidiaries may incur.
The Indenture does not limit the amount of notes, debentures or other
evidences of indebtedness ("Debt Securities") that the Company may issue
thereunder and provides that Debt Securities may be issued from time to time
in one or more series. As of the date of this Prospectus, no Debt Securities
other than the Private Notes are outstanding under the Indenture.
The Exchange Notes will bear interest from March 1, 1997 at the respective
rates per annum set forth on the cover page of this Prospectus and such
interest will be payable semiannually in arrears on March 1 and September 1 of
each year, commencing on September 1, 1997, to the persons in whose names the
Exchange Notes are registered at the close of business on the immediately
preceding February 15 and August 15, respectively. Interest on the Exchange
Notes will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from March 1, 1997. Principal of, premium,
if any, and interest on the Exchange Notes will be payable, and the transfer
of Exchange Notes will be registrable, at the office or agency of the Company
to be maintained for such purpose in the Borough of Manhattan, The City of New
York, except that, at the option of the Company, interest may be paid by
mailing a check to the address of the person entitled thereto as it appears on
the Exchange Notes register. Exchange Notes may be presented for exchange at
the corporate trust offices of the Trustee. Such services will be provided
without charge, other than any tax or other governmental charge payable in
connection therewith, but subject to the limitations provided in the
Indenture.
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Interest on the Exchange Notes will be computed on the basis of a 360-day
year comprised of twelve 30-day months. The amount of interest payable for any
period shorter than a full semi-annual period for which interest is computed
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which principal, premium, if any, or
interest is payable on the Exchange Notes is not a Business Day (as defined in
the Indenture), then payment of the principal, premium, if any, or interest
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay). The Exchange Notes will be issued in integral multiples of $1,000.
For each Private Note accepted for exchange, the holder of such Private Note
will receive a corresponding Exchange Note having a principal amount equal to
that of the surrendered Private Note.
BOOK ENTRY; DELIVERY AND FORM
The certificates representing the Exchange Notes will be issued in fully
registered form. Except as set forth below, the Exchange Notes will be
deposited with, or on behalf of, DTC, and registered in the name of Cede & Co.
("Cede"), as DTC's nominee in the form of one or more global Exchange Note
certificates (the "Global Securities") for each of the Exchange Notes due
2000, the Exchange Notes due 2002 and the Exchange Debentures due 2027,
respectively.
Except as set forth below, the record ownership of any Global Security may
be transferred, in whole or in part, only to DTC, another nominee of DTC or to
a successor of DTC or its nominee. Investors may hold their interests in any
of the Global Securities directly through DTC, or indirectly through
organizations which are participants in DTC ("Participants"). Transfers
between Participants will be effected in the ordinary way in accordance with
DTC rules and will be settled in immediately available funds.
Investors who are not Participants may beneficially own interests in a
Global Security held by DTC only through Participants, including certain
banks, brokers, dealers, trust companies and other parties that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly, and have indirect access to the DTC system ("Indirect
Participants"). So long as Cede, as the nominee of DTC, is the registered
owner of any Global Security, Cede for all purposes will be considered the
sole holder of such Global Security. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have
certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form, and will not be
considered the holder thereof.
Neither McKesson nor the Trustee (nor any registrar or paying agent) will
have any responsibility for the performance by DTC or its Participants or
Indirect Participants of its obligations under the rules and procedures
governing, its operations. DTC has advised McKesson that it will take any
action permitted to be taken by a holder of Exchange Notes only at the
direction of one or more Participants whose accounts are credited with DTC
interests in a Global Security.
DTC has advised McKesson as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions, such as transfers and pledges, among Participants
in deposited securities through electronic book-entry changes to accounts of
its Participants, thereby eliminating the need for physical movement of
securities certificates. Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
Certain of such Participants (or their representatives), together with other
entities, own DTC. The Rules applicable to DTC and its Participants are on
file with the Commission.
Purchases of Exchange Notes under the DTC system must be made by or through
Participants, which will receive a credit for the Exchange Notes on DTC's
records. The ownership interest of each actual purchaser of
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each Exchange Note (a "Beneficial Owner") is in turn to be recorded on the
Participants and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but Beneficial Owners
are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the
Participant or Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the Exchange Notes
are to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Exchange Notes, except in the event
that use of the book-entry system for the Exchange Notes is discontinued.
The deposit of Exchange Notes with DTC and their registration in the name of
Cede effect no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Exchange Notes; DTC's records reflect only the
identity of the Participants to whose accounts such Exchange Notes are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in each Global Security.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time. Redemption notices shall be sent to Cede. If less than all of
the Exchange Debentures due 2027 are being redeemed, DTC's practice is to
determine by lot the interest of each Participant in the Exchange Debentures
due 2027 to be redeemed.
Principal and interest payments on the Exchange Notes will be made to DTC by
wire transfer of immediately available funds. DTC's practice is to credit
Participants' accounts on the payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payment on the payable date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers
in bearer form or registered in "street name," and will be the responsibility
of such Participant and not of DTC or McKesson, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of McKesson, disbursement
of such payments to Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Participants and Indirect Participants. Neither McKesson nor
the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Certificated Notes. DTC may discontinue providing its services as securities
depositary with respect to the Exchange Notes at any time by giving reasonable
notice to McKesson. In the event that DTC notifies McKesson that it is
unwilling or unable to continue as depositary for any Global Security or if at
any time DTC ceases to be a clearing agency registered as such under the
Exchange Act when DTC is required to be so registered to act as such
depositary and no successor depositary shall have been appointed within 90
days of such notification or of McKesson becoming aware of DTC's ceasing to be
so registered, as the case may be, certificates for the relevant Exchange
Notes will be printed and delivered in exchange for interests in such Global
Security. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for relevant Exchange Notes registered in such
names as DTC shall direct. It is expected that such instructions will be based
upon directions received by DTC from its Participants with respect to
ownership of beneficial interests in such Global Security.
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McKesson may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event,
certificates representing the Exchange Notes will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that McKesson believes to be reliable, but
McKesson does not take responsibility for the accuracy thereof.
OPTIONAL REDEMPTION
The Debentures due 2027 will be redeemable as a whole or in part, at the
option of the Company, at any time at a redemption price equal to the greater
of (i) 100% of their principal amount or (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon discounted
to the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Yield plus 12.5 basis
points, plus accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Debentures due 2027 that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Debentures due 2027. "Independent Investment Banker"
means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or
unable to select the Comparable Treasury Issue, an independent investment
banking institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices of the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means each of Morgan Stanley & Co. Incorporated,
BancAmerica Securities, Inc., Chase Securities Inc. and J.P. Morgan Securities
Inc., and their respective successors; provided however, that if any of the
foregoing shall cease to be a primary U.S. Government Securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer.
Holders of Debentures due 2027 to be redeemed will receive notice thereof by
first-class mail at least 30 and not more than 60 days prior to the date fixed
for redemption.
CERTAIN COVENANTS OF THE COMPANY
Definitions. The term "Attributable Debt" shall mean in connection with a
sale and lease-back transaction the lesser of (a) the fair value of the assets
subject to such transaction or (b) the present value of the obligations
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of the lessee for net rental payments during the term of any lease discounted
at the rate of interest set forth or implicit in the terms of such lease or,
if not practicable to determine such rate, the weighted average interest rate
per annum borne by the Debt Securities of each series outstanding pursuant to
the Indenture and subject to limitations on sale and lease-back transaction
covenants, compounded semiannually in either case as determined by the
principal accounting or financial officer of the Company. The term
"Subsidiary" shall mean any corporation of which at least a majority of the
outstanding stock having voting power under ordinary circumstances for the
election of the board of directors of said corporation shall at the time be
owned by the Company or by the Company and one or more Subsidiaries or by one
or more Subsidiaries. The term "Consolidated Subsidiary" shall mean any
Subsidiary substantially all the property of which is located, and
substantially all the operations of which are conducted, in the United States
of America whose financial statements are consolidated with those of the
Company in accordance with generally accepted accounting principles. The term
"Exempted Debt" shall mean the sum of the following as of the date of
determination: (i) Indebtedness of the Company and its Consolidated
Subsidiaries incurred after the date of the Indenture and secured by liens not
permitted by the limitation on liens provisions, and (ii) Attributable Debt of
the Company and its Consolidated Subsidiaries in respect of every sale and
lease-back transaction entered into after the date of the Indenture, other
than leases permitted by the limitation on sale and lease-back provisions. The
term "Indebtedness" shall mean all items classified as indebtedness on the
most recently available consolidated balance sheet of the Company and its
Consolidated Subsidiaries, in accordance with generally accepted accounting
principles.
Limitation on Liens. The Company covenants that, so long as any of the Notes
remain outstanding, it will not, nor will it permit any Consolidated
Subsidiary, to create or assume any Indebtedness for money borrowed which is
secured by a lien (as defined) upon any assets, whether now owned or hereafter
acquired, of the Company or any such Consolidated Subsidiary without equally
and ratably securing the Notes by a lien ranking ratably with and equally to
such secured Indebtedness, except that the foregoing restriction shall not
apply to (a) liens on assets of any corporation existing at the time such
corporation becomes a Consolidated Subsidiary; (b) liens on assets existing at
the time of acquisition thereof, or to secure the payment of the purchase
price of such assets, or to secure indebtedness incurred or guaranteed by the
Company or a Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon, which
indebtedness is incurred or guaranteed prior to, at the time of or within 360
days after such acquisition (or in the case of real property, completion of
such improvement or construction or commencement of full operation of such
property, whichever is later); (c) liens securing indebtedness owed by any
Consolidated Subsidiary to the Company or another wholly owned Subsidiary; (d)
liens on any assets of a corporation existing at the time such corporation is
merged into or consolidated with the Company or a Subsidiary or at the time of
a purchase, lease or other acquisition of the assets of a corporation or firm
as an entirety or substantially as an entirety by the Company or a Subsidiary;
(e) liens on any assets of the Company or a Consolidated Subsidiary in favor
of the United States of America or any state thereof, or in favor of any other
country, or political subdivision thereof, to secure certain 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 (including, but not limited to, liens incurred in
connection with pollution control, industrial revenue or similar financing);
(f) 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 (a) to (e), inclusive; (g) certain statutory liens or other similar
liens arising in the ordinary course of business of the Company or a
Consolidated Subsidiary, or certain liens arising out of government contracts;
(h) certain pledges, deposits or liens made or arising under the worker's
compensation or similar legislation or in certain other circumstances; (i)
certain liens in connection with legal proceedings, including certain liens
arising out of judgments or awards; or (j) liens for certain taxes or
assessments, landlord's liens and liens and charges incidental to the conduct
of the business or the ownership of the assets of the Company or of a
Consolidated Subsidiary, which were not incurred in connection with the
borrowing of money and which do not, in the opinion of the Company, materially
impair the use of such assets in the operation of the business of the Company
or such Consolidated Subsidiary or the value of such assets for the purposes
thereof. Notwithstanding the above, the Company or any Consolidated Subsidiary
may, without securing the Notes, create or assume any
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Indebtedness which is secured by a lien which would otherwise be subject to
the foregoing restrictions, provided that after giving effect thereto the
Exempted Debt then outstanding at such time does not exceed 10% of the total
assets of the Company and its Subsidiaries on a consolidated basis.
Limitation on Sale and Lease-Back Transactions. Sale and lease-back
transactions (except such transactions involving leases for less than three
years) by the Company or any Consolidated Subsidiary of any assets are
prohibited unless (a) the Company or such Consolidated Subsidiary would be
entitled to incur Indebtedness secured by a lien on the assets to be leased in
an amount at least equal to the Attributable Debt in respect of such
transaction without equally and ratably securing the Notes, or (b) the
proceeds of the sale of the assets to be leased are at least equal to their
fair market value and the proceeds are applied to the purchase or acquisition
(or, in the case of real property, the construction) of assets or to the
retirement of indebtedness. The foregoing limitation will not apply, if at the
time the Company or any Consolidated Subsidiary enters into such sale and
lease-back transaction, and after giving effect thereto, Exempted Debt does
not exceed 10% of the total assets of the Company and its Subsidiaries on a
consolidated basis.
SUCCESSOR CORPORATION
The Indenture provides that the Company shall not consolidate or merge with
or into, or transfer or lease its assets substantially as an entirety to any
person unless the Company shall be the continuing corporation, or the
successor corporation or person to which such assets are transferred or leased
shall be a corporation organized under the laws of the United States, any
state thereof or the District of Columbia and shall expressly assume the
Company's obligations on the Notes and under the Indenture, and immediately
after giving effect to such transaction no Event of Default (as defined in the
Indenture) shall have occurred and be continuing, and certain other conditions
are met. Upon assumption of the Company's obligations by a person to whom such
assets are transferred or leased, subject to certain exceptions, the Company
shall be discharged from all obligations under the Notes and the Indenture.
This covenant would not apply to any recapitalization transaction, a change
of control of the Company or a highly leveraged transaction unless such
transaction or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety. There are no covenants or other provisions in the Indenture
providing for a put or increased interest or that would otherwise afford
holders of Notes protection in the event of a recapitalization transaction, a
change of control of the Company or a highly leveraged transaction.
EVENTS OF DEFAULT
An Event of Default is defined under the Indenture with respect to Debt
Securities of each series as being: (a) default in payment of all or any part
of the principal of, or premium, if any, on any Debt Securities of such series
when due, either at maturity, upon any redemption, by declaration or
otherwise; (b) default for 30 days in payment of any interest on any Debt
Securities of such series; (c) default in payment of any sinking fund
installment when due by the terms of the Debt Securities of such series; (d)
default for 60 days after written notice as provided in the Indenture in the
observance or performance of any other covenant or agreement in the Debt
Securities of such series or in the Indenture, other than a covenant included
in the Indenture solely for the benefit of a series of Debt Securities other
than such series; or (e) certain events of bankruptcy, insolvency or
reorganization.
The Indenture provides that (a) if an Event of Default due to the default in
payment of principal, premium, if any, or interest on any series of Debt
Securities, or due to the default in the performance or breach of any other
covenant or agreement of the Company applicable to the Debt Securities of such
series but not applicable to all outstanding Debt Securities, shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the Debt Securities of such series may declare the
principal of all Debt Securities of such series and interest accrued thereon
to be due and payable immediately and (b) if an Event of Default due to a
default in the performance of any other of the covenants or agreements in the
Indenture
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applicable to all Debt Securities then outstanding or due to certain events of
bankruptcy, insolvency and reorganization of the Company shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of the Debt Securities then outstanding (treated as one
class) may declare the principal of all such Debt Securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal, premium, if any, or interest on
such Debt Securities) by the holders of a majority in principal amount of the
Debt Securities of such series (or of all series, as the case may be) then
outstanding.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee to act with the required standard of care, to be
indemnified by the holders of Debt Securities requesting the Trustee to
exercise any right or power under the Indenture before proceeding to exercise
any such right or power at the request of such holders.
The Indenture provides that no holder of Debt Securities of any series may
institute any action against the Company under the Indenture (except actions
for payment of overdue principal, premium, if any, or interest) unless such
holder previously shall have given to the Trustee written notice of default
and continuance thereof and unless the holders of not less than 25% in
principal amount of the Debt Securities of such series then outstanding shall
have requested the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity, the Trustee shall not have instituted such
action within 60 days of such request and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority
in principal amount of the Debt Securities of such series then outstanding.
The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any
default that exists.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or decrease its obligations under the Indenture as
set forth below.
Under terms satisfactory to the Trustee, the Company may discharge certain
obligations to holders of any series of Debt Securities which have not already
been delivered to the Trustee for cancellation and which have either become
due and payable or are by their terms due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
Trustee cash or U.S. Government Obligations (as defined in the Indenture), as
trust funds in an amount certified to be sufficient to pay when due, whether
at maturity, upon redemption or otherwise, the principal of, premium, if any,
and interest on such Debt Securities.
The Company may also discharge any and all of its obligations to holders of
any series of Debt Securities at any time ("defeasance"), but may not thereby
avoid its duty to register the transfer or exchange of such series of Debt
Securities, to replace any temporary, mutilated, destroyed, lost or stolen
series of Debt Securities or to maintain an office or agency in respect of
such series of Debt Securities. Under terms satisfactory to the Trustee, the
Company may instead be released with respect to any outstanding series of Debt
Securities from the obligations imposed by certain provisions of the Indenture
(which contain the covenants described above limiting liens, consolidations,
mergers, transfers and leases and certain dispositions) and omit to comply
with such sections without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the Trustee cash or
U.S. Government Obligations, as trust funds in an amount certified to be
sufficient to pay at maturity (or upon redemption) the principal, premium, if
any, and interest on all outstanding Debt Securities of such series and (ii)
the Company delivers to the Trustee an opinion of counsel to the effect that
the holders of such series of Debt Securities will not recognize income, gain
or loss for United States Federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States Federal income tax
treatment of principal, premium and interest payments on such series of Debt
Securities. In the case of a defeasance, such opinion must be based on a
ruling of the Internal Revenue
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Service or a change in United States Federal income tax law occurring after
the date of the Indenture, since such a result would not occur under current
tax law.
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in the Indenture, provided that such cure or
correction does not adversely affect the holders of Debt Securities, (e)
establish the forms or terms of Debt Securities of any series and (f) evidence
the acceptance of appointment by a successor trustee.
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of all series then outstanding
and affected (voting as one class), to add any provisions to, or change in any
manner or eliminate any of the provisions of, the Indenture or modify in any
manner the rights of the holders of the Debt Securities of each series so
affected; provided that the Company and the Trustee may not, without the
consent of the holder of each outstanding Debt Security affected thereby, (a)
extend the final maturity of any Debt Security, or reduce the principal amount
thereof or premium thereon, if any, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption
thereof or change the currency in which the principal thereof, premium, if
any, or interest thereon is payable or reduce the amount of the principal of
any Debt Security issued with original issue discount that is payable upon
acceleration or provable in bankruptcy or alter certain provisions of the
Indenture relating to the Debt Securities not denominated in U.S. dollars or
impair the right to institute suit for the enforcement of any payment on any
Debt Security when due or (b) reduce the aforesaid percentage in principal
amount of Debt Securities of any series, the consent of the holders of which
is required for any such modification.
CONCERNING THE TRUSTEE
The First National Bank of Chicago is the Trustee under the Indenture. All
payments of principal of, premium, if any, and interest on and all
registration, transfer, exchange, authentication and delivery (including
authentication and delivery on original issuance of the Notes) of, the Notes
will be effected by the Trustee at an office designated by the Trustee in New
York, New York.
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict or resign.
In case of any conflicting interest relating to the Trustee's duties with
respect to the Notes, the Trustee shall either eliminate such conflicting
interest or except as otherwise provided in the TIA, resign.
The holders of a majority in principal amount of any series of Debt
Securities then outstanding will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee with respect to such series of Debt Securities, provided that such
direction would not conflict with any rule of law or with the Indenture, would
not be unduly prejudicial to the rights of another holder of the Debt
Securities, and would not involve the Trustee in personal liability. The
Indenture provides that in case an Event of Default shall occur and be known
to the Trustee (and not be cured), the Trustee will be required to use the
degree of care of a prudent man in the conduct of his own affairs in the
exercise of its power. Subject to such provisions, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request of any of the holders of the Debt Securities, unless they shall
have offered to the Trustee security and indemnity satisfactory to it.
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The Trustee is one of a number of banks with which the Company and its
subsidiaries maintain ordinary banking and trust relationships. With respect
to the sale of the Company's Trust Convertible Preferred Securities, the
Trustee also serves as trustee under the indenture pursuant to which
convertible subordinated debt of the Company was issued, a guarantee agreement
of the Company issued with respect to trust convertible preferred securities
and a declaration of trust related to the issue of trust convertible preferred
securities.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, STOCKHOLDERS OR INCORPORATORS
The Indenture provides that no past, present or future director, officer,
employee, stockholder or incorporator of the Company or any successor
corporation shall have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation, by reason of such person's or
entity's status as such director, officer, stockholder or incorporator.
REGISTRATION RIGHTS
Holders of Exchange Notes are not entitled to any registration rights with
respect to the Exchange Notes. Pursuant to the Registration Rights Agreement,
holders of Private Notes are entitled to certain registration rights. Under
the Registration Rights Agreement, the Company has agreed, for the benefit of
the holders of Private Notes, that it will, at its expense (i) file a
registration statement with the Commission with respect to the Exchange Offers
by July 9, 1997 and (ii) use its reasonable best efforts to cause such
registration statement to be declared effective under the Securities Act by
September 7, 1997. The Registration Statement of which the Prospectus is a
part constitutes the registration statement for the Exchange Offers.
If, (i) because of any change in law or in currently prevailing
interpretations of the Staff the Company is not permitted to effect any of the
Exchange Offers, (ii) any of the Exchange Offers are not consummated by
October 22, 1997, or (iii) in the case of any holder that participates in the
Exchange Offers, such holder does not receive applicable Exchange Notes on the
date of the exchange that may be sold without restriction under state and
Federal securities laws (other than due solely to the status of such holder as
an affiliate of the Company within the meaning of the Securities Act or as a
broker-dealer), then in each case, the Company will (x) promptly deliver to
the applicable holders written notice thereof and (y) at the Company's sole
expense (a) as promptly as practicable (but in no event more than 60 days
after so required or requested pursuant to the Registration Rights Agreement),
file a shelf registration covering resales of the applicable Private Notes
(the "Shelf Registration Statement"), (b) use its reasonable best efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act and (c) use its reasonable best efforts to keep effective the
Shelf Registration Statement until the earlier of two years (or, if Rule
144(k) is amended to provide a shorter restrictive period, such shorter
period) after the Closing Date or such time as all of the applicable Private
Notes have been sold thereunder. The Company will, in the event that a Shelf
Registration Statement is filed, provide to each applicable holder copies of
the prospectus that is a part of the Shelf Registration Statement, notify each
such holder when the Shelf Registration Statement for the applicable Private
Notes has become effective and take certain other actions as are required to
permit unrestricted resales of the applicable Private Notes. A holder that
sells Private Notes pursuant to the Shelf Registration Statement will be
required to be named as a selling security holder in the related prospectus
and to deliver a prospectus to purchasers, will be subject to certain of the
civil liability provisions under the Securities Act in connection with such
sales and will be bound by the provisions of the Registration Rights Agreement
that are applicable to such a holder (including certain indemnification rights
and obligations).
The Registration Rights Agreement is governed by, and construed in
accordance with, the laws of the State of New York. The summary herein of
certain provisions of the Registration Rights Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Registration Rights Agreement, a copy of which is
attached as an exhibit to the Registration Statement of which this Prospectus
forms a part and is available upon request to the Company.
35
<PAGE>
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a general discussion of certain United States Federal tax
consequences associated with the exchange of Private Notes for Exchange Notes
and the acquisition and disposition of the Exchange Notes by a holder who holds
the Exchange Notes as "capital assets" (generally, property held for
investment). This discussion is based upon the United States Federal tax laws,
regulations, rulings and decisions now in effect, which are subject to change,
possibly retroactively. This discussion does not cover all aspects of Federal
income taxation that may be relevant to holders, in light of their specific
circumstances, particularly holders subject to special tax treatment (such as
insurance companies, financial institutions, tax exempt organizations or
foreign persons, except to the extent described below). Prospective investors
are urged to consult their tax advisors regarding the United States Federal tax
consequences of acquiring, holding, and disposing of the Exchange Notes, as
well as any tax consequences that may arise under the laws of any foreign,
state, local, or other taxing jurisdiction.
For purposes of this discussion, a "U.S. holder" means a holder that is a
citizen or resident of the United States, a corporation, partnership, or other
entity created or organized in the United States or under the laws of the
United States or of any political subdivision thereof, an estate whose income
is includible in gross income for United States Federal income tax purposes
regardless of its source, or a trust whose administration is subject to the
primary supervision of a United States court and which has one or more United
States fiduciaries who have the authority to control all substantial decisions
of the trust. A "Non-U.S. holder" means a beneficial owner of Exchange Notes
who is not a U.S. holder.
U.S. HOLDERS
Exchange of Notes. There will be no Federal income tax consequences to
holders exchanging Private Notes for Exchange Notes pursuant to the Exchange
Offers and such a holder will have the same adjusted basis and holding period
in the Exchange Notes as it had in the Private Notes immediately before the
exchange.
Disposition of Exchange Notes. In general, the holder of an Exchange Note
will recognize gain or loss upon the sale, redemption, retirement or other
disposition of the Exchange Note measured by the difference between the amount
of cash and the fair market value of property received (except to the extent
attributable to the payment of accrued interest), and the holder's tax basis in
the Exchange Note. Subject to the market discount rules discussed below, the
gain or loss on the sale or other disposition of the Exchange Note should be
long-term capital gain or loss, provided the holder has a holding period for
the Exchange Note (which would include the holding period of the Private Note)
of more than one year.
Market Discount on Resale. Holders, other than original purchasers of Private
Notes in the original offering, should be aware that the resale of the Exchange
Notes may be affected by the market discount provisions of the Code. These
rules generally provide that if a subsequent holder of an Exchange Note
purchases it at a market discount in excess of statutorily defined de minimis
amount, and thereafter recognizes gain upon a disposition (including a partial
redemption) of the Exchange Note, the lesser of such gain or the portion of the
market discount that accrued while the Exchange Note was held by such holder
will be treated as ordinary interest income at the time of the disposition. The
rules also provide that a holder who acquires an Exchange Note at a market
discount may be required to defer a portion of any interest expense that may
otherwise be deductible on any indebtedness incurred or maintained to purchase
or carry such Exchange Note until the holder disposes of such Exchange Note in
a taxable transaction. If a holder of an Exchange Note elects to include market
discount in income currently, both of the foregoing rules would not apply.
36
<PAGE>
NON-U.S. HOLDERS
Under present United States Federal income and estate tax law, assuming
certain certification requirements are satisfied (which include identification
of the beneficial owner of the instrument), and subject to the discussion of
backup withholding below:
(a) payments of interest on the Exchange Notes to any Non-U.S. holder
will not be subject to United States Federal income or withholding tax,
provided that (1) the holder does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of McKesson
entitled to vote, (2) the holder is not (i) a foreign tax exempt
organization or a foreign private foundation for United States Federal
income tax purposes, (ii) a bank receiving interest pursuant to a loan
agreement entered into in the ordinary course of its trade or business, or
(iii) a controlled foreign corporation that is related to McKesson through
stock ownership, and (3) such interest payments are not effectively
connected with the conduct of a United States trade or business of the
holder;
(b) a holder of an Exchange Note who is a Non-U.S. holder will not be
subject to the United States Federal income tax on gain realized on the
sale, exchange, or other disposition of an Exchange Note, unless (1) such
holder is an individual who is present in the United States for 183 days or
more during the taxable year and certain other requirements are met, or (2)
the gain is effectively connected with the conduct of a United States trade
or business of the holder; and
(c) if interest on the Exchange Notes is exempt from withholding of
United States Federal income tax under the rules described above, the
Exchange Notes will not be included in the estate of a deceased Non-U.S.
holder for United States Federal estate tax purposes.
The certification referred to above may be made on an Internal Revenue
Service Form W-8 or substantially similar substitute form.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax will generally
not apply to interest paid on the Exchange Notes to a Non-U.S. holder at an
address outside the United States. Payments by a United States office of a
broker of the proceeds of a sale of the Exchange Notes are subject to both
backup withholding at a rate of 31% and information reporting unless the
holder certifies its Non-U.S. holder status under penalties of perjury or
otherwise establishes an exemption. Information reporting requirements (but
not backup withholding) will also apply to payments of the proceeds of sales
of the Exchange Notes by foreign offices of United States brokers, or foreign
brokers with certain types of relationships to the United States, unless the
broker has documentary evidence in its records that the holder is a Non-U.S.
holder and certain other conditions are met, or the holder otherwise
establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the holder's
United States Federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service.
These information reporting and backup withholding rules are under review by
the United States Treasury and their application to the Exchange Notes could
be changed by future regulations. The Internal Revenue Service recently issued
proposed Treasury Regulations concerning the withholding of tax and reporting
for certain amounts paid to non-resident individuals and foreign corporations.
The proposed Treasury Regulations, if adopted in their present form, would be
effective for payments made after December 31, 1997. Prospective investors
should consult their tax advisors concerning the potential adoption of such
proposed Treasury Regulations and the potential effect on their ownership of
the Exchange Notes.
37
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offers must acknowledge that it will deliver a Prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Notes received in exchange for Private
Notes where such Private Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has
agreed that, starting on the applicable Expiration Date and ending on the
close of business on the 180th day following such Expiration Date, it will
make this Prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale. In addition, until ,
1997 (90 days after the date of this Prospectus), all dealers effecting
transactions in the Exchange Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offers may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were
received by it for its own account pursuant to the Exchange Offers and any
broker or dealer that participates in a distribution of such Exchange Notes
may be deemed to be an "underwriter" within the meaning of the Securities Act
and any profit of any such resale of Exchange Notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. Each Letter of Transmittal states that
by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such
documents in the applicable Letter of Transmittal. The Company has agreed to
pay all expenses incident to the Exchange Offers (including the expenses of
any special counsel for the holders of the Private Notes) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Private Notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
EXPERTS
The consolidated financial statements of McKesson and the related financial
statement schedule incorporated in this Prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended March 31, 1997 and the
consolidated financial statements of FoxMeyer Corporation for the year ended
March 31, 1996 incorporated in this Prospectus by reference from the Company's
Current Report on Form 8-K/A filed with the Commission on April 28, 1997 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports incorporated herein by reference (which report dated May 16,
1997 on the Company's consolidated financial statements expresses an
unqualified opinion and which report on FoxMeyer Corporation's consolidated
financial statements dated June 28, 1996 (March 18, 1997 as to paragraph seven
of Note Q), expresses an unqualified opinion and includes an explanatory
paragraph relating to the sale of the principal assets of FoxMeyer Corporation
and its Chapter 7 bankruptcy filing). Such consolidated financial statements
and financial statement schedule have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting
and auditing.
LEGAL MATTERS
The validity of the Exchange Notes offered hereby will be passed upon for
McKesson by Skadden, Arps, Slate, Meagher & Flom LLP.
38
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY SECURITY OTHER THAN THE EXCHANGE NOTES OFFERED HEREBY, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
EXCHANGE NOTES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
Available Information...................................................... 3
Incorporation of Certain Documents by Reference............................ 3
Special Note Regarding Forward-Looking Statements.......................... 4
Summary.................................................................... 5
Risk Factors............................................................... 10
The Company................................................................ 12
Use of Proceeds............................................................ 15
Capitalization of McKesson................................................. 16
Selected Consolidated Financial Information of McKesson.................... 17
The Exchange Offers........................................................ 19
Description of Notes....................................................... 27
Certain United States Federal Tax Consequences............................. 36
Plan of Distribution....................................................... 38
Experts.................................................................... 38
Legal Matters.............................................................. 38
</TABLE>
UNTIL , 1997 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
OFFERING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT PARTICIPATING IN
THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
MCKESSON CORPORATION
OFFERS TO EXCHANGE
$175,000,000 6.60% EXCHANGE NOTES
DUE MARCH 1, 2000,
$175,000,000 6 7/8% EXCHANGE NOTES
DUE MARCH 1, 2002 AND
$175,000,000 7.65% EXCHANGE DEBENTURES
DUE MARCH 1, 2027
---------------
PROSPECTUS
---------------
JULY , 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the Restated By-Laws of the Company, in accordance with the
provisions of Section 145 of the General Corporation Law of Delaware (the
"Delaware Corporation Law"), provides that the Company shall indemnify any
person in connection with any threatened, pending or completed legal
proceeding (other than a legal proceeding by or in the right of the Company)
by reason of the fact that he is or was a director or officer of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred in connection with such
legal proceeding if he acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, if he had no reasonable
cause to believe that his conduct was unlawful. If the legal proceeding is by
or in the right of the Company, the director or officer may be indemnified by
the Company against expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of such legal
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, except that he may
not be indemnified in respect of any claim, issue or matter as to which he
shall have been adjudged to be liable to the Company unless a court determines
otherwise.
Article VIII of McKesson's Restated By-Laws allows the Company to maintain
director and officer liability insurance on behalf of any person who is or was
a director or officer of the Company or such person who serves or served as
director, officer, employee or agent of another corporation, partnership or
other enterprise at the request of the Company.
Article VI of McKesson's Restated Certificate of Incorporation, in
accordance with Section 102(b)(7) of the Delaware Corporation Law, provides
that no director of the Company shall be personally liable to the Company or
its stockholders for monetary damages for any breach of his fiduciary duty as
a director; provided, however, that such clause shall not apply to any
liability of a director (1) for any breach of his duty of loyalty to the
Registrant or its stockholders, (2) for acts or omissions that are not in good
faith or involve intentional misconduct or a knowing violation of the law, (3)
under Section 174 of the Delaware Corporation Law, or (4) for any transaction
from which the director derived an improper personal benefit.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. EXHIBITS
The Exhibits listed in the following Exhibit Index are filed as part of the
Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 Indenture between the Company and The First National Bank of Chicago,
dated as of March 11, 1997.
4.2 Officer's Certificate relating to the Private Notes.
4.3 Form of Officer's Certificate relating to the Exchange Notes.
4.4 Form of 6.60% Notes due March 1, 2000 (included in Exhibit A to Annex
A to Exhibit 4.2 above).
4.5 Form of 6 7/8% Notes due March 1, 2002 (included in Exhibit A to Annex
B to Exhibit 4.2 above).
4.6 Form of 7.65% Debentures due March 1, 2027 (included in Exhibit A to
Annex C to Exhibit 4.2 above).
4.7 Form of 6.60% Exchange Notes due March 1, 2000 (included in Exhibit A
to Annex A to Exhibit 4.3 above).
4.8 Form of 6 7/8% Exchange Notes due March 1, 2002 (included in Exhibit A
to Annex B to Exhibit 4.3 above).
4.9 Form of 7.65% Exchange Debentures due March 1, 2027 (included in
Exhibit A to Annex C to Exhibit 4.3 above).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality
of the Exchange Notes being registered hereby.*
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to certain tax
matters.
10.1 Registration Rights Agreement, dated as of March 11, 1997, among the
Company and the Initial Purchasers.
23.1 Independent Auditors' Consent.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
24.1 Power of Attorney.
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The First National Bank of Chicago, as Trustee
under the Indenture.
99.1 Form of Letter of Transmittal for 6.60% Notes due March 1, 2000.
99.2 Form of Letter of Transmittal for 6 7/8% Notes due March 1, 2002.
99.3 Form of Letter of Transmittal for 7.65% Debentures due March 1, 2027.
99.4 Form of Notice of Guaranteed Delivery
99.5 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.6 Form of Letter to Clients
99.7 Form of Exchange Agent Agreement
</TABLE>
- --------
* To be filed by amendment
ITEM 22. UNDERTAKINGS.
The undersigned hereby undertakes as follows:
(a) That for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is
II-2
<PAGE>
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the Securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(c) To respond to requests for information that is incorporated by reference
into the Prospectus pursuant to Item 4, 10(b), 11 or 13 of Form S-4, within
one business day of receipt of such request, and to send the incorporated
documents by first-class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
the Registration Statement through the date of responding to the request.
(d) To supply by means of a post-effective amendment all information
concerning any transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when it
became effective.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SAN FRANCISCO, STATE OF CALIFORNIA, ON THE 8TH DAY
OF JULY, 1997.
McKESSON CORPORATION
/s/ Richard H. Hawkins
By: _________________________________
NAME:RICHARD H. HAWKINS
TITLE:VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
* Chairman of the Board
- -------------------------------------
ALAN SEELENFREUND
/s/ Mark A. Pulido President and Chief
- ------------------------------------- Executive Officer and
MARK A. PULIDO Director (principal
executive officer)
/s/ Richard H. Hawkins Vice President and
- ------------------------------------- Chief Financial Officer
RICHARD H. HAWKINS (principal financial
officer)
/s/ Heidi E. Yodowitz Controller (principal
- ------------------------------------- accounting officer)
HEIDI E. YODOWITZ
* Director
- -------------------------------------
MARY G.F. BITTERMAN
* Director
- -------------------------------------
TULLY M. FRIEDMAN
* Director
- -------------------------------------
JOHN M. PIETRUSKI
</TABLE>
II-4
<PAGE>
* Director
- -------------------------------------
CARL E. REICHARDT
* Director
- -------------------------------------
JANE E. SHAW
* Director
- -------------------------------------
ROBERT H. WATERMAN, JR.
Director
- -------------------------------------
DAVID S. POTTRUCK
*By: /s/ Nancy A. Miller
----------------------------------
Nancy A. Miller
Attorney-in-fact
II-5
<PAGE>
Exhibit 4.1
McKESSON CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
Indenture
Dated as of March 11, 1997
<PAGE>
CROSS REFERENCE SHEET*
Between
Provisions of Trust Indenture Act (as defined herein) and
Indenture dated as of March 11, 1997 between McKESSON CORPORATION and THE FIRST
NATIONAL BANK OF CHICAGO, Trustee:
<TABLE>
<CAPTION>
SECTION OF THE ACT SECTION OF INDENTURE
<S> <C>
310(a)(1) and (2)......................................................................6.9
310(a)(3) and (4).............................................................Inapplicable
310(b)........................................................6.8 and 6.10(a), (b) and (d)
310(c)........................................................................Inapplicable
311(a)................................................................................6.14
311(b)................................................................................6.14
311(c)........................................................................Inapplicable
312(a).........................................................................4.1 and 4.2
312(b).................................................................................4.2
312(c).................................................................................4.2
313(a).................................................................................4.3
313(b)(1).....................................................................Inapplicable
313(b)(2)..............................................................................4.3
313(c)..........................................................4.3, 5.11, 6.10, 6.11, 8.2
and 12.2
313(d).................................................................................4.3
314(a).........................................................................3.5 and 4.2
314(b)........................................................................Inapplicable
314(c)(1) and (2).....................................................................11.5
314(c)(3).....................................................................Inapplicable
314(d)........................................................................Inapplicable
314(e)................................................................................11.5
314(f)........................................................................Inapplicable
315(a), (c) and (d)....................................................................6.1
315(b)................................................................................5.11
315(e)................................................................................5.12
316(a)(1).....................................................................5.9 and 5.10
316(a)(2).....................................................................Not required
316(a) (last sentence).................................................................7.4
316(b).................................................................................5.7
317(a).................................................................................5.2
317(b)......................................................................3.4(a) and (b)
318(a)................................................................................11.7
</TABLE>
*This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED......................... 1
ARTICLE II SECURITIES
SECTION 2.1 FORMS GENERALLY............................... 7
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION........................ 7
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES.......... 8
SECTION 2.4 AUTHENTICATION AND DELIVERY OF
SECURITIES............................ 11
SECTION 2.5 EXECUTION OF SECURITIES........................13
SECTION 2.6 CERTIFICATE OF AUTHENTICATION................. 14
SECTION 2.7 DENOMINATION AND DATE OF SECURITIES;
PAYMENTS OF INTEREST.................. 14
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE........... 15
SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND
STOLEN SECURITIES..................... 21
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION
THEREOF............................... 22
SECTION 2.11 TEMPORARY SECURITIES.......................... 22
ARTICLE III COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST............. 23
SECTION 3.2 OFFICES FOR PAYMENTS, ETC..................... 23
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE
OF TRUSTEE............................ 24
SECTION 3.4 PAYING AGENTS................................. 24
SECTION 3.5 COMPLIANCE CERTIFICATES....................... 25
SECTION 3.6 CORPORATE EXISTENCE........................... 26
SECTION 3.7 MAINTENANCE OF PROPERTIES......................26
SECTION 3.8 PAYMENT OF TAXES AND OTHER CLAIMS..............26
SECTION 3.9 LUXEMBOURG PUBLICATIONS....................... 26
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PAGE
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ARTICLE IV SECURITYHOLDER LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS
TO NAMES AND ADDRESSES OF
SECURITYHOLDERS....................... 27
SECTION 4.2 REPORTS BY THE ISSUER......................... 27
SECTION 4.3 REPORTS BY THE TRUSTEE........................ 27
ARTICLE V REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF
DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED, ACCELERATION
OF MATURITY; WAIVER OF DEFAULT........ 29
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE;
TRUSTEE MAY PROVE DEBT................ 32
SECTION 5.3 APPLICATION OF PROCEEDS....................... 34
SECTION 5.4 SUITS FOR ENFORCEMENT......................... 35
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT
OF PROCEEDINGS........................ 35
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITY HOLDERS...... 35
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS
TO INSTITUTE CERTAIN SUITS............ 36
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY
OR OMISSION NOT WAIVER OF DEFAULT..... 36
SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES.............. 36
SECTION 5.10 WAIVER OF PAST DEFAULTS....................... 37
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT
MAY WITHHOLD IN CERTAIN
CIRCUMSTANCES......................... 37
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF
UNDERTAKING TO PAY COSTS.............. 37
ARTICLE VI CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE
TRUSTEE; DURING DEFAULT; PRIOR TO
DEFAULT............................... 38
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE................. 39
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PAGE
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SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS,
DISPOSITION OF SECURITIES OR
APPLICATION OF PROCEEDS THEREOF....... 40
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES
OR COUPONS; COLLECTIONS, ETC.......... 41
SECTION 6.5 MONEYS HELD BY TRUSTEE........................ 41
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF
TRUSTEE AND ITS PRIOR CLAIM........... 41
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICER'S
CERTIFICATE, ETC...................... 41
SECTION 6.8 INDENTURES NOT CREATING POTENTIAL
CONFLICTING INTERESTS FOR THE
TRUSTEE............................... 42
SECTION 6.9 QUALIFICATION OF TRUSTEE: CONFLICTING
INTERESTS............................. 42
SECTION 6.10 PERSONS ELIGIBLE FOR APPOINTMENT AS
TRUSTEE................................42
SECTION 6.11 RESIGNATION AND REMOVAL; APPOINTMENT
OF SUCCESSOR TRUSTEE.................. 42
SECTION 6.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
TRUSTEE............................... 44
SECTION 6.13 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS OF TRUSTEE..... 45
SECTION 6.14 PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE ISSUER.................... 45
SECTION 6.15 APPOINTMENT OF AUTHENTICATING AGENT........... 46
ARTICLE VII CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY
SECURITYHOLDERS............................... 47
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND
OF HOLDING OF SECURITIES.............. 47
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS............... 47
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT
OUTSTANDING........................... 47
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN........... 48
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PAGE
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ARTICLE VIII SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CON-
SENT OF SECURITYHOLDERS............... 48
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT
OF SECURITYHOLDERS.................... 50
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE.............. 51
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE.............. 51
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF
SUPPLEMENTAL INDENTURES............... 52
ARTICLE IX CONSOLIDATION, MERGER, SALE OR
CONVEYANCE
SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON
CERTAIN TERMS......................... 52
SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED............. 52
SECTION 9.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE.........53
ARTICLE X SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE....... 53
SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS
DEPOSITED FOR PAYMENT OF
SECURITIES............................ 57
SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING
AGENT................................. 57
SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND
PAYING AGENT UNCLAIMED FOR TWO
YEARS................................. 57
SECTION 10.5 INDEMNITY FOR U.S. GOVERNMENT OF
OBLIGATIONS........................... 58
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS OF ISSUER EXEMPT
FROM INDIVIDUAL LIABILITY............. 58
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PAGE
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SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE
BENEFIT OF PARTIES AND HOLDERS OF
SECURITIES AND COUPONS................ 58
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND
BY INDENTURE.......................... 58
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE
AND HOLDERS OF SECURITIES AND
COUPONS............................... 58
SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF
COUNSEL; STATEMENTS TO BE
CONTAINED THEREIN..................... 59
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND
HOLIDAYS.............................. 60
SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE
WITH TRUST INDENTURE ACT.............. 60
SECTION 11.8 NEW YORK LAW TO GOVERN........................ 60
SECTION 11.9 COUNTERPARTS.................................. 61
SECTION 11.10 EFFECT OF HEADINGS............................ 61
SECTION 11.11 SECURITIES IN A FOREIGN CURRENCY OR IN
ECU................................... 61
SECTION 11.12 JUDGMENT CURRENCY............................. 61
ARTICLE XII REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE...................... 62
SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL
REDEMPTIONS........................... 62
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR RE-
DEMPTION.............................. 64
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM
ELIGIBILITY FOR SELECTION FOR RE-
DEMPTION.............................. 65
SECTION 12.5 MANDATORY AND OPTIONAL SINKING FUNDS.......... 65
v
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THIS INDENTURE, dated as of March 11, 1997, by and between
McKESSON CORPORATION, a Delaware corporation (the "Issuer"), and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, as trustee (the
"Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to
time of its unsecured debentures, notes or other evidences of indebtedness to be
issued in one or more series (the "Securities") up to such principal amount or
amounts as may from time to time be authorized in accordance with the terms of
this Indenture;
WHEREAS, the Issuer has duly authorized the execution and
delivery of this Indenture to provide, among other things, for the
authentication, delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the respective holders from
time to time of the Securities and of the coupons, if any, appertaining thereto
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), or the definitions of which in the
Securities Act of 1933, as amended (the "Securities Act"), are referred to in
the Trust Indenture Act, including terms defined therein by reference to the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires), shall have the meaning assigned to such terms in
the Trust Indenture Act and in the Securities Act as in effect from time to
time. All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of any computation
unless a different time shall be specified with respect to such series of
Securities as provided for in Section 2.3. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a whole
and not
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to any particular Article, Section or other subdivision. The terms defined in
this Article have the meanings assigned to them in this Article and include the
plural as well as the singular.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor provision.
"Authenticating Agent" shall have the meaning set forth in
Section 6.15.
"Authorized Newspaper" means a newspaper (which, in the case
of The City of New York, will, if practicable, be The Wall Street Journal
(Eastern Edition), in the case of the United Kingdom of Great Britain and
Northern Ireland (the "United Kingdom"), will, if practicable, be The Financial
Times (London Edition) and, in the case of the Grand Duchy of Luxembourg
("Luxembourg"), will, if practicable, be the Luxemburger Wort) published in an
official or common language of the county of publication customarily published
at least once a day for at least five days in each calendar week and of general
circulation in The City of New York, the United Kingdom or Luxembourg, as
applicable. If it shall be impractical in the opinion of the Trustee to make any
publication of any notice required hereby in an Authorized Newspaper, any
publication or other notice in lieu thereof which is made or given with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Issuer to have been
duly adopted or consented to by the Board of Directors and to be in full force
and effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day
other than any day on which banking institutions in the city (or in any of the
cities, if more than one) in which amounts are payable, as specified in the form
of such Security, are authorized or required by any applicable law or regulation
to be closed.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any time
after the execution and delivery of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular time,
be principally administered, which office is, as of the date of this Indenture,
located at One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Administration.
"Coupon" means any interest coupon appertaining to an
Unregistered Security.
"Covenant Defeasance" shall have the meaning set forth in
Section 10.1(C).
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"Depositary" means, with respect to the Securities of any
series issuable or issued in the form of one or more Registered Global
Securities, the Person designated as Depositary by the Issuer pursuant to
Section 2.3 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depositary" shall mean
or include each Person who is then a Depositary hereunder, and if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any such series shall mean the Depositary with respect to the
Registered Global Securities of that series.
"Dollar" or "$" means the coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts.
"ECU" means the European Currency Unit as defined and revised
from time to time by the European Monetary System of the European Community.
"Event of Default" means any event or condition specified as
such in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Value" when used with respect to any Voting Stock means
the fair value as determined in good faith by the Board of Directors of the
Issuer.
"Foreign Currency" means a currency issued by the government
of a country other than the United States of America.
"Holder," "Holder of Securities," "Securityholder" or other
similar terms mean (a) in the case of any Registered Security, the person in
whose name such Security is registered in the security register kept by the
Issuer for that purpose in accordance with the terms hereof, and (b) in the case
of any Unregistered Security, the bearer of such Security, or any Coupon
appertaining thereto, as the case may be.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular series
of Securities established as contemplated hereunder.
"IRS" means the Internal Revenue Service of the United States
Department of the Treasury, or any successor entity.
"Issuer" means (except as otherwise provided in Article IX)
McKesson Corporation, a Delaware corporation, and, subject to Article IX, its
successors and assigns.
"Issuer Order" means a written statement, request or order of
the Issuer signed in its name by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer.
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"Judgment Currency" has the meaning set forth in
Section 11.12.
"Non-U.S. Person" means any person that is not a "U.S. person"
as such term is defined in Rule 902 of the Securities Act.
"Officer's Certificate" means a certificate signed by the
chairman of the Board of Directors, the president or any vice president or the
treasurer of the Issuer and delivered to the Trustee. Each such certificate
shall comply with Section 314 of the Trust Indenture Act and include the
statements provided for in Section 11.5.
"144A Global Security" has the meaning set forth in
Section 2.8(b)(i).
"Opinion of Counsel" means an opinion in writing signed by
legal counsel who may be an employee of the Issuer or other counsel satisfactory
to the Trustee. Each such opinion shall comply with Section 314 of the Trust
Indenture Act and include the statements provided for in Section 11.5.
"Original Issue Date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.1.
"Outstanding" (except as otherwise provided in Section 7.4),
when used with reference to Securities, means, subject to the provisions of
Section 7.4, as of any particular time, all Securities authenticated and
delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys or U.S. Government Obligations (as provided
for in Section 10.1) in the necessary amount shall have been deposited
in trust with the Trustee or with any paying agent (other than the
Issuer) or shall have been set aside, segregated and held in trust by
the Issuer for the Holders of such Securities (if the Issuer shall act
as its own paying agent), provided, that if such Securities, or
portions thereof, are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein provided, or
provisions satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Securities which shall have been paid or in substitution
for which other Securities shall have been authenticated and delivered
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee
4
<PAGE>
is presented that such Security is held by a person in whose hands such
Security is a legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a
series from time to time, the specific terms of which Securities, including,
without limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PORTAL Market" means Private Offerings, Resales and Trading
through Automatic Linkages Market.
"principal" whenever used with reference to the Securities or
any Security or any portion thereof, shall be deemed to include "and premium, if
any," provided, however, that such inclusion of premium, if any, shall under no
circumstances result in the double counting of such premium for the purpose of
any calculation required hereunder.
"QIB" or "Qualified Institutional Buyer" means "Qualified
Institutional Buyer" as such term is defined in Rule 144A under the Securities
Act.
"record date" shall have the meaning set forth in Section 2.7.
"Registered Global Security" means a Security evidencing all
or a part of a series of Registered Securities, issued to the Depositary for
such series in accordance with Section 2.4, and bearing the legend prescribed in
Section 2.4 and any other legend required by the Depositary for such series.
"Registered Security" means any Security registered on the
Security register of the Issuer.
"Regulation S" means Regulation S under the Securities Act, or
any successor provision.
