<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 30, 1998
REGISTRATION NOS. 333-50985, 333-50985-01, 333-50985-02 AND 333-50985-03
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
<TABLE>
<S> <C> <C>
MCKESSON CORPORATION DELAWARE 94-3207296
MCKESSON FINANCING TRUST II DELAWARE 94-6723899
MCKESSON FINANCING TRUST III DELAWARE 94-6723900
MCKESSON FINANCING TRUST IV DELAWARE 94-6723902
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
MCKESSON PLAZA
ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL 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)
---------------
COPIES TO:
<TABLE>
<S> <C>
IVAN D. MEYERSON GREGG A. NOEL
VICE PRESIDENT AND GENERAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER
MCKESSON CORPORATION & FLOM LLP
MCKESSON PLAZA, ONE POST STREET 300 SOUTH GRAND AVENUE, SUITE 3400
SAN FRANCISCO, CALIFORNIA 94104 LOS ANGELES, CALIFORNIA 90071
(415) 983-8300 (213) 687-5000
</TABLE>
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
(Continued on next page)
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 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 89(a), MAY DETERMINE.
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<PAGE>
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PER UNIT(3) OFFERING PRICE FEE(6)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior debt securities, senior
subordinated debt securities,
subordinated debt securities and
junior subordinated debt
securities (collectively, "Debt
Securities") of McKesson
Corporation....................
Warrants of McKesson Corporation
to purchase Debt Securities....
Warrants of McKesson Corporation
to purchase Series Preferred
Stock or Depositary Shares.....
Warrants of McKesson Corporation
to purchase Common Stock.......
Series Preferred Stock of
McKesson Corporation...........
Depositary Shares of McKesson
Corporation....................
Common Stock of McKesson
Corporation....................
Rights to Purchase Series A Pre-
ferred Stock of McKesson Corpo-
ration(4)......................
Stock Purchase Contracts of Mc-
Kesson Corporation.............
Stock Purchase Units of McKesson
Corporation....................
Prepaid Stock Purchase Contracts
of McKesson Corporation........
Preferred Securities of McKesson
Financing Trust II.............
Preferred Securities of McKesson
Financing Trust III............
Preferred Securities of McKesson
Financing Trust IV.............
Guarantees of Preferred
Securities of McKesson Financing
Trust II, McKesson Financing
Trust III and McKesson Financing
Trust IV by McKesson
Corporation(5).................
$750,000,000 100% $750,000,000 $221,250.00
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</TABLE>
(1) Such indeterminate number or amount of Debt Securities, Warrants, Series
Preferred Stock, Depositary Shares, Common Stock, Stock Purchase Contracts
and Stock Purchase Units of McKesson Corporation and Preferred Securities
of McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV as may from time to time be issued at indeterminate
prices. Debt Securities may be issued and sold to McKesson Financing Trust
II, McKesson Financing Trust III and McKesson Financing Trust IV, in which
event such Debt Securities may later be distributed to the holders of
Preferred Securities.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign
currencies as shall result in an aggregate initial offering price for all
securities of $750,000,000. In addition, this Registration Statement
includes such presently indeterminate number of Offered Securities (as
defined herein) as may be issuable from time to time upon conversion or
exchange of the Offered Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and exclusive of accrued interest and dividends,
if any.
(4) Associated with the Common Stock of McKesson Corporation are rights to
purchase Series A Junior Participating Preferred Stock of McKesson
Corporation (the "Series A Preferred Stock") that will not be exercisable
or evidenced separately from the Common Stock prior to the occurrence of
certain events. No separate consideration will be received by the Company
for the initial issuance of the rights to purchase the Junior Preferred
Stock.
(5) McKesson is also registering under this registration statement all other
obligations that it may have with respect to Preferred Securities issued
by McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV. No separate consideration will be received for any
Guarantee or any other such obligations.
(6) Previously paid.
<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 SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 30, 1998
PROSPECTUS
$750,000,000
MCKESSON CORPORATION
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
-----------
MCKESSON FINANCING TRUST II
MCKESSON FINANCING TRUST III
MCKESSON FINANCING TRUST IV
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
MCKESSON CORPORATION
-----------
McKesson Corporation ("McKesson" or the "Company") may offer and sell from
time to time (i) its unsecured senior debt securities ("Senior Debt
Securities"), unsecured senior subordinated debt securities ("Senior
Subordinated Debt Securities"), unsecured subordinated debt securities
("Subordinated Debt Securities") or unsecured junior subordinated debt
securities ("Junior Subordinated Debt Securities" and together with the Senior
Debt Securities, Senior Subordinated Debt Securities and the Subordinated Debt
Securities, the "Debt Securities"), consisting of debentures, notes or other
evidences of indebtedness, (ii) shares of its Series Preferred Stock, par value
$0.01 per share (the "Preferred Stock"), which may be represented by depositary
shares as described herein, (iii) shares of its common stock, par value $0.01
per share (the "Common Stock") and any associated rights to purchase Series A
Preferred Stock (as defined herein), (iv) warrants to purchase any of the
foregoing Debt Securities, Preferred Stock and Common Stock (the "Warrants"),
(v) stock purchase contracts ("Stock Purchase Contracts") to purchase Common
Stock or (vi) stock purchase units ("Stock Purchase Units"), each representing
ownership of a Stock Purchase Contract and any of (x) the Debt Securities, (y)
debt obligations of third parties, including U.S. Treasury Securities or
(z) Preferred Securities (as defined herein) of a McKesson Trust (as defined
herein), securing the holder's obligation to purchase Common Stock under the
Stock Purchase Contract. Such securities may be offered in one or more separate
classes or series, in amounts, at prices and on terms to be determined by
market conditions and other factors at the time of sale and to be set forth in
a supplement or supplements to this Prospectus (a "Prospectus Supplement").
Such securities may be sold for U.S. dollars, foreign denominated currency or
currency units; amounts payable with respect to any such securities may
likewise be payable in U.S. dollars, foreign denominated currency or currency
units--in each case as the Company specifically designates.
McKesson Financing Trust II, McKesson Financing Trust III and McKesson
Financing Trust IV (each, a "McKesson Trust"), each a statutory business trust
formed under the laws of the State of Delaware, may offer and sell, from time
to time, preferred securities, which may be convertible into other securities
of the Company, representing undivided beneficial interests in the assets of
the respective McKesson Trust ("Preferred
(Continued on next page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DESCRIPTION
OF CERTAIN RISKS TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
OFFERED SECURITIES.
-----------
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 June , 1998.
<PAGE>
(Continued from previous page)
Securities"). The payment of periodic cash distributions ("Distributions")
with respect to Preferred Securities of each of the McKesson Trusts out of
monies held by the Institutional Trustee (as defined herein) of each of the
McKesson Trusts and payments on liquidation of each McKesson Trust and on
redemption of Preferred Securities of such McKesson Trust, will be guaranteed
by the Company as and to the extent described herein (each, a "Preferred
Securities Guarantee"). See "Description of the Preferred Securities
Guarantees." The Company's obligation under each Preferred Securities
Guarantee is an unsecured obligation of the Company. The terms of the
subordination, if any, of a Preferred Securities Guarantee will be set forth
in the applicable Prospectus Supplement. Debt Securities may be issued and
sold from time to time in one or more series by the Company to a McKesson
Trust, or a trustee of such McKesson Trust, in connection with the investment
of the proceeds from the offering of Preferred Securities and Common
Securities (as defined herein) of such McKesson Trust. The Debt Securities
purchased by a McKesson Trust may be subsequently distributed pro rata to
holders of Preferred Securities and Common Securities in connection with the
dissolution of such McKesson Trust upon the occurrence of certain events as
may be described in an accompanying Prospectus Supplement.
Specific terms of the particular Senior Debt Securities, Senior Subordinated
Debt Securities, Subordinated Debt Securities, Junior Subordinated Debt
Securities, Preferred Stock, Common Stock, rights to purchase Series A
Preferred Stock, Warrants, Stock Purchase Contracts, Stock Purchase Units,
Preferred Securities and the related Preferred Securities Guarantee, in
respect of which this Prospectus is being delivered (the "Offered Securities")
will be set forth in an accompanying Prospectus Supplement or Supplements,
together with the terms of the offering of the Offered Securities, the initial
price thereof and the net proceeds from the sale thereof. The Prospectus
Supplement will set forth with regard to the particular Offered Securities,
certain terms thereof, including, where applicable, (i) in the case of Senior
Debt Securities, Senior Subordinated Debt Securities, Subordinated Debt
Securities and Junior Subordinated Debt Securities, the ranking as senior,
senior subordinated, subordinated or junior subordinated Debt Securities, the
specific designation, aggregate principal amount, purchase price, maturity,
interest rate (which may be fixed or variable), if any, the terms of any
subordination to the other debt of the Company, the time and method of
calculating interest payments, if any, the right of the Company, if any, to
defer payments of interest on the Senior Subordinated Debt Securities,
Subordinated Debt Securities or Junior Subordinated Debt Securities and the
maximum length of such deferred period, time of payment of interest, if any,
listing, if any, on a securities exchange, authorized denomination, any
exchangeability, conversion, redemption, prepayment or sinking fund
provisions, the currency or currencies or currency unit or units in which
principal, premium, if any, or interest, if any, is payable, public offering
price and any other specific terms of the Debt Securities; (ii) in the case of
Preferred Stock, the specific designation, number of shares, purchase price
and the rights, preferences and privileges thereof and any qualifications or
restrictions thereon (including dividends, liquidation value, voting rights,
terms for the redemption, conversion or exchange thereof and any other
specific terms of the Preferred Stock), listing, if any, on a securities
exchange and whether the Company has elected to offer the Preferred Stock in
the form of depositary shares; (iii) in the case of Common Stock, the number
of shares offered, the initial offering price, market price and dividend
information; (iv) in the case of Warrants, the specific designation, the
number, purchase price and terms thereof, any listing of the Warrants or the
underlying securities on a securities exchange or any other terms in
connection with the offering, sale and exercise of the Warrants, as well as
the terms on which and the securities for which such Warrants may be
exercised; (v) in the case of Stock Purchase Contracts, the designation and
number of shares of Common Stock issuable thereunder, the purchase price of
the Common Stock, the date or dates on which the Common Stock is required to
be purchased by the holders of the Stock Purchase Contracts, any periodic
payments required to be made by the Company to the holders of the Stock
Purchase Contracts or vice versa, and the terms of the offering and sale
thereof; (vi) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any Debt Securities or debt obligations of third
parties or Preferred Securities of a McKesson Trust securing the holders'
obligation to purchase the Common Stock under the Stock Purchase Contracts,
the ability of a holder of such Stock Purchase Units to settle early the
underlying Stock Purchase Contract by delivering cash in exchange for the
underlying collateral and, if applicable, whether the Company will issue to
such holder a Prepaid Stock Purchase Contract as a result of such early
settlement and the specific terms of the Prepaid Stock Purchase Contract and
the terms of the offering and sale of such Stock
(continued on next page)
2
<PAGE>
(continued from previous page)
Purchase Units; and (vii) in the case of Preferred Securities of a McKesson
Trust, the specific designation, number of securities, liquidation amount per
security, initial public offering price, and any listing on a securities
exchange, distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall
accrue, voting rights, if any, terms for any conversion or exchange into other
securities, any redemption or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Debt Securities of
the Company.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
offering price to the public of the Offered Securities will be limited to
$750,000,000. Any Prospectus Supplement relating to any Offered Securities
will contain information concerning certain United States federal income tax
considerations, if applicable, to the Offered Securities.
----------------
The Company and/or each McKesson Trust may sell the Offered Securities
directly, through agents designated from time to time or through underwriters
or dealers. See "Plan of Distribution." If any agents of the Company and/or
any McKesson Trust or any underwriters or dealers are involved in the sale of
the Offered Securities, the names of such agents, underwriters or dealers and
any applicable commissions and discounts will be set forth in the related
Prospectus Supplement. The managing underwriter or underwriters with respect
to each series sold to or through underwriters will be named in the
accompanying Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
3
<PAGE>
AVAILABLE INFORMATION
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
Securities and Exchange Commission (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, Chicago, Illinois 60661, 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, at prescribed
rates. The Commission also maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants (including McKesson) that file electronically with the Commission
(at http://www.sec.gov). The Common Stock is listed on each of the New York
Stock Exchange, Inc. (the "NYSE") and the Pacific Exchange, Inc. (the "PE").
Reports, proxy statements, and other information concerning the Company may
also be inspected at the offices of the NYSE at 20 Broad Street, New York, New
York 10005 and at the offices of the PE at 301 Pine Street, San Francisco,
California 94104.
The Company and the McKesson Trusts have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement. In addition, certain documents filed by the
Company with the Commission have been incorporated in this Prospectus by
reference. See "Incorporation of Certain Documents by Reference." Statements
contained herein concerning the provisions of any document do not purport to
be complete and, in each instance, are qualified in all respects by reference
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is subject to and
qualified in its entirety by such reference. For further information with
respect to the Company, the McKesson Trusts and the securities offered hereby,
reference is made to the Registration Statement, any applicable Prospectus
Supplement and the documents incorporated herein and therein by reference.
No separate financial statements of any of the McKesson Trusts have been
included or incorporated by reference herein. The Company and the McKesson
Trusts do not consider that such financial statements would be material to
holders of the Preferred Securities because (i) all of the voting securities
of each McKesson Trust will be owned, directly or indirectly, by the Company,
a reporting company under the Exchange Act, (ii) each of the McKesson Trusts
is a special purpose entity, has no operating history, has no independent
operations and is not engaged in, and does not propose to engage in, any
activity other than issuing Trust Securities (as defined herein) representing
undivided beneficial interests in the assets of such McKesson Trust and
investing the proceeds thereof in Debt Securities issued by the Company and
(iii) McKesson's obligations described herein and in any accompanying
Prospectus Supplement under the Declaration (as defined herein) of a McKesson
Trust, the Preferred Securities Guarantee with respect to the Preferred
Securities issued by such McKesson Trust, the Debt Securities purchased by
such McKesson Trust and the Indenture (as defined herein), taken together,
constitute a full and unconditional guarantee of payments due on the Preferred
Securities of such McKesson Trust. See "The McKesson Trusts," "Description of
the Preferred Securities," "Description of the Preferred Securities
Guarantees" and "Description of the Debt Securities." The McKesson Trusts are
statutory business trusts formed under the laws of the State of Delaware. The
Company, as of the date of this Prospectus, owns all of the beneficial
interests in each McKesson Trust. Each holder of Preferred Securities of a
McKesson Trust will be furnished annually with unaudited financial statements
of such McKesson Trust as soon as available after the end of the McKesson
Trust's fiscal year.
4
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the following
documents previously 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, 1998,
filed on June 18, 1998.
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).
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 of the securities offered hereby shall be
deemed to be incorporated by reference in the Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained 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.
The Company will provide without charge to each person, including any
beneficial owner to whom this Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the information that has
been incorporated by reference in the Prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). 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
(415) 983-8300).
----------------
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY MCKESSON TRUST OR ANY UNDERWRITER, DEALER OR
AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO
WHICH IT RELATES IN ANY JURISDICTION WHERE, 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 NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY OR ANY MCKESSON TRUST SINCE
THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.............. 4
Incorporation of Certain Documents
by Reference...................... 5
The Company........................ 6
Risk Factors....................... 7
The McKesson Trusts................ 8
Use of Proceeds.................... 10
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Stock
Dividends......................... 10
Description of Debt Securities..... 10
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Capital Stock....... 18
Description of Depositary Shares... 22
Description of Warrants............ 26
Description of Preferred
Securities........................ 28
Description of Preferred Securities
Guarantee......................... 29
Description of Stock Purchase
Contracts and Stock Purchase
Units............................. 32
Plan of Distribution............... 32
Legal Matters...................... 34
Experts............................ 34
</TABLE>
----------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars" or
"U.S.$").
5
<PAGE>
THE COMPANY
McKesson is the leading health care supply management company in North
America. The Company also develops and manages innovative marketing programs
for pharmaceutical manufacturers and, through McKesson Water Products Company
("Water Products"), processes and markets pure drinking water.
The Company's objective is to become the world leader in health care supply
across the entire supply chain, from manufacturer to patient. The Company
conducts its operations through two operating business segments: the Health
Care Services segment and Water Products segment.
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.
6
<PAGE>
RISK FACTORS
RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS
An element of the Company's growth strategy is to pursue strategic
acquisitions that either expand or complement its business, and McKesson
routinely reviews such potential acquisition opportunities. 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, delays or
difficulties in opening and operating larger distribution centers in an
integrated distribution network, the assimilation and retention of the
personnel of the acquired companies, challenges in retaining the customers of
the combined businesses and potential adverse short-term effects on 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 HEALTH CARE ENVIRONMENT
In recent years, the health care industry has undergone significant change
driven by various efforts to reduce costs, including potential national health
care reform, trends toward managed care, cuts in Medicare, consolidation of
pharmaceutical and medical/surgical supply distributors and the development of
large, sophisticated purchasing groups. This industry is expected to continue
to undergo significant changes for the foreseeable future. Changes in
governmental support of health care services, the method by which such
services are delivered or the prices for such services, or other legislation
or regulations governing such services or mandated benefits, or changes in
pharmaceutical manufacturers' pricing or distribution policies, may have a
material adverse effect on the Company's results of operations.
COMPUTER TECHNOLOGIES
McKesson relies heavily on computer technologies to operate its business. As
a result, McKesson continuously seeks to upgrade and improve its computer
systems in order to provide better service to its customers and to support the
Company's growth. McKesson has conducted an assessment of its computer systems
and has begun to make the changes necessary to make its computer systems Year
2000 compliant. McKesson believes that with modifications to or replacements
of its existing computer-based systems, it will be Year 2000 compliant by
March 31, 1999, although the Company cannot provide any assurance in this
regard. McKesson's systems rely in part on the computer-based systems of its
trading partners. As part of the Company's assessment, an overview of certain
of its trading partners' Year 2000 compliance strategies is being performed,
and the Company plans to conduct extensive systems testing with such trading
partners during calendar 1999. Nevertheless, if any trading partner or other
entity upon which they rely failed to become Year 2000 compliant, McKesson
could be adversely affected. The Company incurred approximately $7 million in
fiscal 1998 and expects to incur between $10 and $15 million in each of the
next two fiscal years in costs associated with modifications to the Company's
existing systems to make them Year 2000 compliant and related testing,
including planned testing with trading partners. Such costs are being expensed
as incurred. Year 2000 project costs are difficult to estimate accurately, and
the projected costs could change due to unanticipated technological
difficulties, project vendor delays, and project vendor cost overruns. The
inability of the Company to successfully complete its Year 2000 compliance
project or to maintain computer systems that meet the Company's and its
customers' needs could have an adverse effect on the Company.
7
<PAGE>
THE MCKESSON TRUSTS
Each of McKesson Financing Trust II, McKesson Financing Trust III and
McKesson Financing Trust IV is a statutory business trust formed in April 1998
under the Delaware Business Trust Act (the "Business Trust Act") pursuant to
(i) separate declarations of trust executed by the Company, as sponsor and the
MFT Trustees (as defined herein) of such McKesson Trust and (ii) the filing of
a certificate of trust with the Secretary of State of the State of Delaware.
Such declaration will be amended and restated in its entirety (as so amended
and restated, the "Declaration") substantially in the form filed as an exhibit
to the Registration Statement of which this Prospectus forms a part. Each
Declaration is qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). Upon issuance of any Preferred Securities by a
McKesson Trust, the holders thereof will own all of the issued and outstanding
Preferred Securities of such McKesson Trust. The Company will acquire
securities representing common undivided beneficial interests in the assets of
each McKesson Trust (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") in an amount equal to at least 3% of the
total capital of such McKesson Trust and will own, directly or indirectly, all
of the issued and outstanding Common Securities of each McKesson Trust. The
Preferred Securities and the Common Securities of a McKesson Trust will rank
pari passu with each other and will have equivalent terms; provided that (i)
if a Declaration Event of Default under the Declaration of a McKesson Trust as
defined therein occurs and is continuing, the holders of Preferred Securities
of such McKesson Trust will have a priority over holders of the Common
Securities of such McKesson Trust with respect to payments in respect of
distributions and payments upon liquidation, redemption and maturity and (ii)
holders of Common Securities of such McKesson Trust have the exclusive right
(subject to the terms of the Declaration) to appoint, remove or replace the
MFT Trustees and to increase or decrease the number of MFT Trustees, subject
to the right of holders of Preferred Securities, if so provided in the
Prospectus Supplement, to appoint one additional Regular Trustee (as defined
herein) of such McKesson Trust (a "Special Regular Trustee") in certain
limited circumstances. Each McKesson Trust exists for the purpose of (a)
issuing its Preferred Securities, (b) issuing its Common Securities to the
Company, (c) investing the gross proceeds from the sale of the Trust
Securities in Debt Securities of the Company and (d) engaging in such other
activities as are necessary, convenient or incidental thereto. The rights of
the holders of the Trust Securities, including economic rights, rights to
information and voting rights, are set forth in the applicable Declaration,
the Business Trust Act and the Trust Indenture Act.
The number of trustees (the "MFT Trustees") of each McKesson Trust will
initially be five. Three of such MFT Trustees (the "Regular Trustees") are
persons who are employees or officers of or who are affiliated with the
Company. The fourth trustee will be an entity that maintains its principal
place of business in the State of Delaware (the "Delaware Trustee"). The fifth
Trustee will be a financial institution that is unaffiliated with McKesson and
will serve as institutional trustee (the "Institutional Trustee") under the
Declaration and will act as indenture trustee under the Declaration for the
purposes of compliance with the provisions of the Trust Indenture Act.
The Institutional Trustee will, for the applicable McKesson Trust, hold
title to the Debt Securities for the benefit of the holders of the Trust
Securities and the Institutional Trustee will have the power to exercise all
rights, powers and privileges under the Indenture as the holder of the Debt
Securities. In addition, the Institutional Trustee will maintain exclusive
control of a segregated non-interest bearing bank account (the "Property
Account") to hold all payments made in respect of the Debt Securities of a
McKesson Trust for the benefit of the holders of the Trust Securities of that
Trust. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Preferred Securities
Guarantee Trustee (as defined herein) will hold the Preferred Securities
Guarantee for the benefit of the holders of the Preferred Securities. The
Company, as the direct or indirect holder of all of the Common Securities,
will have the right to appoint, remove or replace any of the MFT Trustees
(other than a Special Regular Trustee) and to increase or decrease the number
of MFT Trustees. The Company will pay fees and expenses related to each
McKesson Trust and the offering of the Trust Securities.
8
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The business address of each McKesson Trust is c/o McKesson Corporation,
McKesson Plaza, One Post Street, San Francisco, California 94104, telephone
number (415) 983-8300.
The foregoing description summarizes the material terms of the Declaration
and is qualified in its entirely by reference to the form of Declaration which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
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<PAGE>
USE OF PROCEEDS
Each McKesson Trust will use all proceeds received from the sale of its
Trust Securities to purchase Debt Securities of the Company. Unless otherwise
set forth in a Prospectus Supplement with respect to the proceeds from the
sale of the particular Offered Securities to which such Prospectus Supplement
relates, the net proceeds from the sale of the Offered Securities are expected
to be used by the Company for general corporate purposes, including repayment
or redemption of outstanding debt or preferred stock, the possible acquisition
of related businesses or assets thereof, and working capital needs. The
Company routinely reviews opportunities to acquire related businesses or
assets thereof.
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
-------------------------------
1998 1997 1996 1995(3) 1994
----- ----- ----- ------- -----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1)...... 2.91x 1.53x 4.71x -- 3.42x
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends(2).......... 2.91x 1.53x 4.71x -- 2.81x
</TABLE>
- --------
(1) The ratio of earnings to fixed charges was computed by dividing fixed
charges (interest expense, the portion of rental expense under operating
leases deemed by the Company to be representative of the interest factor
and dividends on preferred securities of a subsidiary grantor trust) into
earnings available for fixed charges (income from continuing operations
plus taxes on income and fixed charges).
(2) The ratio of earnings to combined fixed charges and preferred stock
dividends was computed by dividing fixed charges and preferred stock
dividends into earnings available for fixed charges.
(3) The ratios of earnings to fixed charges and earnings to combined fixed
charges and preferred stock dividends were less than 1.0x, (0.01x) in
fiscal 1995. The deficiency in the ratio of earnings to fixed charges was
$53.5 million, and the deficiency in the ratio of earnings to fixed
charges and preferred stock dividends was $58.5 million.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the applicable Prospectus
Supplement relating to such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more series,
and will consist of either Senior Debt Securities, Senior Subordinated Debt
Securities, Subordinated Debt Securities or Junior Subordinated Debt
Securities under an Indenture, (the "Indenture") between the Company and a
trustee (including any successor trustee and each person which is a trustee
under the Indenture including, with respect to the Debt Securities of any
series, the trustee with respect to the Debt Securities of such series, the
"Trustee"). The Indenture will be in the form that has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part,
subject to such amendments or supplements as are adopted from time to time.
The Indenture will be subject to and governed by certain provisions of the
Trust Indenture Act. Prospective purchasers of the Debt Securities are
referred to the Indenture and the Trust Indenture Act for a statement of such
provisions. Capitalized terms used in this section which are not otherwise
defined in this Prospectus shall have the meanings set forth in the Indenture.
The following summaries of certain provisions of the Debt Securities and the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by express reference to, all the provisions of the
Indenture, including the definitions therein of certain terms.
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<PAGE>
The Debt Securities will be direct, unsecured obligations of the Company.
The Indenture does not limit the aggregate principal amount of Debt Securities
that may be issued thereunder and provides that Debt Securities may be issued
thereunder from time to time in one or more series. Under the Indenture, the
Company will have the ability to issue Debt Securities with terms different
from those of Debt Securities previously issued.
The applicable Prospectus Supplement or Prospectus Supplements relating to
any Senior Subordinated Debt Securities, Subordinated Debt Securities or
Junior Subordinated Debt Securities will set forth the aggregate amount of
outstanding indebtedness, as of the most recent practicable date, that by the
terms of such Debt Securities would be senior to such Debt Securities and any
limitation on the issuance of additional senior indebtedness.
Debt Securities may be issued as discount securities, which may be sold at a
discount below their principal amount. These Debt Securities as well as other
Debt Securities that are not issued at a discount below their principal
amount, may, for United States federal income tax purposes, be deemed to have
been issued with "original issue discount" ("OID") because of, among other
things, certain interest payment characteristics. Special United States
federal income tax considerations applicable to Debt Securities issued with
original issue discount, including discount securities, will be described in
more detail in any applicable Prospectus Supplement. In addition, special
United States federal income tax considerations or other restrictions or terms
applicable to any Debt Securities which are issuable in bearer form, offered
exclusively to United States Aliens, denominated in a currency other than
United States dollars or having certain other characteristics will be set
forth in the Prospectus Supplement relating thereto.
The applicable Prospectus Supplement or Prospectus Supplements will
describe, among other things, the following terms of the Debt Securities
offered thereby (the "Offered Debt Securities"): (i) the title of the Offered
Debt Securities; (ii) any limit on the aggregate principal amount of the
Offered Debt Securities; (iii) whether the Offered Debt Securities are to be
issuable as registered securities or bearer securities or both and whether the
Offered Debt Securities may be represented initially by a Debt Security in
temporary or permanent global form, and if so, the initial Depositary (as
defined herein) with respect to such temporary or permanent global Debt
Security and whether, and the circumstances under which, beneficial owners of
interests in any such temporary or permanent global Debt Security may exchange
such interests for Debt Securities of such series and of like tenor of any
authorized form and denomination; (iv) the price or prices at which the
Offered Debt Securities will be issued; (v) the date or dates on which the
principal of the Offered Debt Securities is payable or the method of
determination thereof; (vi) the place or places where and the manner in which
the principal of and premium, if any, and interest, if any, on such Offered
Debt Securities will be payable and the place or places where such Offered
Debt Securities may be presented for transfer and, if applicable, conversion
or exchange; (vii) the rate or rates at which the Offered Debt Securities will
bear interest, or the method of calculating such rate or rates, if any, and
the date or dates from which such interest, if any, will accrue; (viii) the
stated maturities of installments of interest, if any, on which any interest
on the Offered Debt Securities will be payable, and the record date for any
interest payable on any Offered Debt Securities which are registered
securities; (ix) the terms, if any, on which the Offered Debt securities of
any series will be subordinated to other debt of the Company; (x) the right or
obligation, if any, of the Company to redeem or purchase Offered Debt
Securities of the series pursuant to any sinking fund or analogous provisions
or at the option of a holder thereof, the conditions, if any, giving rise to
such right or obligation, and the period or periods within which, and the
price or prices at which and the terms and conditions upon which Offered Debt
Securities of the series shall be redeemed or purchased, in whole or part, and
any provisions for the remarketing of such Offered Debt Securities; (xi)
whether such Offered Debt Securities are convertible or exchangeable into
other debt or equity securities, and, if so, the terms and conditions upon
which such conversion or exchange will be effected, including the initial
conversion or exchange price or rate and any adjustments thereto, the
conversion or exchange period and other conversion or exchange provisions;
(xii) the currency or currencies, including composite currencies or currency
units, of payment of principal of and interest, if any, on the Offered Debt
Securities, if other than U.S. dollars, and, if other than U.S. dollars,
whether the Offered Debt Securities may be satisfied and discharged other than
as provided in the Indenture and whether the Company or the holders of any
such Offered Debt Securities may elect to receive payments in respect of such
Offered Debt Securities in a currency or currency units other than that in
which
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<PAGE>
such Offered Debt Securities are stated to be payable; (xiii) any terms
applicable to such Offered Debt Securities issued at an issue price below
their stated principal amount, including the issue price thereof and the rate
or rates at which such original issue discount will accrue; (xiv) if the
amount of payments of principal of and interest, if any, on the Offered Debt
Securities is to be determined by reference to an index or formula, or based
on a coin or currency or currency unit other than that in which the Offered
Debt Securities are stated to be payable, the manner in which such amounts are
to be determined and the calculation agent, if any, with respect thereto;
(xv) if other than the principal amount thereof, the portion of the principal
amount of the Offered Debt Securities which will be payable upon declaration
or acceleration of the maturity thereof pursuant to an Event of Default (as
defined in the Indenture); (xvi) any deletions from, modifications of or
additions to the Events of Default or covenants of the Company with respect to
such Offered Debt Securities, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set forth
herein; (xvii) any special United States Federal income tax considerations
applicable to the Offered Debt Securities; and (xviii) any other terms of the
Offered Debt Securities not inconsistent with the provisions of the Indenture.
The applicable Prospectus Supplement will also describe the following terms of
any series of Senior Subordinated, Subordinated or Junior Subordinated Debt
Securities offered hereby in respect of which this Prospectus is being
delivered: (a) the rights, if any, to defer payments of interest on the Senior
Subordinated, Subordinated or Junior Subordinated Debt Securities of such
series by extending the interest payment period, and the duration of such
extensions, and (b) the subordination terms of the Senior Subordinated,
Subordinated or Junior Subordinated Debt Securities of such series. The
foregoing is not intended to be an exclusive list of the terms that may be
applicable to any Offered Debt Securities and shall not limit in any respect
the ability of the Company to issue Debt Securities with terms different from
or in addition to those described above or elsewhere in this Prospectus
provided that such terms are not inconsistent with the Indenture. Any such
Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Offered Debt Securities.
GLOBAL DEBT SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Securities (a "Registered Global Security")
that will be deposited with a depositary (a "Depositary") or with a nominee
for a Depositary identified in the Prospectus Supplement relating to such
series and registered in the name of the Depositary or a nominee thereof. In
such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Securities. Unless and until
it is exchanged in whole for Debt Securities in definitive registered form, a
Registered Global Security may not be transferred except as a whole by the
Depositary for such Registered Global Security 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 of
such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the
Depositary for such Registered Global Security will credit, on its book-entry
registration and transfer system, the participants' accounts with the
respective principal amounts of the Debt Securities represented by such
Registered Global Security beneficially owned by such participants. The
accounts to be credited shall be designated by any dealers, underwriters or
agents participating in the distribution of such Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of
12
<PAGE>
such securities in definitive form. Such limits and such laws may impair the
ability to own, transfer or pledge beneficial interests in Registered Global
Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Debt Securities represented by such Registered Global Security for all
purposes under the Indenture. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the
Debt Securities represented by such Registered Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
such Debt Securities in definitive form and will not be considered the owners
or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Registered Global Security must rely on the
procedures of the Depositary for such Registered Global Security and, if such
person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the Indenture. The Company understands that under existing industry practices,
if the Company requests any action of holders or if an owner of a beneficial
interest in a Registered Global Security desires to give or take any action
which a holder is entitled to give or take under the Indenture, the Depositary
for such Registered Global Security would authorize the participants holding
the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such
participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal and premium, if any, and interest, if any, of Debt
Securities represented by a Registered Global Security registered in the name
of a Depositary or its nominee will be made to such Depositary or its nominee,
as the case may be, as the registered owners of such Registered Global
Security. None of the Company, the Trustee or any other agent of the Company
or agent of 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 such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payments of principal and
premium, if any, and interest, if any, in respect of such Registered Global
Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants
will be governed by standing customer instructions and customary practices, as
is now the case with the securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of
such participants.
If the Depositary for any Debt Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or
ceases to be a clearing agency registered under the Exchange Act, and a
successor Depositary registered as a clearing agency under the Exchange Act is
not appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in a definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities. Any Debt Securities
issued in definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received
by the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
Bearer Debt Securities of a series may also be issued in the form of one or
more global Securities (a "Bearer Global Security") that will be deposited
with a common depositary for Euroclear System and Cedel Bank, societe anonyme,
or with a nominee for such depositary identified in the Prospectus Supplement
relating to such series. The specific terms and procedures, including the
specific terms of the depositary arrangement and any
13
<PAGE>
specific procedures for the issuance of Debt Securities in definitive form in
exchange for a Bearer Global Security, with respect to any portion of a series
of Debt Securities to be represented by a Bearer Global Security will be
described in the Prospectus Supplement relating to such series.
SENIOR DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Senior Debt
Securities issued under the Indenture will rank pari passu with all other
unsecured and unsubordinated debt of the Company.
SENIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Senior
Subordinated Debt Securities issued under the Indenture will be junior in
right of payment to the extent and in the manner set forth in the resolutions
of the Board of Directors of the Company ("Board Resolutions") or certificate
executed by an authorized officer of the Company ("Officer's Certificate")
establishing such series of Senior Subordinated Debt Securities to all
unsubordinated debt of the Company, including Senior Debt Securities.
SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Subordinated
Debt Securities issued under the Indenture will be subordinate and junior in
right of payment to the extent and in the manner set forth in the Board
Resolutions or the Officer's Certificate establishing such series of
Subordinated Debt Securities to all Senior Debt and Senior Subordinated Debt
of the Company.
JUNIOR SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Junior
Subordinated Debt Securities issued under the Indenture will be subordinate
and junior in right of payment, to the extent and in the manner set forth in
the Board Resolutions or the Officer's Certificate establishing such series of
Junior Subordinated Debt Securities to all Senior Debt Securities, Senior
Subordinated Debt Securities, Subordinated Debt Securities and may be
subordinate and junior in right of payment to all other debt of the Company.
CONVERSION OR EXCHANGE RIGHTS
The terms and conditions, if any, on which Offered Debt Securities are
convertible at the election of the holder of such Offered Debt Securities or
may be exchanged at the election of the Company into Common Stock, Preferred
Stock or any other security of the Company will be set forth in the Prospectus
Supplement relating thereto. Such terms will include the conversion price, the
conversion or exchange period, provisions as to whether conversion will be at
the option of the holder or exchangeable at the option of the Company, the
events requiring an adjustment of the conversion or exchange price and
provisions affecting conversion or exchange in the event of the redemption of
such Offered Debt Securities; and such terms may include provisions under
which the number of shares of Common Stock to be received by the holders of
the Offered Debt Securities would be calculated according to the market price
of the Common Stock as of a time stated in the Prospectus Supplement.