"Regulation S Global Security" has the meaning set forth in
Section 2.8(b).
5
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"Required Currency" shall have the meaning set forth in
Section 11.12.
"Responsible Officer" when used with respect to the Trustee
means the chairman of the board of directors, any vice chairman of the board of
directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any vice
president (whether or not designated by numbers or words added before or after
the title "Vice President"), the cashier, the secretary, the treasurer, any
trust officer, any assistant trust officer, any assistant vice president, any
assistant cashier, any assistant secretary, any assistant treasurer, or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Restricted Security" has the meaning set forth in
Section 2.8(b).
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144K" means Rule 144(k) under the Securities Act.
"Security" or "Securities" (except as otherwise provided in
Section 7.4) has the meaning stated in the first recital of this Indenture, or,
as the case may be, Securities that have been authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means any corporation of which at least a
majority of the outstanding stock having the voting power to elect a majority of
the Board of Directors of such corporation (irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at the
time of determination directly or indirectly owned by the Issuer, or by one or
more of its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.
"Transfer Restriction Termination Date" means the earlier of
the first date on which (i) the Securities of a series (other than such
Securities acquired by the Issuer or any Affiliate thereof since the issue date
of such Securities) may be sold pursuant to Rule 144K (or any successor
provision) and (ii) all such Securities have been exchanged or sold pursuant to
an effective registration statement.
"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article VI, shall also
include any successor trustee. "Trustee" shall also mean or include each Person
who is then a trustee hereunder and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to the Securities of such series.
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"Unregistered Security" means any Security other than a
Registered Security.
"U.S. Government Obligations" shall have the meaning set forth
in Section 10.1(A).
"Voting Stock" means stock of any class or classes having
general voting power under ordinary circumstances to elect a majority of the
board of directors, managers or trustees of the corporation in question,
provided, that, for the purposes hereof, stock which carries only the right to
vote conditionally on the happening of an event shall not be considered voting
stock whether or not such event shall have happened.
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE II
SECURITIES
SECTION 2.1 FORMS GENERALLY. The Securities of each series and
the Coupons, if any, to be attached thereto shall be substantially in such form
(not inconsistent with this Indenture) as shall be established by or pursuant to
one or more Board Resolutions (as set forth in a Board Resolution or, to the
extent established pursuant to but not set forth in a Board Resolution, an
Officer's Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.
The definitive Securities and Coupons, if any, shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the officers executing such Securities
and Coupons, if any, as evidenced by their execution of such Securities and
Coupons, if any.
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTI-
CATION. The Trustee's certificate of authentication on all Securities shall be
in substantially the following form:
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"This is one of the Securities referred to in the within-
mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By
------------------------------
Authorized Signatory"
If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the Trustee's
Certificate of Authentication to be borne by the Securities of each such series
shall be substantially as follows:
"This is one of the Securities referred to in the within-
mentioned Indenture.
[ ]
------------------------------------
as Authenticating Agent
By
------------------------------
Authorized Signatory"
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and each
such series shall rank equally and pari passu with all other unsecured and
unsubordinated debt of the Issuer. There shall be established in or pursuant to
one or more Board Resolutions (and to the extent established pursuant to but not
set forth in a Board Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series,
(1) the designation of the Securities of the series, which
shall distinguish the Securities of the series from the Securities of
all other series, and which may be part of a series of Securities
previously issued;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities
8
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authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) if other than Dollars, the coin or currency in which the
Securities of the series are denominated (including, but not limited
to, any Foreign Currency or ECU);
(4) the date or dates on which the principal of the Securities
of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such interest
shall accrue, on which such interest shall be payable and (in the case
of Registered Securities) on which a record shall be taken for the
determination of Holders to whom interest is payable and/or the method
by which such rate or rates or date or dates shall be determined;
(6) the place or places where the principal of and any
interest on Securities of the series shall be payable, if other than as
provided in Section 3.2;
(7) the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods within which,
the price or prices at which and any terms and conditions upon which
Securities of the series may be so redeemed, pursuant to any sinking
fund or otherwise;
(8) the obligation, if any, of the Issuer to redeem, purchase
or repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder
thereof and the price or prices at which and the period or periods
within which and any terms and conditions upon which Securities of the
series shall be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof in the case of Registered Securities, or $1,000 and
$5,000 in the case of Unregistered Securities, the denominations in
which Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof;
(11) if other than the coin or currency in which the
Securities of the series are denominated, the coin or currency in which
payment of the principal of or interest on the Securities of such
series shall be payable;
(12) if the principal of or interest on the Securities of the
series are to be payable, at the election of the Issuer or a Holder
thereof, in a coin or currency other than
9
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that in which the Securities are denominated, the period or periods
within which, and the terms and conditions upon which, such election
may be made;
(13) if the amount of payments of principal of and interest on
the Securities of the series may be determined with reference to an
index based on a coin or currency other than that in which the
Securities of the series are denominated, the manner in which such
amounts shall be determined;
(14) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be
issuable as Registered Global Securities) or Unregistered Securities
(with or without Coupons), or any combination of the foregoing, any
restrictions applicable to the offer, sale or delivery of Unregistered
Securities or the payment of interest thereon and, if other than as
provided in Section 2.8, the terms upon which Unregistered Securities
of any series may be exchanged for Registered Securities of such series
and vice versa;
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a person who
is not a U.S. person in respect of any tax, assessment or governmental
charge withheld or deducted and, if so, whether the Issuer will have
the option to redeem the Securities of the series rather than pay such
additional amounts;
(16) if the Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(17) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars of any other agents with respect
to the Securities of such series;
(18) any other events of default or covenants with respect to
the Securities of such series;
(19) if the Securities of the series are to be convertible
into or exchangeable for any other security; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and Coupons, if any,
appertaining thereto shall be substantially identical, except in the case of
Registered Securities as to denomination and except as may otherwise be provided
by or pursuant to the Board Resolution or Officer's Certificate referred to
above or as set forth in any indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and may be issued from time
to time,
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consistent with the terms of this Indenture, if so provided by or pursuant to
such Board Resolution, such Officer's Certificate or in any indenture
supplemental hereto.
SECTION 2.4 AUTHENTICATION AND DELIVERY OF SECURI-
TIES. The Issuer may deliver Securities of any series having attached thereto
appropriate Coupons, if any, executed by the Issuer to the Trustee for
authentication together with the applicable documents referred to below in this
Section 2.4, and the Trustee shall thereupon authenticate and deliver such
Securities and Coupons, if any, to or upon the order of the Issuer (contained in
the Issuer Order referred to below in this Section) or pursuant to such
procedures acceptable to the Trustee and to such recipients as may be specified
from time to time by an Issuer Order. The maturity date, original issue date,
interest rate and any other terms of the Securities of such series and Coupons,
if any, appertaining thereto shall be determined by or pursuant to such Issuer
Order and procedures. If provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral or electronic
instructions from the Issuer or its duly authorized agent or agents, which
instructions, if oral, shall be promptly confirmed in writing. In authenticating
such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs (2), (3) and (4) below only at or before
the time of the first request of the Issuer to the Trustee to authenticate
Securities of such series) and (subject to Section 6.1) shall be fully protected
in relying upon, the following enumerated documents unless and until such
documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting
forth delivery instructions if the Securities and Coupons, if any, are
not to be delivered to the Issuer, provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such Issuer
Order may be delivered by the Issuer to the Trustee prior to the
delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities of
such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
established for such series, pursuant to an Issuer Order or pursuant to
procedures acceptable to the Trustee as may be specified from time to
time by an Issuer Order, (c) the maturity date or dates, original issue
date or dates, interest rate or rates and any other terms of Securities
of such series shall be determined by an Issuer Order or pursuant to
such procedures and (d) if provided for in such procedures, such Issuer
Order may authorize authentication and delivery pursuant to oral or
electronic instructions from the Issuer or its duly authorized agent or
agents, which instructions, if oral, shall be promptly confirmed in
writing;
(2) any Board Resolution, Officer's Certificate and/or
executed supplemental indenture referred to in Section 2.1 and 2.3 by
or pursuant to which the forms and terms of the Securities and Coupons,
if any, were established;
(3) an Officer's Certificate setting forth the form or forms
and terms of the Securities and Coupons, if any, stating that the form
or forms and terms of the Securities
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and Coupons, if any, have been established pursuant to Sections 2.1 and
2.3 and comply with this Indenture, and covering such other matters as
the Trustee may reasonably request; and
(4) At the option of the Issuer, either one or more Opinions
of Counsel, or a letter addressed to the Trustee permitting it to rely
on one or more Opinions of Counsel, substantially to the effect that:
(a) the form or forms of the Securities and Coupons,
if any, have been duly authorized and established in
conformity with the provisions of this Indenture;
(b) in the case of an underwritten offering, the
terms of the Securities have been duly authorized and
established in conformity with the provisions of this
Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities have been
established pursuant to a Board Resolution, an Officer's
Certificate or a supplemental indenture in accordance with
this Indenture, and when such other terms as are to be
established pursuant to procedures set forth in an Issuer
Order shall have been established, all such terms will have
been duly authorized by the Issuer and will have been
established in conformity with the provisions of this
Indenture; and
(c) such Securities and Coupons, if any, when
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered
to and duly paid for by the purchasers thereof, and subject to
any conditions specified in such Opinion of Counsel, will have
been duly issued under this Indenture, will be entitled to the
benefits of this Indenture, and will be valid and binding
obligations of the Issuer, enforceable in accordance with
their respective terms except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) rights of
acceleration, if any, and (iii) the availability of equitable
remedies may be limited by equitable principles of general
applicability and such counsel need express no opinion with
regard to the enforceability of Section 6.6 or of a judgment
denominated in a currency other than Dollars.
In rendering such opinions, any counsel may qualify any
opinions as to enforceability by stating that such enforceability may be limited
by bankruptcy, insolvency, reorganization, liquidation, moratorium, fraudulent
transfer and other similar laws affecting the rights and remedies of creditors
and is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Such counsel
may rely upon opinions of other counsel (copies of which shall be delivered to
the Trustee) reasonably satisfactory to the Trustee, in which case the opinion
shall state that such counsel believes he and the Trustee are entitled so to
rely. Such counsel may also state that, insofar as
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such opinion involves factual matters, he has relied, to the extent he deems
proper, upon certificates of officers of the Issuer and its subsidiaries and
certificates of public officials.
The Trustee shall have the right to decline to authenticate
and deliver any Securities under this section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee or a trust committee of directors or trustees shall
determine that such action would expose the Trustee to personal liability to
existing Holders or would affect the Trustee's own rights, duties or immunities
under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
authenticate and deliver one or more Registered Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or delivered or held pursuant to
such Depositary's instructions and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, this Security may not be transferred
except as a whole by the Depositary to the nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at
the time of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation.
SECTION 2.5 EXECUTION OF SECURITIES. The Securities and each
Coupon appertaining thereto, if any, shall be signed on behalf of the Issuer by
the chairman or vice chairman of its Board of Directors or its president, or any
executive (senior or other), a vice president or its treasurer, under its
corporate seal (except in the case of Coupons) which may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of
the Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the
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Trustee or disposed of by the Issuer, such Security or Coupon nevertheless may
be authenticated and delivered or disposed of as though the person who signed
such Security or Coupon had not ceased to be such officer of the Issuer; and any
Security or Coupon may be signed on behalf of the Issuer by such persons as, at
the actual date of the execution of such Security or Coupon, shall be the proper
officers of the Issuer, although at the date of the execution and delivery of
this Indenture any such person was not such an officer.
SECTION 2.6 CERTIFICATE OF AUTHENTICATION. Only such
Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, executed by the Trustee by the manual
signature of one of its authorized officers, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. No Coupon shall be
entitled to the benefits of this Indenture or shall be valid and obligatory for
any purpose until the certificate of authentication on the Security to which
such Coupon appertains shall have been duly executed by the Trustee. The
execution of such certificate by the Trustee upon any Security executed by the
Issuer shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered hereunder and that the Holder is entitled to
the benefits of this Indenture.
SECTION 2.7 DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
INTEREST. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3 or, with respect to the Registered Securities of any
series, if not so established, in denominations of $1,000 and any integral
multiple thereof. If denominations of Unregistered Securities of any series are
not so established, such Securities shall be issuable in denominations of $1,000
and $5,000. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Issuer executing the same may determine with the approval of the
Trustee, as evidenced by the execution and authentication thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in the
Board Resolution referred to in Section 2.3. The Securities of each series shall
bear interest, if any, from the date, and such interest shall be payable on the
dates, established as contemplated by Section 2.3.
The person in whose name any Registered Security of any series
is registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the
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Issuer to the Holders of Registered Securities not less than 15 days preceding
such subsequent record date. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) for the
Securities of any series shall mean the date specified as such in the terms of
the Registered Securities of such series established as contemplated by Section
2.3, or, if no such date is so established, if such interest payment date is the
first day of a calendar month, the fifteenth day of the preceding calendar month
or, if such interest payment date is the fifteenth day of a calendar month, the
first day of such calendar month, whether or not such record date is a Business
Day.
SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE. (a) The
Issuer will keep at each office or agency to be maintained for the purpose as
provided in Section 3.2 for each series of Securities a register or registers in
which, subject to such reasonable regulations as the Issuer may prescribe, it
will provide for the registration of Registered Securities of such series and
the registration of transfer of Registered Securities of such series. Such
register shall be in written form in the English language or in any other form
capable of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection by the
Trustee.
Upon due presentation for registration of transfer of any
Registered Security of any series at any such office or agency to be maintained
for the purpose as provided in Section 3.2, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Registered Security or Registered Securities of the same
series, maturity date, interest rate and original issue date in authorized
denominations for a like aggregate principal amount.
Unregistered Securities (except for any temporary global
Unregistered Securities) and Coupons (except for Coupons attached to any
temporary global Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of
any series (other than a Registered Global Security, except as set forth below)
may be exchanged for a Registered Security or Registered Securities of such
series having authorized denominations and an equal aggregate principal amount,
upon surrender of such Registered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with Section
3.2 and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, at the option of the Holder thereof, except as otherwise
specified pursuant to Section 2.3, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2, with, in the case
of Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. At the option of
the Holder thereof, if Unregistered Securities of any series, maturity date,
interest rate and
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original issue date are issued in more than one authorized denomination, except
as otherwise specified pursuant to Section 2.3, such Unregistered Securities may
be exchanged for Unregistered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2 or as specified
pursuant to Section 2.3, with, in the case of Unregistered Securities that have
Coupons attached, all unmatured Coupons and all matured Coupons in default
thereto appertaining, and upon payment, if the Issuer shall so require, of the
charges hereinafter provided. Registered Securities of any series may not be
exchanged for Unregistered Securities of such series unless (1) otherwise
specified pursuant to Section 2.3 and (2) the Issuer has delivered to the
Trustee an Opinion of Counsel that (x) the Issuer has received from the IRS a
ruling or (y) since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to the effect that the inclusion of terms
permitting Registered Securities to be exchanged for Unregistered Securities
would result in no Federal income tax effect adverse to the Issuer or to any
Holder. Whenever any Securities are so surrendered for exchange, the Issuer
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. All Securities and
Coupons, if any, surrendered upon any exchange or transfer provided for in this
Indenture shall be promptly cancelled and disposed of by the Trustee, and the
Trustee shall deliver a certificate of disposition thereof to the Issuer.
All Registered Securities presented for registration of
transfer, exchange, redemption or payment shall (if so required by the Issuer or
the Trustee) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed, by the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge shall be
made for any such transaction.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days preceding
the first mailing of notice of redemption of Securities of such series to be
redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not so to be redeemed.
Notwithstanding any other provision of this Section 2.8,
unless and until it is exchanged in whole or in part for Securities in
definitive registered form, a Registered Global Security representing all or a
portion of the Securities of a series may not be transferred except as a whole
by the Depositary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
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If at any time the Depositary for any Registered Securities of
a series represented by one or more Registered Global Securities notifies the
Issuer that it is unwilling or unable to continue as Depositary for such
Registered Securities or if at any time the Depositary for such Registered
Securities shall no longer be eligible under Section 2.4, the Issuer shall
appoint a successor Depositary eligible under Section 2.4 with respect to such
Registered Securities. If a successor Depositary eligible under Section 2.4 for
such Registered Securities is not appointed by the Issuer within 90 days after
the Issuer receives such notice or becomes aware of such ineligibility, the
Issuer's election pursuant to Section 2.3 that such Registered Securities be
represented by one or more Registered Global Securities shall no longer be
effective and the Issuer will execute, and the Trustee, upon receipt of an
Officer's Certificate for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Registered Global Security or Securities representing such Registered
Securities in exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion
determine that the Registered Securities of any series issued in the form of one
or more Registered Global Securities shall no longer be represented by a
Registered Global Security or Securities. In such event the Issuer will execute,
and the Trustee, upon receipt of any Officer's Certificate for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive registered
form without coupons, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Registered Global Security or
Securities representing such Registered Securities, in exchange for such
Registered Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with
respect to Securities represented by a Registered Global Security, the
Depositary for such Registered Global Security may surrender such Registered
Global Security in exchange in whole or in part for Securities of the same
series in definitive registered form on such terms as are acceptable to the
Issuer and such Depositary. Thereupon, the Issuer shall execute, and the Trustee
shall authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new
Registered Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Registered Global Security and the aggregate
principal amount of Registered Securities authenticated and delivered
pursuant to clause (i) above.
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Upon the exchange of a Registered Global Security for
Securities in definitive registered form without coupons, in authorized
denominations, such Registered Global Security shall be cancelled by the Trustee
or an agent of the Issuer or the Trustee. Securities in definitive registered
form without coupons issued in exchange for a Registered Global Security
pursuant to this Section 2.8 shall be registered in such names and in such
authorized denominations as the Depositary for such Registered Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee or an agent of the Issuer or the Trustee. The Trustee
or such agent shall deliver such Securities to or as directed by the Persons in
whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of any series
of Securities to the contrary, none of the Issuer, the Trustee or any agent of
the Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officer's Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in Federal income tax consequences adverse to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.
(b)(i) Securities that are distributed to QIBs will be represented by a
global Security (the "144A Global Security"). Securities that are distributed to
Non-U.S. Persons will be represented by a global Security (the "Regulation S
Global Security"). Each of the 144A Global Security and the Regulation S Global
Security shall be referred to herein as a "Global Security." If Global
Securities are issued, transfers of interests in the Securities between the 144A
Global Security and the Regulation S Global Security will be made in accordance
with the standing instructions and procedures of the Depositary and its
participants and the Trustee shall make appropriate endorsements to reflect
increases or decreases in the principal amounts of such Global Securities to
reflect any such transfers.
Except as provided below, beneficial owners of a Security in
global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Securities in global form.
(ii) So long as the Securities are eligible for book-entry
settlement, and to the extent that Securities are held by QIBs or Non-U.S.
Persons, as the case may be, in a Global Security, or unless otherwise required
by law, upon any transfer of a definitive Security to a QIB in accordance with
Rule 144A or to a Non-U.S. Person in accordance with Regulation S, unless
otherwise requested by the transferor, and upon receipt of the definitive
Security or Securities being so transferred, together with a certification from
the transferor that the transfer is being
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made in compliance with Rule 144A or Regulation S, as the case may be (or other
evidence satisfactory to the Trustee), the Trustee shall make an endorsement on
any 144A Global Security or any Regulation S Global Security, as the case may
be, to reflect an increase in the aggregate principal amount of the Securities
represented by such Global Security, and the Trustee shall cancel such
definitive Security or Securities in accordance with the standing instructions
and procedures of the Depositary, the aggregate principal amount of Securities
represented by such Global Security to be increased accordingly; provided that
no definitive Security, or portion thereof, in respect of which the Issuer or an
Affiliate of the Issuer held any beneficial interest shall be included in such
Global Security until such definitive Security is freely tradable in accordance
with Rule 144K; provided further that the Trustee shall, at the written request
of the Issuer, issue Securities in definitive form upon any transfer of a
beneficial interest in the Global Security to the Issuer or any Affiliate of the
Issuer.
Any Global Security may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the Depositary, by the
New York Stock Exchange or by the National Association of Securities Dealers,
Inc. in order for the Securities to be tradeable on the PORTAL Market or as may
be required for the Securities to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
any securities exchange upon which the Securities may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Securities are subject.
(iii)Each Security that bears or is required to bear the
legend set forth in this Section 2.8(b) (a "Restricted Security") shall be
subject to the restrictions on transfer provided in the legend set forth in this
Section 2.8(b), unless such restrictions on transfer shall be waived by the
written consent of the Issuer, and the Holder of each Restricted Security, by
such Holder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 2.8(b), the term "transfer" encompasses any
sale, pledge, transfer or other disposition of any Restricted Security.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Security shall bear a legend in substantially the following form,
unless otherwise agreed by the Issuer (with written notice thereof to the
Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS
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DEFINED IN RULE 50l(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
EXCEPT (A) TO McKESSON CORPORATION (THE "COMPANY") OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE FOR THE SECURITIES A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE FOR THE SECURITIES. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO
IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE FOR THE SECURITIES SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
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Following the Transfer Restriction Termination Date, any
Security or security issued in exchange or substitution therefor (other than
Securities acquired by the Issuer or any Affiliate thereof since the issue date
of the Securities) may upon surrender of such Security for exchange to the
registrar in accordance with the provisions of this Section 2.8, be exchanged
for a new Security or Securities, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.8(b).
SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
SECURITIES. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall be mutilated, defaced, destroyed, lost or
stolen, the Issuer in its discretion may execute and, upon the written request
of any officer of the Issuer, the Trustee shall authenticate and deliver, a new
Security of the same series, maturity date, interest rate and original issue
date, bearing a number or other distinguishing symbol not contemporaneously
outstanding, in exchange and substitution for the mutilated or defaced Security,
or in lieu of and in substitution for the Security so destroyed, lost or stolen
with Coupons corresponding to the Coupons appertaining to the Securities so
mutilated, defaced, destroyed, lost or stolen, or in exchange or substitution
for the Security to which such mutilated, defaced, destroyed, lost or stolen
Coupon appertained, with Coupons appertaining thereto corresponding to the
Coupons so mutilated, defaced, destroyed, lost or stolen. In every case the
applicant for a substitute Security or Coupon shall furnish to the Issuer and to
the Trustee and any agent of the Issuer or the Trustee such security or
indemnity as may be required by them to indemnify and defend and to save each of
them harmless and, in every case of destruction, loss or theft, evidence to
their satisfaction of the destruction, loss or theft of such Security or Coupon
and of the ownership thereof, and in the case of mutilation or defacement shall
surrender the Security and related Coupons to the Trustee or such agent.
Upon the issuance of any substitute Security or Coupon, the
Issuer may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) or its agent connected
therewith. In case any Security or Coupon which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a
substitute Security, pay or authorize the payment of the same or the relevant
Coupon (without surrender thereof except in the case of a mutilated or defaced
Security or Coupon), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the destruction, loss or theft of such
Security or Coupons and of the ownership thereof.
Every substitute Security or Coupon of any series issued
pursuant to the provisions of this Section by virtue of the fact that any such
Security or Coupon is destroyed, lost or stolen shall constitute an additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Security or Coupon shall be at any time enforceable by anyone and
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shall be entitled to all the benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and proportionately
with any and all other Securities or Coupons of such series duly authenticated
and delivered hereunder. All Securities and Coupons shall be held and owned upon
the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced or destroyed, lost or stolen Securities and Coupons and shall
preclude any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF.
All Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if any, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee, shall
be cancelled by it; and no Securities or Coupons shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee or its agent shall dispose of cancelled Securities and Coupons held by
it and deliver a certificate of disposition to the Issuer. If the Issuer or its
agent shall acquire any of the Securities or Coupons, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities or Coupons unless and until the same are delivered to the Trustee or
its agent for cancellation.
SECTION 2.11 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without coupons, or as Unregistered Securities
with or without coupons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer and
be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Registered Securities of such
series may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section 3.2
and, in the case of Unregistered Securities, at any agency maintained by the
Issuer for such purpose as specified pursuant to Section 2.3, and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations and, in the case of Unregistered
Securities, having attached thereto any appropriate Coupons. Until so exchanged,
the temporary
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Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series, unless otherwise established
pursuant to Section 2.3. The provisions of this Section are subject to any
restrictions or limitations on the issue and delivery of temporary Unregistered
Securities of any series that may be established pursuant to Section 2.3
(including any provision that Unregistered Securities of such series initially
be issued in the form of a single global Unregistered Security to be delivered
to a depositary or agency located outside the United States and the procedures
pursuant to which definitive or global Unregistered Securities of such series
would be issued in exchange for such temporary global Unregistered Security).
ARTICLE III
COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer
covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay or cause to be paid the principal of, and interest on,
if any, each of the Securities of such series (together with any additional
amounts payable pursuant to the terms of such Securities) at the place or
places, at the respective time or times and in the manner provided in such
Securities and in the Coupons, if any, appertaining thereto and in this
Indenture. The interest on Securities with Coupons attached (together with any
additional amounts payable pursuant to the terms of such Securities) shall be
payable only upon presentation and surrender of the several Coupons for such
interest installments as are evidenced thereby as they severally mature. If any
temporary Unregistered Security provides that interest thereon may be paid while
such Security is in temporary form, the interest on any such temporary
Unregistered Security (together with any additional amounts payable pursuant to
the terms of such Security) shall be paid, as to the installments of interest
evidenced by Coupons attached thereto, if any, only upon presentation and
surrender thereof, and, as to the other installments of interest, if any, only
upon presentation of such Securities for notation thereon of the payment of such
interest, in each case subject to any restrictions that may be established
pursuant to Section 2.3. The interest, if any, on Registered Securities
(together with any additional amounts payable pursuant to the terms of such
Securities) shall be payable only to or upon the written order of the Holders
thereof and, at the option of the Issuer, may be paid by wire transfer or by
mailing checks for such interest payable to or upon the written order of such
Holders at their last addresses as they appear on the Securities register of the
Issuer.
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any
Registered Securities are authorized for issuance pursuant to this Indenture or
are outstanding hereunder, the Issuer will maintain in the Borough of Manhattan,
The City of New York, an office or agency where the Registered Securities of
each series may be presented for payment, where the Securities of each series
may be presented for exchange as is provided in this Indenture and, if
applicable, pursuant to Section 2.3 and where the Registered Securities of each
series may be presented for registration of transfer as in this Indenture
provided.
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The Issuer will maintain one or more offices or agencies in a
city or cities located outside the United States (including any city in which
such an agency is required to be maintained under the rules of any stock
exchange on which the Securities of such series are listed) where the
Unregistered Securities, if any, of each series and Coupons, if any,
appertaining thereto may be presented for payment. No payment on any
Unregistered Security or Coupon will be made upon presentation of such
Unregistered Security or Coupon at an agency of the Issuer within the United
States nor will any payment be made by transfer to an account in, or by mail to
an address in, the United States unless pursuant to applicable United States
laws and regulations then in effect such payment can be made without tax
consequences adverse to the Issuer. Notwithstanding the foregoing, payments in
Dollars of Unregistered Securities of any series and Coupons appertaining
thereto which are payable in Dollars may be made at an agency of the Issuer
maintained in the Borough of Manhattan, The City of New York if such payment in
Dollars at each agency maintained by the Issuer outside the United States for
payment on such Unregistered Securities is illegal or effectively precluded by
exchange controls or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, The City
of New York, an office or agency where notices and demands to or upon the Issuer
in respect of the Securities of any series, the Coupons appertaining thereto or
this Indenture may be served.
The Issuer will give to the Trustee written notice of the
location of each such office or agency and of any change of location thereof. In
case the Issuer shall fail to maintain any agency required by this Section to be
located in the Borough of Manhattan, The City of New York, or shall fail to give
such notice of the location or for any change in the location of any of the
above agencies, presentations and demands may be made and notices may be served
at the Corporate Trust Office of the Trustee.
The Issuer may from time to time designate one or more
additional offices or agencies where the Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Securities of that
series may be presented for exchange as provided in this Indenture and pursuant
to Section 2.3 and where the Registered Securities of that series may be
presented for registration of transfer as in this Indenture provided, and the
Issuer may from time to time rescind any such designation, as the Issuer may
deem desirable or expedient; provided, that no such designation or rescission
shall in any manner relieve the Issuer of its obligations to maintain the
agencies provided for in this Section. The Issuer shall give to the Trustee
prompt written notice of any such designation or rescission thereof.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF
TRUSTEE. The Issuer, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee with respect to each series of
Securities hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying
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agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent
for the payment of the principal of or interest on the Securities of
such series (whether such sums have been paid to it by the Issuer or by
any other obligor on the Securities of such series) in trust for the
benefit of the Holders of the Securities of such series, or Coupons
appertaining thereto, if any, or of the Trustee;
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities of such series) to
make any payment of the principal of or interest on the Securities of
such series when the same shall be due and payable; and
(c) that it will pay any such sums so held in trust by it to
the Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in the foregoing clause (b).
The Issuer will, on or prior to each due date of the principal
of or interest on the Securities of such series, deposit with the paying agent a
sum sufficient to pay such principal or interest so becoming due, and (unless
such paying agent is the Trustee) the Issuer will promptly notify the Trustee of
any failure to take such action.
If the Issuer shall act as its own paying agent with respect
to the Securities of any series, it will, on or before each due date of the
principal of or interest on the Securities of such series, set aside, segregate
and hold in trust for the benefit of the Holders of the Securities of such
series or the Coupons appertaining thereto a sum sufficient to pay such
principal or interest so becoming due. The Issuer will promptly notify the
Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, but
subject to Section 10.1, the Issuer may at any time, for the purpose of
obtaining a satisfaction and discharge with respect to one or more or all series
of Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
SECTION 3.5 COMPLIANCE CERTIFICATES. The Issuer will furnish
to the Trustee on or before January 31 in each year (beginning with January 31,
1998) a brief certificate (which need not comply with Section 11.5) from the
principal executive, financial or accounting officer of the Issuer stating that
in the course of the performance by the signer of his or her duties as an
officer of the Issuer he or she would normally have knowledge of any default or
non-compliance by the Issuer in the performance of any covenants or conditions
contained
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in this Indenture, stating whether or not he or she has knowledge of any such
default or non-compliance and, if so, describing each such default or
non-compliance of which the signer has knowledge and the nature thereof.
SECTION 3.6 CORPORATE EXISTENCE. Subject to Article IX, the
Issuer will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and the rights (charter and
statutory), licenses and franchises of the Issuer and its Subsidiaries;
provided, that the Issuer shall not be required to preserve any such right,
license or franchise, if, in the judgment of the Issuer, the preservation
thereof is no longer desirable in the conduct of the business of the Issuer and
its Subsidiaries taken as a whole and the loss thereof is not disadvantageous in
any material respect to the Securityholders.
SECTION 3.7 MAINTENANCE OF PROPERTIES. The Issuer will cause
all properties used in or useful in the conduct of its business or the busi ess
of any Subsidiary to be maintained and kept in good condition, repair, and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Issuer may be necessary, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all time except to the extent that the Issuer may be prevented from
so doing by circumstances beyond its control; provided, that nothing in this
Section shall prevent the Issuer from discontinuing the operation or maintenance
of any of such properties, or disposing of any of them, if such discontinuance
or disposal is, in the judgment of the Issuer desirable in the conduct of the
business of the Issuer or any Subsidiary and not disadvantageous in any material
respect to the Securityholders.
SECTION 3.8 PAYMENT OF TAXES AND OTHER CLAIMS. The Issuer will
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent: (a) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary; and (b) all lawful claims for labor,
materials, and supplies, which, if unpaid, might by law become a lien upon the
property of the Issuer or any Subsidiary; provided, that the Issuer shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings; and provided further that
the Issuer shall not be required to cause to be paid or discharged any such tax,
assessment, charge or claim if the Issuer shall determine that such payment is
not advantageous to the conduct of the business of the Issuer and its
Subsidiaries taken as a whole and that the failure so to pay or discharge is not
disadvantageous in any material respect to the Securityholders.
SECTION 3.9 LUXEMBOURG PUBLICATIONS. In the event of the
publication of any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.2, 10.4 or
12.2, the party making such publication in the Borough of Manhattan, The City of
New York and London shall also, to the extent that notice is required to be
given to Holders of Securities of any series by
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applicable Luxembourg law or stock exchange regulation, as evidenced by an
Officer's Certificate delivered to such party, make a similar publication in
Luxembourg.
ARTICLE IV
SECURITYHOLDER LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 ISSUER TO FURNISH TRUSTEE INFORMATION AS TO
NAMES AND ADDRESSES OF SECURITYHOLDERS. If and so long as the Trustee shall
not be the Security registrar for the Securities of any series, the Issuer and
any other obligor on the Securities will furnish or cause to be furnished to the
Trustee a list in such form as the Trustee may reasonably require of the names
and addresses of the Holders of the Registered Securities of such series
pursuant to Section 312 of the Trust Indenture Act:
(a) semi-annually not more than 5 days after each record date
for the payment of interest on such Registered Securities, as
hereinabove specified, as of such record date and on dates to be
determined pursuant to Section 2.3 for non-interest bearing Registered
Securities in each year; and
(b) at such other times as the Trustee may reasonably request
in writing, within thirty days after receipt by the Issuer of any such
request as of a date not more than 15 days prior to the time such
information is furnished.
SECTION 4.2 REPORTS BY THE ISSUER. The Issuer covenants to
file with the Trustee, within 15 days after the Issuer is required to file the
same with the Commission, copies of the annual reports and of the information,
documents, and other reports that the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act or
pursuant to Section 314 of the Trust Indenture Act.
SECTION 4.3 REPORTS BY THE TRUSTEE.
(a) On or before the first July 15 which occurs not less than
60 days after the earliest date of issuance of any Securities and on or
before July 15 in each year thereafter, so long as any Securities are
Outstanding hereunder, the Trustee shall transmit by mail as provided
below to the Securityholders of each series of outstanding Securities,
as hereinafter in this Section provided, a brief report dated as of the
preceding May 15 with respect to:
(i) its eligibility under Section 6.10 and its
qualification under Section 6.9, or in lieu thereof, if to the
best of its knowledge it has continued to be eligible and
qualified under such Sections, a written statement to such
effect;
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(ii) the character and amount of any advances (and if
the Trustee elects to so state, the circumstances surrounding
the making thereof) made by the Trustee (as such) which remain
unpaid on the date of such report and for the reimbursement of
which it claims or may claim a lien or charge, prior to that
of the Securities of such series, on any property or funds
held or collected by it as Trustee, except that the Trustee
shall not be required (but may elect) to report such advances
if such advances so remaining unpaid aggregate not more than
0.5% of the principal of the Securities of such series
outstanding on the date of such report;
(iii) the amount, interest rate and maturity date of
all other indebtedness owing by the Issuer (or any other
obligor on the Securities of such series) to the Trustee in
its individual capacity on the date of such report, with a
brief description of any property held as collateral security
therefor, except any indebtedness based upon a creditor
relationship;
(iv) the property and funds, if any, physically in
the possession of the Trustee (as such) in respect of the
Securities of such series on the date of such report;
(v) any additional issue of Securities of such
series which the Trustee has not previously reported; and
(vi) any action taken by the Trustee in the
performance of its duties under this Indenture which the
Trustee has not previously reported and which in the Trustee's
opinion materially affects the Securities of such series,
except action in respect of a default, notice of which has
been or is to be withheld by it in accordance with the
provisions of Section 5.11.
(b) The Trustee shall transmit to the Securityholders of each
series, as provided in subsection (c) of this Section, a brief report
with respect to the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) in respect of the Securities of
such series since the date of the last report transmitted pursuant to
the provisions of subsection (a) of this Section (or if no such report
has yet been so transmitted, since the date of this Indenture) for the
reimbursement of which it claims or may claim a lien or charge prior to
that of the Securities of such series on property or funds held or
collected by it as Trustee and which it has not previously reported
pursuant to this subsection (b), except that the Trustee shall not be
required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal
amount of Securities of such series outstanding at such time, such
report to be transmitted within 90 days after such time.
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(c) Reports pursuant to this Section shall be transmitted by
mail to all Holders of Securities of such series, as the names and
addresses of such Holders appear upon the Securities register as of a
date not more than 15 days prior to the mailing thereof.
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be
filed by the Trustee with each stock exchange upon which the Securities
of such series are listed and also with the Commission. The Issuer
agrees to notify the Trustee when and as Securities of any series
become listed on any national securities exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 EVENT OF DEFAULT DEFINED, ACCELERATION OF
MATURITY; WAIVER OF DEFAULT. "Event of Default" with respect to Securities of
any series, wherever used herein, means each one of the following events which
shall have occurred and be continuing (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon
any of the Securities of such series as and when the same shall become
due and payable, and continuance of such default for a period of 30
days; or
(b) default in the payment of all or any part of the principal
on any of the Securities of such series as and when the same shall
become due and payable either at maturity, upon any redemption, by
declaration or otherwise; or
(c) default in the payment of any sinking fund installment as
and when the same shall become due and payable by the terms of the
Securities of such series; or
(d) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part of the
Issuer in the Securities of such series or contained in this Indenture
(other than a covenant or agreement included in this Indenture solely
for the benefit of a series of Securities other than such series) for a
period of 60 days after the date on which written notice specifying
such failure, stating that such notice is a "Notice of Default"
hereunder and demanding that the Issuer remedy the same, shall have
been given by registered or certified mail, return receipt requested,
to the Issuer by the Trustee, or to the Issuer and the Trustee by the
holders of at least 25% in aggregate principal amount of the
Outstanding Securities of the series to which such covenant or
agreement relates; or
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(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the
Issuer for any substantial part of its or their property or ordering
the winding up or liquidation of its or their affairs, and such decree
or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(f) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Issuer or for any
substantial part of its or their property, or make any general
assignment for the benefit of creditors; or
(g) any other Event of Default provided in the supplemental
indenture or Board Resolution under which such series of Securities is
issued or in the form of Security for such series.
If an Event of Default described in clause (a), (b), (c), (d)
or (g) (if the Event of Default under clause (d) or (g), as the case may be, is
with respect to less than all series of Securities then Outstanding) occurs and
is continuing, then, and in each and every such case, except for any series of
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(each such series voting as a separate class) by notice in writing to the Issuer
(and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Securities of any such affected series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) of all Securities of all such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration, the same shall become immediately due and payable.
If an Event of Default described in clause (d) or (g) above
with respect to all series of Securities then Outstanding, or an Event of
Default described in clause (e) or (f) above occurs and is continuing, then, and
in each and every such case, unless the Principal of all of the Securities shall
have already become due and payable, either the Trustee or the Holders of not
less than 25% in aggregate principal amount of all of the Securities then
Outstanding hereunder (treated as one class) by notice in writing to the Issuer
(and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Securities of any series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all of the Securities then Outstanding, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
such declaration, the same shall become immediately due and payable.
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The foregoing provisions are subject to the condition
that if, at any time after the principal (or, if the Securities are Original
Issue Discount Securities, such portion of the principal as may be specified in
the terms thereof) of the Securities of any series (or of all the Securities, as
the case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided,
(A) the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay
(i) all matured installments of interest upon all
the Securities of each such series (or all the Securities, as
the case may be); and
(ii) the principal of any and all Securities of each
such series (or of all the Securities, as the case may be)
which shall have become due otherwise than by acceleration;
and
(iii) interest upon such principal and, to the extent
that payment of such interest is enforceable under applicable
law, on overdue installments of interest, at the same rate as
the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the
Securities of each such series (or at the respective rates of
interest or Yields to Maturity of all the Securities, as the
case may be) to the date of such payment or deposit; and
(iv) all amounts payable to the Trustee pursuant to
Section 6.6; and
(B) all Events of Default under the Indenture, other than the
non-payment of the principal of Securities which shall have become due
by acceleration, shall have been cured, waived or otherwise remedied as
provided herein,
then and in every such case the Holders of a majority in aggregate principal
amount of all the Securities of each such series, each such series voting as a
separate class (or of all the Securities, as the case may be, voting as a single
class), then Outstanding, by written notice to the Issuer and to the Trustee,
may waive all defaults with respect to each such series (or with respect to all
the Securities, as the case may be) and rescind and annul such declaration and
its consequences, but no such waiver or rescission and annulment shall extend to
or shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been accelerated
and declared due and payable pursuant to the provisions hereof, then, from and
after such declaration, unless such declaration has been rescinded and annulled,
the principal amount of such Original Issue Discount Securities shall be deemed,
for all purposes hereunder, to be such portion of the principal thereof as shall
be due and payable as a result of such acceleration, and payment of such portion
of the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any,
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thereon and all other amounts owing thereunder, shall constitute payment in full
of such Original Issue Discount Securities.
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY
PROVE DEBT. The Issuer covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days, or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise, then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities of such series,
and such Coupons, for principal and interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and such
other amount due the Trustee under Section 6.6 in respect of Securities of such
series.
Until such demand is made by the Trustee, the Issuer may pay
the principal of and interest on the Securities of any series to the registered
Holders, whether or not the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Issuer or other obligor upon the
Securities and collect in the manner provided by law out of the property of the
Issuer or other obligor upon the Securities, wherever situated, all the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the
Issuer or any other obligor upon the Securities under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to the
Issuer or other obligor upon the Securities, or to the creditors or property of
the Issuer or such other obligor, the Trustee, irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
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(a) to file and prove a claim or claims for the whole amount
of principal and interest (or, if the Securities of any series are
Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) owing and
unpaid in respect of the Securities of any series, and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for amounts payable
to the Trustee under Section 6.6) and of the Securityholders allowed in
any judicial proceedings relative to the Issuer or other obligor upon
the Securities, or to the creditors or property of the Issuer or such
other obligor; and
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the holders of the Securities of any series in any
election of a receiver, assignee, trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings, custodian or other person performing similar
functions in respect of any such proceedings; and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Securityholders and
of the Trustee on their behalf; and any trustee, receiver, or
liquidator, custodian or other similar official performing similar
functions in respect of any such proceedings is hereby authorized by
each of the Securityholders to make payments to the Trustee, and, in
the event that the Trustee shall consent to the making of payments
directly to the Securityholders, to pay to the Trustee its costs and
expenses of collection and all other amounts due to it pursuant to
Section 6.6.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding, except as aforesaid in clause (b).
All rights of action and of asserting claims under this
Indenture, or under any of the Securities of any series or Coupons appertaining
to such Securities, may be enforced by the Trustee without the possession of any
of the Securities of such series or Coupons appertaining to such Securities or
the production thereof in any trial or other proceedings relative thereto, and
any such action or proceedings instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall
awarded to the Trustee for ratable distribution to the Holders of the Securities
or Coupons appertaining to such Securities in respect of which such action was
taken, after payment of all sums due to the Trustee under Section 6.6 in respect
of such Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the Holders of the Securities or Coupons appertaining to
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such Securities in respect to which such action was taken, and it shall not be
necessary to make any Holders of such Securities or Coupons appertaining to such
Securities parties to any such proceedings.
SECTION 5.3 APPLICATION OF PROCEEDS. Any moneys collected by
the Trustee pursuant to this Article in respect of any series shall be applied
in the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such
series of Securities in respect of which monies have been collected,
including all amounts due to the Trustee and each predecessor Trustee
pursuant to Section 6.6 in respect to such series of Securities;
SECOND: In case the principal of the Securities of such series
in respect of which moneys have been collected shall not have become
and be then due and payable, to the payment of interest on the
Securities of such series in default in the order of the maturity of
the installments on such interest, with interest (to the extent that
such interest has been collected by the Trustee and is permitted by
applicable law) upon the overdue installments of interest at the same
rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in such Securities, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities of such series
in respect of which moneys have been collected shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities of such series for principal
and interest, with interest upon the overdue principal, and (to the
extent that such interest has been collected by the Trustee and is
permitted by applicable law) upon the overdue installations of interest
at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities
of such series; and in case such moneys shall be insufficient to pay in
full the whole amount so due and unpaid upon the Securities of such
series, then to the payment of such principal and interest or Yield to
Maturity, without preference or priority of principal over interest or
Yield to Maturity, or of interest or Yield to Maturity over principal,
or of any installment of interest over any other installment of
interest or of any Security of such series over any other Security of
such series, ratably to the aggregate of such principal and accrued and
unpaid interest or Yield to Maturity; and
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FOURTH: To the payment of the remainder, if any, to the
Issuer or any other person lawfully entitled thereto.
SECTION 5.4 SUITS FOR ENFORCEMENT. In case an Event of Default
has occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF
PROCEEDINGS. In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
for any reason, or shall have been determined adversely to the Trustee, then and
in every such case the Issuer and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Issuer, the Trustee and the Securityholders shall continue as though no
such proceedings had been taken.
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITY HOLDERS. No
Holder of any Security of any series or of any Coupon appertaining thereto shall
have any right by virtue or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Indenture or such Security, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder or thereunder, unless (a)
such Holder previously shall have given to the Trustee written notice of an
Event of Default with respect to Securities of such series and of the
continuance thereof, as hereinbefore provided, and (b) the Holders of not less
than 25% in aggregate principal amount of the Securities of such affected series
then Outstanding (treated as a single class) shall have made written request
upon the Trustee to institute such action or proceedings in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and (c) the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity shall have failed to institute
any such action or proceeding, and (d) no direction inconsistent with such
written request shall have been given to the Trustee pursuant to Section 5.9; it
being understood and intended, and being expressly covenanted by the taker and
Holder of every Security or Coupon with every other taker and Holder and the
Trustee, that no one or more Holders of Securities of any series or Coupons
appertaining to such Securities shall have any right in any manner whatever by
virtue or by availing of any provision of this Indenture or any Security to
affect, disturb or prejudice the rights of any other such taker or Holder of
Securities or Coupons appertaining to such Securities, or to obtain or seek to
obtain priority over or preference to any other such taker or Holder or to
enforce any right under this Indenture or any Security, except in the manner
herein provided and for the equal, ratable and common benefit of all Holders of
Securities of the appli-
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cable series and Coupons appertaining to such Securities. For the protection and
enforcement of the provisions of this Section, each and every Securityholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO
INSTITUTE CERTAIN SUITS. Notwithstanding any other provision in this Indenture
and any provision of any Security, the right of any Holder of any Security or
Coupon to receive payment of the principal of and interest on such Security or
Coupon on or after the respective due dates expressed in such Security or Coupon
or the applicable redemption dates provided for in such Security, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION
NOT WAIVER OF DEFAULT. Except as provided in Section 5.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders of Securities
or Coupons is intended to be exclusive of any other right or remedy and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of
Securities or Coupons to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power or shall be construed to be a waiver of any such Event of Default or an
acquiescence therein. Every power and remedy given by this Indenture, any
Security or law to the Trustee or to the Holders of Securities or Coupons may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or, subject to Section 5.6, by the Holders of Securities or Coupons.
SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES. The Holders of a
majority in aggregate principal amount of the Securities of each series affected
(with each such series voting as a separate class) at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
this Indenture; provided, that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided, further,
that (subject to the provisions of Section 6.1) the Trustee shall have the right
to decline to follow any such direction if (a) the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken; or (b) if the Trustee by its board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
of the Trustee shall determine in good faith that the action or proceedings so
directed would involve the Trustee in personal liability; or (c) if the Trustee
in good faith shall so determine that the actions or forbearances specified in
or pursuant to such direction would be unduly prejudicial to the interests of
Holders of the Securities of all affected series not joining in the giving of
said
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direction, it being understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the Trustee and
which is not inconsistent with such direction or directions by Securityholders.
SECTION 5.10 WAIVER OF PAST DEFAULTS. Prior to the declaration
of acceleration of the maturity of any Securities as provided in Section 5.1,
the Holders of a majority in aggregate principal amount of the Securities of
such series (each series voting as a separate class) at the time Outstanding
with respect to which an Event of Default shall have occurred and be continuing
(voting as a single class) may on behalf of the Holders of all such Securities
waive any past default or Event of Default described in Section 5.1 and its
consequences, except a default in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Holder of each
Security affected. In the case of any such waiver, the Issuer, the Trustee and
the Holders of all such Securities shall be restored to their former positions
and rights hereunder, respectively, and such default shall cease to exist and be
deemed to have been cured and not to have occurred for purposes of this
Indenture; but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY
WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall, within ninety days after
the occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i) if
any Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York and at least once in an Authorized Newspaper
in London (and, if required by Section 3.9, at least once in an Authorized
Newspaper in Luxembourg) and (ii) to all Holders of Securities of such series in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, unless in each case such defaults shall have been cured before the mailing
or publication of such notice (the term "default" for the purpose of this
Section being hereby defined to mean any event or condition which is, or with
notice or lapse of time or both would become, an Event of Default); provided,
that, except in the case of default in the payment of the principal of or
interest on any of the Securities of such series, or in the payment of any
sinking fund installment on such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors or trustees and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Securityholders of such series.
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING
TO PAY COSTS. All parties to this Indenture agree, and each Holder of any
Security or Coupon by his acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken, suffered or omitted by it as
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Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder or group of Securityholders of any series
holding in the aggregate more than 10% in aggregate principal amount of the
Securities of such series, or, in the case of any suit relating to or arising
under clause (d) or (g) of Section 5.1 (if the suit relates to Securities of
more than one but less than all series), 10% in aggregate principal amount of
Securities then Outstanding and affected thereby, or in the case of any suit
relating to or arising under clause (d) or (g) (if the suit under clause (d) or
(g) relates to all the Securities then Outstanding), (e) or (f) of Section 5.1,
10% in aggregate principal amount of all Securities then Outstanding, or to any
suit instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security or any date fixed for redemption.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. Prior to the occurrence of an Event of Default with
respect to the Securities of a particular series and after the curing or waiving
of all Events of Default which may have occurred with respect to such series,
the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture with respect to such series of
Securities. In case an Event of Default with respect to the Securities of a
series has occurred and has not been cured or waived, the Trustee shall exercise
with respect to such series of Securities such of the rights and powers vested
in it by this Indenture with respect to such series of Securities, and use the
same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or waiving
of all such Events of Default with respect to such series which may
have occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no
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implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.9 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it.
The provisions of this Section 6.1 are in furtherance of and
subject to Section 315 of the Trust Indenture Act.
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of
and subject to the Trust Indenture Act, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof is specifically
prescribed herein or in the terms established in respect of any
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series); and any resolution of the Board of Directors may be evidenced
to the Trustee by a copy thereof certified by the secretary or an
assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written
advice or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Securities of all series
affected then Outstanding; provided, that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee
may require reasonable indemnity against such expenses or liabilities
as a condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Issuer or, if paid by the Trustee or
any predecessor trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the Trustee
shall not be responsible for any misconduct or negligence on the part
of any such agent or attorney appointed with due care by it hereunder.
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS,
DISPOSITION OF SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Issuer,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency
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of this Indenture or of the Securities or Coupons. The Trustee shall not be
accountable for the use or application by the Issuer of any of the Securities or
of the proceeds thereof.
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES OR COUPONS;
COLLECTIONS, ETC. The Trustee or any agent of the Issuer or of the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities or Coupons with the same rights it would have if it were not the
Trustee or such agent and may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
SECTION 6.5 MONEYS HELD BY TRUSTEE. Subject to the provisions
of Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND
ITS PRIOR CLAIM. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor trustee upon its request for all
reasonable expense, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The obligations
of the Issuer under this Section to compensate and indemnify the Trustee and
each predecessor trustee and to pay or reimburse the Trustee and each
predecessor trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the Holders
of particular Securities or Coupons, and the Securities are hereby subordinated
to such senior claim.
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICER'S
CERTIFICATE, ETC. Subject to Sections 6.1 and 6.2, whenever in the
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless
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other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to the
Trustee, and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 6.8 INDENTURES NOT CREATING POTENTIAL CON-
FLICTING INTERESTS FOR THE TRUSTEE. The following indentures are hereby
specifically described for the purposes of Section 310(b)(1) of the Trust
Indenture Act: this Indenture with respect to the Securities of any other
series.
SECTION 6.9 QUALIFICATION OF TRUSTEE: CONFLICTING
INTERESTS. The Trustee shall comply with Section 310(b) of the Trust Indenture
Act.
SECTION 6.10 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUST-
EE. The Trustee for each series of Securities hereunder shall at all times be a
corporation or banking association organized and doing business under the laws
of the United States of America, any State thereof or the District of Columbia,
having a combined capital and surplus of at least $50,000,000, and which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by Federal, state or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.11.
The provisions of this Section 6.10 are in furtherance of and
subject to Section 310(a) of the Trust Indenture Act.
SECTION 6.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer and (i) if any Unregistered
Securities of a series affected are then Outstanding, by giving notice of such
resignation to the Holders thereof, by publication at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York, and at
least once in an Authorized Newspaper in London (and, if required by Section
3.9, at least once in an Authorized Newspaper in Luxembourg), (ii) if any
Unregistered Securities of a series affected are then Outstanding, by mailing
notice of such resignation to the Holders thereof who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act at such addresses as were so furnished to the Trustee and (iii) by mailing
notice of such resignation to the Holders of then Outstanding Registered
Securities of each series
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affected at their addresses as they shall appear on the registry books. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Section 5.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act with
respect to any series of Securities after written request
therefor by the Issuer or by any Securityholder who has been a
bona fide Holder of a Security or Securities of such series
for at least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.10 and Section
310(a) of the Trust Indenture Act and shall fail to resign
after written request therefor by the Issuer or by any
Securityholder; or
(iii) the Trustee shall become incapable of acting
with respect to any series of Securities, or shall be adjudged
a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 315(e) of the Trust Indenture Act, any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at least six
months may on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of
the Securities of each series at the time outstanding may at any time
remove the Trustee with respect to Securities of such series and
appoint a successor trustee with respect to the Securities of
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such series by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Issuer the evidence provided for in
Section 7.1 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect to
any series and any appointment of a successor trustee with respect to
such series pursuant to any of the provisions of this Section 6.11
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 6.12.
. SECTION 6.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 6.11 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the
Securities of one or more (but not all) series, the Issuer, the predecessor
trustee and each successor trustee with respect to the Securities of any
applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
trustee with respect to the Securities of any series as to which the predecessor
trustee is not retiring shall continue to be vested in the predecessor trustee,
and shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such trustees co-trustees of the
same trust and that each such trustee shall be trustee of a trust or trusts
under separate indentures.
No successor trustee with respect to any series of Securities
shall accept appointment as provided in this Section 6.12 unless at the time of
such acceptance such successor trustee shall be qualified under Section 310(b)
of the Trust Indenture Act and eligible under the provisions of Section 6.10.
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Upon acceptance of appointment by any successor trustee as
provided in this Section 6.12, the Issuer shall give notice thereof (a) if any
Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, by publication of such notice at least once in an Authorized
Newspaper in the Borough of Manhattan, The City of New York and at least once in
an Authorized Newspaper in London (and, if required by Section 3.9, at least
once in an Authorized Newspaper in Luxembourg), (b) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof who
have filed their names and addresses with the Trustee pursuant to Section
313(c)(2) of the Trust Indenture Act, by mailing such notice to such Holders at
such addresses as were so furnished to the Trustee (and the Trustee shall make
such information available to the Issuer for such purpose) and (c) to the
Holders of Registered Securities of each series affected, by mailing such notice
to such Holders at their addresses as they shall appear on the registry books.
If the acceptance of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 6.11. If the Issuer fails to give
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be given at the
expense of the Issuer.
SECTION 6.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided, that such
corporation shall be qualified under Section 310(b) of the Trust Indenture Act
and eligible under the provisions of Section 6.10, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities of any
series shall have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any predecessor
trustee and deliver such Securities so authenticated; and, in case at that time
any of the Securities of any series shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor Trustee; and in all
such cases such certificate shall have the full force which it is anywhere in
the Securities of such series or in this Indenture provided that the certificate
of the Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor trustee or to authenticate Securities of any
series in the name of any predecessor trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 6.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
ISSUER. The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated.
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SECTION 6.15 APPOINTMENT OF AUTHENTICATING AGENT. As long as
any Securities of a series remain Outstanding, the Trustee may, by an instrument
in writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $45,000,000 (determined as provided in Section
6.10 with respect to the Trustee) and subject to supervision or examination by
Federal or State authority.
Any corporation into which any Authenticating Agent may be
merged or converted, or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be the
authenticating Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of any paper or
any further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to the
Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.15 with respect to
one or more series of Securities, the Trustee shall upon receipt of an Issuer
Order appoint a successor Authenticating Agent and the Issuer shall provide
notice of such appointment to all Holders of Securities of such series in the
manner and to the extent provided in Section 11.4. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. The Issuer agrees to
pay to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
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ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY
SECURITYHOLDERS. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage in principal amount of the Securityholders of any or all
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage of
Securityholders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article.
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING
OF SECURITIES. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holding or Securities shall
be proved by the Security register or by a certificate of the registrar thereof.
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the person
in whose name any Security shall be registered upon the Security register for
such series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes and neither the Issuer,
the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Unregistered Security or Coupon.
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING.
In determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities of any or all series have concurred in any request,
demand, authorization, direction, notice, consent, waiver or other action by
Securityholders under this
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Indenture, Securities which are owned by the Issuer or any other obligor on the
Securities with respect to which such determination is being made or by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer or any other obligor on the Securities
with respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such action only Securities which the Trustee knows are so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor upon the
Securities or any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer or any other obligor on
the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Issuer shall
furnish to the Trustee promptly an Officer's Certificate listing and identifying
all Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.1, of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon any
such Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action shall be conclusively
binding upon the Issuer, the Trustee and the Holders of all the Securities
affected by such action.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that
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the specific terms of such action may be determined in accordance with or
pursuant to an Issuer Order), and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto for one or more
of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article IX;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and the
Trustee shall consider to be for the protection of the Holders of
Securities or Coupons, and to make the occurrence, or the occurrence
and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting
the enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, that in respect of any such
additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit the
right of the Holders of a majority in aggregate principal amount of the
Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make any other provisions as
the Issuer may deem necessary or desirable, provided, that no such
action shall adversely affect the interests of the Holders of the
Securities or Coupons;
(e) to establish the forms or terms of Securities of any
series or of the Coupons appertaining to such Securities as permitted
by Sections 2.1 and 2.3; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee,
pursuant to the requirements of Section 6.12.
The Trustee is hereby authorized to join with the Issuer in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
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supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. With the consent (evidenced as provided in Article VII) of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of all series affected by such supplemental
indenture (voting as one class), the Issuer, when authorized by a resolution of
its Board of Directors (which resolution may provide general terms or parameters
for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order), and the Trustee
may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force and effect at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of each such
series or of the Coupons appertaining to such Securities; provided, that no such
supplemental indenture shall (a) extend the final maturity of any Security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof,
or make the principal thereof (including any amount in respect of original issue
discount), or interest thereon payable in any coin or currency other than that
provided in the Securities and Coupons or in accordance with the terms thereof,
or reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 5.1 or the amount thereof provable in bankruptcy pursuant to
Section 5.2, or alter the provisions of Section 11.11 or 11.12 or impair or
affect the right of any Securityholder to institute suit for the payment thereof
when due or, if the Securities provide therefor, any right of repayment at the
option of the Securityholder, in each case without the consent of the Holder of
each Security so affected, or (b) reduce the aforesaid percentage of Securities
of any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
affected.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of Holders of Securities of such series, or of Coupons
appertaining to such Securities, with respect to such covenant or provision,
shall be deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series or of the Coupons appertaining to such
Securities.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors (which resolution may provide general terms
or parameters for such action
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and may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order) certified by the secretary or an
assistant secretary of the Issuer authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of the Holders of the Securities as aforesaid and other documents, if
any, required by Section 7.1, the Trustee shall join with the Issuer in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall give notice thereof (i) to the Holders of then Outstanding
Registered Securities of each series affected thereby, by mailing a notice
thereof by first-class mail to such Holders at their addresses as they shall
appear on the Security register, (ii) if any Unregistered Securities of a series
affected thereby are then Outstanding, to the Holders thereof who have filed
their names and addresses with the Trustee pursuant to Section 313(c)(2) of the
Trust Indenture Act, by mailing a notice thereof by first-class mail to such
Holders at such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
all Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and at
least once in an Authorized Newspaper in London (and, if required by Section
3.9, at least once in an Authorized Newspaper in Luxembourg), and in each case
such notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to give such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Issuer and the Holders
of Securities of each series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, may receive an Officer's
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article 8 complies with the
applicable provisions of this Indenture.
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SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. The Issuer shall not consolidate with or merge into any other Person or
transfer or lease its properties and assets substantially as an entirety to any
Person, and the Issuer shall not permit any other Person to consolidate with or
merge into the Issuer, unless:
(a) either the Issuer shall be the continuing corporation, or
the successor corporation (if other than the Issuer) formed by such
consolidation or into which the Issuer is merged or to which the
properties and assets of the Issuer substantially as an entity are
transferred or leased shall be a corporation organized and existing
under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Issuer under
the Securities and this Indenture; and
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Issuer or
a Subsidiary as a result of such transaction as having been incurred by
the Issuer or such Subsidiary at the time of such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be
continuing.
SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED. The
successor corporation formed by such consolidation or into which the Issuer is
merged or to which such transfer or lease is made shall succeed to and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such successor corporation had been
named as the Issuer herein, and thereafter (except in the case of a lease to
another Person) the predecessor corporation shall be relieved of all obligations
and covenants under the Indenture and the Securities and, in the event of such
conveyance or transfer, any such predecessor corporation may be dissolved and
liquidated.
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SECTION 9.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The
Trustee, subject to the provisions of Sections 6.1 and 6.2, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale or conveyance, and any such assumption, complies with the provisions of
this Article IX.
ARTICLE X
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE.
(A) If at any time (i) the Issuer shall have paid or caused to
be paid the principal of and interest on all the Securities of any series
Outstanding hereunder and all un- matured Coupons appertaining thereto (other
than Securities of such series and Coupons appertaining thereto which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9) as and when the same shall have become due and payable, or (ii) the
Issuer shall have delivered to the Trustee for cancellation all Securities of
any series theretofore authenticated and all unmatured Coupons appertaining
thereto (other than any Securities of such series and Coupons appertaining
thereto which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.9) or (iii) in the case of any
series of Securities where the exact amount (including the currency of payment)
of principal of and interest due on which can be determined at the time of
making the deposit referred to in clause (b) below, (a) all the Securities of
such series and all unmatured Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and (b) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust the entire amount in (i) cash (other than moneys repaid by the Trustee
or any paying agent to the Issuer in accordance with Section 10.4), (ii) in the
case of any series of Securities the payments on which may only be made in
Dollars, direct obligations of the United States of America, backed by its full
faith and credit ("U.S. Government Obligations"), maturing as to principal and
interest at such times and in such amounts as will insure the availability of
cash sufficient to pay at such maturity or upon such redemption, as the case may
be, or (iii) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (a) the principal and
interest on all Securities of such series and Coupons appertaining thereto on
each date that such principal or interest is due and payable and (b) any
mandatory sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of the Indenture and the Securities of such
series; (x) the principal and interest on all Securities of such series and
Coupons appertaining thereto on each date that such principal or interest is due
and payable and (y) any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the terms of the Indenture
and the Securities of such series; and if, in any such case, the Issuer shall
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also pay or cause to be paid all other sums payable hereunder by the Issuer,
then this Indenture shall cease to be of further effect (except as to (i) rights
of registration of transfer and exchange of Securities of such Series and of
Coupons appertaining thereto and the Issuer's right of optional redemption, if
any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (iii) rights of holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) any optional redemption rights of such series of
Securities to the extent to be exercised to make such call for redemption within
one year, (v) the rights, obligations, duties and immunities of the Trustee
hereunder, including those under Section 6.6, (vi) the rights of the Holders of
securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them, and (vii) the obligations of the Issuer under Section 3.2) and
the Trustee, on demand of the Issuer accompanied by an Officer's Certificate and
an Opinion of Counsel and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture; provided, that the rights of Holders of the Securities and Coupons to
receive amounts in respect of principal of and interest on the Securities and
Coupons held by them shall not be delayed longer than required by
then-applicable mandatory rules or policies of any securities exchange upon
which the Securities are listed. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities of
such series.
(B) The following provisions shall apply to the Securities of
each series unless specifically otherwise provided in a Board Resolution,
Officer's Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities the exact amounts
(including the currency of payment) of principal of and interest due on which
can be determined at the time of making the deposit referred to in clause (a)
below, the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such a series and the Coupons appertaining
thereto on the date of the deposit referred to in subparagraph (a) below, and
the provisions of this Indenture with respect to the Securities of such series
and Coupons appertaining thereto shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto and the Issuer's right of optional redemption,
if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (iii) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) any optional redemption rights of such series of
Securities to the extent to be exercised to make such call for redemption within
one year, (v) the rights, obligations, duties and immunities of the Trustee
hereunder, (vi) the rights of the Holders of Securities of such series and
Coupons appertaining thereto as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any
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of them and (vii) the obligations of the Issuer under Section 3.2) and the
Trustee, at the expense of the Issuer, shall at the Issuer's request, execute
proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the Securities
of such series and Coupons appertaining thereto (i) cash in an amount,
or (ii) in the case of any series of Securities the payments on which
may only be made in Dollars, U.S. Government Obligations, maturing as
to principal and interest at such times and in such amounts as will
insure the availability of cash or (iii) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and interest
on all Securities of such series and Coupons appertaining thereto on
each date that such principal or interest is due and payable and (b)
any mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of the Indenture and
the Securities of such series;
(b) such deposit will not result in a breach or violation of,
or constitute a default under, any agreement or instrument to which the
Issuer is a party or by which it is bound;
(c) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Issuer has received from, or
there has been published by, the IRS a ruling or (y) since the date
hereof, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and such opinion shall confirm
that, the Holders of the Securities of such series and Coupons
appertaining thereto will not recognize income, gain or loss for United
States Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to United States Federal
income tax on the same amount and in the same manner and at the same
times, as would have been the case if such deposit, defeasance and
discharge had not occurred; and
(d) the Issuer has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
provision have been complied with.
(C) The Issuer shall be released from its obligations under
Sections 3.6 and 9.1 and unless otherwise provided for in the Board Resolution,
Officer's Certificate or Indenture supplemental hereto establishing such series
of Securities, from all covenants and other obligations referred to in Section
2.3(18) or 2.3(19) with respect to such series of Securities, and any Coupons
appertaining thereto, outstanding on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that, with respect to the Outstanding Securities of
any series, the Issuer may omit to comply with and shall have no liability in
respect of any term, condition or limitation
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set forth in such Section, whether directly or indirectly by reason of any
reference elsewhere herein to such Section or by reason of any reference in such
Section to any other provision herein or in any other document and such omission
to comply shall not constitute an Event of Default under Section 5.1, but the
remainder of this Indenture and such Securities and Coupons shall be unaffected
thereby. The following shall be the conditions to application of this subsection
C of this Section 10.1:
(a) The Issuer has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of the Securities
of such series and coupons appertaining thereto, (i) cash in an amount,
or (ii) in the case of any series of Securities the payments on which
may only be made in Dollars, U.S. Government Obligations maturing as to
principal and interest at such times and in such amounts as will insure
the availability of cash or (iii) a combination thereof, sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay (A) the principal and interest on all Securities of
such series and Coupons appertaining thereof and (B) any mandatory
sinking fund payments on the day on which such payments are due and
payable in accordance with the terms of the Indenture and the
Securities of such series;
(b) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit;
(c) Such covenant defeasance shall not cause the Trustee to
have a conflicting interest as defined in Section 6.9 and for purposes
of the Trust Indenture Act with respect to any securities of the
Issuer;
(d) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
other agreement or instrument to which the Issuer is a party or by
which it is bound;
(e) Such covenant defeasance shall not cause any Securities
then listed on any registered national securities exchange under the
Exchange Act to be delisted;
(f) The Issuer shall have delivered to the Trustee an
Officer's Certificate and Opinion of Counsel to the effect that the
Holders of the Securities of such series and Coupons appertaining
thereto will not recognize income, gain or loss for United States
Federal income tax purposes as a result of such covenant defeasance and
will be subject to United States Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred; and
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(g) The Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the covenant defeasance
contemplated by this provision have been complied with.
SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR
PAYMENT OF SECURITIES. Subject to Section 10.4, all moneys deposited with the
Trustee (for other trustee) pursuant to Section 10.1 shall be held in trust and
applied by it to the payment, either directly or through any paying agent
(including the Issuer acting as its own paying agent), to the Holders of the
particular Securities of such series and of Coupons appertaining thereto for the
payment or redemption of which such moneys have been deposited with the Trustee,
of all sums due and to become due thereon for principal and interest; but such
money need not be segregated from other funds except to the extent required by
law.
SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT.
In connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under the
provisions of this Indenture with respect to such series of Securities shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.
SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND
PAYING AGENT UNCLAIMED FOR TWO YEARS. Any moneys deposited with or paid
to the Trustee or any paying agent for the payment of the principal of or
interest on any Security of any series of Coupons attached thereto and not
applied but remaining unclaimed for two years after the date upon which such
principal or interest shall have become due and payable, shall, upon the written
request of the Issuer and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be repaid to the
Issuer by the Trustee for such series or such paying agent, and the Holder of
the Securities of such series and of any Coupons appertaining thereto shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for any
payment which such Holder may be entitled to collect, and all liability of the
Trustee or any paying agent with respect to such moneys shall thereupon cease;
provided, that the Trustee or such paying agent, before being required to make
any such repayment with respect to moneys deposited with it for any payment (a)
in respect of Registered Securities of any series, shall at the expense of the
Issuer, mail by first-class mail to Holders of such Securities at their
addresses as they shall appear on the Security register, and (b) in respect of
Unregistered Securities of any series, shall at the expense of the Issuer cause
to the published once, in an Authorized Newspaper in the Borough of Manhattan,
The City of New York and once in an Authorized Newspaper in London (and if
required by Section 3.9, once in an Authorized Newspaper in Luxembourg), notice,
that such moneys remain and that, after a date specified therein, which shall
not be less than thirty days from the date of such mailing or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer.
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SECTION 10.5 INDEMNITY FOR U.S. GOVERNMENT OF OBLIGATIONS. The
Issuer shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.1 or the principal or interest received in respect of
such obligations.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS OF ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon
any obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities and the Coupons, if any,
appertaining thereto by the Holders thereof and as part of the consideration for
the issue of the Securities and the Coupons appertaining thereto.
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF
PARTIES AND HOLDERS OF SECURITIES AND COUPONS. Nothing in this Indenture, in the
Securities or in the Coupons appertaining thereto, expressed or implied, shall
give or be construed to give to any person, firm or corporation, other than the
parties thereto and their successors and the Holders of the Securities or
Coupons, if any, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities or Coupons, if any.
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY
INDENTURE. All the covenants, stipulations, promises and agreements in this
Indenture contained by or in behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND
HOLDERS OF SECURITIES AND COUPONS. Any notice or demand which by any provision
of this Indenture is required or permitted to be given or served by the Trustee
or by the Holders of Securities or Coupons, if any, to or on the Issuer may be
given or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Issuer is filed by the Issuer with the Trustee) to McKesson Corporation,
McKesson Plaza, One Post Street, San Francisco, California 94104, Attention:
Secretary. Any notice, direction, request or demand by the Issuer or any Holder
of Securities or Coupons, if any, to or upon the Trustee shall be deemed to have
been sufficiently
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given or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Trustee is filed by the Trustee with the Issuer) to The First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Services Division.
Where this Indenture provides for notice to Holders of
Registered Securities, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class mail, postage
prepaid, to each Holder entitled thereto, at his last address as it appears in
the Security register. In any case where notice to such Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Issuer
when such notice is required to the given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the Issuer
to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
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Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters or information with respect to which is in the
possession of the Issuer, upon the certificate, statement or opinion of or
representations by an officer of officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion of or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND
HOLIDAYS. If the date of maturity of interest on or principal of the Securities
of any series or any Coupons appertaining thereto or the date fixed for
redemption or repayment of any such Security or Coupon shall not be a Business
Day, then payment of interest or principal need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date.
SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with duties imposed by, or with another provision (an
"incorporated provision") included in this Indenture by operation of Sections
310 to 318, inclusive, of the Trust Indenture Act, such imposed duties or
incorporated provision shall control.
SECTION 11.8 NEW YORK LAW TO GOVERN. THIS INDENTURE AND EACH
SECURITY AND COUPON SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE
OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
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SECTION 11.9 COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 EFFECT OF HEADINGS. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 11.11 SECURITIES IN A FOREIGN CURRENCY OR IN
ECU. Unless otherwise specified in an Officer's Certificate delivered pursuant
to Section 2.3 of this Indenture with respect to a particular series of
Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of
Securities of all series or all series affected by a particular action at the
time Outstanding and, at such time, there are Outstanding Securities of any
series which are denominated in a coin or currency other than Dollars (including
ECUs), then the principal amount of Securities of such series which shall be
deemed to be Outstanding for the purpose of taking such action shall be that
amount of Dollars that could be obtained for such amount at the Market Exchange
Rate. For purposes of this Section 11.11, Market Exchange Rate shall mean the
noon Dollar buying rate in The New York City for cable transfers of that
currency as published by the Federal Reserve Bank of New York; provided, in the
case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by
the Commission of the European Communities (or any successor thereto) as
published in the Official Journal of the European Communities (such publication
or any successor publication, the "Journal"). If such Market Exchange Rate is
not available for any reason with respect to such currency, the Trustee shall
use, in its sole discretion and without liability on its part, such quotation of
the Federal Reserve Bank of New York or, in the case of ECUs, the rate of
exchange as published in the Journal, as of the most recent available date, or
quotations or, in the case of ECUs, rates of exchange from one or more major
banks in The City of New York or in the country of issue of the currency in
question, which for purposes of the ECU shall be Brussels, Belgium, or such
other quotations or, in the case of ECU, rates of exchange as the Trustee shall
deem appropriate. The provisions of this paragraph shall apply in determining
the equivalent principal amount in respect of Securities of a series denominated
in a currency other than Dollars in connection with any action taken by Holders
of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the
Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive to the extent permitted by law for all purposes
and irrevocably binding upon the Issuer and all Holders.
SECTION 11.12 JUDGMENT CURRENCY. The Issuer agrees, to the
fullest extent that it may effectively do so under applicable law, that (a) if
for the purpose of obtaining judgment in any court it is necessary to convert
the sum due in respect of the principal of or interest on the Securities of any
series (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the
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rate at which in accordance with normal banking procedures the Trustee could
purchase in The City of New York the Required Currency with the Judgment
Currency on the day on which final unappealable judgment is entered, unless such
day is not a New York Banking Day, then, to the extent permitted by applicable
law, the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which final unappealable judgment is entered and (b) its
obligations under this Indenture to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, or any recovery pursuant to
any judgment (whether or not entered in accordance with subsection (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
ARTICLE XII
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.
SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice
of redemption to the Holders of Registered Securities of any series to be
redeemed as a whole or in part at the option of the Issuer shall be given by
mailing notice of such redemption by first class mail, postage prepaid, at least
30 days and not more than 60 days prior to the date fixed for redemption to such
Holders of Securities of such series at their last addresses as they shall
appear upon the registry books. Notice of redemption to the Holders of
Unregistered Securities to be redeemed as a whole or in part, who have filed
their names and addresses with the Trustee pursuant to Section 313(c)(2) of the
Trust Indenture Act shall be given by mailing notice of such redemption, by
first class mail, postage prepaid, at least 30 days and not more than 60 prior
to the date fixed for redemption, to such Holders at such addresses as were so
furnished to the Trustee (and, in the case of any such notice given by the
Issuer, the Trustee shall make such information available to the Issuer for such
purpose). Notice of redemption to all other Holders of Unregistered Securities
shall be published in an Authorized Newspaper in the Borough of Manhattan, The
City of New York and in an Authorized Newspaper in London (and, if required by
Section 3.9, in an Authorized Newspaper in
62
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Luxembourg), in each case, once in each of three successive calendar weeks, the
first publication to be not less than 30 nor more than 60 days prior to the date
fixed for redemption. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
Holder receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of such Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender of
such Securities and, in the case of Securities with Coupons attached thereto, of
all Coupons appertaining thereto maturing after the date fixed for redemption,
that such redemption is pursuant to the mandatory or optional sinking fund, or
both, if such be the case, that interest accrued to the date fixed for
redemption will be paid as specified in such notice and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue. In case any Security of a series is to be redeemed in part only the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer is acting as its
own paying agent, set aside, segregate and holder in trust as provided in
Section 3.4) an amount of money sufficient to redeem on the redemption date all
the Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. The Issuer will deliver to the Trustee at least 70 days prior to the
date fixed for redemption, or such shorter period as shall be acceptable to the
Trustee, an Officer's Certificate stating the aggregate principal amount of
Securities to be redeemed. In case of a redemption at the election of the Issuer
prior to the expiration of any restriction on such redemption, the Issuer shall
deliver to the Trustee, prior to the giving of any notice of redemption to
Holders pursuant to this Section, an Officer's Certificate stating that such
restriction has been complied with.
If less than all the Securities of a series are to be
redeemed, the Trustee shall select, in such manner as it shall deemed
appropriate and fair, in its sole discretion, Securities of such series to be
redeemed in whole or in part. Securities may be redeemed in part in multiples
equal to the minimum authorized denomination for Securities of such series or
any multiple thereof. The Trustee shall promptly notify the Issuer in writing of
the Securities of
63
<PAGE>
such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities of any series
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue, and the unmatured Coupons, if any, appertaining thereto
shall be void, and, except as provided in Sections 6.5 and 10.4, such Securities
shall cease from and after the date fixed for redemption to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall have no
right in respect of such Securities except the right to receive the redemption
price thereof and unpaid interest to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified in
said notice, together with all Coupons, if any, appertaining thereto maturing
after the date fixed for redemption, said Securities or the specified portions
thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption;
provided, that payment of interest becoming due on or prior to the date fixed
for redemption shall be payable in the case of Securities with Coupons attached
thereto, to the Holders of the Coupons for such interest upon surrender thereof,
and in the case of Registered Securities, to the Holder of such Registered
Securities registered as such on the relevant record date, subject to the terms
and provisions of Section 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
If any Security with Coupons attached thereto is surrendered
for redemption and is not accompanied by all appurtenant Coupons maturing after
the date fixed for redemption, the surrender of such missing Coupon or Coupons
may be waived by the Issuer and the Trustee, if there be furnished to each of
them such security or indemnity as they may require to save each of them
harmless.
Upon presentation of any Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver to or on the
order of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
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<PAGE>
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY
FOR SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.5 MANDATORY AND OPTIONAL SINKING FUNDS. The minimum
amount of any sinking fund payment provided for by the terms of the Securities
of any series is herein referred to as a "mandatory sinking fund payment," and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund redemption price specified in
such Securities.
On or before the 60th day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee an Officer's
Certificate (which need not contain the statements required by Section 11.5) (a)
specifying the portion of the mandatory sinking fund payment to be satisfied by
payment of cash and the portion to be satisfied by credit of Securities of such
series and the basis for such credit, (b) stating that none of the Securities of
such series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Issuer intends to pay
on or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officer's Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officer's
Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer
shall become unconditionally obligated to make all the cash
65
<PAGE>
payments or payments therein referred to, if any, on or before the next
succeeding sinking fund payment date. Failure of the Issuer, on or before any
such 60th day, to deliver such Officer's Certificate and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof and (ii) that the
Issuer will make no optional sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or ECU)
or a lesser sum in Dollars (or the equivalent thereof in any Foreign Currency or
ECU) if the Issuer shall so request with respect to the Securities of any
particular series, such cash shall be applied on the next succeeding sinking
fund payment date to the redemption of Securities of such series at the sinking
fund redemption price together with accrued interest to the date fixed for
redemption. If such amount shall be $50,000 (or the equivalent thereof in any
Foreign Currency or ECU) or less and the Issuer makes no such request then it
shall be carried over until a sum in excess of $50,000 (or the equivalent
thereof in any Foreign Currency or ECU) is available. The Trustee shall select,
in the manner provided in Section 12.2, for redemption on such sinking fund
payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by the
Issuer) inform the Issuer of the serial numbers of the Securities of such series
(or portions thereof) so selected. Securities shall be excluded from eligibility
for redemption under this Section if they are identified by registration and
certificate number in an Officer's Certificate delivered to the Trustee at least
60 days prior to the sinking fund payment date as being owned of record and
beneficially by, and not pledged or hypothecated by, either (a) the Issuer or
(b) an entity specifically identified in such Officer's Certificate as directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Issuer. The Trustee, in the name and at the expense of the
Issuer (or the Issuer, if it shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the redemption of Securities of such series in part at the
option of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to the
next cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section. Any and all
sinking fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such series shall
be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest on, the Securities of
such series at maturity.
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<PAGE>
On or before each sinking fund payment date, the Issuer shall
pay to the Trustee in cash or shall otherwise provide for the payment of all
interest accrued to the date fixed for redemption on Securities to be redeemed
on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or give any notice of redemption
of Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the giving of notice of redemption of any
Securities shall theretofore have been made, the Trustee shall redeem or cause
to be redeemed such Securities, provided that it shall have received from the
Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in
the sinking fund for such series at the time when any such default or Event of
Default shall occur, and any moneys thereafter paid into the sinking fund,
shall, during the continuance of such default or Event of Default be deemed to
have been collected under Article Five and held for the payment of all such
Securities. In case such Event of Default shall have been waived as provided in
Section 5.10 or the default cured on or before the sixtieth day preceding the
sinking fund payment date in any year, such moneys shall thereafter be applied
on the next succeeding sinking fund payment date in accordance with this Section
to the redemption of such Securities.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and attested as of the date first written above.
McKESSON CORPORATION
By: /s/ Richard H. Hawkins
----------------------
Name: Richard H. Hawkins
Title: Vice President and
Chief Financial Officer
Attest:
By: /s/ Lorraine Peetz
------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Richard D. Manella
----------------------
Name: Richard D. Manella
Title: Vice President
Attest:
By: /s/ Janice Ott Rotunno
----------------------
<PAGE>
Exhibit 4.2
OFFICER'S CERTIFICATE
---------------------
The undersigned, McKesson Corporation, a Delaware corporation (the
"Corporation"), hereby certifies through Nancy A. Miller, its Vice President and
Secretary, pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), by and between the Company, as Issuer, and First National
Bank of Chicago, a national association, as Trustee, as follows:
1. She has read Section 2.3 of the Indenture, read such other documents as she
deemed necessary and made such other inquiries as she deemed necessary to make
the certifications in paragraph 2 and 3 hereof.
2. Pursuant to the terms of resolutions adopted by the Board of Directors of
the Corporation (the "Board of Directors") dated January 29, 1997 and the
Finance Committee of the Board of Directors dated March 6, 1997 and action of
officers of the Corporation dated March 11, 1997, the terms of the Corporation's
6.60% Notes due 2000, 6-7/8% Notes due 2002 and 7.65% Debentures due 2027 set
forth in Annex A, Annex B and Annex C, respectively, attached hereto have been
duly adopted by the Corporation.
3. All conditions precedent provided for in the Indenture relating to the
issuance of such securities have been complied with.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized officer as of this 11th day of March 1997.
McKESSON CORPORATION
By: /s/ Nancy A. Miller
-------------------
Nancy A. Miller
Vice President and
Secretary
<PAGE>
ANNEX A
Pursuant to Section 2.3 of the Indenture, dated as of March 11,
1997 (the "Indenture"), between McKesson Corporation (the "Issuer") and The
First National Bank of Chicago, a national banking association, as trustee
(the "Trustee"), the terms of a series of securities to be issued pursuant
to the Indenture are as follows:
1. Designation. The designation of the securities is "6.60%
-----------
Notes due March 1, 2000" (the "Notes due 2000").
2. Aggregate Principal Amount. The Notes due 2000 shall be
--------------------------
limited in aggregate principal amount to $175,000,000
(except for Notes due 2000 authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu
of, other Notes due 2000 pursuant to Section 2.8, 2.9, 2.11,
8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Notes due 2000 shall be
---------------------
denominated in Dollars.
4. Maturity. The date on which the principal of the Notes due
--------
2000 is payable is March 1, 2000.
5. Rate of Interest; Interest Payment Date; Regular Record
-------------------------------------------------------
Dates. Each Note due 2000 shall bear interest from March 1,
-----
1997 at 6.60% per annum until the principal thereof is paid.
Such interest shall be payable semiannually in arrears on
March 1 and September 1 of each year, commencing on
September 1, 1997, to the persons in whose names the Notes
due 2000 are registered at the close of business on the
immediately preceding February 15 and August 15,
respectively. Interest on the Notes due 2000 shall accrue
from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of original
issuance. Interest on the Notes due 2000 shall be computed
on the basis of a 360-day year comprised of twelve 30-day
months. The amount of interest payable for any period
shorter than a full semi-annual period for which interest is
computed will be computed on the basis of the actual number
of days elapsed per 30-day month. In the event that any
date on which principal, premium, if any, or interest is
payable on the Notes due 2000 is not a Business Day, then
payment of the principal, premium, if any, or
<PAGE>
interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and
----------------
interest on the Notes due 2000 shall be payable, and the
transfer of Notes due 2000 shall be registrable, at the
office or agency of the Issuer to be maintained for such
purpose in the Borough of Manhattan, The City of New York,
except that, at the option of the Issuer, interest may be
paid by mailing a check to the address of the person
entitled thereto as it appears on the Notes due 2000
register; provided, however, that while any Notes due 2000
are represented by a Registered Global Security, payment of
principal of, premium, if any, or interest on the Notes due
2000 may be made by wire transfer to the account of the
Depositary or its nominee.
7. Optional Redemption. The Notes due 2000 are not optionally
-------------------
redeemable and are not entitled to the benefit of a sinking
fund or any analogous provisions.
8. Mandatory Redemption. The Notes due 2000 are not
--------------------
mandatorily redeemable and are not entitled to the benefit
of a sinking fund or any analogous provisions.
9. Denominations. The Notes due 2000 shall be issued initially
-------------
in minimum denominations of $100,000 and shall be issued in
integral multiples of $1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the
--------------------------------
Notes due 2000 shall be payable upon declaration of
acceleration pursuant to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Notes due
----------------
2000 shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest
---------------------------
on the Notes due 2000 shall not be payable in a currency
other than Dollars.
13. Payment Currency - Index. The principal of and interest on
------------------------
the Notes due 2000 shall not be determined with reference to
an index based on a coin or currency.
2
<PAGE>
14. Registered Securities. The Notes due 2000 shall be issuable
---------------------
as Registered Securities. The Notes due 2000 may be issued
as Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional
------------------
amounts on the Notes due 2000 held by a Person that is not a
U.S. Person in respect of taxes or similar charges withheld
or deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will
-----------------------
govern the transferability of Notes due 2000 in definitive
form.
17. Registrar; Paying Agent; Depositary. The Trustee shall
-----------------------------------
initially serve as the registrar and the paying agent for
the Notes due 2000. The Depository Trust Company shall
initially serve as the Depositary for the Registered Global
Security representing Notes due 2000.
18. Events of Default; Covenants. There shall be no deletions
----------------------------
from, modifications or additions to the Events of Default
set forth in Section 5.1 of the Indenture with respect to
the Notes due 2000. There shall be the following additions
to the covenants of the Issuer set forth in Article III with
respect to the Notes due 2000:
Limitation on Liens. The Issuer covenants that, so long as
any of the Notes due 2000 remain outstanding, it shall not,
nor shall it permit any Consolidated Subsidiary to, create
or assume any Indebtedness for money borrowed which is
secured by a mortgage, pledge, security interest or lien
("liens") of or upon any assets, whether now owned or
hereafter acquired, of the Issuer or any such Consolidated
Subsidiary without equally and ratably securing the Notes
due 2000 by a lien ranking ratably with and equal to (or at
the option of the Issuer, senior to) such secured
Indebtedness, except that the foregoing restriction shall
not apply to (a) liens on any assets of any corporation
existing at the time such corporation becomes a Consolidated
Subsidiary; (b) liens on any assets existing at the time of
acquisition of such assets by the Issuer or a Consolidated
Subsidiary, or liens to secure the payment of all or any
part of the purchase price of such assets upon the
acquisition of such assets by the Issuer or a Consolidated
Subsidiary or to secure any indebtedness incurred or
3
<PAGE>
guaranteed by the Issuer or a Consolidated Subsidiary 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 any assets
theretofore owned by the Issuer or a Consolidated
Subsidiary, 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, or to secure
the payment of the purchase price of such assets, or to
secure indebtedness incurred or guaranteed by the Issuer or
a Consolidated Subsidiary for the purpose of financing the
purchase price of such assets or improvements or
construction thereon, which indebtedness is incurred or
guaranteed prior to, at the time of or within 360 days after
such acquisition (or in the case of real property,
completion of such improvement or construction or
commencement of full operation of such property, whichever
is later); (c) liens on any assets securing indebtedness
owed by any Consolidated Subsidiary to the Issuer or another
wholly owned Subsidiary; (d) liens on any assets of a
corporation existing at the time such corporation is merged
into or consolidated with the Issuer or a Subsidiary or at
the time of a purchase, lease or other acquisition of the
assets of a corporation or firm as an entirety or
substantially as an entirety by the Issuer or a Subsidiary;
(e) liens on any assets of the Issuer or a Consolidated
Subsidiary in favor of the United States of America or 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
(including, but not limited to, liens incurred in connection
with pollution control, industrial revenue or similar
financing); (f) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole
or in part, of
4
<PAGE>
any lien referred to in the foregoing clauses (a) to (e),
inclusive; provided, however, that the principal amount of
indebtedness secured thereby shall not exceed the principal
amount of indebtedness so secured at the time of such
extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to all or a part of
the assets which secured the lien so extended, renewed or
replaced (plus improvements and construction on such real
property); (g) liens imposed by law, such as mechanics',
workmen's, repairmen's, materialmen's, carriers',
warehousemen's, vendors' or other similar liens arising in
the ordinary course of business, or governmental (federal,
state or municipal) liens arising out of contracts for the
sale of products or services by the Issuer or any
Consolidated Subsidiary, or deposits or pledges to obtain
the release of any of the foregoing liens; (h) pledges,
liens or deposits under worker's compensation laws or
similar legislation and liens or judgments thereunder which
are not currently dischargeable, or in connection with bids,
tenders, contracts (other than for the payment of money) or
leases to which the Issuer or any Consolidated Subsidiary is
a party, or to secure public or statutory obligations of the
Issuer or any Consolidated Subsidiary, or in connection with
obtaining or maintaining self-insurance or to obtain the
benefits of any law, regulation or arrangement pertaining to
unemployment insurance, old age pensions, social security or
similar matters, or to secure surety, appeal or customs
bonds to which the Issuer or any Consolidated Subsidiary is
a party, or in litigation or other proceedings such as, but
not limited to, interpleader proceedings, and other similar
pledges, liens or deposits made or incurred in the ordinary
course of business; (i) 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 judgements or awards against the Issuer or
any Consolidated Subsidiary with respect to which the Issuer
or such Consolidated Subsidiary is in good faith prosecuting
an appeal or proceedings 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 the Issuer or any
Consolidated Subsidiary for the purpose of obtaining a stay
or discharge in the course of any litigation or other
proceeding to which the Issuer or such Consolidated
Subsidiary is a party; or (j) liens for taxes or assessments
or governmental charges
5
<PAGE>
or levies not yet due or delinquent, or which can thereafter
be paid without penalty, or which are being contested in
good faith by appropriate proceedings; landlord's liens on
property held under lease; and any other liens or charges
incidental to the conduct of the business of the Issuer or
any Consolidated Subsidiary or the ownership of the assets
of any of them which were not incurred in connection with
the borrowing of money or the obtaining of advances or
credit and which do not, in the opinion of the Issuer,
materially impair the use of such assets in the operation of
the business of the Issuer or such Consolidated Subsidiary
or the value of such assets for the purposes thereof.
Notwithstanding the above, the Issuer or any Consolidated
Subsidiary may, without securing the Notes due 2000, create
or assume any Indebtedness which is secured by a lien which
would otherwise be subject to the foregoing restrictions,
provided that at the time of such creation or assumption,
after giving effect thereto, Exempted Debt does not exceed
10% of the total assets of the Issuer and its Subsidiaries
on a consolidated basis, determined in accordance with
generally accepted accounting principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Notes due 2000 remain
outstanding, it will not, nor shall it permit any
Consolidated Subsidiary to, enter into any sale and lease-
back transaction with respect to any assets, other than any
sale leaseback transaction (involving a lease for a term of
not more than three years), unless either (a) the Issuer or
such Consolidated Subsidiary would be entitled to incur
Indebtedness secured by a lien on the assets to be leased in
an amount at least equal to the Attributable Debt in respect
of such transaction without equally and ratably securing the
Notes due 2000 pursuant to clauses (a) through (j) inclusive
of the covenant with respect to "Limitation on Liens" above,
or (b) the proceeds of the sale of the assets to be leased
are at least equal to their fair market value (as determined
by the Board of Directors of the Issuer) and the proceeds
are applied to the purchase or acquisition (or, in the case
of real property, the construction) of assets or to the
retirement (other than at maturity or pursuant to a
mandatory sinking fund or mandatory redemption provision) of
indebtedness. The foregoing limitation shall not apply, if
at the time the Issuer or any Consolidated Subsidiary enters
into such sale and lease-back transaction, and after giving
effect thereto, Exempted Debt does not exceed 10% of the
6
<PAGE>
total assets of the Issuer and its Subsidiaries on a
consolidated basis, determined in accordance with generally
accepted accounting principles.
The term "Attributable Debt" in connection with a sale and
lease-back transaction shall mean, as of the date of
determination, the lesser of (a) the fair value of the
assets subject to such transaction or (b) the present value
(discounted at the rate of interest set forth in or implicit
in the terms of such lease or, if it is not practicable to
determine such rate, the weighted average interest rate per
annum borne by all series of Securities then Outstanding and
subject to the Limitation on Sale and Leaseback Transactions
compounded semiannually, in either case as determined by the
principal accounting or financial officer of the Issuer) of
the obligations of the Issuer or any Consolidated Subsidiary
for net rental payments during the remaining term of all
leases (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
The term "net rental payments" under any lease of any period
shall mean the sum of the rental and other payments required
to be paid in such period by the lessee thereunder, not
including, however, any amounts required to be paid by such
lessee (whether or not designated as rental or additional
rental) on account of maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates
or similar charges required to be paid by such lessee
thereunder or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance
and repairs, reconstruction, insurance, taxes, assessments,
water rates or similar charges. The term "Consolidated
Subsidiary" shall mean any Subsidiary substantially all the
property of which is located, and substantially all the
operations of which are conducted, in the United States of
America whose financial statements are consolidated with
those of the Issuer in accordance with generally accepted
accounting principles. The term "Exempted Debt" shall mean
the sum of the following as of the date of determination:
(i) Indebtedness of the Issuer and its Consolidated
Subsidiaries incurred after the date of the Indenture and
secured by liens not permitted to be created or assumed
pursuant to the covenant with respect to "Limitation on
Liens" above, and (ii) Attributable Debt of the Issuer and
its Consolidated Subsidiaries in respect of every sale and
lease-back transaction entered into after the date of the
Indenture, other than leases expressly permitted by the
7
<PAGE>
covenant with respect to "Limitation on Sale and Lease-Back
Transactions" above. The term "Indebtedness" shall mean all
items classified as indebtedness on the most recently
available consolidated balance sheet of the Issuer and its
Consolidated Subsidiaries, in accordance with generally
accepted accounting principles.
19 Conversion and Exchange. The Notes due 2000 shall not be
-----------------------
convertible into or exchangeable into any other security;
provided that this provision shall not limit the Issuer's
ability to consummate an exchange offer as contemplated by
the Registration Rights Agreement, dated as of March 11,
1997, by and among the Issuer, Morgan Stanley & Co.
Incorporated, BancAmerica Securities, Inc., Chase Securities
Inc. and J.P. Morgan Securities Inc.
20. Other Terms. The Notes due 2000 shall have the other terms
-----------
and shall be substantially in the form set forth in the form
of Notes due 2000 attached hereto as Exhibit A. In case of
any conflict between this Annex A and the Notes due 2000 in
the form attached hereto as Exhibit A, the form of the Notes
due 2000 shall control.
Capitalized terms used but not otherwise defined herein shall
have the respective meanings ascribed to such terms in the Indenture.
8
<PAGE>
EXHIBIT A
[FORM OF FACE OF NOTE DUE MARCH 1, 2000]
[IF THE NOTE DUE 2000 IS TO BE A GLOBAL SECURITY, INSERT THE FOLLOWING
- - - THIS NOTE DUE 2000 IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS NOTE DUE 2000 IS EXCHANGEABLE FOR NOTES DUE
2000 REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
THIS NOTE DUE 2000 (OTHER THAN A TRANSFER OF THIS NOTE DUE 2000 AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE DUE 2000 IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE DUE 2000 ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
MCKESSON CORPORATION
6.60% NOTE DUE MARCH 1, 2000
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A NOTE DUE 2000 SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM, UNLESS
OTHERWISE AGREED BY THE ISSUER (WITH WRITTEN NOTICE THEREOF TO THE
<PAGE>
TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO McKESSON
CORPORATION (THE "ISSUER") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE FOR THE SECURITIES A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE SECURITIES. IF THE
PROPOSED TRANSFEREE
2
<PAGE>
IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE
SECURITIES, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
ISSUER OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, _____________________________,
the principal sum of _________________________ Dollars ($______) on March 1,
2000 and to pay interest on said principal sum from March 1, 1997, or from the
most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1997,
at the rate of 6.60% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Note due 2000 is not a Business Day,
then payment of principal or interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of such delay). The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture (referred to on the reverse hereof) be paid to the
person in whose name this Note due 2000 is registered at the close of business
on the record date for such interest installment, which shall be the close of
business on the immediately preceding February 15 and August 15 prior to such
Interest Payment Date, as applicable. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable
3
<PAGE>
to the registered holders on such record date and may be paid to the person in
whose name this Note due 2000 is registered at the close of business on a
subsequent record date (which shall be not less than five Business Days prior to
the date of payment of such defaulted interest), notice whereof shall be given
by mail by or on behalf of the Issuer to the registered holders of Notes due
2000 not less than 15 days preceding such subsequent record date, all as more
fully provided in the Indenture. The principal of and the interest on this Note
due 2000 shall be payable at the office or agency of the Issuer maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Issuer by check mailed to the person entitled thereto at such address as shall
appear in the registry books of the Issuer; provided, further that for so long
as this Note due 2000 is represented by a Registered Global Security, payment of
principal, premium, if any, or interest on this Note due 2000 may be made by
wire transfer to the account of the Depositary or its nominee.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture, by the
manual signature of one of its authorized officers, this Note due 2000 shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
Capitalized terms used in this Note due 2000 which are defined in the
Indenture shall have the respective meanings assigned to them in the Indenture.
The provisions of this Note due 2000 are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
[FORM OF REVERSE SIDE OF NOTE]
This Note due 2000 is one of a duly authorized series of securities
(the "Securities") of the Issuer designated as its 6.60% Notes due March 1, 2000
(the "Notes due 2000"). The Securities are all issued or to be issued under
and pursuant to an Indenture, dated as of March 11, 1997 (the "Indenture"), duly
executed and delivered between the Issuer and The First National Bank of
Chicago, a national banking association (the "Trustee," which term includes any
successor Trustee with respect to the Securities under the Indenture), to which
the Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Issuer, the Trustee
and the holders of the Securities and the terms upon which the Notes due 2000
are to be authenticated and
4
<PAGE>
delivered. The terms of individual series of Securities may vary with respect
to interest rate or interest rate formulas, issue dates, maturity, redemption,
repayment, currency of payment and otherwise.
This Note due 2000 is not redeemable and is not entitled to the
benefit of a sinking fund or any analogous provision.
If an Event of Default with respect to the Notes due 2000 shall occur
and be continuing, the principal of all the Notes due 2000 may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding Note
due 2000 affected thereby, (i) extend the final maturity of the principal of any
Security or reduce the principal amount thereof or reduce the rate or extend the
time of payment of interest thereon, or reduce any amount payable on redemption
thereof or make the principal thereof (including any amount in respect of
original issue discount), or interest thereon payable in any coin or currency
other than that provided in the Securities or Coupons or in accordance with the
terms thereof, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof or the amount thereof provable in bankruptcy or alter certain provisions
of the Indenture relating to Securities not denominated in Dollars or the
Judgment Currency of such Securities or impair or affect the right of any
Securityholder to institute suit for the enforcement of any payment thereof when
due or, if the Securities provide therefor, any right of repayment at the option
of the Securityholder or (ii) reduce the aforesaid percentage in principal
amount of Securities of any series issued under such Indenture, the consent of
the holders of which is required for any such modification. It is also provided
in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, the holders of a majority in aggregate
principal amount Outstanding of the Securities of each such series, each such
series voting as a separate class (or, of all Securities, as the case may be
voting as a single class) may under certain circumstances waive all defaults
with respect to each such series (or with respect to all the Securities, as the
case may be) and rescind and annul a declaration of default and its
consequences,
5
<PAGE>
but no such waiver or rescission and annulment shall extend to or affect any
subsequent default or shall impair any right consequent thereto. The preceding
sentence shall not, however, apply to a default in the payment of the principal
of or interest on any of the Securities.