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 Debt Securities and under the Indenture, and
immediately after giving effect to such transaction no Event of Default 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,
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<PAGE>
subject to certain exceptions, the Company shall be discharged from all
obligations under the Debt Securities 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.
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 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 such Trustee to institute such action and shall have offered
the Trustee reasonable indemnity, such Trustee shall not have instituted such
action within 60 days of such request and such 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.
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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 applicable 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 any covenants imposed by a series
of Debt Securities, certain provisions of the Indenture and omit to comply
with such covenants 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 Service or a change in United States federal
income tax law occurring after June 30, 1998, since such a result would not
occur under then 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, (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, eliminate or waive 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 (other than as
otherwise may be provided with respect to such series), 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.
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CONCERNING THE TRUSTEE
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. If there are
different Trustees for different series of Debt Securities, each Trustee shall
be a Trustee of a trust under the Indenture separate and apart from the trust
administered by any other Trustee thereunder, and except as otherwise indicate
herein or a Prospectus Supplement, any action described herein taken by a
Trustee may be taken by such Trustee only with respect to the one or more
series of Debt Securities for which it is the Trustee under the Indenture. Any
Trustee under the Indenture may resign or be removed with respect to one or
more series of Debt Securities. 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
Debt Securities) of, the Debt Securities 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 any Trustee's duties with
respect to the Debt Securities, such Trustee shall either eliminate such
conflicting interest or, except as otherwise provided in the Trust Indenture
Act, 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 any Trustee in personal liability. The
Indenture provides that in case an Event of Default shall occur and be known
to any Trustee (and not be cured), such Trustee will be required to use the
degree of care of a prudent person in the conduct of his or her 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.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, STOCKHOLDERS OR INCORPORATORS
The Indenture will provide 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 Debt Securities or the Indenture or for any claim based on, in respect or,
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.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
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DESCRIPTION OF CAPITAL STOCK
The following descriptions of the Company's capital stock and of certain
provisions of Delaware law do not purport to be complete and are subject to
and qualified in their entirety by reference to the Company's Restated
Certificate of Incorporation (the "Certificate") and Restated By-Laws (the
"By-Laws") and Delaware law, and, with respect to certain rights of holders of
shares of Common Stock, the Rights Agreement (as defined herein). Copies of
such documents have been filed with the Commission and are filed as exhibits
to the Registration Statement of which this Prospectus is a part.
As of the date hereof, the capital stock of the Company consists of
200,000,000 authorized shares of Common Stock and 100,000,000 authorized
shares of Preferred Stock.
COMMON STOCK
As of June 1, 1998, there were 94,929,952 shares of Common Stock issued and
outstanding.
The holders of outstanding shares of Common Stock are entitled to receive
dividends out of assets legally available therefor at such times and in such
amounts as the Company's Board of Directors (the "Board") may from time to
time determine. The shares of Common Stock are neither redeemable nor
convertible, and the holders thereof have no preemptive or subscription rights
to purchase any securities of the Company. Upon liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to receive
the assets of the Company which are legally available for distribution, after
payment of all debts, other liabilities and any liquidation preferences of
outstanding Preferred Stock. Each outstanding share of Common Stock is
entitled to one vote on all matters submitted to a vote of stockholders. There
is no cumulative voting.
In February 1997, McKesson Financing Trust issued an aggregate of 4,123,720
5% Trust Convertible Preferred Securities (each, a "Trust Security"). Each
Trust Security is convertible into Common Stock at any time prior to the close
of business on the business day prior to June 1, 2027 (or prior to the date of
redemption of the Trust Security), at the option of the holder, at the rate of
1.3418 shares of Common Stock for each Trust Security (equivalent to a
conversion price of $37.26 per share of Common Stock), subject to adjustment
in certain circumstances.
PREFERRED STOCK
As of the date hereof, there were no shares of Preferred Stock issued and
outstanding. The Board is authorized to issue the Preferred Stock in classes
or series and to fix the designations, preferences, qualifications,
limitations, or restrictions of any class or series with respect to the rate
and nature of dividends, the price and terms and conditions on which shares
may be redeemed, the amount payable in the event of voluntary or involuntary
liquidation, the terms and conditions for conversion or exchange into any
other class or series of the stock, voting rights and other terms. Of the
Preferred Stock, 10,000,000 shares have been designated Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock") and reserved
for issuance pursuant to the Company's Rights Agreement.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION AND BY-LAWS
The Certificate and By-Laws of the Company contain certain provisions that
may be deemed to have an anti-takeover effect and may delay, deter or prevent
a tender offer or takeover attempt that a stockholder might consider in its
best interest, including those attempts that might result in a premium over
the market price for the shares held by stockholders.
Pursuant to the Certificate, the Board is divided into three classes serving
staggered three-year terms. Directors can be removed from office only for
cause and only by the affirmative vote of the holders of at least a majority
of the voting power of the then outstanding shares of any class or series of
capital stock of the Company entitled to vote generally in the election of
directors. Vacancies and newly created directorships on the Board may be
filled only by a majority of the remaining directors or by the plurality vote
of the stockholders.
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The Certificate also provides that any action required or permitted to be
taken by the holders of Common Stock may be effected only at an annual or
special meeting of such holders, and that stockholders may act in lieu of such
meetings only by unanimous written consent. The By-Laws provide that special
meetings of holders of Common Stock may be called only by the Chairman or the
President of the Company or the Board. Holders of Common Stock are not
permitted to call a special meeting or to require that the Board call a
special meeting of stockholders.
The By-Laws establish an advance notice procedure for the nomination, other
than by or at the direction of the Board, of candidates for election as
directors as well as for other stockholder proposals to be considered at
annual meetings of stockholders. In general, notice of intent to nominate a
director or raise business at such meetings must be received by the Company
not less than 60 nor more than 90 days prior to the date of the annual meeting
and must contain certain specified information concerning the person to be
nominated or the matters to be brought before the meeting and concerning the
stockholder submitting the proposal.
The Certificate also provides that certain provisions of the By-Laws may
only be amended by the affirmative vote of the holders of 75% of the shares of
the Company outstanding and entitled to vote. The Certificate also provides
that, in addition to any affirmative vote required by law, the affirmative
vote of holders of 80% of the voting stock of the Company and two-thirds of
the voting stock other than voting stock held by an interested stockholder
shall be necessary to approve certain business combinations proposed by an
interested stockholder.
The foregoing summary is qualified in its entirety by the provisions of the
Certificate and By-Laws, copies of which have been filed with the Commission.
RIGHTS PLAN
Pursuant to the Company's Rights Agreement, the Board declared a dividend
distribution of one right (a "Right") for each outstanding share of Common
Stock to stockholders of record of the Company at November 1, 1994 (the
"Record Date"). As a result of the two-for-one stock split effective January
2, 1998, each share of the Common Stock has attached to it one-half of a
Right. Each Right entitles the registered holder to purchase from the Company
a unit consisting of one one-hundredth of a share of Series A Preferred Stock
at a purchase price of $100 per unit. The Rights expire on October 21, 2004,
unless redeemed earlier by the Board. The terms of the Rights are set forth in
a Rights Agreement between the Company and a Rights Agent (the "Rights
Agreement"), a copy of which is filed with the Commission. The following
summary outlines certain provisions of the Rights Agreement and is qualified
by reference to the full text of the form of the Rights Agreement.
The Rights are attached to all Common Stock certificates representing shares
outstanding at the Record Date and shares issued between the Record Date and
the Distribution Date (as defined herein), and no separate rights certificates
(the "Rights Certificates") have been distributed. The Rights will separate
from the Common Stock, separate Rights Certificates will be issued and a
distribution date (the "Distribution Date") will occur upon the earlier to
occur of (i) ten business days following the date of a public announcement
that there is an Acquiring Person (as defined herein) (such date, the "Stock
Acquisition Date"), (ii) ten business days (or such later date as the Board
may determine) following commencement of a tender or exchange offer that would
result in the offeror beneficially owning 15% or more of the Common Stock or
(iii) ten business days after the Board determines that the ownership of 10%
or more of the Company's outstanding Common Stock by a person is (A) intended
to cause the Company to repurchase the Common Stock beneficially owned by such
person or (B) is causing, or is reasonably likely to cause, a material adverse
impact on the Company.
The term "Acquiring Person" means any person who, together with affiliates
and associates, acquires beneficial ownership of shares of Common Stock
representing 15% or more of the Common Stock, but shall not include the
Company, any subsidiary of the Company, any employee benefit plan of the
Company or of any subsidiary of the Company, or any person or entity
organized, appointed or established by the Company for or pursuant to the
terms of such plan.
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In the event that a person becomes an Acquiring Person (except pursuant to
an offer for all outstanding shares of Common Stock which the independent
directors determine to be fair to and otherwise in the best interests of the
Company and its stockholders), each holder of a Right will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a calculated value
equal to two times the exercise price of the Right. Notwithstanding the
foregoing, following the occurrence of such event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person and certain related persons and
transferees will be null and void. However, Rights are not exercisable
following the occurrence of such event until such time as the Rights are no
longer redeemable as set forth below.
At any time prior to the tenth day following the Stock Acquisition Date, the
Company may redeem the Rights, in whole, but not in part, at a price of $.01
per Right.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including without limitation, the right to
vote or to receive dividends.
In general, the Rights Agreement may be amended by the Board (i) prior to
the Distribution Date in any manner, and (ii) on or after the Distribution
Date in certain respects including (a) to shorten or lengthen at any time
period and (b) in a manner not adverse to the interests of Rights holders.
However, amendments extending the redemption period must be made while the
Rights are still redeemable.
The Rights have certain anti-takeover effects and will cause substantial
dilution to a person or group that attempts to acquire the Company on terms
not approved by the Board. The Rights should not interfere with any merger or
other business combination approved by the Board, since the Board may redeem
the Rights as provided above.
SECTION 203 OF DELAWARE GENERAL CORPORATION LAW
The Company is subject to the "business combination" statute of the Delaware
General Corporation Law (Section 203). In general, such statute prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with any "interested stockholder" for a period of three years after the date
of the transaction in which the person became an "interested stockholder,"
unless (i) such transaction is approved by the board of directors prior to the
date the interested stockholder obtains such status, (ii) upon consummation of
such transaction, the "interested stockholder" beneficially owned at least 85%
of the voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned by (a) persons who are directors and also
officers and (b) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer, or (iii) the "business
combination" is approved by the board of directors and authorized at an annual
or special meeting of stockholders by the affirmative vote of at least 66 2/3%
of the outstanding voting stock which is not owned by the "interested
stockholder." A "business combination" includes mergers, asset sales and other
transactions resulting in financial benefit to the "interested stockholder."
An "interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) beneficially 15% or more of
a corporation's voting stock. The statute could prohibit or delay mergers or
other takeover or change in control attempts with respect to the Company and,
accordingly, may discourage attempts to acquire the Company.
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
The Company's authorized but unissued shares of Common Stock and Preferred
Stock may be issued without additional stockholder approval and may be
utilized for a variety of corporate purposes, including future offerings to
raise additional capital or to facilitate corporate acquisitions.
The issuance of Preferred Stock could have the effect of delaying or
preventing a change in control of the Company. The issuance of Preferred Stock
could decrease the amount of earnings and assets available for
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distribution to the holders of Common Stock or could adversely affect the
rights and powers, including voting rights, of the holders of the Common
Stock. In certain circumstances, such issuance could have the effect of
decreasing the market price of the Common Stock.
One of the effects of the existence of unissued and unreserved Common Stock
or Preferred Stock may be to enable the Board to issue shares to persons
friendly to current management which could render more difficult or discourage
an attempt to obtain control of the Company by means of a merger, tender
offer, proxy contest or otherwise, and thereby protect the continuity of
management. Such additional shares also could be used to dilute the stock
ownership of persons seeking to obtain control of the Company.
The Company plans to issue additional shares of Common Stock (i) in
connection with its employee benefit plans and (ii) upon conversion of the
Trust Securities. The Company does not currently have any plans to issue
shares of Preferred Stock, although, 10,000,000 shares of Series A Preferred
Stock have been designated pursuant to the Company's Rights Agreement.
LIMITATION OF DIRECTORS LIABILITY
The Certificate contains a provision that limits the liability of the
Company's directors for monetary damages for breach of fiduciary duty as a
director to the fullest extent permitted by the Delaware General Corporation
Law. Such limitation does not, however, affect the liability of a director (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or purchases and (iv)
for any transaction from which the director derives an improper personal
benefit. The effect of this provision is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
the fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit or eliminate the
rights of the Company or any stockholder to seek non-monetary relief such as
an injunction or rescission in the event of a breach of a director's duty of
care. In addition, the directors and officers of the Company have
indemnification protection.
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DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The following description sets forth certain general terms and provisions of
the Depositary Shares to which any Prospectus Supplement may relate. The
particular terms of the Depositary Shares to which any Prospectus Supplement
may relate and the extent, if any, to which such general provisions may apply
to the Depositary Shares so offered will be described in the applicable
Prospectus Supplement.
The Company may, at its option, elect to offer fractional shares of the
Preferred Stock of a series, rather than full shares of the Preferred Stock of
such series. In the event such option is exercised, the Company will issue
receipts for Depositary Shares, each of which will represent a fraction (to be
set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock) of a share of a particular series of Preferred Stock as
described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") among
the Company, a depositary to be named in the applicable Prospectus Supplement
(the "Preferred Stock Depositary"), and the holders from time to time of
depositary receipts issued thereunder. Subject to the terms of the Deposit
Agreement, each holder of a Depositary Share will be entitled, in proportion
to the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, subscription and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of the
related series of Preferred Stock.
The following summary of certain provisions of the Depositary Shares and
Deposit Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by express reference to, all the provisions of the
Deposit Agreement, including the definitions therein of certain terms. The
forms of Deposit Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus forms a part.
Immediately following the issuance of shares of a series of Preferred Stock
by the Company, the Company will deposit such shares with the Preferred Stock
Depositary, which will then issue and deliver the Depositary Receipts to the
purchasers thereof. Depositary Receipts will only be issued evidencing whole
Depositary Shares. A Depositary Receipt may evidence any number of whole
Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts, the
Preferred Stock Depositary may, upon the written order of the Company, issue
temporary Depositary Receipts substantially identical to (and entitling the
holders thereof to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary Receipts will be
prepared thereafter without unreasonable delay, and such temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts at the
Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the related series of Preferred
Stock to the record holders of Depositary Shares relating to such series of
Preferred Stock in proportion to the number of such Depositary Shares owned by
such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of Depositary
Shares owned by such holders, unless the Preferred Stock Depositary determines
that such distribution cannot be made proportionately among such holders or
that it is not feasible to make such distributions, in which case the
Preferred Stock Depositary may, with the approval of the Company, adopt such
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method as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and
upon such terms as it may deem proper.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes or other governmental charges.
CONVERSION AND EXCHANGE
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the
Prospectus Supplement relating thereto, each record holder of Depositary
Shares will have the right or obligation to convert or exchange such
Depositary Shares pursuant to the terms thereof.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Preferred Stock Depositary resulting from any
redemption, in whole or in part, of such series of the Preferred Stock held by
the Preferred Stock Depositary. The redemption price per Depositary Share will
be equal to the applicable fraction of the redemption price per share payable
with respect to such series of the Preferred Stock. If the Company redeems
shares of a series of Preferred Stock held by the Preferred Stock Depositary,
the Preferred Stock Depositary will redeem as of the same redemption date the
number of Depositary Shares representing the shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as
determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption, upon
surrender to the Preferred Stock Depositary of the Depositary Receipts
evidencing such Depositary Shares. Any funds deposited by the Company with the
Preferred Stock Depositary for any Depositary Shares that the holders thereof
fail to redeem will be returned to the Company after a period of two years
from the date such funds are so deposited.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
the Preferred Stock are entitled to vote, the Preferred Stock Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such series of Preferred Stock. Each
record holder of such Depositary Shares on the record date (which will be the
same date as the record date for the related series of Preferred Stock) will
be entitled to instruct the Preferred Stock Depositary as to the exercise of
the voting rights pertaining to the number of shares of the series of
Preferred Stock represented by such holder's Depositary Shares. The Preferred
Stock Depositary will endeavor, insofar as practicable, to vote or cause to be
voted the number of shares of the Preferred Stock represented by such
Depositary Shares in accordance with such instructions, provided the Preferred
Stock Depositary receives such instructions sufficiently in advance of such
meeting to enable it to so vote or cause to be voted the shares of Preferred
Stock, and the Company will agree to take all reasonable action that may be
deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares
representing such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred
Stock,
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or (ii) the Preferred Stock Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice, or of the mandatory conversion of or
any election on the part of the Company to call for the redemption of any
Preferred Stock, the Preferred Stock Depositary shall in each such instance
fix a record date (which shall be the same as the record date for the
Preferred Stock) for the determination of the holders of Depositary Receipts
(x) who shall be entitled to receive such dividend, distribution, rights,
preferences or privileges or the net proceeds of the sale thereof or (y) who
shall be entitled to give instructions for the exercise of voting rights at
any such meeting or to receive notice of such meeting or of such redemption or
conversion, subject to the provisions of the Deposit Agreement.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt and any provision of the Deposit Agreement
may at any time be amended by agreement between the Company and the Preferred
Stock Depositary. However, any amendment which imposes or increases any fees,
taxes or other charges payable by the holders of Depositary Receipts (other
than taxes and other governmental charges, fees and other expenses payable by
such holders as stated under "Charges of Preferred Stock Depositary"), or
which otherwise prejudices any substantial existing right of holders of
Depositary Receipts, will not take effect as to outstanding Depositary
Receipts until the expiration of 30 days after notice of such amendment has
been mailed to the record holders of outstanding Depositary Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred
Stock Depositary may likewise terminate the Deposit Agreement if at any time
45 days shall have expired after the Preferred Stock Depositary shall have
delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its
appointment. If any Depositary Receipts remain outstanding after the date of
termination, the Preferred Stock Depositary thereafter will discontinue the
transfer of Depositary Receipts, will suspend the distribution of dividends to
the holders thereof, and will not give any further notices (other than notice
of such termination) or perform any further acts under the Deposit Agreement
except as provided below and except that the Preferred Stock Depositary will
continue (i) to collect dividends on the Preferred Stock and any other
distributions with respect thereto and (ii) to deliver the Preferred Stock
together with such dividends and distributions and the net proceeds of any
sales of rights, preferences, privileges or other property, without liability
for interest thereon, in exchange for Depositary Receipts surrendered. At any
time after the expiration of two years from the date of termination, the
Preferred Stock Depositary may sell the Preferred Stock then held by it at
public or private sales, at such place or places and upon such terms as it
deems proper and may thereafter hold the net proceeds of any such sale,
together with any money and other property then held by it, without liability
for interest thereon, for the pro rata benefit of the holders of Depositary
Receipts which have not been surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all charges of the Preferred Stock Depositary including
charges in connection with the initial deposit of the Preferred Stock, the
initial issuance of the Depositary Receipts, the distribution of information
to the holders of Depositary Receipts with respect to matters on which
Preferred Stock is entitled to vote, withdrawals of the Preferred Stock by the
holders of Depositary Receipts or redemption or conversion of the Preferred
Stock, except for taxes (including transfer taxes, if any) and other
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be at the expense of holders of Depositary Receipts or
persons depositing Preferred Stock.
MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by holders
of Depositary Receipts at its corporate office and its New York office, all
reports and communications from the Company which are delivered to the
Preferred Stock Depositary as the holder of Preferred Stock.
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Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Preferred Stock Depositary under the Deposit Agreement are limited to
performing its duties thereunder without negligence or bad faith. The
obligations of the Company under the Deposit Agreement are limited to
performing its duties thereunder in good faith. Neither the Company nor the
Preferred Stock Depositary is obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Preferred Stock
Depositary are entitled to rely upon advice of or information from counsel,
accountants or other persons believed to be competent and on documents
believed to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by the
Company, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been
appointed or accepted such appointment within 45 days after the Preferred
Stock Depositary has delivered a notice of election to resign to the Company,
the Preferred Stock Depositary may terminate the Deposit Agreement. See
"Amendment and Termination of Deposit Agreement" above.
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DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants for the purchase of (i) Debt Securities
("Debt Warrants") or (ii) Preferred Stock or Common Stock ("Stock Warrants").
The Warrants will be issued under Warrant Agreements (as defined herein) to
be entered into between the Company and a bank or trust company, as warrant
agent (the "Warrant Agent"), all to be set forth in the applicable Prospectus
Supplement relating to any or all Warrants in respect of which this Prospectus
is being delivered. Copies of the form of agreement for each Warrant (each a
"Debt Securities Warrant Agreement" or "Stock Warrant Agreement," as the case
may be, or collectively the "Warrant Agreements"), including the forms of
certificates representing the Warrants ("Debt Warrant Certificates" or "Stock
Warrant Certificates," as the case may be, or collectively, the "Warrant
Certificates") reflecting the provisions to be included in such agreements
that will be entered into with respect to the particular offerings of each
type of warrant are filed as exhibits to the Registration Statement of which
this Prospectus forms a part.
The following description sets forth certain general terms and provisions of
the Warrants to which any Prospectus Supplement may relate. The particular
terms of the Warrants to which any Prospectus Supplement may relate and the
extent, if any, to which such general provisions may apply to the Warrants so
offered will be described in the applicable Prospectus Supplement. The
following summary of certain provisions of the Warrants, Warrant Agreements
and Warrant Certificates does not purport to be complete and is subject to,
and is qualified in its entirety by express reference to, all the provisions
of the Warrant Agreements and Warrant Certificates, including the definitions
therein of certain terms.
DEBT WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Debt Warrants in respect of which this Prospectus is being delivered,
the Debt Securities Warrant Agreement relating to such Debt Warrants and the
Debt Warrant Certificates representing such Debt Warrants, including the
following: (i) the designation, aggregate principal amount and terms of the
Debt Securities purchasable upon exercise of such Debt Warrants and the
procedures and conditions relating to the exercise of such Debt Warrants; (ii)
the designation and terms of any related Debt Securities with which such Debt
Warrants are issued and the number of such Debt Warrants issued with each such
Debt Security; (iii) the date, if any, on and after which such Debt Warrants
and any related Offered Securities will be separately transferable; (iv) the
principal amount of Debt Securities purchasable upon exercise of each Debt
Warrant and the price at which such principal amount of Debt Securities may be
purchased upon such exercise; (v) the date on which the right to exercise such
Debt Warrants shall commence and the date on which such right shall expire;
(vi) a discussion of the material United States federal income tax
considerations applicable to the ownership or exercise of Debt Warrants; (vii)
whether the Debt Warrants represented by the Debt Warrant Certificates will be
issued in registered or bearer form, and, if registered, where they may be
transferred and registered; (viii) call provisions of such Debt Warrants, if
any; and (ix) any other terms of the Debt Warrants.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders
of the Debt Securities purchasable upon such exercise and will not be entitled
to any payments of principal and premium, if any, and interest, if any, on the
Debt Securities purchasable upon such exercise.
Exercise of Debt Warrants. Each Debt Warrant will entitle the holder to
purchase for cash such principal amount of Debt Securities at such exercise
price as shall in each case be set forth in, or be determinable as set forth
in, the applicable Prospectus Supplement relating to the Debt Warrants offered
thereby. Unless otherwise specified in the applicable Prospectus Supplement,
Debt Warrants may be exercised at any time up to 5:00 p.m.,
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New York City time, on the expiration date set forth in the applicable
Prospectus Supplement. After 5:00 p.m., New York City time, on the expiration
date, unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating to the Debt Warrants. Upon receipt of payment and the Debt
Warrant Certificate properly completed and duly executed at the corporate
trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Company will, as soon as practicable,
forward the Debt Securities purchasable upon such exercise. If less than all
of the Debt Warrants represented by such Debt Warrant Certificate are
exercised, a new Debt Warrant Certificate will be issued for the remaining
amount of Debt Warrants.
STOCK WARRANTS
General. Reference is made to the applicable Prospectus Supplement for the
terms of Stock Warrants in respect of which this Prospectus is being
delivered, the Stock Warrant Agreement relating to such Stock Warrants and the
Stock Warrant Certificates representing such Stock Warrants, including the
following: (i) the type and number of shares of Preferred Stock or Common
Stock purchasable upon exercise of such Stock Warrants and the procedures and
conditions relating to the exercise of such Stock Warrants; (ii) the date, if
any, on and after which such Stock Warrants and related Offered Securities
will be separately tradeable; (iii) the offering price of such Stock Warrants,
if any; (iv) the initial price at which such shares may be purchased upon
exercise of Stock Warrants and any provision with respect to the adjustment
thereof; (v) the date on which the right to exercise such Stock Warrants shall
commence and the date on which such right shall expire; (vi) a discussion of
the material United States federal income tax considerations applicable to the
ownership or exercise of Stock Warrants; (vii) call provisions of such Stock
Warrants, if any; (viii) any other terms of the Stock Warrants (ix) anti-
dilution provisions of the Stock Warrants, if any and; (x) information
relating to any Preferred Stock purchasable upon exercise of such Stock
Warrants.
Stock Warrant Certificates will be exchangeable for new Stock Warrant
Certificates of different denominations and Stock Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated
in the applicable Prospectus Supplement. Prior to the exercise of their Stock
Warrants, holders of Stock Warrants will not have any of the rights of holders
of shares of capital stock purchasable upon such exercise, and will not be
entitled to any dividend payments on such capital stock purchasable upon
such exercise.
Exercise of Stock Warrants. Each Stock Warrant will entitle the holder to
purchase for cash such number of shares of Preferred Stock or Common Stock, as
the case may be, at such exercise price as shall in each case be set forth in,
or be determinable as set forth in, the applicable Prospectus Supplement
relating to the Stock Warrants offered thereby. Unless otherwise specified in
the applicable Prospectus Supplement, Stock Warrants may be exercised at any
time up to 5:00 p.m., New York City time, on the expiration date set forth in
the applicable Prospectus Supplement. After 5:00 p.m., New York City time, on
the expiration date, unexercised Stock Warrants will become void.
Stock Warrants may be exercised as set forth in the applicable Prospectus
Supplement relating thereto. Upon receipt of payment and the Stock Warrant
Certificates properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, forward a
certificate representing the number of shares of capital stock purchasable
upon such exercise. If less than all of the Stock Warrants represented by such
Stock Warrant Certificate are exercised, a new Stock Warrant Certificate will
be issued for the remaining amount of Stock Warrants.
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DESCRIPTION OF PREFERRED SECURITIES
Each McKesson Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each McKesson Trust authorizes the
Regular Trustees of such McKesson Trust to issue on behalf of such McKesson
Trust one series of Preferred Securities. Each Declaration will be qualified
as an indenture under the Trust Indenture Act. The Preferred Securities will
have such terms, including distributions, redemption, voting, liquidation
rights and such other preferred, deferred or other special rights or such
restrictions as shall be set forth in the related Declaration or made part of
such Declaration by the Trust Indenture Act or the Business Trust Act.
Reference is made to any Prospectus Supplement relating to the Preferred
Securities of a McKesson Trust for specific terms, including (i) the specific
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such McKesson Trust, (iii) the annual distribution rate
(or method of calculation thereof) for Preferred Securities issued by such
McKesson Trust, the date or dates upon which such distributions shall be
payable and the record date or dates for the payment of such distributions,
(iv) whether distributions on Preferred Securities issued by such McKesson
Trust shall be cumulative, and, in the case of Preferred Securities having
such cumulative distribution rights, the date or dates or method of
determining the date or dates from which distributions on Preferred Securities
issued by such McKesson Trust shall be cumulative, (v) the amount or amounts
which shall be paid out of the assets of such McKesson Trust to the holders of
Preferred Securities of such McKesson Trust upon voluntary or involuntary
dissolution, winding up or termination of such McKesson Trust, (vi) the
obligation or right, if any, of such McKesson Trust to purchase or redeem
Preferred Securities issued by such McKesson Trust and the price or prices at
which, the period or periods within which and the terms and conditions upon
which Preferred Securities issued by such McKesson Trust shall or may be
purchased or redeemed, in whole or in part, pursuant to such obligation or
right, (vii) the voting rights, if any, of Preferred Securities issued by such
McKesson Trust in addition to those required by law, including the number of
votes per Preferred Security and any requirement for the approval by the
holders of Preferred Securities, or of Preferred Securities issued by one or
more McKesson Trusts, or of both, as a condition to specified actions or
amendments to the Declaration of such McKesson Trust, (viii) the terms and
conditions, if any, upon which Preferred Securities issued by such McKesson
Trust may be converted by the holder thereof or exchanged at the election of
the Company into Common Stock, Preferred Stock or any other securities of the
Company, including the conversion price per share and the circumstances, if
any, under which such conversion right will expire, (ix) the terms and
conditions, if any, upon which the Debt Securities may be distributed to
holders of the Preferred Securities, (x) if applicable, any securities
exchange upon which the Preferred Securities shall be listed, and (xi) any
other relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities issued by such McKesson Trust consistent with the
Declaration of such McKesson Trust or with applicable law. All Preferred
Securities offered hereby will be guaranteed by the Company as and to the
extent set forth below under "Description of the Preferred Securities
Guarantee." Certain United States federal income tax considerations applicable
to any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
In connection with the issuance of Preferred Securities, each McKesson Trust
will issue one series of Common Securities. The Declaration of each McKesson
Trust authorizes the Regular Trustees of such trust to issue on behalf of such
McKesson Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by a
McKesson Trust will be substantially identical to the terms of the Preferred
Securities issued by such McKesson Trust and the Common Securities will rank
pari passu, and payments will be made thereon on a pro rata basis with the
Preferred Securities except that if a Declaration Event of Default occurs and
is continuing, the rights of the holders of such Common Securities to payments
in respect of distributions and payments upon liquidation, redemption and
maturity will be subordinated to the rights of the holders of such Preferred
Securities. Except in certain limited circumstances, the Common Securities
issued by a McKesson Trust will also carry the right to vote and to appoint,
remove or replace any of the MFT Trustees (other than a Special Regular
Trustee) of that McKesson Trust. All of the Common Securities of a McKesson
Trust will be directly or indirectly owned by the Company.
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DESCRIPTION OF PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee which will be executed and delivered by the Company for
the benefit of the holders from time to time of the Preferred Securities of
each McKesson Trust. The summary does not purport to be complete and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to the respective Preferred Securities Guarantee, a form of which
has been attached as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each Preferred Securities Guarantee incorporates by
reference the terms of the Trust Indenture Act. The trustee of each Preferred
Securities Guarantee (the "Preferred Securities Guarantee Trustee") will hold
the Preferred Securities Guarantee for the benefit of the holders of the
Preferred Securities of that McKesson Trust.
GENERAL
Pursuant to and to the extent set forth in each Preferred Securities
Guarantee, the Company will agree, to the extent set forth therein, to pay in
full to the holders of the Preferred Securities of the applicable McKesson
Trust (except to the extent paid by that McKesson Trust), as and when due,
regardless of any defense, right of set off or counterclaim which the McKesson
Trust may have or assert, the following payments (the "Preferred Securities
Guarantee Payments"), without duplication: (i) all accrued and unpaid
distributions that are required to be paid on the Preferred Securities to the
extent the McKesson Trust has funds available therefor, (ii) the redemption
price, if any, plus accrued and unpaid distributions with respect to any such
Preferred Securities called for redemption by the McKesson Trust, to the
extent the McKesson Trust has funds available therefor, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
McKesson Trust (other than in connection with the distribution of the Debt
Securities held by the McKesson Trust to its holders of Preferred Securities
or the redemption of all the Preferred Securities of the McKesson Trust), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid distributions on the Preferred Securities to the date of payment to the
extent that McKesson Trust has funds available therefor and (b) the amount of
assets of the McKesson Trust remaining available for distribution to holders
of its Preferred Securities then outstanding upon the liquidation of the
McKesson Trust. If the Company were to default on its obligation to pay
amounts payable on the Debt Securities held by a McKesson Trust, that McKesson
Trust would lack available funds for the payment of distributions or amounts
payable on redemption of its Preferred Securities or otherwise, and in such
event holders of those Preferred Securities would not be able to rely upon the
Preferred Securities Guarantee for payment of such amounts. Instead, a holder
of such Preferred Securities would be required to rely on the enforcement (i)
by the Institutional Trustee of its rights, as registered holder of the Debt
Securities, against the Company pursuant to the terms of the Debt Securities
or (ii) by such holder of Preferred Securities of its rights against the
Company to enforce payments on Debt Securities. Each Declaration provides that
each holder of Preferred Securities, by acceptance thereof, agrees to the
provisions of the applicable Preferred Securities Guarantee, including the
subordination provisions thereof.
The Preferred Securities Guarantee will not apply to any payment of
distributions or redemption price, if any, or to payments upon the
dissolution, winding-up or termination of the related McKesson Trust, except
to the extent that McKesson Trust shall have funds available therefor. If the
Company does not make interest payments on the Debt Securities held by a
McKesson Trust, that McKesson Trust will not pay distributions on its
Preferred Securities and will not have funds available therefor. A Preferred
Securities Guarantee, when taken together with the Company's obligations under
the related Debt Securities and Declaration and the Indenture, including its
obligations to pay costs, expenses, debts and liabilities of that McKesson
Trust (other than with respect to the Trust Securities) will provide a full
and unconditional guarantee by the Company of payments due on the Preferred
Securities of that McKesson Trust. The terms of the subordination, if any, of
a Preferred Securities Guarantee will be set forth in the applicable
Prospectus Supplement.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of each McKesson Trust with respect to its Common
Securities (the "Common Securities Preferred Securities Guarantee") to the
same extent as the related Preferred Securities Guarantee, except that upon
the occurrence and during the continuation of a Declaration Event of Default
with respect to the Debt Securities held by the
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McKesson Trust, the holders of its Preferred Securities shall have priority
over the holders of the Common Securities with respect to the Preferred
Securities Guarantee Payments.
CERTAIN COVENANTS OF THE COMPANY
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any of the related Preferred Securities remain outstanding, if (i) the
Company has exercised its option to defer interest payments on the related
Debt Securities by extending the interest payment period and such extension
period, or any extension thereof, shall be continuing, (ii) the Company shall
be in default with respect to its payment or other obligations under the
Preferred Securities Guarantee or (iii) there shall have occurred and be
continuing a Declaration Event of Default or any event that, with the giving
of notice or lapse of time or both, would constitute a Declaration Event of
Default, then the Company shall not (a) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or (b) make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu with or junior
in interest to the related Debt Securities or make any guarantee payment with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or junior in
interest to the related Debt Securities (other than (i) as a result of a
reclassification of the Company capital stock or the exchange or conversion of
one class or series of the Company capital stock for another class or series
of the Company capital stock, (ii) the purchase of fractional interests in
shares of the Company capital stock pursuant to the conversion or exchange
provisions of such capital stock of the Company or the security being
converted into or exchanged for capital stock of the Company, (iii) dividends
or distributions in Common Stock, (iv) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the
Preferred Securities Guarantee, (vi) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans
for its directors, officers or employees and (vii) obligations under any
dividend reinvestment and stock purchase plans).
As part of each Preferred Securities Guarantee, the Company will agree that
it will honor all obligations relating to the conversion of the Preferred
Securities into, as the case may be, Common Stock, Preferred Stock or other
securities of the Company.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the related Preferred Securities (in which
case no vote will be required), a Preferred Securities Guarantee may be
amended only with the prior approval of the holders of at least a majority in
liquidation amount of all the related Preferred Securities then outstanding.
All guarantees and agreements contained in each Preferred Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Company and shall inure to the benefit of the holders of the related
Preferred Securities then outstanding. Except in connection with any permitted
merger or consolidation of the Company with or into another entity or any
permitted sale, transfer or lease of the Company's assets to another entity
the Company may not assign its rights or delegate its obligations under any
Preferred Securities Guarantee without the prior approval of the holders of at
least a majority of the aggregate stated liquidation amount of the related
Preferred Securities then outstanding.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
Each Preferred Securities Guarantee will terminate as to each holder of
Preferred Securities with respect to a McKesson Trust upon (i) full payment of
the redemption price, if any, and accrued and unpaid distributions with
respect to all related Preferred Securities, (ii) distribution of the Debt
Securities held by the McKesson Trust to the holders of its Preferred
Securities, (iii) full payment of the amounts payable under its Declaration
upon liquidation of the McKesson Trust, or (iv) the distribution of the
underlying securities to the holder thereof upon any conversion or exchange of
such holder's Preferred Securities into the designated security, and will
terminate
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completely upon full payment of the amounts payable in accordance with the
applicable Declaration. Each Preferred Securities Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of related Preferred Securities must restore payment of any sum paid
under such Preferred Securities or the Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee will occur upon
(a) the failure of the Company to perform any of its payment or other
obligations thereunder or (b) if applicable, the failure by the Company to
deliver the designated securities upon an appropriate election by the holder
or holders of related Preferred Securities to convert or exchange the
Preferred Securities into such designated security.