No reference herein to the Indenture and no provision of this Note due
2000 or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note due 2000 at the time, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note due 2000 may be registered on the
registry books of the Issuer, upon surrender of this Note due 2000 for
registration of transfer at the office or agency of the Issuer maintained by the
Issuer for such purpose in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or by its attorney duly authorized in writing, and thereupon one or more new
Notes due 2000 of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes due 2000 are issuable only in registered form in minimum
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes due 2000 are exchangeable for a like aggregate principal amount
of Notes due 2000 as requested by the holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Note due 2000 for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the person in whose name this Note due 2000 is registered as the owner
hereof for all purposes, whether or not this Note due 2000 be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
THE INDENTURE AND THIS NOTE DUE 2000 SHALL BE DEEMED TO BE A CONTRACT
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCOR-
6
<PAGE>
DANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and in imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By:
------------------
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
7
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
_________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Note due 2000 and hereby irrevocably constitutes and appoints
________ attorney to transfer the said Note due 2000 on the books of the Issuer,
with full power of substitution in the premises.
In connection with any transfer of the within Note due 2000 occurring prior to
the Transfer Restriction Termination Date, the undersigned confirms that such
Note due 2000 is being transferred:
__ To McKesson Corporation or a subsidiary thereof; or
__ Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
__ To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
__ Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
__ Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended; or
__ Pursuant to an effective registration statement.
<PAGE>
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
__ The transferee is an Affiliate of the Issuer.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Note due 2000 in every particular without
alteration or enlargement or any change whatsoever.
- --------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount
of Notes due 2000
by which this Global
Security is to be Remaining
Reduced or Increased, Principal
and Reason for Amount of this
Date Reduction or Increase Global Security Notation Made By
--------- --------------------- --------------- ----------------
<PAGE>
ANNEX B
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "6-7/8% Notes
-----------
due March 1, 2002" (the "Notes due 2002").
2. Aggregate Principal Amount. The Notes due 2002 shall be limited
--------------------------
in aggregate principal amount to $175,000,000 (except for Notes
due 2002 authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes due
2002 pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3 of the
Indenture).
3. Currency Denomination. The Notes due 2002 shall be denominated
---------------------
in Dollars.
4. Maturity. The date on which the principal of the Notes due 2002
--------
is payable is March 1, 2002.
5. Rate of Interest; Interest Payment Date; Regular Record Dates.
-------------------------------------------------------------
Each Note due 2002 shall bear interest from March 1, 1997 at 6-
7/8% per annum until the principal thereof is paid. Such interest
shall be payable semiannually in arrears on March 1 and September
1 of each year, commencing on September 1, 1997, to the persons
in whose names the Notes due 2002 are registered at the close of
business on the immediately preceding February 15 and August 15,
respectively. Interest on the Notes due 2002 shall accrue from
the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance.
Interest on the Notes due 2002 shall be computed on the basis of
a 360-day year comprised of twelve 30-day months. The amount of
interest payable for any period shorter than a full semi-annual
period for which interest is computed will be computed on the
basis of the actual number of days elapsed per 30-day month. In
the event that any date on which principal, premium, if any, or
interest is payable on the Notes due 2002 is not a Business Day,
then payment of the principal, premium, if any, or interest
payable
<PAGE>
on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in
respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and interest on
----------------
the Notes due 2002 shall be payable, and the transfer of Notes
due 2002 shall be registrable, at the office or agency of the
Issuer to be maintained for such purpose in the Borough of
Manhattan, The City of New York, except that, at the option of
the Issuer, interest may be paid by mailing a check to the
address of the person entitled thereto as it appears on the Notes
due 2002 register; provided, however, that while any Notes due
2002 are represented by a Registered Global Security, payment of
principal of, premium, if any, or interest on the Notes due 2002
may be made by wire transfer to the account of the Depositary or
its nominee.
7. Optional Redemption. The Notes due 2002 are not optionally
-------------------
redeemable and are not entitled to the benefit of a sinking fund
or any analogous provisions.
8. Mandatory Redemption. The Notes due 2002 are not mandatorily
--------------------
redeemable and are not entitled to the benefit of a sinking fund
or any analogous provisions.
9. Denominations. The Notes due 2002 shall be issued initially in
-------------
minimum denominations of $100,000 and shall be issued in integral
multiples of $1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the Notes due
--------------------------------
2002 shall be payable upon declaration of acceleration pursuant
to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Notes due 2002
----------------
shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on
---------------------------
the Notes due 2002 shall not be payable in a currency other than
Dollars.
2
<PAGE>
13. Payment Currency - Index. The principal of and interest on the
------------------------
Notes due 2002 shall not be determined with reference to an index
based on a coin or currency.
14. Registered Securities. The Notes due 2002 shall be issuable as
---------------------
Registered Securities. The Notes due 2002 may be issued as
Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Notes due 2002 held by a Person that is not a U.S. Person
in respect of taxes or similar charges withheld or deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will
-----------------------
govern the transferability of Notes due 2002 in definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Notes due
2002. The Depository Trust Company shall initially serve as the
Depositary for the Registered Global Security representing Notes
due 2002.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in
Section 5.1 of the Indenture with respect to the Notes due 2002.
There shall be the following additions to the covenants of the
Issuer set forth in Article III with respect to the Notes due
2002:
Limitation on Liens. The Issuer covenants that, so long as any
of the Notes due 2002 remain outstanding, it shall not, nor shall
it permit any Consolidated Subsidiary to, create or assume any
Indebtedness for money borrowed which is secured by a mortgage,
pledge, security interest or lien ("liens") of or upon any
assets, whether now owned or hereafter acquired, of the Issuer or
any such Consolidated Subsidiary without equally and ratably
securing the Notes due 2002 by a lien ranking ratably with and
equal to (or at the option of the Issuer, senior to) such secured
Indebtedness, except that the foregoing restriction shall not
apply to (a) liens on any assets of any corporation existing at
the time such corporation becomes a Consolidated Subsidiary; (b)
liens on any assets existing at the time of acquisition of such
assets by the Issuer or a Consoli-
3
<PAGE>
dated Subsidiary, or liens to secure the payment of all or any
part of the purchase price of such assets upon the acquisition of
such assets by the Issuer or a Consolidated Subsidiary or to
secure any indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary 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 any assets theretofore owned by the Issuer or a
Consolidated Subsidiary, 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, or to
secure the payment of the purchase price of such assets, or to
secure indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon,
which indebtedness is incurred or guaranteed prior to, at the
time of or within 360 days after such acquisition (or in the case
of real property, completion of such improvement or construction
or commencement of full operation of such property, whichever is
later); (c) liens on any assets securing indebtedness owed by any
Consolidated Subsidiary to the Issuer or another wholly owned
Subsidiary; (d) liens on any assets of a corporation existing at
the time such corporation is merged into or consolidated with the
Issuer or a Subsidiary or at the time of a purchase, lease or
other acquisition of the assets of a corporation or firm as an
entirety or substantially as an entirety by the Issuer or a
Subsidiary; (e) liens on any assets of the Issuer or a
Consolidated Subsidiary in favor of the United States of America
or 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
4
<PAGE>
of construction) of the assets subject to such liens (including,
but not limited to, liens incurred in connection with pollution
control, industrial revenue or similar financing); (f) 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 (a) to (e), inclusive;
provided, however, that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement
shall be limited to all or a part of the assets which secured the
lien so extended, renewed or replaced (plus improvements and
construction on such real property); (g) liens imposed by law,
such as mechanics', workmen's, repairmen's, materialmen's,
carriers', warehousemen's, vendors' or other similar liens
arising in the ordinary course of business, or governmental
(federal, state or municipal) liens arising out of contracts for
the sale of products or services by the Issuer or any
Consolidated Subsidiary, or deposits or pledges to obtain the
release of any of the foregoing liens; (h) pledges, liens or
deposits under worker's compensation laws or similar legislation
and liens or judgments thereunder which are not currently
dischargeable, or in connection with bids, tenders, contracts
(other than for the payment of money) or leases to which the
Issuer or any Consolidated Subsidiary is a party, or to secure
public or statutory obligations of the Issuer or any Consolidated
Subsidiary, or in connection with obtaining or maintaining self-
insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age
pensions, social security or similar matters, or to secure
surety, appeal or customs bonds to which the Issuer or any
Consolidated Subsidiary is a party, or in litigation or other
proceedings such as, but not limited to, interpleader
proceedings, and other similar pledges, liens or deposits made or
incurred in the ordinary course of business; (i) 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 judgements or awards against the
Issuer or any Consolidated Subsidiary with respect to which the
Issuer or such Consolidated Subsidiary is in good faith
prosecuting an appeal or proceedings for review or for which the
time to make an appeal has not yet expired; or final unappealable
judgment liens
5
<PAGE>
which are satisfied within 15 days of the date of judgment; or
liens incurred by the Issuer or any Consolidated Subsidiary for
the purpose of obtaining a stay or discharge in the course of any
litigation or other proceeding to which the Issuer or such
Consolidated Subsidiary is a party; or (j) liens for taxes or
assessments or governmental charges or levies not yet due or
delinquent, or which can thereafter be paid without penalty, or
which are being contested in good faith by appropriate
proceedings; landlord's liens on property held under lease; and
any other liens or charges incidental to the conduct of the
business of the Issuer or any Consolidated Subsidiary or the
ownership of the assets of any of them which were not incurred in
connection with the borrowing of money or the obtaining of
advances or credit and which do not, in the opinion of the
Issuer, materially impair the use of such assets in the operation
of the business of the Issuer or such Consolidated Subsidiary or
the value of such assets for the purposes thereof.
Notwithstanding the above, the Issuer or any Consolidated
Subsidiary may, without securing the Notes due 2002, create or
assume any Indebtedness which is secured by a lien which would
otherwise be subject to the foregoing restrictions, provided that
at the time of such creation or assumption, after giving effect
thereto, Exempted Debt does not exceed 10% of the total assets of
the Issuer and its Subsidiaries on a consolidated basis,
determined in accordance with generally accepted accounting
principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Notes due 2002 remain
outstanding, it will not, nor shall it permit any Consolidated
Subsidiary to, enter into any sale and lease-back transactions
with respect to any assets, other than any sale leaseback
transaction (involving a lease for a term of not more than three
years), unless either (a) the Issuer or such Consolidated
Subsidiary would be entitled to incur Indebtedness secured by a
lien on the assets to be leased in an amount at least equal to
the Attributable Debt in respect of such transaction without
equally and ratably securing the Notes due 2002 pursuant to
clauses (a) through (j) inclusive of the covenant with respect to
"Limitation on Liens" above, or (b) the proceeds of the sale of
the assets to be leased are at least equal to their fair market
value (as determined by the Board of Directors of the Issuer) and
the proceeds are applied to the purchase or
6
<PAGE>
acquisition (or, in the case of real property, the construction)
of assets or to the retirement (other than at maturity or
pursuant to a mandatory sinking fund or mandatory redemption
provision) of indebtedness. The foregoing limitation shall not
apply, if at the time the Issuer or any Consolidated Subsidiary
enters into such sale and lease-back transaction, and after
giving effect thereto, Exempted Debt does not exceed 10% of the
total assets of the Issuer and its Subsidiaries on a consolidated
basis, determined in accordance with generally accepted
accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the
lesser of (a) the fair value of the assets subject to such
transaction or (b) the present value (discounted at the rate of
interest set forth in or implicit in the terms of such lease or,
if it is not practicable to determine such rate, the weighted
average interest rate per annum borne by all series of Securities
then Outstanding and subject to the Limitation Sale and Leaseback
Transactions and compounded semiannually, in either case as
determined by the principal accounting or financial officer of
the Issuer) of the obligations of the Issuer or any Consolidated
Subsidiary for net rental payments during the remaining term of
all leases (including any period for which such lease has been
extended or may, at the option of the lessor, be extended). The
term "net rental payments" under any lease of any period shall
mean the sum of the rental and other payments required to be paid
in such period by the lessee thereunder, not including, however,
any amounts required to be paid by such lessee (whether or not
designated as rental or additional rental) on account of
maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges required to be paid
by such lessee thereunder or any amounts required to be paid by
such lessee thereunder contingent upon the amount of sales,
maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges. The term
"Consolidated Subsidiary" shall mean any Subsidiary substantially
all the property of which is located, and substantially all the
operations of which are conducted, in the United States of
America whose financial statements are consolidated with those of
the Issuer in accordance with generally accepted accounting
principles. The term "Exempted Debt" shall mean the sum of the
7
<PAGE>
following as of the date of determination: (i) Indebtedness of
the Issuer and its Consolidated Subsidiaries incurred after the
date of the Indenture and secured by liens not permitted to be
created or assumed pursuant to the covenant with respect to
"Limitation on Liens" above, and (ii) Attributable Debt of the
Issuer and its Consolidated Subsidiaries in respect of every sale
and lease-back transaction entered into after the date of the
Indenture, other than leases expressly permitted by the covenant
with respect to "Limitation on Sale and Lease-Back Transactions"
above. The term "Indebtedness" shall mean all items classified
as indebtedness on the most recently available consolidated
balance sheet of the Issuer and its Consolidated Subsidiaries, in
accordance with generally accepted accounting principles.
19. Conversion and Exchange. The Notes due 2002 shall not be
-----------------------
convertible for or exchangeable into any other security; provided
that this provision shall not limit the Issuer's ability to
consummate an exchange offer as contemplated by the Registration
Rights Agreement, dated as of March 11, 1997, by and among the
Issuer, Morgan Stanley & Co. Incorporated, BancAmerica
Securities, Inc., Chase Securities Inc. and J.P. Morgan
Securities Inc.
20. Other Terms. The Notes due 2002 shall have the other terms and
-----------
shall be substantially in the form set forth in the form of Notes
due 2002 attached hereto as Exhibit A. In case of any conflict
between this Annex B and the Notes due 2002 in the form attached
hereto as Exhibit A, the form of the Notes due 2002 shall
control.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
8
<PAGE>
EXHIBIT A
[FORM OF FACE OF NOTE DUE MARCH 1, 2002]
[IF THE NOTE DUE 2002 IS TO BE A GLOBAL SECURITY, INSERT THE FOLLOWING
- - - THIS NOTE DUE 2002 IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS NOTE DUE 2002 IS EXCHANGEABLE FOR NOTES DUE
2002 REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
THIS NOTE DUE 2002 (OTHER THAN A TRANSFER OF THIS NOTE DUE 2002 AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE DUE 2002 IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE DUE 2002 ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
MCKESSON CORPORATION
6-7/8% NOTE DUE MARCH 1, 2002
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A NOTE DUE 2002 SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM, UNLESS
OTHERWISE AGREED BY THE ISSUER (WITH WRITTEN NOTICE THEREOF TO THE
<PAGE>
TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO McKESSON
CORPORATION (THE "ISSUER") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE FOR THE SECURITIES A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE SECURITIES. IF THE
PROPOSED TRANSFEREE
2
<PAGE>
IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE
SECURITIES, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
ISSUER OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, ______________________________,
the principal sum of _________________________ Dollars ($______) on March 1,
2002 and to pay interest on said principal sum from March 1, 1997, or from the
most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1997,
at the rate of 6-7/8% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Note due 2002 is not a Business Day,
then payment of principal or interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of such delay). The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture (referred to on the reverse hereof) be paid to the
person in whose name this Note due 2002 is registered at the close of business
on the record date for such interest installment, which shall be the close of
business on the immediately preceding February 15 and August 15 prior to such
Interest Payment Date, as applicable. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable
3
<PAGE>
to the registered holders on such record date and may be paid to the person in
whose name this Note due 2002 is registered at the close of business on a
subsequent record date (which shall be not less than five Business Days prior to
the date of payment of such defaulted interest), notice whereof shall be given
by mail by or on behalf of the Issuer to the registered holders of Notes due
2002 not less than 15 days preceding such subsequent record date, all as more
fully provided in the Indenture. The principal of and the interest on this Note
due 2002 shall be payable at the office or agency of the Issuer maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Issuer by check mailed to the person entitled thereto at such address as shall
appear in the registry books of the Issuer; provided, further that for so long
as this Note due 2002 is represented by a Registered Global Security, payment of
principal, premium, if any, or interest on this Note due 2002 may be made by
wire transfer to the account of the Depositary or its nominee.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture, by the
manual signature of one of its authorized officers, this Note due 2002 shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
Capitalized terms used in this Note due 2002 which are defined in the
Indenture shall have the respective meanings assigned to them in the Indenture.
The provisions of this Note due 2002 are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
[FORM OF REVERSE SIDE OF NOTE]
This Note due 2002 is one of a duly authorized series of securities
(the "Securities") of the Issuer designated as its 6-7/8% Notes due March 1,
2002 (the "Notes due 2002"). The Securities are all issued or to be issued under
and pursuant to an Indenture, dated as of March 11, 1997 (the "Indenture"), duly
executed and delivered between the Issuer and The First National Bank of
Chicago, a national banking association (the "Trustee," which term includes any
successor Trustee with respect to the Securities under the Indenture), to which
the Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Issuer, the Trustee
and the holders of the Securities and the terms upon which the Notes due 2002
are to be authenticated and
4
<PAGE>
delivered. The terms of individual series of Securities may vary with respect
to interest rate or interest rate formulas, issue dates, maturity, redemption,
repayment, currency of payment and otherwise.
This Note due 2002 is not redeemable and is not entitled to the
benefit of a sinking fund or any analogous provision.
If an Event of Default with respect to the Notes due 2002 shall occur
and be continuing, the principal of all the Notes due 2002 may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding Note
due 2002 affected thereby, (i) extend the final maturity of the principal of any
Security or reduce the principal amount thereof or reduce the rate or extend the
time of payment of interest thereon, or reduce any amount payable on redemption
thereof or make the principal thereof (including any amount in respect of
original issue discount), or interest thereon payable in any coin or currency
other than that provided in the Securities or Coupons or in accordance with the
terms thereof, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof or the amount thereof provable in bankruptcy or alter certain provisions
of the Indenture relating to Securities not denominated in Dollars or the
Judgment Currency of such Securities or impair or affect the right of any
Securityholder to institute suit for the enforcement of any payment thereof when
due or, if the Securities provide therefor, any right of repayment at the option
of the Securityholder or (ii) reduce the aforesaid percentage in principal
amount of Securities of any series issued under such Indenture, the consent of
the holders of which is required for any such modification. It is also provided
in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, the holders of a majority in aggregate
principal amount Outstanding of the Securities of each such series, each such
series voting as a separate class (or, of all Securities, as the case may be
voting as a single class) may under certain circumstances waive all defaults
with respect to each such series (or with respect to all the Securities, as the
case may be) and rescind and annul a declaration of default and its
consequences,
5
<PAGE>
but no such waiver or rescission and annulment shall extend to or affect any
subsequent default or shall impair any right consequent thereto. The preceding
sentence shall not, however, apply to a default in the payment of the principal
of or interest on any of the Securities.
No reference herein to the Indenture and no provision of this Note due
2002 or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note due 2002 at the time, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note due 2002 may be registered on the
registry books of the Issuer, upon surrender of this Note due 2002 for
registration of transfer at the office or agency of the Issuer maintained by the
Issuer for such purpose in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or by its attorney duly authorized in writing, and thereupon one or more new
Notes due 2002 of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes due 2002 are issuable only in registered form in minimum
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes due 2002 are exchangeable for a like aggregate principal amount
of Notes due 2002 as requested by the holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Note due 2002 for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the person in whose name this Note due 2002 is registered as the owner
hereof for all purposes, whether or not this Note due 2002 be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
THE INDENTURE AND THIS NOTE DUE 2002 SHALL BE DEEMED TO BE A CONTRACT
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCOR-
6
<PAGE>
DANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF.
7
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and in imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By:
-----------------
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
_________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Note due 2002 and hereby irrevocably constitutes and appoints
________ attorney to transfer the said Note due 2002 on the books of the Issuer,
with full power of substitution in the premises.
In connection with any transfer of the within Note due 2002 occurring prior to
the Transfer Restriction Termination Date, the undersigned confirms that such
Note due 2002 is being transferred:
__ To McKesson Corporation or a subsidiary thereof; or
__ Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
__ To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
__ Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
__ Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended; or
__ Pursuant to an effective registration statement.
<PAGE>
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
__ The transferee is an Affiliate of the Issuer.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Note due 2002 in every particular without
alteration or enlargement or any change whatsoever.
- ----------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount
of Notes due 2002
by which this Global
Security is to be Remaining
Reduced or Increased, Principal
and Reason for Amount of this
Date Reduction or Increase Global Security Notation Made By
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ANNEX C
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "7.65%
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Debentures due March 1, 2027" (the "Debentures due 2027").
2. Aggregate Principal Amount. The Debentures due 2027 shall be
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limited in aggregate principal amount to $175,000,000 (except for
Debentures due 2027 authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other
Debentures due 2027 pursuant to Section 2.8, 2.9, 2.11, 8.5 or
12.3 of the Indenture).
3. Currency Denomination. The Debentures due 2027 shall be
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denominated in Dollars.
4. Maturity. The date on which the principal of the Debentures due
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2027 is payable is March 1, 2027.
5. Rate of Interest; Interest Payment Date; Regular Record Dates.
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Each Debenture due 2027 shall bear interest from March 1, 1997 at
7.65% per annum until the principal thereof is paid. Such
interest shall be payable semiannually in arrears on March 1 and
September 1 of each year, commencing on September 1, 1997, to the
persons in whose names the Debentures due 2027 are registered at
the close of business on the immediately preceding February 15
and August 15, respectively. Interest on the Debentures due 2027
shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original
issuance. Interest on the Debentures due 2027 shall be computed
on the basis of a 360-day year comprised of twelve 30-day months.
The amount of interest payable for any period shorter than a full
semi-annual period for which interest is computed will be
computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which principal,
premium, if any, or interest is payable on the Debentures due
2027 is not a Business Day, then payment of the principal,
premium, if any, or interest payable on such date will be made on
the next succeeding
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day that is a Business Day (and without any interest or other
payment in respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and interest on
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the Debentures due 2027 shall be payable, and the transfer of
Debentures due 2027 shall be registrable, at the office or agency
of the Issuer to be maintained for such purpose in the Borough of
Manhattan, The City of New York, except that, at the option of
the Issuer, interest may be paid by mailing a check to the
address of the person entitled thereto as it appears on the
Debentures due 2027 register; provided, however, that while any
Debentures due 2027 are represented by a Registered Global
Security, payment of principal of, premium, if any, or interest
on the Debentures due 2027 may be made by wire transfer to the
account of the Depositary or its nominee.
7. Optional Redemption. The Debentures due 2027 may be redeemed as
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a whole or in part, at the option of the Issuer, at any time at a
redemption price equal to the greater of (i) 100% of their
principal amount or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon
discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Yield plus 12.5 basis points, plus accrued interest
to the date of redemption. Holders of Debentures due 2027 to be
redeemed will receive notice thereof by first-class mail at least
30 and not more than 60 days prior to the date fixed for
redemption.
"Treasury Yield" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for
the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date. "Comparable Treasury Issue" means the United
States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of
the Debentures due 2027 that would be utilized, at the time of
selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Debentures due 2027.
"Independent Investment Banker" means Morgan Stanley & Co.
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Incorporated or, if such firm is unwilling or unable to select
the Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) on the third business day preceding such
redemption date, as set forth in the daily statistical release
(or any successor release) published by the Federal Reserve Bank
of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such
prices on such business day, (A) the average of the Reference
Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such
Quotations. "Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Trustee, of the bid and
asked prices of the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Morgan Stanley & Co.
Incorporated, BancAmerica Securities, Inc., Chase Securities Inc.
and J.P. Morgan Securities Inc., and their respective successors;
provided however, that if any of the foregoing shall cease to be
a primary U.S. Government Securities dealer in New York City (a
"Primary Treasury Dealer"), the Issuer shall substitute therefor
another Primary Treasury Dealer.
8. Mandatory Redemption. The Debentures due 2027 are not
--------------------
mandatorily redeemable and are not entitled to the benefit of a
sinking fund or any analogous provisions.
9. Denominations. The Debentures due 2027 shall be issued initially
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in minimum denominations of $100,000 and shall be issued in
integral multiples of $1,000 in excess thereof.
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10. Amount Payable Upon Acceleration. The principal of the
--------------------------------
Debentures due 2027 shall be payable upon declaration of
acceleration pursuant to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Debentures due
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2027 shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on
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the Debentures due 2027 shall not be payable in a currency other
than Dollars.
13. Payment Currency - Index. The principal of and interest on the
------------------------
Debentures due 2027 shall not be determined with reference to an
index based on a coin or currency.
14. Registered Securities. The Debentures due 2027 shall be issuable
---------------------
as Registered Securities. The Debentures due 2027 may be issued
as Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Debentures due 2027 held by a Person that is not a U.S.
Person in respect of taxes or similar charges withheld or
deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will
-----------------------
govern the transferability of Debentures due 2027 in definitive
form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Debentures
due 2027. The Depository Trust Company shall initially serve as
the Depositary for the Registered Global Securities representing
Debentures due 2027.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in
Section 5.1 of the Indenture with respect to the Debentures due
2027. There shall be the following additions to the covenants of
the Issuer set forth in Article III with respect to the
Debentures due 2027:
Limitation on Liens. The Issuer covenants that, so long as any
of the Debentures due 2027 remain outstanding, it shall not, nor
shall
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it permit any Consolidated Subsidiary to, create or assume any
Indebtedness for money borrowed which is secured by a mortgage,
pledge, security interest or lien ("liens") of or upon any
assets, whether now owned or hereafter acquired, of the Issuer or
any such Consolidated Subsidiary without equal and ratably
securing the Debentures due 2027 by a lien ranking ratably with
and equalto (or at the option of the Issuer, senior to) such
secured Indebtedness, except that the foregoing restriction shall
not apply to (a) liens on any assets of any corporation existing
at the time such corporation becomes a Consolidated Subsidiary;
(b) liens on any assets existing at the time of acquisition of
such assets by the Issuer or a Consolidated Subsidiary, or liens
to secure the payment of all or any part of the purchase price of
such assets upon the acquisition of such assets by the Issuer or
a Consolidated Subsidiary or to secure any indebtedness incurred
or guaranteed by the Issuer or a Consolidated Subsidiary 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 any
assets theretofore owned by the Issuer or a Consolidated
Subsidiary, 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, or to secure the
payment of the purchase price of such assets, or to secure
indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon,
which indebtedness is incurred or guaranteed prior to, at the
time of or within 360 days after such acquisition (or in the case
of real property, completion of such improvement or construction
or commencement of full operation of such property, whichever is
later); (c) liens on any assets securing indebtedness owed by any
Consolidated Subsidiary to the Issuer or another wholly owned
Subsidiary; (d) liens on any assets of a corporation existing at
the time such corporation is merged into or consolidated with the
Issuer or a Subsidiary or at the time of a purchase, lease or
other
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<PAGE>
acquisition of the assets of a corporation or firm as an entirety
or substantially as an entirety by the Issuer or a Subsidiary;
(e) liens on any assets of the Issuer or a Consolidated
Subsidiary in favor of the United States of America or 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 (including, but not limited to, liens incurred in
connection with pollution control, industrial revenue or similar
financing); (f) 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 (a) to
(e), inclusive; provided, however, that the principal amount of
indebtedness secured thereby shall not exceed the principal
amount of indebtedness so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or
replacement shall be limited to all or a part of the assets which
secured the lien so extended, renewed or replaced (plus
improvements and construction on such real property); (g) liens
imposed by law, such as mechanics', workmen's, repairmen's,
materialmen's, carriers', warehousemen's, vendors' or other
similar liens arising in the ordinary course of business, or
governmental (federal, state or municipal) liens arising out of
contracts for the sale of products or services by the Issuer or
any Consolidated Subsidiary, or deposits or pledges to obtain the
release of any of the foregoing liens; (h) pledges, liens or
deposits under worker's compensation laws or similar legislation
and liens or judgments thereunder which are not currently
dischargeable, or in connection with bids, tenders, contracts
(other than for the payment of money) or leases to which the
Issuer or any Consolidated Subsidiary is a party, or to secure
public or statutory obligations of the Issuer or any Consolidated
Subsidiary, or in connection with obtaining or maintaining self-
insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age
pensions, social security or similar matters, or to secure
surety, appeal or customs bonds to which the Issuer or any
Consolidated Subsidiary is a party, or in litigation or other
proceedings such as,
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but not limited to, interpleader proceedings, and other similar
pledges, liens or deposits made or incurred in the ordinary
course of business; (i) 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
judgements or awards against the Issuer or any Consolidated
Subsidiary with respect to which the Issuer or such Consolidated
Subsidiary is in good faith prosecuting an appeal or proceedings
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 the
Issuer or any Consolidated Subsidiary for the purpose of
obtaining a stay or discharge in the course of any litigation or
other proceeding to which the Issuer or such Consolidated
Subsidiary is a party; or (j) liens for taxes or assessments or
governmental charges or levies not yet due or delinquent, or
which can thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings; landlord's
liens on property held under lease; and any other liens or
charges incidental to the conduct of the business of the Issuer
or any Consolidated Subsidiary or the ownership of the assets of
any of them which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and
which do not, in the opinion of the Issuer, materially impair the
use of such assets in the operation of the business of the Issuer
or such Consolidated Subsidiary or the value of such assets for
the purposes thereof. Notwithstanding the above, the Issuer or
any Consolidated Subsidiary may, without securing the Debentures
due 2027, create or assume any Indebtedness which is secured by a
lien which would otherwise be subject to the foregoing
restrictions, provided that at the time of such creation or
assumption, after giving effect thereto, Exempted Debt does not
exceed 10% of the total assets of the Issuer and its Subsidiaries
on a consolidated basis, determined in accordance with generally
accepted accounting principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Debentures due 2027 remain
outstanding, it will not, nor shall it permit any Consolidated
Subsidiary to, enter into any sale and lease-back transactions
with respect to any assets, other than any sale leaseback
transaction (involving leases for a term of not more than three
years), unless
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either (a) the Issuer or such Consolidated Subsidiary would be
entitled to incur Indebtedness secured by a lien on the assets to
be leased in an amount at least equal to the Attributable Debt in
respect of such transaction without equally and ratably securing
the Debentures due 2027 pursuant to clauses (a) through (j)
inclusive of the covenant with respect to "Limitation on Liens"
above, or (b) the proceeds of the sale of the assets to be leased
are at least equal to their fair market value (as determined by
the Board of Directors of the Issuer) and the proceeds are
applied to the purchase or acquisition (or, in the case of real
property, the construction) of assets or to the retirement (other
than at maturity or pursuant to a mandatory sinking fund or
mandatory redemption provision) of indebtedness. The foregoing
limitation shall not apply, if at the time the Issuer or any
Consolidated Subsidiary enters into such sale and lease-back
transaction, and after giving effect thereto, Exempted Debt does
not exceed 10% of the total assets of the Issuer and its
Subsidiaries on a consolidated basis, determined in accordance
with generally accepted accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the
lesser of (a) the fair value of the assets subject to such
transaction or (b) the present value (discounted at the rate of
interest set forth in or implicit in the terms of such lease or,
if it is not practicable to determine such rate, the weighted
average interest rate per annum borne by all series of Securities
then Outstanding and subject to the Limitation on Sale and
Leaseback Transactions and compounded semiannually, in either
case as determined by the principal accounting or financial
officer of the Issuer) of the obligations of the Issuer or any
Consolidated Subsidiary for net rental payments during the
remaining term of all leases (including any period for which such
lease has been extended or may, at the option of the lessor, be
extended). The term "net rental payments" under any lease of any
period shall mean the sum of the rental and other payments
required to be paid in such period by the lessee thereunder, not
including, however, any amounts required to be paid by such
lessee (whether or not designated as rental or additional rental)
on account of maintenance and repairs, reconstruction, insurance,
taxes, assessments, water rates or similar charges required to be
paid by such lessee thereunder or any amounts required to be paid
by such lessee thereunder contingent
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upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or
similar charges. The term "Consolidated Subsidiary" shall mean
any Subsidiary substantially all the property of which is
located, and substantially all the operations of which are
conducted, in the United States of America whose financial
statements are consolidated with those of the Issuer in
accordance with generally accepted accounting principles. The
term "Exempted Debt" shall mean the sum of the following as of
the date of determination: (i) Indebtedness of the Issuer and
its Consolidated Subsidiaries incurred after the date of the
Indenture and secured by liens not permitted to be created or
assumed pursuant to the covenant with respect to "Limitation on
Liens" above, and (ii) Attributable Debt of the Issuer and its
Consolidated Subsidiaries in respect of every sale and lease-back
transaction entered into after the date of the Indenture, other
than leases permitted by this covenant with respect to
"Limitation on Sale and Lease-Back Transactions" above. The term
"Indebtedness" shall mean all items classified as indebtedness on
the most recently available consolidated balance sheet of the
Issuer and its Consolidated Subsidiaries, in accordance with
generally accepted accounting principles.
19. Conversion and Exchange. The Debentures due 2027 shall not by
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their terms be convertible into or exchangeable for any other
security; provided that this provision shall not limit the
Issuer's ability to consummate an exchange offer as contemplated
by the Registration Rights Agreement, dated as of March 11, 1997,
by and among the Issuer, Morgan Stanley & Co. Incorporated,
BancAmerica Securities, Inc., Chase Securities Inc. and J.P.
Morgan Securities Inc.
20. Other Terms. The Debentures due 2027 shall have the other terms
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and shall be substantially in the form set forth in the form of
Debentures due 2027 attached hereto as Exhibit A. In case of any
conflict between this Annex C and the Debentures due 2027 in the
form attached hereto as Exhibit A, the form of the Debentures due
2027 shall control.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
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EXHIBIT A
[FORM OF FACE OF DEBENTURE DUE MARCH 1, 2027]
[IF THE DEBENTURE DUE 2027 IS TO BE A GLOBAL SECURITY, INSERT THE
FOLLOWING - - THIS DEBENTURE DUE 2027 IS A BOOK-ENTRY SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS DEBENTURE DUE 2027 IS
EXCHANGEABLE FOR DEBENTURES DUE 2027 REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS DEBENTURE DUE 2027 (OTHER THAN A
TRANSFER OF THIS DEBENTURE DUE 2027) AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS DEBENTURE DUE 2027 IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY DEBENTURE DUE 2027 ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
MCKESSON CORPORATION
7.65% DEBENTURE DUE MARCH 1, 2027
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A DEBENTURE DUE 2027 SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM,
UNLESS OTHER-
<PAGE>
WISE AGREED BY THE ISSUER (WITH WRITTEN NOTICE THEREOF TO THE TRUSTEE): THE
SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO McKESSON CORPORATION (THE
"ISSUER") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR
THE SECURITIES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY
PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO
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THE TRUSTEE FOR THE SECURITIES. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE SECURITIES, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE ISSUER OR THE TRUSTEE
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _______________________________,
the principal sum of _____________________________ Dollars ($______________) on
March 1, 2027 and to pay interest on said principal sum from March 1, 1997, or
from the most recent interest payment date to which interest has been paid or
duly provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1997,
at the rate of 7.65% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal, premium, if any, or interest payable on this Debenture due 2027
is not a Business Day, then payment of principal, premium, if any, or interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of such delay). The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture (referred to on the
reverse hereof) be paid to the person in whose name this Debenture due 2027 is
registered at the close of business on the record date for such interest
installment, which shall be the close of business on the immediately preceding
February 15 and August 15 prior to such Interest
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Payment Date, as applicable. Any such interest installment not punctually paid
or duly provided for shall forthwith cease to be payable to the registered
holders on such record date and may be paid to the person in whose name this
Debenture due 2027 is registered at the close of business on a subsequent record
date (which shall be not less than five Business Days prior to the date of
payment of such defaulted interest), notice whereof shall be given by mail by or
on behalf of the Issuer to the registered holders of Debentures due 2027 not
less than 15 days preceding such subsequent record date, all as more fully
provided for in the Indenture. The principal of, preimum, if any, and the
interest on this Debenture due 2027 shall be payable at the office or agency of
the Issuer maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Issuer by check mailed to the person entitled thereto
at such address as shall appear in the registry books of the Issuer; provided,
further that for so long as this Debenture due 2027 is represented by a
Registered Global Security, payment of principal, premium, if any, or interest
on this Debenture due 2027 may be made by wire transfer to the account of the
Depositary or its nominee.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture, by the
manual signature of one of its authorized officers, this Debenture due 2027
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Capitalized terms used in this Debenture due 2027 which are defined in
the Indenture shall have the respective meanings assigned to them in the
Indenture.
The provisions of this Debenture due 2027 are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
[FORM OF REVERSE SIDE OF DEBENTURE]
This Debenture due 2027 is one of a duly authorized series of
securities (the "Securities") of the Issuer designated as its 7.65% Debentures
due March 1, 2027 (the "Debentures due 2027"). The Securities are all issued or
to be issued under and pursuant to an Indenture, dated as of March 11, 1997 (the
"Indenture"), duly executed and delivered between the Issuer and The First
National Bank of Chicago, a national banking association (the "Trustee," which
term includes
4
<PAGE>
any successor Trustee with respect to the Securities under the Indenture), to
which the Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Issuer, the
Trustee and the holders of the Securities and the terms upon which the
Debentures due 2027 are to be authenticated and delivered. The terms of
individual series of Securities may vary with respect to interest rate or
interest rate formulas, issue dates, maturity, redemption, repayment, currency
of payment and otherwise.
Except as set forth below, this Debenture due 2027 is not redeemable
and is not entitled to the benefit of a sinking fund or any analogous provision.
This Debenture due 2027 is redeemable as a whole or in part, at the
option of the Issuer, at any time at a redemption price equal to the greater of
(i) 100% of its principal amount or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Yield plus 12.5 basis points, plus accrued
interest to the date of redemption. The Holder of this Debenture due 2027 will
receive notice thereof by first-class mail at least 30 and not more than 60 days
prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. "Comparable Treasury Issue" means the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Debentures due 2027
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Debentures due 2027.
"Independent Investment Banker" means Morgan Stanley & Co. Incorporated or, if
such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Trustee. "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor
5
<PAGE>
release) is not published or does not contain such prices on such business day,
(A) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices of the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date. "Reference Treasury Dealer" means each of
Morgan Stanley & Co. Incorporated, BancAmerica Securities, Inc., Chase
Securities Inc. and J.P. Morgan Securities, Inc., and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government Securities dealer in New York City (a "Primary Treasury
Dealer"), the Issuer shall substitute therefor another Primary Treasury Dealer.
If an Event of Default with respect to the Debentures due 2027 shall
occur and be continuing, the principal of all the Debentures due 2027 may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding
Debenture due 2027 affected thereby, (i) extend the final maturity of the
principal of any Security or reduce the principal amount thereof or reduce the
rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or make the principal thereof (including any
amount in respect of original issue discount), or interest thereon payable in
any coin or currency other than that provided in the Securities or Coupons or in
accordance with the terms thereof, or reduce the amount of principal of an
Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof or the amount thereof provable in
bankruptcy or alter certain provisions of the Indenture relating to Securities
not denominated in Dollars or the Judgment Currency of such Securities or impair
or affect the right of any Securityholder to institute suit for the enforcement
of any payment thereof when due
6
<PAGE>
or, if the Securities provide therefor, any right of repayment at the option of
the Securityholder or (ii) reduce the aforesaid percentage in principal amount
of Securities of any series issued under such Indenture, the consent of the
holders of which is required for any such modification. It is also provided in
the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, the holders of a majority in aggregate
principal amount Outstanding of the Securities of each such series, each such
series voting as a separate class (or, of all Securities, as the case may be
voting as a single class) may under certain circumstances waive all defaults
with respect to each such series (or with respect to all the Securities, as the
case may be) and rescind and annul a declaration of default and its
consequences, but no such waiver or rescission and annulment shall extend to or
affect any subsequent default or shall impair any right consequent thereto. The
preceding sentence shall not, however, apply to a default in the payment of the
principal of or interest on any of the Securities.
No reference herein to the Indenture and no provision of this
Debenture due 2027 or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Debenture due 2027 at the time, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Debenture due 2027 may be registered on
the registry books of the Issuer, upon surrender of this Debenture due 2027 for
registration of transfer at the office or agency of the Issuer maintained by the
Issuer for such purpose in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or by its attorney duly authorized in writing, and thereupon one or more new
Debentures due 2027 of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Debentures due 2027 are issuable only in registered form in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, the Debentures due 2027 are exchangeable for a like aggregate
principal amount of Debentures due 2027 as requested by the holder surrendering
the same.
7
<PAGE>
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Debenture due 2027 for registration
of transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the person in whose name this Debenture due 2027 is registered as the
owner hereof for all purposes, whether or not this Debenture due 2027 be
overdue, and neither the Issuer, the Trustee nor any such agent shall be
affected by notice to the contrary.
THE INDENTURE AND THIS DEBENTURE DUE 2027 SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
8
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By:
------------------
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR DEBENTURES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _________________________
________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Debenture due 2027 and hereby irrevocably constitutes and appoints
________ attorney to transfer the said Debenture due 2027 on the books of the
Issuer, with full power of substitution in the premises.
In connection with any transfer of the within Debenture due 2027 occurring prior
to the Transfer Restriction Termination Date, the undersigned confirms that such
Debenture due 2027 is being transferred:
__ To McKesson Corporation or a subsidiary thereof; or
__ Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
__ To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
__ Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
__ Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended; or
__ Pursuant to an effective registration statement.
<PAGE>
and unless the box below is checked, the undersigned confirms that such
Debenture is not being transferred to an "affiliate" of the Issuer as defined in
Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):
__ The transferee is an Affiliate of the Issuer.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Debenture due 2027 in every particular
without alteration or enlargement or any change whatsoever.
- ----------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount
of Debentures due 2027
by which this Global
Security is to be
Reduced or Increased, Remaining Principal
and Reason for Amount of this
Date Reduction or Increase Global Security Notation Made By
--------- --------------------- --------------- ----------------
<PAGE>
Exhibit 4.3
FORM OF OFFICER'S CERTIFICATE
-----------------------------
The undersigned, McKesson Corporation, a Delaware corporation (the
"Corporation"), hereby certifies through Nancy A. Miller, its Vice President and
Corporate Secretary, pursuant to Section 2.3 of the Indenture, dated as of March
11, 1997 (the "Indenture"), by and between the Company, as Issuer, and First
National Bank of Chicago, a national association, as Trustee, as follows:
1. She has read Section 2.3 of the Indenture, read such other documents as she
deemed necessary and made such other inquiries as she deemed necessary to make
the certifications in paragraph 2 and 3 hereof.
2. Pursuant to the terms of resolutions adopted by the Board of Directors of
the Corporation (the "Board of Directors") dated January 29, 1997 and the
Finance Committee of the Board of Directors dated March 6, 1997 and action of
officers of the Corporation dated March 11, 1997, the terms of the Corporation's
6.60% Exchange Notes due 2000, 6-7/8% Exchange Notes due 2002 and 7.65% Exchange
Debentures due 2027 set forth in Annex A, Annex B and Annex C, respectively,
attached hereto have been duly adopted by the Corporation.
3. All conditions precedent provided for in the Indenture relating to the
issuance of such securities have been complied with.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized officer as of this th day of June 1997.
McKESSON CORPORATION
By:
-------------------
Nancy A. Miller
Vice President and
Corporate Secretary
<PAGE>
ANNEX A
Pursuant to Section 2.3 of the Indenture, dated as of March 11,
1997 (the "Indenture"), between McKesson Corporation (the "Issuer") and The
First National Bank of Chicago, a national banking association, as trustee
(the "Trustee"), the terms of a series of securities to be issued pursuant
to the Indenture are as follows:
1. Designation. The designation of the securities is "6.60%
-----------
Exchange Notes due March 1, 2000" (the "Exchange Notes due
2000").
2. Aggregate Principal Amount. The Exchange Notes due 2000
--------------------------
shall be limited in aggregate principal amount to
$175,000,000 (except for Exchange Notes due 2000
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Exchange Notes
due 2000 pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3 of
the Indenture).
3. Currency Denomination. The Exchange Notes due 2000 shall be
---------------------
denominated in Dollars.
4. Maturity. The date on which the principal of the Exchange
--------
Notes due 2000 is payable is March 1, 2000.
5. Rate of Interest; Interest Payment Date; Regular Record
-------------------------------------------------------
Dates. Each Exchange Note due 2000 shall bear interest from
-----
March 1, 1997 at 6.60% per annum until the principal thereof
is paid. Such interest shall be payable semiannually in
arrears on March 1 and September 1 of each year, commencing
on September 1, 1997, to the persons in whose names the
Exchange Notes due 2000 are registered at the close of
business on the immediately preceding February 15 and August
15, respectively. Interest on the Exchange Notes due 2000
shall accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the date of
original issuance. Interest on the Exchange Notes due 2000
shall be computed on the basis of a 360-day year comprised
of twelve 30-day months. The amount of interest payable for
any period shorter than a full semi-annual period for which
interest is computed will be computed on the basis of the
actual number of days elapsed per 30-day month. In the
event that any date on which principal, premium, if any, or
interest
<PAGE>
is payable on the Exchange Notes due 2000 is not a Business
Day, then payment of the principal, premium, if any, or
interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and
----------------
interest on the Exchange Notes due 2000 shall be payable,
and the transfer of Exchange Notes due 2000 shall be
registrable, at the office or agency of the Issuer to be
maintained for such purpose in the Borough of Manhattan, The
City of New York, except that, at the option of the Issuer,
interest may be paid by mailing a check to the address of
the person entitled thereto as it appears on the Exchange
Notes due 2000 register; provided, however, that while any
Exchange Notes due 2000 are represented by a Registered
Global Security, payment of principal of, premium, if any,
or interest on the Exchange Notes due 2000 may be made by
wire transfer to the account of the Depositary or its
nominee.
7. Optional Redemption. The Exchange Notes due 2000 are not
-------------------
optionally redeemable and are not entitled to the benefit of
a sinking fund or any analogous provisions.
8. Mandatory Redemption. The Exchange Notes due 2000 are not
--------------------
mandatorily redeemable and are not entitled to the benefit
of a sinking fund or any analogous provisions.
9. Denominations. The Exchange Notes due 2000 shall be issued
-------------
initially in minimum denominations of $100,000 and shall be
issued in integral multiples of $1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the
--------------------------------
Exchange Notes due 2000 shall be payable upon declaration of
acceleration pursuant to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Exchange
----------------
Notes due 2000 shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest
---------------------------
on the Exchange Notes due 2000 shall not be payable in a
currency other than Dollars.
2
<PAGE>
13. Payment Currency - Index. The principal of and interest on
------------------------
the Exchange Notes due 2000 shall not be determined with
reference to an index based on a coin or currency.
14. Registered Securities. The Exchange Notes due 2000 shall be
---------------------
issuable as Registered Securities. The Exchange Notes due
2000 may be issued as Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional
------------------
amounts on the Exchange Notes due 2000 held by a Person that
is not a U.S. Person in respect of taxes or similar charges
withheld or deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will
-----------------------
govern the transferability of Exchange Notes due 2000 in
definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall
-----------------------------------
initially serve as the registrar and the paying agent for
the Exchange Notes due 2000. The Depository Trust Company
shall initially serve as the Depositary for the Registered
Global Security representing Exchange Notes due 2000.
18. Events of Default; Covenants. There shall be no deletions
----------------------------
from, modifications or additions to the Events of Default
set forth in Section 5.1 of the Indenture with respect to
the Exchange Notes due 2000. There shall be the following
additions to the covenants of the Issuer set forth in
Article III with respect to the Exchange Notes due 2000:
Limitation on Liens. The Issuer covenants that, so long as
any of the Exchange Notes due 2000 remain outstanding, it
shall not, nor shall it permit any Consolidated Subsidiary
to, create or assume any Indebtedness for money borrowed
which is secured by a mortgage, pledge, security interest or
lien ("liens") of or upon any assets, whether now owned or
hereafter acquired, of the Issuer or any such Consolidated
Subsidiary without equally and ratably securing the Exchange
Notes due 2000 by a lien ranking ratably with and equal to
(or at the option of the Issuer, senior to) such secured
Indebtedness, except that the foregoing restriction shall
not apply to (a) liens on any assets of any corporation
existing at the time such corporation becomes a Consolidated
Subsidiary; (b) liens on any assets existing at the time of
acquisition of such assets by
3
<PAGE>
the Issuer or a Consolidated Subsidiary, or liens to secure
the payment of all or any part of the purchase price of such
assets upon the acquisition of such assets by the Issuer or
a Consolidated Subsidiary or to secure any indebtedness
incurred or guaranteed by the Issuer or a Consolidated
Subsidiary 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 any
assets theretofore owned by the Issuer or a Consolidated
Subsidiary, 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, or to secure
the payment of the purchase price of such assets, or to
secure indebtedness incurred or guaranteed by the Issuer or
a Consolidated Subsidiary for the purpose of financing the
purchase price of such assets or improvements or
construction thereon, which indebtedness is incurred or
guaranteed prior to, at the time of or within 360 days after
such acquisition (or in the case of real property,
completion of such improvement or construction or
commencement of full operation of such property, whichever
is later); (c) liens on any assets securing indebtedness
owed by any Consolidated Subsidiary to the Issuer or another
wholly owned Subsidiary; (d) liens on any assets of a
corporation existing at the time such corporation is merged
into or consolidated with the Issuer or a Subsidiary or at
the time of a purchase, lease or other acquisition of the
assets of a corporation or firm as an entirety or
substantially as an entirety by the Issuer or a Subsidiary;
(e) liens on any assets of the Issuer or a Consolidated
Subsidiary in favor of the United States of America or 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
4
<PAGE>
(including, but not limited to, liens incurred in connection
with pollution control, industrial revenue or similar
financing); (f) 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
(a) to (e), inclusive; provided, however, that the principal
amount of indebtedness secured thereby shall not exceed the
principal amount of indebtedness so secured at the time of
such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or
a part of the assets which secured the lien so extended,
renewed or replaced (plus improvements and construction on
such real property); (g) liens imposed by law, such as
mechanics', workmen's, repairmen's, materialmen's,
carriers', warehousemen's, vendors' or other similar liens
arising in the ordinary course of business, or governmental
(federal, state or municipal) liens arising out of contracts
for the sale of products or services by the Issuer or any
Consolidated Subsidiary, or deposits or pledges to obtain
the release of any of the foregoing liens; (h) pledges,
liens or deposits under worker's compensation laws or
similar legislation and liens or judgments thereunder which
are not currently dischargeable, or in connection with bids,
tenders, contracts (other than for the payment of money) or
leases to which the Issuer or any Consolidated Subsidiary is
a party, or to secure public or statutory obligations of the
Issuer or any Consolidated Subsidiary, or in connection with
obtaining or maintaining self-insurance or to obtain the
benefits of any law, regulation or arrangement pertaining to
unemployment insurance, old age pensions, social security or
similar matters, or to secure surety, appeal or customs
bonds to which the Issuer or any Consolidated Subsidiary is
a party, or in litigation or other proceedings such as, but
not limited to, interpleader proceedings, and other similar
pledges, liens or deposits made or incurred in the ordinary
course of business; (i) 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 judgements or awards against the Issuer or
any Consolidated Subsidiary with respect to which the Issuer
or such Consolidated Subsidiary is in good faith prosecuting
an appeal or proceedings 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 the Issuer or any
5
<PAGE>
Consolidated Subsidiary for the purpose of obtaining a stay
or discharge in the course of any litigation or other
proceeding to which the Issuer or such Consolidated
Subsidiary is a party; or (j) liens for taxes or assessments
or governmental charges or levies not yet due or delinquent,
or which can thereafter be paid without penalty, or which
are being contested in good faith by appropriate
proceedings; landlord's liens on property held under lease;
and any other liens or charges incidental to the conduct of
the business of the Issuer or any Consolidated Subsidiary or
the ownership of the assets of any of them which were not
incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not, in the
opinion of the Issuer, materially impair the use of such
assets in the operation of the business of the Issuer or
such Consolidated Subsidiary or the value of such assets for
the purposes thereof. Notwithstanding the above, the Issuer
or any Consolidated Subsidiary may, without securing the
Exchange Notes due 2000, create or assume any Indebtedness
which is secured by a lien which would otherwise be subject
to the foregoing restrictions, provided that at the time of
such creation or assumption, after giving effect thereto,
Exempted Debt does not exceed 10% of the total assets of the
Issuer and its Subsidiaries on a consolidated basis,
determined in accordance with generally accepted accounting
principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Exchange Notes due
2000 remain outstanding, it will not, nor shall it permit
any Consolidated Subsidiary to, enter into any sale and
lease-back transaction with respect to any assets, other
than any sale leaseback transaction (involving a lease for a
term of not more than three years), unless either (a) the
Issuer or such Consolidated Subsidiary would be entitled to
incur Indebtedness secured by a lien on the assets to be
leased in an amount at least equal to the Attributable Debt
in respect of such transaction without equally and ratably
securing the Exchange Notes due 2000 pursuant to clauses (a)
through (j) inclusive of the covenant with respect to
"Limitation on Liens" above, or (b) the proceeds of the sale
of the assets to be leased are at least equal to their fair
market value (as determined by the Board of Directors of the
Issuer) and the proceeds are applied to the purchase or
acquisition (or, in the case of real property, the
construction) of assets or to the retirement (other than at
maturity or pursuant to a mandatory sinking fund or mandato-
6
<PAGE>
ry redemption provision) of indebtedness. The foregoing
limitation shall not apply, if at the time the Issuer or any
Consolidated Subsidiary enters into such sale and lease-back
transaction, and after giving effect thereto, Exempted Debt
does not exceed 10% of the total assets of the Issuer and
its Subsidiaries on a consolidated basis, determined in
accordance with generally accepted accounting principles.
The term "Attributable Debt" in connection with a sale and
lease-back transaction shall mean, as of the date of
determination, the lesser of (a) the fair value of the
assets subject to such transaction or (b) the present value
(discounted at the rate of interest set forth in or implicit
in the terms of such lease or, if it is not practicable to
determine such rate, the weighted average interest rate per
annum borne by all series of Securities then Outstanding and
subject to the Limitation on Sale and Leaseback Transactions
compounded semiannually, in either case as determined by the
principal accounting or financial officer of the Issuer) of
the obligations of the Issuer or any Consolidated Subsidiary
for net rental payments during the remaining term of all
leases (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
The term "net rental payments" under any lease of any period
shall mean the sum of the rental and other payments required
to be paid in such period by the lessee thereunder, not
including, however, any amounts required to be paid by such
lessee (whether or not designated as rental or additional
rental) on account of maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates
or similar charges required to be paid by such lessee
thereunder or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance
and repairs, reconstruction, insurance, taxes, assessments,
water rates or similar charges. The term "Consolidated
Subsidiary" shall mean any Subsidiary substantially all the
property of which is located, and substantially all the
operations of which are conducted, in the United States of
America whose financial statements are consolidated with
those of the Issuer in accordance with generally accepted
accounting principles. The term "Exempted Debt" shall mean
the sum of the following as of the date of determination:
(i) Indebtedness of the Issuer and its Consolidated
Subsidiaries incurred after the date of the Indenture and
secured by liens not permitted to be created or assumed
pursuant to the covenant with respect
7
<PAGE>
to "Limitation on Liens" above, and (ii) Attributable Debt
of the Issuer and its Consolidated Subsidiaries in respect
of every sale and lease-back transaction entered into after
the date of the Indenture, other than leases expressly
permitted by the covenant with respect to "Limitation on
Sale and Lease-Back Transactions" above. The term
"Indebtedness" shall mean all items classified as
indebtedness on the most recently available consolidated
balance sheet of the Issuer and its Consolidated
Subsidiaries, in accordance with generally accepted
accounting principles.
19 Conversion and Exchange. The Exchange Notes due 2000 shall
-----------------------
not be convertible into or exchangeable into any other
security.
20. Other Terms. The Exchange Notes due 2000 shall have the
-----------
other terms and shall be substantially in the form set forth
in the form of Exchange Notes due 2000 attached hereto as
Exhibit A. In case of any conflict between this Annex A and
the Exchange Notes due 2000 in the form attached hereto as
Exhibit A, the form of the Exchange Notes due 2000 shall
control.
Capitalized terms used but not otherwise defined herein shall
have the respective meanings ascribed to such terms in the Indenture.
8
<PAGE>
EXHIBIT A
[FORM OF FACE OF EXCHANGE NOTE DUE MARCH 1, 2000]
[IF THE EXCHANGE NOTE DUE 2000 IS TO BE A GLOBAL SECURITY, INSERT THE
FOLLOWING - - THIS EXCHANGE NOTE DUE 2000 IS A BOOK-ENTRY SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS EXCHANGE NOTE DUE 2000 IS
EXCHANGEABLE FOR EXCHANGE NOTES DUE 2000 REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS EXCHANGE NOTE DUE 2000
(OTHER THAN A TRANSFER OF THIS EXCHANGE NOTE DUE 2000 AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS EXCHANGE NOTE DUE 2000 IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY EXCHANGE NOTE DUE 2000 ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
MCKESSON CORPORATION
6.60% EXCHANGE NOTE DUE MARCH 1, 2000
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, _____________________________,
<PAGE>
the principal sum of _________________________ Dollars ($______) on March 1,
2000 and to pay interest on said principal sum from March 1, 1997, or from the
most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1997,
at the rate of 6.60% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Exchange Note due 2000 is not a
Business Day, then payment of principal or interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of such delay). The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Exchange Note due 2000 is registered at the
close of business on the record date for such interest installment, which shall
be the close of business on the immediately preceding February 15 and August 15
prior to such Interest Payment Date, as applicable. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered holders on such record date and may be paid to the
person in whose name this Exchange Note due 2000 is registered at the close of
business on a subsequent record date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest), notice whereof
shall be given by mail by or on behalf of the Issuer to the registered holders
of Exchange Notes due 2000 not less than 15 days preceding such subsequent
record date, all as more fully provided in the Indenture. The principal of and
the interest on this Exchange Note due 2000 shall be payable at the office or
agency of the Issuer maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Issuer by check mailed to the person entitled thereto
at such address as shall appear in the registry books of the Issuer; provided,
further that for so long as this Exchange Note due 2000 is represented by a
Registered Global Security, payment of principal, premium, if any, or interest
on this Exchange Note due 2000 may be made by wire transfer to the account of
the Depositary or its nominee.
2
<PAGE>
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture, by the
manual signature of one of its authorized officers, this Exchange Note due 2000
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Capitalized terms used in this Exchange Note due 2000 which are
defined in the Indenture shall have the respective meanings assigned to them in
the Indenture.
The provisions of this Exchange Note due 2000 are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
This Exchange Note due 2000 is one of a duly authorized series of
securities (the "Securities") of the Issuer designated as its 6.60% Exchange
Notes due March 1, 2000 (the "Exchange Notes due 2000"). The Securities are
all issued or to be issued under and pursuant to an Indenture, dated as of March
11, 1997 (the "Indenture"), duly executed and delivered between the Issuer and
The First National Bank of Chicago, a national banking association (the
"Trustee," which term includes any successor Trustee with respect to the
Securities under the Indenture), to which the Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Trustee and the holders of the Securities
and the terms upon which the Exchange Notes due 2000 are to be authenticated and
delivered. The terms of individual series of Securities may vary with respect
to interest rate or interest rate formulas, issue dates, maturity, redemption,
repayment, currency of payment and otherwise.
This Exchange Note due 2000 is not redeemable and is not entitled to
the benefit of a sinking fund or any analogous provision.
If an Event of Default with respect to the Exchange Notes due 2000
shall occur and be continuing, the principal of all the Exchange Notes due 2000
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then
3
<PAGE>
outstanding and affected (voting as one class) to add any provisions to, or
change in any manner or eliminate any of the provisions of, such Indenture or
modify in any manner the rights of the holders of the Securities of each series
or Coupons so affected; provided that the Issuer and the Trustee may not,
without the consent of the holder of each Outstanding Exchange Note due 2000
affected thereby, (i) extend the final maturity of the principal of any Security
or reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or make the principal thereof (including any amount in respect of original issue
discount), or interest thereon payable in any coin or currency other than that
provided in the Securities or Coupons or in accordance with the terms thereof,
or reduce the amount of principal of an Original Issue Discount Security that
would be due and payable upon an acceleration of the maturity thereof or the
amount thereof provable in bankruptcy or alter certain provisions of the
Indenture relating to Securities not denominated in Dollars or the Judgment
Currency of such Securities or impair or affect the right of any Securityholder
to institute suit for the enforcement of any payment thereof when due or, if the
Securities provide therefor, any right of repayment at the option of the
Securityholder or (ii) reduce the aforesaid percentage in principal amount of
Securities of any series issued under such Indenture, the consent of the holders
of which is required for any such modification. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding
the Securities of any series, the holders of a majority in aggregate principal
amount Outstanding of the Securities of each such series, each such series
voting as a separate class (or, of all Securities, as the case may be voting as
a single class) may under certain circumstances waive all defaults with respect
to each such series (or with respect to all the Securities, as the case may be)
and rescind and annul a declaration of default and its consequences, but no such
waiver or rescission and annulment shall extend to or affect any subsequent
default or shall impair any right consequent thereto. The preceding sentence
shall not, however, apply to a default in the payment of the principal of or
interest on any of the Securities.
No reference herein to the Indenture and no provision of this Exchange
Note due 2000 or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Exchange Note due 2000 at the time, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Exchange Note due 2000 may be registered
on the registry books of the Issuer, upon surrender of this Exchange Note due
2000 for
4
<PAGE>
registration of transfer at the office or agency of the Issuer maintained by the
Issuer for such purpose in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or by its attorney duly authorized in writing, and thereupon one or more new
Exchange Notes due 2000 of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Exchange Notes due 2000 are issuable only in registered form in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, the Exchange Notes due 2000 are exchangeable for a like
aggregate principal amount of Exchange Notes due 2000 as requested by the holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Exchange Note due 2000 for
registration of transfer, the Issuer, the Trustee and any agent of the Issuer or
the Trustee may treat the person in whose name this Exchange Note due 2000 is
registered as the owner hereof for all purposes, whether or not this Exchange
Note due 2000 be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
THE INDENTURE AND THIS EXCHANGE NOTE DUE 2000 SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
5
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and in imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By:
-----------------------
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR EXCHANGE NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
_________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Exchange Note due 2000 and hereby irrevocably constitutes and
appoints ________ attorney to transfer the said Exchange Note due 2000 on the
books of the Issuer, with full power of substitution in the premises.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Exchange Note due 2000 in every particular
without alteration or enlargement or any change whatsoever.
- -----------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount of
Exchange Notes due
2000 by which this
Global Security is to be
Reduced or Increased, Remaining Principal
and Reason for the Amount of
Date Reduction or Increase this Global Security Notation Made By
--------- --------------------- -------------------- ----------------
<PAGE>
ANNEX B
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "6-7/8%
-----------
Exchange Notes due March 1, 2002" (the "Exchange Notes due
2002").
2. Aggregate Principal Amount. The Exchange Notes due 2002 shall be
--------------------------
limited in aggregate principal amount to $175,000,000 (except for
Exchange Notes due 2002 authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Exchange Notes due 2002 pursuant to Section 2.8, 2.9, 2.11,
8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Exchange Notes due 2002 shall be
---------------------
denominated in Dollars.
4. Maturity. The date on which the principal of the Exchange Notes
--------
due 2002 is payable is March 1, 2002.
5. Rate of Interest; Interest Payment Date; Regular Record Dates.
-------------------------------------------------------------
Each Exchange Note due 2002 shall bear interest from March 1,
1997 at 6-7/8% per annum until the principal thereof is paid.
Such interest shall be payable semiannually in arrears on March 1
and September 1 of each year, commencing on September 1, 1997, to
the persons in whose names the Exchange Notes due 2002 are
registered at the close of business on the immediately preceding
February 15 and August 15, respectively. Interest on the
Exchange Notes due 2002 shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid,
from the date of original issuance. Interest on the Exchange
Notes due 2002 shall be computed on the basis of a 360-day year
comprised of twelve 30-day months. The amount of interest
payable for any period shorter than a full semi-annual period for
which interest is computed will be computed on the basis of the
actual number of days elapsed per 30-day month. In the event
that any date on which principal, premium, if any, or interest is
payable on the
<PAGE>
Exchange Notes due 2002 is not a Business Day, then payment of
the principal, premium, if any, or interest payable on such date
will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such
delay).
6. Place of Payment. Principal of, premium, if any, and interest on
----------------
the Exchange Notes due 2002 shall be payable, and the transfer of
Exchange Notes due 2002 shall be registrable, at the office or
agency of the Issuer to be maintained for such purpose in the
Borough of Manhattan, The City of New York, except that, at the
option of the Issuer, interest may be paid by mailing a check to
the address of the person entitled thereto as it appears on the
Exchange Notes due 2002 register; provided, however, that while
any Exchange Notes due 2002 are represented by a Registered
Global Security, payment of principal of, premium, if any, or
interest on the Exchange Notes due 2002 may be made by wire
transfer to the account of the Depositary or its nominee.
7. Optional Redemption. The Exchange Notes due 2002 are not
-------------------
optionally redeemable and are not entitled to the benefit of a
sinking fund or any analogous provisions.
8. Mandatory Redemption. The Exchange Notes due 2002 are not
--------------------
mandatorily redeemable and are not entitled to the benefit of a
sinking fund or any analogous provisions.
9. Denominations. The Exchange Notes due 2002 shall be issued
-------------
initially in minimum denominations of $100,000 and shall be
issued in integral multiples of $1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the Exchange
--------------------------------
Notes due 2002 shall be payable upon declaration of acceleration
pursuant to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Exchange Notes
----------------
due 2002 shall be payable in Dollars.
2
<PAGE>
12. Payment Currency - Election. The principal of and interest on
---------------------------
the Exchange Notes due 2002 shall not be payable in a currency
other than Dollars.
13. Payment Currency - Index. The principal of and interest on the
------------------------
Exchange Notes due 2002 shall not be determined with reference to
an index based on a coin or currency.
14. Registered Securities. The Exchange Notes due 2002 shall be
---------------------
issuable as Registered Securities. The Exchange Notes due 2002
may be issued as Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Exchange Notes due 2002 held by a Person that is not a
U.S. Person in respect of taxes or similar charges withheld or
deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will
-----------------------
govern the transferability of Exchange Notes due 2002 in
definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Exchange
Notes due 2002. The Depository Trust Company shall initially
serve as the Depositary for the Registered Global Security
representing Exchange Notes due 2002.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in
Section 5.1 of the Indenture with respect to the Exchange Notes
due 2002. There shall be the following additions to the
covenants of the Issuer set forth in Article III with respect to
the Exchange Notes due 2002:
Limitation on Liens. The Issuer covenants that, so long as any
of the Exchange Notes due 2002 remain outstanding, it shall not,
nor shall it permit any Consolidated Subsidiary to, create or
assume any Indebtedness for money borrowed which is secured by a
mortgage, pledge, security interest or lien ("liens") of or upon
any assets, whether now owned or hereafter acquired, of the
Issuer or any such Consolidated Subsidiary without equally and
ratably
3
<PAGE>
securing the Exchange Notes due 2002 by a lien ranking ratably
with and equal to (or at the option of the Issuer, senior to)
such secured Indebtedness, except that the foregoing restriction
shall not apply to (a) liens on any assets of any corporation
existing at the time such corporation becomes a Consolidated
Subsidiary; (b) liens on any assets existing at the time of
acquisition of such assets by the Issuer or a Consolidated
Subsidiary, or liens to secure the payment of all or any part of
the purchase price of such assets upon the acquisition of such
assets by the Issuer or a Consolidated Subsidiary or to secure
any indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary 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 any assets theretofore owned by the Issuer or a
Consolidated Subsidiary, 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, or to
secure the payment of the purchase price of such assets, or to
secure indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon,
which indebtedness is incurred or guaranteed prior to, at the
time of or within 360 days after such acquisition (or in the case
of real property, completion of such improvement or construction
or commencement of full operation of such property, whichever is
later); (c) liens on any assets securing indebtedness owed by any
Consolidated Subsidiary to the Issuer or another wholly owned
Subsidiary; (d) liens on any assets of a corporation existing at
the time such corporation is merged into or consolidated with the
Issuer or a Subsidiary or at the time of a purchase, lease or
other acquisition of the assets of a corporation or firm as an
entirety or substantially as an entirety by the Issuer or a
Subsidiary; (e) liens on any assets of the Issuer or a
Consolidated Subsidiary in favor of the United States of America
or any state thereof, or any
4
<PAGE>
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 (including, but
not limited to, liens incurred in connection with pollution
control, industrial revenue or similar financing); (f) 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 (a) to (e), inclusive;
provided, however, that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement
shall be limited to all or a part of the assets which secured the
lien so extended, renewed or replaced (plus improvements and
construction on such real property); (g) liens imposed by law,
such as mechanics', workmen's, repairmen's, materialmen's,
carriers', warehousemen's, vendors' or other similar liens
arising in the ordinary course of business, or governmental
(federal, state or municipal) liens arising out of contracts for
the sale of products or services by the Issuer or any
Consolidated Subsidiary, or deposits or pledges to obtain the
release of any of the foregoing liens; (h) pledges, liens or
deposits under worker's compensation laws or similar legislation
and liens or judgments thereunder which are not currently
dischargeable, or in connection with bids, tenders, contracts
(other than for the payment of money) or leases to which the
Issuer or any Consolidated Subsidiary is a party, or to secure
public or statutory obligations of the Issuer or any Consolidated
Subsidiary, or in connection with obtaining or maintaining self-
insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age
pensions, social security or similar matters, or to secure
surety, appeal or customs bonds to which the Issuer or any
Consolidated Subsidiary is a party, or in litigation or other
proceedings such as, but not limited to, interpleader
proceedings, and other similar pledges, liens or deposits made or
incurred in the ordinary course of business; (i) liens created by
or resulting from any litigation or
5
<PAGE>
other proceeding which is being contested in good faith by
appropriate proceedings, including liens arising out of
judgements or awards against the Issuer or any Consolidated
Subsidiary with respect to which the Issuer or such Consolidated
Subsidiary is in good faith prosecuting an appeal or proceedings
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 the
Issuer or any Consolidated Subsidiary for the purpose of
obtaining a stay or discharge in the course of any litigation or
other proceeding to which the Issuer or such Consolidated
Subsidiary is a party; or (j) liens for taxes or assessments or
governmental charges or levies not yet due or delinquent, or
which can thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings; landlord's
liens on property held under lease; and any other liens or
charges incidental to the conduct of the business of the Issuer
or any Consolidated Subsidiary or the ownership of the assets of
any of them which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and
which do not, in the opinion of the Issuer, materially impair the
use of such assets in the operation of the business of the Issuer
or such Consolidated Subsidiary or the value of such assets for
the purposes thereof. Notwithstanding the above, the Issuer or
any Consolidated Subsidiary may, without securing the Exchange
Notes due 2002, create or assume any Indebtedness which is
secured by a lien which would otherwise be subject to the
foregoing restrictions, provided that at the time of such
creation or assumption, after giving effect thereto, Exempted
Debt does not exceed 10% of the total assets of the Issuer and
its Subsidiaries on a consolidated basis, determined in
accordance with generally accepted accounting principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Exchange Notes due 2002
remain outstanding, it will not, nor shall it permit any
Consolidated Subsidiary to, enter into any sale and lease-back
transactions with respect to any assets, other than any sale
leaseback transaction (involving a lease for a term of not more
than three years), unless either (a) the Issuer or such
Consolidated Subsidiary would be entitled to incur Indebtedness
secured by a lien on the assets to
6
<PAGE>
be leased in an amount at least equal to the Attributable Debt in
respect of such transaction without equally and ratably securing
the Exchange Notes due 2002 pursuant to clauses (a) through (j)
inclusive of the covenant with respect to "Limitation on Liens"
above, or (b) the proceeds of the sale of the assets to be leased
are at least equal to their fair market value (as determined by
the Board of Directors of the Issuer) and the proceeds are
applied to the purchase or acquisition (or, in the case of real
property, the construction) of assets or to the retirement (other
than at maturity or pursuant to a mandatory sinking fund or
mandatory redemption provision) of indebtedness. The foregoing
limitation shall not apply, if at the time the Issuer or any
Consolidated Subsidiary enters into such sale and lease-back
transaction, and after giving effect thereto, Exempted Debt does
not exceed 10% of the total assets of the Issuer and its
Subsidiaries on a consolidated basis, determined in accordance
with generally accepted accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the
lesser of (a) the fair value of the assets subject to such
transaction or (b) the present value (discounted at the rate of
interest set forth in or implicit in the terms of such lease or,
if it is not practicable to determine such rate, the weighted
average interest rate per annum borne by all series of Securities
then Outstanding and subject to the Limitation Sale and Leaseback
Transactions and compounded semiannually, in either case as
determined by the principal accounting or financial officer of
the Issuer) of the obligations of the Issuer or any Consolidated
Subsidiary for net rental payments during the remaining term of
all leases (including any period for which such lease has been
extended or may, at the option of the lessor, be extended). The
term "net rental payments" under any lease of any period shall
mean the sum of the rental and other payments required to be paid
in such period by the lessee thereunder, not including, however,
any amounts required to be paid by such lessee (whether or not
designated as rental or additional rental) on account of
maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges required to be paid
by such lessee thereunder or any amounts required to be paid by
such lessee thereunder contingent
7
<PAGE>
upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or
similar charges. The term "Consolidated Subsidiary" shall mean
any Subsidiary substantially all the property of which is
located, and substantially all the operations of which are
conducted, in the United States of America whose financial
statements are consolidated with those of the Issuer in
accordance with generally accepted accounting principles. The
term "Exempted Debt" shall mean the sum of the following as of
the date of determination: (i) Indebtedness of the Issuer and
its Consolidated Subsidiaries incurred after the date of the
Indenture and secured by liens not permitted to be created or
assumed pursuant to the covenant with respect to "Limitation on
Liens" above, and (ii) Attributable Debt of the Issuer and its
Consolidated Subsidiaries in respect of every sale and lease-back
transaction entered into after the date of the Indenture, other
than leases expressly permitted by the covenant with respect to
"Limitation on Sale and Lease-Back Transactions" above. The term
"Indebtedness" shall mean all items classified as indebtedness on
the most recently available consolidated balance sheet of the
Issuer and its Consolidated Subsidiaries, in accordance with
generally accepted accounting principles.
19. Conversion and Exchange. The Exchange Notes due 2002 shall not
-----------------------
be convertible for or exchangeable into any other security.
20. Other Terms. The Exchange Notes due 2002 shall have the other
-----------
terms and shall be substantially in the form set forth in the
form of Exchange Notes due 2002 attached hereto as Exhibit A. In
case of any conflict between this Annex B and the Exchange Notes
due 2002 in the form attached hereto as Exhibit A, the form of
the Exchange Notes due 2002 shall control.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
8
<PAGE>
EXHIBIT A
[FORM OF FACE OF EXCHANGE NOTE DUE MARCH 1, 2002]
[IF THE EXCHANGE NOTE DUE 2002 IS TO BE A GLOBAL SECURITY, INSERT THE
FOLLOWING - - THIS EXCHANGE NOTE DUE 2002 IS A BOOK-ENTRY SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS EXCHANGE NOTE DUE 2002 IS
EXCHANGEABLE FOR EXCHANGE NOTES DUE 2002 REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS EXCHANGE NOTE DUE 2002
(OTHER THAN A TRANSFER OF THIS EXCHANGE NOTE DUE 2002 AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS EXCHANGE NOTE DUE 2002 IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY EXCHANGE NOTE DUE 2002 ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
MCKESSON CORPORATION
6-7/8% EXCHANGE NOTE DUE MARCH 1, 2002
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, ______________________________,
<PAGE>
the principal sum of _________________________ Dollars ($______) on March 1,
2002 and to pay interest on said principal sum from March 1, 1997, or from the
most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1997,
at the rate of 6-7/8% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Exchange Note due 2002 is not a
Business Day, then payment of principal or interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of such delay). The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Exchange Note due 2002 is registered at the
close of business on the record date for such interest installment, which shall
be the close of business on the immediately preceding February 15 and August 15
prior to such Interest Payment Date, as applicable. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered holders on such record date and may be paid to the
person in whose name this Exchange Note due 2002 is registered at the close of
business on a subsequent record date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest), notice whereof
shall be given by mail by or on behalf of the Issuer to the registered holders
of Exchange Notes due 2002 not less than 15 days preceding such subsequent
record date, all as more fully provided in the Indenture. The principal of and
the interest on this Exchange Note due 2002 shall be payable at the office or
agency of the Issuer maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Issuer by check mailed to the person entitled thereto
at such address as shall appear in the registry books of the Issuer; provided,
further that for so long as this Exchange Note due 2002 is represented by a
Registered Global Security, payment of principal, premium, if any, or interest
on this Exchange Note due 2002 may be made by wire transfer to the account of
the Depositary or its nominee.
2
<PAGE>
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture, by the
manual signature of one of its authorized officers, this Exchange Note due 2002
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Capitalized terms used in this Exchange Note due 2002 which are
defined in the Indenture shall have the respective meanings assigned to them in
the Indenture.
The provisions of this Exchange Note due 2002 are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
This Exchange Note due 2002 is one of a duly authorized series of
securities (the "Securities") of the Issuer designated as its 6-7/8% Exchange
Notes due March 1, 2002 (the "Exchange Notes due 2002"). The Securities are all
issued or to be issued under and pursuant to an Indenture, dated as of March 11,
1997 (the "Indenture"), duly executed and delivered between the Issuer and The
First National Bank of Chicago, a national banking association (the "Trustee,"
which term includes any successor Trustee with respect to the Securities under
the Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights thereunder of
the Issuer, the Trustee and the holders of the Securities and the terms upon
which the Exchange Notes due 2002 are to be authenticated and delivered. The
terms of individual series of Securities may vary with respect to interest rate
or interest rate formulas, issue dates, maturity, redemption, repayment,
currency of payment and otherwise.
This Exchange Note due 2002 is not redeemable and is not entitled to
the benefit of a sinking fund or any analogous provision.
If an Event of Default with respect to the Exchange Notes due 2002
shall occur and be continuing, the principal of all the Exchange Notes due 2002
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then
3
<PAGE>
outstanding and affected (voting as one class) to add any provisions to, or
change in any manner or eliminate any of the provisions of, such Indenture or
modify in any manner the rights of the holders of the Securities of each series
or Coupons so affected; provided that the Issuer and the Trustee may not,
without the consent of the holder of each Outstanding Exchange Note due 2002
affected thereby, (i) extend the final maturity of the principal of any Security
or reduce the principal amount thereof or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or make the principal thereof (including any amount in respect of original issue
discount), or interest thereon payable in any coin or currency other than that
provided in the Securities or Coupons or in accordance with the terms thereof,
or reduce the amount of principal of an Original Issue Discount Security that
would be due and payable upon an acceleration of the maturity thereof or the
amount thereof provable in bankruptcy or alter certain provisions of the
Indenture relating to Securities not denominated in Dollars or the Judgment
Currency of such Securities or impair or affect the right of any Securityholder
to institute suit for the enforcement of any payment thereof when due or, if the
Securities provide therefor, any right of repayment at the option of the
Securityholder or (ii) reduce the aforesaid percentage in principal amount of
Securities of any series issued under such Indenture, the consent of the holders
of which is required for any such modification. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding
the Securities of any series, the holders of a majority in aggregate principal
amount Outstanding of the Securities of each such series, each such series
voting as a separate class (or, of all Securities, as the case may be voting as
a single class) may under certain circumstances waive all defaults with respect
to each such series (or with respect to all the Securities, as the case may be)
and rescind and annul a declaration of default and its consequences, but no such
waiver or rescission and annulment shall extend to or affect any subsequent
default or shall impair any right consequent thereto. The preceding sentence
shall not, however, apply to a default in the payment of the principal of or
interest on any of the Securities.
No reference herein to the Indenture and no provision of this Exchange
Note due 2002 or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Exchange Note due 2002 at the time, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Exchange Note due 2002 may be registered
on the registry books of the Issuer, upon surrender of this Exchange Note due
2002 for
4
<PAGE>
registration of transfer at the office or agency of the Issuer maintained by the
Issuer for such purpose in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or by its attorney duly authorized in writing, and thereupon one or more new
Exchange Notes due 2002 of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Exchange Notes due 2002 are issuable only in registered form in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, the Exchange Notes due 2002 are exchangeable for a like
aggregate principal amount of Exchange Notes due 2002 as requested by the holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Exchange Note due 2002 for
registration of transfer, the Issuer, the Trustee and any agent of the Issuer or
the Trustee may treat the person in whose name this Exchange Note due 2002 is
registered as the owner hereof for all purposes, whether or not this Exchange
Note due 2002 be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
THE INDENTURE AND THIS EXCHANGE NOTE DUE 2002 SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
5
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and in imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By:
------------------------
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR EXCHANGE NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
_________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Exchange Note due 2002 and hereby irrevocably constitutes and
appoints ________ attorney to transfer the said Exchange Note due 2002 on the
books of the Issuer, with full power of substitution in the premises.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Exchange Note due 2002 in every particular
without alteration or enlargement or any change whatsoever.
- --------------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount of
Exchange Notes due
2002 by which this
Global Security is to be
Reduced or Increased, Remaining Principal
and Reason for the Amount of
Date Reduction or Increase this Global Security Notation Made By
--------- --------------------- -------------------- ----------------
<PAGE>
ANNEX C
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "7.65%
-----------
Exchange Debentures due March 1, 2027" (the "Exchange Debentures
due 2027").
2. Aggregate Principal Amount. The Exchange Debentures due 2027
--------------------------
shall be limited in aggregate principal amount to $175,000,000
(except for Exchange Debentures due 2027 authenticated and
delivered upon registration of transfer of, or in exchange for,
or in lieu of, other Exchange Debentures due 2027 pursuant to
Section 2.8, 2.9, 2.11, 8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Exchange Debentures due 2027 shall be
---------------------
denominated in Dollars.
4. Maturity. The date on which the principal of the Exchange
--------
Debentures due 2027 is payable is March 1, 2027.
5. Rate of Interest; Interest Payment Date; Regular Record Dates.
-------------------------------------------------------------
Each Debenture due 2027 shall bear interest from March 1, 1997 at
7.65% per annum until the principal thereof is paid. Such
interest shall be payable semiannually in arrears on March 1 and
September 1 of each year, commencing on September 1, 1997, to the
persons in whose names the Exchange Debentures due 2027 are
registered at the close of business on the immediately preceding
February 15 and August 15, respectively. Interest on the
Exchange Debentures due 2027 shall accrue from the most recent
date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest on the
Exchange Debentures due 2027 shall be computed on the basis of a
360-day year comprised of twelve 30-day months. The amount of
interest payable for any period shorter than a full semi-annual
period for which interest is computed will be computed on the
basis of the actual number of days elapsed per 30-day month. In
the event that any date on which principal, premium, if any, or
interest is payable on the Exchange Debentures due 2027 is not a
Business
<PAGE>
Day, then payment of the principal, premium, if any, or interest
payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in
respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and interest on
----------------
the Exchange Debentures due 2027 shall be payable, and the
transfer of Exchange Debentures due 2027 shall be registrable, at
the office or agency of the Issuer to be maintained for such
purpose in the Borough of Manhattan, The City of New York, except
that, at the option of the Issuer, interest may be paid by
mailing a check to the address of the person entitled thereto as
it appears on the Exchange Debentures due 2027 register;
provided, however, that while any Exchange Debentures due 2027
are represented by a Registered Global Security, payment of
principal of, premium, if any, or interest on the Exchange
Debentures due 2027 may be made by wire transfer to the account
of the Depositary or its nominee.
7. Optional Redemption. The Exchange Debentures due 2027 may be
-------------------
redeemed as a whole or in part, at the option of the Issuer, at
any time at a redemption price equal to the greater of (i) 100%
of their principal amount or (ii) the sum of the present values
of the remaining scheduled payments of principal and interest
thereon discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Yield plus 12.5 basis points, plus
accrued interest to the date of redemption. Holders of Exchange
Debentures due 2027 to be redeemed will receive notice thereof by
first-class mail at least 30 and not more than 60 days prior to
the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for
the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date. "Comparable Treasury Issue" means the United
States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of
the Exchange Debentures due 2027 that would be utilized, at the
2
<PAGE>
time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Exchange
Debentures due 2027. "Independent Investment Banker" means
Morgan Stanley & Co. Incorporated or, if such firm is unwilling
or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by
the Trustee. "Comparable Treasury Price" means, with respect to
any redemption date, (i) the average of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third business day
preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such business day, (A) the average of the
Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (B) if the Trustee obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all
such Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Trustee, of the bid and
asked prices of the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Morgan Stanley & Co.
Incorporated, BancAmerica Securities, Inc., Chase Securities Inc.
and J.P. Morgan Securities Inc., and their respective successors;
provided however, that if any of the foregoing shall cease to be
a primary U.S. Government Securities dealer in New York City (a
"Primary Treasury Dealer"), the Issuer shall substitute therefor
another Primary Treasury Dealer.
8. Mandatory Redemption. The Exchange Debentures due 2027 are not
--------------------
mandatorily redeemable and are not entitled to the benefit of a
sinking fund or any analogous provisions.
3
<PAGE>
9. Denominations. The Exchange Debentures due 2027 shall be issued
-------------
initially in minimum denominations of $100,000 and shall be
issued in integral multiples of $1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the Exchange
--------------------------------
Debentures due 2027 shall be payable upon declaration of
acceleration pursuant to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Exchange
----------------
Debentures due 2027 shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on
---------------------------
the Exchange Debentures due 2027 shall not be payable in a
currency other than Dollars.
13. Payment Currency - Index. The principal of and interest on the
------------------------
Exchange Debentures due 2027 shall not be determined with
reference to an index based on a coin or currency.
14. Registered Securities. The Exchange Debentures due 2027 shall be
---------------------
issuable as Registered Securities. The Exchange Debentures due
2027 may be issued as Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Exchange Debentures due 2027 held by a Person that is not
a U.S. Person in respect of taxes or similar charges withheld or
deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will
-----------------------
govern the transferability of Exchange Debentures due 2027 in
definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Exchange
Debentures due 2027. The Depository Trust Company shall initially
serve as the Depositary for the Registered Global Securities
representing Exchange Debentures due 2027.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in
Section 5.1 of the Indenture with respect to the Exchange
4
<PAGE>
Debentures due 2027. There shall be the following additions to
the covenants of the Issuer set forth in Article III with respect
to the Exchange Debentures due 2027:
Limitation on Liens. The Issuer covenants that, so long as any
of the Exchange Debentures due 2027 remain outstanding, it shall
not, nor shall it permit any Consolidated Subsidiary to, create
or assume any Indebtedness for money borrowed which is secured by
a mortgage, pledge, security interest or lien ("liens") of or
upon any assets, whether now owned or hereafter acquired, of the
Issuer or any such Consolidated Subsidiary without equal and
ratably securing the Exchange Debentures due 2027 by a lien
ranking ratably with and equal to (or at the option of the
Issuer, senior to) such secured Indebtedness, except that the
foregoing restriction shall not apply to (a) liens on any assets
of any corporation existing at the time such corporation becomes
a Consolidated Subsidiary; (b) liens on any assets existing at
the time of acquisition of such assets by the Issuer or a
Consolidated Subsidiary, or liens to secure the payment of all or
any part of the purchase price of such assets upon the
acquisition of such assets by the Issuer or a Consolidated
Subsidiary or to secure any indebtedness incurred or guaranteed
by the Issuer or a Consolidated Subsidiary 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 any assets
theretofore owned by the Issuer or a Consolidated Subsidiary,
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, or to secure the payment of the purchase
price of such assets, or to secure indebtedness incurred or
guaranteed by the Issuer or a Consolidated Subsidiary for the
purpose of financing the purchase price of such assets or
improvements or construction thereon, which indebtedness is
incurred or guaranteed prior to, at the time of or within 360
days after such acquisition (or in the case of real property,
completion of such improvement or construction or
5
<PAGE>
commencement of full operation of such property, whichever is
later); (c) liens on any assets securing indebtedness owed by any
Consolidated Subsidiary to the Issuer or another wholly owned
Subsidiary; (d) liens on any assets of a corporation existing at
the time such corporation is merged into or consolidated with the
Issuer or a Subsidiary or at the time of a purchase, lease or
other acquisition of the assets of a corporation or firm as an
entirety or substantially as an entirety by the Issuer or a
Subsidiary; (e) liens on any assets of the Issuer or a
Consolidated Subsidiary in favor of the United States of America
or 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 (including, but not limited to,
liens incurred in connection with pollution control, industrial
revenue or similar financing); (f) 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 (a) to (e), inclusive; provided, however, that the
principal amount of indebtedness secured thereby shall not exceed
the principal amount of indebtedness so secured at the time of
such extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to all or a part of the
assets which secured the lien so extended, renewed or replaced
(plus improvements and construction on such real property); (g)
liens imposed by law, such as mechanics', workmen's, repairmen's,
materialmen's, carriers', warehousemen's, vendors' or other
similar liens arising in the ordinary course of business, or
governmental (federal, state or municipal) liens arising out of
contracts for the sale of products or services by the Issuer or
any Consolidated Subsidiary, or deposits or pledges to obtain the
release of any of the foregoing liens; (h) pledges, liens or
deposits under worker's compensation laws or similar legislation
and liens or judgments thereunder which are not currently
dischargeable, or in connection with bids, tenders, contracts
(other than for the payment of money) or leases to which the
Issuer or any Consolidated Subsidiary is a party, or to secure
public or statutory obligations of the Issuer or any Consolidated
6
<PAGE>
Subsidiary, or in connection with obtaining or maintaining self-
insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age
pensions, social security or similar matters, or to secure
surety, appeal or customs bonds to which the Issuer or any
Consolidated Subsidiary is a party, or in litigation or other
proceedings such as, but not limited to, interpleader
proceedings, and other similar pledges, liens or deposits made or
incurred in the ordinary course of business; (i) 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 judgements or awards against the
Issuer or any Consolidated Subsidiary with respect to which the
Issuer or such Consolidated Subsidiary is in good faith
prosecuting an appeal or proceedings 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 the Issuer or any Consolidated
Subsidiary for the purpose of obtaining a stay or discharge in
the course of any litigation or other proceeding to which the
Issuer or such Consolidated Subsidiary is a party; or (j) liens
for taxes or assessments or governmental charges or levies not
yet due or delinquent, or which can thereafter be paid without
penalty, or which are being contested in good faith by
appropriate proceedings; landlord's liens on property held under
lease; and any other liens or charges incidental to the conduct
of the business of the Issuer or any Consolidated Subsidiary or
the ownership of the assets of any of them which were not
incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not, in the opinion
of the Issuer, materially impair the use of such assets in the
operation of the business of the Issuer or such Consolidated
Subsidiary or the value of such assets for the purposes thereof.
Notwithstanding the above, the Issuer or any Consolidated
Subsidiary may, without securing the Exchange Debentures due
2027, create or assume any Indebtedness which is secured by a
lien which would otherwise be subject to the foregoing
restrictions, provided that at the time of such creation or
assumption, after giving effect thereto, Exempted Debt does not
exceed 10% of the total assets of the Issuer and its Subsidiaries
on a consolidated basis, determined in accordance with generally
accepted accounting principles.
7
<PAGE>
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Exchange Debentures due
2027 remain outstanding, it will not, nor shall it permit any
Consolidated Subsidiary to, enter into any sale and lease-back
transactions with respect to any assets, other than any sale
leaseback transaction (involving leases for a term of not more
than three years), unless either (a) the Issuer or such
Consolidated Subsidiary would be entitled to incur Indebtedness
secured by a lien on the assets to be leased in an amount at
least equal to the Attributable Debt in respect of such
transaction without equally and ratably securing the Exchange
Debentures due 2027 pursuant to clauses (a) through (j) inclusive
of the covenant with respect to "Limitation on Liens" above, or
(b) the proceeds of the sale of the assets to be leased are at
least equal to their fair market value (as determined by the
Board of Directors of the Issuer) and the proceeds are applied to
the purchase or acquisition (or, in the case of real property,
the construction) of assets or to the retirement (other than at
maturity or pursuant to a mandatory sinking fund or mandatory
redemption provision) of indebtedness. The foregoing limitation
shall not apply, if at the time the Issuer or any Consolidated
Subsidiary enters into such sale and lease-back transaction, and
after giving effect thereto, Exempted Debt does not exceed 10% of
the total assets of the Issuer and its Subsidiaries on a
consolidated basis, determined in accordance with generally
accepted accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the
lesser of (a) the fair value of the assets subject to such
transaction or (b) the present value (discounted at the rate of
interest set forth in or implicit in the terms of such lease or,
if it is not practicable to determine such rate, the weighted
average interest rate per annum borne by all series of Securities
then Outstanding and subject to the Limitation on Sale and
Leaseback Transactions and compounded semiannually, in either
case as determined by the principal accounting or financial
officer of the Issuer) of the obligations of the Issuer or any
Consolidated Subsidiary for net rental payments during the
remaining term of all leases (including any period for which such
lease has been extended or may, at the option of the lessor, be
extended). The term "net rental payments" under any lease of any
period shall mean the sum of the rental and
8
<PAGE>
other payments required to be paid in such period by the lessee
thereunder, not including, however, any amounts required to be
paid by such lessee (whether or not designated as rental or
additional rental) on account of maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or
similar charges required to be paid by such lessee thereunder or
any amounts required to be paid by such lessee thereunder
contingent upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or
similar charges. The term "Consolidated Subsidiary" shall mean
any Subsidiary substantially all the property of which is
located, and substantially all the operations of which are
conducted, in the United States of America whose financial
statements are consolidated with those of the Issuer in
accordance with generally accepted accounting principles. The
term "Exempted Debt" shall mean the sum of the following as of
the date of determination: (i) Indebtedness of the Issuer and
its Consolidated Subsidiaries incurred after the date of the
Indenture and secured by liens not permitted to be created or
assumed pursuant to the covenant with respect to "Limitation on
Liens" above, and (ii) Attributable Debt of the Issuer and its
Consolidated Subsidiaries in respect of every sale and lease-back
transaction entered into after the date of the Indenture, other
than leases permitted by this covenant with respect to
"Limitation on Sale and Lease-Back Transactions" above. The term
"Indebtedness" shall mean all items classified as indebtedness on
the most recently available consolidated balance sheet of the
Issuer and its Consolidated Subsidiaries, in accordance with
generally accepted accounting principles.
19. Conversion and Exchange. The Exchange Debentures due 2027 shall
-----------------------
not by their terms be convertible into or exchangeable for any
other security.
20. Other Terms. The Exchange Debentures due 2027 shall have the
-----------
other terms and shall be substantially in the form set forth in
the form of Exchange Debentures due 2027 attached hereto as
Exhibit A. In case of any conflict between this Annex C and the
Exchange Debentures due 2027 in the form attached hereto as
Exhibit A, the form of the Exchange Debentures due 2027 shall
control.
9
<PAGE>
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
10
<PAGE>
EXHIBIT A
[FORM OF FACE OF EXCHANGE DEBENTURE DUE MARCH 1, 2027]
[IF THE EXCHANGE DEBENTURE DUE 2027 IS TO BE A GLOBAL SECURITY, INSERT
THE FOLLOWING - - THIS EXCHANGE DEBENTURE DUE 2027 IS A BOOK-ENTRY SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS EXCHANGE DEBENTURE
DUE 2027 IS EXCHANGEABLE FOR EXCHANGE DEBENTURES DUE 2027 REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS EXCHANGE
DEBENTURE DUE 2027 (OTHER THAN A TRANSFER OF THIS EXCHANGE DEBENTURE DUE 2027)
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS EXCHANGE DEBENTURE DUE 2027 IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY EXCHANGE DEBENTURE DUE 2027 ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
MCKESSON CORPORATION
7.65% EXCHANGE DEBENTURE DUE MARCH 1, 2027
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
<PAGE>
for value received, hereby promises to pay to _______________________________,
the principal sum of _____________________________ Dollars ($______________) on
March 1, 2027 and to pay interest on said principal sum from March 1, 1997, or
from the most recent interest payment date to which interest has been paid or
duly provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1997,
at the rate of 7.65% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal, premium, if any, or interest payable on this Exchange Debenture
due 2027 is not a Business Day, then payment of principal, premium, if any, or
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of such
delay). The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture
(referred to on the reverse hereof) be paid to the person in whose name this
Exchange Debenture due 2027 is registered at the close of business on the record
date for such interest installment, which shall be the close of business on the
immediately preceding February 15 and August 15 prior to such Interest Payment
Date, as applicable. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered holders on
such record date and may be paid to the person in whose name this Exchange
Debenture due 2027 is registered at the close of business on a subsequent record
date (which shall be not less than five Business Days prior to the date of
payment of such defaulted interest), notice whereof shall be given by mail by or
on behalf of the Issuer to the registered holders of Exchange Debentures due
2027 not less than 15 days preceding such subsequent record date, all as more
fully provided for in the Indenture. The principal of, preimum, if any, and the
interest on this Exchange Debenture due 2027 shall be payable at the office or
agency of the Issuer maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Issuer by check mailed to the person entitled thereto
at such address as shall appear in the registry books of the Issuer; provided,
further that for so long as this Exchange Debenture due 2027 is represented by a
Registered Global Security, payment of principal, premium, if any, or interest
on this Exchange Debenture due
2
<PAGE>
2027 may be made by wire transfer to the account of the Depositary or its
nominee.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture, by the
manual signature of one of its authorized officers, this Exchange Debenture due
2027 shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Capitalized terms used in this Exchange Debenture due 2027 which are
defined in the Indenture shall have the respective meanings assigned to them in
the Indenture.
The provisions of this Exchange Debenture due 2027 are continued on
the reverse side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
[FORM OF REVERSE SIDE OF EXCHANGE DEBENTURE]
This Exchange Debenture due 2027 is one of a duly authorized series of
securities (the "Securities") of the Issuer designated as its 7.65% Exchange
Debentures due March 1, 2027 (the "Exchange Debentures due 2027"). The
Securities are all issued or to be issued under and pursuant to an Indenture,
dated as of March 11, 1997 (the "Indenture"), duly executed and delivered
between the Issuer and The First National Bank of Chicago, a national banking
association (the "Trustee," which term includes any successor Trustee with
respect to the Securities under the Indenture), to which the Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Trustee and the holders of the
Securities and the terms upon which the Exchange Debentures due 2027 are to be
authenticated and delivered. The terms of individual series of Securities may
vary with respect to interest rate or interest rate formulas, issue dates,
maturity, redemption, repayment, currency of payment and otherwise.
Except as set forth below, this Exchange Debenture due 2027 is not
redeemable and is not entitled to the benefit of a sinking fund or any analogous
provision.
This Exchange Debenture due 2027 is redeemable as a whole or in part,
at the option of the Issuer, at any time at a redemption price equal to the
3
<PAGE>
greater of (i) 100% of its principal amount or (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Yield plus 12.5 basis
points, plus accrued interest to the date of redemption. The Holder of this
Exchange Debenture due 2027 will receive notice thereof by first-class mail at
least 30 and not more than 60 days prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. "Comparable Treasury Issue" means the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Exchange Debentures
due 2027 that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Exchange Debentures due
2027. "Independent Investment Banker" means Morgan Stanley & Co. Incorporated
or, if such firm is unwilling or unable to select the Comparable Treasury Issue,
an independent investment banking institution of national standing appointed by
the Trustee. "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices of the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption
date. "Reference Treasury Dealer" means each of Morgan Stanley & Co.
Incorporated, BancAmerica Securities, Inc., Chase Securities Inc. and J.P.
Morgan Securities, Inc., and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary
4
<PAGE>
U.S. Government Securities dealer in New York City (a "Primary Treasury
Dealer"), the Issuer shall substitute therefor another Primary Treasury Dealer.
If an Event of Default with respect to the Exchange Debentures due
2027 shall occur and be continuing, the principal of all the Exchange Debentures
due 2027 may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding
Exchange Debenture due 2027 affected thereby, (i) extend the final maturity of
the principal of any Security or reduce the principal amount thereof or reduce
the rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or make the principal thereof (including any
amount in respect of original issue discount), or interest thereon payable in
any coin or currency other than that provided in the Securities or Coupons or in
accordance with the terms thereof, or reduce the amount of principal of an
Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof or the amount thereof provable in
bankruptcy or alter certain provisions of the Indenture relating to Securities
not denominated in Dollars or the Judgment Currency of such Securities or impair
or affect the right of any Securityholder to institute suit for the enforcement
of any payment thereof when due or, if the Securities provide therefor, any
right of repayment at the option of the Securityholder or (ii) reduce the
aforesaid percentage in principal amount of Securities of any series issued
under such Indenture, the consent of the holders of which is required for any
such modification. It is also provided in the Indenture that, with respect to
certain defaults or Events of Default regarding the Securities of any series,
the holders of a majority in aggregate principal amount Outstanding of the
Securities of each such series, each such series voting as a separate class (or,
of all Securities, as the case may be voting as a single class) may under
certain circumstances waive all defaults with respect to each such series (or
with respect to all the Securities, as the case may be) and rescind and annul a
declaration of default and its consequences, but no such waiver or rescission
and annulment shall extend to or affect any subsequent default or shall impair
any right consequent thereto. The preceding sen-
5
<PAGE>
tence shall not, however, apply to a default in the payment of the principal of
or interest on any of the Securities.