The holders of a majority in liquidation amount of Preferred Securities then
outstanding relating to the Preferred Securities Guarantee have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Preferred Securities Guarantee Trustee in respect of the
Preferred Securities Guarantee or to direct the exercise of any trust or power
conferred upon the Preferred Securities Guarantee Trustee under the related
Preferred Securities. If the Preferred Securities Guarantee Trustee fails to
enforce the Preferred Securities Guarantee, any holder of the related
Preferred Securities may institute a legal proceeding directly against the
Company to enforce the Preferred Securities Guarantee Trustee's rights under
the Preferred Securities Guarantee, without first instituting a legal
proceeding against the McKesson Trust, the Preferred Securities Guarantee
Trustee or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make a Preferred Securities Guarantee Payment, the
related holder of Preferred Securities may directly institute a proceeding
against the Company for enforcement of the Preferred Securities Guarantee for
such payment. The Company waives any right or remedy to require that any
action be brought first against each McKesson Trust or any other person or
entity before proceeding directly against the Company.
STATUS OF THE PREFERRED SECURITIES GUARANTEE; SUBORDINATION
The Preferred Securities Guarantee will constitute an unsecured obligation
of the Company and will rank in right of payment to all other liabilities of
the Company in the manner set forth in the applicable Prospectus Supplement.
The terms of the Preferred Securities provide that each holder of Preferred
Securities by acceptance thereof agrees to the subordination provisions, if
any, and other terms of the Preferred Securities Guarantee relating thereto.
The Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity). The Preferred Securities Guarantee does not place
a limitation on the amount of additional indebtedness that may be incurred by
the Company.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE
Each Preferred Securities Guarantee Trustee, prior to the occurrence of a
default with respect to the related Preferred Securities Guarantee, undertakes
to perform only such duties as are specifically set forth in the Preferred
Securities Guarantee and, after default with respect to that Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
person would exercise in the conduct of his or her own affairs. Subject to
such provision, a Preferred Securities Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Preferred
Securities Guarantee at the request of any holder of related Preferred
Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
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GOVERNING LAW
Each Preferred Securities Guarantee will be governed by, and construed in
accordance with, the laws of the State of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to
the holders, a specified number of shares of Common Stock at a future date or
dates. The price per share of Common Stock may be fixed at the time the Stock
Purchase Contracts are issued or may be determined by reference to a specific
formula set forth in the Stock Purchase Contracts. The Stock Purchase
Contracts may be issued separately or as a part of units ("Stock Purchase
Units") consisting of a Stock Purchase Contract and either (x) Senior Debt
Securities, Senior Subordinated Debt Securities, Subordinated Debt Securities
or Junior Subordinated Debt Securities, (y) debt obligations of third parties,
including U.S. Treasury securities or (z) Preferred Securities of a McKesson
Trust securing the holder's obligations to purchase the Common Stock under the
Stock Purchase Contracts. The Stock Purchase Contracts may require the Company
to make periodic payments to the holders of the Stock Purchase Units or vice
versa, and such payments may be unsecured or prefunded on some basis. The
Stock Purchase Contracts may require holders to secure their obligations
thereunder in a specified manner and in certain circumstances the Company may
deliver newly issued prepaid stock purchase contracts ("Prepaid Securities")
upon release to a holder of any collateral securing such holder's obligations
under the original Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to
be complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, the collateral arrangements and depositary arrangements,
if applicable, relating to such Stock Purchase Contracts or Stock Purchase
Units and, if applicable, the Prepaid Securities and the document pursuant to
which such Prepaid Securities will be issued.
GOVERNING LAW
Each Stock Purchase Contract will be governed by, and construed in
accordance with, the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company and/or McKesson Trust may sell the Offered Securities directly
or through agents, underwriters or dealers.
Offers to purchase Offered Securities may be solicited by agents designated
by the Company and/or a McKesson Trust from time to time. Any such agent, who
may be deemed to be an underwriter as that term is defined in the Securities
Act, involved in the offer or sale of the Offered Securities in respect of
which this Prospectus is delivered will be named, and any commissions payable
by the Company and/or a McKesson Trust to such agent set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment, The Company and/or a McKesson Trust may also sell
Offered Securities to an agent as principal. Agents may be entitled to, under
agreements which may be entered into with the Company and/or a McKesson Trust,
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
If any underwriters are utilized in the sale of Offered Securities in
respect of which this Prospectus is delivered, the Company and/or a McKesson
Trust will enter into an underwriting agreement with such
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underwriters and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales of the Offered Securities in respect of
which this Prospectus is delivered to the public. Underwriters may offer and
sell the Offered Securities at a fixed price or prices, which may be changed,
or from time to time at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
underwriters may be entitled, under the relevant underwriting agreement, to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company and/or a McKesson Trust will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. Dealers may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("Remarketing firms"), acting as principals
for their own accounts or as agents for the Company and/or a McKesson Trust.
Any Remarketing firm will be identified and the terms of its agreement, if
any, with the Company and/or a McKesson Trust and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be deemed to be
underwriters in connection with the Offered Securities remarketing thereby.
Remarketing firms may be entitled under agreements which may be entered into
with the Company and/or a McKesson Trust to indemnification by the Company
and/or a McKesson Trust against certain liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with
or perform services for the Company and/or a McKesson Trust in the ordinary
course of business.
If so indicated in the Prospectus Supplement, the Company and/or a McKesson
Trust will authorize agents and underwriters or dealers to solicit offers by
certain purchasers to purchase Offered Securities from the Company and/or a
McKesson Trust at the public offering price set forth in the Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject to
only those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation
of such offers.
33
<PAGE>
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Offered Securities of McKesson will be passed upon for
McKesson by Ivan D. Meyerson, Vice President and General Counsel of McKesson,
and by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California.
EXPERTS
The consolidated financial statements of the Company and the related
financial statement schedule incorporated in this Registration Statement by
reference from the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998 and the consolidated financial statements of FoxMeyer for
the year ended March 31, 1996 incorporated in this Registration Statement by
reference from McKesson'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 18, 1998 on McKesson's consolidated
financial statements expresses an unqualified opinion and which report on
FoxMeyer'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 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 auditing and accounting.
34
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee............................................. $ 221,250
Printing and engraving........................................... 200,000
Legal fees and expenses.......................................... 150,000
Fees of accountants.............................................. 100,000
Fees of trustee.................................................. 50,000
Blue Sky fees and expenses....................................... 10,000
Rating agency fees............................................... 250,000
Miscellaneous.................................................... 268,750
----------
Total.......................................................... $1,250,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the Restated By-Laws of the Company (the "Bylaws"), 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 of 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 a 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 the Company's 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 the Company'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
Company 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.
Each Declaration of Trust (a "Declaration") of a McKesson Trust provides
that no Trustee, affiliate of any Trustee or any officers, directors,
stockholders, members, partners, employees, representatives or agents of any
Trustee or any employee or agent of such McKesson Trust or its affiliates
(each, an "Indemnified Person") shall be liable, responsible or accountable in
damages or otherwise to any employee or agent of such McKesson Trust
II-1
<PAGE>
or its affiliates, or any officers, directors, shareholders, employees,
representatives or agents of the Company or its affiliates or to any holders
of Trust Securities of such McKesson Trust for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of such McKesson Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by the Declaration of such
McKesson Trust or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence (or, in the case of the Institutional Trustee of
such McKesson Trust, negligence) or willful misconduct with respect to such
acts or omissions. Each Declaration also provides that, to the fullest extent
permitted by applicable law, the Company shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of such McKesson Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by such Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of
any loss, damage or claim incurred by such Indemnified Person by reason of
gross negligence (or, in the case of the Institutional Trustee of such
McKesson Trust, negligence) or willful misconduct with respect to such acts or
omissions. Each Declaration further provides that to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or the final
disposition of such claim, demand, action, suit or proceeding shall, from time
to time, be advanced by the Company prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified pursuant to such Declaration.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1.1** Form of Underwriting Agreement (Debt).
1.2** Form of Underwriting Agreement (Equity).
1.3* Form of Underwriting Agreement (Preferred Securities).
1.4* Form of Underwriting Agreement (Stock Purchase Contracts).
1.5* Form of Underwriting Agreement (Stock Purchase Units).
3.1 Restated Certificate of Incorporation of the Company (Exhibit 3.1(1)).
3.2 Restated Bylaws of the Company as amended through May 30, 1997
(Exhibit 3.1 (2)).
3.3 Rights Agreement, dated as of October 21, 1994, by and between the
Company and First Chicago Trust Company of New York as Rights Agent
(Exhibit 4.1( 3)).
4.1** Form of Indenture.
4.2** Certificate of Trust of McKesson Financing Trust II.
4.3** Certificate of Trust of McKesson Financing Trust III.
4.4** Certificate of Trust of McKesson Financing Trust IV.
4.5** Declaration of Trust of McKesson Financing Trust II.
4.6** Declaration of Trust of McKesson Financing Trust III.
4.7** Declaration of Trust of McKesson Financing Trust IV.
4.8** Form of Amended and Restated Declaration of Trust of McKesson
Financing Trust II.
4.9** Form of Amended and Restated Declaration of Trust of McKesson
Financing Trust III.
4.10** Form of Amended and Restated Declaration of Trust of McKesson
Financing Trust IV.
4.11** Form of Warrant (Stock).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
4.12** Form of Warrant (Debt).
4.13** Form of Preferred Securities Guarantee Agreement with respect to
Preferred Securities to be issued by McKesson Financing Trust II.
4.14** Form of Preferred Securities Guarantee Agreement with respect to
Preferred Securities to be issued by McKesson Financing Trust III.
4.15** Form of Preferred Securities Guarantee Agreement with respect to
Preferred Securities to be issued by McKesson Financing Trust IV.
4.16* Form of Purchase Contract Agreement.
4.17* Form of Pledge Agreement.
4.18** Form of Deposit Agreement.
5.1** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality
of the Debt Securities, Common Stock, Preferred Stock, Warrants,
Preferred Securities, Preferred Securities Guarantees, Stock Purchase
Contracts and Stock Purchase Units being registered hereby.
12.1** Computation of Ratio of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends of McKesson
Corporation.
23.1** Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
23.2** Independent Auditors' Consent.
24*** Power of Attorney.
</TABLE>
- --------
(1) Incorporated by reference to designated exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1996, as amended
by Amendment No. 1 on Form 10-K/A, filed on February 13, 1997, File No. 1-
3252.
(2) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K filed with the Commission June 24, 1997, File No. 1-
13252.
(3) Incorporated by reference to designated exhibit to Amendment No. 3 to the
Company's Registration Statement on Form 10 filed with the Commission on
October 27, 1994, File No. 1-13252.
(4) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form S-4 filed with the Commission on July 8,
1997, File No. 333-30899.
* To be filed by amendment or as an exhibit to a document to be incorporated
or deemed to be incorporated by reference in the Registration Statement.
** Filed herewith.
*** Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
II-3
<PAGE>
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company'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 this registration statement shall be deemed to
be a new registration statement relating to the securities offered thereby,
and for the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the provisions referred
to in Item 15 of this registration statement, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants 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
registrants 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 of 1933 and will be
governed by the final adjudication of such.
(d)(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430(A) and contained
in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at the time
shall be deemed to be the initial bona fide offering hereof.
(e) The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-4
<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-3 and has duly caused this Amendment to the
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 30th day of June, 1998.
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 below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Chief June 30, 1998
____________________________________ Executive
Mark A. Pulido Officer and Director
(principal executive
officer)
* Vice President and June 30, 1998
____________________________________ Chief Financial Officer
Richard H. Hawkins (principal financial
officer)
* Controller June 30, 1998
____________________________________ (principal accounting
Heidi E. Yodowitz officer)
* Director June 30, 1998
____________________________________
Mary G. F. Bitterman
* Director June 30, 1998
____________________________________
Tully M. Friedman
* Director June 30, 1998
____________________________________
John M. Pietruski
* Director June 30, 1998
____________________________________
David S. Pottruck
* Director June 30, 1998
____________________________________
Carl E. Reichardt
* Director; June 30, 1998
____________________________________ Chairman of the Board
Alan Seelenfreund
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director June 30, 1998
____________________________________
Jane E. Shaw
* Director June 30, 1998
____________________________________
Robert H. Waterman, Jr.
*By: /s/ Nancy A. Miller
___________________________________
Nancy A. Miller
Attorney-in-fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, McKesson
Financing Trust II, McKesson Financing Trust III and McKesson Financing Trust
IV, each certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3, and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Francisco, State of California,
on June 30, 1998.
McKESSON FINANCING TRUST II
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
McKESSON FINANCING TRUST III
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
McKESSON FINANCING TRUST IV
By: McKesson Corporation, as Sponsor
/s/ Nancy A. Miller
By: _________________________________
Name: Nancy A. Miller
Title: Vice President and
Corporate Secretary
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
------- -------------------- ------------
<C> <S> <C>
1.1** Form of Underwriting Agreement (Debt).
1.2** Form of Underwriting Agreement (Equity).
1.3* Form of Underwriting Agreement (Preferred Securities).
1.4* Form of Underwriting Agreement (Stock Purchase
Contracts).
1.5* Form of Underwriting Agreement (Stock Purchase Units).
3.1 Restated Certificate of Incorporation of the Company
(Exhibit 3.1(1)).
3.2 Restated Bylaws of the Company as amended through May
30, 1997 (Exhibit 3.1 (2)).
3.3 Rights Agreement, dated as of October 21, 1994, by and
between the Company and First Chicago Trust Company of
New York as Rights Agent (Exhibit 4.1(3)).
4.1** Form of Indenture.
4.2** Certificate of Trust of McKesson Financing Trust II.
4.3** Certificate of Trust of McKesson Financing Trust III.
4.4** Certificate of Trust of McKesson Financing Trust IV.
4.5** Declaration of Trust of McKesson Financing Trust II.
4.6** Declaration of Trust of McKesson Financing Trust III.
4.7** Declaration of Trust of McKesson Financing Trust IV.
4.8** Form of Amended and Restated Declaration of Trust of
McKesson Financing Trust II.
4.9** Form of Amended and Restated Declaration of Trust of
McKesson Financing Trust III.
4.10** Form of Amended and Restated Declaration of Trust of
McKesson Financing Trust IV.
4.11** Form of Warrant (Stock).
4.12** Form of Warrant (Debt).
4.13** Form of Preferred Securities Guarantee Agreement with
respect to Preferred Securities to be issued by
McKesson Financing Trust II.
4.14** Form of Preferred Securities Guarantee Agreement with
respect to Preferred Securities to be issued by
McKesson Financing Trust III.
4.15** Form of Preferred Securities Guarantee Agreement with
respect to Preferred Securities to be issued by
McKesson Financing Trust IV.
4.16* Form of Purchase Contract Agreement.
4.17* Form of Pledge Agreement.
4.18** Form of Deposit Agreement.
5.1** Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as
to the legality of the Debt Securities, Common Stock,
Preferred Stock, Warrants, Preferred Securities,
Preferred Securities Guarantees, Stock Purchase
Contracts and Stock Purchase Units being registered
hereby.
12.1** Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock
Dividends of McKesson Corporation.
23.1** Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
23.2** Independent Auditors' Consent.
24*** Power of Attorney.
</TABLE>
<PAGE>
- --------
(1) Incorporated by reference to designated exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1996, as amended
by Amendment No. 1 on Form 10-K/A, filed on February 13, 1997, File No. 1-
3252.
(2) Incorporated by reference to designated exhibit to the Company's Current
Report on Form 8-K filed with the Commission June 24, 1997, File No. 1-
13252.
(3) Incorporated by reference to designated exhibit to Amendment No. 3 to the
Company's Registration Statement on Form 10 filed with the Commission on
October 27, 1994, File No. 1-13252.
(4) Incorporated by reference to designated exhibit to the Company's
Registration Statement on Form S-4 filed with the Commission on July 8,
1997, File No. 333-30899.
* To be filed by amendment or as an exhibit to a document to be incorporated
or deemed to be incorporated by reference in the Registration Statement.
** Filed herewith.
*** Previously filed.
<PAGE>
Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT (DEBT SECURITIES
AND WARRANTS TO PURCHASE DEBT SECURITIES)
[DATE]
[Name and address
of Underwriters]
Ladies and Gentlemen:
From time to time, McKesson Corporation, a Delaware corporation (the
"Company"), may enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain securities (the "Securities"), specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto.
Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Designated Securities, for whom the firms designated as
representatives of the Underwriters of such Designated Securities in the Pricing
Agreement relating thereto will act as representatives (the "Representatives").
The term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to the Underwriters who act without any
firm being designated as their representative. This Agreement shall not be
construed as an obligation of the Company to sell any of the Securities or as an
obligation of any of the Underwriters to purchase any of the Securities. The
obligation of the Company to issue and sell any of the Securities and the
obligation of any of the Underwriters to purchase any of the Securities shall be
evidenced by the Pricing
<PAGE>
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of Designated
Securities, if any, the initial public offering price of such Designated
Securities or the manner of determining such price, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters, the number of such Designated Securities to be purchased by the
Underwriters and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Designated Securities, if any, and payment therefor. The Pricing Agreement
shall also specify (to the extent not set forth in the registration statement
and prospectus with respect thereto) the terms of such Designated Securities. A
Pricing Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus,
relating to the Securities. The registration statement as amended at the time
it becomes effective, is hereinafter referred to as the "Initial Registration
Statement"; such Initial Registration Statement and any post-effective amendment
thereto, together with a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Securities Act"), and,
in each case, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained therein is hereinafter referred to as the
"Registration Statement." The prospectus relating to the Securities, in the form
in which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement is hereinafter called the
"Prospectus." Any reference to Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein as of the date of the
Prospectus and any amendment or supplement in the form in which it is filed with
the Commission pursuant to Rule 424(b) under the Securities Act, including any
documents incorporated by reference therein as of the date of such filing.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
------------------------------
to, and agrees with the Underwriters, that:
a. The Registration Statement has become effective under the Securities
Act; no stop order suspending the effectiveness of the Registration Statement is
in effect, and no
2
<PAGE>
proceedings for such purpose is pending before or, to the knowledge of the
Company, threatened by the Commission.
b. (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
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,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph 1(b)
do not apply to (A) statements or omissions in the Registration Statement or the
Prospectus based upon information relating to the Underwriters furnished to the
Company in writing by the Underwriters expressly for use therein and (B) that
part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") of the Trustee.
c. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable, and the rules and regulations of the Commission thereunder, and none
of such documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not 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.
d. The accountants who have audited certain financial statements included
or incorporated by reference in the Registration Statement and the Prospectus
are independent public accountants as required by the Securities Act and the
rules and regulations thereunder.
e. The financial statements (together with the related notes thereto)
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the
3
<PAGE>
financial position of the Company and its consolidated subsidiaries as of and at
the dates indicated and the results of their operations for the periods
specified, except as otherwise disclosed therein; and except as otherwise stated
therein or in the Registration Statement and the Prospectus, said financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis; and the pro forma
consolidated financial data of the Company and its subsidiaries and the related
notes thereto included or incorporated by reference in the Registration
Statement and Prospectus have been prepared in accordance with the Commission's
rules and regulations with respect to pro forma financial data, have been and
will be properly compiled on the bases described therein and the assumptions
used in the preparation thereof are and will be reasonable and the adjustments
used therein are and will be appropriate to give effect to the transactions and
circumstances referred to therein.
f. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in the State of California; and the Company is duly qualified to
transact business and is in good standing in each other jurisdiction in which
the conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
g. Each significant subsidiary of the Company, as defined by Rule 1-02(w)
of Regulation S-X of the Securities Act, has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own ifs property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
h. This Agreement has been, and, when signed, the applicable Pricing
Agreement relating to the Designated Securities will be, duly authorized,
executed and delivered by the Company.
i. The Indenture to be dated as of [ ] (the "Indenture") between
the Company and [ ], as trustee (the "Indenture Trustee"), has been duly
authorized
4
<PAGE>
by the Company and, when duly executed and delivered by the Company and assuming
the due authorization, execution and delivery of the Indenture by the Indenture
Trustee, will be a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether enforcement is sought in
a proceeding at law or in equity); and the Indenture has been qualified under
the Trust Indenture Act.
j. [If warrants (the "Warrants") to purchase any unsecured senior debt
------------------------------------------------------------------
securities (the "Senior Debt Securities"), unsecured senior subordinated debt
- -----------------------------------------------------------------------------
securities (the "Senior Subordinated Debt Securities"), unsecured subordinated
- ------------------------------------------------------------------------------
debt securities (the "Subordinated Debt Securities") or unsecured junior
- ------------------------------------------------------------------------
subordinated debt securities (the "Junior Subordinated Debt Securities and,
- ---------------------------------------------------------------------------
together with the Senior Debt Securities, Senior Subordinated Debt Securities
- -----------------------------------------------------------------------------
and the Subordinated Debt Securities, the "Debt Securities") of the Company are
- -------------------------------------------------------------------------------
being issued, The Warrant Agreement to be dated as of [ ], (the
- ------------
"Warrant Agreement") between the Company and [ ], has been duly
authorized by the Company and, when duly executed and delivered by the Company
and assuming the due authorization, execution and delivery of the Warrant
Agreement by the other parties thereto, will be a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles (regardless of
whether enforcement is sought in a proceeding at law or in equity).
k. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement, the Indenture, the Debt
Securities [if Warrants are to be issued, the Warrant Agreement] [if Debt
----------------------------
Securities convertible into capital stock are issued, the issuance of the
Securities issuable upon conversion of the Debt Securities] and, when
signed, the applicable Pricing Agreement (A) do not and will not contravene (l)
any provision of the General Corporation Law of the State of Delaware (the
"DGCL") or any other provision of applicable law, or (2) the charter or by-laws
of the Company, or (3) any agreement, contract, bond, indenture or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or (4) any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary of the Company, except with respect to
clauses (A)(3) and (A)(4), for a contravention which would not have a material
adverse effect on the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries taken as a whole, (B) do
not and will not result in the imposition of any lien, charge or encumbrance
upon any assets of the Company or any of its subsidiaries, pursuant to the terms
of any agreement or instrument
5
<PAGE>
to which the Company or any of its subsidiaries is a party or by which any of
them or any of their respective properties is bound, except for any liens,
charges or encumbrances which would not have a material adverse effect on the
condition, financial or otherwise, or the earnings or business affairs of the
Company and its subsidiaries taken as a whole and (C) do not require any
consent, approval, authorization or order of, or qualification with, any
governmental body or agency, except such as may be required by the securities or
Blue Sky laws of the various states and except as may be required under the
Securities Act and the Exchange Act in connection with the offer and sale of the
Designated Securities.
l. There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
m. There are no legal or governmental proceedings pending or, to the best
of the Company's knowledge, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject (i) which are required to be described in the
documents incorporated by reference in the Registration Statement or Prospectus
and are not so described or (ii) which could reasonably be expected to result in
a material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, or in the power or ability of the Company to perform its obligations
under this Agreement or to consummate any of the transactions contemplated by
the Prospectus or this Agreement. There are no statutes, regulations, contracts
or other documents that are required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
n. The Company is not an "investment company", as such term is defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act").
o. [If Debt Securities convertible into capital stock are to be issued,
-------------------------------------------------------------------
The authorized capital stock of the Company conforms as to legal matters to the
description thereof contained in the Prospectus.]
p. [If Debt Securities convertible into capital stock are to be issued,
-------------------------------------------------------------------
the shares of capital stock of the Company (including the shares outstanding)
have been duly authorized and are validly issued, fully paid and non-
assessable.]
6
<PAGE>
q. The Designated Securities have been duly and validly authorized, and,
when the Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement, such Designated Securities will be valid
and binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their terms,
subject, as to enforcement, (A) to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles (regardless of
whether enforcement is sought in a proceeding at law or in equity) and (B)
Section 6.6 of the Indenture; the Securities conform to the description thereof
contained in the Registration Statement and the Designated Securities will
conform to the description thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Securities.
r. Each of the Company and its subsidiaries has all necessary consents,
authorizations, approvals, orders, certificates and permits (collectively,
"Permits") of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license and use
its properties and assets and to conduct its business in the manner described in
the Prospectus, except to the extent that the failure to obtain or file could
not reasonably be expected to have a material adverse effect on the Company and
its subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Permits which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
s. The Company and its subsidiaries (i) are in compliance with all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances, and regulated wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals and filed
all notices required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of each such permit, license, notice or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits licenses, approvals or obligations or to file such notices would
not, singly or in the aggregate have a material adverse effect on the Company
and its subsidiaries taken as a whole, except as otherwise disclosed or
incorporated by reference in the Prospectus.
7
<PAGE>
t. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for cleanup, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole, except as otherwise disclosed or incorporated by reference in
the Prospectus.
u. [Except for (i) the Registration Rights Agreement dated as of February
19, 1998 among the Company, Salomon Brothers Inc, BancAmerica Robertson
Stephens and J.P. Morgan Securities Inc., (ii) the Registration Rights Agreement
dated as of February 20, 1997 among McKesson Financing Trust, the Company and
Morgan Stanley & Co. Incorporated and (iii) the Registration Rights Agreement
dated as of September 22, 1997 between the Company and 399 Venture Partners,
Inc.,] there are no contracts, agreements or understandings between the Company,
on the one hand, and any person, on the other hand, granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to require the
Company to include such securities in any registration statement filed by the
Company under the Securities Act.
v. The securities into or for which the Debt Securities are initially
convertible or exchangeable, if any, and for which the Warrants may be exercised
(the "Underlying Securities") have been duly authorized and reserved for
issuance.
w. When the Underlying Securities are issued upon the conversion,
exchange or exercise the Debt Securities or Warrants, as the case may be, in
accordance with the terms of such Debt Securities or Warrants, such Underlying
Securities will be validly issued, fully paid and non-assessable and will not be
subject to any pre-emptive rights or other rights to subscribe for or purchase
such underlying Securities.
2. OFFERING. Upon the execution of the Pricing Agreement applicable to
--------
any Designated Securities and authorization by the Representatives of the
release of the Designated Securities, the several Underwriters propose to offer
the Designated Securities
8
<PAGE>
for sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
3. PAYMENT AND DELIVERY. The aggregate principal amount of Designated
--------------------
Securities to be purchased by the Underwriters pursuant to such Pricing
Agreement shall be the aggregate amount set forth in Schedule I to such Pricing
Agreement.
Certificates for the Designated Securities to be purchased by the
Underwriters pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement and in such authorized denominations and
registered in such names as the Representatives may request upon at least forty-
eight hours' prior notice to the Company, shall be delivered by or on behalf of
the Company to the Representatives for the account of the Underwriters, against
payment by the Underwriters or on their behalf of the purchase price therefor by
wire transfer of Federal (same-day) funds to the Company in such amounts and at
such time specified in such Pricing Agreement, all in the manner and at the
place and time and date specified in such Pricing Agreement or at such other
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery."
4. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
-------------------------------------------
Underwriters are subject to the following conditions:
a. Subsequent to the execution and delivery of the Pricing Agreement
relating to the Designated Securities and prior to the Time of Delivery:
i. there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of
the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
ii. there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or
supplements thereto
9
<PAGE>
subsequent to the date of this Agreement) that, in the
Underwriters' judgment, is so material and adverse and that makes
it, in the Underwriters' judgment, impracticable to market the
Designated Securities on the terms and in the manner contemplated
in the Prospectus.
b. The Underwriters shall have received at each Time of Delivery for the
Designated Securities a certificate, at and as of such Time of Delivery, signed
by an executive officer of the Company, to the effect set forth in clause (a)(i)
above and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct at and as of such Time of
Delivery and that the Company has complied with all of the agreements and
satisfied all of the conditions on their part to be performed or satisfied
hereunder on or before each such Time of Delivery.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
c. The Underwriters shall have received at each Time of Delivery for the
Designated Securities an opinion of Ivan D. Meyerson, Vice President and General
Counsel of the Company, at and as of such Time of Delivery, to the effect that:
i. the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the state of
Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in the State of California; and the Company is duly
qualified to transact business and is in good standing in each
other jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or to be
in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
ii. each significant subsidiary of the Company, as defined by
Rule l-02(w) of Regulation S-X of the Securities Act, has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its
10
<PAGE>
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
iii. [if Debt Securities convertible into capital stock are to be
-----------------------------------------------------------
issued, to the best of such counsel's knowledge, the issuance of
------
shares of common stock, par value $0.01 per share (the "Common
Stock") of the Company, or preferred stock, par value $0.01 per
share (the "Preferred Securities") of the Company, as the case
may be, upon the conversion of the Securities is not subject to
preemptive or similar rights arising under the DGCL, the charter
or by-laws of the Company or, to the best of such counsel's
knowledge, any agreement or instrument to which the Company or
any of its subsidiaries is a party;]
iv. if applicable, the securities into or for which the Debt
Securities or the Warrants are convertible, exchangeable or
exercisable as the case may be, initially reserved for issuance
upon such conversion, exchange or exercise of the Debt Securities
or the Warrants (the "Underlying Securities"), have been duly
authorized and reserved for issuance;
v. the statements in the Company's most recent Annual Report on Form
10-K under the caption "Legal Proceedings" and the statements
regarding legal proceedings in the Company's Current Reports on
Form 8-K, as amended, and Quarterly Reports on Form 10-Q, as
amended, incorporated by reference in the Prospectus, in each
case insofar as such statements constitute summaries of legal
matters or legal proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
11
<PAGE>
vi. each document filed pursuant to the Exchange Act and incorporated
by reference in the Prospectus (except for financial statements,
exhibits and schedules included therein as to which counsel need
not express any opinion) complied when so filed or, if amended,
when so amended, as to form in all material respects with the
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder;
vii. the execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the
Indenture [if Warrants are to be issued, the Warrant Agreement]
----------------------------
and the applicable Pricing Agreement, [if Debt Securities
------------------
convertible into capital stock are to be issued and the issuance
-----------------------------------------------
of the Securities issuable upon conversion of the Debt
Securities] (A) do not and will not contravene (l) any provision
of applicable law or the charter or by-laws of the Company, or
(2) to the best of such counsel's knowledge, any agreement,
contract, bond, indenture or other instrument binding upon the
Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or (3) to the
best of such counsel's knowledge, any judgment, order or decree
of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary of the Company, except, with
respect to clauses (A)(2) and (A)(3), for a contravention which
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of
the Company and its subsidiaries taken as a whole, (B) to the
best of such counsel's knowledge, do not and will not result in
the imposition of any lien, charge or encumbrance upon any assets
of the Company or any of its subsidiaries pursuant to the terms
of any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of their
respective properties is bound, except for any liens, charges or
encumbrances which would not have a material adverse effect on
the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries taken as a
whole, and (C) do not require any consent, approval,
authorization or order of, or qualification with, any
governmental body or agency, except such as may be required by
the securities or Blue Sky laws of the various states and except
as may be required under the Securities Act,
12
<PAGE>
the Exchange Act and the Trust Indenture Act in connection with
the performance of the obligations under this Agreement. Such
opinion may state that the term "applicable law" as used in such
opinion means those laws, rules and regulations of the State of
California, the DGCL and the federal laws of the United States of
America that, in such counsel's opinion are normally applicable
to transactions of the type contemplated by this Agreement (other
than federal and state securities laws, the laws, rules and
regulations relating specifically to bank holding companies,
antifraud laws, or any law, rule or regulation that may have
become applicable to the Company as a result of the Underwriters'
involvement with the transaction contemplated by this Agreement
or because of any facts specifically pertaining to the
Underwriters and the rules and regulations of the National
Association of Securities Dealers, Inc.), but without such
counsel having made any special investigation concerning the
applicability of any other laws, rules or regulations;
viii. to the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is
subject (i) which are required to be described in the
Registration Statement or the Prospectus and are not so described
or (ii) which could reasonably be expected to result in a
material adverse change in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, or in the power or ability of the
Company to perform its obligations under the Agreement or to
consummate any of the transactions contemplated by the Agreement.
To the best of such counsel's knowledge, there are no contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or
filed as required.
In addition, such counsel shall state that such counsel or his
representatives has participated in discussions with officers and other
representatives of the Company and representatives of the independent public
accountants for the Company, at which the contents of the Registration
Statement, the Prospectus and related matters were discussed and, although such
counsel has not independently verified, is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and has made no
independent check or verification thereof (except as otherwise indicated above),
on the basis of the foregoing, such counsel shall state that no facts have come
to such counsel's attention that have led such counsel to believe that (except
for financial statements and schedules and other
13
<PAGE>
financial and statistical data included or incorporated by reference therein, as
to which such counsel need not express any belief) the Registration Statement
and the prospectus included therein at the time the Registration Statement
became effective contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or, as of its date or at or as of the Time of
Delivery for the Designated Securities, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
The foregoing opinion shall be rendered to the Underwriters at the request
of the Company and shall so state therein. In addition, in rendering such
opinion, such counsel shall state that such opinion is limited to matters
arising under the laws of the State of California, the DGCL and the federal laws
of the United States.
d. The Underwriters shall have received at each Time of Delivery for the
Designated Securities an opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Company, dated as of such Time of Delivery, to the effect
that:
i. the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of
Delaware;
ii. the statements (A) in the Prospectus under the caption[s] [if
--
Debt Securities convertible into capital stock are to be issued
---------------------------------------------------------------
"Description of Capital Stock,"][if Warrants are to be issued and
----------------------------
"Description of Warrants,"] and "Description of the Debt
Securities" and (B) in the Registration Statement in Item 15,
insofar as such statements constitute summaries of legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
iii. this Agreement and the applicable Pricing Agreement relating to
the Designated Securities have been duly authorized, executed and
delivered by the Company;
iv. the Indenture has been duly qualified under the Trust Indenture
Act and the Indenture has been duly authorized by the Company
and, when duly executed and delivered by the Company and assuming
the due authorization, execution and delivery of the Indenture by
the
14
<PAGE>
Indenture Trustee, will be a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, subject, (a) as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding at law or in equity) and
(b) such counsel may state that they express no opinion regarding
the enforceability or effect of Section 6.6 of the Indenture;
v. [if Warrants are to be issued, the Warrant Agreement has been
----------------------------
duly authorized by the Company and, when duly executed and
delivered by the Company and assuming the due authorization,
execution and delivery of the Warrant Agreement by the other
parties thereto, will be a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding at law or in equity);]
vi. the execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the
Indenture, the Debt Securities [if Warrants are to be issued, the
----------------------------
Warrant Agreement] and, when signed, the applicable Pricing
Agreement, [if Debt Securities convertible into capital stock are
-----------------------------------------------------
to be issued
------------
and the issuance of the Debt Securities issuable upon conversion
of the Debt Securities] (A) do not and will not contravene any
provision of applicable law, the charter or by-laws of the
Company, and (B) do not require any consent, approval,
authorization or order of or qualification with, any governmental
body or agency, except such as may be required by the securities
or Blue Sky laws of the various states. Such opinion may state
that the term "applicable law" as used in such opinion means
those laws, rules and regulations of the state of New York, the
state of California, the DGCL and the federal laws of the United
States of America that, in such counsel's experience, are
normally applicable to transactions of the type contemplated by
this Agreement (other than federal and state securities laws, the
laws, rules and regulations relating specifically to bank holding
companies, antifraud laws, or any law, rule or regulation that
may have become applicable to the Company as a result of the
Underwriters' involvement with the transaction contemplated by
this agreement or because any facts specifically pertaining to
the Underwriters and the rules and regulations of the National
Associa-
15
<PAGE>
tion of Securities Dealers, Inc.), but without such counsel
having made any special investigation concerning the
applicability of any other laws, rules or regulations;
vii. the Company is not an "investment company," as such term is
defined in the Investment Company Act;
viii. each of the Registration Statement, as of its effective date, and
the Prospectus, as of its date, appeared on its face to be
appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and
regulations of the Commission, except that in each case we
express no opinion as to (a) the documents and information
incorporated or deemed to be incorporated by reference therein
(the "Incorporated Documents") or (b) the financial statements,
schedules and other financial and statistical data included or
incorporated by reference therein or excluded therefrom or the
exhibits to the Registration Statement, and we do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the
Prospectus or any of the documents incorporated therein by
reference;
ix. the Designated Securities have been duly and validly authorized,
and, when the Designated Securities are issued and delivered
pursuant to this Agreement [if Warrants are to be issued, the
----------------------------
Warrant Agreement] and the Pricing Agreement, such Designated
Securities will be valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against
the Company in accordance with their terms, (a) subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether enforcement is
sought in a proceeding at law or in equity) and (b) such counsel
may state that they express no opinion regarding the
enforceability or effect of Section 6.6 of the Indenture; the
Securities conform to the description thereof contained in the
Registration Statement and the Designated Securities will conform
to the description thereof contained in the Prospectus as amended
or supplemented with respect to such Designated Securities; and
x. [if Debt Securities convertible into capital stock are to be
-----------------------------------------------------------
issued when the Underlying Securities are issued upon conversion
------
of the Debt
16
<PAGE>
Securities or the Warrants in accordance with the terms of the
Debt Securities or the Warrants, such Underlying Securities will
be validly issued, fully paid and non-assessable.]