No reference herein to the Indenture and no provision of this Exchange
Debenture due 2027 or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Exchange Debenture due 2027 at the time, place and rate, and in
the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Exchange Debenture due 2027 may be
registered on the registry books of the Issuer, upon surrender of this Exchange
Debenture due 2027 for registration of transfer at the office or agency of the
Issuer maintained by the Issuer for such purpose in the Borough of Manhattan,
The City of New York, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the holder hereof or by its attorney duly authorized in writing, and thereupon
one or more new Exchange Debentures due 2027 of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.
The Exchange Debentures due 2027 are issuable only in registered form
in minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, the Exchange Debentures due 2027 are exchangeable for a like
aggregate principal amount of Exchange Debentures due 2027 as requested by the
holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Exchange Debenture due 2027 for
registration of transfer, the Issuer, the Trustee and any agent of the Issuer or
the Trustee may treat the person in whose name this Exchange Debenture due 2027
is registered as the owner hereof for all purposes, whether or not this Exchange
Debenture due 2027 be overdue, and neither the Issuer, the Trustee nor any such
agent shall be affected by notice to the contrary.
THE INDENTURE AND THIS EXCHANGE DEBENTURE DUE 2027 SHALL BE DEEMED TO
BE A CONTRACT UNDER THE LAWS OF THE
6
<PAGE>
STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF.
7
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By:
---------------------
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR EXCHANGE DEBENTURES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _________________________
________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Exchange Debenture due 2027 and hereby irrevocably constitutes and
appoints ________ attorney to transfer the said Exchange Debenture due 2027 on
the books of the Issuer, with full power of substitution in the premises.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Exchange Debenture due 2027 in every
particular without alteration or enlargement or any change whatsoever.
- -------------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount of
Exchange Debentures due
2027 by which this
Global Security is to be
Reduced or Increased, Remaining Principal
and Reason for the Amount of
Date Reduction or Increase this Global Security Notation Made By
--------- --------------------- -------------------- ----------------
<PAGE>
EXHIBIT 8.1
[SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
July 8, 1997
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, CA 94104
Ladies and Gentlemen:
We have acted as special counsel to McKesson Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-4 (such Registration Statement being
hereinafter referred to as the "Registration Statement"), to be filed by the
Company with the Securities and Exchange Commission (the "Commission") on the
date hereof, with respect to the registration under the Securities Act of 1933,
as amended (the "Securities Act"), by the Company of its offers to exchange (the
"Exchange Offers") an aggregate principal amount of up to $525,000,000 of its
6.60% Exchange Notes due March 1, 2000, 6 7/8% Exchange Notes due March 1, 2002
and 7.65% Exchange Debentures due March 1, 2027 (together the "Exchange Notes")
for a like principal amount of 6.60% Notes due March 1, 2000, 6 7/8% Notes due
March 1, 2002 and 7.65% Debentures due March 1, 2027 (together the "Private
Notes"). The Private Notes have been and the Exchange Notes will be issued
pursuant to an Indenture dated as of March 11, 1997 (the "Indenture"), between
the Company and The First National Bank of Chicago, as trustee (the "Trustee").
We hereby confirm that, although the discussion set forth in the Registration
Statement under the heading "CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES TO
NON-U.S. HOLDERS" does not purport to discuss all possible United States federal
income tax consequences of the acquisition, ownership, and disposition of the
Exchange Notes, in our opinion such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal income tax
consequences of the acquisition, ownership, and disposition of the Exchange
Notes, based upon current law. There can be no assurances that any of the opin-
<PAGE>
McKesson Corporation
July 8, 1997
Page 2
ions expressed herein will be accepted by the Internal Revenue Service, or if
challenged, by a court.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 8.1 to the Registration Statement. We also consent to the use of our
name under the heading "Legal Matters" in the Registration Statement. In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission promulgated thereunder. This opinion is expressed
as of the date hereof unless otherwise expressly stated and we disclaim any
undertaking to advise you of any subsequent changes of the facts stated or
assumed herein or any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE>
EXHIBIT 10.1
McKESSON CORPORATION
$175,000,000 6.60% Notes due March 1, 2000
$175,000,000 6 7/8% Notes due March 1, 2002
$175,000,000 7.65% Debentures due March 1, 2027
REGISTRATION RIGHTS AGREEMENT
New York, New York
March 11, 1997
Morgan Stanley & Co. Incorporated
BancAmerica Securities, Inc.
Chase Securities Inc.
J.P. Morgan Securities Inc.
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
McKesson Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell (the "Initial Placement") to Morgan Stanley & Co. Incorporated
("Morgan Stanley"), BancAmerica Securities, Inc., Chase Securities Inc. and J.P.
Morgan Securities Inc. (the "Purchasers"), upon the terms set forth in a
placement agreement of even date herewith (the "Placement Agreement"),
$175,000,000 of the Company's 6.60% Notes due March 1, 2000, $175,000,000 of the
Company's 6 7/8% Notes due March 1, 2002 and $175,000,000 of the Company's 7.65%
Debentures due March 1, 2027 (each, a "Series of Notes" and, collectively, the
"Notes"). The Notes will be issued under an Indenture to be dated as of March
11, 1997 (the "Indenture") between the Company and The First National Bank of
Chicago, as trustee (the "Trustee"). As an inducement to the Purchasers to
enter into the Placement Agreement and in satisfaction of a condition to your
obligations thereunder, the Company agrees with you, (i) for your benefit and
(ii) for the benefit of the holders from time to time (each of the foregoing a
"Holder" and together the "Holders") of the Notes or the Exchange Notes (as
defined herein), as follows:
1. Definitions. Capitalized terms used herein without definition
-----------
shall have their respective meanings set forth in the Placement Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
<PAGE>
"Act" means the Securities Act of 1933, as amended, and the rules and
---
regulations of the Commission promulgated thereunder.
"Affiliate" shall have the same meaning given to that term in Rule 405
---------
of the Act or any successor rule thereunder.
"Closing Date" has the meaning set forth in the Placement Agreement.
------------
"Commission" means the Securities and Exchange Commission.
----------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Notes" means the three Series of Exchange Notes,
--------------
collectively.
"Exchange Offer Registration Period" means the 180-day period
----------------------------------
following the issuance of the Exchange Notes, exclusive of any period during
which any stop order shall be in effect suspending the effectiveness of the
Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
-------------------------------------
of the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include any Purchaser)
-----------------
which is a broker-dealer electing to exchange Notes acquired for its own account
as a result of market-making activities or other trading activities for Exchange
Notes.
"Final Memorandum" has the meaning set forth in the Placement
----------------
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
------
"Indenture" has the meaning set forth in the preamble hereto.
---------
"Initial Placement" has the meaning set forth in the preamble hereto.
-----------------
"Liquidated Damages" has the meaning set forth in Section 7(a) hereof.
------------------
2
<PAGE>
"Majority Holders" means the Holders of a majority of the aggregate
----------------
principal amount of securities registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment
---------------------
bankers and manager or managers that shall administer an underwritten offering.
"Notes" has the meaning set forth in the preamble hereto.
-----
"Prospectus" means the prospectus included in any Registration
----------
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Notes or the Exchange Notes, covered by such Registration Statement, and
all amendments and supplements to the Prospectus, including post-effective
amendments.
"Registered Exchange Offer" means the proposed offer to the Holders to
-------------------------
issue and deliver to such Holders, with respect to each Series of Notes, a like
principal amount of the corresponding Series of Exchange Notes, in exchange for
the Notes.
"Registration Statement" means any Exchange Offer Registration
----------------------
Statement or Shelf Registration Statement that covers any of the Notes or the
Exchange Notes pursuant to the provisions of this Agreement, and amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Series of Exchange Notes" means, in respect of each Series of Notes,
------------------------
a like principal amount of debt securities of the Company identical in all
material respects to, and entitled to substantially the same benefits of, such
Series of Notes.
"Series of Notes" has the meaning set forth in the preamble hereto.
---------------
"Shelf Registration" means a registration effected pursuant to Section
------------------
3 hereof.
"Shelf Registration Event" has the meaning set forth in Section 3
------------------------
hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
-------------------------
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
----------------------------
of the Company pursuant to the provisions
3
<PAGE>
of Section 3 hereof which covers some or all of the Notes or the Exchange Notes,
as applicable, on an appropriate form under Rule 415 under the Act, or any
similar rule that may be adopted by the Commission, and amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Special Counsel" means Brown & Wood llp or such other counsel as
---------------
shall be specified by the Majority Holders of securities included in the
relevant Registration Statement, the fees and expenses of which will be paid by
the Company pursuant to Section 5 hereof.
"Trustee" has the meaning set forth in the preamble hereto.
-------
"Underwriter" means any underwriter of Notes in connection with an
-----------
offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of Exchange Notes by
-------------------------------------------------------
Exchanging Dealers. (a) The Company shall prepare and, not later than 120 days
- -------------------
following the Closing Date, shall file with the Commission the Exchange Offer
Registration Statement. The Company shall use its reasonable best efforts to
cause the Exchange Offer Registration Statement to become effective under the
Act within 180 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offer, it
being the objective of such Registered Exchange Offer to enable each Holder
electing to exchange Notes for Exchange Notes (assuming that such Holder is not
an affiliate of the Company within the meaning of the Act, acquires the Exchange
Notes in the ordinary course of such Holder's business and has no arrangements
with any person to participate in the distribution (within the meaning of the
Act) of the Exchange Notes) to transfer such Exchange Notes from and after their
receipt without any limitations or restrictions under the Act and without
material restrictions under the securities laws of a substantial proportion of
the several states of the United States.
(c) In connection with the Registered Exchange Offer, the Company
shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
4
<PAGE>
(ii) keep the Registered Exchange Offer open for not less than 30
days after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of New
York; and
(iv) comply in all material respects with all applicable laws.
(d) As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
(i) accept for exchange all Notes validly tendered and not
withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all Notes so accepted
for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to
each Holder of tendered Notes, Exchange Notes of the appropriate series
equal in principal amount to the Notes of such Holder so accepted for
exchange therefor.
(e) The Purchasers and the Company acknowledge that, pursuant to
interpretations by the Commission's staff of Section 5 of the Act, and in the
absence of an applicable exemption therefrom, each Exchanging Dealer is required
to deliver a Prospectus in connection with a sale of any Exchange Notes received
by such Exchanging Dealer pursuant to the Registered Exchange Offer in exchange
for Notes acquired for its own account as a result of market-making activities
or other trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto in
the forepart of the Exchange Offer Registration Statement in a section
setting forth details of the Registered Exchange Offer, and in Annex C
hereto in the underwriting or plan of distribution section of the
Prospectus forming a part of the Exchange Offer Registration Statement, and
include the information set forth in Annex D hereto in the Letter of
Transmittal delivered pursuant to the Registered Exchange Offer; and
(ii) use its reasonable best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during the
Exchange Offer Registration Period for delivery of the Prospectus forming a
part thereof by Exchanging Dealers in connection with sales of Exchange
Securities received pursuant to the Registered Exchange Offer, as
contemplated by Section 4(h) below.
5
<PAGE>
(f) In the event that the Purchasers determine that they are not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Notes constituting any portion of their initial unsold allotment, at
the request of the Purchasers, the Company shall issue and deliver to the
Purchasers, in exchange for such Notes, a like principal amount of Exchange
Notes (provided that such Exchange Notes shall include legends with respect to
restrictions on transfer), and the Company shall, starting on the date of
effectiveness of the Exchange Offer Registration Statement and ending on the
close of business on the 180th day following such date, make available as many
copies of the Exchange Offer Registration Statement prospectus, as amended or
supplemented, as reasonably requested by the Purchasers. The Company shall seek
to cause the CUSIP Service Bureau to issue the same CUSIP number(s) for such
securities as for the corresponding Series of Exchange Notes issued pursuant to
the Registered Exchange Offer. The Purchasers agree to promptly notify the
Company in writing following the resale of their initial allotment of Notes.
3. Shelf Registration. If, (i) because of any change in law or
-------------------
currently prevailing interpretations thereof by the Commission's staff, the
Company determines upon advice of its outside counsel that it is not permitted
to effect the Registered Exchange Offer as contemplated by Section 2 hereof, or
(ii) for any other reason the Registered Exchange Offer is not consummated
within 225 days of the Closing Date, or (iii) in the case of any Holder that
participates in the Registered Exchange Offer, such Holder does not receive
freely tradeable Exchange Notes on the date of the exchange (other than due
solely to the status of such Holder as an affiliate of the Company within the
meaning of the Act or as a broker-dealer) (it being understood that, for
purposes of this Section 3, (x) the requirement that the Purchasers deliver a
Prospectus containing the information required by Items 507 and/or 508 of
Regulation S-K under the Act in connection with sales of Exchange Notes acquired
in exchange for such Notes shall result in such Exchange Notes being not "freely
tradeable" but (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of Exchange Notes acquired in the Registered
Exchange Offer in exchange for Notes acquired as a result of market-making
activities or other trading activities shall not result in such Exchange Notes
being not "freely tradeable") (the events described in clauses (i), (ii) and
(iii) of this paragraph are each referred to herein as a "Shelf Registration
Event"), the following provisions shall apply:
(a) The Company shall promptly deliver to the Holders written notice
of a Shelf Registration Event and, as promptly as practicable (but in no event
more than 60 days after so required or requested pursuant to this Section 3),
file with the Commission and thereafter use its reasonable best efforts to cause
to be declared effective under the Act, a Shelf Registration Statement relating
to the offer and sale of the Notes or the Exchange Notes, as applicable, by the
Holders from time to
6
<PAGE>
time in accordance with the methods of distribution elected by such Holders and
set forth in such Shelf Registration Statement; provided, however, that with
-------- -------
respect to Exchange Notes received by the Purchasers in exchange for Notes
constituting any portion of an unsold allotment, the Company may, if permitted
by current interpretations by the Commission's staff, file a post-effective
amendment to the Exchange Offer Registration Statement containing the
information required by Regulation S-K Items 507 and/or 508, as applicable, in
satisfaction of their obligations under this paragraph (a) with respect thereto,
and any such Exchange Offer Registration Statement, as so amended, shall be
referred to herein as, and governed by the provisions herein applicable to, a
Shelf Registration Statement.
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of two
years (or, if Rule 144(k) is amended to provide a shorter restrictive period,
such shorter period) or such shorter period that will terminate when all the
Notes or Exchange Notes, as applicable, covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement (in any
such case, such period being called the "Shelf Registration Period").
4. Registration Procedures. In connection with any Shelf
------------------------
Registration Statement and, to the extent specified, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to each Purchaser, prior to the filing
thereof with the Commission, a copy of any Shelf Registration Statement and
any Exchange Offer Registration Statement, and each amendment thereof and
each amendment or supplement, if any, to the Prospectus included therein
and the Company shall, if reasonably requested, promptly incorporate in
such Registration Statement, such information and comments as the
Purchasers reasonably agree with the Company and its counsel should be
included therein provided that the Company shall not be required to take
any action under this Section 4(a) that is not in the reasonable opinion of
counsel for the Company in compliance with applicable law.
(b) The Company shall ensure that subject to Section 4(k), (i) any
Registration Statement and any amendment thereto and any Prospectus forming
a part thereof and any amendment or supplement thereto complies in all
material respects with the Act, (ii) any Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of any Registration
Statement, and any amendment or supplement to such
7
<PAGE>
Prospectus, does not, during the period when delivery thereof is required,
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Purchasers and, in the case of a
Shelf Registration Statement, the Holders of securities covered thereby
and, if requested by you or any such Holder, confirm such advice in
writing:
(i) when a Registration Statement and any amendment thereto
has been filed with the Commission and when a Registration Statement
or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to a Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise the Purchasers and, in the case of a Shelf
Registration Statement, the Holders of securities covered thereby,
and, in the case of an Exchange Offer Registration Statement, any
Exchanging Dealer which has provided in writing to the Company a
telephone or facsimile number and address for notices, and, if
requested by you or any such Holder or Exchanging Dealer, confirm such
advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the suspension of the use of a Prospectus.
(d) Subject to Section 4(k), the Company shall use its reasonable best
efforts to prevent the issuance or obtain the withdrawal of any order
suspending the effectiveness or use of any Registration Statement at the
earliest possible time.
(e) The Company shall furnish to each Holder of securities included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and
8
<PAGE>
schedules, and, if the Holder so requests in writing, all exhibits
(including those incorporated by reference).
(f) Subject to Section 4(k), the Company shall, during the Shelf
Registration Period, as promptly as is reasonably practicable deliver to
each Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may
reasonably request; and subject to Section 4(k), the Company consents to
the use of the Prospectus or any amendment or supplement thereto as to
which no notice has been given pursuant to paragraph 4(c)(2) by each of the
selling Holders of securities in connection with the offering and sale of
the securities covered by the Prospectus or any amendment or supplement
thereto.
(g) The Company shall furnish to each Exchanging Dealer which so
requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein, and, if the Exchanging Dealer so requests in writing, all exhibits
(including those incorporated by reference).
(h) Subject to Section 4(k), the Company shall, during the Exchange
Offer Registration Period, promptly deliver to each Exchanging Dealer,
without charge, as many copies of the Prospectus included in such Exchange
Offer Registration Statement and any amendment or supplement thereto as
such Exchanging Dealer may reasonably request for delivery by such
Exchanging Dealer in connection with a sale of Exchange Notes received by
it pursuant to the Registered Exchange Offer; and subject to Section 4(k),
the Company consents to the use of the Prospectus or any amendment or
supplement thereto as to which no notice has been given pursuant to
paragraph 4(c)(2) by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or the effectiveness of a
Registration Statement, the Company shall, if required by applicable law,
register or qualify or cooperate with the Holders of securities included
therein and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holders reasonably request
in writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such United States jurisdictions of the
securities covered by such Registration Statement; provided, however, that
-------- -------
the Company will not be required to (i) qualify generally to do business or
as a foreign corporation or as a dealer in securities in any
9
<PAGE>
jurisdiction where it would not otherwise be required to so qualify but for
this Section 4(i), (ii) file any general consent to service of process in
any jurisdiction where it is not as of the date hereof so subject or (iii)
subject itself to taxation in any jurisdiction where it is not otherwise
subject.
(j) Unless the applicable securities shall be in book-entry only form,
the Company shall cooperate with the Holders of Notes to facilitate the
timely preparation and delivery of certificates representing Notes to be
sold pursuant to any Registration Statement free of any restrictive legends
and in such denominations and registered in such names as Holders may
request prior to sales of Notes pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraphs
(c)(1)(ii), (c)(2)(i) or (c)(2)(iii) above, the Company agrees to notify
the Purchasers, and in the case of a Shelf Registration Statement, the
Holders of securities covered thereby, to suspend use of the Prospectus and
the Company shall prepare, using its reasonable best efforts to do so as
soon as possible, a post-effective amendment to any Registration Statement
or an amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading and the Purchasers, and in the case of
a Shelf Registration Statement, the Holders of securities covered thereby,
shall suspend use of such Prospectus until the Company has amended or
supplemented such Prospectus so that such Prospectus does not contain any
such untrue statement or omission.
(l) The Company shall use its reasonable best efforts to cause The
Depository Trust Company ("DTC") on the first business day following the
effective date of any Shelf Registration Statement hereunder or as soon as
possible thereafter to remove (i) from any existing CUSIP number assigned
to any Series of Notes, any designation indicating that such Notes are
"restricted securities," which efforts shall include delivery to DTC of a
letter executed by the Company substantially in the form of Annex E hereto
and (ii) any other stop or restriction on DTC's system with respect to such
Notes. In the event the Company is unable to cause DTC to take the actions
described in the immediately preceding sentence, the Company shall take
such actions as Morgan Stanley may reasonably request to provide, as soon
as practicable, a CUSIP number for each Series of Notes registered under
such Registration Statement and to cause such CUSIP numbers to be assigned
to such Notes (or to the maximum aggregate principal amount of such Notes
to
10
<PAGE>
which such number(s) may be assigned). Upon compliance with the foregoing
requirements of this Section 4(l), the Company shall provide the Trustee
with printed certificates for each Series of Notes, in a form eligible for
deposit with DTC.
(m) The Company shall use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission and shall make
generally available to its security holders as soon as practicable after
the effective date of the applicable Registration Statement an earnings
statement satisfying the provisions of Section 11(a) of the Act.
(n) The Company shall cause the Indenture to be qualified under the
Trust Indenture Act of 1939 (the "Trust Indenture Act") in a timely manner.
(o) The Company may require each Holder of securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding such Holder and the distribution of such securities
by such Holder as the Company may from time to time reasonably require for
inclusion in such Registration Statement and securities of a Holder which
does not provide information necessary for inclusion in such Registration
Statement may be omitted from any Shelf Registration Statement.
(p) The Company shall, if reasonably requested, and in no event more
than three times, promptly incorporate in a Prospectus supplement or post-
effective amendment to a Shelf Registration Statement, such information as
the Managing Underwriters and Holders of a majority in aggregate principal
amount of each Series of Notes reasonably agree with the Company and its
counsel should be included therein and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as notified
of the matters to be incorporated in such Prospectus supplement or post-
effective amendment provided that the Company shall not be required to take
any action under this Section 4(p) that is not in the reasonable opinion of
counsel for the Company in compliance with applicable law.
(q) In the case of any Shelf Registration Statement, the Company shall
enter into such customary agreements (including underwriting agreements)
and take all other appropriate and reasonably required actions in
connection therewith in order to expedite or facilitate the registration or
the disposition of the Notes or the Exchange Notes, as the case may be, and
in connection therewith, if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and procedures no less
favorable than those set forth in Section 6 (or such other provisions and
procedures acceptable to the Holders of a majority in aggregate principal
amount of each Series of
11
<PAGE>
Notes and the Managing Underwriters, if any) with respect to all parties to
be indemnified pursuant to Section 6.
(r) In the case of any Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by the Holders of securities
to be registered thereunder, subject to their acceptance of the provisions
of this Section 4(r), any underwriter participating in any distribution
pursuant to such Registration Statement, and any Special Counsel,
accountant or other agent retained by the Holders or any such underwriter,
all relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries as shall reasonably be
required in connection with the discharge of their due diligence
obligations; (ii) cause the Company's officers, directors and employees and
any relevant trustee to supply all relevant information reasonably
requested by the Holders or any such underwriter, Special Counsel,
accountant or agent in connection with any such Registration Statement as
is customary for similar due diligence examinations; provided, however,
-------- -------
that, in the case of clause (i) and (ii) above, any information that is
designated in writing by the Company, in good faith, as confidential at the
time of delivery of such information shall be kept confidential by the
Holders and any such underwriter, Special Counsel, accountant or agent,
unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public
generally or through a third party without an accompanying obligation of
confidentiality; and provided further, however, that the foregoing
-------- ------- -------
inspection and information gathering shall be coordinated on behalf of the
Holders and the other parties entitled thereto by the Special Counsel and
other parties; (iii) make such representations and warranties to the
Holders of securities registered thereunder and the underwriters, if any,
in form, substance and scope as are customarily made by issuers to
underwriters in secondary offerings and covering such matters as are
customarily covered in representations and warranties requested in
secondary offerings; (iv) obtain opinions of counsel to the Company and
updates thereof addressed to each selling Holder and the underwriters, if
any, covering such matters and with such exceptions as are customarily
covered or taken in opinions requested in secondary offerings; (v) obtain
"cold comfort" letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each selling Holder of securities registered
thereunder and the underwriters, if any, in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with secondary
12
<PAGE>
offerings; and (vi) deliver such documents and certificates as may be
reasonably requested by the Majority Holders and the Managing Underwriters,
if any, or their counsel including those to evidence compliance with
Section 4(k) and with conditions customarily contained in the underwriting
agreement or other agreement entered into by the Company. The foregoing
actions set forth in clauses (iii), (iv), (v) and (vi) of this Section 4(r)
shall be performed at (A) the effectiveness of such Registration Statement
and each post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement, if
requested by the Purchasers, the Company shall (i) make reasonably
available for inspection by the Purchasers, subject to their acceptance of
the provisions of this Section 4(s), and any Special Counsel, accountant or
other agent retained by the Purchasers, all relevant financial and other
records, pertinent corporate documents and properties of the Company and
its subsidiaries as shall reasonably be required in connection with the
discharge of their due diligence obligations; (ii) cause the Company's
officers, directors and employees and any relevant trustee to supply all
relevant information reasonably requested by the Purchasers or any such
Special Counsel, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence
examinations; provided, however, that, in the case of clause (i) and (ii)
-------- -------
above, any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such information
shall be kept confidential by the Purchasers and any such Special Counsel,
accountant or agent, unless such disclosure is made in connection with a
court proceeding or required by law, or such information becomes available
to the public generally or through a third party without an accompanying
obligation of confidentiality; and provided further, however, that the
-------- ------- -------
foregoing inspection and information gathering shall be coordinated on
behalf of the Purchasers and other parties entitled thereto by the Special
Counsel and other parties; (iii) make such representations and warranties
to the Purchasers, in form, substance and scope as are customarily made by
issuers to underwriters in secondary offerings and covering such matters as
are customarily covered in representations and warranties requested in
secondary offerings; and (iv) deliver such documents and certificates as
may be reasonably requested by the Purchasers or their counsel, including
those to evidence compliance with Section 4(k) and with conditions
customarily contained in underwriting agreements. The foregoing actions
set forth in clauses (iii) and (iv) of this Section 4(s) shall be
performed, if requested by the Purchasers, at the closing of the Registered
Exchange Offer and the effective date of any post-effective amendment to
the Exchange Offer Registration Statement.
13
<PAGE>
5. Registration Expenses. The Company shall bear all expenses
----------------------
incurred in connection with the performance of their obligations under Sections
2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of the Special
Counsel designated in connection therewith, and, in the case of any Exchange
Offer Registration Statement, will reimburse the Purchasers for the reasonable
fees and disbursements of the Special Counsel acting in connection therewith.
6. Indemnification; Contribution.
------------------------------
(a) The Company agrees to indemnify and hold harmless each Holder and each
person, if any, who controls any Holder within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or any amendment thereof, including all documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary Prospectus or any Prospectus (or
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Holder furnished to the Company in writing by such
Holder expressly for use therein. The Company shall also indemnify each
Exchanging Dealer participating in the offering and sale of the Notes and each
person who controls any such Exchanging Dealer (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) to the same extent and with the
same limitations as provided above with respect to the indemnification of the
Holders of the Notes.
The foregoing notwithstanding, the Company shall not be liable to the
extent that such losses, claims, damages or liabilities arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Prospectus that is a preliminary Prospectus if (i)
such indemnified person failed to send or deliver a copy of the Prospectus with
or prior to the delivery of written confirmation of the sale of the Notes giving
rise to such losses, claims, damages or liabilities and (ii) the Prospectus
would have corrected such untrue statement or omission.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Company's directors,
14
<PAGE>
the Company's officers who sign a Registration Statement, and each person, if
any, who controls the Company within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or any amendment
thereof, any preliminary Prospectus or any Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Holder furnished to the Company in writing by such Holder expressly for use in
such Registration Statement, preliminary Prospectus, Prospectus or any
amendments or supplements thereto. In no event shall the liability of any
Holder of the Notes hereunder be greater in amount than the net dollar amount of
the proceeds received by such Holder from the sale of the Notes giving rise to
such indemnification obligation.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
- ------------------
indemnity may be sought (the "indemnifying party") in writing and the
------------------
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (a) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Holders and all
persons, if any, who control any Holders within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act, and (b) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Company
and each person, if any, who controls the Company within the meaning of either
such Section, and that all such fees and expenses shall be
15
<PAGE>
reimbursed as they are incurred. In the case of any such separate firm for the
Company and any such control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Holders or any such control persons of any Holders, such firm shall be
designated in writing on behalf of the Majority Holders. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or (b)
of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Holders' respective obligations to contribute
pursuant to this paragraph are several in proportion to the respective number of
the Notes they have sold pursuant to a Registration Statement, and not joint.
16
<PAGE>
(e) The Company and the Holders agree that it would not be just or
equitable if contribution pursuant to Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section 6.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in paragraph (d) of this Section 6
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, a Holder of the Notes shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Notes sold by such indemnifying party and distributed
to the public were offered to the public pursuant to any Registration Statement
exceeds the amount of any damages which such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company or any person
controlling the Company and (iii) the sale of any Notes by any Holder.
7. Liquidated Damages Under Certain Circumstances. (a) Liquidated
-----------------------------------------------
damages ("Liquidated Damages") shall become payable in respect of the Notes as
follows if any of the following events occur (each such event in clauses (i)
through (iv) below, a "Registration Default"):
(i) if the Exchange Offer Registration Statement is not filed with
the Commission on or prior to the 120th day following the Closing Date;
(ii) if the Exchange Offer Registration Statement is not declared
effective on or prior to the 180th day following the Closing Date;
(iii) if the Registered Exchange Offer is not consummated or the
Shelf Registration Statement is not declared effective on or prior to the
225th day following the Closing Date; or
17
<PAGE>
(iv) if after the Shelf Registration Statement is declared
effective, (A) such Shelf Registration Statement ceases to be effective
prior to the end of the Shelf Registration Period (except as permitted in
paragraph (b) of this Section 7); (B) such Shelf Registration Statement or
the related Prospectus ceases to be useable in connection with resales of
Notes or Exchange Notes, as the case may be, covered by such Shelf
Registration Statement prior to the end of the Shelf Registration Period
(except as permitted in paragraph (b) of this Section 7) because (1) the
Company determines that any event occurs as a result of which the related
Prospectus forming part of such Shelf Registration Statement would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, (2) the Company determines that
it shall be necessary to amend such Shelf Registration Statement, or
supplement the related Prospectus, to comply with the Act or the Exchange
Act or the rules thereunder, or (3) the Company determines that it is
advisable to suspend use of the Prospectus for a discrete period of time
due to pending material corporate developments or similar material events
that have not yet been publicly disclosed and as to which the Company
believes public disclosure will be prejudicial to the Company.
Liquidated Damages shall accrue on the Notes or the Exchange Notes, as
the case may be, over and above the interest rate set forth in the title to the
Notes or the Exchange Notes, as the case may be, following the occurrence of
each Registration Default set forth in clauses (i), (ii) and (iii) above from
and including the next day following each such Registration Default, in each
case at a rate equal to 0.25% per annum; provided, however, that in any case, if
-------- -------
one or more Registration Defaults referred to in Section 7(a)(iv) occurs and
continues for more than 60 days (whether or not consecutive) in any twelve month
period (the 61st day being referred to as the "Default Day") then from the
Default Day until the earlier of (i) the date the Shelf Registration Statement
is again deemed effective or is useable, (ii) the date that is the second
anniversary of the Closing Date (or, if Rule 144(k) of the Act is amended to
provide a shorter restrictive period, such shorter period) or (iii) the date of
which all the Notes are sold pursuant to the Shelf Registration Statement,
Liquidated Damages shall accrue at a rate of 0.25% per annum; provided, further,
-------- -------
that the aggregate amount of Liquidated Damages payable pursuant to this Section
7 will in no event exceed 0.25% per annum. The Liquidated Damages attributable
to each Registration Default shall cease to accrue from the date such
Registration Default is cured.
(b) A Registration Default referred to in Section 7(a)(iv) shall be
deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related Prospectus if (i) such Registration
Default has occurred
18
<PAGE>
solely as a result of (x) the filing of a post-effective amendment to such Shelf
Registration Statement to incorporate annual audited financial information with
respect to the Company where such post-effective amendment is not yet effective
and needs to be declared effective to permit Holders to use the related
Prospectus or (y) the occurrence of other material events or developments with
respect to the Company that would need to be described in such Registration
Statement or the related Prospectus and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement such
Registration Statement and related Prospectus to describe such events.
(c) Any amounts of Liquidated Damages due pursuant to the foregoing
paragraphs will be payable in cash on March 1 and September 1 of each year to
the holders of record on the preceding February 15 and August 15, respectively.
8. Miscellaneous.
--------------
(a) No Inconsistent Agreements. The Company has not, as of the date
---------------------------
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to the Notes that is inconsistent with the rights granted
to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
-----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding aggregate
principal amount of each Series of Notes (or, after the consummation of any
Exchange Offer in accordance with Section 2 hereof, of each Series of Exchange
Notes); provided, however, that, with respect to any matter that affects the
-------- -------
rights of any Purchaser hereunder, the Company shall obtain the written consent
of the Purchasers. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
Notes are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by the
Holders of a majority of each Series of Notes, determined on the basis of Notes
being sold rather than registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or
--------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this
Section 8(c), which address
19
<PAGE>
initially is, with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy in like
manner to Morgan Stanley;
(2) if to you, initially at the address set forth in the
Placement Agreement; and
(3) if to the Company, initially at the address set forth in the
Placement Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit
-----------------------
of and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Notes and/or Exchange Notes. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of Notes
and/or Exchange Notes and any such Holder may enforce the provisions of this
Agreement as if an original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
-------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
---------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
--------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
(h) Severability. In the event that any one of more of the provisions
-------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
------------------------------------
approval of Holders of a specified percentage of
20
<PAGE>
principal amount of Notes or Exchange Notes is required hereunder, Notes or
Exchange Notes, as applicable, held by the Company or their respective
Affiliates (other than subsequent Holders of Notes or Exchange Notes if such
subsequent Holders are deemed to be Affiliates solely by reason of their
holdings of such Notes or Exchange Notes) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
21
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Company and you.
Very truly yours,
McKESSON CORPORATION
By: /s/ Ivan D. Meyerson
--------------------------------
Name: Ivan D. Meyerson
Title: Vice President
Accepted, March 11, 1997
MORGAN STANLEY & CO. INCORPORATED
BANCAMERICA SECURITIES, INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Mark H. Bradley
-----------------------------
Name: Mark H. Bradley
Title: Principal
<PAGE>
ANNEX A
Annex A
-------
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Notes acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, ending on the close of business on the
180th day following the Expiration Date (as defined herein), it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
<PAGE>
ANNEX B
Annex B
-------
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Notes, where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution."
<PAGE>
ANNEX C
Plan of Distribution
--------------------
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Notes where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities. The Company has
agreed that, starting on the Expiration Date and ending on the close of business
on the 180th day following the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale. In addition, until , 199 , all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sale of Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Act and any profit of any such resale of
Exchange Notes and any commissions or concessions received by any such persons
may be deemed to be underwriting compensation under the Securities Act. The
Letter of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of any Special Counsel
for the holders of the Notes) other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the
<PAGE>
Notes (including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
2
<PAGE>
ANNEX D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:__________________________________________
Address: ______________________________________
______________________________________
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Notes, it represents that the
Notes to be exchanged for Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Act.
<PAGE>
ANNEX E
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, CA 94104
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004
Re: $175,000,000 6.60% Notes due March 1, 2000,
$175,000,000 6 7/8% Notes due March 1, 2002, and
$175,000,000 7.65% Debentures due March 1, 2027
of McKesson Corporation
Ladies and Gentlemen:
Please be advised that the Securities and Exchange Commission has
declared effective a Registration Statement on Form S-3 under the Securities Act
of 1933, as amended, with regard to all of the securities referenced above.
Accordingly, there is no longer any restriction as to whom such securities may
be sold and any restrictions on the CUSIP designations are no longer appropriate
and may be removed. I understand that upon receipt of this letter, DTC will
remove any stop or restriction on its system with respect to these issues.
As always, please do not hesitate to call if we can be of further
assistance.
McKESSON CORPORATION
by: ______________________________
Authorized Officer
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of McKesson Corporation ("McKesson") on Form S-4 of our reports dated May 16,
1997 on McKesson's consolidated financial statements and consolidated
supplementary financial schedule, both such reports appearing in the Annual
Report on Form 10-K of McKesson Corporation for the year ended March 31, 1997,
and our report on FoxMeyer Corporation's consolidated financial statements
dated June 28, 1996 (March 18, 1997 as to paragraph seven of Note Q), which
report expresses an unqualified opinion and includes an explanatory paragraph
relating to the sale of the principal assets of FoxMeyer Corporation and its
Chapter 7 bankruptcy filing, appearing in the Current Report on Form 8-K/A of
McKesson Corporation filed with the Securities and Exchange Commission on
April 28, 1997. We also consent to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
San Francisco, California
Dallas, Texas
July 8, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
Each of the undersigned directors and each of the undersigned officers of
McKesson Corporation, a Delaware corporation (the "Company"), does hereby
constitute and appoint Mark A. Pulido, Richard H. Hawkins, Ivan D. Meyerson
and Nancy A. Miller, and each of them, as his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead in any
and all capacities, to execute and deliver in his or her name and on his or
her behalf:
(a) one or more Registration Statements (with all exhibits thereto) of
the Company on Form S-3 or any other appropriate form proposed to be filed
by the Company with the Securities and Exchange Commission (the "SEC"),
(including, without limitation, Registration Statements filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, or any successor
thereto (the "Securities Act")), for the purpose of registering under the
Securities Act, up to 2.8 million shares of the Company's common stock, par
value $.01 per share (the "Shares");
(b) any and all supplements and amendments (including, without
limitation, post-effective amendments) to such Registration Statements; and
(c) any and all other documents and instruments in connection with the
registration of the Shares which such attorneys-in-fact and agents, or any
one of them, deem necessary or advisable to enable the Company to comply
with (i) the Securities Act, the Securities Exchange Act of 1934, as
amended, and the other federal securities laws of the United States of
America and the rules, regulations and requirements of the SEC in respect
of any thereof; (ii) the securities or Blue Sky laws of any state or other
governmental subdivision of the United States of America; and (iii) the
securities or similar applicable laws of any foreign jurisdiction;
and each of the undersigned hereby grants unto such attorneys-in-fact and
agents, and each of them, or his or her substitute or substitutes, each and
every act and thing requisite and necessary to be done in and about the
premises as fully as to all intents and purposes as he or she might or could
do in person, and does hereby ratify and confirm as his or her own acts and
\deeds all that such attorneys-in-fact and agents, and each of them, or his or
her substitute or substitutes, shall lawfully do or cause to be done by virtue
hereof. Each one of such attorneys-in-fact and agents shall have, and may
exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 26th day of March 1997.
<TABLE>
<S> <C>
/s/ Alan Seelenfreund /s/ John M. Pietruski
- ------------------------------------- ------------------------------------
ALAN SEELENFREUND JOHN M. PIETRUSKI
/s/ Mark A. Pulido /s/ Carl E. Reichardt
- ------------------------------------- -------------------------------------
MARK A. PULIDO CARL E. REICHARDT
/s/ Mary G. F. Bitterman /s/ Jane E. Shaw
- ------------------------------------- -------------------------------------
MARY G. F. BITTERMAN JANE E. SHAW
/s/ Tully M. Friedman /s/ Robert H. Waterman, Jr.
- ------------------------------------- -------------------------------------
TULLY M. FRIEDMAN ROBERT H. WATERMAN, JR.
/s/ Heidi E. Yodowitz /s/ Richard H. Hawkins
- ------------------------------------- -------------------------------------
HEIDI E. YODOWITZ RICHARD H. HAWKINS
</TABLE>
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)_
-------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Att: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-------------------
McKesson Corporation
(Exact name of obligor as specified in its charter)
Delaware 94-3207296
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
McKesson Plaza
One Post Street
San Francisco, California 94104
(Address of principal executive offices) (Zip Code)
6.60% Exchange Notes due March 1, 2000, 6 7/8% Exchange Notes due March 1, 2002
and 7.65% Exchange Debentures due March 1, 2027
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
-------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
-----------------------------
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
----------------
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 30th day of June, 1997.
The First National Bank of Chicago,
Trustee
By /s/ Richard D. Manella
-----------------------------------
Richard D. Manella
Vice President and Senior Counsel
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc. filed with the Securities and Exchange Commission on October 25,
1996 (Registration No. 333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 30, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between McKesson
Corporation and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ Richard D. Manella
-----------------------------------
Richard D. Manella
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC-BALANCE SHEET
<TABLE>
<CAPTION> C400
Dollar Amounts in -------
Thousands RCFD BIL MIL THOU
--------- ---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)....... 0081 3,871,170 1.a.
b. Interest-bearing balances(2)................................ 0071 6,498,314 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B,
column D)................................................... 1773 3,901,208 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 4,612,975 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)...................................................... RCFD 2122 23,345,201 4.a.
b. LESS: Allowance for loan and lease losses................... RCFD 3123 420,963 4.b.
c. LESS: Allocated transfer risk reserve....................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)........................ 2125 22,924,238 4.d
5. Trading assets (from Schedule RD-D)............................ 3545 8,792,158 5.
6. Premises and fixed assets (including capitalized leases)....... 2145 706,928 6.
7. Other real estate owned (from Schedule RC-M)................... 2150 6,563 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)................................. 2130 61,551 8.
9. Customers' liability to this bank on acceptances outstanding.. 2155 488,866 9.
10. Intangible assets (from Schedule RC-M)......................... 2143 291,569 10.
11. Other assets (from Schedule RC-F).............................. 2160 1,775,283 11.
12. Total assets (sum of items 1 through 11)....................... 2170 53,930,823 12.
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Call Date: 03/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
LIABILITIES
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns
A and C from Schedule RC-E, part I)............... RCON 2200 21,550,056 13.a.
(1) Noninterest-bearing(1)........................ RCON 6631 8,895,137 13.a.1
(2) Interest-bearing.............................. RCON 6636 12,654,919 13.a.2
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule
RC-E, part II).................................... RCFN 2200 12,364,650 13.b.
(1) Noninterest-bearing........................... RCFN 6631 287,496 13.b.1
(2) Interest-bearing.............................. RCFN 6636 12,077,154 13.b.2
14. Federal funds purchased and securities sold
under agreements to repurchase:...................... RCFD 2800 3,817,421 14
15. a. Demand notes issued to the U.S. Treasury.......... RCON 2840 63,621 15.a.
b. Trading Liabilities (from Schedule RC-D).......... RCFD 3548 5,872,831 15.b.
16. Other borrowed money:
a. With original maturity of one year or less........ RCFD 2332 2,607,549 16.a.
b. With original maturity of more than one year...... RCFD 2333 322,414 16.b.
17. Not applicable
18. Bank's liability on acceptance executed
and outstanding...................................... RCFD 2920 488,866 18.
19. Subordinated notes and debentures.................... RCFD 3200 1,550,000 19.
20. Other liabilities (from Schedule RC-G)............... RCFD 2930 1,196,229 20.
21. Total liabilities (sum of items 13 through 20)....... RCFD 2948 49,833,637 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus........ RCFD 3838 0 23.
24. Common stock......................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to
preferred stock)..................................... RCFD 3839 2,944,244 25.
26. a. Undivided profits and capital reserves............ RCFD 3632 954,885 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities..................... RCFD 8434 (1,089) 26.b.
27. Cumulative foreign currency translation
adjustments.......................................... RCFD 3284 (1,712) 27.
28. Total equity capital (sum of items 23 through 27).... RCFD 3210 4,097,186 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21,22, and 28)...... RCFD 3300 53,930,823 29.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number
of the statement below that best describes
the most comprehensive level of auditing work Number
performed for the bank by independent external **********************************
auditors as of any date during 1996 ...........RCFD 6724 .... * 2 * M.1.
**********************************
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required
by state chartering authority)
</TABLE>
- -----------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
MCKESSON CORPORATION
OFFER TO EXCHANGE ITS 6.60% EXCHANGE NOTES DUE MARCH 1, 2000
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 6.60% NOTES DUE MARCH 1, 2000
PURSUANT TO THE PROSPECTUS DATED , 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1997, UNLESS EXTENDED. TENDERED
SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER
Delivery To: The First National Bank of Chicago, Exchange Agent
By Mail: By Hand or Overnight Delivery:
(Registered or Certified Mail
recommended) The First National Bank of Chicago
The First National Bank of Chicago c/o First Chicago Trust
c/o First Chicago Trust Company of New York
Company of New York 14 Wall Street
14 Wall Street 8th Floor, Window 2
8th Floor, Window 2 New York, New York 10005
New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus dated , 1997 (the "Prospectus") of McKesson Corporation (the
"Company") and this Letter of Transmittal (the "Letter of Transmittal"), which
together constitute the Company's offer (the "Exchange Offer") to exchange an
aggregate principal amount of up to $175,000,000 6.60% Exchange Notes due
March 1, 2000 (the "Exchange Notes due 2000") for a like principal amount of
the Company's outstanding 6.60% Notes due March 1, 2000 (the "Private Notes
due 2000").
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1997, unless the Company in its sole discretion, extends the Exchange
Offer. The Company reserves the right to extend the Exchange Offer at its
discretion, in which event the term "Expiration Date" shall mean the time and
date when the Exchange Offer as so extended shall expire. The Company shall
notify the holders of the Private Notes due 2000 of any extension by means of
a press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
<PAGE>
The Exchange Notes due 2000 will bear interest from the most recent date to
which interest has been paid on the Private Notes due 2000 or, if no interest
has been paid, from March 1, 1997. Accordingly, if the relevant record date for
interest payment occurs after the consummation of the Exchange Offer registered
holders of Exchange Notes due 2000 on such record date will receive interest
accruing from the most recent date to which interest has been paid or, if no
interest has been paid, from March 1, 1997. If, however, the relevant record
date for interest payments occurs prior to the consummation of the Exchange
Offer registered holders of Private Notes due 2000 on such record date will
receive interest accruing from the most recent date to which interest has been
paid or, if no interest has been paid, from March 1, 1997. Private Notes due
2000 accepted for exchange will cease to accrue interest from and after the
date of consummation of the Exchange Offer, except as set forth in the
immediately preceding sentence. Holders of Private Notes due 2000 whose Private
Notes due 2000 are accepted for exchange will not receive any payment in
respect of accrued interest on such Private Notes due 2000 otherwise payable on
any interest payment date the record date for which occurs on or after
consummation of the Exchange Offer.
The Exchange Offer is not conditioned upon any minimum principal amount of
Private Notes due 2000 being tendered for exchange. However, the Exchange Offer
is subject to certain conditions. Please see the Prospectus under the section
entitled "The Exchange Offers--Certain Conditions to the Exchange Offers."
The Exchange Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of Private Notes due 2000 in any jurisdiction in which
the making or acceptance of the Exchange Offer would not be in compliance with
the laws of such jurisdiction.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus. As used herein, the term "Holder" means a holder
of Private Notes due 2000, including any participant ("DTC Participant") in the
book-entry transfer facility system of The Depository Trust Company ("DTC")
whose name appears on a security position listing as the owner of the Private
Notes due 2000. As used herein, the term "Certificates" means physical
certificates representing Private Notes due 2000.
To participate in the Exchange Offer, Holders must tender by (a) book-entry
transfer pursuant to the procedures set forth in the Prospectus under "The
Exchange Offers--Procedures for Tendering Private Notes," or (b) forwarding
Certificates herewith. Holders who are DTC Participants tendering by book-entry
transfer must execute such tender through the Automated Tender Offer Program
("ATOP") of DTC. A Holder using ATOP should transmit its acceptance to DTC on
or prior to the Expiration Date. DTC will verify such acceptance, execute a
book-entry transfer of the tendered Private Notes due 2000 into the Exchange
Agent's account at DTC and then send to the Exchange Agent confirmation of such
book-entry transfer (a "Book-Entry Confirmation"), including an agent's message
("Agent's Message") confirming that DTC has received an express acknowledgement
from such Holder that such Holder has received and agrees to be bound by this
Letter of Transmittal and that the Company may enforce this Letter of
Transmittal against such Holder. The Book-Entry Confirmation must be received
by the Exchange Agent in order for the tender relating thereto to be effective.
Book-entry transfer to DTC in accordance with DTC's procedures does not
constitute delivery of the Book-Entry Confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as this Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in order for such
tender to be effective.
Holders of Private Notes due 2000 who cannot complete the procedures for
delivery by book-entry transfer of such Private Notes due 2000 on a timely
basis or who cannot deliver their Certificates for such Private Notes due 2000
and all other required documents to the Exchange Agent on or prior to the
Expiration Date, must, in order to participate in the Exchange Offer, tender
their Private Notes due 2000 according to the guaranteed delivery procedures
set forth in the Prospectus under "The Exchange Offers--Procedures for
Tendering Private Notes due 2000".
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE FOLLOWING BOX
2
<PAGE>
List below the Private Notes due 2000 to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate numbers and
principal amount of Private Notes due 2000 should be listed on a separate
signed schedule affixed hereto.
DESCRIPTION OF PRIVATE NOTES DUE 2000
(SEE INSTRUCTIONS 2, 3, AND 8)
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF
BLANK) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------------------
1 2 3
- ----------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF PRIVATE
NOTES DUE 2000 TENDERED(2)
AGGREGATE PRINCIPAL (MUST BE IN
TITLE OF SECURITIES AND AMOUNT OF PRIVATE DENOMINATIONS OF $1,000 OR
CERTIFICATE NUMBER(S)(1) NOTES DUE 2000 INTEGRAL MULTIPLES THEREOF)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
<S> <C> <C> <C>
Total
</TABLE>
(1) Certificate numbers not required if Private Notes due 2000 are being
tendered by book-entry transfer.
(2) Unless otherwise indicated, a holder will be deemed to have tendered ALL of
the Private Notes due 2000 represented in column 2.
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2000 ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:__________________________________________________
Account Number:_________________________________________________________________
Transaction Code Number:________________________________________________________
3
<PAGE>
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2000 ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):________________________________________________
Window Ticket Number (if any):__________________________________________________
Date of Execution of Notice of Guaranteed Delivery:_____________________________
If delivered by book-entry transfer, complete the following:
Account Number:_________________________________________________________________
Transaction Code Number:________________________________________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:___________________________________________________________________________
Address:________________________________________________________________________
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Private Notes due 2000 indicated above. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Subject to, and effective upon, the acceptance for exchange of the Private
Notes due 2000 tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest
in and to such Private Notes due 2000 as are being tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent its
agent and attorney-in-fact (with full knowledge that the Exchange Agent also
acts as the agent of the Company) with respect to the tendered Private Notes
due 2000 with full power of substitution to (i) deliver certificates for such
Private Notes due 2000 to the Company and deliver all accompanying evidences
of transfer and authenticity to, or upon the order of, the Company (ii)
present such Private Notes due 2000 for transfer on the books of the Company
and (iii) receive for the account of the Company all benefits and otherwise
exercise all rights of the beneficial ownership of such Private Notes due
2000, all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed to be irrevocable and
coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Private Notes due
2000 tendered hereby and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that (i) any
Exchange Notes due 2000 acquired in exchange for Private Notes due 2000
tendered hereby will have been acquired in the ordinary course of business of
the person receiving such Exchange Notes due 2000, whether or not such person
is the undersigned, (ii) neither the holder nor any such other person has an
arrangement or understanding with any person to participate in the
"distribution" of such Exchange Notes due 2000 within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") and (iii) neither
the holder nor any such other person is an "affiliate," as described in Rule
405 under the Securities Act of the Company.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to
third parties, that the Exchange Notes due 2000 issued in exchange for the
Private Notes due 2000 pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than
holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act.