The foregoing opinion shall be rendered to the Underwriters at the request
of the Company and shall so state therein. In addition, in rendering such
opinion, such counsel shall state that such opinion is limited to matters
arising under the laws of the states of New York and California, the DGCL and
the federal laws of the United States.
e. The Underwriters shall have received at each Time of Delivery for the
Designated Securities an opinion of [_____________________], counsel for the
Underwriters, at and as of such Time of Delivery, in form and substance
satisfactory to the Underwriters, with respect to this Agreement, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may require.
f. The Underwriters shall have received at each Time of Delivery for the
Designated Securities, a letter dated the date hereof or at and as of such Time
of Delivery, as the case may be, in form and substance satisfactory to the
Underwriters, from Deloitte & Touche LLP, independent auditors, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in the
Registration Statement and the Prospectus; provided that the letter delivered at
--------
and as of the Time of Delivery shall use a "cut-off date" not earlier than the
date hereof.
g. Any certificate signed by any officer of the Company and delivered to
the Underwriters or the Underwriters' counsel shall be deemed a representation
and warranty by the Company to the Underwriters as to the matters covered
thereby.
5. COVENANTS OF THE COMPANY. In further consideration of the agreements
------------------------
of the Underwriters herein contained, the Company covenants with the
Underwriters as follows:
a. To furnish to the Underwriters, without charge, two signed copies of
the Registration Statement (including exhibits thereto) and a conformed copy of
the Registration Statement (without exhibits thereto) and to furnish to the
Underwriters in New York City, without charge, prior to 5:00 P.M. New York City
time on the business day next succeeding the date of this Agreement and during
the period mentioned in paragraph (c) below, as many copies of the Prospectus
and any supplements and amendments thereto or to the Registration Statement as
the Underwriters may reasonably request.
17
<PAGE>
b. Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to the Underwriters a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which the Underwriters reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such Rule.
c. If during such period after the first date of the public offering of
the Designated Securities as in the Underwriters' opinion the Prospectus is
required by law to be delivered in connection with sales by the Underwriters or
a dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Underwriters will furnish to the Company)
to which Designated Securities may have been sold by the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law.
d. To endeavor to qualify the Designated Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Underwriters
shall reasonably request, to comply with such laws as to permit the continuance
of sales and dealings in such jurisdictions until the earlier of (i) one year
after the date of this Agreement and (ii) as long as may be necessary to
complete the distribution of Designated Securities; provided, however, that the
Company will not be required to qualify as a foreign corporation, to file a
general consent to service of process in any such jurisdiction or to take any
other action that would subject the Company to service of process in any suits
other than those arising out of the offering of the Designated Securities or to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject.
e. To make generally available to the Company's security holders and to
the Underwriters as soon as practicable an earnings statement (which need not be
audited) complying with Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158).
18
<PAGE>
6. EXPENSES. Whether or not the transactions contemplated in this
--------
Agreement or any Pricing Agreement are consummated or this Agreement or any
Pricing Agreement is terminated, the Company agrees to pay or cause to be paid
all expenses incident to the performance of their obligations under this
Agreement and the applicable Pricing Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Designated
Securities under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, the Prospectus
and amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities herein above specified, (ii) all
costs and expenses related to the transfer and delivery of the Designated
Securities to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Designated
Securities under state securities laws and all expenses in connection with the
qualification of the Designated Securities for offer and sale under state
securities laws as provided in Section 5(d) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky or Legal
Investment memorandum, (iv) the cost of printing certificates representing the
Designated Securities, (v) the costs and charges of any transfer agent,
registrar or depositary, (vi) the fees and expenses of the Trustee and the fees
and disbursements of its counsel and (vii) all other costs and expenses incident
to the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 7 entitled "Indemnity and
Contribution" and Section 10 entitled "Miscellaneous," the Underwriters will pay
all of their costs and expenses, including fees and disbursements of its
counsel, stock transfer taxes payable on resale of any of the Designated
Securities by it and any advertising expenses connected with any offers it may
make. It is also understood that nothing in this Agreement or the applicable
Pricing Agreement shall change or set aside any existing arrangement or
agreement between the Company and the Underwriters with respect to fees or
expenses incurred or to be incurred in connection with the transactions
contemplated by this Agreement or the applicable Pricing Agreement.
7. INDEMNITY AND CONTRIBUTION. a. The Company agrees to indemnify and
--------------------------
hold harmless the Underwriters and each person, if any, who controls the
Underwriters within the meaning of either Section 15 of the Securities 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
19
<PAGE>
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof or the 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 in the Registration
Statement a material fact necessary in order to make the statements therein not
misleading, or caused by any omission or alleged omission to state in the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) 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 the Underwriters
furnished to the Company in writing by the Underwriters expressly for use
therein.
b. The Underwriters agree to indemnify and hold harmless the Company, the
directors of the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities 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
the Registration Statement or any amendment thereof or the 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 in
the Registration Statement a material fact necessary in order to make the
statements therein not misleading, or caused by any omission or alleged omission
to state in the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, but only with reference to information
relating to the Underwriters furnished to the Company in writing by the
Underwriters expressly for use in the Registration Statement, the Prospectus or
any amendments or supplements thereto.
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 paragraph (a), (b) or (c) of this Section 7, 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
20
<PAGE>
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 (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section of the Exchange Act and that all such reasonable fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of the Underwriters,
such firm shall be designated in writing by the Underwriters. In the case of
any such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
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 the reasonable 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.
21
<PAGE>
d. To the extent the indemnification provided for in paragraph (a), (b)
or (c) of this Section 7 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Designated Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
e. The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 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 7.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) of this Section 7
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 7, the Underwriters shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Designated Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that the
Underwriters have 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 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.
22
<PAGE>
f. The indemnity and contribution provisions contained in this Section 7
and the representations, warranties and other statements of the Company
contained in this Agreement 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 the Underwriters or any person controlling the Underwriters
or the Company, its officers or directors or any person controlling the Company
and (iii) acceptance of and payment for any of the Designated Securities.
8. TERMINATION. This Agreement and each Pricing Agreement shall be
-----------
subject to termination by notice given by the Underwriters to the Company, if
(a) after the execution and delivery of this Agreement and prior to each Time of
Delivery (i) trading generally shall have been suspended or materially limited
on or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange or the National Association of Securities Dealers, Inc., (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the Underwriters' judgment, is material and adverse
and (b) in the case of any of the events specified in clauses (a)(i) through
(iv) such event, singly or together with any other such event, makes it, in the
Underwriters' judgment, impracticable to market the Designated Securities on the
terms and in the manner contemplated in the Prospectus.
9. Default by One or More of the Underwriters. a. If any Underwriter
------------------------------------------
shall default in its obligation to purchase the Designated Securities which it
has agreed to purchase under the Pricing Agreement relating to such Securities,
the Representatives may in their discretion arrange for themselves or another
party or other parties to purchase such Securities on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Designated Securities,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Securities on such terms. In the event that,
within the respective prescribed period, the Representatives notify the Company
that they have so arranged for the purchase of such Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Securities, the Representatives or the Company shall have the right to postpone
a Time of Delivery for such Securities for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration
23
<PAGE>
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
b. If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of the Designated
Securities to be purchased at the respective Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to purchase the
principal amount of Designated Securities which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Securities and,
in addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made); but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
c. If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities to be purchased at the respective Time of Delivery, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 7 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. MISCELLANEOUS. If this Agreement or any applicable Pricing Agreement
-------------
shall be terminated by the Underwriters because (A) of any failure or refusal on
the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or (B) if for any reason the Company shall be
unable to perform its obligations under this
24
<PAGE>
Agreement, then the Company will reimburse the Underwriters, for all out-of-
pocket expenses (including the fees and disbursements of its counsel) reasonably
incurred by the Underwriters in connection with this Agreement or the offering
contemplated hereunder. If any Pricing Agreement shall be terminated pursuant to
Section 8 hereof, the Company shall not then be under any liability to any
Underwriter with respect to the Designated Securities with respect to which such
Pricing Agreement shall have been terminated except as provided in Sections 6
and 7 hereof; but, if for any other reason, Designated Securities are not
delivered by or on behalf of the Company as provided herein, the Company will
reimburse the Underwriters through the Representatives for all out-of-pocket
expenses approved in writing by the Representatives, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Securities,
but the Company shall then be under no further liability to any Underwriter with
respect to such Designated Securities except as provided in Sections 6 and 7
hereof.
11. EFFECTIVENESS. Each of this Agreement and each applicable Pricing
-------------
Agreement shall become effective upon the execution and delivery hereof and
thereof, as applicable, by the parties hereto.
12. COUNTERPARTS. This Agreement and each applicable Pricing Agreement
------------
may be signed in two or more counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
13. APPLICABLE LAW. This Agreement and each applicable Pricing Agreement
--------------
shall be governed by and construed in accordance with the laws of the State of
New York including, without limitation, Section 5-1404 of the New York General
Obligations Law.
14. HEADINGS. The headings of the sections of this Agreement and each
--------
applicable Pricing Agreement have been inserted for convenience of reference
only and shall not be deemed a part of this Agreement.
15. NOTICES. Except as otherwise provided in this Agreement and in the
-------
applicable Pricing Agreement, all notices, requests and other communications to
any person provided for hereunder shall be in writing and shall be given to such
person (a) in the case of any Underwriter, to such Underwriter at the address
set forth in its Underwriters' Questionnaire, or telex constituting a
Questionnaire, which address will be supplied to the Company by the
Representatives upon request, or (b) in the case of the Company, at McKesson
Corporation, One Post Street, San Francisco, California 94104, to the attention
25
<PAGE>
of its General Counsel, or at such other address, or to the attention of such
other officer, as the Company shall have furnished to the Underwriters in
writing. Each such notice, request or other communication shall be effective
(i) if given by mail, 72 hours after such communication is deposited in the mail
with first class postage prepaid, addressed as aforesaid or (ii) if given by any
other means (including without limitation, by air courier), when delivered at
the address specified above. In all dealings hereunder, the Representatives of
the Underwriters of Designated Securities shall act on behalf of each of such
Underwriter, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice
26
<PAGE>
or agreement on behalf of any Underwriter made or given by such Representatives
jointly or by such of the Representatives, if any, as may be designated for such
purpose in the Pricing Agreement.
Very truly yours,
McKESSON CORPORATION
By:_________________________________
Name:
Title:
Accepted, __________________
____________________________
____________________________
By: _______________________
By:_________________________
Name: ___________________
Title: ________________
27
<PAGE>
ANNEX I
Pricing Agreement
-----------------
Ladies and Gentlemen:
McKesson Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated ___________, ____ (the "Underwriting Agreement"), between the
Company on the one hand and _________________________________ on the other hand,
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities" consisting of Designated Securities the Underwriters may elect to
purchase). Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement,
except that each representation and warranty which refers to the Prospectus in
Section 1 of the Underwriting Agreement shall be deemed to be a representation
or warranty as of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Securities pursuant to Section 15 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 15 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
I-1
<PAGE>
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriters in Schedule I hereto.
I-2
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and one for each of the Representatives plus
one for each counsel] counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
McKESSON CORPORATION
By:_____________________________
Name:
Title:
Accepted as of the date hereof:
- ------------------------------
Name(s) of Co-Representative(s)
By:________________________________
(______________________)
I-3
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount
of Number of
Debt Securities Warrants
Underwriters to be Purchased to be Purchased
-------------- ------------------ ------------------
<S> <C> <C>
[Name(s) of Representative(s)]
[Names of other Underwriters]
Total ================== ==================
</TABLE>
I-4
<PAGE>
SCHEDULE II
Principal Amount of Debt Securities:............
Number of Warrants:.............
Initial Offering Price to Public:
[$........ per Debt Security] [Formula]
[$........ per Warrant] [Formula]
Purchase Price by Underwriters:
[$........ per Debt Security] [Formula]
[$........ per Warrant] [Formula]
Commission Payable to Underwriters:
$........ per Debt Security
$........ per Warrant
Form of Designated Securities:
Definitive form, to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of The Depository
Trust Company or [its designated custodian, the Representatives]
Specified Funds for Payment of Purchase Price:
Blackout Provisions:
Time of Delivery:
......... a.m. (New York City time), .................., 19..
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
Other Terms:
I-5
<PAGE>
$4/NOFOLIO
Exhibit 1.2
FORM OF UNDERWRITING AGREEMENT (EQUITY SECURITIES
AND WARRANTS TO PURCHASE EQUITY SECURITIES)
[DATE]
[Name and address
of Underwriters]
Ladies and Gentlemen:
From time to time, McKesson Corporation, a Delaware corporation (the
"Company"), may enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain securities (the "Securities"), specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, the "Firm Securities"). If
specified in such Pricing Agreement, the Company may grant to the Underwriters
the right to purchase at their election an additional number of Securities,
specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Securities"). The Firm Securities and the Optional Securities, if
any, which the Underwriters elect to purchase pursuant to Section 3 hereof are
herein collectively called the "Designated Securities."
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto.
If the Designated Securities specified in any Pricing Agreement are
depositary shares (the "Depositary Shares"), each Depositary Share will
represent a portion, specified in the applicable Pricing Agreement, of the
Company's capital stock that the Company will have deposited against delivery of
depositary receipts (the "Depositary Receipts") to be issued by a depositary,
specified in the applicable Pricing Agreement (the "Depositary"), under a
<PAGE>
deposit agreement (the "Deposit Agreement") among the Company, the Depositary
and the holders from time to time of the Depositary Receipts issued thereunder.
Each Depositary Receipt will represent Depositary Shares as described in the
applicable Depositary Agreement.
Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Designated Securities, for whom the firms designated as
representatives of the Underwriters of such Designated Securities in the Pricing
Agreement relating thereto will act as representatives (the "Representatives").
The term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to the Underwriters who act without any
firm being designated as their representative. This Agreement shall not be
construed as an obligation of the Company to sell any of the Securities or as an
obligation of any of the Underwriters to purchase any of the Securities. The
obligation of the Company to issue and sell any of the Securities and the
obligation of any of the Underwriters to purchase any of the Securities shall be
evidenced by the Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify the aggregate number of
the Firm Securities, the maximum number of Optional Securities, if any, the
initial public offering price of such Firm and Optional Securities or the manner
of determining such price, the purchase price to the Underwriters of such
Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters, the number of
such Designated Securities to be purchased by the Underwriters and the
commission, if any, payable to the Underwriters with respect thereto and shall
set forth the date, time and manner of delivery of such Firm and Optional
Securities, if any, and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Securities. A
Pricing Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus,
relating to the Securities. The registration statement as amended at the time
it becomes effective, is hereinafter referred to as the "Initial Registration
Statement"; such Initial Registration Statement and any post-effective amendment
thereto, together with a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed
2
<PAGE>
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), and, in each case, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained therein is
hereinafter referred to as the "Registration Statement." The prospectus relating
to the Securities, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of this
Agreement is hereinafter called the "Prospectus." Any reference to Prospectus
shall be deemed to refer to and include the documents incorporated by reference
therein as of the date of the Prospectus and any amendment or supplement in the
form in which it is filed with the Commission pursuant to Rule 424(b) under the
Securities Act, including any documents incorporated by reference therein as of
the date of such filing.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
------------------------------
to, and agrees with the Underwriters, that:
a. The Registration Statement has become effective under the Securities
Act; no stop order suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose is pending before or, to the
knowledge of the Company, threatened by the Commission.
b. (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
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,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph 1(b)
do not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to the Underwriters furnished to the
Company in writing by the Underwriters expressly for use therein.
c. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable, and the rules and regulations of the Commission thereunder, and none
of such documents contained an untrue statement of a
3
<PAGE>
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will
not 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.
d. The accountants who have audited certain financial statements included
or incorporated by reference in the Registration Statement and the Prospectus
are independent public accountants as required by the Securities Act and the
rules and regulations thereunder.
e. The financial statements (together with the related notes thereto)
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of and at the dates indicated and the results of
their operations for the periods specified, except as otherwise disclosed
therein; and except as otherwise stated therein or in the Registration Statement
and the Prospectus, said financial statements have been prepared in conformity
with generally accepted accounting principles in the United States applied on a
consistent basis; and the pro forma consolidated financial data of the Company
and its subsidiaries and the related notes thereto included or incorporated by
reference in the Registration Statement and Prospectus have been prepared in
accordance with the Commission's rules and regulations with respect to pro forma
financial data, have been and will be properly compiled on the bases described
therein and the assumptions used in the preparation thereof are and will be
reasonable and the adjustments used therein are and will be appropriate to give
effect to the transactions and circumstances referred to therein.
f. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in the State of California; and the Company is duly qualified to
transact business and is in good standing in each other jurisdiction in which
the conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
4
<PAGE>
g. Each significant subsidiary of the Company, as defined by Rule 1-02(w)
of Regulation S-X of the Securities Act, has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
h. This Agreement has been, and, when signed, the applicable Pricing
Agreement relating to the Designated Securities will be, duly authorized,
executed and delivered by the Company.
i. [If Depositary Shares are being issued the Deposit Agreement has been
-------------------------------------
duly authorized by the Company and, when duly executed and delivered by the
Company and assuming the due authorization, execution and delivery of the
Deposit Agreement by the other parties thereto, will be a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(regardless of whether enforcement is sought in a proceeding at law or in
equity).]
j. [If warrants (the "Warrants") to purchase any Series preferred stock,
-------------------------------------------------------------------
par value $0.01 per share (the "Preferred Securities"), or common stock, par
- -----------------------------------------------------------------------------
value $0.01 per share (the "Common Stock"), of the Company are being issued
- ----------------------------------------------------------------------------
The Warrant Agreement to be dated as of [ ], (the "Warrant Agreement")
between the Company and [ ], has been duly authorized by the Company
and, when duly executed and delivered by the Company and assuming the due
authorization, execution and delivery of the Warrant Agreement by the other
parties thereto, will be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding at law or in equity).]
k. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement [if convertible Preferred
------------------------
Securities are to be issued, the issuance of the Securities] issuable upon
- ---------------------------
conversion of the Preferred Securities] [if Depositary Shares are to be issued,
the Depositary Shares] and, when signed, the applicable Pricing Agreement (A) do
not and will not contravene (l) any provision of the General Corporation
5
<PAGE>
Law of the State of Delaware (the "DGCL") or any other provision of applicable
law, or (2) the charter or by-laws of the Company, or (3) any agreement,
contract, bond, indenture or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or (4) any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary of the Company,
except with respect to clauses (A)(3) and (A)(4), for a contravention which
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company and its
subsidiaries taken as a whole, (B) do not and will not result in the imposition
of any lien, charge or encumbrance upon any assets of the Company or any of its
subsidiaries, pursuant to the terms of any agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of them or any of
their respective properties is bound, except for any liens, charges or
encumbrances which would not have a material adverse effect on the condition,
financial or otherwise, or the earnings or business affairs of the Company and
its subsidiaries taken as a whole and (C) do not require any consent, approval,
authorization or order of, or qualification with, any governmental body or
agency, except such as may be required by the securities or Blue Sky laws of the
various states and except as may be required under the Securities Act and the
Exchange Act in connection with the offer and sale of the Designated Securities.
l. There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
m. There are no legal or governmental proceedings pending or, to the best
of the Company's knowledge, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject (i) which are required to be described in the
documents incorporated by reference in the Registration Statement or Prospectus
and are not so described or (ii) which could reasonably be expected to result in
a material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, or in the power or ability of the Company to perform its obligations
under this Agreement or to consummate any of the transactions contemplated by
the Prospectus or this Agreement. There are no statutes, regulations, contracts
or other documents that are required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
6
<PAGE>
n. The Company is not an "investment company," as such term is defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act").
o. The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
p. The shares of capital stock of the Company (including the shares
outstanding) have been duly authorized and are validly issued, fully paid and
non-assessable.
q. The Securities have been duly and validly authorized, and, when the
Firm Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities and, in the case of
any Optional Securities, pursuant to Over-allotment Options (as defined in
Section 3 hereof) with respect to such Securities, such Designated Securities
will be duly and validly issued and fully paid and non-assessable; the
Securities conform to the description thereof contained in the Registration
Statement and the Designated Securities will conform to the description thereof
contained in the Prospectus as amended or supplemented with respect to such
Designated Securities.
r. Each of the Company and its subsidiaries has all necessary consents,
authorizations, approvals, orders, certificates and permits (collectively,
"Permits") of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license and use
its properties and assets and to conduct its business in the manner described in
the Prospectus, except to the extent that the failure to obtain or file could
not reasonably be expected to have a material adverse effect on the Company and
its subsidiaries, taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Permits which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
s. The Company and its subsidiaries (i) are in compliance with all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances, and regulated wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals and filed
all notices required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of each such permit, license, notice or approval, except where such
noncompli-
7
<PAGE>
ance with Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of such
permits licenses, approvals or obligations or to file such notices would not,
singly or in the aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole, except as otherwise disclosed or incorporated by
reference in the Prospectus.
t. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for cleanup, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole, except as otherwise disclosed or incorporated by reference in
the Prospectus.
u. [Except for (i) the Registration Rights Agreement dated as of February
19, 1998 among the Company, Salomon Brothers Inc, BancAmerica Robertson
Stephens and J.P. Morgan Securities Inc., (ii) the Registration Rights Agreement
dated as of February 20, 1997 among McKesson Financing Trust, the Company and
Morgan Stanley & Co. Incorporated and (iii) the Registration Rights Agreement
dated as of September 22, 1997 between the Company and 399 Venture Partners,
Inc.,] there are no contracts, agreements or understandings between the Company,
on the one hand, and any person, on the other hand, granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to require the
Company to include such securities in any registration statement filed by the
Company under the Securities Act.
v. [The Rights (as defined in the Rights Agreement, dated [ ],
between the Company and [ ] (the "Rights Agreement")) have
been duly authorized by the Company and, when shares of Common Stock are issued
by the Company [including upon conversion of the Preferred Securities], the
Rights attached to such shares will be validly issued (unless the Rights have
theretofore been redeemed or exchanged or have expired pursuant to the Rights
Agreement.]
2. OFFERING. Upon the execution of the Pricing Agreement applicable to
--------
any Designated Securities and authorization by the Representatives of the
release of the Firm
8
<PAGE>
Securities, the several Underwriters propose to offer the Firm Securities for
sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
3. PAYMENT AND DELIVERY. The Company may specify in the Pricing
--------------------
Agreement applicable to any Designated Securities that the Company thereby
grants to the Underwriters the right (an "Over-allotment Option") to purchase at
their election up to the number of Optional Securities set forth in such Pricing
Agreement, on the terms set forth in the paragraph above, for the sole purpose
of covering over-allotments in the sale of the Firm Securities. Any such
election to purchase Optional Securities may be exercised by written notice from
the Representatives to the Company, given within a period specified in the
Pricing Agreement, setting forth the aggregate number of Optional Securities to
be purchased and the date on which such Optional Securities are to be delivered,
as determined by the Representatives, but in no event earlier than the First
Time of Delivery (as defined in Section 3 hereof) or, unless the Representatives
and the Company otherwise agree in writing, earlier than or later than the
respective number of business days after the date of such notice set forth in
such Pricing Agreement.
The number of Optional Securities to be added to the number of Firm
Securities to be purchased by the Underwriters as set forth in Schedule I to the
Pricing Agreement applicable to such Designated Securities shall be, in each
case, the number of Optional Securities which the Company has been advised by
the Representatives have been attributed to such Underwriters; provided that, if
the Company has not been so advised, the number of Optional Securities to be so
added shall be, in each case, that proportion of Optional Securities which the
number of Firm Securities to be purchased by the Underwriters under such Pricing
Agreement bears to the aggregate number of Firm Securities (rounded as the
Representatives may determine to the nearest 100 Securities). The total number
of Designated Securities to be purchased by all the Underwriters pursuant to
such Pricing Agreement shall be the aggregate number of Firm Securities set
forth in Schedule I to such Pricing Agreement plus the aggregate number of
Optional Securities which the Underwriters elect to purchase.
Certificates for the Firm Securities and the Optional Securities to be
purchased by the Underwriters pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of the
Underwriters, against payment by the Underwriters or on their behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
Company in such
9
<PAGE>
amounts and at such time specified in such Pricing Agreement, (i) with respect
to the Firm Securities, all in the manner and at the place and time and date
specified in such Pricing Agreement or at such other place and time and date as
the Representatives and the Company may agree upon in writing, such time and
date being herein called the "First Time of Delivery" and (ii) with respect to
the Optional Securities, if any, in the manner and at the time and date
specified by the Representatives in the written notice given by the Representa-
tives of the Underwriters' election to purchase such Optional Securities, or at
such other time and date as the Representatives and the Company may agree upon
in writing, such time and date, if not the First Time of Delivery, herein called
the "Second Time of Delivery." Each such time and date for delivery is herein
called a "Time of Delivery."
4. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
-------------------------------------------
Underwriters are subject to the following conditions:
a. Subsequent to the execution and delivery of the Pricing Agreement
relating to the Designated Securities and prior to the Time of Delivery:
i. there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of
the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
ii. there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement)
that, in the Underwriters' judgment, is so material and adverse
and that makes it, in the Underwriters' judgment, impracticable
to market the Designated Securities on the terms and in the
manner contemplated in the Prospectus.
b. The Underwriters shall have received at each Time of Delivery for the
Designated Securities a certificate, at and as of such Time of Delivery, signed
by an
10
<PAGE>
executive officer of the Company, to the effect set forth in clause (a)(i) above
and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct at and as of such Time of
Delivery and that the Company has complied with all of the agreements and
satisfied all of the conditions on their part to be performed or satisfied
hereunder on or before each such Time of Delivery.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
c. The Underwriters shall have received at each Time of Delivery for the
Designated Securities an opinion of Ivan D. Meyerson, Vice President and General
Counsel of the Company, at and as of such Time of Delivery, to the effect that:
i. the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the state of
Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in the State of California; and the Company is duly
qualified to transact business and is in good standing in each
other jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or to be
in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
ii. each significant subsidiary of the Company, as defined by
Rule l-02(w) of Regulation S-X of the Securities Act, has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
11
<PAGE>
iii. the shares of outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar
rights arising under the DGCL, the charter or by-laws of the
Company or, to the best of such counsel's knowledge, any
agreement or instrument to which the Company or any of its
subsidiaries is a party;
iv. the statements in the Company's most recent Annual Report on Form
10-K under the caption "Legal Proceedings" and the statements
regarding legal proceedings in the Company's Current Reports on
Form 8-K, as amended, and Quarterly Reports on Form 10-Q, as
amended, incorporated by reference in the Prospectus, in each
case insofar as such statements constitute summaries of legal
matters or legal proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
v. each document filed pursuant to the Exchange Act and incorporated
by reference in the Prospectus (except for financial statements,
exhibits and schedules included therein as to which counsel need
not express any opinion) complied when so filed or, if amended,
when so amended, as to form in all material respects with the
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder;
vi. the execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement and, when
signed, the applicable Pricing Agreement, [if Depositary Shares
--------------------
are to be issued, the Depositary Shares] [if convertible
---------------- ---------------
Preferred Securities are to be issued and the issuance of the
-------------------------------------
Securities issuable upon conversion of the Preferred Securities]
(A) do not and will not contravene (l) any provision of
applicable law or the charter or by-laws of the Company, or (2)
to the best of such counsel's knowledge, any agreement, contract,
bond, indenture or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or (3) to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any subsidiary of the Company, except, with respect to
12
<PAGE>
clauses (A)(2) and (A)(3), for a contravention which would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company and
its subsidiaries taken as a whole, (B) to the best of such
counsel's knowledge, do not and will not result in the imposition
of any lien, charge or encumbrance upon any assets of the
Company or any of its subsidiaries pursuant to the terms of any
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of their
respective properties is bound, except for any liens, charges or
encumbrances which would not have a material adverse effect on
the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries taken as a
whole, and (C) do not require any consent, approval,
authorization or order of, or qualification with, any
governmental body or agency, except such as may be required by
the securities or Blue Sky laws of the various states and except
as may be required under the Securities Act and the Exchange Act
in connection with the performance of the obligations under this
Agreement. Such opinion may state that the term "applicable law"
as used in such opinion means those laws, rules and regulations
of the State of California, the DGCL and the federal laws of the
United States of America that, in such counsel's opinion are
normally applicable to transactions of the type contemplated by
this Agreement (other than federal and state securities laws, the
laws, rules and regulations relating specifically to bank
holding companies, antifraud laws, or any law, rule or regulation
that may have become applicable to the Company as a result of the
Underwriters' involvement with the transaction contemplated by
this Agreement or because of any facts specifically pertaining to
the Underwriters and the rules and regulations of the National
Association of Securities Dealers, Inc.), but without such
counsel having made any special investigation concerning the
applicability of any other laws, rules or regulations;
vii. to the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is
subject (i) which are required to be described in the
Registration Statement or the Prospectus and are not so described
or (ii) which could reasonably be expected to result in a
material adverse change in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, or in the power or ability of the
Company to perform its obligations under the Agreement or to
consummate any of the transactions contemplated by
13
<PAGE>
the Agreement. To the best of such counsel's knowledge, there are
no contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or
filed as required.
In addition, such counsel shall state that such counsel or his
representatives has participated in discussions with officers and other
representatives of the Company and representatives of the independent public
accountants for the Company, at which the contents of the Registration
Statement, the Prospectus and related matters were discussed and, although such
counsel has not independently verified, is not passing upon and does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and has made no
independent check or verification thereof (except as otherwise indicated above),
on the basis of the foregoing, such counsel shall state that no facts have come
to such counsel's attention that have led such counsel to believe that (except
for financial statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which such counsel need not
express any belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or, as of its date or at or as of the Time of Delivery for the Designated
Securities, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
The foregoing opinion shall be rendered to the Underwriters at the request
of the Company and shall so state therein. In addition, in rendering such
opinion, such counsel shall state that such opinion is limited to matters
arising under the laws of the State of California, the DGCL and the federal laws
of the United States.
d. The Underwriters shall have received at each Time of Delivery for the
Designated Securities an opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
special counsel to the Company, dated as of such Time of Delivery, to the effect
that:
i. the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of
Delaware;
ii. the statements (A) in the Prospectus under the captions
"Description of Capital Stock," [if Depositary Shares are being
------------------------------
issued and
----------
14
<PAGE>
"Description of Depositary Shares,"] [if Warrants are being
---------------------
issued and "Description of Warrants,"] and (B) in the
------
Registration Statement in Item 15, insofar as such statements
constitute summaries of legal matters, documents or proceedings
referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings
and fairly summarize the matters referred to therein;
iii. this Agreement and the applicable Pricing Agreement relating to
the Designated Securities have been duly authorized, executed and
delivered by the Company;
iv. [if Warrants are to be issued the Warrant Agreement has been duly
----------------------------
authorized by the Company and, when duly executed and delivered
by the Company and assuming the due authorization, execution and
delivery of the Warrant Agreement by the other parties thereto,
will be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether enforcement is
sought in a proceeding at law or in equity);]
v. [if Depositary Shares are to be issued the Depositary Agreement
-------------------------------------
has been duly authorized by the Company and, when duly executed
and delivered by the Company and assuming the due authorization,
execution and delivery of the Depositary Agreement by the other
parties thereto, will be a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether
enforcement is sought in a proceeding at law or in equity);]
vi. the execution and delivery by the Company of and the performance
by the Company of its obligations under, the Agreement [if
--
convertible Preferred Securities are to be issued, the issuance
-------------------------------------------------
of the Securities issuable upon conversion of the Preferred
Securities] and, when
15
<PAGE>
signed, the applicable Pricing Agreement, [if Depositary Shares
--------------------
are to be issued and the Depositary Agreement] (A) do not and
----------------
will not contravene any provision of applicable law, the charter
or by-laws of the Company, and (B) do not require any consent,
approval, authorization or order of or qualification with, any
governmental body or agency, except such as may be required by
the securities or Blue Sky laws of the various states. Such
opinion may state that the term "applicable law" as used in such
opinion means those laws, rules and regulations of the state of
New York, the state of California, the DGCL and the federal laws
of the United States of America that, in such counsel's
experience, are normally applicable to transactions of the type
contemplated by this Agreement (other than federal and state
securities laws, the laws, rules and regulations relating
specifically to bank holding companies, antifraud laws, or any
law, rule or regulation that may have become applicable to the
Company as a result of the Underwriters' involvement with the
transaction contemplated by this Agreement or because of any
facts specifically pertaining to the Underwriters and the rules
and regulations of the National Association of Securities
Dealers, Inc.), but without such counsel having made any special
investigation concerning the applicability of any other laws,
rules or regulations;
vii. the Company is not an "investment company," as such term is
defined in the Investment Company Act;
viii. each of the Registration Statement, as of its effective date, and
the Prospectus, as of its date, appeared on its face to be
appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and
regulations of the Commission, except that in each case we
express no opinion as to (a) the documents and information
incorporated or deemed to be incorporated by reference therein
(the "Incorporated Documents") or (b) the financial statements,
schedules and other financial and statistical data included or
incorporated by reference therein or excluded therefrom or the
exhibits to the Registration Statement, and we do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the
Prospectus or any of the documents incorporated therein by
reference;
ix. the Designated Securities have been duly and validly authorized,
and, when the Firm Securities are issued and delivered pursuant
to this Agreement and the Pricing Agreement with respect to such
Designated Securities and, in the case of any Optional Designated
Securities, pursuant to Over-
16
<PAGE>
allotment Options with respect to such Securities, such
Designated Securities will be duly and validly issued and fully
paid and non-assessable; the Securities conform to the
description thereof contained in the Registration Statement and
the Designated Securities will conform to the description thereof
contained in the Prospectus as amended or supplemented with
respect to such Designated Securities;
x. [the Rights have been duly authorized by the Company and, when
shares of Common Stock are issued by the Company [if Preferred
------------
Securities are to be issued, including upon conversion of the
---------------------------
Preferred Securities,] the Rights attached to such shares will be
validly issued (unless the Rights have theretofore been redeemed
or exchanged or have expired pursuant to the Rights Agreement).]
The foregoing opinion shall be rendered to the Underwriters at the request
of the Company and shall so state therein. In addition, in rendering such
opinion, such counsel shall state that such opinion is limited to matters
arising under the laws of the states of New York and California, the DGCL and
the federal laws of the United States.
e. The Underwriters shall have received at each Time of Delivery for the
Designated Securities an opinion of [_____________________], counsel for the
Underwriters, at and as of such Time of Delivery, in form and substance
satisfactory to the Underwriters, with respect to this Agreement, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may require.
f. The Underwriters shall have received at each Time of Delivery for the
Designated Securities, a letter dated the date hereof or at and as of such Time
of Delivery, as the case may be, in form and substance satisfactory to the
Underwriters, from Deloitte & Touche LLP, independent auditors, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in the
Registration Statement and the Prospectus; provided that the letter delivered at
--------
and as of the Time of Delivery shall use a "cut-off date" not earlier than the
date hereof.
g. Any certificate signed by any officer of the Company and delivered to
the Underwriters or the Underwriters' counsel shall be deemed a representation
and warranty by the Company to the Underwriters as to the matters covered
thereby.
17
<PAGE>
5. COVENANTS OF THE COMPANY. In further consideration of the agreements
------------------------
of the Underwriters herein contained, the Company covenants with the
Underwriters as follows:
a. To furnish to the Underwriters, without charge, two signed copies of
the Registration Statement (including exhibits thereto) and a conformed copy of
the Registration Statement (without exhibits thereto) and to furnish to the
Underwriters in New York City, without charge, prior to 5:00 P.M. New York City
time on the business day next succeeding the date of this Agreement and during
the period mentioned in paragraph (c) below, as many copies of the Prospectus
and any supplements and amendments thereto or to the Registration Statement as
the Underwriters may reasonably request.
b. Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to the Underwriters a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which the Underwriters reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such Rule.
c. If during such period after the first date of the public offering of
the Designated Securities as in the Underwriters' opinion the Prospectus is
required by law to be delivered in connection with sales by the Underwriters or
a dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Underwriters will furnish to the Company)
to which Designated Securities may have been sold by the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law.
d. To endeavor to qualify the Designated Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Underwriters
shall reasonably request, to comply with such laws as to permit the continuance
of sales and dealings in such jurisdictions until the earlier of (i) one year
after the date of this Agreement and (ii) as long as may be necessary to
complete the distribution of Designated Securities; provided,
18
<PAGE>
however, that the Company will not be required to qualify as a foreign
corporation, to file a general consent to service of process in any such
jurisdiction or to take any other action that would subject the Company to
service of process in any suits other than those arising out of the offering of
the Designated Securities or to taxation in respect of doing business in any
jurisdiction in which it is not otherwise subject.
e. To make generally available to the Company's security holders and to
the Underwriters as soon as practicable an earnings statement (which need not be
audited) complying with Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158).
6. EXPENSES. Whether or not the transactions contemplated in this
--------
Agreement or any Pricing Agreement are consummated or this Agreement or any
Pricing Agreement is terminated, the Company agrees to pay or cause to be paid
all expenses incident to the performance of their obligations under this
Agreement and the applicable Pricing Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Designated
Securities under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, the Prospectus
and amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities herein above specified, (ii) all
costs and expenses related to the transfer and delivery of the Designated
Securities to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Designated
Securities under state securities laws and all expenses in connection with the
qualification of the Designated Securities for offer and sale under state
securities laws as provided in Section 5(d) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky or Legal
Investment memorandum, (iv) the cost of printing certificates representing the
Designated Securities, (v) the costs and charges of any transfer agent,
registrar or depositary and (vi) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 7 entitled "Indemnity and Contribution" and
Section 10 entitled "Miscellaneous," the Underwriters will pay all of their
costs and expenses, including fees and disbursements of its counsel, stock
transfer taxes payable on resale of any of the Designated Securities by it and
any advertising expenses connected with any offers it may make. It is also
understood that nothing in this Agreement or the applicable Pricing
19
<PAGE>
Agreement shall change or set aside any existing arrangement or agreement
between the Company and the Underwriters with respect to fees or expenses
incurred or to be incurred in connection with the transactions contemplated by
this Agreement or the applicable Pricing Agreement.
7. INDEMNITY AND CONTRIBUTION. a. The Company agrees to indemnify and
--------------------------
hold harmless the Underwriters and each person, if any, who controls the
Underwriters within the meaning of either Section 15 of the Securities 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 the Registration Statement or any amendment
thereof or the 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 in the Registration Statement a material fact
necessary in order to make the statements therein not misleading, or caused by
any omission or alleged omission to state in the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) 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 the Underwriters furnished to the Company in
writing by the Underwriters expressly for use therein.
b. The Underwriters agree to indemnify and hold harmless the Company, the
directors of the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities 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
the Registration Statement or any amendment thereof or the 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 in
the Registration Statement a material fact necessary in order to make the
statements therein not misleading, or caused by any omission or alleged omission
to state in the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) a material fact necessary in
order to make the statements therein, in the light of the circumstances under
20
<PAGE>
which they were made, not misleading, but only with reference to information
relating to the Underwriters furnished to the Company in writing by the
Underwriters expressly for use in the Registration Statement, the Prospectus or
any amendments or supplements thereto.
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 paragraph (a), (b) or (c) of this Section 7, 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 (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section of the Exchange Act and that all such reasonable fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of the Underwriters,
such firm shall be designated in writing by the Underwriters. In the case of
any such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
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 the reasonable fees and expenses of counsel
as contemplated by the
21
<PAGE>
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), (b)
or (c) of this Section 7 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Designated Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
e. The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 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 7.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) of this Section 7
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
22
<PAGE>
provisions of this Section 7, the Underwriters shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Designated Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that the Underwriters
have 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7 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 7
and the representations, warranties and other statements of the Company
contained in this Agreement 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 the Underwriters or any person controlling the Underwriters
or the Company, its officers or directors or any person controlling the Company
and (iii) acceptance of and payment for any of the Designated Securities.
8. TERMINATION. This Agreement and each Pricing Agreement shall be
-----------
subject to termination by notice given by the Underwriters to the Company, if
(a) after the execution and delivery of this Agreement and prior to each Time of
Delivery (i) trading generally shall have been suspended or materially limited
on or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange or the National Association of Securities Dealers, Inc., (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the Underwriters' judgment, is material and adverse
and (b) in the case of any of the events specified in clauses (a)(i) through
(iv) such event, singly or together with any other such event, makes it, in the
Underwriters' judgment, impracticable to market the Designated Securities on the
terms and in the manner contemplated in the Prospectus.
9. Default by One or More of the Underwriters. a. If any Underwriter
------------------------------------------
shall default in its obligation to purchase the Firm Securities or Optional
Securities which it has agreed to purchase under the Pricing Agreement relating
to such Securities, the Representatives may in their discretion arrange for
themselves or another party or other parties to purchase such Securities on the
terms contained herein. If within thirty-six hours after such
23
<PAGE>
default by any Underwriter the Representatives do not arrange for the purchase
of such Firm Securities or Optional Securities, as the case may be, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to the Representatives to
purchase such Securities on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Securities, the
Representatives or the Company shall have the right to postpone a Time of
Delivery for such Securities for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
b. If, after giving effect to any arrangements for the purchase of the
Firm Securities or Optional Securities, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate number of such Securities which remains
unpurchased does not exceed one-eleventh of the aggregate number of the Firm
Securities or Optional Securities, as the case may be, to be purchased at the
respective Time of Delivery, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Firm Securities or
Optional Securities, as the case may be, which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Securities and,
in addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Firm Securities or Optional Securities, as the
case may be, which such Underwriter agreed to purchase under such Pricing
Agreement) of the Firm Securities or Optional Securities, as the case may be, of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
c. If, after giving effect to any arrangements for the purchase of the
Firm Securities or Optional Securities, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate number of Firm Securities or Optional
Securities, as the case may be, which remains unpurchased exceeds one-eleventh
of the aggregate number of the Firm Securities
24
<PAGE>
or Optional Securities, as the case may be, to be purchased at the respective
Time of Delivery, as referred to in subsection (b) above, or if the Company
shall not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Firm Securities or Optional Securities, as
the case may be, of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Firm Securities or the Over-allotment Option relating
to such Optional Securities, as the case may be, shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. MISCELLANEOUS. If this Agreement or any applicable Pricing Agreement
-------------
shall be terminated by the Underwriters because (A) of any failure or refusal on
the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or (B) if for any reason the Company shall be
unable to perform its obligations under this Agreement, then the Company will
reimburse the Underwriters, for all out-of-pocket expenses (including the fees
and disbursements of its counsel) reasonably incurred by the Underwriters in
connection with this Agreement or the offering contemplated hereunder. If any
Pricing Agreement or Over-allotment Option shall be terminated pursuant to
Section 8 hereof, the Company shall not then be under any liability to any
Underwriter with respect to the Firm Securities or Optional Securities with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 7 hereof; but, if for any other reason, Designated
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Securities, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Securities except as provided in
Sections 6 and 7 hereof.
11. EFFECTIVENESS. Each of this Agreement and each applicable Pricing
-------------
Agreement shall become effective upon the execution and delivery hereof and
thereof, as applicable, by the parties hereto.
12. COUNTERPARTS. This Agreement and each applicable Pricing Agreement
------------
may be signed in two or more counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
25
<PAGE>
13. APPLICABLE LAW. This Agreement and each applicable Pricing Agreement
--------------
shall be governed by and construed in accordance with the laws of the State of
New York including, without limitation, Section 5-1404 of the New York General
Obligations Law.
14. HEADINGS. The headings of the sections of this Agreement and each
--------
applicable Pricing Agreement have been inserted for convenience of reference
only and shall not be deemed a part of this Agreement.
15. NOTICES. Except as otherwise provided in this Agreement and in the
-------
applicable Pricing Agreement, all notices, requests and other communications to
any person provided for hereunder shall be in writing and shall be given to such
person (a) in the case of any Underwriter, to such Underwriter at the address
set forth in its Underwriters' Questionnaire, or telex constituting a
Questionnaire, which address will be supplied to the Company by the
Representatives upon request, or (b) in the case of the Company, at McKesson
Corporation, One Post Street, San Francisco, California 94104, to the attention
of its General Counsel, or at such other address, or to the attention of such
other officer, as the Company shall have furnished to the Underwriters in
writing. Each such notice, request or other communication shall be effective
(i) if given by mail, 72 hours after such communication is deposited in the mail
with first class postage prepaid, addressed as aforesaid or (ii) if given by any
other means (including without limitation, by air courier), when delivered at
the address specified above. In all dealings hereunder, the Representatives of
the Underwriters of Designated Securities shall act on behalf of each of such
Underwriter, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice
26
<PAGE>
or agreement on behalf of any Underwriter made or given by such Representatives
jointly or by such of the Representatives, if any, as may be designated for such
purpose in the Pricing Agreement.
Very truly yours,
McKESSON CORPORATION
By:______________________________
Name:
Title:
Accepted, __________________
____________________________
____________________________
By: _______________________
By:_________________________
Name: ___________________
Title: ________________
27
<PAGE>
ANNEX I
Pricing Agreement
-----------------
Ladies and Gentlemen:
McKesson Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated ___________, ____ (the "Underwriting Agreement"), between the
Company on the one hand and _________________________________ on the other hand,
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities" consisting of Firm Securities and any Optional Securities the
Underwriters may elect to purchase). Each of the provisions of the Underwriting
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein; and each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 1 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in relation
to the Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing Agreement. Each reference to
the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 15 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 15 are set forth in Schedule
II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
I-1
<PAGE>
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the time and place and at the purchase price to the Underwriters set forth in
Schedule II hereto, the number of Firm Securities set forth opposite the name of
such Underwriters in Schedule I hereto [and, (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional
Securities, as provided below, the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company at the purchase price to the Underwriters
set forth in Schedule II hereto that portion of the number of Optional
Securities as to which such election shall have been exercised].
[The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Securities set forth
opposite the name of such Underwriters in Schedule I hereto on the terms
referred to in the paragraph above for the sole purpose of covering over-
allotments in the sale of the Firm Securities. Any such election to purchase
Optional Securities may be exercised by written notice from the Representatives
to the Company given within a period of 30 calendar days after the date of this
Pricing Agreement, setting forth the aggregate number of Optional Securities to
be purchased and the date on which such Optional Securities are to be delivered,
as determined by the Representatives, but in no event earlier than the First
Time of Delivery or, unless the Representatives and the Company otherwise agree
in writing, no earlier than two or later than ten business days after the date
of such notice.]
I-2
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and one for each of the Representatives plus
one for each counsel] counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
McKESSON CORPORATION
By:_____________________________
Name:
Title:
Accepted as of the date hereof:
- ------------------------------
Name(s) of Co-Representative(s)
By:________________________________
(_____________________)
I-3
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Maximum
Number
of Optional
Number of Securities
Firm Securities Which
Underwriters to be Purchased May be
Purchased
---------------- ------------------- -----------------
<S> <C> <C>
[Name(s) of Representative(s)]
[Names of other Underwriters]
Total =================== =================
</TABLE>
I-4
<PAGE>
SCHEDULE II
Number of Designated Securities:
Number of Firm Securities:
Maximum Number of Optional Securities:
Initial Offering Price to Public:
[$........ per Security] [Formula]
Purchase Price by Underwriters:
[$........ per Security] [Formula]
Commission Payable to Underwriters:
$........ per Share
Form of Designated Securities:
Definitive form, to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of The Depository
Trust Company or [its designated custodian, the Representatives]
Specified Funds for Payment of Purchase Price:
Blackout Provisions:
Time of Delivery:
......... a.m. (New York City time), .................., 19..
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
Other Terms:
I-5
<PAGE>
Exhibit 4.1
________________________________________________________________________________
________________________________________________________________________________
McKESSON CORPORATION
and
[ ], as Trustee
Indenture
Dated as of ________ __, ____
Debt Securities
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
CROSS REFERENCE SHEET*
Between
Provisions of Trust Indenture Act (as defined herein) and Indenture
dated as of ________ __, ____ between McKESSON CORPORATION and [ ],
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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I DEFINITIONS
SECTION 1.1 CERTAIN TERMS DEFINED................................................ 1
ARTICLE II SECURITIES
SECTION 2.1 FORMS GENERALLY...................................................... 6
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................................................. 18
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION
THEREOF........................................................... 19
SECTION 2.11 TEMPORARY SECURITIES................................................. 20
ARTICLE III COVENANTS OF THE ISSUER
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST.................................... 20
SECTION 3.2 OFFICES FOR PAYMENTS, ETC............................................ 21
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE
OF TRUSTEE........................................................ 22
SECTION 3.4 PAYING AGENTS........................................................ 22
SECTION 3.5 COMPLIANCE CERTIFICATES.............................................. 23
SECTION 3.6 CORPORATE EXISTENCE.................................................. 23
SECTION 3.7 MAINTENANCE OF PROPERTIES............................................ 23
SECTION 3.8 PAYMENT OF TAXES AND OTHER CLAIMS.................................... 24
SECTION 3.9 LUXEMBOURG PUBLICATIONS.............................................. 24
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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...................................... 24
SECTION 4.2 REPORTS BY THE ISSUER................................................ 25
SECTION 4.3 REPORTS BY THE TRUSTEE............................................... 25
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................................................. 27
SECTION 5.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
DEBT.............................................................. 29
SECTION 5.3 APPLICATION OF PROCEEDS.............................................. 31
SECTION 5.4 SUITS FOR ENFORCEMENT................................................ 32
SECTION 5.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS.................. 33
SECTION 5.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS.............................. 33
SECTION 5.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE
CERTAIN SUITS..................................................... 33
SECTION 5.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT................................................. 34
SECTION 5.9 CONTROL BY HOLDERS OF SECURITIES..................................... 34
SECTION 5.10 WAIVER OF PAST DEFAULTS.............................................. 35
SECTION 5.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN CERTAIN
CIRCUMSTANCES..................................................... 35
SECTION 5.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY COSTS......... 35
ARTICLE VI CONCERNING THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT;
PRIOR TO DEFAULT.................................................. 36
SECTION 6.2 CERTAIN RIGHTS OF THE TRUSTEE........................................ 37
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF SECURITIES
OR APPLICATION OF PROCEEDS THEREOF................................ 38
SECTION 6.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES OR COUPONS; COLLECTIONS,
ETC............................................................... 38
SECTION 6.5 MONEYS HELD BY TRUSTEE............................................... 39
SECTION 6.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR CLAIM...... 39
SECTION 6.7 RIGHT OF TRUSTEE TO RELY ON OFFICER'S CERTIFICATE, ETC............... 39
SECTION 6.8 INDENTURES NOT CREATING POTENTIAL CONFLICTING INTERESTS FOR THE
TRUSTEE........................................................... 40
SECTION 6.9 QUALIFICATION OF TRUSTEE: CONFLICTING INTERESTS..................... 40
SECTION 6.10 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE.......................... 40
SECTION 6.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE............ 40
SECTION 6.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE....................... 42
SECTION 6.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF
TRUSTEE........................................................... 43
SECTION 6.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER................. 43
SECTION 6.15 APPOINTMENT OF AUTHENTICATING AGENT.................................. 43
ARTICLE VII CONCERNING THE SECURITYHOLDERS
SECTION 7.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS.......................... 45
SECTION 7.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF SECURITIES....... 45
SECTION 7.3 HOLDERS TO BE TREATED AS OWNERS...................................... 45
SECTION 7.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING.................... 45
SECTION 7.5 RIGHT OF REVOCATION OF ACTION TAKEN.................................. 46
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE VIII SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS........... 46
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.............. 48
SECTION 8.3 EFFECT OF SUPPLEMENTAL INDENTURE..................................... 49
SECTION 8.4 DOCUMENTS TO BE GIVEN TO TRUSTEE..................................... 49
SECTION 8.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL INDENTURES......... 49
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.................. 50
SECTION 9.2 SUCCESSOR CORPORATION SUBSTITUTED.................................... 50
SECTION 9.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE............................... 50
ARTICLE X SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 SATISFACTION AND DISCHARGE OF INDENTURE.............................. 51
SECTION 10.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES........................................................ 55
SECTION 10.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT............................. 55
SECTION 10.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT UNCLAIMED
FOR TWO YEARS..................................................... 55
SECTION 10.5 INDEMNITY FOR U.S. GOVERNMENT OF OBLIGATIONS......................... 55
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF ISSUER
EXEMPT FROM INDIVIDUAL LIABILITY.................................. 56
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 11.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES AND
HOLDERS OF SECURITIES AND COUPONS................................. 56
SECTION 11.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.................. 56
SECTION 11.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND HOLDERS OF SECURITIES
AND COUPONS....................................................... 56
SECTION 11.5 OFFICER'S CERTIFICATES AND OPINIONS OF COUNSEL; STATEMENTS TO BE
CONTAINED THEREIN................................................. 57
SECTION 11.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS...................... 58
SECTION 11.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE ACT...... 58
SECTION 11.8 NEW YORK LAW TO GOVERN............................................... 58
SECTION 11.9 COUNTERPARTS......................................................... 58
SECTION 11.10 EFFECT OF HEADINGS................................................... 59
SECTION 11.11 SECURITIES IN A COMPOSITE CURRENCY, CURRENCY UNIT, FOREIGN
CURRENCY OR IN ECU................................................ 59
SECTION 11.12 JUDGMENT CURRENCY.................................................... 59
ARTICLE XII REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE............................................. 60
SECTION 12.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS............................ 60
SECTION 12.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION.......................... 62
SECTION 12.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR SELECTION
FOR REDEMPTION.................................................... 63
SECTION 12.5 MANDATORY AND OPTIONAL SINKING FUNDS................................. 63
</TABLE>
v
<PAGE>
THIS INDENTURE, dated as of ________ __, ___, by and between McKESSON
CORPORATION, a Delaware corporation (the "Issuer"), and [ ], a [ ],
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 to any particular Article,
1
<PAGE>
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 [ ].
"Coupon" means any interest coupon appertaining to an Unregistered
Security.
"Covenant Defeasance" shall have the meaning set forth in Section
10.1(C).
2
<PAGE>
"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.
3
<PAGE>
"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.
"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 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).
4
<PAGE>
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.
"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.
"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.
"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.
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"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.
"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.
"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
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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 AUTHENTICATION. 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.
[ ],
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. 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
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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, currency or currencies in which
the Securities of the series are denominated (including, but not limited
to, any composite currency, currency units, Foreign Currency or ECU);
(4) the date or dates on which the principal of the Securities of the
series is payable or the method of determination thereof;
(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, the terms and conditions of any
deferral of interest and the additional interest, if any, thereon 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 and the manner in which, 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, or the date
or dates on 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 or the date or
dates on which, the price or prices at 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) the terms, if any, on which the Securities of such series will be
subordinate to other debt of the Company;
(10) 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;
(11) the percentage of the principal amount at which the Securities
will be issued and 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;
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(12) if other than the coin, currency or currencies in which the
Securities of the series are denominated, the coin, currency or currencies in
which payment of the principal of or interest on the Securities of such series
shall be payable including composite currencies or currency units;
(13) 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 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;
(14) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index or formula
based on a coin, currency, composite currency or currency unit other than that
in which the Securities of the series are denominated, the manner in which such
amounts shall be determined;
(15) 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;
(16) 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;
(17) 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;
(18) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars of any other agents with respect to the Securities
of such series;
(19) any deletion from modification of or addition to the Events of
Default or covenants with respect to the Securities of such series;
(20) if the Securities of the series are to be convertible into or
exchangeable for any other security or property of the Company; and
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
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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,
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 SECURITIES. 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;
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(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 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
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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 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
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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 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 subse-
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quent 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 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
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<PAGE>
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 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.
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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.
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
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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.
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.
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
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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 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
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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 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
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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.
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.
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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 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
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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 [ ]) 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 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 business 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
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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 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
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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;
(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;
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(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.
(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
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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
(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
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(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.
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
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(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, 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 other-
wise, then upon demand of the Trustee, the Issuer will pay to the Trustee for
the benefit of the
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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:
(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
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(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 be
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 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)
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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
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
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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 applicable 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
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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 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.
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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 with-
holding 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 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
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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 person would
exercise or use under the circumstances in the conduct of his or her 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 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
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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 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;
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(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 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
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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 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.
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SECTION 6.8 INDENTURES NOT CREATING POTENTIAL CONFLICTING 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 series of Securities that are of an equal priority and the
indenture between the Company and The First National Bank of Chicago, dated as
of March 11, 1997 with respect to series of securities thereunder that are of an
equal priority to any series of Securities.
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 TRUSTEE. 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 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 re-
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spect 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 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.
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(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.
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
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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.
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,
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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.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
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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 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
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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 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:
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(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 supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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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 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
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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.
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
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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.
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
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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 unmatured 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 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
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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 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
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(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(19) or 2.3(21) 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 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
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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
(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.
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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.
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.
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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 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 [
], Attention:[ ].
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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.
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,
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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 INCLUDING, WITHOUT LIMITATION, SECTION 5-140 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
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.
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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 COMPOSITE CURRENCY, CURRENCY UNIT,
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, currency
or currencies other than Dollars (including, but not limited to, any composite
currency, currency units, Foreign Currency or 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 such currency or currencies 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 rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New
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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 Luxembourg), in each case, once in each of three
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<PAGE>
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
such series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the
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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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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
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<PAGE>
the Trustee the Issuer shall become unconditionally obligated to make all the
cash 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 composite currency, currency
units, Foreign Currency or ECU) or a lesser sum in Dollars (or the equivalent
thereof in any composite currency, currency units, 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
composite currency, currency units, 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 composite currency, currency units,
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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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: _____________________________________________
Name:
Title:
Attest:
By:______
[ ], as Trustee
By: _____________________________________________
Name:
Title:
Attest:
By:______
<PAGE>
Exhibit 4.2
CERTIFICATE OF TRUST
The undersigned, the trustees of McKesson Financing Trust II, desiring
to form a business trust pursuant to Delaware Business Trust Act, 12 Del. C. (S)
---- --
3801 et seq., hereby certify as follows:
-- ---
i. The name of the business trust being formed hereby (the "Trust")
is "McKesson Financing Trust II."
ii. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
iii. This Certificate of Trust shall be effective as of the date of
its filing.
Dated: April 23, 1998
/s/ Nancy Miller
----------------------------------------
Name: Nancy Miller
Title: Regular Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Institutional Trustee
By: /s/ Steve Wagner
---------------------------------------
Name: Steve Wagner
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By: /s/ Steve Wagner
---------------------------------------
Name: Steve Wagner
Title: Vice President
<PAGE>
EXHIBIT 4.3
CERTIFICATE OF TRUST
The undersigned, the trustees of McKesson Financing Trust III,
desiring to form a business trust pursuant to Delaware Business Trust Act, 12
Del. C. (S) 3801 et seq., hereby certify as follows:
- ---- -- -- ---
i. The name of the business trust being formed hereby (the "Trust")
is "McKesson Financing Trust III."
ii. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
iii. This Certificate of Trust shall be effective as of the date of
its filing.
Dated: April 23, 1998
/s/ Nancy Miller
----------------------------------------
Name: Nancy Miller
Title: Regular Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Institutional Trustee
By: /s/ Steve Wagner
---------------------------------------
Name: Steve Wagner
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By: /s/ Steve Wagner
---------------------------------------
Name: Steve Wagner
Title: Vice President
<PAGE>
EXHIBIT 4.4
CERTIFICATE OF TRUST
The undersigned, the trustees of McKesson Financing Trust IV, desiring
to form a business trust pursuant to Delaware Business Trust Act, 12 Del. C. (S)
---- --
3801 et seq., hereby certify as follows:
-- ---
i. The name of the business trust being formed hereby (the "Trust")
is "McKesson Financing Trust IV."
ii. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
iii. This Certificate of Trust shall be effective as of the date of
its filing.
Dated: April 23, 1998
/s/ Nancy Miller
----------------------------------------
Name: Nancy Miller
Title: Regular Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Institutional Trustee
By: /s/ Steve Wagner
---------------------------------------
Name: Steve Wagner
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By: /s/ Steve Wagner
---------------------------------------
Name: Steve Wagner
Title: Vice President
<PAGE>
Exhibit 4.5
DECLARATION OF TRUST
DECLARATION OF TRUST, dated as of April 23, 1998, among McKesson
Corporation, a Delaware corporation, as Sponsor, William A. Armstrong, Richard
H. Hawkins, Nancy A. Miller, First Chicago Delaware, Inc., a Delaware banking
corporation, and The First National Bank of Chicago, a national banking
association, not in their individual capacities but solely as Trustees
(collectively the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "McKesson Financing Trust
II," in which name the Trustees, or the Sponsor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such amount
in trust from the Sponsor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Sponsor. It is the intention of the parties hereto that the Trust
created hereby constitutes a business trust under Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (S) 3801 et seq. (the "Business Trust Act"), and that
this document constitutes the governing instrument of the Trust. The Trustees
are hereby authorized and directed to execute and file a certificate of trust
with the Delaware Secretary of State in the form attached hereto.
3. The Sponsor and the Trustees will enter into an Amended and Restated
Declaration of Trust, satisfactory to each such party and substantially in the
form included as an exhibit to the 1933 Act Registration Statement referred to
below, to provide the contemplated operation of the Trust created hereby and the
issuance of the Preferred Securities and Common Securities referred to therein.
Prior to the execution and delivery of such Amended and Restated Declaration
of Trust, the Trustees shall not have any duty or obligation hereunder or with
respect of the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery any licenses,
consents or approvals required by applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the Sponsor,
as the sponsor of the Trust, (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on behalf of the Trust,
(a) a Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments to such
Registration Statement, relating to the registration under the Securities Act of
1933, as amended, of the Preferred Securities of the Trust and (b) a
Registration Statement on Form 8-A or other appropriate form (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the
<PAGE>
Trust under Section 12(b) of the Securities Exchange Act of 1934, as
amended; (ii) to file with the New York Stock Exchange or any other national
stock exchange for listing, or quotation on an interdealer quotation system, and
execute on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on the New York
Stock Exchange or any other national stock exchange or quoted on an interdealer
quotation system; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust,
may deem necessary or desirable; (iv) to prepare and execute letters or
documents to, or instruments with, The Depository Trust Company relating to the
Preferred Securities; (v) to execute on behalf of the Trust an underwriting
agreement among the Trust, the Sponsor and any underwriter, dealer or agent
relating to the Preferred Securities and (vi) to incur expenses, execute
documents and to take any other actions as shall be necessary or desirable in
offering the Preferred Securities. In the event that any filing referred to in
clauses (i)-(iii) above is required by the rules and regulations of the
Commission, the New York Stock Exchange, any other national stock exchange or
interdealer quotation system or state securities or Blue Sky laws, to be
executed on behalf of the Trust by one or more of the Trustees, William A.
Armstrong, Richard H. Hawkins and Nancy A. Miller, in their capacities as
Trustees of the Trust, are each hereby authorized and directed to join in any
such filing and to execute on behalf of the Trust any and all of the foregoing,
it being understood that First Chicago Delaware, Inc. and The First National
Bank of Chicago, in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the New
York Stock Exchange or state securities or blue sky laws. In connection with
all of the foregoing, the Sponsor and each Trustee, solely in his, her or its,
as the case may be, capacity as Trustee of the Trust, hereby constitute and
appoint William A. Armstrong, Richard H. Hawkins and Nancy A. Miller, and each
of them, as his, her or its, as the case may be, true and lawful attorneys-in-
fact, and agents, with full power of substitution and resubstitution, for the
Sponsor or such Trustee or in the Sponsor's or such Trustee's name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement, the 1934 Act
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Sponsor or such Trustee might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his or her substitute or
substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more counterparts.
2
<PAGE>
6. The number of Trustees initially shall be five (5) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the number of Trustees shall in no
event be less than five (5); and provided, further that to the extent required
by the Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has as its principal place of business in the State of Delaware. Subject to the
foregoing, the Sponsor is entitled to appoint or remove without cause any
Trustee at any time, upon written notice delivered to the Trustee. The Trustees
may resign upon thirty days prior notice to the Sponsor.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
McKesson Corporation, as Sponsor First Chicago Delaware, Inc.,
not in its individual capacity but
solely as Trustee
By: /s/ Nancy A. Miller By: /s/ Steve Wagner
------------------------------------ -----------------------------
Name: Nancy A. Miller Name: Steve Wagner
Title: Vice President and Secretary Title: Vice President
The First National Bank of Chicago,
not in its individual capacity but
solely as Trustee
By: /s/ Steve Wagner /s/ William A. Armstrong
----------------------------------- ---------------------------------
Name: Steve Wagner William A. Armstrong,
Title: Vice President not in his individual capacity but
solely as Trustee
/s/ Richard H. Hawkins /s/ Nancy A. Miller
- -------------------------------------- ---------------------------------
Richard H. Hawkins, Nancy A. Miller,
not in his individual capacity but not in her individual capacity but
solely as Trustee solely as Trustee
<PAGE>
Exhibit 4.6
DECLARATION OF TRUST
DECLARATION OF TRUST, dated as of April 23, 1998, among McKesson
Corporation, a Delaware corporation, as Sponsor, William A. Armstrong, Richard
H. Hawkins, Nancy A. Miller, First Chicago Delaware, Inc., a Delaware banking
corporation, and The First National Bank of Chicago, a national banking
association, not in their individual capacities but solely as Trustees
(collectively the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "McKesson Financing Trust
III," in which name the Trustees, or the Sponsor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such amount
in trust from the Sponsor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Sponsor. It is the intention of the parties hereto that the Trust
created hereby constitutes a business trust under Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (S) 3801 et seq. (the "Business Trust Act"), and that
this document constitutes the governing instrument of the Trust. The Trustees
are hereby authorized and directed to execute and file a certificate of trust
with the Delaware Secretary of State in the form attached hereto.
3. The Sponsor and the Trustees will enter into an Amended and Restated
Declaration of Trust, satisfactory to each such party and substantially in the
form included as an exhibit to the 1933 Act Registration Statement referred to
below, to provide the contemplated operation of the Trust created hereby and the
issuance of the Preferred Securities and Common Securities referred to therein.
Prior to the execution and delivery of such Amended and Restated Declaration of
Trust, the Trustees shall not have any duty or obligation hereunder or with
respect of the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery any licenses,
consents or approvals required by applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the Sponsor,
as the sponsor of the Trust, (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on behalf of the Trust,
(a) a Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments to such
Registration Statement, relating to the registration under the Securities Act of
1933, as amended, of the Preferred Securities of the Trust and (b) a
Registration Statement on Form 8-A or other appropriate form (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the
<PAGE>
Trust under Section 12(b) of the Securities Exchange Act of 1934, as amended;
(ii) to file with the New York Stock Exchange or any other national stock
exchange for listing, or quotation on an interdealer quotation system, and
execute on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on the New York
Stock Exchange or any other national stock exchange or quoted on an interdealer
quotation system; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust,
may deem necessary or desirable; (iv) to prepare and execute letters or
documents to, or instruments with, The Depository Trust Company relating to the
Preferred Securities; (v) to execute on behalf of the Trust an underwriting
agreement among the Trust, the Sponsor and any underwriter, dealer or agent
relating to the Preferred Securities and (vi) to incur expenses, execute
documents and to take any other actions as shall be necessary or desirable in
offering the Preferred Securities. In the event that any filing referred to in
clauses (i)-(iii) above is required by the rules and regulations of the
Commission, the New York Stock Exchange, any other national stock exchange or
interdealer quotation system or state securities or Blue Sky laws, to be
executed on behalf of the Trust by one or more of the Trustees, William A.
Armstrong, Richard H. Hawkins and Nancy A. Miller, in their capacities as
Trustees of the Trust, are each hereby authorized and directed to join in any
such filing and to execute on behalf of the Trust any and all of the foregoing,
it being understood that First Chicago Delaware, Inc. and The First National
Bank of Chicago, in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the New
York Stock Exchange or state securities or blue sky laws. In connection with all
of the foregoing, the Sponsor and each Trustee, solely in his, her or its, as
the case may be, capacity as Trustee of the Trust, hereby constitute and
appoint William A. Armstrong, Richard H. Hawkins and Nancy A. Miller, and each
of them, as his, her or its, as the case may be, true and lawful attorneys-in-
fact, and agents, with full power of substitution and resubstitution, for the
Sponsor or such Trustee or in the Sponsor's or such Trustee's name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement, the 1934 Act
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Sponsor or such Trustee might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his or her substitute or
substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more counterparts.
2
<PAGE>
6. The number of Trustees initially shall be five (5) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the number of Trustees shall in no
event be less than five (5); and provided, further that to the extent required
by the Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has as its principal place of business in the State of Delaware. Subject to the
foregoing, the Sponsor is entitled to appoint or remove without cause any
Trustee at any time, upon written notice delivered to the Trustee. The Trustees
may resign upon thirty days prior notice to the Sponsor.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
McKesson Corporation, as Sponsor First Chicago Delaware, Inc.,
not in its individual capacity but
solely as Trustee
By: /s/ Nancy A. Miller By: /s/ Steve Wagner
--------------------------------------- --------------------------
Name: Nancy A. Miller Name: Steve Wagner
Title: Vice President and Secretary Title: Vice President
The First National Bank of Chicago, not in
its individual capacity but solely as
Trustee
By: /s/ Steve Wagner /s/ William A. Armstrong
--------------------------------------- -------------------------------
Name: Steve Wagner William A. Armstrong,
Title: Vice President not in his individual capacity
but solely as Trustee
/s/ Richard H. Hawkins /s/ Nancy A. Miller
- -------------------------------------------- -------------------------------
Richard H. Hawkins, Nancy A. Miller,
not in his individual capacity but not in her individual capacity
solely as Trustee but solely as Trustee
<PAGE>
Exhibit 4.7
DECLARATION OF TRUST
DECLARATION OF TRUST, dated as of April 23, 1998, among McKesson
Corporation, a Delaware corporation, as Sponsor, William A. Armstrong, Richard
H. Hawkins, Nancy A. Miller, First Chicago Delaware, Inc., a Delaware banking
corporation, and The First National Bank of Chicago, a national banking
association, not in their individual capacities but solely as Trustees
(collectively the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "McKesson Financing Trust
IV," in which name the Trustees, or the Sponsor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue and
be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such amount
in trust from the Sponsor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Sponsor. It is the intention of the parties hereto that the Trust
created hereby constitutes a business trust under Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (S) 3801 et seq. (the "Business Trust Act"), and that
this document constitutes the governing instrument of the Trust. The Trustees
are hereby authorized and directed to execute and file a certificate of trust
with the Delaware Secretary of State in the form attached hereto.