However, the undersigned acknowledges that any purchaser of Private Notes due
2000 who is an affiliate of the Company within the meaning of Rule 405 under
the Securities Act or who intends to participate in the Exchange Offer for the
purpose of distributing the Exchange Notes, or any broker-dealer who purchased
the Private Notes from the Company to resell pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act (i)
will not be able to rely on the interpretations of the staff of the Commission
set forth in the above-mentioned no-action letters, (ii) will not be entitled
to tender its Private Notes due 2000 in the Exchange Offer and (ii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Private Notes
due 2000 unless such sale or transfer is made pursuant to an exemption from
such requirements. The undersigned also acknowledges that the Company has not
sought its own no-action letter and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of the
Exchange Notes due 2000. If the undersigned is a broker-dealer that
5
<PAGE>
will receive Exchange Notes due 2000 for its own account in exchange for
Private Notes due 2000, it represents that the Private Notes due 2000 to be
exchanged for Exchange Notes due 2000 were acquired by it as a result of
market-making activities or other trading activities, and acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes due 2000 pursuant to the
Exchange Offer; however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment, transfer and sale of the Private Notes
due 2000 tendered hereby. All authority conferred or agreed to be conferred in
this Letter of Transmittal and every obligation of the undersigned hereunder
shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in the instructions contained in this Letter of
Transmittal.
For the purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Private Notes due 2000 when, as and if the Company
has given oral and written notice thereof to the Exchange Agent.
If any tendered Private Notes due 2000 are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Private Notes due 2000 will be returned (or, in the case of Private
Notes due 2000 tendered by book-entry transfer through DTC, will be promptly
credited to an account maintained at DTC), without expense, to the undersigned
at the address shown below or at a different address as may be indicated
herein under the "Special Delivery Instructions" as promptly as practicable
after the Expiration Date.
The undersigned understands that tenders of Private Notes due 2000 pursuant
to the procedures described under the section entitled "The Exchange Offers--
Procedures for Tendering Private Notes" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes due 2000 (and, if
applicable, substitute certificates representing Private Notes due 2000 for
any Private Notes due 2000 not exchanged) in the name(s) of the undersigned
or, in the case of a book-entry delivery of Private Notes due 2000, please
credit the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under the box entitled "Special Delivery Instructions"
below, please send the Exchange Notes due 2000 (and, if applicable, substitute
certificates representing Private Notes due 2000 for any Private Notes due
2000 not exchanged) to the undersigned at the address shown above in the box
entitled "Description of Private Notes due 2000." In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the certificates representing the Exchange Notes due
2000 issued in exchange for the Private Notes due 2000 accepted for exchange
in the name(s) of, and return any certificates for Private Notes due 2000 not
tendered or not exchanged to, the person(s) so indicated. The undersigned
understands that the Company has no obligation pursuant to the "Special
Issuance Instructions" and "Special Delivery Instructions" to transfer any
Private Notes due 2000 from the name of the registered holder(s) thereof if
the Company does not accept for exchange any of the Private Notes due 2000 so
tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF PRIVATE
NOTES DUE 2000" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED
TO HAVE TENDERED THE PRIVATE NOTES DUE 2000 AS SET FORTH IN SUCH BOX ABOVE.
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
I hereby TENDER the Private Notes due 2000 described above in the box
entitled "Description of Private Notes due 2002" pursuant to the terms of the
Exchange Offer.
X___________________________________ __________________________________, 1997
X___________________________________ __________________________________, 1997
X___________________________________ __________________________________, 1997
Signature(s) of Owner(s) Date
If a holder is tendering any Private Notes due 2000, this Letter of
Transmittal must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Private Notes due 2000 or on a
security position listing or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or
other person acting in a fiduciary or representative capacity, please set
forth full title. See Instruction 4.
Name(s):________________________________________________________________________
(Please Type or Print)
- --------------------------------------------------------------------------------
Capacity:_______________________________________________________________________
Address:________________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 4)
Signature(s) Guaranteed by an Eligible Institution:_____________________________
(Authorized Signature)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: _______________________, 1997
7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5) (SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if To be completed ONLY if
certificates for Private Notes due certificates for Private Notes due
2000 not exchanged and/or Exchange 2000 not exchanged and/or Exchange
Notes due 2000 are to be issued in Notes due 2000 are to be sent to
the name of and sent to someone someone other than the person or
other than the person or person(s) persons whose signature(s)
whose signature(s) appear(s) on appear(s) on this Letter of
this Letter of Transmittal above, Transmittal above or to such
or if Private Notes due 2000 person or persons at an address
delivered by book-entry transfer other than shown in the box
which are not accepted for entitled "Description of Private
exchange are to be returned by Notes due 2000" on this Letter of
credit to an account maintained at Transmittal above.
DTC other than the account
indicated above.
Issue Exchange Notes due 2000 Mail Exchange Notes due 2000
and/or Private Notes due 2000 to: and/or Private Notes due 2000 to:
Name_______________________________ Name_______________________________
(Please Type or Print) (Please Type or Print)
------------------------------- -------------------------------
(Please Type or Print) (Please Type or Print)
Address____________________________ Address____________________________
------------------------------ ------------------------------
(Zip Code) (Zip Code)
-----------------------------------
Employer Identification or
Social Security Number
(Complete Substitute Form W-9)
[_]Credit unexchanged Private
Notes due 2000 delivered by
book-entry transfer to the DTC
account set forth below.
-----------------------------------
(DTC Account Number, if
applicable)
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
This Letter to Transmittal is to be completed either if (a) Certificates are
to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Exchange
Offers--Procedures for Tendering Private Notes" in the Prospectus and an
Agent's Message is not delivered. Holders who are DTC Participants tendering
by book-entry transfer must execute such tender through DTC's ATOP system. A
holder using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date. DTC will verify such acceptance, execute a book-entry
transfer of the tendered Private Notes due 2000 into the Exchange Agent's
account at DTC and then send to the Exchange Agent a Book-Entry Confirmation,
including an Agent's Message confirming that DTC has received an express
acknowledgement from such holder that such holder has received and agrees to
be bound by this Letter of Transmittal and that the Company may enforce this
Letter of Transmittal against such holder. The Book-Entry Confirmation must be
received by the Exchange Agent in order for the tender relating thereto to be
effective. Book-entry transfer to DTC in accordance with DTC's procedure does
not constitute delivery of the Book-Entry Confirmation to the Exchange Agent.
Private Notes due 2000 tendered hereby must be in denominations of $1,000 and
integral multiples thereof.
If the tender is not made through ATOP, certificates representing Private
Notes due 2000, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at its address set forth herein on or prior to
the Expiration Date in order for such tender to be effective.
Holders who wish to tender their Private Notes due 2000 and (i) whose
Private Notes due 2000 are not immediately available, or (ii) cannot deliver
their Private Notes due 2000, this Letter of Transmittal or any other
documents required hereby to the Exchange Agent prior to the Expiration Date
or (iii) who cannot comply with the procedures for book-entry transfer on a
timely basis must tender their Private Notes due 2000 according to the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (i) such tender must be made through an Eligible Institution (as
defined below); (ii) prior to the Expiration Date, the Exchange Agent must
have received from the Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Company (by fax transmission, mail or hand delivery) setting forth the
name and address of the holder, the certificate number(s) of such Private
Notes due 2000 (except in the case of book-entry tenders) and the principal
amount of Private Notes due 2000 tendered, stating that the tender is being
made thereby and guaranteeing that, within three NYSE trading days after the
Expiration Date, this Letter of Transmittal (or a copy hereof) together with
the certificate(s) representing the Private Notes due 2000 (except in the case
of book-entry tenders) and any other required documents will be deposited by
the Eligible Institution with the Exchange Agent; and (iii) such properly
completed and executed Letter of Transmittal (or a copy hereof), as well as
all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Private Notes due 2000 in proper form
for transfer of a Book-Entry Confirmation with respect to such Private Notes
due 2000, must be received by the Exchange Agent within three NYSE trading
days after the Expiration Date, all as provided in the Prospectus under the
section entitled "The Exchange Offers--Guaranteed Delivery Procedures." Any
holder who wishes to tender his Private Notes due 2000 pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to the Expiration Date.
As used in this Letter of Transmittal, "Eligible Institution" shall mean a
firm which is a member of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States.
All questions as to the validity, eligibility (including time of receipt),
acceptance and withdrawal of tendered Private Notes due 2000 will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and
all Private Notes due 2000 not
9
<PAGE>
properly tendered or any Private Notes due 2000 the Company's acceptance of
which would, in the opinion of counsel for the Company, be unlawful. The
Company also reserves the right to waive any defects, irregularities or
conditions of tender as to particular Private Notes due 2000. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the instructions in this Letter of Transmittal) shall be final and binding on
all parties. Unless waived, any defects or irregularities in connection with
tenders of Private Notes due 2000 must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Private Notes due 2000, nor shall
any of them incur any liability for failure to give such notification. Tenders
of Private Notes due 2000 will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any Private Notes due
2000 received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
See "The Exchange Offers" in the Prospectus.
2. TENDER BY HOLDER.
Only a holder of Private Notes due 2000 may tender such Private Notes due
2000 in the Exchange Offer. Any beneficial owner whose Private Notes due 2000
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on behalf of such
beneficial owner. If such beneficial owner wishes to tender on such owner's
own behalf; such owner must, prior to completing and executing this Letter of
Transmittal and delivering such owner's Private Notes due 2000, either make
appropriate arrangements to register ownership of the Private Notes due 2000
in such owner's name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
3. PARTIAL TENDERS AND WITHDRAWALS.
Tenders of Private Notes due 2000 will be accepted only in denominations of
$1,000 and integral multiples thereof. If less than all the Private Notes due
2000 are to be tendered, the tendering holder(s) should fill in the aggregate
principal amount of Private Notes due 2000 to be tendered in the box above
entitled "Description of Private Notes due 2000--Principal Amount of Private
Notes due 2000 Tendered." A reissued certificate representing the balance of
nontendered Private Notes due 2000 will be sent to such tendering holder
(except in the case of book-entry tenders), unless otherwise provided in the
appropriate box on this Letter of Transmittal, promptly after the Expiration
Date. ALL OF THE PRIVATE NOTES DUE 2000 DELIVERED TO THE EXCHANGE AGENT WILL
BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
Any holder who has tendered Private Notes due 2000 may withdraw the tender
by delivering written notice of withdrawal to the Exchange Agent prior to the
Expiration Date. For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent at its address set forth on
the first page of this Letter of Transmittal. Any such notice of withdrawal
must (i) specify the name of the person having tendered the Private Notes due
2000 to be withdrawn (the "Depositor"), (ii) identify the Private Notes due
2000 to be withdrawn (including the certificate number or numbers and
principal amount of such Private Notes due 2000 (except in the case of book-
entry tenders)), (iii) be signed by the holder in the same manner as the
original signature on this Letter of Transmittal by which such Private Notes
due 2000 were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee (as
defined in the Prospectus) register the transfer of such Private Notes due
2000 into the name of the person withdrawing the tender and (iv) specify the
name in which any such Private Notes due 2000 are registered, if different
from that of the Depositor. If Private Notes due 2000 have been delivered or
otherwise identified to the Exchange Agent, the name of the registered holder
and the certificate numbers of the particular Private Notes due 2000 withdrawn
must also be furnished to the Exchange Agent as aforesaid prior to the
physical release of the withdrawn Private Notes due 2000. If the Private Notes
due 2000 have been tendered pursuant to the
10
<PAGE>
procedures for book-entry tender set forth in the Prospectus, a notice of
withdrawal must specify, in lieu of certificate numbers, the name and account
number at the DTC to be credited with the withdrawn Private Notes due 2000.
Private Notes due 2000 properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Exchange Offer; provided, however, that
withdrawn Private Notes due 2000 may be retendered by again following one of
the procedures herein at any time prior to the Expiration Date. All questions
as to the validity, form and eligibility (including time of receipt) of any
notice of withdrawal, will be determined by the Company, whose determinations
will be final and binding on all parties. Neither the Company, the Exchange
Agent nor any other person will be under any duty to give notification of any
debts or irregularities in any notice of withdrawal or incur any liability for
failure to give such notification. See "The Exchange Offers--Withdrawal
Rights" in the Prospectus.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURE.
If this Letter of Transmittal is signed by the registered holder of the
Private Notes due 2000 tendered hereby, the signature must correspond exactly
with the name as written on the face of the certificates (if applicable)
without any change whatsoever.
If any tendered Private Notes due 2000 are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Private Notes due 2000 are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Private Notes due 2000 specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If,
however, the Exchange Notes due 2000 to be issued,or any untendered Private
Notes due 2000 are to be reissued, to a person other than the registered
holder, then endorsements of any certificates transmitted hereby or separate
bond powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate bond powers, in
either case signed exactly as the name or names of the registered holder(s)
appear(s) on the certificate(s).
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted.
Endorsements on certificates for Private Notes due 2000 or signatures on
bond powers required by this Instruction 4 must be guaranteed by an Eligible
Institution.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Private Notes due 2000 are tendered: (i) by
a registered holder of such Private Notes due 2000 (which term, for purposes
of the Exchange Offer, includes any participant in the DTC system whose name
appears on a security position listing as the holder of such Private Notes due
2000) who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on this Letter of Transmittal; or (ii) for
the account of an Eligible Institution.
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Private Notes due 2000 should indicate in the
applicable box the name and address in or to which Exchange Notes due 2000
issued pursuant to the Exchange Offer and/or substitute certificates
evidencing Private Notes due 2000 not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Private Notes due 2000 by book-entry transfer may
request that Private Notes due 2000 not exchanged be credited to
11
<PAGE>
such account maintained at the DTC as such holder may designate hereon. If no
such instructions are given, such Private Notes due 2000 not exchanged will be
returned to the name or address of the person signing this Letter of
Transmittal.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Private Notes due 2000 to them or their order pursuant to the Exchange
Offer. If however, Exchange Notes due 2000 and/or substitute Private Notes due
2000 not exchanged are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Private
Notes due 2000 tendered hereby, or if tendered Private Notes due 2000 are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
transfer of Private Notes due 2000 to the Company or their order pursuant to
the Exchange Offer, the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence or payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Private Notes due 2000 specified in
this Letter of Transmittal.
7. WAIVER OF CONDITION.
Subject to the terms and conditions set forth in the Prospectus, the Company
reserves the absolute right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Private Notes due 2000, by execution of
this Letter of Transmittal, shall waive any right to receive notice of the
acceptance of their Private Notes due 2000 for exchange.
Neither the Company nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE NOTES DUE 2000.
Any holder whose Private Notes due 2000 have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
QUESTIONS RELATING TO THE PROCEDURE FOR TENDERING, AS WELL AS REQUESTS FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL, MAY BE
DIRECTED TO THE EXCHANGE AGENT, AT THE ADDRESS INDICATED ON THE FIRST PAGE OF
THIS LETTER OF TRANSMITTAL OR BY TELEPHONE AT (212) 240-8801.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a registered holder of Private Notes due
2000 or Exchange Notes due 2000 is required to provide the Trustee (as payor)
with such holder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below or otherwise establish a basis for exemption from
backup withholding. If such holder is an individual, the TIN is his social
security number. If the Trustee is not provided with the correct TIN, a $50
penalty may be imposed by the Internal Revenue Service, and payments made to
such holder with respect to Private Notes due 2000 or Exchange Notes due 2000
may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Trustee a properly completed Internal Revenue Service Form W-8, signed
under penalties of perjury, attesting to that holder's exempt status. A Form
W-8 can be obtained from the Trustee.
If backup withholding applies, the Trustee is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional U.S. federal income tax. Rather, the U.S. federal income tax
liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Private Notes
due 2000 or Exchange Notes due 2000 the holder is required to provide the
Trustee with: (i) the holder's correct TIN by completing the form below,
certifying that the TIN provided on Substitute Form W-9 is correct (or that
such holder is awaiting a TIN) and that (A) such holder is exempt from backup
withholding, (B) the holder has not been notified by the Internal Revenue
Service that the holder is subject to backup withholding as a result of
failure to report all interest or dividends or (C) the Internal Revenue
Service has notified the holder that the holder is no longer subject to backup
withholding; and (ii) if applicable, an adequate basis for exemption.
13
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE "IMPORTANT TAX INFORMATION" ABOVE)
PAYER'S NAME: THE FIRST NATIONAL BANK OF CHICAGO
PART 1--PLEASE PROVIDE YOUR TIN:__________________
TIN IN THE BOX AT RIGHT AND Social Security
CERTIFY BY SIGNING AND Number or
SUBSTITUTE DATING BELOW. Employee
Identification Number
--------------------------------------------------------
FORM W-9 PART 2--CERTIFICATION--Under PART 3
penalties of perjury, I certify
that:
DEPARTMENT OF THE Awaiting TIN [_]
TREASURY
INTERNAL REVENUE (1) The number shown on this form
SERVICE is my correct Taxpayer
Identification Number (or I am
waiting for a number to be
issued to me) and
PAYER'S REQUEST FOR
TAXPAYER
IDENTIFICATION
NUMBER (TIN) (2) I am not subject to backup
withholding because (i) I am
exempt from backup
withholding, (ii) I have not
been notified by the Internal
Revenue Service ("IRS") that I
am subject to backup
withholding as a result of a
failure to report all interest
or dividends, or (iii) the IRS
has notified me that I am no
longer subject to backup
withholding.
--------------------------------------------------------
Certificate Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS
stating that you are no longer subject to backup
withholding, do not cross out such item (2).
SIGNATURE ___________________________________________
DATE_________________________________________________
NAME_________________________________________________
(Please Print)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
14
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the Notes due
2000 shall be retained until I provide a taxpayer identification number to
the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the
Internal Revenue Service as backup withholding and 31% of all reportable
payments made to me thereafter will be withheld and remitted to the Internal
Revenue Service until I provide a taxpayer identification number.
----------------------------------- -----------------------------------
Signature(s) Date
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH THE
CERTIFICATES FOR PRIVATE NOTES DUE 2000 (IF APPLICABLE) AND ALL OTHER REQUIRED
DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
15
<PAGE>
EXHIBIT 99.2
LETTER OF TRANSMITTAL
MCKESSON CORPORATION
OFFER TO EXCHANGE ITS 6 7/8% EXCHANGE NOTES DUE MARCH 1, 2002
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 6 7/8% NOTES DUE MARCH 1, 2002
PURSUANT TO THE PROSPECTUS DATED , 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1997, UNLESS EXTENDED. TENDERED
SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER
Delivery To: The First National Bank of Chicago, Exchange Agent
By Mail: By Hand or Overnight Delivery:
(Registered or Certified Mail
recommended) The First National Bank of Chicago
The First National Bank of Chicago c/o First Chicago Trust
c/o First Chicago Trust Company of New York
Company of New York 14 Wall Street
14 Wall Street 8th Floor, Window 2
8th Floor, Window 2 New York, New York 10005
New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus dated , 1997 (the "Prospectus") of McKesson Corporation (the
"Company") and this Letter of Transmittal (the "Letter of Transmittal"), which
together constitute the Company's offer (the "Exchange Offer") to exchange an
aggregate principal amount of up to $175,000,000 6 7/8% Exchange Notes due
March 1, 2002 (the "Exchange Notes due 2002") for a like principal amount of
the Company's outstanding 6 7/8% Notes due March 1, 2002 (the "Private Notes
due 2002").
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1997, unless the Company in its sole discretion, extends the Exchange
Offer. The Company reserves the right to extend the Exchange Offer at its
discretion, in which event the term "Expiration Date" shall mean the time and
date when the Exchange Offer as so extended shall expire. The Company shall
notify the holders of the Private Notes due 2002 of any extension by means of
a press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
<PAGE>
The Exchange Notes due 2002 will bear interest from the most recent date to
which interest has been paid on the Private Notes due 2002 or, if no interest
has been paid, from March 1, 1997. Accordingly, if the relevant record date for
interest payment occurs after the consummation of the Exchange Offer registered
holders of Exchange Notes due 2002 on such record date will receive interest
accruing from the most recent date to which interest has been paid or, if no
interest has been paid, from March 1, 1997. If, however, the relevant record
date for interest payments occurs prior to the consummation of the Exchange
Offer registered holders of Private Notes due 2002 on such record date will
receive interest accruing from the most recent date to which interest has been
paid or, if no interest has been paid, from March 1, 1997. Private Notes due
2002 accepted for exchange will cease to accrue interest from and after the
date of consummation of the Exchange Offer, except as set forth in the
immediately preceding sentence. Holders of Private Notes due 2002 whose Private
Notes due 2002 are accepted for exchange will not receive any payment in
respect of accrued interest on such Private Notes due 2002 otherwise payable on
any interest payment date the record date for which occurs on or after
consummation of the Exchange Offer.
The Exchange Offer is not conditioned upon any minimum principal amount of
Private Notes due 2002 being tendered for exchange. However, the Exchange Offer
is subject to certain conditions. Please see the Prospectus under the section
entitled "The Exchange Offers--Certain Conditions to the Exchange Offers."
The Exchange Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of Private Notes due 2002 in any jurisdiction in which
the making or acceptance of the Exchange Offer would not be in compliance with
the laws of such jurisdiction.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus. As used herein, the term "Holder" means a holder
of Private Notes due 2002, including any participant ("DTC Participant") in the
book-entry transfer facility system of The Depository Trust Company ("DTC")
whose name appears on a security position listing as the owner of the Private
Notes due 2002. As used herein, the term "Certificates" means physical
certificates representing Private Notes due 2002.
To participate in the Exchange Offer, Holders must tender by (a) book-entry
transfer pursuant to the procedures set forth in the Prospectus under "The
Exchange Offers--Procedures for Tendering Private Notes," or (b) forwarding
Certificates herewith. Holders who are DTC Participants tendering by book-entry
transfer must execute such tender through the Automated Tender Offer Program
("ATOP") of DTC. A Holder using ATOP should transmit its acceptance to DTC on
or prior to the Expiration Date. DTC will verify such acceptance, execute a
book-entry transfer of the tendered Private Notes due 2002 into the Exchange
Agent's account at DTC and then send to the Exchange Agent confirmation of such
book-entry transfer (a "Book-Entry Confirmation"), including an agent's message
("Agent's Message") confirming that DTC has received an express acknowledgement
from such Holder that such Holder has received and agrees to be bound by this
Letter of Transmittal and that the Company may enforce this Letter of
Transmittal against such Holder. The Book-Entry Confirmation must be received
by the Exchange Agent in order for the tender relating thereto to be effective.
Book-entry transfer to DTC in accordance with DTC's procedures does not
constitute delivery of the Book-Entry Confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as this Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in order for such
tender to be effective.
Holders of Private Notes due 2002 who cannot complete the procedures for
delivery by book-entry transfer of such Private Notes due 2002 on a timely
basis or who cannot deliver their Certificates for such Private Notes due 2002
and all other required documents to the Exchange Agent on or prior to the
Expiration Date, must, in order to participate in the Exchange Offer, tender
their Private Notes due 2002 according to the guaranteed delivery procedures
set forth in the Prospectus under "The Exchange Offers--Procedures for
Tendering Private Notes due 2002".
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE FOLLOWING BOX
2
<PAGE>
List below the Private Notes due 2002 to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate numbers and
principal amount of Private Notes due 2002 should be listed on a separate
signed schedule affixed hereto.
DESCRIPTION OF PRIVATE NOTES DUE 2002
(SEE INSTRUCTIONS 2, 3, AND 8)
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF
BLANK) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------------------
1 2 3
- ----------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF PRIVATE
NOTES DUE 2002 TENDERED(2)
AGGREGATE PRINCIPAL (MUST BE IN
TITLE OF SECURITIES AND AMOUNT OF PRIVATE DENOMINATIONS OF $1,000 OR
CERTIFICATE NUMBER(S)(1) NOTES DUE 2002 INTEGRAL MULTIPLES THEREOF)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
<S> <C> <C> <C>
Total
</TABLE>
(1) Certificate numbers not required if Private Notes due 2002 are being
tendered by book-entry transfer.
(2) Unless otherwise indicated, a holder will be deemed to have tendered ALL of
the Private Notes due 2002 represented in column 2.
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2002 ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:__________________________________________________
Account Number:_________________________________________________________________
Transaction Code Number:________________________________________________________
3
<PAGE>
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2002 ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):________________________________________________
Window Ticket Number (if any):__________________________________________________
Date of Execution of Notice of Guaranteed Delivery:_____________________________
If delivered by book-entry transfer, complete the following:
Account Number:_________________________________________________________________
Transaction Code Number:________________________________________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:___________________________________________________________________________
Address:________________________________________________________________________
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Private Notes due 2002 indicated above. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Subject to, and effective upon, the acceptance for exchange of the Private
Notes due 2002 tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest
in and to such Private Notes due 2002 as are being tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent its
agent and attorney-in-fact (with full knowledge that the Exchange Agent also
acts as the agent of the Company) with respect to the tendered Private Notes
due 2002 with full power of substitution to (i) deliver certificates for such
Private Notes due 2002 to the Company and deliver all accompanying evidences
of transfer and authenticity to, or upon the order of, the Company (ii)
present such Private Notes due 2002 for transfer on the books of the Company
and (iii) receive for the account of the Company all benefits and otherwise
exercise all rights of the beneficial ownership of such Private Notes due
2002, all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed to be irrevocable and
coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Private Notes due
2002 tendered hereby and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that (i) any
Exchange Notes due 2002 acquired in exchange for Private Notes due 2002
tendered hereby will have been acquired in the ordinary course of business of
the person receiving such Exchange Notes due 2002, whether or not such person
is the undersigned, (ii) neither the holder nor any such other person has an
arrangement or understanding with any person to participate in the
"distribution" of such Exchange Notes due 2002 within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") and (iii) neither
the holder nor any such other person is an "affiliate," as described in Rule
405 under the Securities Act of the Company.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to
third parties, that the Exchange Notes due 2002 issued in exchange for the
Private Notes due 2002 pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than
holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act.
However, the undersigned acknowledges that any purchaser of Private Notes due
2002 who is an affiliate of the Company within the meaning of Rule 405 under
the Securities Act or who intends to participate in the Exchange Offer for the
purpose of distributing the Exchange Notes, or any broker-dealer who purchased
the Private Notes from the Company to resell pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act (i)
will not be able to rely on the interpretations of the staff of the Commission
set forth in the above-mentioned no-action letters, (ii) will not be entitled
to tender its Private Notes due 2002 in the Exchange Offer and (ii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Private Notes
due 2002 unless such sale or transfer is made pursuant to an exemption from
such requirements. The undersigned also acknowledges that the Company has not
sought its own no-action letter and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of the
Exchange Notes due 2002. If the undersigned is a broker-dealer that
5
<PAGE>
will receive Exchange Notes due 2002 for its own account in exchange for
Private Notes due 2002, it represents that the Private Notes due 2002 to be
exchanged for Exchange Notes due 2002 were acquired by it as a result of
market-making activities or other trading activities, and acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes due 2002 pursuant to the
Exchange Offer; however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment, transfer and sale of the Private Notes
due 2002 tendered hereby. All authority conferred or agreed to be conferred in
this Letter of Transmittal and every obligation of the undersigned hereunder
shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in the instructions contained in this Letter of
Transmittal.
For the purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Private Notes due 2002 when, as and if the Company
has given oral and written notice thereof to the Exchange Agent.
If any tendered Private Notes due 2002 are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Private Notes due 2002 will be returned (or, in the case of Private
Notes due 2002 tendered by book-entry transfer through DTC, will be promptly
credited to an account maintained at DTC), without expense, to the undersigned
at the address shown below or at a different address as may be indicated
herein under the "Special Delivery Instructions" as promptly as practicable
after the Expiration Date.
The undersigned understands that tenders of Private Notes due 2002 pursuant
to the procedures described under the section entitled "The Exchange Offers--
Procedures for Tendering Private Notes" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes due 2002 (and, if
applicable, substitute certificates representing Private Notes due 2002 for
any Private Notes due 2002 not exchanged) in the name(s) of the undersigned
or, in the case of a book-entry delivery of Private Notes due 2002, please
credit the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under the box entitled "Special Delivery Instructions"
below, please send the Exchange Notes due 2002 (and, if applicable, substitute
certificates representing Private Notes due 2002 for any Private Notes due
2002 not exchanged) to the undersigned at the address shown above in the box
entitled "Description of Private Notes due 2002." In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the certificates representing the Exchange Notes due
2002 issued in exchange for the Private Notes due 2002 accepted for exchange
in the name(s) of, and return any certificates for Private Notes due 2002 not
tendered or not exchanged to, the person(s) so indicated. The undersigned
understands that the Company has no obligation pursuant to the "Special
Issuance Instructions" and "Special Delivery Instructions" to transfer any
Private Notes due 2002 from the name of the registered holder(s) thereof if
the Company does not accept for exchange any of the Private Notes due 2002 so
tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF PRIVATE
NOTES DUE 2002" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED
TO HAVE TENDERED THE PRIVATE NOTES DUE 2002 AS SET FORTH IN SUCH BOX ABOVE.
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
I hereby TENDER the Private Notes due 2002 described above in the box
entitled "Description of Private Notes due 2002" pursuant to the terms of the
Exchange Offer.
X___________________________________ __________________________________, 1997
X___________________________________ __________________________________, 1997
X___________________________________ __________________________________, 1997
Signature(s) of Owner(s) Date
If a holder is tendering any Private Notes due 2002, this Letter of
Transmittal must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Private Notes due 2002 or on a
security position listing or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or
other person acting in a fiduciary or representative capacity, please set
forth full title. See Instruction 4.
Name(s):________________________________________________________________________
(Please Type or Print)
- --------------------------------------------------------------------------------
Capacity:_______________________________________________________________________
Address:________________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 4)
Signature(s) Guaranteed by an Eligible Institution:_____________________________
(Authorized Signature)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: _______________________, 1997
7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5) (SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if To be completed ONLY if
certificates for Private Notes due certificates for Private Notes due
2002 not exchanged and/or Exchange 2002 not exchanged and/or Exchange
Notes due 2002 are to be issued in Notes due 2002 are to be sent to
the name of and sent to someone someone other than the person or
other than the person or person(s) persons whose signature(s)
whose signature(s) appear(s) on appear(s) on this Letter of
this Letter of Transmittal above, Transmittal above or to such
or if Private Notes due 2002 person or persons at an address
delivered by book-entry transfer other than shown in the box
which are not accepted for entitled "Description of Private
exchange are to be returned by Notes due 2002" on this Letter of
credit to an account maintained at Transmittal above.
DTC other than the account
indicated above.
Issue Exchange Notes due 2002 Mail Exchange Notes due 2002
and/or Private Notes due 2002 to: and/or Private Notes due 2002 to:
Name_______________________________ Name_______________________________
(Please Type or Print) (Please Type or Print)
------------------------------- -------------------------------
(Please Type or Print) (Please Type or Print)
Address____________________________ Address____________________________
------------------------------ ------------------------------
(Zip Code) (Zip Code)
-----------------------------------
Employer Identification or
Social Security Number
(Complete Substitute Form W-9)
[_]Credit unexchanged Private
Notes due 2002 delivered by
book-entry transfer to the DTC
account set forth below.
-----------------------------------
(DTC Account Number, if
applicable)
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
This Letter to Transmittal is to be completed either if (a) Certificates are
to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Exchange
Offers--Procedures for Tendering Private Notes" in the Prospectus and an
Agent's Message is not delivered. Holders who are DTC Participants tendering
by book-entry transfer must execute such tender through DTC's ATOP system. A
holder using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date. DTC will verify such acceptance, execute a book-entry
transfer of the tendered Private Notes due 2002 into the Exchange Agent's
account at DTC and then send to the Exchange Agent a Book-Entry Confirmation,
including an Agent's Message confirming that DTC has received an express
acknowledgement from such holder that such holder has received and agrees to
be bound by this Letter of Transmittal and that the Company may enforce this
Letter of Transmittal against such holder. The Book-Entry Confirmation must be
received by the Exchange Agent in order for the tender relating thereto to be
effective. Book-entry transfer to DTC in accordance with DTC's procedure does
not constitute delivery of the Book-Entry Confirmation to the Exchange Agent.
Private Notes due 2002 tendered hereby must be in denominations of $1,000 and
integral multiples thereof.
If the tender is not made through ATOP, certificates representing Private
Notes due 2002, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at its address set forth herein on or prior to
the Expiration Date in order for such tender to be effective.
Holders who wish to tender their Private Notes due 2002 and (i) whose
Private Notes due 2002 are not immediately available, or (ii) cannot deliver
their Private Notes due 2002, this Letter of Transmittal or any other
documents required hereby to the Exchange Agent prior to the Expiration Date
or (iii) who cannot comply with the procedures for book-entry transfer on a
timely basis must tender their Private Notes due 2002 according to the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (i) such tender must be made through an Eligible Institution (as
defined below); (ii) prior to the Expiration Date, the Exchange Agent must
have received from the Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Company (by fax transmission, mail or hand delivery) setting forth the
name and address of the holder, the certificate number(s) of such Private
Notes due 2002 (except in the case of book-entry tenders) and the principal
amount of Private Notes due 2002 tendered, stating that the tender is being
made thereby and guaranteeing that, within three NYSE trading days after the
Expiration Date, this Letter of Transmittal (or a copy hereof) together with
the certificate(s) representing the Private Notes due 2002 (except in the case
of book-entry tenders) and any other required documents will be deposited by
the Eligible Institution with the Exchange Agent; and (iii) such properly
completed and executed Letter of Transmittal (or a copy hereof), as well as
all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Private Notes due 2002 in proper form
for transfer of a Book-Entry Confirmation with respect to such Private Notes
due 2002, must be received by the Exchange Agent within three NYSE trading
days after the Expiration Date, all as provided in the Prospectus under the
section entitled "The Exchange Offers--Guaranteed Delivery Procedures." Any
holder who wishes to tender his Private Notes due 2002 pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to the Expiration Date.
As used in this Letter of Transmittal, "Eligible Institution" shall mean a
firm which is a member of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States.
All questions as to the validity, eligibility (including time of receipt),
acceptance and withdrawal of tendered Private Notes due 2002 will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and
all Private Notes due 2002 not
9
<PAGE>
properly tendered or any Private Notes due 2002 the Company's acceptance of
which would, in the opinion of counsel for the Company, be unlawful. The
Company also reserves the right to waive any defects, irregularities or
conditions of tender as to particular Private Notes due 2002. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the instructions in this Letter of Transmittal) shall be final and binding on
all parties. Unless waived, any defects or irregularities in connection with
tenders of Private Notes due 2002 must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Private Notes due 2002, nor shall
any of them incur any liability for failure to give such notification. Tenders
of Private Notes due 2002 will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any Private Notes due
2002 received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
See "The Exchange Offers" in the Prospectus.
2. TENDER BY HOLDER.
Only a holder of Private Notes due 2002 may tender such Private Notes due
2002 in the Exchange Offer. Any beneficial owner whose Private Notes due 2002
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on behalf of such
beneficial owner. If such beneficial owner wishes to tender on such owner's
own behalf; such owner must, prior to completing and executing this Letter of
Transmittal and delivering such owner's Private Notes due 2002, either make
appropriate arrangements to register ownership of the Private Notes due 2002
in such owner's name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
3. PARTIAL TENDERS AND WITHDRAWALS.
Tenders of Private Notes due 2002 will be accepted only in denominations of
$1,000 and integral multiples thereof. If less than all the Private Notes due
2002 are to be tendered, the tendering holder(s) should fill in the aggregate
principal amount of Private Notes due 2002 to be tendered in the box above
entitled "Description of Private Notes due 2002--Principal Amount of Private
Notes due 2002 Tendered." A reissued certificate representing the balance of
nontendered Private Notes due 2002 will be sent to such tendering holder
(except in the case of book-entry tenders), unless otherwise provided in the
appropriate box on this Letter of Transmittal, promptly after the Expiration
Date. ALL OF THE PRIVATE NOTES DUE 2002 DELIVERED TO THE EXCHANGE AGENT WILL
BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
Any holder who has tendered Private Notes due 2002 may withdraw the tender
by delivering written notice of withdrawal to the Exchange Agent prior to the
Expiration Date. For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent at its address set forth on
the first page of this Letter of Transmittal. Any such notice of withdrawal
must (i) specify the name of the person having tendered the Private Notes due
2002 to be withdrawn (the "Depositor"), (ii) identify the Private Notes due
2002 to be withdrawn (including the certificate number or numbers and
principal amount of such Private Notes due 2002 (except in the case of book-
entry tenders)), (iii) be signed by the holder in the same manner as the
original signature on this Letter of Transmittal by which such Private Notes
due 2002 were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee (as
defined in the Prospectus) register the transfer of such Private Notes due
2002 into the name of the person withdrawing the tender and (iv) specify the
name in which any such Private Notes due 2002 are registered, if different
from that of the Depositor. If Private Notes due 2002 have been delivered or
otherwise identified to the Exchange Agent, the name of the registered holder
and the certificate numbers of the particular Private Notes due 2002 withdrawn
must also be furnished to the Exchange Agent as aforesaid prior to the
physical release of the withdrawn Private Notes due 2002. If the Private Notes
due 2002 have been tendered pursuant to the
10
<PAGE>
procedures for book-entry tender set forth in the Prospectus, a notice of
withdrawal must specify, in lieu of certificate numbers, the name and account
number at the DTC to be credited with the withdrawn Private Notes due 2002.
Private Notes due 2002 properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Exchange Offer; provided, however, that
withdrawn Private Notes due 2002 may be retendered by again following one of
the procedures herein at any time prior to the Expiration Date. All questions
as to the validity, form and eligibility (including time of receipt) of any
notice of withdrawal, will be determined by the Company, whose determinations
will be final and binding on all parties. Neither the Company, the Exchange
Agent nor any other person will be under any duty to give notification of any
debts or irregularities in any notice of withdrawal or incur any liability for
failure to give such notification. See "The Exchange Offers--Withdrawal
Rights" in the Prospectus.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURE.
If this Letter of Transmittal is signed by the registered holder of the
Private Notes due 2002 tendered hereby, the signature must correspond exactly
with the name as written on the face of the certificates (if applicable)
without any change whatsoever.
If any tendered Private Notes due 2002 are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Private Notes due 2002 are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Private Notes due 2002 specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If,
however, the Exchange Notes due 2002 to be issued,or any untendered Private
Notes due 2002 are to be reissued, to a person other than the registered
holder, then endorsements of any certificates transmitted hereby or separate
bond powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate bond powers, in
either case signed exactly as the name or names of the registered holder(s)
appear(s) on the certificate(s).
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted.
Endorsements on certificates for Private Notes due 2002 or signatures on
bond powers required by this Instruction 4 must be guaranteed by an Eligible
Institution.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Private Notes due 2002 are tendered: (i) by
a registered holder of such Private Notes due 2002 (which term, for purposes
of the Exchange Offer, includes any participant in the DTC system whose name
appears on a security position listing as the holder of such Private Notes due
2002) who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on this Letter of Transmittal; or (ii) for
the account of an Eligible Institution.
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Private Notes due 2002 should indicate in the
applicable box the name and address in or to which Exchange Notes due 2002
issued pursuant to the Exchange Offer and/or substitute certificates
evidencing Private Notes due 2002 not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Private Notes due 2002 by book-entry transfer may
request that Private Notes due 2002 not exchanged be credited to
11
<PAGE>
such account maintained at the DTC as such holder may designate hereon. If no
such instructions are given, such Private Notes due 2002 not exchanged will be
returned to the name or address of the person signing this Letter of
Transmittal.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Private Notes due 2002 to them or their order pursuant to the Exchange
Offer. If however, Exchange Notes due 2002 and/or substitute Private Notes due
2002 not exchanged are to be delivered to, or are to be registered or issued in
the name of, any person other than the registered holder of the Private Notes
due 2002 tendered hereby, or if tendered Private Notes due 2002 are registered
in the name of any person other than the person signing this Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
transfer of Private Notes due 2002 to the Company or their order pursuant to
the Exchange Offer, the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence or payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Private Notes due 2002 specified in
this Letter of Transmittal.
7. WAIVER OF CONDITION.
Subject to the terms and conditions set forth in the Prospectus, the Company
reserves the absolute right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Private Notes due 2002, by execution of this
Letter of Transmittal, shall waive any right to receive notice of the
acceptance of their Private Notes due 2002 for exchange.
Neither the Company nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE NOTES DUE 2002.
Any holder whose Private Notes due 2002 have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
QUESTIONS RELATING TO THE PROCEDURE FOR TENDERING, AS WELL AS REQUESTS FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL, MAY BE
DIRECTED TO THE EXCHANGE AGENT, AT THE ADDRESS INDICATED ON THE FIRST PAGE OF
THIS LETTER OF TRANSMITTAL OR BY TELEPHONE AT (212) 240-8801.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a registered holder of Private Notes due
2002 or Exchange Notes due 2002 is required to provide the Trustee (as payor)
with such holder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below or otherwise establish a basis for exemption from
backup withholding. If such holder is an individual, the TIN is his social
security number. If the Trustee is not provided with the correct TIN, a $50
penalty may be imposed by the Internal Revenue Service, and payments made to
such holder with respect to Private Notes due 2002 or Exchange Notes due 2002
may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Trustee a properly completed Internal Revenue Service Form W-8, signed
under penalties of perjury, attesting to that holder's exempt status. A Form
W-8 can be obtained from the Trustee.
If backup withholding applies, the Trustee is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional U.S. federal income tax. Rather, the U.S. federal income tax
liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Private Notes
due 2002 or Exchange Notes due 2002 the holder is required to provide the
Trustee with: (i) the holder's correct TIN by completing the form below,
certifying that the TIN provided on Substitute Form W-9 is correct (or that
such holder is awaiting a TIN) and that (A) such holder is exempt from backup
withholding, (B) the holder has not been notified by the Internal Revenue
Service that the holder is subject to backup withholding as a result of
failure to report all interest or dividends or (C) the Internal Revenue
Service has notified the holder that the holder is no longer subject to backup
withholding; and (ii) if applicable, an adequate basis for exemption.
13
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE "IMPORTANT TAX INFORMATION" ABOVE)
PAYER'S NAME: THE FIRST NATIONAL BANK OF CHICAGO
PART 1--PLEASE PROVIDE YOUR TIN:__________________
TIN IN THE BOX AT RIGHT AND Social Security
CERTIFY BY SIGNING AND Number or
SUBSTITUTE DATING BELOW. Employee
Identification Number
--------------------------------------------------------
FORM W-9 PART 2--CERTIFICATION--Under PART 3
penalties of perjury, I certify
that:
DEPARTMENT OF THE Awaiting TIN [_]
TREASURY
INTERNAL REVENUE (1) The number shown on this form
SERVICE is my correct Taxpayer
Identification Number (or I am
waiting for a number to be
issued to me) and
PAYER'S REQUEST FOR
TAXPAYER
IDENTIFICATION
NUMBER (TIN) (2) I am not subject to backup
withholding because (i) I am
exempt from backup
withholding, (ii) I have not
been notified by the Internal
Revenue Service ("IRS") that I
am subject to backup
withholding as a result of a
failure to report all interest
or dividends, or (iii) the IRS
has notified me that I am no
longer subject to backup
withholding.
--------------------------------------------------------
Certificate Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS
stating that you are no longer subject to backup
withholding, do not cross out such item (2).
SIGNATURE ___________________________________________
DATE_________________________________________________
NAME_________________________________________________
(Please Print)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
14
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the Notes due
2002 shall be retained until I provide a taxpayer identification number to
the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the
Internal Revenue Service as backup withholding and 31% of all reportable
payments made to me thereafter will be withheld and remitted to the Internal
Revenue Service until I provide a taxpayer identification number.
----------------------------------- -----------------------------------
Signature(s) Date
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH THE
CERTIFICATES FOR PRIVATE NOTES DUE 2002 (IF APPLICABLE) AND ALL OTHER REQUIRED
DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
15
<PAGE>
EXHIBIT 99.3
LETTER OF TRANSMITTAL
MCKESSON CORPORATION
OFFER TO EXCHANGE ITS 7.65% EXCHANGE DEBENTURES DUE MARCH 1, 2027
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 7.65% DEBENTURES DUE MARCH 1, 2027
PURSUANT TO THE PROSPECTUS DATED , 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1997, UNLESS EXTENDED. TENDERED
SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER
Delivery To: The First National Bank of Chicago, Exchange Agent
By Mail: By Hand or Overnight Delivery:
(Registered or Certified Mail
recommended) The First National Bank of Chicago
The First National Bank of Chicago c/o First Chicago Trust
c/o First Chicago Trust Company of New York
Company of New York 14 Wall Street
14 Wall Street 8th Floor, Window 2
8th Floor, Window 2 New York, New York 10005
New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus dated , 1997 (the "Prospectus") of McKesson Corporation (the
"Company") and this Letter of Transmittal (the "Letter of Transmittal"), which
together constitute the Company's offer (the "Exchange Offer") to exchange an
aggregate principal amount of up to $175,000,000 7.65% Exchange Debentures due
March 1, 2027 (the "Exchange Debentures due 2027") for a like principal amount
of the Company's outstanding 7.65% Debentures due March 1, 2027 (the "Private
Debentures due 2027").
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1997, unless the Company in its sole discretion, extends the Exchange
Offer. The Company reserves the right to extend the Exchange Offer at its
discretion, in which event the term "Expiration Date" shall mean the time and
date when the Exchange Offer as so extended shall expire. The Company shall
notify the holders of the Private Debentures due 2027 of any extension by
means of a press release or other public announcement no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
<PAGE>
The Exchange Debentures due 2027 will bear interest from the most recent
date to which interest has been paid on the Private Debentures due 2027 or, if
no interest has been paid, from March 1, 1997. Accordingly, if the relevant
record date for interest payment occurs after the consummation of the Exchange
Offer registered holders of Exchange Debentures due 2027 on such record date
will receive interest accruing from the most recent date to which interest has
been paid or, if no interest has been paid, from March 1, 1997. If, however,
the relevant record date for interest payments occurs prior to the
consummation of the Exchange Offer registered holders of Private Debentures
due 2027 on such record date will receive interest accruing from the most
recent date to which interest has been paid or, if no interest has been paid,
from March 1, 1997. Private Debentures due 2027 accepted for exchange will
cease to accrue interest from and after the date of consummation of the
Exchange Offer, except as set forth in the immediately preceding sentence.
Holders of Private Debentures due 2027 whose Private Debentures due 2027 are
accepted for exchange will not receive any payment in respect of accrued
interest on such Private Debentures due 2027 otherwise payable on any interest
payment date the record date for which occurs on or after consummation of the
Exchange Offer.
The Exchange Offer is not conditioned upon any minimum principal amount of
Private Debentures due 2027 being tendered for exchange. However, the Exchange
Offer is subject to certain conditions. Please see the Prospectus under the
section entitled "The Exchange Offers--Certain Conditions to the Exchange
Offers."
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of Private Debentures due 2027 in any jurisdiction in
which the making or acceptance of the Exchange Offer would not be in
compliance with the laws of such jurisdiction.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus. As used herein, the term "Holder" means a holder
of Private Debentures due 2027, including any participant ("DTC Participant")
in the book-entry transfer facility system of The Depository Trust Company
("DTC") whose name appears on a security position listing as the owner of the
Private Debentures due 2027. As used herein, the term "Certificates" means
physical certificates representing Private Debentures due 2027.
To participate in the Exchange Offer, Holders must tender by (a) book-entry
transfer pursuant to the procedures set forth in the Prospectus under "The
Exchange Offers--Procedures for Tendering Private Debentures," or (b)
forwarding Certificates herewith. Holders who are DTC Participants tendering
by book-entry transfer must execute such tender through the Automated Tender
Offer Program ("ATOP") of DTC. A Holder using ATOP should transmit its
acceptance to DTC on or prior to the Expiration Date. DTC will verify such
acceptance, execute a book-entry transfer of the tendered Private Debentures
due 2027 into the Exchange Agent's account at DTC and then send to the
Exchange Agent confirmation of such book-entry transfer (a "Book-Entry
Confirmation"), including an agent's message ("Agent's Message") confirming
that DTC has received an express acknowledgement from such Holder that such
Holder has received and agrees to be bound by this Letter of Transmittal and
that the Company may enforce this Letter of Transmittal against such Holder.
The Book-Entry Confirmation must be received by the Exchange Agent in order
for the tender relating thereto to be effective. Book-entry transfer to DTC in
accordance with DTC's procedures does not constitute delivery of the Book-
Entry Confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as this Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in order for such
tender to be effective.
Holders of Private Debentures due 2027 who cannot complete the procedures
for delivery by book-entry transfer of such Private Debentures due 2027 on a
timely basis or who cannot deliver their Certificates for such Private
Debentures due 2027 and all other required documents to the Exchange Agent on
or prior to the Expiration Date, must, in order to participate in the Exchange
Offer, tender their Private Debentures due 2027 according to the guaranteed
delivery procedures set forth in the Prospectus under "The Exchange Offers--
Procedures for Tendering Private Debentures due 2027".
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE FOLLOWING BOX
2
<PAGE>
List below the Private Debentures due 2027 to which this Letter of
Transmittal relates. If the space provided below is inadequate, the certificate
numbers and principal amount of Private Debentures due 2027 should be listed on
a separate signed schedule affixed hereto.
DESCRIPTION OF PRIVATE DEBENTURES DUE 2027
(SEE INSTRUCTIONS 2, 3, AND 8)
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF
BLANK) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------------------
1 2 3
- ----------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF PRIVATE
DEBENTURES DUE 2027
AGGREGATE PRINCIPAL TENDERED(2) (MUST BE IN
TITLE OF SECURITIES AND AMOUNT OF PRIVATE DENOMINATIONS OF $1,000 OR
CERTIFICATE NUMBER(S)(1) DEBENTURES DUE 2027 INTEGRAL MULTIPLES THEREOF)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
<S> <C> <C> <C>
Total
</TABLE>
(1) Certificate numbers not required if Private Debentures due 2027 are being
tendered by book-entry transfer.
(2) Unless otherwise indicated, a holder will be deemed to have tendered ALL of
the Private Debentures due 2027 represented in column 2.