3. The Sponsor and the Trustees will enter into an Amended and Restated
Declaration of Trust, satisfactory to each such party and substantially in the
form included as an exhibit to the 1933 Act Registration Statement referred to
below, to provide the contemplated operation of the Trust created hereby and the
issuance of the Preferred Securities and Common Securities referred to therein.
Prior to the execution and delivery of such Amended and Restated Declaration
of Trust, the Trustees shall not have any duty or obligation hereunder or with
respect of the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery any licenses,
consents or approvals required by applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the Sponsor,
as the sponsor of the Trust, (i) to file with the Securities and Exchange
Commission (the "Commission") and execute, in each case on behalf of the Trust,
(a) a Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments to such
Registration Statement, relating to the registration under the Securities Act of
1933, as amended, of the Preferred Securities of the Trust and (b) a
Registration Statement on Form 8-A or other appropriate form (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the
<PAGE>
Trust under Section 12(b) of the Securities Exchange Act of 1934, as amended;
(ii) to file with the New York Stock Exchange or any other national stock
exchange for listing, or quotation on an interdealer quotation system, and
execute on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on the New York
Stock Exchange or any other national stock exchange or quoted on an interdealer
quotation system; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust,
may deem necessary or desirable; (iv) to prepare and execute letters or
documents to, or instruments with, The Depository Trust Company relating to the
Preferred Securities; (v) to execute on behalf of the Trust an underwriting
agreement among the Trust, the Sponsor and any underwriter, dealer or agent
relating to the Preferred Securities and (vi) to incur expenses, execute
documents and to take any other actions as shall be necessary or desirable in
offering the Preferred Securities. In the event that any filing referred to in
clauses (i)-(iii) above is required by the rules and regulations of the
Commission, the New York Stock Exchange, any other national stock exchange or
interdealer quotation system or state securities or Blue Sky laws, to be
executed on behalf of the Trust by one or more of the Trustees, William A.
Armstrong, Richard H. Hawkins and Nancy A. Miller, in their capacities as
Trustees of the Trust, are each hereby authorized and directed to join in any
such filing and to execute on behalf of the Trust any and all of the foregoing,
it being understood that First Chicago Delaware, Inc. and The First National
Bank of Chicago, in their capacities as Trustees of the Trust, shall not be
required to join in any such filing or execute on behalf of the Trust any such
document unless required by the rules and regulations of the Commission, the New
York Stock Exchange or state securities or blue sky laws. In connection with all
of the foregoing, the Sponsor and each Trustee, solely in his, her or its, as
the case may be, capacity as Trustee of the Trust, hereby constitute and appoint
William A. Armstrong, Richard H. Hawkins and Nancy A. Miller, and each of them,
as his, her or its, as the case may be, true and lawful attorneys-in-fact, and
agents, with full power of substitution and resubstitution, for the Sponsor or
such Trustee or in the Sponsor's or such Trustee's name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to the 1933 Act Registration Statement, the 1934 Act Registration
Statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Commission, granting unto said attorneys-in-
fact and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as the Sponsor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, shall
do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more counterparts.
2
<PAGE>
6. The number of Trustees initially shall be five (5) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the number of Trustees shall in no
event be less than five (5); and provided, further that to the extent required
by the Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has as its principal place of business in the State of Delaware. Subject to the
foregoing, the Sponsor is entitled to appoint or remove without cause any
Trustee at any time, upon written notice delivered to the Trustee. The Trustees
may resign upon thirty days prior notice to the Sponsor.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
McKesson Corporation, as Sponsor First Chicago Delaware, Inc.,
not in its individual capacity but
solely as Trustee
By: /s/ Nancy A. Miller By: /s/ Steve Wagner
------------------------------------ ------------------------------
Name: Nancy A. Miller Name: Steve Wagner
Title: Vice President and Secretary Title: Vice President
The First National Bank of Chicago,
not in its individual capacity but
solely as Trustee
By: /s/ Steve Wagner /s/ William A. Armstrong
------------------------------------ ----------------------------------
Name: Steve Wagner William A. Armstrong,
Title: Vice President not in his individual capacity but
solely as Trustee
/s/ Richard H. Hawkins /s/ Nancy A. Miller
- -------------------------------------- ----------------------------------
Richard H. Hawkins, Nancy A. Miller,
not in his individual capacity but not in her individual capacity but
solely as Trustee solely as Trustee
<PAGE>
Exhibit 4.8
- --------------------------------------------------------------------------------
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
McKESSON FINANCING TRUST II
Dated as of _________ ____, _____
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions........................................................ 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application................................... 8
SECTION 2.2. Lists of Holders of Securities..................................... 8
SECTION 2.3. Reports by the Institutional Trustee............................... 9
SECTION 2.4. Periodic Reports to Institutional Trustee.......................... 9
SECTION 2.5. Evidence of Compliance with Conditions Precedent................... 9
SECTION 2.6. Events of Default; Waiver.......................................... 9
SECTION 2.7. Event of Default; Notice........................................... 11
ARTICLE III
ORGANIZATION
SECTION 3.1. Name............................................................... 11
SECTION 3.2. Office............................................................. 12
SECTION 3.3. Purpose............................................................ 12
SECTION 3.4. Authority.......................................................... 12
SECTION 3.5. Title to Property of the Trust..................................... 13
SECTION 3.6. Powers and Duties of the Regular Trustees.......................... 13
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees............... 16
SECTION 3.8. Powers and Duties of the Institutional Trustee..................... 17
SECTION 3.9. Certain Duties and Responsibilities of the Institutional Trustee... 19
SECTION 3.10. Certain Rights of Institutional Trustee............................ 20
SECTION 3.11. Delaware Trustee................................................... 22
SECTION 3.12. Execution of Documents............................................. 23
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities............. 23
SECTION 3.14. Duration of Trust.................................................. 23
SECTION 3.15. Mergers............................................................ 23
</TABLE>
i
<PAGE>
ARTICLE IV
SPONSOR
<TABLE>
<S> <C> <C>
SECTION 4.1. Sponsor's Purchase of Common Securities........................ 25
SECTION 4.2. Responsibilities of the Sponsor................................ 25
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees............................................. 26
SECTION 5.2. Delaware Trustee............................................... 26
SECTION 5.3. Institutional Trustee; Eligibility............................. 26
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally............................................. 27
SECTION 5.5. Regular Trustees............................................... 27
SECTION 5.6. Appointment, Removal and Resignation of Trustees............... 28
SECTION 5.7. Vacancies Among Trustees....................................... 29
SECTION 5.8. Effect of Vacancies............................................ 29
SECTION 5.9. Meetings....................................................... 30
SECTION 5.10. Delegation of Power............................................ 30
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business.... 30
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.................................................. 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities........................ 31
SECTION 7.2. Execution and Authentication................................... 31
SECTION 7.3. Form and Dating................................................ 32
SECTION 7.4. Paying Agent................................................... 33
</TABLE>
ii
<PAGE>
ARTICLE VIII
TERMINATION OF TRUST
<TABLE>
<S> <C> <C>
SECTION 8.1. Termination of Trust................................................... 33
</TABLE>
ARTICLE IX
TRANSFER OF INTERESTS
<TABLE>
<S> <C> <C>
SECTION 9.1. Transfer of Securities................................................. 34
SECTION 9.2. Transfer of Certificates............................................... 35
SECTION 9.3. Deemed Security Holders................................................ 36
SECTION 9.4. Book Entry Interests................................................... 36
SECTION 9.5. Notices to Clearing Agency............................................. 37
SECTION 9.6. Appointment of Successor Clearing Agency............................... 38
SECTION 9.7. Definitive Preferred Security Certificates Under Certain Circumstances. 38
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates...................... 39
</TABLE>
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
<TABLE>
<S> <C> <C>
SECTION 10.1. Liability................................................................39
SECTION 10.2. Exculpation..............................................................40
SECTION 10.3. Fiduciary Duty...........................................................40
SECTION 10.4. Indemnification..........................................................41
SECTION 10.5. Outside Business.........................................................44
</TABLE>
ARTICLE XI
ACCOUNTING
<TABLE>
<S> <C> <C>
SECTION 11.1. Fiscal Year............................................................ 44
SECTION 11.2. Certain Accounting Matters............................................. 44
SECTION 11.3. Banking................................................................ 45
SECTION 11.4. Withholding............................................................ 45
</TABLE>
iii
<PAGE>
ARTICLE XII
AMENDMENTS AND MEETINGS
<TABLE>
<S> <C> <C>
SECTION 12.1. Amendments............................................................. 46
SECTION 12.2. Meetings of the Holders of Securities; Action by Written Consent....... 48
</TABLE>
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
<TABLE>
<S> <C> <C>
SECTION 13.1. Representations and Warranties of Institutional Trustee................ 50
SECTION 13.2. Representations and Warranties of Delaware Trustee..................... 50
</TABLE>
ARTICLE XIV
MISCELLANEOUS
<TABLE>
<S> <C> <C>
SECTION 14.1. Notices................................................................ 51
SECTION 14.2. Governing Law.......................................................... 52
SECTION 14.3. Intention of the Parties............................................... 52
SECTION 14.4. Headings............................................................... 52
SECTION 14.5. Successors and Assign.................................................. 53
SECTION 14.6. Partial Enforceability................................................. 53
SECTION 14.7. Counterparts........................................................... 53
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(b)...................................................... 5.3(c) & (d)
311(a)...................................................... 2.2(b)
311(b)...................................................... 2.2(b)
312(b)...................................................... 2.2(b)
313......................................................... 2.3
313(d)...................................................... 2.3
314......................................................... 2.4
314(a)...................................................... 3.6(j)
314(c)...................................................... 2.5
316(a)...................................................... 2.6(a)-(c)&(e)
317(b)...................................................... 3.8(h)
</TABLE>
- --------------------
* This Cross-Reference table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
FORM OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
McKESSON FINANCING TRUST II
____________ ___, ____
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ____________ ____, _____, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established McKesson Financing Trust
II (the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of ____________ ___, ______, (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on April 23, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debt
Securities (as defined herein) of the Debt Security Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitutes the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.
Unless the context otherwise requires:
<PAGE>
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits of or to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent [or Conversion Agent]/1/.
["Appointment Event" means an event defined in the terms of the Preferred
Securities set forth in ANNEX I which entitles the Holders of a Majority in
liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee.]
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in New York, New York or Wilmington, Delaware are
permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S)3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
- ---------------------
/1/ Insert bracketed language relating to conversion throughout the document if
the Securities are convertible.
2
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means ___________ ___, _____.
"Closing Price" has the meaning specified in Annex I.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement to be dated as
of ________ ___, ______ of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
["Common Stock" means the common stock of McKesson Corporation, a Delaware
corporation, par value $.01 per share, and any other shares of common stock as
may constitute "Common Stock" under the Indenture.]
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
["Conversion Agent" has the meaning specified in Section 7.4.]
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at [One North State Street, 9th Floor,
Chicago, Illinois 60602], Attention: [Corporate Trust Services Division].
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debt Securities" means the series of Debt Securities to be issued by the
Debt Security Issuer under the Indenture to be held by the Institutional
Trustee, a specimen certificate for such series of Debt Securities being Exhibit
B.
3
<PAGE>
"Debt Security Issuer" means McKesson Corporation, a Delaware corporation,
in its capacity as issuer of the Debt Securities under the Indenture.
"Debt Security Trustee" means ___________________, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Declaration Event of Default" means an Event of Default under the Debt
Securities.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debt Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4(a).
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means each Company Indemnified Person and each
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of __________ ____, ____ between
the Debt Security Issuer and the Debt Security Trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
4
<PAGE>
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidated Distribution" has the meaning specified in the terms of the
Securities as set forth in Annex I.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Offered Securities" means the Preferred Securities, the Preferred
Securities Guarantee, the Debt Securities[, the shares of Common Stock issuable
upon conversion of the Preferred Securities and the Rights attached thereto].
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
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, in the opinion of each such officer, such
condition or covenant has been complied with.
"Option Closing Date" means the date of closing of any sale of Additional
Securities (as defined in the Purchase Agreement).
"Paying Agent" has the meaning specified in Section 3.8(h).
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"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________ ___, ______, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Purchase Agreement" means the Purchase Agreement for the offering and sale
of Preferred Securities in the form of Exhibit C.
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee, any
officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rights" has the meaning specified in the Rights Agreement, dated October
21, 1994, between the Sponsor and The First Chicago Trust Company of New York.
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"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
["Special Regular Trustee" means a Regular Trustee appointed by the Holders
of a Majority in liquidation amount of the Preferred Securities in accordance
with Section 5.6(a)(iii).]
"Sponsor" or "McKesson" means McKesson Corporation, a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debt Securities, (ii) any cash on deposit
in, or owing to, the Institutional Trustee Account and (iii) all proceeds and
rights in respect of the foregoing to be held by the Institutional Trustee
pursuant to the terms of this Declaration for the benefit of the
Securityholders.
"25% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 25% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions. The Trust Indenture Act shall be
applicable to this Declaration except as otherwise set forth herein, as if the
Securities had been sold pursuant to an effective registration statement.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If, and to the extent that, any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such duties imposed under the Trust Indenture Act
shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list in such form as the Institutional
Trustee may reasonably require of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that, neither
the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in the
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity), provided that, the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
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SECTION 2.3. Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by (S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Institutional
Trustee is for informational purposes only and the Institutional Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Sponsor's compliance with any of its covenants hereunder (as to which the
Institutional Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred Securities
may by vote on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default in respect of the Preferred Securities and its
consequences, provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debt Securities (a "Super Majority")
to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities that the
relevant Super Majority represents of the aggregate principal amount of the
Debt Securities outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debt Securities outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Institutional Trustee shall act solely on behalf of the Holders of the
Preferred Securities and only the Holders of the Preferred Securities will have
the right to direct the Institutional Trustee to act in accordance with the
terms of the Securities. The foregoing provisions of this Section 2.6(b) shall
be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
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(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the occurrence of
an Event of Default actually known to a Responsible Officer of the Institutional
Trustee, transmit by mail, first class postage prepaid, to the Holders of the
Securities, notices of all such defaults with respect to the Securities unless
such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debt Securities or in the payment of
any sinking fund installment established for the Debt Securities, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities. Any such notice given pursuant to this Section 2.7(a)
shall state that an Event of Default under the Indenture also constitutes an
Event of Default under this Declaration.
(b) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.1(a) and 5.1(b) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1. Name.
The Trust is named "McKesson Financing Trust II" as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
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SECTION 3.2. Office.
The address of the principal office of the Trust is c/o McKesson
Corporation, McKesson Plaza, One Post Street, San Francisco, CA, 94104. On at
least ten Business Days written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3. Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debt Securities,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4. Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that the registration statement referred to
in Section 3.6, including any amendments thereto, shall, subject to Section
3.4(d), be signed by all of the Regular Trustees; and
(d) A Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of executing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to Section 3.6.
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SECTION 3.5. Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debt Securities and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The
Holders of Securities shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities, and
provided further, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a simultaneous
issuance of both Preferred Securities and Common Securities on the Closing Date
and Option Closing Date, if any;
(b) in connection with the issue and sale of the Securities, at the
direction of the Sponsor, to:
(i) execute and file with the Commission, at such time as determined
by the Sponsor, a registration statement on Form S-3 prepared by the
Sponsor, including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file an application, prepared by the Sponsor, at
such time as determined by the Sponsor, to the New York Stock Exchange or
any other national stock exchange for listing, or quotation on an
interdealer quotation system, of the Preferred Securities;
(ii) execute and deliver letters, documents, or instruments with The
Depository Trust Company relating to the Preferred Securities;
(iv) execute and file with the Commission, at such time as determined
by the Sponsor, a registration statement on Form 8-A, including any
amendments thereto, prepared by the Sponsor relating to the registration of
the Preferred Securities under Section 12(b) of the Exchange Act;
(v) execute and enter into the Purchase Agreement and other related
agreements providing for the sale of the Securities;
(vi) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the
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Preferred Securities in any State in which the Sponsor has determined to
qualify or register such Preferred Securities for sale or resale, as the
case may be; and
(vii) take all actions and perform such duties as may be required of
the Regular Trustees to open checking, deposit or similar banking accounts
as may be necessary in connection with the issuance and sale of the
Securities;
(c) to acquire the Debt Securities with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debt Securities to be held of
record in the name of the Institutional Trustee for the benefit of the Holders
of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of (S)316 (c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants, and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
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(l) to act as, or appoint another Person to act as, registrar, transfer
agent, Paying Agent [and Conversion Agent] for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debt Security Issuer of its election to defer payments
of interest on the Debt Securities by extending the interest payment period
under the Indenture;
(n) to execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debt Security Issuer to ensure that the
Debt Securities will be treated as indebtedness of the Debt Security Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders or
vary the terms of the Preferred Securities;
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
(r) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to Section 11.2 herein; and
(s) to the extent provided in this Declaration, the winding up of the
affairs of and liquidation of the Trust and the preparation, execution and
filing of the Certificate of Cancellation with the Secretary of State of the
State of Delaware.
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The Regular Trustees must exercise the powers set forth in this Section 3.6
in a manner that is consistent with the purposes and functions of the Trust set
out in Section 3.3, and the Regular Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Sponsor.
The Trust initially appoints the Institutional Trustee as transfer agent
and registrar for the Preferred Securities.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to engage in any activity other than as
required or authorized by this Declaration. In particular the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the Debt
Securities, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debt Securities;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever except as
permitted by the terms of this Declaration;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I hereto,
(A) direct the time, method and place of exercising any trust or power
conferred upon the Debt Security Trustee with respect to the Debt
Securities, (B) waive any past default that is not waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debt Securities shall be due and payable, or (D)
consent to any amendment, modification
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or termination of the Indenture or the Debt Securities where such consent
shall be required unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause more than an
insubstantial risk that (x) the Trust will be deemed an Investment Company
required to be registered under the Investment Company Act or (y) the Trust
will not be classified as a grantor trust for United States federal income
tax purposes.
SECTION 3.8. Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debt Securities shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debt Securities shall vest automatically in each
Person who may hereafter be appointed as Institutional Trustee in accordance
with Section 5.6. Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Debt Securities have been
executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debt Securities to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debt Securities held by the Institutional Trustee, deposit such
funds into the Institutional Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the Common Securities
from the Institutional Trustee Account in accordance with Section 6.1.
Funds in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional Trustee
Account shall be an account that is maintained with a banking institution
the rating on whose long-term unsecured indebtedness is at least equal to
the rating assigned to the Preferred Securities (or, if the Preferred
Securities are not rated, the rating assigned to McKesson's senior debt) by
a "nationally recognized statistical rating organization," as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debt Securities are redeemed or mature;
(iii) engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Trust Property in accordance
with the terms of this Declaration; and
(iv) to the extent provided for in this Declaration, take such
ministerial actions necessary in connection with the winding up of the
affairs of and liquidation of the Trust and
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the preparation, execution and filing of the Certificate of Cancellation
with the Secretary of State of the State of Delaware.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with, an Event of Default of which a Responsible Officer of
the Institutional Trustee has actual knowledge, or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided however, that if a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debt Security
Issuer to pay interest or principal on the Debt Securities on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debt Securities
and provided, further, that if the Institutional Trustee fails to enforce its
rights under the Debt Securities, any Holder of Preferred Securities may
institute a legal proceeding against any person to enforce the Institutional
Trustee's rights under the Debt Securities. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Preferred Securities to the extent of any payment
made by the Debt Security Issuer to such Holder of Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debt Securities.
(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debt Securities under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debt Securities subject to the rights of the Holders pursuant to
the terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or Liquidation
Distributions on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Institutional Trustee.
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(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee shall
be determined solely by the express provisions of this Declaration and
the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of the Institutional
Trustee, the Institutional Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Institutional Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
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(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional 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 of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional 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 it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debt Securities and
the Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debt Securities or the payment of any taxes or assessments levied thereon
or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
SECTION 3.10. Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument,
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opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Sponsor or any of its Affiliates, and
may include any of its employees. The Institutional Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to (a) require the Holders of Preferred Securities to offer such
indemnity in the event such Holders direct the Institutional Trustee to
take any action it is empowered to take under this Declaration following an
Event of Default or (b) relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Institutional 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,
direction, consent, order, bond, debenture, note, other evidence of
indebted-
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ness or other paper or document, but the Institutional Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Institutional Trustee (i) may request written
instructions from the Holders of the Securities which instructions may only
be given by the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee under
the terms of the Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration,
the Institutional Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration; and
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the
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duties and responsibilities of the Regular Trustees, the Institutional Trustee
or the Trustees generally (except as may be required under the Business Trust
Act) described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of (S) 3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents.
Except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall, subject to Section 3.4(d), be signed by
all of the Regular Trustees.
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for _________ (__) years from __________ ___,
_____.
SECTION 3.15. Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities")
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so long as the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debt Security Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debt Securities;
(iii) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating organization;
(iv) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders' interest
in the Successor Entity);
(v) such Successor Entity has a purpose identical to that of the
Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the
Holders' interest in the Successor Entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or such Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(vii) the Sponsor guarantees the obligations of the Successor Entity
under the Successor Securities at least to the extent provided by the
Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger or replacement would cause
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the Trust or the Successor Entity to be classified as other than a grantor trust
for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common Securities
issued by the Trust, in an amount at least equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2. Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Securities, including any amendments
thereto;
(b) prepare for execution and filing by the Trust of an application,
prepared by the Sponsor, at such time as determined by the Sponsor, to the New
York Stock Exchange or any other national stock exchange for listing, or
quotation on an interdealer quotation system, of the Preferred Securities;
(c) prepare for execution and filing by the Trust of documents, or
instruments to be delivered to The Depository Trust Company relating to the
Preferred Securities;
(d) prepare for execution and filing by the Trust of a registration
statement on Form 8-A, including any amendments thereto, prepared by the Sponsor
relating to the registration of the Preferred Securities under Section 12(b) of
the Exchange Act;
(e) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Preferred Securities and to do any and
all such acts, other than actions which must be taken by the Trust, and advise
the Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States; and
(f) to negotiate the terms of the Purchase Agreement providing for the sale
of the Preferred Securities.
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ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, [and except as provided in clause
(ii) below and Section 5.6(a)(iii) with respect to the Special Regular Trustee,]
the number of Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; provided, however, that the
number of Trustees shall in no event be less than two (2); provided further,
that (i) one Trustee, in the case of a natural person, shall be a person who is
a resident of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee"); [(ii) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event has occurred and is continuing
and the Holders of a Majority in liquidation amount of the Preferred Securities
appoint a Special Regular Trustee in accordance with Section 5.6(a)(iii) and the
terms of the Preferred Securities; (iii) unless a Special Regular Trustee has
been appointed (which appointment shall not impair the right of the Holders of
Common Securities to increase or decrease the number of, or to appoint, remove
or replace, Trustees (other than the Special Regular Trustee as provided
herein), there shall be at least one Trustee who is any employee of, or is
affiliated with the Sponsor ([together with any Special Regular Trustee] a
"Regular Trustee");] and (iv) one Trustee shall be the Institutional Trustee,
and such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2. Delaware Trustee.
If required by the Business Trust Act, one Trustee shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law;
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
The Initial Delaware Trustee shall be: [First Chicago Delaware Inc.]
SECTION 5.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), 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.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be: [The First National Bank
of Chicago].
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5. Regular Trustees.
The initial Regular Trustees shall be:
[William A. Armstrong]
[Richard H. Hawkins]
[Nancy A. Miller]
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any
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power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall, subject to Section
3.4(d), be signed by all of the Regular Trustees.
SECTION 5.6. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) after the issuance of any Securities, other than with respect
to the Special Trustee, by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities; and
[(iii) if an Appointment Event has occurred and is continuing, one
additional Regular Trustee (the "Special Regular Trustee") may be
appointed, who need not be an Affiliate of the Sponsor, by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities,
voting as a class.]
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor;
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor; and
[(iii) the Trustee that acts as Special Regular Trustee may only be
removed (otherwise than by the operation of Section 5.6(c)), by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities voting
as a class.]
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation; [provided
--------
that a Special Regular Trustee shall only hold office while an Appointment Event
is continuing and shall cease to hold office immediately after the Appointment
Event pursuant to which the Special Regular Trustee was appointed and all other
Appointment Events cease to be continuing.] Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional
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Trustee and delivered to the Trust, the Sponsor and the resigning
Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
[(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the resignation to the
Sponsor and the Trust or such later date specified in the resignation
during which period the Holders of the Preferred Securities shall have the
right to appoint a successor Special Regular Trustee as provided in this
Article V.]
[(d) Any action taken by Holders of Preferred Securities pursuant to this
Article V to appoint or remove a Special Regular Trustee upon the occurrence of
an Appointment Event, shall be taken at a meeting of Holders of Preferred
Securities, convened for such purpose or by written consent as provided in
Section 12.2.
(e) No amendment may be made to this Section 5.6 or Section 5.1, which
would change the rights of Holders of Preferred Securities to appoint, remove or
replace a Special Regular Trustee except with the consent of the Holders of a
Majority in liquidation amount of the Preferred Securities.]
(f) the Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.6.
(g) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.
(h) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7. Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur, until such vacancy is filled by the appointment of
a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
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SECTION 5.9. Meetings.
If there is more than one Regular Trustee, meetings of the Regular Trustees
shall be held from time to time upon the call of any Regular Trustee. Regular
meetings of the Regular Trustees may be held at a time and place fixed by
resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustee or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10. Delegation of Power.
A Regular Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 his or her power for the
purposes of executing any documents contemplated in Section 3.6, including any
registration statement or amendment thereto filed with the Commission, or making
any other governmental filing.
The Regular Trustees shall have power to delegate from time to time to such
of their number or to officers of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
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ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.
Holders of Securities shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debt Security Issuer makes a payment of
interest (including Compound Interest (as [to be] defined in the Indenture) and
Additional Sums (as [to be] defined in the Indenture)), premium and/or principal
on the Debt Securities held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
[convertible] preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of [convertible] common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of and shall
be bound by this Declaration.
SECTION 7.2. Execution and Authentication.
(a) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. In case any Regular Trustee of the Trust who shall have signed any of
the Securities shall cease to be such
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Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not such a Regular Trustee.
(b) One Regular Trustee shall sign the Preferred Securities for the Trust
by manual or facsimile signature. Unless otherwise determined by the Trust,
such signature shall, in the case of Common Securities, be a manual signature.
A Preferred Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Preferred Securities for original
issue.
The Institutional Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Institutional Trustee may do so.
Each reference in this Declaration to authentication by the Institutional
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Institutional Trustee to deal with the Company or an
Affiliate.
SECTION 7.3. Form and Dating.
The Preferred Securities and the Institutional Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular Trustees, as evidenced
by their execution thereof. The Securities may have letters, numbers,
notations, other marks of identification or designation or other changes or
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice and such legends or endorsements required by law, stock
exchange rule and agreements to which the Trust is subject, if any (provided
that any such notation, legend or endorsement is in a form acceptable to the
Trust). The Trust at the direction of the Sponsor shall furnish any such legend
not contained in Exhibit A-1 to the Institutional Trustee in writing. Each
Preferred Security Certificate shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and, to the extent applicable, the Institutional Trustee and the
Sponsor, by their execution and delivery of this Declaration, expressly agree to
such terms and provisions and to be bound thereby.
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SECTION 7.4. Paying Agent. The Trust shall maintain in the Borough of
Manhattan, City of New York, State of New York, an office or agency where
Preferred Securities not held in book-entry only form may be presented for
payment ("Paying Agent"). [The Trust shall maintain an office or agency where
Securities may be presented for conversion ("Conversion Agent").] The Trust may
appoint the Paying Agent [and the Conversion Agent] and may appoint one or more
additional paying agents [and one or more additional conversion agents] in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent [and the term "Conversion Agent" includes any additional
conversion agent]. The Trust may change any Paying Agent [or Conversion Agent]
without prior notice to any Holder. The Trust shall notify the Institutional
Trustee in writing of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as Paying
Agent [or Conversion Agent], the Institutional Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent [or Conversion Agent].
The Trust shall act as Paying Agent [and Conversion Agent] for the Common
Securities.
The Trust initially appoints _________________, ___________________,
_____________, __________, ____ _______, Attention: ____________ as Paying Agent
[and Conversion Agent] for the Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor or the Holder of the Common
Securities;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Holder of the Common
Securities; the filing of a certificate of cancellation with respect to the
Trust after having obtained the consent of at least a Majority in
liquidation amount of the Securities voting together as a single class to
file such certificate of cancellation; or the revocation of the Sponsor's
charter or the charter of the Holder of the Common Securities and the
expiration of 90 days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, the Trust or the Holder of the Common Securities;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
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(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance with
the terms of the Securities and all of the Debt Securities held by the
Institutional Trustee shall have been distributed to the Holders of
Securities in exchange for all of the Securities;
(vi) upon the written direction to the Institutional Trustee from
the Sponsor at any time to terminate the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, the
distribution of Debt Securities to Holders in exchange for the Securities,
subject to the Regular Trustees' receipt of an opinion of nationally
recognized independent counsel experienced in such matters to the effect
that the holders of the Preferred Securities will not recognize any income,
gain or loss for United States federal income tax purposes as a result of
the dissolution of the Trust and such distribution to Holders;
[(vii) upon the distribution of the Sponsor's Common Stock to all
Holders of Preferred Securities upon conversion of all outstanding
Preferred Securities;]
(viii) the expiration of the term of the Trust on ________ ____,
_____; or
(ix) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such
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transfer shall not violate the Securities Act and is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to register
under the Investment Company Act or the transferee would become an
Investment Company required to register under the Investment Company Act.
(d) Each Common Security that bears or is required to bear the legend set
forth in this Section 9.1(d) shall be subject to the restrictions on transfer
provided in the legend set forth in this Section 9.1(d), unless such
restrictions on transfer shall be waived by the written consent of the Regular
Trustees, and the Holder of each such Common Security, by such securityholder's
acceptance thereof, agrees to be bound by such restrictions on transfer. As
used in this Section 9.1(d) and in Section 9.1(e), the term "transfer"
encompasses any sale, pledge, transfer or other disposition of any such Common
Security.
Any certificate evidencing a Common Security shall bear a legend in
substantially the following form, unless otherwise agreed by the Regular
Trustees (with written notice thereof to the Institutional 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 UNLESS SUCH OFFER AND SALE ARE
REGISTERED UNDER OR ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT.
THE TRANSFER OF THE SECURITY EVIDENCED HEREBY IS ALSO SUBJECT TO THE
RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW.
SECTION 9.2. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and
of transfers of Certificates, which will be effected without charge, but only
upon payment in respect of any tax or other government charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder
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hereunder upon the receipt by such transferee of a Certificate. By acceptance of
a Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.3. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4. Book Entry Interests.
(a) So long as Preferred Securities are eligible for book-entry settlement
with the Clearing Agency or unless otherwise required by law, all Preferred
Securities that are so eligible may be represented by one or more fully
registered Preferred Security Certificates (each, a "Global Certificate") in
global form to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section 9.7
below. The transfer and exchange of beneficial interests in any such Security
in global form shall be effected through the Clearing Agency in accordance with
this Declaration and the procedures of the Clearing Agency therefor.
(b) Except as provided below, beneficial owners of a Preferred 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
Preferred Security in global form.
(c) Any Global Certificate may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Declaration as may be required by the Clearing Agency, by any
national securities exchange or by the National Association of Securities
Dealers, Inc. as may be required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities
exchange or interdealer quotation system upon which the Preferred 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
Preferred Securities are subject.
(d) Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners of a Preferred Security in global
form pursuant to Section 9.7:
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(i) the provisions of this Section 9.4 shall be in full force and
effect with respect to such Preferred Securities;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of such Preferred Securities and the
sole holder of the Global Certificates and shall have no obligation to the
Preferred Security Beneficial Owners of such Preferred Securities;
(iii) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners of
Preferred Securities in global form shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Preferred Security Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants. The Clearing
Agency will make book-entry transfers among Clearing Agency Participants
and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants provided, that solely for
the purposes of determining whether the Holders of the requisite amount of
Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Preferred Security Certificates have not
been issued, the Trustees may conclusively rely on, and shall be protected
in relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Securities
Beneficial Owners' votes or assigning the right to vote on any matter to
any other Persons either in whole or in part.
(e) Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in this Section 9.4(e)), a Preferred Security in global
form may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee to a successor Clearing Agency or a nominee
of such successor Clearing Agency.
SECTION 9.5. Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6. Appointment of Successor Clearing Agency.
If any Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities, if such Clearing Agency ceases to perform such services, or if at
any time such Clearing Agency ceases to be a clearing agency registered as such
under the Exchange Act when such Clearing Agency is required to be so registered
to act as such depositary, then the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Preferred
Securities.
SECTION 9.7. Definitive Preferred Security Certificates Under Certain
Circumstances.
If:
(a) a Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities, if at any time such Clearing Agency ceases to be a clearing agency
registered as such under the Exchange Act when such Clearing Agency is required
to be so registered to act as such depositary and no successor Clearing Agency
shall have been appointed pursuant to Section 9.6 within 90 days of such
notification;
(b) the Regular Trustees (with the consent of the Sponsor), in their sole
discretion determine that the Preferred Securities in global form shall be
exchanged for certificated Preferred Securities; or
(c) there shall have occurred and be continuing an Event of Default;
then:
(d) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(e) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners of such Preferred Securities in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said instructions of
the Clearing Agency. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Preferred Securities may be listed, or to conform to usage.
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At such time as all interests in a Preferred Security in global form have
been redeemed, [converted,] exchanged, repurchased or canceled, such Preferred
Security in global form shall be, upon receipt thereof, canceled by the Trust in
accordance with standing procedures and instructions of the Clearing Agency.
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the Regular
Trustees such security or indemnity as may be required by them to keep each of
them harmless,
then:
in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Institutional Trustee or any Regular Trustee on
behalf of the Trust shall execute and deliver, in exchange for, or in lieu of,
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Institutional Trustee or the Regular Trustees may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1. Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
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(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of the
Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
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(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. Indemnification.
(a) (i) the Debt Security Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or 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
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful.
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(ii) The Debt Security Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit 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 Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debt
Security Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) or (ii). Such determination shall be
made (1) by the Regular Trustees by a majority vote of a quorum consisting
of such Regular Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common Security Holder of
the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debt Security Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debt Security Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debt Security Issuer if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Common Security Holder of the Trust, that, based upon the facts known to
the Regular Trustees,
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counsel or the Common Security Holder at the time such determination is
made, such Company Indemnified Person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that
such Company Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or Common
Security Holder reasonably determine that such person deliberately breached
his duty to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debt
Security Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debt Security Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debt Security Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether
or not the Debt Security Issuer would have the power to indemnify him
against such liability under the provisions of this Section 10.4(a)
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such a person.
(b) The Debt Security Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i)
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through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person 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 or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the resignation or removal of
the Institutional Trustee or the Delaware Trustee, as the case may be.
SECTION 10.5. Outside Business.
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
shall have the right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the same as the
fiscal year of the Company.
SECTION 11.2. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books, records and supporting documents,
which shall reflect in detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting in compliance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for the United States federal income
tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the
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end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Sponsor shall cause to be prepared and delivered to each of the
Holders of Securities, within 90 days after the end of each Fiscal Year of the
Sponsor, annual financial statements of the Sponsor, including a balance sheet
of the Sponsor as of the end of such Fiscal Year, and the related statements of
income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on a Form 1041 or such other form required by United States federal income tax
law, and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debt Securities held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4. Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made,
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the Trust may reduce subsequent Distributions by the amount of such withholding.
Furthermore, if withholding is imposed on payments of interest on the Debt
Securities, to the extent such withholding is attributable to ownership by a
specific Holder of Preferred Securities, the amount withheld shall be deemed a
distribution in the amount of the withholding to such specific Holder.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
Except as otherwise provided in this Declaration or by any applicable terms
of the Securities,
(a) this Declaration may only be amended by a written instrument approved
and executed by the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees) and:
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, also by the
Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the Delaware
Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
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(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees [(other than
a Special Regular Trustee)] shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities; and
[(g) the rights of Holders of Preferred Securities to appoint or remove a
Special Regular Trustee shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Preferred Securities;] and
(h) notwithstanding Section 12.1(c), this Declaration may be amended from
time to time by the Holders of a Majority in liquidation amount of the Common
Securities and the Institutional Trustee, without the consent of the Holders of
the Preferred Securities to:
(i) cure any ambiguity, correct or supplement any provision in this
Declaration that may be inconsistent with any other provision, or to make
any other provisions with respect to matters or questions arising under
this Declaration, which shall not be inconsistent with the other provisions
of this Declaration; or
(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that the Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an investment company
under the Investment Company Act;
provided, however, such action shall not adversely affect in any material
respect the interests of any Holder of Securities;
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(i) this Declaration may be amended by the Holders of a Majority in
liquidation amount of the Common Securities and the Institutional Trustee if:
(i) the Holders of a Majority in liquidation amount of the
Preferred Securities consent to such amendment and
(ii) the Regular Trustees have received an opinion of nationally
recognized independent counsel experienced in such matters to the effect
that such amendment or the exercise of any power granted to the Regular
Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or
the Trust's exemption from status as an "investment company" under the
Investment Company Act,
provided, that without the consent of each Holder of Securities, this
Declaration may not be amended to:
(x) change the amount or timing of any distribution on the Securities
or otherwise adversely affect the amount of any distribution required to be
made in respect of the Securities as of a specified date or
(y) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
(j) Any amendments of this Declaration shall become effective when notice
thereof is given to Holders of Securities.
SECTION 12.2. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Preferred Securities are listed
or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least 25% in
liquidation amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
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(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal, valid
and binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee, of the Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation, duly organized, validly
existing and in good standing, with corporate power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration.
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(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal place
of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
McKesson Financing Trust II
c/o McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
[First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801]
Attention: ____________________
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(c) if given to the Institutional Trustee, at its Corporate Trust Office's
mailing address set forth below (or such other address as the Institutional
Trustee may give notice of to the Holders of the Securities).
[The First National Bank of Chicago
One North State Street, 9/th/ Floor
Chicago, Illinois 60602]
Attention: [Corporate Trust Services Division]
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2. GOVERNING LAW.
THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
SECTION 14.3. Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
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SECTION 14.5. Successors and Assign.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 14.6. Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7. Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
----------------------------------------------------
[WILLIAM A. ARMSTRONG], as Regular Trustee
Solely as trustee and not in [his] individual capacity
----------------------------------------------------
[RICHARD H. HAWKINS], as Regular Trustee
Solely as trustee and not in [his] individual capacity
----------------------------------------------------
[NANCY A. MILLER], as Regular Trustee
Solely as trustee and not in [her] individual capacity
----------------------------------------------------
[FIRST CHICAGO DELAWARE INC.],
as Delaware Trustee
By:
-------------------------------------------------
Name:
Title:
----------------------------------------------------
[THE FIRST NATIONAL BANK OF CHICAGO],
as Institutional Trustee
By:
-------------------------------------------------
Name:
Title:
McKESSON CORPORATION, as Sponsor
By:
------------------------------------------------
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
____% TRUST CONVERTIBLE PREFERRED SECURITIES
_____% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ____________ ____, ______ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the [Convertible] Preferred Securities and the
[Convertible] Common Securities are set out below (each capitalized term used
but not defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Offering Memorandum referred to
below):
1. Designation and Number.
----------------------
(a) [Convertible] Preferred Securities. __________ [Convertible]
----------------------------------
Preferred Securities of the Trust (__________ [Convertible] Preferred
Securities if the Underwriter's over-allotment option is exercised in full) with
an aggregate liquidation amount with respect to the assets of the Trust of
______________ Dollars ($__________) (_____________ Dollars ($___________) if
the Underwriter's over-allotment option is exercised in full), and a liquidation
amount with respect to the assets of $____ per [convertible] preferred security,
are hereby designated for the purposes of identification only as "___% Trust
[Convertible] Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such letters, numbers,
notations, other means of identification or designation or other changes or
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice and such legends or endorsements required by law, state
exchange rule and agreements to which the Trust is subject, if any (provided
that any such notation, legend or endorsement is in a form acceptable to the
Trust).
(b) [Convertible] Common Securities. ________ [Convertible] Common
-------------------------------
Securities of the Trust (_________ [Convertible] Common Securities if the
Underwriter's over-allotment option is exercised in full) with an aggregate
liquidation amount with respect to the assets of the Trust of _____________
Dollars ($_________) (_____________ Dollars ($__________) if the Underwriter's
over-allotment option is exercised in full), and a liquidation amount with
respect to the assets of the Trust of $____ per [convertible] common security,
are hereby designated for the purposes of identification only as "___%
[Convertible] Common Securities" (the "Common Securities"). The Common
Securities Certificates evidencing the Common Securities shall be in the form of
Exhibit A-2 to the Declaration, with such letters, numbers, notations, other
means of identification or designation or other changes or additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice and
such legends or endorsements required by law, state exchange rule and agreements
to which the Trust is subject, if any (provided that any such notation, legend
or endorsement is in a form acceptable to the Trust).
I-2
<PAGE>
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ___% (the "Coupon Rate") of the stated liquidation amount of $___ per
Security, such rate being the rate of interest payable on the Debt Securities to
be held by the Institutional Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such interest payable unless otherwise stated. A Distribution
is payable only to the extent that payments are made in respect of the Debt
Securities held by the Institutional Trustee and to the extent the Institutional
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
____________ ____, ______ and will be payable quarterly in arrears, on _______
___, _________ ___, ___________ ____ and __________ ___ of each year, commencing
on _________ ___, _____, except as otherwise described below. So long as the
Debt Security Issuer shall not be in default in the payment of interest on the
Debt Securities, the Debt Security Issuer has the right under the Indenture to
defer payments of interest on the Debt Securities by extending the interest
payment period from time to time on the Debt Securities for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debt Securities,
provided that no Extension Period shall last beyond the date of maturity or any
redemption date of the Debt Securities. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debt Security Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity or
any redemption date of the Debt Securities. Payments of accrued Distributions
and, to the extent permitted by applicable law, accrued interest thereon shall
be payable on the Distribution payment date on which the relevant Extension
Period terminates and shall be payable to Holders as they appear on the books
and records of the Trust at the close of business on the record date next
preceding such Distribution payment date. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debt Security Issuer may
commence a new Extension Period, subject to the above requirements. Each
Extension Period, if any, will end on an interest payment date for the Debt
Securities; such date will also be a Distribution payment date for the
Securities. In the event that the Debt Security Issuer exercises its right to
defer payment of interest, then during such Extension Period the Debt Security
Issuer shall not (a) declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, or (b) make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Debt Security Issuer that rank pari passu with or
junior in interest to the Debt Securities or make any
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guarantee payments with respect to any guarantee by the Debt Security Issuer of
the debt securities of any subsidiary of the Debt Security Issuer if such
guarantee ranks pari passu with or junior in interest to the Debt Securities
(other than (i) as a result of a reclassification of the capital stock of the
Debt Security Issuer or the exchange or conversion of one class or series of the
capital stock of the Debt Security Issuer for another class or series of the
capital stock of the Debt Security Issuer, (ii) the purchase of fractional
interests in shares of the capital stock of the Debt Security Issuer pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in Common Stock of the Debt Security Issuer, (iv) any declaration
of a dividend in connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (v) payments under
the Securities Guarantees, (vi) purchases of Common Stock of the Debt Security
Issuer related to the issuance of Common Stock of the Debt Security Issuer or
rights under any of the Debt Security Issuer's benefit plans for its directors,
officers or employees and (vii) obligations under any dividend reinvestment and
stock purchase plans).
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates, which shall be fifteen days prior to the relevant payment dates, which
payment dates correspond to the record and interest payment dates on the Debt
Securities. The relevant record dates for the Common Securities shall be the
same record dates as for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debt Security Issuer having failed to make a payment under the
Debt Securities, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable
on the Securities is not a Business Day, then payment of the Distributions
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)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
[(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into Common Stock following such record date;
provided, further that if the date of any redemption of related Debt Securities
falls between such record date and such corresponding payment date, the amount
of such Distribution shall include accumulated and unpaid Distributions accrued
to but excluding such date of redemption and such payment shall be made to the
converting holder.]
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(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
The Debt Security Issuer will have the right at any time to cause the Trust
to be dissolved with the result that, after satisfaction of creditors of the
Trust, Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities and the Common
Securities will be distributed on a pro rata basis to the Holders of the
Preferred Securities and the Common Securities in liquidation of such Holders'
interests in the Trust, within 90 days following notice given to the Holders of
the Preferred Securities, subject to the Regular Trustees' receipt of an opinion
of nationally recognized independent counsel experienced in such matters to the
effect that the Holders will not recognize any income, gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and such distribution to Holders of Preferred Securities.
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the Holders of
the Securities on the date of the Liquidation will be entitled to receive out of
the assets of the Trust available for distribution to Holders of Securities
after satisfaction of liabilities of creditors an amount equal to the aggregate
of the stated liquidation amount of $50 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, Debt Securities in
an aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall have been distributed on a Pro
Rata basis to the Holders of the Securities in exchange for such Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) The Debt Securities will mature on _________ ___, _____, and may be
redeemed, in whole or in part, [at any time on or after ___________ ____, _____,
or] at any time in certain circumstances upon the occurrence of a Tax Event (as
defined below). Upon the repayment of the Debt Securities in whole or in part,
whether at maturity, upon redemption (either at the option of the Debt Security
Issuer or pursuant to a Tax Event as described below) or otherwise, the proceeds
from such repayment or payment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debt Securities so repaid or redeemed at a redemption
price per Security equal to the redemption price of the Debt Securities,
together with accrued and unpaid Distributions thereon to, but excluding, the
date of the redemption,
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payable in cash (the "Redemption Price"). Holders will be given not less than 30
nor more than 60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Preferred Securities will be redeemed Pro Rata and the
Preferred Securities to be redeemed will be as described in Section 4(f) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may with the consent of the Debt Security Issuer, except in certain
limited circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors, cause Debt Securities
held by the Institutional Trustee, having an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate identical to
the Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that such dissolution and distribution shall be conditioned on (i) the Regular
Trustees' receipt of an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and the distribution of Debt Securities, (ii) in the case of a Tax Event, the
Debt Security Issuer or the Trust being unable to avoid, within the 90 Day
Period, the Tax Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable measure that
has no adverse effect on the Trust, the Debt Security Issuer, the Sponsor or the
Holders of the Securities ("Ministerial Action"), and (iii) the Debt Security
Issuer's prior written consent to such dissolution and distribution.
Furthermore, if (i) after receipt of a Dissolution Tax Opinion (as defined
hereinafter) by the Regular Trustees, the Debt Security Issuer has received an
opinion (a "Redemption Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Debt Security Issuer would be precluded
from deducting the interest on the Debt Securities for United States federal
income tax purposes even after the Debt Securities were distributed to the
Holders of Securities in liquidation of such Holders' interests in the Trust as
described in this Section 4(c), or (ii) the Regular Trustees shall have been
informed by such tax counsel that it cannot deliver a No Recognition Opinion to
the Trust, the Debt Security Issuer shall have the right, upon not less than 30
nor more than 60 days' notice, to redeem the Debt Securities, in whole or in
part, at a redemption price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, for cash within 90 days following the
occurrence of such Tax Event. Following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the Debt
Securities so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that, if at the time there is available to
the Debt Security Issuer or the Trust the opportunity to eliminate, within such
90 day
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period, the Tax Event by taking some Ministerial Action, the Trust or the
Debt Security Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after __________ ___, ____,
as a result of (a) any amendment to, clarification of, or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, including
any notice or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification, change or Administrative Action is made known, which amendment,
clarification, change or Administrative Action is effective or such
pronouncement or decision is announced, in each case, on or after, ________ ___,
____, there is the creation by such amendment, clarification, change or
Administrative Action of more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debt Securities,
(ii) the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes (other than withholding taxes), duties or
other governmental charges, or (iii) interest paid in cash by the Debt Security
Issuer to the Trust on the Debt Securities is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, by the Debt Security
Issuer for United States federal income tax purposes. Notwithstanding the
foregoing, a Tax Event shall not include any change in tax law that requires the
Debt Security Issuer for United States federal income tax purposes to defer
taking a deduction for any original issue discount ("OID") that accrues with
respect to the Debt Securities until the interest payment related to such OID is
paid by the Debt Security Issuer in cash; provided, that such change in tax law
does not create more than an insubstantial risk that the Debt Security Issuer
will be prevented from taking a deduction for OID accruing with respect to the
Debt Securities at a date that is no later than the date the interest payment
related to such OID is actually paid by the Debt Security Issuer in cash.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority on or after _________ ___, _____ (a "Change in 1940 Act Law"), there
is more than an insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
After the date fixed by the Regular Trustees for any distribution of Debt
Securities upon dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) The Depository Trust Company (the "Depositary")
or its nominee (or any successor Clearing Agency or
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its nominee), as the record Holder of the Preferred Securities held in global
form, will receive a registered certificate or certificates representing the
Debt Securities held in global form to be delivered upon such distribution, and
(iii) certificates representing Securities held in definitive form, except for
certificates representing Preferred Securities held by the Depositary or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest (including Compound Interest (as
defined in the Indenture)) equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debt Security Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or prior to the date of
redemption.
(e) (i) Notice of any redemption of, or notice of distribution of Debt
Securities in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debt Securities.
For purposes of the calculation of the date of redemption or exchange and
the dates on which notices are given pursuant to this Section 4(e), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or by such
other means suitable to assure delivery of such written notice, to Holders
of Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder of Securities shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder of
Securities.
(ii) In addition to the Redemption/Distribution Notice to be
provided to the Holders of Securities pursuant to clause (i) of this
Section 4(e), the Debt Security Issuer or the Trust shall give public
notice of any such redemption by the issuance of a press release through
the services of the Dow Jones Broad Tape, Reuters News Service and
Bloomberg News Service.
(f) In the event that fewer than all the outstanding Securities are to be
redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder of Preferred Securities, it being understood that, in respect of
Preferred Securities registered in the name of and held of record by the
Depositary or its nominee (or any successor Clearing Agency or its nominee) or
any nominee, the distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by such agency or
nominee.
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(g) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued for a redemption
if the Debt Securities are redeemed as set out in the Indenture (which notice
will be irrevocable), then (i) with respect to Preferred Securities held in
book-entry form by 12:00 noon, New York City time, on the redemption date,
provided that the Debt Security Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption of the Debt
Securities, the Institutional Trustee will deposit irrevocably with the
Depositary or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to such Preferred
Securities and will give the Depository irrevocable instructions and authority
to pay the Redemption Price to the Holders of such Preferred Securities, and
(ii) with respect to Preferred Securities issued in definitive form and Common
Securities, provided that the Debt Security Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related redemption of
the Debt Securities, the Institutional Trustee will pay the relevant Redemption
Price to the Holders of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given in
connection with a redemption and funds deposited as required, then from and
after the required date of such deposit, distributions will cease to accrue on
the Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of the Holders
of such Securities to receive the Redemption Price, but without interest on such
Redemption Price. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day falls in
the next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
Neither the Regular Trustees nor the Trust shall be required (i) in the
event of any redemption in part, to issue, register the transfer of or exchange
any Securities during a period beginning at the opening of business 15 days
before any selection for redemption of Securities and ending at the close of
business on the earliest date in which the relevant Redemption/Distribution
Notice is deemed to have been given to all holders of Securities to be so
redeemed or (ii) to register the transfer of or exchange any Securities selected
for redemption, in whole or in part, except for the unredeemed portion of any
Securities being redeemed in part.
(h) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to (i) in respect of Preferred Securities held in global
form, the Depositary or its nominee (or any successor Clearing Agency or its
nominee), (ii) with respect to Preferred Securities held in definitive form, to
the Holders thereof, and (iii) in respect of the Common Securities, to the
Holders thereof.
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(i) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or otherwise.
[5. Conversion Rights.
-----------------
The Holders of Securities shall have the right at any time, beginning
________ ___, ____ through the close of business on ________ ___, ____ (or, in
the case of Securities called for redemption, prior to the close of business
on the Business Day prior to the redemption date), at their option, to cause the
Conversion Agent to convert Securities, on behalf of the converting Holders,
into shares of Common Stock in the manner described herein on and subject to the
following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debt Securities theretofore held by the Trust on the basis of one
Security per $___ principal amount of Debt Securities, and immediately convert
such amount of Debt Securities into fully paid and nonassessable shares of
Common Stock at an initial rate of ____ shares of Common Stock per $____
principal amount of Debt Securities (which is equivalent to a conversion price
of $_____ per share of Common Stock, subject to certain adjustments set forth in
the Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Securities into Common Stock, the Holder shall
submit to the Conversion Agent at its office an irrevocable request to convert
Securities on behalf of such Holder (the "Conversion Request"), together, if the
Securities are in certificated form, with such certificates. The Conversion
Request shall (i) set forth the number of Securities to be converted and the
name or names, if other than the Holder, in which the shares of Common Stock
should be issued and (ii) direct the Conversion Agent (a) to exchange such
Securities for a portion of the Debt Securities held by the Trust (at the rate
of exchange specified in the preceding paragraph) and (b) to immediately convert
such Debt Securities on behalf of such Holder, into Common Stock (at the
conversion rate specified in the preceding paragraph). The Conversion Agent
shall notify the Trust of the Holder's election to exchange Securities for a
portion of the Debt Securities held by the Trust and the Trust shall, upon
receipt of such notice, deliver to the Conversion Agent the appropriate
principal amount of Debt Securities for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify McKesson of the Holder's
election to convert such Debt Securities into shares of Common Stock. Holders
of Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date; provided, however, that if the date of any redemption of the related Debt
Securities falls between such record date and the related Distribution payment
date, the amount of such Distribution shall include accumulated and unpaid
Distributions accrued to but excluding such date of redemption, and such payment
shall be made to the converting Holder. Except as provided above, neither the
Trust nor the Sponsor will make, or be required to make, any payment, allowance
or adjustment upon any conversion on account of any accumulated and unpaid
Distributions accrued
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on the Securities (including any Additional Amounts accrued thereon) surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, except to the extent that
such shares are held of record on the record date for any such distributions.
Securities shall be deemed to have been converted immediately prior to the close
of business on the day on which a Notice of Conversion relating to such
Securities is received by the Trust in accordance with the foregoing provision
(the "Conversion Date"). The Person or Persons entitled to receive Common Stock
issuable upon conversion of the Debt Securities shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, McKesson shall issue
and deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless otherwise directed by
the Holder in the notice of conversion and the Conversion Agent shall distribute
such certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
_________________ as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debt Securities held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debt Securities into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Section and to deliver to the Trust a new Debt Security
or Debt Securities for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion of Securities, but in lieu thereof such fractional interest will be
paid in cash by McKesson, in an amount based on the Closing Price of the Common
Stock on the date such Securities are surrendered for conversion, to the
Conversion Agent, which in turn will make such payment to the Holder or Holders
of Securities so converted.
(e) McKesson shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debt Securities, free from any preemptive or other similar rights, such
number of shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debt Securities then outstanding. Notwithstanding the
foregoing, McKesson shall be entitled to deliver upon conversion of Debt
Securities, shares of Common Stock reacquired and held in the treasury of
McKesson (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debt Securities shall be duly authorized, validly issued
and fully paid and nonassessable. The Trust shall deliver the shares of Common
Stock received upon conversion of the Debt Securities to the converting Holder
free and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Each of McKesson and the Trust
shall
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prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be required by
law, and shall comply with all applicable requirements as to registration or
qualification of Common Stock (and all requirements to list Common Stock
issuable upon conversion of Debt Securities that are at the time applicable), in
order to enable McKesson to lawfully issue Common Stock to the Trust upon
conversion of the Debt Securities and the Trust to lawfully deliver Common Stock
to each Holder upon conversion of the Securities.
(f) McKesson will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Debt Securities
and the delivery of the shares of Common Stock by the Trust upon conversion of
the Securities. McKesson shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Trust the amount of
any such tax, or has established to the satisfaction of the Trust that such tax
has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or as set
forth in this Annex I to the Declaration or to the Declaration itself or
otherwise require the Institutional Trustee or the Trust to pay any amounts on
account of such withholdings.
(h) The term "Closing Price" with respect to any security on any day means
the last reported sale price, regular way on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the NYSE Composite Tape,
or, if such security is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the principal interdealer quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
interdealer quotation system, the average of the closing bid and asked prices of
such security in the over-the-counter market on the day in question as reported
by the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors (or any
committee duly authorized by the Board of Directors) of the Debt Security Issuer
for that purpose or, if not so available in such manner, as otherwise determined
in good faith by the Board of Directors (or any committee duly authorized by the
Board of Directors) of the Debt Security Issuer.]
6. Voting and Other Rights - Preferred Securities.
----------------------------------------------
(a) Except as provided under Sections 6(b) and 8 of this Annex I to the
Declaration and as otherwise required by law and the Declaration, the Holders of
the Preferred Securities will not have voting rights.
[(b) If (i) the Trust fails to make Distributions in full on the Preferred
Securities for 6 consecutive quarterly Distribution periods; or (ii) an Event of
Default occurs and is continuing (each, an "Appointment Event"), then the
Holders of the Preferred Securities, acting as a single class, will be entitled
by the vote of Holders of Preferred Securities representing a Majority in
liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee in accordance with paragraph 5.6(a)(iii) of the Declaration. Any Holder
of Preferred Securities (other than the Sponsor or any Affiliate of the Sponsor)
will have the right to nominate any Person to be appointed as Special Regular
Trustee. For purposes of determining whether the Trust has failed to pay
Distributions in full for 6 consecutive quarterly Distribution periods,
Distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly Distribution periods
terminating on or prior to the date of payment of such cumulative Distribution.
Not later than 30 days after such right to appoint a Special Regular Trustee
arises, the Regular Trustees will convene a meeting for the purpose of
appointing a Special Regular Trustee. If the Regular Trustees fail to convene
such meeting within such 30-day period, the Holders of Preferred Securities
representing 25% in liquidation amount of the outstanding Preferred Securities
will be entitled to convene such meeting in accordance with Section 12.2 of the
Declaration. The record date for such meeting will be the close of business on
the Business Day next preceding the day on which notice of the meeting is sent
to Holders of Preferred Securities. The provisions of the Declaration relating
to the convening and conduct of the meetings of the Holders will apply with
respect to any such meeting. If, at any such meeting, Holders of less than a
Majority in liquidation amount of Preferred Securities entitled to vote for the
appointment of a Special Regular Trustee vote for such appointment, no Special
Regular Trustee shall be appointed. Any Special Regular Trustee may be removed
without cause at any time by the Holders of Preferred Securities representing a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(b)(iii) of the Declaration. The Holders of 25% in liquidation amount
of the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for such
meeting will be the close of business on the Business Day next preceding the day
on which notice of the meeting is sent to Holders of Preferred Securities. Any
Special Regular Trustee appointed shall cease to be a Special Regular Trustee as
provided in Section 5.6(c) of the Declaration. Notwithstanding the appointment
of any such Special Regular Trustee, the Debt Security Issuer shall retain all
rights under the Indenture, including the right to extend the interest payment
period on the Debt Securities, and any extension for a period not exceeding 20
quarterly interest periods will not constitute an Event of Default in respect of
the Debt Securities.]
I-12
<PAGE>
(c) Subject to the requirements set forth in this paragraph, the Holders of
a Majority in liquidation amount of the Preferred Securities then outstanding,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or may direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debt Securities, to (i) exercise the
remedies available under the Indenture with respect to the Debt Securities, (ii)
waive any past default and its consequences that is waivable under the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debt Securities shall be due and payable, provided,
however, that if an Event of Default under the Indenture has occurred and is
continuing then the holders of 25% of the aggregate liquidation amount of the
Preferred Securities then outstanding may direct the Institutional Trustee to
declare the principal of and interest on the Debt Securities immediately due and
payable; and provided, further, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Debt Securities then outstanding (a "Super
Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Preferred Securities which the
relevant Super Majority represents of the aggregate principal amount of the Debt
Securities then outstanding. The Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee as set
forth above, the Institutional Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Institutional Trustee has obtained an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust as a result of such action. If the
Institutional Trustee fails to enforce its rights under the Debt Securities, any
Holder of Preferred Securities may institute a legal proceeding against any
person to enforce the Institutional Trustee's rights under the Debt Securities.
If a Declaration Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debt Security Issuer to pay interest or
principal on the Debt Securities on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debt Securities having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such Holder (a "Direct Action") on or
after the respective due date specified in the Debt Securities. In connection
with such Direct Action, the rights of the Holders of Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent of
any payment made by the Issuer to such Holder of Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debt Securities.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter
I-13
<PAGE>
upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debt Securities in accordance with the Declaration and the terms
of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 7(b), 7(c) and 8 of this Annex I of
the Declaration and as otherwise required by law and the Declaration, the
Holders of the Common Securities will not have voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the Debt
Security Trustee, or exercising any trust or power conferred on the Debt
Security Trustee with respect to the Debt Securities, (ii) waive any past
default and its consequences that is waivable under the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debt Securities shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the relevant
Super Majority, the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debt Securities outstanding.
The Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debt Security Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the
I-14
<PAGE>
Holders of the Common Securities under this paragraph unless the Institutional
Trustee has obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the Debt
Securities in accordance with the Declaration and the terms of the Securities.
8. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Securities voting together as a
single class, will be entitled to vote on such amendment or proposal (but not on
any other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities then outstanding affected thereby;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities then outstanding.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debt Securities is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debt Securities,
the Institutional Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities then outstanding,
voting together as a single class; provided,
I-15
<PAGE>
however, that where a consent under the Indenture would require the consent of
the relevant Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities then outstanding which the relevant Super
Majority represents of the aggregate principal amount of the Debt Securities
then outstanding; provided, further, that the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Securities under this Section 8(b) unless the Institutional Trustee has obtained
an opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust as a result of
such action.
9. Pro Rata.
--------
A reference in these terms of the Securities to any distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first in cash to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
10. Ranking.
-------
The Preferred Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where a Declaration Event of
Default occurs and is continuing, the rights of Holders of the Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
I-16
<PAGE>
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee or the
Common Securities Guarantee (as may be appropriate), and the Indenture to a
Holder without charge on written request to the Sponsor at its principal place
of business.
I-17
<PAGE>
EXHIBIT A-1
[FORM OF [CONVERTIBLE] PREFERRED SECURITY CERTIFICATE]
[IF THE [CONVERTIBLE] PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - THIS [CONVERTIBLE] PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN
THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS [CONVERTIBLE] PREFERRED SECURITY IS EXCHANGEABLE FOR
[CONVERTIBLE] PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS [CONVERTIBLE] PREFERRED SECURITY (OTHER THAN
A TRANSFER OF THIS [CONVERTIBLE] PREFERRED SECURITY 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
LIMITED CIRCUMSTANCES.
UNLESS THIS [CONVERTIBLE] PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY [CONVERTIBLE] PREFERRED SECURITY 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.]
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] PREFERRED SECURITIES:
CUSIP NO.:
Certificate Evidencing [Convertible] Preferred Securities
of
McKESSON FINANCING TRUST II
A1-1
<PAGE>
____% Trust [Convertible] Preferred Securities
(liquidation amount $___ per Trust [Convertible] Preferred Security)
McKesson Financing Trust II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
____________________ (the "Holder") is the registered owner of [convertible]
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the ___% Trust [Convertible] Preferred
Securities (liquidation amount $____ per Trust [Convertible] Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of ___________ ___, _____,
as the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Preferred Securities as set forth in Annex I to
the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the
Preferred Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee and the
Indenture to the Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debt Securities.
Unless the Institutional Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, _____.
McKesson Financing Trust II
By:
-----------------------------
Name:
Title: Trustee
Solely as trustee and not in his
individual capacity
A1-3
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Declaration.
Dated: _____________ ____, _____
[THE FIRST NATIONAL BANK OF CHICAGO],
as Institutional Trustee or as Authentication Agent
By: By:
--------------------------- ---------------------------
Authorized Signatory Authorized Signatory
A1-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ____% (the "Coupon Rate") of the stated liquidation amount of $___ per
Preferred Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debt Securities held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from __________ ___, _____ and will
be payable quarterly in arrears, on ________ ____, _________ ____, _________ ___
and ________ ___ of each year, commencing on ________ ___, _______, which
payment dates shall correspond to the interest payment dates on the Debt
Securities, to Holders of record at the close of business on the regular record
date for such Distribution which shall be the close of business 15 days prior to
such Distribution payment date unless otherwise provided in the Declaration.
The Debt Security Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the Debt
Securities for a period not exceeding 20 consecutive quarters (each an
"Extension Period"); provided that no Extension Period shall last beyond the
date of the maturity or any redemption date of the Debt Securities and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any
such Extension Period, the Debt Security Issuer may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
or extend beyond the maturity or any redemption date of the Debt Securities.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debt Security Issuer may commence a new Extension Period, subject to
the above requirements.
The Preferred Securities shall be redeemable as provided in the Declaration.
[The Preferred Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debt Securities and (ii) the immediate conversion of such Debt Securities into
Debt Security Issuer Common Stock, in the manner and according to the terms set
forth in the Declaration.]
A1-5
<PAGE>
[CONVERSION REQUEST]
[To: [The First National Bank of Chicago],
as Institutional Trustee of McKesson Financing Trust II
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of McKesson Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ___________ ___, _____, by [William A. Armstrong],
[Richard H. Hawkins] and [Nancy A. Miller], as Regular Trustees, [First Chicago
Delaware Inc.], as Delaware Trustee, [The First National Bank of Chicago], as
Institutional Trustee, McKesson Corporation, as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debt Securities (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debt Securities on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.]
A1-6
<PAGE>
[Date: _______________, ____
in whole _____ in part _____
Number of Preferred Securities to be converted: ____________________
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Common Stock are
to be issued, along with the address or addresses of such person or
persons
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
Signature
Please Print or Typewrite Name and Address, Including Zip Code, and
Social Security or Other Identifying Number
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
Signature Guarantee:/*/
------------------------------------
- -------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
A1-7
<PAGE>
[FORM OF ASSIGNMENT FOR DEFINITIVE PREFERRED SECURITY]
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 security and hereby irrevocably constitutes and appoints _________
________ attorney to transfer the said security on the books of the Company,
with full power of substitution in the premises.
Dated:
-------------------
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee/*/
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- ---------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A1-8
<PAGE>
SCHEDULE I
CHANGES TO NUMBER OF PREFERRED SECURITIES IN GLOBAL SECURITY
<TABLE>
<CAPTION>
Number of Preferred
Securities by which this
Global Security Is To Be Remaining Preferred
Reduced or Increased, Securities Represent
and Reason for by this
Date Reduction or Increase Global Security Notation Made By
- ------- ------------------------- ----------------------- --------------
<S> <C> <C> <C>
</TABLE>
A1-9
<PAGE>
EXHIBIT A-2
[FORM OF [CONVERTIBLE] COMMON SECURITY CERTIFICATE]
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 UNLESS SUCH OFFER AND SALE ARE REGISTERED UNDER OR ARE EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT. THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH IN THE
DECLARATION REFERRED TO BELOW.
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] COMMON SECURITIES:
Certificate Evidencing [Convertible] Common Securities
of
McKESSON FINANCING TRUST II
____% [Convertible] Common Securities
(liquidation amount $____ per [Convertible] Common Security)
McKesson Financing Trust II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________ (the "Holder") is the registered owner
of [convertible] common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the ___%
[Convertible] Common Securities (liquidation amount $____ per [Convertible]
Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of __________ ___, _____, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Common Securities as set forth in Annex I to the
Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent
A2-1
<PAGE>
provided therein. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debt Securities.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of ________, _____.
McKesson Financing Trust II
By:
------------------------------
Name:
Title: Trustee
Solely as trustee and not in his
individual capacity
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum, of ___% (the "Coupon Rate") of the stated liquidation amount of $____ per
Common Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debt Securities held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accrue from __________ ___, ____ and will be payable
quarterly in arrears, on _______ ___, ________ ___, _______ ___ and ________ ___
of each year, commencing on _________ ___, ____, which payment dates shall
correspond to the interest payment dates on the Debt Securities, to Holders of
record at the close of business on the regular record date for such Distribution
which shall be the close of business 15 days prior to such Distribution payment
date unless otherwise provided in the Declaration. The Debt Security Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debt Securities for a period
not exceeding 20 consecutive quarters (each an "Extension Period"), provided
that no Extension Period shall last beyond the date of maturity of the Debt
Securities and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debt Security Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the date of maturity of the Debt Securities. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debt Security Issuer may commence a new Extension Period, subject to the above
requirements.
The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debt
Securities and (ii) the immediate conversion of such Debt Securities into Debt
Security Issuer Common Stock, in the manner and according to the term set forth
in the Declaration.]
A2-4
<PAGE>
[CONVERSION REQUEST]
[To: [The First National Bank of Chicago],
as Institutional Trustee of McKesson Financing Trust II
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of McKesson Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _________ ___, ____, by [William A. Armstrong],
[Richard H. Hawkins] and [Nancy A. Miller], as Regular Trustees, [First Chicago
Delaware Inc.], as Delaware Trustee, [The First National Bank of Chicago], as
Institutional Trustee, McKesson Corporation, as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Common Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Common Securities for a portion of the Debt Securities (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Common Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debt Securities on behalf of the undersigned,
into Common Stock (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.]