[_]CHECK HERE IF TENDERED PRIVATE DEBENTURES DUE 2027 ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH
DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:__________________________________________________
Account Number:_________________________________________________________________
Transaction Code Number:________________________________________________________
3
<PAGE>
[_]CHECK HERE IF TENDERED PRIVATE DEBENTURES DUE 2027 ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):________________________________________________
Window Ticket Number (if any):__________________________________________________
Date of Execution of Notice of Guaranteed Delivery:_____________________________
If delivered by book-entry transfer, complete the following:
Account Number:_________________________________________________________________
Transaction Code Number:________________________________________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:___________________________________________________________________________
Address:________________________________________________________________________
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Private Debentures due 2027 indicated above. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Subject to, and effective upon, the acceptance for exchange of the Private
Debentures due 2027 tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest
in and to such Private Debentures due 2027 as are being tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent its
agent and attorney-in-fact (with full knowledge that the Exchange Agent also
acts as the agent of the Company) with respect to the tendered Private
Debentures due 2027 with full power of substitution to (i) deliver
certificates for such Private Debentures due 2027 to the Company and deliver
all accompanying evidences of transfer and authenticity to, or upon the order
of, the Company (ii) present such Private Debentures due 2027 for transfer on
the books of the Company and (iii) receive for the account of the Company all
benefits and otherwise exercise all rights of the beneficial ownership of such
Private Debentures due 2027, all in accordance with the terms of the Exchange
Offer. The power of attorney granted in this paragraph shall be deemed to be
irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Private
Debentures due 2027 tendered hereby and that the Company will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim when the same are
accepted by the Company. The undersigned hereby further represents that (i)
any Exchange Debentures due 2027 acquired in exchange for Private Debentures
due 2027 tendered hereby will have been acquired in the ordinary course of
business of the person receiving such Exchange Debentures due 2027, whether or
not such person is the undersigned, (ii) neither the holder nor any such other
person has an arrangement or understanding with any person to participate in
the "distribution" of such Exchange Debentures due 2027 within the meaning of
the Securities Act of 1933, as amended (the "Securities Act") and (iii)
neither the holder nor any such other person is an "affiliate," as described
in Rule 405 under the Securities Act of the Company.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to
third parties, that the Exchange Debentures due 2027 issued in exchange for
the Private Debentures due 2027 pursuant to the Exchange Offer may be offered
for resale, resold and otherwise transferred by holders thereof (other than
holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act.
However, the undersigned acknowledges that any purchaser of Private Debentures
due 2027 who is an affiliate of the Company within the meaning of Rule 405
under the Securities Act or who intends to participate in the Exchange Offer
for the purpose of distributing the Exchange Debentures, or any broker-dealer
who purchased the Private Debentures from the Company to resell pursuant to
Rule 144A under the Securities Act or any other available exemption under the
Securities Act (i) will not be able to rely on the interpretations of the
staff of the Commission set forth in the above-mentioned no-action letters,
(ii) will not be entitled to tender its Private Debentures due 2027 in the
Exchange Offer and (ii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
transfer of the Private Debentures due 2027 unless such sale or transfer is
made pursuant to an exemption from such requirements. The undersigned also
acknowledges that the Company has not sought its own no-action letter and
there can be no assurance that the staff of the Commission would make a
similar determination with respect to the Exchange Offer as in such other
circumstances.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of the
Exchange Debentures due 2027. If the undersigned is a broker-dealer
5
<PAGE>
that will receive Exchange Debentures due 2027 for its own account in exchange
for Private Debentures due 2027, it represents that the Private Debentures due
2027 to be exchanged for Exchange Debentures due 2027 were acquired by it as a
result of market-making activities or other trading activities, and
acknowledges that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Debentures due
2027 pursuant to the Exchange Offer; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment, transfer and sale of the Private
Debentures due 2027 tendered hereby. All authority conferred or agreed to be
conferred in this Letter of Transmittal and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of
the undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in the instructions contained in this Letter of
Transmittal.
For the purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Private Debentures due 2027 when, as and if the
Company has given oral and written notice thereof to the Exchange Agent.
If any tendered Private Debentures due 2027 are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Private Debentures due 2027 will be returned (or, in the case of
Private Debentures due 2027 tendered by book-entry transfer through DTC, will
be promptly credited to an account maintained at DTC), without expense, to the
undersigned at the address shown below or at a different address as may be
indicated herein under the "Special Delivery Instructions" as promptly as
practicable after the Expiration Date.
The undersigned understands that tenders of Private Debentures due 2027
pursuant to the procedures described under the section entitled "The Exchange
Offers--Procedures for Tendering Private Debentures" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Debentures due 2027 (and, if
applicable, substitute certificates representing Private Debentures due 2027
for any Private Debentures due 2027 not exchanged) in the name(s) of the
undersigned or, in the case of a book-entry delivery of Private Debentures due
2027, please credit the account indicated above maintained at DTC. Similarly,
unless otherwise indicated under the box entitled "Special Delivery
Instructions" below, please send the Exchange Debentures due 2027 (and, if
applicable, substitute certificates representing Private Debentures due 2027
for any Private Debentures due 2027 not exchanged) to the undersigned at the
address shown above in the box entitled "Description of Private Debentures due
2027." In the event that both "Special Issuance Instructions" and "Special
Delivery Instructions" are completed, please issue the certificates
representing the Exchange Debentures due 2027 issued in exchange for the
Private Debentures due 2027 accepted for exchange in the name(s) of, and
return any certificates for Private Debentures due 2027 not tendered or not
exchanged to, the person(s) so indicated. The undersigned understands that the
Company has no obligation pursuant to the "Special Issuance Instructions" and
"Special Delivery Instructions" to transfer any Private Debentures due 2027
from the name of the registered holder(s) thereof if the Company does not
accept for exchange any of the Private Debentures due 2027 so tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF PRIVATE
DEBENTURES DUE 2027" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE
DEEMED TO HAVE TENDERED THE PRIVATE DEBENTURES DUE 2027 AS SET FORTH IN SUCH
BOX ABOVE.
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
I hereby TENDER the Private Debentures due 2027 described above in the box
entitled "Description of Private Debentures due 2027" pursuant to the terms of
the Exchange Offer.
X___________________________________ __________________________________, 1997
X___________________________________ __________________________________, 1997
X___________________________________ __________________________________, 1997
Signature(s) of Owner(s) Date
If a holder is tendering any Private Debentures due 2027, this Letter of
Transmittal must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Private Debentures due 2027 or on a
security position listing or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or
other person acting in a fiduciary or representative capacity, please set
forth full title. See Instruction 4.
Name(s):________________________________________________________________________
(Please Type or Print)
- --------------------------------------------------------------------------------
Capacity:_______________________________________________________________________
Address:________________________________________________________________________
- --------------------------------------------------------------------------------
(Include Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 4)
Signature(s) Guaranteed by an Eligible Institution:_____________________________
(Authorized Signature)
- --------------------------------------------------------------------------------
(Title)
- --------------------------------------------------------------------------------
(Name of Firm)
- --------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: _______________________, 1997
7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5) (SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if To be completed ONLY if
certificates for Private certificates for Private
Debentures due 2027 not exchanged Debentures due 2027 not exchanged
and/or Exchange Debentures due and/or Exchange Debentures due
2027 are to be issued in the name 2027 are to be sent to someone
of and sent to someone other than other than the person or persons
the person or person(s) whose whose signature(s) appear(s) on
signature(s) appear(s) on this this Letter of Transmittal above
Letter of Transmittal above, or if or to such person or persons at an
Private Debentures due 2027 address other than shown in the
delivered by book-entry transfer box entitled "Description of
which are not accepted for Private Debentures due 2027" on
exchange are to be returned by this Letter of Transmittal above.
credit to an account maintained at
DTC other than the account
indicated above.
Issue Exchange Debentures due 2027 Mail Exchange Debentures due 2027
and/or Private Debentures due 2027 and/or Private Debentures due 2027
to: to:
Name_______________________________ Name_______________________________
(Please Type or Print) (Please Type or Print)
------------------------------- -------------------------------
(Please Type or Print) (Please Type or Print)
Address____________________________ Address____________________________
------------------------------ ------------------------------
(Zip Code) (Zip Code)
-----------------------------------
Employer Identification or
Social Security Number
(Complete Substitute Form W-9)
[_]Credit unexchanged Private
Debentures due 2027 delivered
by book-entry transfer to the
DTC account set forth below.
-----------------------------------
(DTC Account Number, if
applicable)
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
This Letter to Transmittal is to be completed either if (a) Certificates are
to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Exchange
Offers--Procedures for Tendering Private Debentures" in the Prospectus and an
Agent's Message is not delivered. Holders who are DTC Participants tendering
by book-entry transfer must execute such tender through DTC's ATOP system. A
holder using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date. DTC will verify such acceptance, execute a book-entry
transfer of the tendered Private Debentures due 2027 into the Exchange Agent's
account at DTC and then send to the Exchange Agent a Book-Entry Confirmation,
including an Agent's Message confirming that DTC has received an express
acknowledgement from such holder that such holder has received and agrees to
be bound by this Letter of Transmittal and that the Company may enforce this
Letter of Transmittal against such holder. The Book-Entry Confirmation must be
received by the Exchange Agent in order for the tender relating thereto to be
effective. Book-entry transfer to DTC in accordance with DTC's procedure does
not constitute delivery of the Book-Entry Confirmation to the Exchange Agent.
Private Debentures due 2027 tendered hereby must be in denominations of $1,000
and integral multiples thereof.
If the tender is not made through ATOP, certificates representing Private
Debentures due 2027, as well as this Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of Transmittal,
must be received by the Exchange Agent at its address set forth herein on or
prior to the Expiration Date in order for such tender to be effective.
Holders who wish to tender their Private Debentures due 2027 and (i) whose
Private Debentures due 2027 are not immediately available, or (ii) cannot
deliver their Private Debentures due 2027, this Letter of Transmittal or any
other documents required hereby to the Exchange Agent prior to the Expiration
Date or (iii) who cannot comply with the procedures for book-entry transfer on
a timely basis must tender their Private Debentures due 2027 according to the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (i) such tender must be made through an Eligible Institution (as
defined below); (ii) prior to the Expiration Date, the Exchange Agent must
have received from the Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Company (by fax transmission, mail or hand delivery) setting forth the
name and address of the holder, the certificate number(s) of such Private
Debentures due 2027 (except in the case of book-entry tenders) and the
principal amount of Private Debentures due 2027 tendered, stating that the
tender is being made thereby and guaranteeing that, within three NYSE trading
days after the Expiration Date, this Letter of Transmittal (or a copy hereof)
together with the certificate(s) representing the Private Debentures due 2027
(except in the case of book-entry tenders) and any other required documents
will be deposited by the Eligible Institution with the Exchange Agent; and
(iii) such properly completed and executed Letter of Transmittal (or a copy
hereof), as well as all other documents required by this Letter of Transmittal
and the certificate(s) representing all tendered Private Debentures due 2027
in proper form for transfer of a Book-Entry Confirmation with respect to such
Private Debentures due 2027, must be received by the Exchange Agent within
three NYSE trading days after the Expiration Date, all as provided in the
Prospectus under the section entitled "The Exchange Offers--Guaranteed
Delivery Procedures." Any holder who wishes to tender his Private Debentures
due 2027 pursuant to the guaranteed delivery procedures described above must
ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
prior to the Expiration Date. As used in this Letter of Transmittal, "Eligible
Institution" shall mean a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
All questions as to the validity, eligibility (including time of receipt),
acceptance and withdrawal of tendered Private Debentures due 2027 will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and
all Private Debentures due 2027
9
<PAGE>
not properly tendered or any Private Debentures due 2027 the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Private Debentures due
2027. The Company's interpretation of the terms and conditions of the Exchange
Offer (including the instructions in this Letter of Transmittal) shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Private Debentures due 2027 must be cured within
such time as the Company shall determine. Neither the Company, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Private Debentures due
2027, nor shall any of them incur any liability for failure to give such
notification. Tenders of Private Debentures due 2027 will not be deemed to
have been made until such defects or irregularities have been cured or waived.
Any Private Debentures due 2027 received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering
holders, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date.
See "The Exchange Offers" in the Prospectus.
2. TENDER BY HOLDER.
Only a holder of Private Debentures due 2027 may tender such Private
Debentures due 2027 in the Exchange Offer. Any beneficial owner whose Private
Debentures due 2027 are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and who wishes to tender should contact
the registered holder promptly and instruct such registered holder to tender
on behalf of such beneficial owner. If such beneficial owner wishes to tender
on such owner's own behalf; such owner must, prior to completing and executing
this Letter of Transmittal and delivering such owner's Private Debentures due
2027, either make appropriate arrangements to register ownership of the
Private Debentures due 2027 in such owner's name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
3. PARTIAL TENDERS AND WITHDRAWALS.
Tenders of Private Debentures due 2027 will be accepted only in
denominations of $1,000 and integral multiples thereof. If less than all the
Private Debentures due 2027 are to be tendered, the tendering holder(s) should
fill in the aggregate principal amount of Private Debentures due 2027 to be
tendered in the box above entitled "Description of Private Debentures due
2027--Principal Amount of Private Debentures due 2027 Tendered." A reissued
certificate representing the balance of nontendered Private Debentures due
2027 will be sent to such tendering holder (except in the case of book-entry
tenders), unless otherwise provided in the appropriate box on this Letter of
Transmittal, promptly after the Expiration Date. ALL OF THE PRIVATE DEBENTURES
DUE 2027 DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED
UNLESS OTHERWISE INDICATED.
Any holder who has tendered Private Debentures due 2027 may withdraw the
tender by delivering written notice of withdrawal to the Exchange Agent prior
to the Expiration Date. For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent at its address set forth on
the first page of this Letter of Transmittal. Any such notice of withdrawal
must (i) specify the name of the person having tendered the Private Debentures
due 2027 to be withdrawn (the "Depositor"), (ii) identify the Private
Debentures due 2027 to be withdrawn (including the certificate number or
numbers and principal amount of such Private Debentures due 2027 (except in
the case of book-entry tenders)), (iii) be signed by the holder in the same
manner as the original signature on this Letter of Transmittal by which such
Private Debentures due 2027 were tendered (including any required signature
guarantees) or be accompanied by documents of transfer sufficient to have the
Trustee (as defined in the Prospectus) register the transfer of such Private
Debentures due 2027 into the name of the person withdrawing the tender and
(iv) specify the name in which any such Private Debentures due 2027 are
registered, if different from that of the Depositor. If Private Debentures due
2027 have been delivered or otherwise identified to the Exchange Agent, the
name of the registered holder and the certificate numbers of the particular
Private Debentures due 2027 withdrawn must also be furnished to the Exchange
Agent as aforesaid prior to the physical release of the withdrawn Private
Debentures due 2027. If the Private Debentures due 2027
10
<PAGE>
have been tendered pursuant to the procedures for book-entry tender set forth
in the Prospectus, a notice of withdrawal must specify, in lieu of certificate
numbers, the name and account number at the DTC to be credited with the
withdrawn Private Debentures due 2027. Private Debentures due 2027 properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Exchange Offer; provided, however, that withdrawn Private Debentures due 2027
may be retendered by again following one of the procedures herein at any time
prior to the Expiration Date. All questions as to the validity, form and
eligibility (including time of receipt) of any notice of withdrawal, will be
determined by the Company, whose determinations will be final and binding on
all parties. Neither the Company, the Exchange Agent nor any other person will
be under any duty to give notification of any debts or irregularities in any
notice of withdrawal or incur any liability for failure to give such
notification. See "The Exchange Offers--Withdrawal Rights" in the Prospectus.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURE.
If this Letter of Transmittal is signed by the registered holder of the
Private Debentures due 2027 tendered hereby, the signature must correspond
exactly with the name as written on the face of the certificates (if
applicable) without any change whatsoever.
If any tendered Private Debentures due 2027 are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Private Debentures due 2027 are registered in different names
on several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or holders
of the Private Debentures due 2027 specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If, however,
the Exchange Debentures due 2027 to be issued,or any untendered Private
Debentures due 2027 are to be reissued, to a person other than the registered
holder, then endorsements of any certificates transmitted hereby or separate
bond powers are required.
If this Letter of Transmittal is signed by a person other than the registered
holder or holders of any certificate(s) specified herein, such certificate(s)
must be endorsed or accompanied by appropriate bond powers, in either case
signed exactly as the name or names of the registered holder(s) appear(s) on
the certificate(s).
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted.
Endorsements on certificates for Private Debentures due 2027 or signatures on
bond powers required by this Instruction 4 must be guaranteed by an Eligible
Institution.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Private Debentures due 2027 are tendered:
(i) by a registered holder of such Private Debentures due 2027 (which term, for
purposes of the Exchange Offer, includes any participant in the DTC system
whose name appears on a security position listing as the holder of such Private
Debentures due 2027) who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on this Letter of Transmittal;
or (ii) for the account of an Eligible Institution.
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Private Debentures due 2027 should indicate in the
applicable box the name and address in or to which Exchange Debentures due 2027
issued pursuant to the Exchange Offer and/or substitute certificates evidencing
Private Debentures due 2027 not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Private Debentures due 2027 by book-entry transfer
may request that Private Debentures due 2027 not exchanged
11
<PAGE>
be credited to such account maintained at the DTC as such holder may designate
hereon. If no such instructions are given, such Private Debentures due 2027 not
exchanged will be returned to the name or address of the person signing this
Letter of Transmittal.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Private Debentures due 2027 to them or their order pursuant to the Exchange
Offer. If however, Exchange Debentures due 2027 and/or substitute Private
Debentures due 2027 not exchanged are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered
holder of the Private Debentures due 2027 tendered hereby, or if tendered
Private Debentures due 2027 are registered in the name of any person other than
the person signing this Letter of Transmittal, or if a transfer tax is imposed
for any reason other than the transfer of Private Debentures due 2027 to the
Company or their order pursuant to the Exchange Offer, the amount of any such
transfer taxes (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence or payment of
such taxes or exemption therefrom is not submitted herewith, the amount of such
transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Private Debentures due 2027 specified
in this Letter of Transmittal.
7. WAIVER OF CONDITION.
Subject to the terms and conditions set forth in the Prospectus, the Company
reserves the absolute right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Private Debentures due 2027, by execution of
this Letter of Transmittal, shall waive any right to receive notice of the
acceptance of their Private Debentures due 2027 for exchange.
Neither the Company nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE DEBENTURES DUE 2027.
Any holder whose Private Debentures due 2027 have been mutilated, lost,
stolen or destroyed should contact the Exchange Agent at the address indicated
above for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
QUESTIONS RELATING TO THE PROCEDURE FOR TENDERING, AS WELL AS REQUESTS FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL, MAY BE
DIRECTED TO THE EXCHANGE AGENT, AT THE ADDRESS INDICATED ON THE FIRST PAGE OF
THIS LETTER OF TRANSMITTAL OR BY TELEPHONE AT (212) 240-8801.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a registered holder of Private
Debentures due 2027 or Exchange Debentures due 2027 is required to provide the
Trustee (as payor) with such holder's correct Taxpayer Identification Number
("TIN") on Substitute Form W-9 below or otherwise establish a basis for
exemption from backup withholding. If such holder is an individual, the TIN is
his social security number. If the Trustee is not provided with the correct
TIN, a $50 penalty may be imposed by the Internal Revenue Service, and
payments made to such holder with respect to Private Debentures due 2027 or
Exchange Debentures due 2027 may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Trustee a properly completed Internal Revenue Service Form W-8, signed
under penalties of perjury, attesting to that holder's exempt status. A Form
W-8 can be obtained from the Trustee.
If backup withholding applies, the Trustee is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional U.S. federal income tax. Rather, the U.S. federal income tax
liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Private
Debentures due 2027 or Exchange Debentures due 2027 the holder is required to
provide the Trustee with: (i) the holder's correct TIN by completing the form
below, certifying that the TIN provided on Substitute Form W-9 is correct (or
that such holder is awaiting a TIN) and that (A) such holder is exempt from
backup withholding, (B) the holder has not been notified by the Internal
Revenue Service that the holder is subject to backup withholding as a result
of failure to report all interest or dividends or (C) the Internal Revenue
Service has notified the holder that the holder is no longer subject to backup
withholding; and (ii) if applicable, an adequate basis for exemption.
13
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE "IMPORTANT TAX INFORMATION" ABOVE)
PAYER'S NAME: THE FIRST NATIONAL BANK OF CHICAGO
PART 1--PLEASE PROVIDE YOUR TIN:__________________
TIN IN THE BOX AT RIGHT AND Social Security
CERTIFY BY SIGNING AND Number or
SUBSTITUTE DATING BELOW. Employee
Identification Number
--------------------------------------------------------
FORM W-9 PART 2--CERTIFICATION--Under PART 3
penalties of perjury, I certify
that:
DEPARTMENT OF THE Awaiting TIN [_]
TREASURY
INTERNAL REVENUE (1) The number shown on this form
SERVICE is my correct Taxpayer
Identification Number (or I am
waiting for a number to be
issued to me) and
PAYER'S REQUEST FOR
TAXPAYER
IDENTIFICATION
NUMBER (TIN) (2) I am not subject to backup
withholding because (i) I am
exempt from backup
withholding, (ii) I have not
been notified by the Internal
Revenue Service ("IRS") that I
am subject to backup
withholding as a result of a
failure to report all interest
or dividends, or (iii) the IRS
has notified me that I am no
longer subject to backup
withholding.
--------------------------------------------------------
Certificate Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS
stating that you are no longer subject to backup
withholding, do not cross out such item (2).
SIGNATURE ___________________________________________
DATE_________________________________________________
NAME_________________________________________________
(Please Print)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
14
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the Debentures
due 2027 shall be retained until I provide a taxpayer identification number
to the Exchange Agent and that, if I do not provide my taxpayer
identification number within 60 days, such retained amounts shall be
remitted to the Internal Revenue Service as backup withholding and 31% of
all reportable payments made to me thereafter will be withheld and remitted
to the Internal Revenue Service until I provide a taxpayer identification
number.
----------------------------------- -----------------------------------
Signature(s) Date
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH THE
CERTIFICATES FOR PRIVATE DEBENTURES DUE 2027 (IF APPLICABLE) AND ALL OTHER
REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE
EXPIRATION DATE.
15
<PAGE>
Exhibit 99.4
NOTICE OF GUARANTEED DELIVERY FOR
MCKESSON CORPORATION
This form or one substantially equivalent hereto must be used to accept the
Exchange Offers of McKesson Corporation (the "Company") made pursuant to the
Prospectus, dated , 1997 (the "Prospectus"), if certificates for the
outstanding 6.60% Notes due March 1, 2000, 6 7/8% Notes due March 1, 2002 and
7.65% Debentures due March 1, 2027 of the Company (the "Private Notes") are
not immediately available or if the procedure for book-entry transfer cannot
be completed on a timely basis or time will not permit all required documents
to reach the Company prior to 5:00 p.m., New York City time, on the Expiration
Date of the Exchange Offers. Such form may be delivered or transmitted by
telegram, telex, facsimile transmission, mail or hand delivery to The First
National Bank of Chicago (the "Exchange Agent") as set forth below. In
addition, in order to utilize the guaranteed delivery procedure to tender
Private Notes pursuant to the Exchange Offers, completed, signed and dated
applicable Letters of Transmittal (or facsimiles thereof) must also be
received by the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date. Capitalized terms not defined herein are defined in the
Prospectus.
Delivery To: The First National Bank of Chicago, Exchange Agent
By Mail: By Hand or Overnight Delivery:
(Registered or Certified Mail
recommended)
The First National Bank of Chicago
The First National Bank of Chicago c/o First Chicago Trust
c/o First Chicago Trust Company of New York
Company of New York 14 Wall Street
14 Wall Street 8th Floor, Window 2
8th Floor, Window 2 New York, New York 10005
New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON SUCH LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letters of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Private Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offers--Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of 6.60% Notes due
March 1, 2000 Tendered:*
$ ___________________________________
If 6.60% Notes due March 1, 2000
_____________________________________ will be delivered by book-entry
Certificate Nos. (if available) transfer to The Depository Trust
Company, provide account number.
Total Principal Amount Represented
by Certificate(s) for 6.60% Notes
due March 1, 2000 :
Account Number: _____________________
$ ___________________________________
Principal Amount of 6 7/8% Notes due
March 1, 2002 Tendered:
$ ___________________________________ If 6 7/8% Notes due March 1, 2002
will be delivered by book-entry
transfer to The Depository Trust
Company, provide account number
_____________________________________
Certificate Nos. (if available)
Total Principal Amount Represented
by Certificate(s) for 6 7/8% Notes
due March 1, 2002:
Account Number: _____________________
$ ___________________________________
Principal Amount of 7.65% Debentures
due March 1, 2027 Tendered:
If 7.65% Debentures due March 1,
$ ___________________________________ 2027 will be delivered by book-entry
transfer to The Depository Trust
_____________________________________ Company, provide account number.
Certificate Nos. (if available)
Total Principal Amount Represented
by Certificate(s) for 7.65%
Debentures due March 1, 2027: Account Number: _____________________
$ ___________________________________
- --------
* Must be denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
- --------------------------------------------------------------------------------
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
X ___________________________________ ____________
X ___________________________________ ____________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: ______________
This Notice of Guaranteeed Delivery must be signed by the holder(s) of
Private Notes as their name(s) appear(s) on certificates for Private Notes or
on a security position listing, or by person(s) authorized to become registered
holder(s) by endorsement and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):________________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Capacity:_______________________________________________________________________
Address(es):____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of a registered national securities exchange, or a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the United States,
hereby guarantees that the certificates representing the principal amount of
Private Notes tendered hereby in proper form for transfer, or timely
confirmation of the book-entry transfer of such Private Notes into the Exchange
Agent's account at The Depository Trust Company pursuant to the procedures set
forth in "The Exchange Offers--Guaranteed Delivery Procedures" section of the
Prospectus, together with properly completed and duly executed Letters of
Transmittal (or a manually signed facsimile thereof) with any required
signature guarantee and any other documents required by the Letters of
Transmittal, will be received by the Exchange Agent at the address set forth
above, no later than three New York Stock Exchange trading days after the date
of execution hereof.
_____________________________________ ___________________________________
Name of Firm Authorized Signature
_____________________________________ ___________________________________
Address Title
_____________________________________ Name: _____________________________
Zip Code (Please Type or Print)
Area Code and Tel. No. ______________ Dated: ____________________________
NOTE: DO NOT SEND CERTIFICATES FOR PRIVATE NOTES WITH THIS FORM. CERTIFICATES
FOR PRIVATE NOTES SHOULD ONLY BE SENT WITH YOUR LETTERS OF TRANSMITTAL.
<PAGE>
Exhibit 99.5
MCKESSON CORPORATION
OFFERS FOR ALL OUTSTANDING
6.60% NOTES DUE MARCH 1, 2000,
6 7/8% NOTES DUE MARCH 1, 2002 AND
7.65% DEBENTURES DUE MARCH 1, 2027
IN EXCHANGE FOR
6.60% EXCHANGE NOTES DUE MARCH 1, 2000,
6 7/8% EXCHANGE NOTES DUE MARCH 1, 2002 AND
7.65% EXCHANGE DEBENTURES DUE MARCH 1, 2027
TO:BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
McKesson Corporation (the "Company") is offering, upon and subject to the
terms and conditions set forth in the Prospectus, dated , 1997 (the
"Prospectus"), and the enclosed Letters of Transmittal (the "Letters of
Transmittal"), to exchange (the "Exchange Offers") its 6.60% Exchange Notes
due March 1, 2000, 6 7/8% Exchange Notes due March 1, 2002 and 7.65% Exchange
Debentures due March 1, 2027, which have been registered under the Securities
Act of 1933, as amended (the "Exchange Notes"), for its outstanding 6.60%
Notes due March 1, 2000, 6 7/8% Notes due March 1, 2002 and 7.65% Debentures
due March 1, 2027 (the "Private Notes"), respectively. The Exchange Offers are
being made in order to satisfy certain obligations of the Company contained in
the Registration Rights Agreement dated March 11, 1997, by and among the
Company and the initial purchasers referred to therein.
We are requesting that you contact your clients for whom you hold Private
Notes regarding the Exchange Offers. For your information and for forwarding
to your clients for whom you hold Private Notes registered in your name or in
the name of your nominee, or who hold Private Notes registered in their own
names, we are enclosing the following documents:
1. Prospectus dated , 1997;
2. Each of the three Letters of Transmittal for your use and for the
information of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offers if certificates for Private Notes are not immediately available or
time will not permit all required documents to reach the Exchange Agent
prior to the Expiration Date (as defined below) or if the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account
you hold Private Notes registered in your name or the name of your nominee,
with space provided for obtaining such clients' instructions with regard to
the Exchange Offers;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to The First National Bank of Chicago, the
Exchange Agent for the Private Notes.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFERS WILL EXPIRE AT 5:00
P.M, NEW YORK CITY TIME, ON , , 1997, UNLESS EXTENDED BY THE COMPANY
(THE "EXPIRATION DATE"). PRIVATE NOTES TENDERED PURSUANT TO THE EXCHANGE
OFFERS MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offers, your clients must tender by having
you execute for them a book-entry transfer of tendered Private Notes into the
account of The First National Bank of Chicago, as Exchange Agent, at The
Depository Trust Company ("DTC") using DTC's Automated Tender Offer Program.
(Your clients may also tender by having certificates representing the Private
Notes, duly executed and properly completed
<PAGE>
applicable Letters of Transmittal (or facsimile thereof), with any required
signature guarantees, and any other required documents delivered to such
Exchange Agent.) The Letters of Transmittal and the Prospectus should be
consulted for complete instructions and information about participation in the
Exchange Offer.
If holders of Private Notes wish to tender, but it is impracticable for them
to forward their certificates for Private Notes prior to the expiration of the
Exchange Offers or to comply with the book-entry transfer procedures on a
timely basis, a tender may be effected by following the guaranteed delivery
procedures described in the Prospectus under "The Exchange Offers--Guaranteed
Delivery Procedures."
The Company will, upon request, reimburse brokers, dealers, commercial banks
and trust companies for reasonable and necessary costs and expenses incurred by
them in forwarding the Prospectus and the related documents to the beneficial
owners of Private Notes held by them as nominee or in a fiduciary capacity. The
Company will pay or cause to be paid all stock transfer taxes applicable to the
exchange of Private Notes pursuant to the Exchange Offers, except as set forth
in Instruction 6 of the applicable Letters of Transmittal.
Any inquiries you may have with respect to the Exchange Offers, or requests
for additional copies of the enclosed materials, should be directed to The
First National Bank of Chicago, the Exchange Agent for the Private Notes, at
its address and telephone number set forth on the front of the Letters of
Transmittal.
Very truly yours,
McKESSON CORPORATION
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER
OF THEM WITH RESPECT TO THE EXCHANGE OFFERS, EXCEPT FOR STATEMENTS EXPRESSLY
MADE IN THE PROSPECTUS OR THE APPLICABLE LETTERS OF TRANSMITTAL.
Enclosures
2
<PAGE>
Exhibit 99.6
MCKESSON CORPORATION
OFFERS FOR ALL OUTSTANDING
6.60% NOTES DUE MARCH 1, 2000,
67/8% NOTES DUE MARCH 1, 2002 AND
7.65% DEBENTURES DUE MARCH 1, 2027
IN EXCHANGE FOR
6/60% EXCHANGE NOTES DUE MARCH 1, 2000,
67/8% EXCHANGE NOTES DUE MARCH 1, 2002 AND
7.65% EXCHANGE DEBENTURES DUE MARCH 1, 2027
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated , 1997 (the
"Prospectus"), and the related Letters of Transmittal (the "Letters of
Transmittal"), relating to the offers (the "Exchange Offers") of McKesson
Corporation (the "Company") to exchange its 6.60% Exchange Notes due March 1,
2000, 6 7/8% Exchange Notes due March 1, 2002 and 7.65% Exchange Debentures
due March 1, 2027, which have been registered under the Securities Act of
1933, as amended (the "Exchange Notes"), for its outstanding 6.60% Notes due
March 1, 2000, 6 7/8% Notes due March 1, 2002 and 7.65% Debentures due March
1, 2027 (the "Private Notes"), respectively, upon the terms and subject to the
conditions described in the Prospectus and the applicable Letters of
Transmittal. The Exchange Offers are being made in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement
dated March 11, 1997, by and among the Company and the initial purchasers
referred to therein.
This material is being forwarded to you as the beneficial owner of the
Private Notes carried by us in your account but not registered in your name. A
TENDER OF SUCH PRIVATE NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf any or all of the Private Notes held by us for your account,
pursuant to the terms and conditions set forth in the enclosed Prospectus and
applicable Letters of Transmittal.
Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender your Private Notes on your behalf in accordance with
the provisions of the Exchange Offers. The Exchange Offers will expire at 5:00
p.m., New York City time, on , , 1997, unless extended by the Company.
Any Private Notes tendered pursuant to the Exchange Offers may be withdrawn at
any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offers are for any and all Private Notes.
2. The Exchange Offers are subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offers--Certain Conditions
to the Exchange Offers."
3. Any transfer taxes incident to the transfer of Private Notes from the
holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the applicable Letters of Transmittal.
4. The Exchange Offers expire at 5:00 p.m., New York City time, on ,
, 1997, unless extended by the Company.
If you wish to have us tender any or all of your Private Notes, please so
instruct us by completing, executing and returning to us the instruction form
on the back of this letter. THE LETTERS OF TRANSMITTAL ARE FURNISHED TO YOU
FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER YOUR
PRIVATE NOTES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFERS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offers made by McKesson
Corporation with respect to its Private Notes.
This will instruct you to tender the Private Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related applicable Letters of Transmittal.
Please tender the Private Notes held by you for my account as indicated
below:
AGGREGATE PRINCIPAL AMOUNT OF
-----------------------------
PRIVATE NOTES
-------------
6.60% Notes due March 1, 2000
-------------------------------
6 7/8% Notes due March 1, 2002 -------------------------------
7.65% Debentures due March 1, 2027
-------------------------------
[_] Please do not tender any Private Notes held
by you for my account
Dated: , 1997
---------------------------------
-------------------------------
Signature(s)
-------------------------------
-------------------------------
-------------------------------
Please print name(s) here
-------------------------------
-------------------------------
Address(es)
-------------------------------
Area Code and Telephone Number
-------------------------------
Tax Identification or Social
Security No(s).
None of the Private Notes held by us for your account will be tendered unless
we receive written instructions from you to do so. Unless a specific contrary
instruction is given in the space provided, your signature(s) hereon shall
constitute an instruction to us to tender all the Private Notes held by us for
your account.
<PAGE>
Exhibit 99.7
July , 1997
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Services Division
Ladies and Gentlemen:
McKesson Corporation, a Delaware corporation (the "Company") proposes to
make an offer (the "Exchange Offer") to exchange any and all of its
outstanding 6.60% Notes due March 1, 2000, 6 7/8% Notes due March 1, 2002 and
7.65% Debentures due March 1, 2027 (together the "Private Notes") for its
6.60% Exchange Notes due March 1, 2000, 6 7/8% Exchange Notes due March 1,
2002 and 7.65% Debentures due March 1, 2027 (together the "Exchange Notes").
The terms and conditions of the Exchange Offer as currently contemplated are
set forth in a prospectus, dated July , 1997 (the "Prospectus"), to be
distributed to all record holders of the Private Notes. A copy of the
Prospectus is attached hereto as Exhibit A. The Private Notes and the Exchange
Notes are collectively referred to herein as the "Notes." Capitalized terms
used but not defined herein shall have the same meaning given them in the
Prospectus.
A copy of each of the form of the Letter of Transmittal, the form of the
Notice of Guaranteed Delivery, the form of Letter to Brokers, Dealers and the
form of Letter to Clients is attached hereto as Exhibit B.
The Company hereby appoints The First National Bank of Chicago to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to The First National Bank of
Chicago.
The Exchange Offer is expected to be commenced by the Company on or about
July , 1997. The Letter of Transmittal accompanying the Prospectus (or in the
case of book entry securities, the ATOP system) is to be used by the holders
of the Private Notes to accept the Exchange Offer and contains instructions
with respect to (i) the delivery of certificates for Private Notes tendered in
connection therewith and (ii) the book entry transfer of Notes to the Exchange
Agent's account.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on August
, 1997 or on such later date or time to which the Company may extend the
Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Company expressly reserves the right to
extend the Exchange Offer from time to time by giving oral (to be confirmed in
writing) or written notice to you before 9:00 A.M., New York City time, on the
Business Day following the previously scheduled Expiration Date.
<PAGE>
The Company expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Private Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified in the Prospectus under the caption "The Exchange
Offer--Certain Conditions to the Exchange Offer." The Company will give you
prompt oral (confirmed in writing) or written notice of any amendment,
termination or nonacceptance of Private Notes.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are specifically set
forth in the section of the Prospectus captioned "The Exchange Offer" or as
specifically set forth herein; provided, however, that in no way will your
general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Private Notes at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Exchange Offer within two Business Days after the date of the Prospectus,
and any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Private Notes by causing
the Book-Entry Transfer Facility to transfer such Private Notes into your
account in accordance with the Book-Entry Transfer Facility's procedure for
such transfer.
3. You are to examine each of the Letters of Transmittal and certificates
for Private Notes (or confirmation of book-entry transfer into your account at
the Book-Entry Transfer Facility) and any other documents delivered or mailed
to you by or for holders of the Private Notes to ascertain whether: (i) the
Letters of Transmittal and any such other documents are duly executed and
properly completed in accordance with instructions set forth therein and (ii)
the Private Notes have otherwise been properly tendered. In each case where
the Letter of Transmittal or any other document has been improperly completed
or executed or any of the certificates for Private Notes are not in proper
form for transfer or some other irregularity in connection with the acceptance
of the Exchange Offer exists, you will endeavor to inform such holders of the
need for fulfillment of all requirements and to take any other action as may
be necessary or advisable to cause such irregularity to be corrected.
4. With the approval of any person designated in writing by the Company (a
"Designated Officer") (such approval, if given orally, to be confirmed in
writing) or any other party designated by any such Designated Officer in
writing, you are authorized to waive any irregularities in connection with any
tender of Private Notes pursuant to the Exchange Offer.
5. Tenders of Private Notes may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "The Exchange
Offer--Procedures for Tendering Private Notes," and Private Notes shall be
considered properly tendered to you only when tendered in accordance with the
procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Private Notes which any
Designated Officer of the Company shall approve as having been properly
tendered shall be considered to be properly tendered. Such approval, if given
orally, shall be confirmed in writing.
6. You shall advise the Company with respect to any Private Notes received
subsequent to the Expiration Date and accept its instructions with respect
to disposition of such Private Notes.
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<PAGE>
7. You shall accept tenders:
(a) in cases where the Private Notes are registered in two or more names
only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only
when proper evidence of such person's authority so to act is submitted; and
(c) from persons other than the registered holder of Private Notes
provided that customary transfer requirements, including satisfaction of
any applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Private Notes where so indicated and as
permitted in the Letter of Transmittal and deliver certificates for Private
Notes to the transfer agent for division and return any untendered Private
Notes to the holder (or such other person as may be designated in the Letter
of Transmittal) as promptly as practicable after expiration or termination of
the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Company will notify you (such notice, if given orally, to be
confirmed in writing) of its acceptance, promptly after the Expiration Date,
of all Private Notes properly tendered and you, on behalf of the Company, will
exchange such Private Notes for Exchange Notes and cause such Private Notes to
be canceled. Delivery of Exchange Notes will be made on behalf of the Company
by you at the rate of $1,000 principal amount of Exchange Notes for each
$1,000 principal amount of the corresponding series of Private Notes tendered
promptly after notice (such notice, if given orally, to be confirmed in
writing) of acceptance of said Private Notes by the Company; provided,
however, that in all cases, Private Notes tendered pursuant to the Exchange
Offer will be exchanged only after timely receipt by you of certificates for
such Private Notes (or confirmation of book-entry transfer into your account
at the Book-Entry Transfer Facility), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required signature
guarantees and any other required documents. You shall issue Exchange Notes
only in denominations of $1,000 or any integral multiple thereof. Private
Notes may be tendered in denominations of $1,000 or any integral multiple
thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and
the Letter of Transmittal, Private Notes tendered pursuant to the Exchange
Offer may be withdrawn at any time on or prior to the Expiration Date.
10. The Company shall not be required to exchange any Private Notes tendered
if any of the conditions set forth in the Exchange Offer are not met. Notice
of any decision by the Company not to exchange any Private Notes tendered
shall be given orally (and confirmed in writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Private Notes tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus
under the caption "The Exchange Offer--Certain Conditions to the Exchange
Offer" or otherwise, you shall promptly after the expiration or termination of
the Exchange Offer return those certificates for unaccepted Private Notes (or
effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them.
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<PAGE>
12. All certificates for reissued Private Notes unaccepted Private Notes or
for Exchange Notes shall be forwarded (a) by first-class certified mail,
return receipt requested, under a blanket surety bond protecting you and the
Company from loss or liability arising out of the non-receipt or non-delivery
of such certificates; (b) by registered mail insured separately for the
replacement value of each of such certificates or (c) by effectuating
appropriate book-entry transfer.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons
or to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically set
forth in the section of the Prospectus captioned "The Exchange Offer," the
Letter of Transmittal or herein or as may be subsequently agreed to in
writing by you and the Company;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of
any of the certificates or the Private Notes represented thereby deposited
with you pursuant to the Exchange Offer, and will not be required to and
will make no representation as to the validity, value or genuineness of the
Exchange Offer or the Letter of Transmittal or any other disclosure
materials delivered in connection therewith;
(c) shall not be obligated to take any legal action hereunder which might
in your reasonable judgment involve any expense or liability, unless you
shall have been furnished with indemnity reasonably satisfactory to you;
(d) may reasonably rely on and shall be protected in acting in reliance
upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you
to be genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request, agreement or
other instrument whatsoever not only as to its due execution and validity
and effectiveness of its provisions, but also as to the truth and accuracy
of any information contained therein, which you shall in good faith believe
to be genuine or to have been signed or represented by a proper person or
persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any Designated Officer of the Company;
(g) may consult with counsel satisfactory to you, including counsel for
the Company, with respect to any questions relating to your duties and
responsibilities and the advice or opinion of such counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by you hereunder in good faith and in
accordance with the advice or opinion of such counsel, provided that you
shall promptly notify the Company of any action taken or omitted by you in
reliance upon such advice or opinion; and
(h) shall not advise any person tendering Private Notes pursuant to the
Exchange Offer as to the wisdom of making such tender or as to the market
value or decline or appreciation in market value of any Private Notes.
15. You shall take such action as may from time to time be requested by the
Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and
the Notice of Guaranteed Delivery or such other forms as may be approved from
time to time by the Company, to all persons requesting such documents and to
4
<PAGE>
accept and comply with telephone requests for information relating to the
Exchange Offer, provided that such information shall relate only to the
procedures for accepting (or withdrawing from) the Exchange Offer. The Company
will furnish you with copies of such documents at your request. All other
requests for information relating to the Exchange Offer shall be directed to
the Company, Attention: Nancy A. Miller.
16. You shall advise by facsimile transmission or telephone, and promptly
thereafter confirm in writing to Nancy A. Miller of the Company, and such
other person or persons as the Company may request, daily (and more frequently
during the week immediately preceding the Expiration Date and if otherwise
requested) up to and including the Expiration Date, as to the number of
Private Notes which have been tendered pursuant to the Exchange Offer and the
items received by you pursuant to this Agreement, separately reporting and
giving cumulative totals as to items properly received and items improperly
received. In addition, you will also inform, and cooperate in making available
to, the Company or any such other person or persons, upon oral request made
from time to time on or prior to the Expiration Date, such other information
as it or such person reasonably requests. Such cooperation shall include,
without limitation, the granting by you to the Company and such person as the
Company may request, of access to those persons on your staff who are
responsible for receiving tenders, in order to ensure that immediately prior
to the Expiration Date the Company shall have received information in
sufficient detail to enable it to decide whether to extend the Exchange Offer.
You shall prepare a final list of all persons whose tenders were accepted, the
aggregate principal amount of Private Notes tendered, the aggregate principal
amount of Private Notes accepted and deliver said list to the Company promptly
after the Expiration Date.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities.
18. You hereby expressly waive any lien, encumbrance or right of set-off
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or
credit agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be entitled
to compensation as set forth on Schedules I, II and III attached hereto plus
reasonable out-of-pocket expenses and reasonable attorneys' fees, incurred in
connection with your services hereunder, within thirty days following receipt by
the Company of an itemized statement of such expenses and fees in reasonable
detail.
20. (a) The Company covenants and agrees to indemnify and hold you (which
for purposes of this paragraph shall include your directors, officers and
employees) harmless in your capacity as Exchange Agent hereunder from and
against any and all loss, liability, cost, damage, expense and claim,
including but not limited to reasonable attorneys' fees and expenses, incurred
by you as a result of, arising out of or in connection with the performance by
you of your duties under this Agreement or the compliance by you with the
instructions set forth herein or delivered hereunder; provided, however, that
the Company shall not be liable for indemnification or otherwise for any loss,
liability, cost, damage, expense or claim arising out of your gross negligence
or willful misconduct. In no case shall the Company be liable under this
indemnity with respect to any claim against you unless the Company shall be
notified by you, by letter or by facsimile confirmed by letter, of the written
assertion of a claim against you or of any other action commenced against you,
promptly after you shall have received any such written assertion or notice of
commencement of action. The Company shall be entitled to participate at its
own expense in
5
<PAGE>
the defense of any such claim or other action, and, if the Company so elects,
the Company may assume the defense of any suit brought to enforce any such
claim; provided that the Company shall not be entitled to assume the defense
of any such action if the named parties to such action include both the
Company and you and representation of both parties by the same legal counsel
would, in the written opinion of counsel to you, be inappropriate due to
actual or potential conflicting interests between them. In the event that the
Company shall assume the defense of any such suit or threatened action in
respect of which indemnification may be sought hereunder, the Company shall
not be liable for the fees and expenses of any counsel thereafter retained by
you. The Company shall not be liable under this paragraph for the fees and
expenses of more than one legal counsel for you.
(b) You agree that, without the prior written consent of the Company (which
consent shall not be unreasonably withheld), you will not settle, compromise
or consent to the entry of any pending or threatened claim, action, or
proceeding in respect of which indemnification could be sought in accordance
with the indemnification provisions of this Agreement (whether or not you or
the Company or any of its controlling persons is an actual or potential party
to such claim, action or proceeding), unless such settlement, compromise or
consent includes an unconditional release of the Company and controlling
persons from all liability arising out of such claim, action or proceeding.
21. You shall arrange to comply with all requirements under the tax laws of
the United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service. The Company understands that you are required in certain instances to
deduct 31% of the amounts to be paid with respect to interest paid on the
Exchange Notes and proceeds from the sale, exchange, redemption or retirement
of the Exchange Notes from holders who have not supplied their correct
Taxpayer Identification Number or required certification. Such funds will be
turned over to the Internal Revenue Service in accordance with applicable
regulations.
22. You shall notify the Company of the amount of any transfer taxes payable
in respect of the exchange of Private Notes and, upon receipt of written
approval from the Company, you shall deliver or cause to be delivered, in a
timely manner to each governmental authority to which any transfer taxes are
payable in respect of the exchange of Private Notes, your check in the amount
of all transfer taxes so payable, and the Company shall reimburse you for the
amount of any and all transfer taxes payable in respect of the exchange of
Private Notes; provided, however, that you shall reimburse the Company for
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
23. This Agreement and your appointment as Exchange Agent hereunder shall be
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto, and no other person
shall have any rights hereunder.
24. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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<PAGE>
26. This Agreement shall not be deemed or construed to be modified, amended,
rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
27. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or facsimile number set forth below:
If to the Company:
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, CA 94104
Facsimile: (415) 983-8826
Attention: Nancy A. Miller
If to the Exchange Agent:
The First National Bank of Chicago
c/o First Chicago Trust Company of New York
14 Wall Street
8th Floor, Window 2
New York, New York 10005
Facsimile: (212) 240-8938
Attention: Corporate Trust Administration
With a copy to:
The First National Bank of Chicago
One First National Plaza
Suite 0125
Chicago, Illinois 60670-0126
Facsimile: (312) 407-1708
Attention: Janice Ott Rotunno
28. Unless terminated earlier by the parties hereto, this Agreement shall
terminate 180 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 20 and 22 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver
to the Company any certificates for Notes, funds or property then held by you
as Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of the date hereof.
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<PAGE>
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
McKESSON CORPORATION
By: ______________________________________
Name: Nancy A. Miller
Title: Vice President and Corporate Secretary
Accepted as the date
first above written:
THE FIRST NATIONAL BANK OF CHICAGO, as Exchange Agent
By: ___________________________________
Name:Richard D. Manella
Title:Vice President
8
<PAGE>
SCHEDULE I
THE FIRST NATIONAL BANK OF CHICAGO
FEE SCHEDULE
EXCHANGE AGENT SERVICES
McKESSON CORPORATION - 6.60% EXCHANGE NOTES DUE MARCH 1, 2000
-------------------------------------------------------------
I. Exchange Agency
---------------
A fee for the receipt of exchanged 6.60% Exchange Notes of McKesson
Corporation will be charged at $6.50 per letter of transmittal. The total
charge will be subject to a minimum of $2,000 and maximum of $5,000.
This fee covers examination and execution of all required documentation,
receipt of transmittal letters, reporting as required to the Company and
communication with DTC.
II. Miscellaneous
-------------
Fees for services not specifically covered in this schedule will be
assessed in amounts commensurate with the services rendered.
<PAGE>
SCHEDULE II
THE FIRST NATIONAL BANK OF CHICAGO
FEE SCHEDULE
EXCHANGE AGENT SERVICES
McKESSON CORPORATION - 6-7/8% EXCHANGE NOTES DUE MARCH 1, 2000
--------------------------------------------------------------
I. Exchange Agency
---------------
A fee for the receipt of exchanged 6-7/8% Exchange Notes of McKesson
Corporation will be charged at $6.50 per letter of transmittal. The total
charge will be subject to a minimum of $2,000 and maximum of $5,000.
This fee covers examination and execution of all required documentation,
receipt of transmittal letters, reporting as required to the Company and
communication with DTC.
II. Miscellaneous
-------------
Fees for services not specifically covered in this schedule will be
assessed in amounts commensurate with the services rendered.
<PAGE>
SCHEDULE III
THE FIRST NATIONAL BANK OF CHICAGO
FEE SCHEDULE
EXCHANGE AGENT SERVICES
McKESSON CORPORATION - 7.56% EXCHANGE DEBENTURES
DUE MARCH 1, 2000
-----------------
I. Exchange Agency
---------------
A fee for the receipt of exchanged 7.56% Exchange Debentures of McKesson
Corporation will be charged at $6.50 per letter of transmittal. The total
charge will be subject to a minimum of $2,000 and maximum of $5,000.
This fee covers examination and execution of all required documentation,
receipt of transmittal letters, reporting as required to the Company and
communication with DTC.
II. Miscellaneous
-------------
Fees for services not specifically covered in this schedule will be
assessed in amounts commensurate with the services rendered.