A2-5
<PAGE>
[Date: _______________, ____
in whole _____ in part _____
Number of Common Securities to be converted: ____________________
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Common Stock are
to be issued, along with the address or addresses of such person or
persons
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
Signature
Please Print or Typewrite Name and Address, Including Zip Code, and
Social Security or Other Identifying Number
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
Signature Guarantee:/*/
---------------------------------------
- ------------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
A2-6
<PAGE>
FORM OF ASSIGNMENT FOR SECURITY [OR
COMMON STOCK ISSUABLE UPON CONVERSION] THEREOF
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 security and hereby irrevocably constitutes and appoints __________
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
Dated: ________________________
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee/*/
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- ---------------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A2-7
<PAGE>
EXHIBIT B
SPECIMEN OF DEBT SECURITY
B-1
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
C-1
<PAGE>
Exhibit 4.9
- --------------------------------------------------------------------------------
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
McKESSON FINANCING TRUST III
Dated as of _________ ____, _____
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C> <C>
SECTION 1.1. Definitions............................................................ 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application....................................... 8
SECTION 2.2. Lists of Holders of Securities......................................... 8
SECTION 2.3. Reports by the Institutional Trustee................................... 9
SECTION 2.4. Periodic Reports to Institutional Trustee.............................. 9
SECTION 2.5. Evidence of Compliance with Conditions Precedent....................... 9
SECTION 2.6. Events of Default; Waiver.............................................. 9
SECTION 2.7. Event of Default; Notice............................................... 11
ARTICLE III
ORGANIZATION
SECTION 3.1. Name................................................................... 11
SECTION 3.2. Office................................................................. 12
SECTION 3.3. Purpose................................................................ 12
SECTION 3.4. Authority.............................................................. 12
SECTION 3.5. Title to Property of the Trust......................................... 13
SECTION 3.6. Powers and Duties of the Regular Trustees.............................. 13
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees................... 16
SECTION 3.8. Powers and Duties of the Institutional Trustee......................... 17
SECTION 3.9. Certain Duties and Responsibilities of the Institutional Trustee....... 19
SECTION 3.10. Certain Rights of Institutional Trustee................................ 20
SECTION 3.11. Delaware Trustee....................................................... 22
SECTION 3.12. Execution of Documents................................................. 23
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities................. 23
SECTION 3.14. Duration of Trust...................................................... 23
SECTION 3.15. Mergers................................................................ 23
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV
SPONSOR
<S> <C> <C>
SECTION 4.1. Sponsor's Purchase of Common Securities................................ 25
SECTION 4.2. Responsibilities of the Sponsor........................................ 25
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees..................................................... 26
SECTION 5.2. Delaware Trustee....................................................... 26
SECTION 5.3. Institutional Trustee; Eligibility..................................... 26
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware Trustee
Generally.............................................................. 27
SECTION 5.5. Regular Trustees....................................................... 27
SECTION 5.6. Appointment, Removal and Resignation of Trustees....................... 28
SECTION 5.7. Vacancies Among Trustees............................................... 29
SECTION 5.8. Effect of Vacancies.................................................... 29
SECTION 5.9. Meetings............................................................... 30
SECTION 5.10. Delegation of Power.................................................... 30
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business............ 30
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.......................................................... 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities................................ 31
SECTION 7.2. Execution and Authentication........................................... 31
SECTION 7.3. Form and Dating........................................................ 32
SECTION 7.4. Paying Agent........................................................... 33
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VIII
TERMINATION OF TRUST
<S> <C> <C>
SECTION 8.1. Termination of Trust................................................... 33
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities................................................. 34
SECTION 9.2. Transfer of Certificates............................................... 35
SECTION 9.3. Deemed Security Holders................................................ 36
SECTION 9.4. Book Entry Interests................................................... 36
SECTION 9.5. Notices to Clearing Agency............................................. 37
SECTION 9.6. Appointment of Successor Clearing Agency............................... 38
SECTION 9.7. Definitive Preferred Security Certificates Under Certain Circumstances. 38
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates...................... 39
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1. Liability.............................................................. 39
SECTION 10.2. Exculpation............................................................ 40
SECTION 10.3. Fiduciary Duty......................................................... 40
SECTION 10.4. Indemnification........................................................ 41
SECTION 10.5. Outside Business....................................................... 44
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year............................................................ 44
SECTION 11.2. Certain Accounting Matters............................................. 44
SECTION 11.3. Banking................................................................ 45
SECTION 11.4. Withholding............................................................ 45
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE XII
AMENDMENTS AND MEETINGS
<S> <C> <C>
SECTION 12.1. Amendments............................................................. 46
SECTION 12.2. Meetings of the Holders of Securities; Action by Written Consent....... 48
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee................ 50
SECTION 13.2. Representations and Warranties of Delaware Trustee..................... 50
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Notices................................................................ 51
SECTION 14.2. Governing Law.......................................................... 52
SECTION 14.3. Intention of the Parties............................................... 52
SECTION 14.4. Headings............................................................... 52
SECTION 14.5. Successors and Assign.................................................. 53
SECTION 14.6. Partial Enforceability................................................. 53
SECTION 14.7. Counterparts........................................................... 53
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(b) .............................................................................. 5.3(c) & (d)
311(a) .............................................................................. 2.2(b)
311(b) .............................................................................. 2.2(b)
312(b) .............................................................................. 2.2(b)
313 .............................................................................. 2.3
313(d) .............................................................................. 2.3
314 .............................................................................. 2.4
314(a) .............................................................................. 3.6(j)
314(c) .............................................................................. 2.5
316(a) .............................................................................. 2.6(a)- (c) &(e)
317(b) .............................................................................. 3.8(h)
</TABLE>
- -----------------
* This Cross-Reference table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
FORM OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
McKESSON FINANCING TRUST III
____________ ___, ____
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ____________ ____, _____, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established McKesson Financing Trust
III (the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of ____________ ___, ______, (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on April 23, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debt
Securities (as defined herein) of the Debt Security Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitutes the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.
Unless the context otherwise requires:
<PAGE>
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits of or to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent [or Conversion Agent]/1/.
["Appointment Event" means an event defined in the terms of the Preferred
Securities set forth in ANNEX I which entitles the Holders of a Majority in
liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee.]
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in New York, New York or Wilmington, Delaware are
permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S)3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
- ------------------------
/1/ Insert bracketed language relating to conversion throughout the document if
the Securities are convertible.
2
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means ___________ ___, _____.
"Closing Price" has the meaning specified in Annex I.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement to be dated as
of ________ ___, ______ of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
["Common Stock" means the common stock of McKesson Corporation, a Delaware
corporation, par value $.01 per share, and any other shares of common stock as
may constitute "Common Stock" under the Indenture.]
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
["Conversion Agent" has the meaning specified in Section 7.4.]
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at [One North State Street, 9th Floor,
Chicago, Illinois 60602], Attention: [Corporate Trust Services Division].
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debt Securities" means the series of Debt Securities to be issued by the
Debt Security Issuer under the Indenture to be held by the Institutional
Trustee, a specimen certificate for such series of Debt Securities being Exhibit
B.
3
<PAGE>
"Debt Security Issuer" means McKesson Corporation, a Delaware corporation,
in its capacity as issuer of the Debt Securities under the Indenture.
"Debt Security Trustee" means ___________________, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Declaration Event of Default" means an Event of Default under the Debt
Securities.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debt Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4(a).
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means each Company Indemnified Person and each
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of __________ ____, ____ between
the Debt Security Issuer and the Debt Security Trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
4
<PAGE>
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidated Distribution" has the meaning specified in the terms of the
Securities as set forth in Annex I.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Offered Securities" means the Preferred Securities, the Preferred
Securities Guarantee, the Debt Securities[, the shares of Common Stock issuable
upon conversion of the Preferred Securities and the Rights attached thereto].
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
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, in the opinion of each such officer, such
condition or covenant has been complied with.
"Option Closing Date" means the date of closing of any sale of Additional
Securities (as defined in the Purchase Agreement).
"Paying Agent" has the meaning specified in Section 3.8(h).
5
<PAGE>
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________ ___, ______, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Purchase Agreement" means the Purchase Agreement for the offering and sale
of Preferred Securities in the form of Exhibit C.
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee, any
officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rights" has the meaning specified in the Rights Agreement, dated October
21, 1994, between the Sponsor and The First Chicago Trust Company of New York.
6
<PAGE>
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
["Special Regular Trustee" means a Regular Trustee appointed by the
Holders of a Majority in liquidation amount of the Preferred Securities in
accordance with Section 5.6(a)(iii).]
"Sponsor" or "McKesson" means McKesson Corporation, a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debt Securities, (ii) any cash on deposit
in, or owing to, the Institutional Trustee Account and (iii) all proceeds and
rights in respect of the foregoing to be held by the Institutional Trustee
pursuant to the terms of this Declaration for the benefit of the
Securityholders.
"25% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 25% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
7
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions. The Trust Indenture Act shall be
applicable to this Declaration except as otherwise set forth herein, as if the
Securities had been sold pursuant to an effective registration statement.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If, and to the extent that, any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such duties imposed under the Trust Indenture Act
shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list in such form as the Institutional
Trustee may reasonably require of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that, neither
the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in the
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity), provided that, the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
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SECTION 2.3. Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by (S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Institutional
Trustee is for informational purposes only and the Institutional Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Sponsor's compliance with any of its covenants hereunder (as to which the
Institutional Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may by vote on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debt Securities (a "Super Majority")
to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities that the
relevant Super Majority represents of the aggregate principal amount of the
Debt Securities outstanding.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debt Securities outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Institutional Trustee shall act solely on behalf of the Holders of the
Preferred Securities and only the Holders of the Preferred Securities will have
the right to direct the Institutional Trustee to act in accordance with the
terms of the Securities. The foregoing provisions of this Section 2.6(b) shall
be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
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(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the occurrence of
an Event of Default actually known to a Responsible Officer of the Institutional
Trustee, transmit by mail, first class postage prepaid, to the Holders of the
Securities, notices of all such defaults with respect to the Securities unless
such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debt Securities or in the payment of
any sinking fund installment established for the Debt Securities, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities. Any such notice given pursuant to this Section 2.7(a)
shall state that an Event of Default under the Indenture also constitutes an
Event of Default under this Declaration.
(b) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.1(a) and 5.1(b) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1. Name.
The Trust is named "McKesson Financing Trust III" as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
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SECTION 3.2. Office.
The address of the principal office of the Trust is c/o McKesson
Corporation, McKesson Plaza, One Post Street, San Francisco, CA, 94104. On at
least ten Business Days written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3. Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities and use the proceeds from such sale to acquire the Debt Securities,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4. Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that the registration statement referred to
in Section 3.6, including any amendments thereto, shall, subject to Section
3.4(d), be signed by all of the Regular Trustees; and
(d) A Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of executing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to Section 3.6.
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SECTION 3.5. Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debt Securities and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The
Holders of Securities shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities, and
provided further, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a simultaneous
issuance of both Preferred Securities and Common Securities on the Closing Date
and Option Closing Date, if any;
(b) in connection with the issue and sale of the Securities, at the
direction of the Sponsor, to:
(i) execute and file with the Commission, at such time as determined
by the Sponsor, a registration statement on Form S-3 prepared by the
Sponsor, including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file an application, prepared by the Sponsor, at
such time as determined by the Sponsor, to the New York Stock Exchange or
any other national stock exchange for listing, or quotation on an
interdealer quotation system, of the Preferred Securities;
(ii) execute and deliver letters, documents, or instruments with The
Depository Trust Company relating to the Preferred Securities;
(iv) execute and file with the Commission, at such time as determined
by the Sponsor, a registration statement on Form 8-A, including any
amendments thereto, prepared by the Sponsor relating to the registration of
the Preferred Securities under Section 12(b) of the Exchange Act;
(v) execute and enter into the Purchase Agreement and other related
agreements providing for the sale of the Securities;
(vi) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the
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Preferred Securities in any State in which the Sponsor has determined to
qualify or register such Preferred Securities for sale or resale, as the
case may be; and
(vii) take all actions and perform such duties as may be required of
the Regular Trustees to open checking, deposit or similar banking accounts
as may be necessary in connection with the issuance and sale of the
Securities;
(c) to acquire the Debt Securities with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debt Securities to be held of
record in the name of the Institutional Trustee for the benefit of the Holders
of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of (S)316 (c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants, and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
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(l) to act as, or appoint another Person to act as, registrar, transfer
agent, Paying Agent [and Conversion Agent] for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debt Security Issuer of its election to defer payments
of interest on the Debt Securities by extending the interest payment period
under the Indenture;
(n) to execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debt Security Issuer to ensure that the
Debt Securities will be treated as indebtedness of the Debt Security Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders or
vary the terms of the Preferred Securities;
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
(r) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to Section 11.2 herein; and
(s) to the extent provided in this Declaration, the winding up of the
affairs of and liquidation of the Trust and the preparation, execution and
filing of the Certificate of Cancellation with the Secretary of State of the
State of Delaware.
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The Regular Trustees must exercise the powers set forth in this Section 3.6
in a manner that is consistent with the purposes and functions of the Trust set
out in Section 3.3, and the Regular Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Sponsor.
The Trust initially appoints the Institutional Trustee as transfer agent
and registrar for the Preferred Securities.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to engage in any activity other than as
required or authorized by this Declaration. In particular the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debt Securities, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debt Securities;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever
except as permitted by the terms of this Declaration;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I hereto,
(A) direct the time, method and place of exercising any trust or power
conferred upon the Debt Security Trustee with respect to the Debt
Securities, (B) waive any past default that is not waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debt Securities shall be due and payable, or (D)
consent to any amendment, modification
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or termination of the Indenture or the Debt Securities where such consent
shall be required unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause more than an
insubstantial risk that (x) the Trust will be deemed an Investment Company
required to be registered under the Investment Company Act or (y) the Trust
will not be classified as a grantor trust for United States federal income
tax purposes.
SECTION 3.8. Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debt Securities shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debt Securities shall vest automatically in each
Person who may hereafter be appointed as Institutional Trustee in accordance
with Section 5.6. Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Debt Securities have been
executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debt Securities to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debt Securities held by the Institutional Trustee, deposit such
funds into the Institutional Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the Common Securities
from the Institutional Trustee Account in accordance with Section 6.1.
Funds in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional Trustee
Account shall be an account that is maintained with a banking institution
the rating on whose long-term unsecured indebtedness is at least equal to
the rating assigned to the Preferred Securities (or, if the Preferred
Securities are not rated, the rating assigned to McKesson's senior debt) by
a "nationally recognized statistical rating organization," as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debt Securities are redeemed or mature;
(iii) engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Trust Property in accordance
with the terms of this Declaration; and
(iv) to the extent provided for in this Declaration, take such
ministerial actions necessary in connection with the winding up of the
affairs of and liquidation of the Trust and
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the preparation, execution and filing of the Certificate of Cancellation
with the Secretary of State of the State of Delaware.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with, an Event of Default of which a Responsible Officer of
the Institutional Trustee has actual knowledge, or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided however, that if a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debt Security
Issuer to pay interest or principal on the Debt Securities on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debt Securities
and provided, further, that if the Institutional Trustee fails to enforce its
rights under the Debt Securities, any Holder of Preferred Securities may
institute a legal proceeding against any person to enforce the Institutional
Trustee's rights under the Debt Securities. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Preferred Securities to the extent of any payment
made by the Debt Security Issuer to such Holder of Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debt Securities.
(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debt Securities under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debt Securities subject to the rights of the Holders pursuant to
the terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or Liquidation
Distributions on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Institutional Trustee.
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(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee shall
be determined solely by the express provisions of this Declaration and
the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of the Institutional
Trustee, the Institutional Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Institutional Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
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(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional 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 of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional 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 it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debt Securities and
the Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debt Securities or the payment of any taxes or assessments levied thereon
or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in
writing with the Sponsor. Money held by the Institutional Trustee need not
be segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
SECTION 3.10. Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument,
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opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Sponsor or any of its Affiliates, and
may include any of its employees. The Institutional Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to (a) require the Holders of Preferred Securities to offer such
indemnity in the event such Holders direct the Institutional Trustee to
take any action it is empowered to take under this Declaration following an
Event of Default or (b) relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Institutional 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,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness
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or other paper or document, but the Institutional Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Institutional Trustee (i) may request written
instructions from the Holders of the Securities which instructions may only
be given by the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee under
the terms of the Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration; and
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the
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duties and responsibilities of the Regular Trustees, the Institutional Trustee
or the Trustees generally (except as may be required under the Business Trust
Act) described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of (S) 3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents.
Except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall, subject to Section 3.4(d), be signed by
all of the Regular Trustees.
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for _________ (__) years from __________ ___,
_____.
SECTION 3.15. Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities")
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so long as the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debt Security Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debt Securities;
(iii) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating organization;
(iv) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders' interest
in the Successor Entity);
(v) such Successor Entity has a purpose identical to that of the
Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the Successor Entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or such Successor Entity) will continue to
be classified as a grantor trust for United States federal income
tax purposes; and
(vii) the Sponsor guarantees the obligations of the Successor Entity
under the Successor Securities at least to the extent provided by the
Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger or replacement would cause
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the Trust or the Successor Entity to be classified as other than a grantor trust
for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common Securities
issued by the Trust, in an amount at least equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2. Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Securities, including any amendments
thereto;
(b) prepare for execution and filing by the Trust of an application,
prepared by the Sponsor, at such time as determined by the Sponsor, to the New
York Stock Exchange or any other national stock exchange for listing, or
quotation on an interdealer quotation system, of the Preferred Securities;
(c) prepare for execution and filing by the Trust of documents, or
instruments to be delivered to The Depository Trust Company relating to the
Preferred Securities;
(d) prepare for execution and filing by the Trust of a registration
statement on Form 8-A, including any amendments thereto, prepared by the Sponsor
relating to the registration of the Preferred Securities under Section 12(b) of
the Exchange Act;
(e) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Preferred Securities and to do any and
all such acts, other than actions which must be taken by the Trust, and advise
the Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States; and
(f) to negotiate the terms of the Purchase Agreement providing for the sale
of the Preferred Securities.
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ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, [and except as provided in clause
(ii) below and Section 5.6(a)(iii) with respect to the Special Regular Trustee,]
the number of Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; provided, however, that the
number of Trustees shall in no event be less than two (2); provided further,
that (i) one Trustee, in the case of a natural person, shall be a person who is
a resident of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee"); [(ii) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event has occurred and is continuing
and the Holders of a Majority in liquidation amount of the Preferred Securities
appoint a Special Regular Trustee in accordance with Section 5.6(a)(iii) and the
terms of the Preferred Securities; (iii) unless a Special Regular Trustee has
been appointed (which appointment shall not impair the right of the Holders of
Common Securities to increase or decrease the number of, or to appoint, remove
or replace, Trustees (other than the Special Regular Trustee as provided herein)
there shall be at least one Trustee who is any employee of, or is affiliated
with the Sponsor ([together with any Special Regular Trustee] a "Regular
Trustee");] and (iv) one Trustee shall be the Institutional Trustee, and such
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2. Delaware Trustee.
If required by the Business Trust Act, one Trustee shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law;
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
The Initial Delaware Trustee shall be: [First Chicago Delaware Inc.]
SECTION 5.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), 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.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be: [The First National Bank
of Chicago].
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5. Regular Trustees.
The initial Regular Trustees shall be:
[William A. Armstrong]
[Richard H. Hawkins]
[Nancy A. Miller]
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any
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power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall, subject to Section
3.4(d), be signed by all of the Regular Trustees.
SECTION 5.6. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) after the issuance of any Securities, [other than with respect
to the Special Trustee,] by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; and
[(iii) if an Appointment Event has occurred and is continuing, one
additional Regular Trustee (the "Special Regular Trustee") may be
appointed, who need not be an Affiliate of the Sponsor, by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities,
voting as a class.]
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor;
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor; and
[(iii) the Trustee that acts as Special Regular Trustee may only be
removed (otherwise than by the operation of Section 5.6(c)), by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities voting
as a class.]
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation; [provided
--------
that a Special Regular Trustee shall only hold office while an Appointment Event
is continuing and shall cease to hold office immediately after the Appointment
Event pursuant to which the Special Regular Trustee was appointed and all other
Appointment Events cease to be continuing.] Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Institutional
Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional
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Trustee and delivered to the Trust, the Sponsor and the resigning
Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
[(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the resignation to the
Sponsor and the Trust or such later date specified in the resignation
during which period the Holders of the Preferred Securities shall have the
right to appoint a successor Special Regular Trustee as provided in this
Article V.]
[(d) Any action taken by Holders of Preferred Securities pursuant to this
Article V to appoint or remove a Special Regular Trustee upon the occurrence of
an Appointment Event, shall be taken at a meeting of Holders of Preferred
Securities convened for such purpose or by written consent as provided in
Section 12.2.
(e) No amendment may be made to this Section 5.6 or Section 5.1, which
would change the rights of Holders of Preferred Securities to appoint, remove or
replace a Special Regular Trustee except with the consent of the Holders of a
Majority in liquidation amount of the Preferred Securities.]
(f) the Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.6.
(g) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.
(h) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7. Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur, until such vacancy is filled by the appointment of
a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
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SECTION 5.9. Meetings.
If there is more than one Regular Trustee, meetings of the Regular Trustees
shall be held from time to time upon the call of any Regular Trustee. Regular
meetings of the Regular Trustees may be held at a time and place fixed by
resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustee or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10. Delegation of Power.
A Regular Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 his or her power for the
purposes of executing any documents contemplated in Section 3.6, including any
registration statement or amendment thereto filed with the Commission, or making
any other governmental filing.
The Regular Trustees shall have power to delegate from time to time to such
of their number or to officers of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
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ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.
Holders of Securities shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debt Security Issuer makes a payment of
interest (including Compound Interest (as [to be] defined in the Indenture) and
Additional Sums (as [to be] defined in the Indenture), premium and/or principal
on the Debt Securities held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
[convertible] preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of [convertible] common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of and shall
be bound by this Declaration.
SECTION 7.2. Execution and Authentication.
(a) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. In case any Regular Trustee of the Trust who shall have signed any of
the Securities shall cease to be such
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Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not such a Regular Trustee.
(b) One Regular Trustee shall sign the Preferred Securities for the Trust
by manual or facsimile signature. Unless otherwise determined by the Trust,
such signature shall, in the case of Common Securities, be a manual signature.
A Preferred Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Preferred Securities for original
issue.
The Institutional Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Institutional Trustee may do so.
Each reference in this Declaration to authentication by the Institutional
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Institutional Trustee to deal with the Company or an
Affiliate.
SECTION 7.3. Form and Dating.
The Preferred Securities and the Institutional Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular Trustees, as evidenced
by their execution thereof. The Securities may have letters, numbers,
notations, other marks of identification or designation or other changes or
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice and such legends or endorsements required by law, stock
exchange rule and agreements to which the Trust is subject, if any (provided
that any such notation, legend or endorsement is in a form acceptable to the
Trust). The Trust at the direction of the Sponsor shall furnish any such legend
not contained in Exhibit A-1 to the Institutional Trustee in writing. Each
Preferred Security Certificate shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and, to the extent applicable, the Institutional Trustee and the
Sponsor, by their execution and delivery of this Declaration, expressly agree to
such terms and provisions and to be bound thereby.
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SECTION 7.4. Paying Agent. The Trust shall maintain in the Borough of
Manhattan, City of New York, State of New York, an office or agency where
Preferred Securities not held in book-entry only form may be presented for
payment ("Paying Agent"). [The Trust shall maintain an office or agency where
Securities may be presented for conversion ("Conversion Agent").] The Trust may
appoint the Paying Agent [and the Conversion Agent] and may appoint one or more
additional paying agents [and one or more additional conversion agents] in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent [and the term "Conversion Agent" includes any additional
conversion agent]. The Trust may change any Paying Agent [or Conversion Agent]
without prior notice to any Holder. The Trust shall notify the Institutional
Trustee in writing of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as Paying
Agent [or Conversion Agent], the Institutional Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent [or Conversion Agent].
The Trust shall act as Paying Agent [and Conversion Agent] for the Common
Securities.
The Trust initially appoints _________________, ___________________,
_____________, __________, ___________, Attention: ____________ as Paying Agent
[and Conversion Agent] for the Preferred Securities.
ARTICLE VII
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor or the Holder of the Common
Securities;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Holder of the Common
Securities; the filing of a certificate of cancellation with respect to the
Trust after having obtained the consent of at least a Majority in
liquidation amount of the Securities voting together as a single class to
file such certificate of cancellation; or the revocation of the Sponsor's
charter or the charter of the Holder of the Common Securities and the
expiration of 90 days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, the Trust or the Holder of the Common Securities;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
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(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Debt Securities held by the Institutional
Trustee shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(vi) upon the written direction to the Institutional Trustee from
the Sponsor at any time to terminate the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, the
distribution of Debt Securities to Holders in exchange for the Securities,
subject to the Regular Trustees' receipt of an opinion of nationally
recognized independent counsel experienced in such matters to the effect
that the holders of the Preferred Securities will not recognize any income,
gain or loss for United States federal income tax purposes as a result of
the dissolution of the Trust and such distribution to Holders;
[(vii) upon the distribution of the Sponsor's Common Stock to all
Holders of Preferred Securities upon conversion of all outstanding
Preferred Securities;]
(viii) the expiration of the term of the Trust on ________ ____,
_____; or
(ix) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such
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transfer shall not violate the Securities Act and is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to register
under the Investment Company Act or the transferee would become an
Investment Company required to register under the Investment Company Act.
(d) Each Common Security that bears or is required to bear the legend set
forth in this Section 9.1(d) shall be subject to the restrictions on transfer
provided in the legend set forth in this Section 9.1(d), unless such
restrictions on transfer shall be waived by the written consent of the Regular
Trustees, and the Holder of each such Common Security, by such securityholder's
acceptance thereof, agrees to be bound by such restrictions on transfer. As
used in this Section 9.1(d) and in Section 9.1(e), the term "transfer"
encompasses any sale, pledge, transfer or other disposition of any such Common
Security.
Any certificate evidencing a Common Security shall bear a legend in
substantially the following form, unless otherwise agreed by the Regular
Trustees (with written notice thereof to the Institutional 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 UNLESS SUCH OFFER AND SALE ARE
REGISTERED UNDER OR ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT.
THE TRANSFER OF THE SECURITY EVIDENCED HEREBY IS ALSO SUBJECT TO THE
RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW.
SECTION 9.2. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and
of transfers of Certificates, which will be effected without charge, but only
upon payment in respect of any tax or other government charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder
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hereunder upon the receipt by such transferee of a Certificate. By acceptance of
a Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.3. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4. Book Entry Interests.
(a) So long as Preferred Securities are eligible for book-entry settlement
with the Clearing Agency or unless otherwise required by law, all Preferred
Securities that are so eligible may be represented by one or more fully
registered Preferred Security Certificates (each, a "Global Certificate") in
global form to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section 9.7
below. The transfer and exchange of beneficial interests in any such Security
in global form shall be effected through the Clearing Agency in accordance with
this Declaration and the procedures of the Clearing Agency therefor.
(b) Except as provided below, beneficial owners of a Preferred 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
Preferred Security in global form.
(c) Any Global Certificate may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Declaration as may be required by the Clearing Agency, by any
national securities exchange or by the National Association of Securities
Dealers, Inc. as may be required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities
exchange or interdealer quotation system upon which the Preferred 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
Preferred Securities are subject.
(d) Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners of a Preferred Security in global
form pursuant to Section 9.7:
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(i) the provisions of this Section 9.4 shall be in full force and
effect with respect to such Preferred Securities;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of such Preferred Securities and the
sole holder of the Global Certificates and shall have no obligation to the
Preferred Security Beneficial Owners of such Preferred Securities;
(iii) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners of
Preferred Securities in global form shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Preferred Security Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants. The Clearing
Agency will make book-entry transfers among Clearing Agency Participants
and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants provided, that solely for
the purposes of determining whether the Holders of the requisite amount of
Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Preferred Security Certificates have not
been issued, the Trustees may conclusively rely on, and shall be protected
in relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Securities
Beneficial Owners' votes or assigning the right to vote on any matter to
any other Persons either in whole or in part.
(e) Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in this Section 9.4(e), a Preferred Security in global
form may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee to a successor Clearing Agency or a nominee
of such successor Clearing Agency.
SECTION 9.5. Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6. Appointment of Successor Clearing Agency.
If any Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities, if such Clearing Agency ceases to perform such services, or if at
any time such Clearing Agency ceases to be a clearing agency registered as such
under the Exchange Act when such Clearing Agency is required to be so registered
to act as such depositary, then the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Preferred
Securities.
SECTION 9.7. Definitive Preferred Security Certificates Under Certain
Circumstances.
If:
(a) a Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities, if at any time such Clearing Agency ceases to be a clearing agency
registered as such under the Exchange Act when such Clearing Agency is required
to be so registered to act as such depositary and no successor Clearing Agency
shall have been appointed pursuant to Section 9.6 within 90 days of such
notification;
(b) the Regular Trustees (with the consent of the Sponsor), in their sole
discretion determine that the Preferred Securities in global form shall be
exchanged for certificated Preferred Securities; or
(c) there shall have occurred and be continuing an Event of Default;
then:
(d) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(e) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners of such Preferred Securities in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said instructions of
the Clearing Agency. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Preferred Securities may be listed, or to conform to usage.
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At such time as all interests in a Preferred Security in global form have
been redeemed, [converted,] exchanged, repurchased or canceled, such Preferred
Security in global form shall be, upon receipt thereof, canceled by the Trust in
accordance with standing procedures and instructions of the Clearing Agency.
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the Regular
Trustees such security or indemnity as may be required by them to keep each of
them harmless,
then:
in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Institutional Trustee or any Regular Trustee on
behalf of the Trust shall execute and deliver, in exchange for, or in lieu of,
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Institutional Trustee or the Regular Trustees may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10. Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
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(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of the
Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
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(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. Indemnification.
(a) (i) the Debt Security Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or 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
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful.
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(ii) The Debt Security Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit 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 Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debt
Security Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) or (ii). Such determination shall be
made (1) by the Regular Trustees by a majority vote of a quorum consisting
of such Regular Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common Security Holder of
the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debt Security Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debt Security Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debt Security Issuer if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Common Security Holder of the Trust, that, based upon the facts known to
the Regular Trustees,
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counsel or the Common Security Holder at the time such determination is
made, such Company Indemnified Person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that
such Company Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or Common
Security Holder reasonably determine that such person deliberately breached
his duty to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debt
Security Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debt Security Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debt Security Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether
or not the Debt Security Issuer would have the power to indemnify him
against such liability under the provisions of this Section 10.4(a)
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debt Security Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i)
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through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person 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 or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the resignation or removal of
the Institutional Trustee or the Delaware Trustee, as the case may be.
SECTION 10.5. Outside Business.
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
shall have the right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the same as the
fiscal year of the Company.
SECTION 11.2. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books, records and supporting documents,
which shall reflect in detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting in compliance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for the United States federal income
tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the
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end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Sponsor shall cause to be prepared and delivered to each of the
Holders of Securities, within 90 days after the end of each Fiscal Year of the
Sponsor, annual financial statements of the Sponsor, including a balance sheet
of the Sponsor as of the end of such Fiscal Year, and the related statements of
income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on a Form 1041 or such other form required by United States federal income tax
law, and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debt Securities held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4. Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made,
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the Trust may reduce subsequent Distributions by the amount of such withholding.
Furthermore, if withholding is imposed on payments of interest on the Debt
Securities, to the extent such withholding is attributable to ownership by a
specific Holder of Preferred Securities, the amount withheld shall be deemed a
distribution in the amount of the withholding to such specific Holder.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
Except as otherwise provided in this Declaration or by any applicable terms
of the Securities,
(a) this Declaration may only be amended by a written instrument approved
and executed by the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees) and:
(i) if the amendment affects the rights, powers, duties, obligations
or immunities of the Institutional Trustee, also by the Institutional
Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the Delaware
Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
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(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees [(other than
a Special Regular Trustee)] shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
[(g) the rights of Holders of Preferred Securities to appoint or remove a
Special Regular Trustee shall not be amended without the consent of the Holders
of Preferred Securities;] and
(h) notwithstanding Section 12.1(c), this Declaration may be amended from
time to time by the Holders of a Majority in liquidation amount of the Common
Securities and the Institutional Trustee, without the consent of the Holders of
the Preferred Securities to:
(i) cure any ambiguity, correct or supplement any provision in this
Declaration that may be inconsistent with any other provision, or to make
any other provisions with respect to matters or questions arising under
this Declaration, which shall not be inconsistent with the other provisions
of this Declaration; or
(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that the Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an investment company
under the Investment Company Act;
provided, however, such action shall not adversely affect in any material
respect the interests of any Holder of Securities;
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(i) this Declaration may be amended by the Holders of a Majority in
liquidation amount of the Common Securities and the Institutional Trustee if:
(i) the Holders of a Majority in liquidation amount of the Preferred
Securities consent to such amendment and
(ii) the Regular Trustees have received an opinion of nationally
recognized independent counsel experienced in such matters to the effect
that such amendment or the exercise of any power granted to the Regular
Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or
the Trust's exemption from status as an "investment company" under the
Investment Company Act,
provided, that without the consent of each Holder of Securities, this
Declaration may not be amended to:
(x) change the amount or timing of any distribution on the Securities
or otherwise adversely affect the amount of any distribution required to be
made in respect of the Securities as of a specified date or
(y) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
(j) Any amendments of this Declaration shall become effective when notice
thereof is given to Holders of Securities.
SECTION 12.2. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Preferred Securities are listed
or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least 25% in
liquidation amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
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(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal, valid
and binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee, of the Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation, duly organized, validly
existing and in good standing, with corporate power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration.
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(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal place
of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
McKesson Financing Trust III
c/o McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
[First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801]
Attention: ____________________
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(c) if given to the Institutional Trustee, at its Corporate Trust Office's
mailing address set forth below (or such other address as the Institutional
Trustee may give notice of to the Holders of the Securities).
[The First National Bank of Chicago
One North State Street, 9/th/ Floor
Chicago, Illinois 60602]
Attention: [Corporate Trust Services Division]
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2. GOVERNING LAW.
THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
SECTION 14.3. Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
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SECTION 14.5. Successors and Assign.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 14.6. Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7. Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
---------------------------------------------------
[WILLIAM A. ARMSTRONG], as Regular Trustee
Solely as trustee and not in [his] individual capacity
---------------------------------------------------
[RICHARD H. HAWKINS], as Regular Trustee
Solely as trustee and not in [his] individual capacity
---------------------------------------------------
[NANCY A. MILLER], as Regular Trustee
Solely as trustee and not in [her] individual capacity
[FIRST CHICAGO DELAWARE INC.], as Delaware Trustee
By:
----------------------------------------------
Name:
Title:
[THE FIRST NATIONAL BANK OF CHICAGO],
as Institutional Trustee
By:
----------------------------------------------
Name:
Title:
McKESSON CORPORATION, as Sponsor
By:
-----------------------------------------------
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
____% TRUST CONVERTIBLE PREFERRED SECURITIES
_____% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ____________ ____, ______ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the [Convertible] Preferred Securities and the
[Convertible] Common Securities are set out below (each capitalized term used
but not defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Offering Memorandum referred to
below):
1. Designation and Number.
----------------------
(a) [Convertible] Preferred Securities. __________ [Convertible]
----------------------------------
Preferred Securities of the Trust (__________ [Convertible] Preferred
Securities if the Underwriter's over-allotment option is exercised in full) with
an aggregate liquidation amount with respect to the assets of the Trust of
______________ Dollars ($__________) (_____________ Dollars ($___________) if
the Underwriter's over-allotment option is exercised in full), and a liquidation
amount with respect to the assets of $____ per [convertible] preferred security,
are hereby designated for the purposes of identification only as "___% Trust
[Convertible] Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such letters, numbers,
notations, other means of identification or designation or other changes or
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice and such legends or endorsements required by law, state
exchange rule and agreements to which the Trust is subject, if any (provided
that any such notation, legend or endorsement is in a form acceptable to the
Trust).
(b) [Convertible] Common Securities. ________ [Convertible] Common
-------------------------------
Securities of the Trust (_________ [Convertible] Common Securities if the
Underwriter's over-allotment option is exercised in full) with an aggregate
liquidation amount with respect to the assets of the Trust of _____________
Dollars ($_________) (_____________ Dollars ($__________) if the Underwriter's
over-allotment option is exercised in full), and a liquidation amount with
respect to the assets of the Trust of $____ per [convertible] common security,
are hereby designated for the purposes of identification only as "___%
[Convertible] Common Securities" (the "Common Securities"). The Common
Securities Certificates evidencing the Common Securities shall be in the form of
Exhibit A-2 to the Declaration, with such letters, numbers, notations, other
means of identification or designation or other changes or additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice and
such legends or endorsements required by law, state exchange rule and agreements
to which the Trust is subject, if any (provided that any such notation, legend
or endorsement is in a form acceptable to the Trust).
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2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ___% (the "Coupon Rate") of the stated liquidation amount of $___ per
Security, such rate being the rate of interest payable on the Debt Securities to
be held by the Institutional Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such interest payable unless otherwise stated. A Distribution
is payable only to the extent that payments are made in respect of the Debt
Securities held by the Institutional Trustee and to the extent the Institutional
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
____________ ____, ______ and will be payable quarterly in arrears, on _______
___, _________ ___, ___________ ____ and __________ ___ of each year, commencing
on _________ ___, _____, except as otherwise described below. So long as the
Debt Security Issuer shall not be in default in the payment of interest on the
Debt Securities, the Debt Security Issuer has the right under the Indenture to
defer payments of interest on the Debt Securities by extending the interest
payment period from time to time on the Debt Securities for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debt Securities,
provided that no Extension Period shall last beyond the date of maturity or any
redemption date of the Debt Securities. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debt Security Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity or
any redemption date of the Debt Securities. Payments of accrued Distributions
and, to the extent permitted by applicable law, accrued interest thereon shall
be payable on the Distribution payment date on which the relevant Extension
Period terminates and shall be payable to Holders as they appear on the books
and records of the Trust at the close of business on the record date next
preceding such Distribution payment date. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debt Security Issuer may
commence a new Extension Period, subject to the above requirements. Each
Extension Period, if any, will end on an interest payment date for the Debt
Securities; such date will also be a Distribution payment date for the
Securities. In the event that the Debt Security Issuer exercises its right to
defer payment of interest, then during such Extension Period the Debt Security
Issuer shall not (a) declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, or (b) make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Debt Security Issuer that rank pari passu with or
junior in interest to the Debt Securities or make any
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guarantee payments with respect to any guarantee by the Debt Security Issuer of
the debt securities of any subsidiary of the Debt Security Issuer if such
guarantee ranks pari passu with or junior in interest to the Debt Securities
(other than (i) as a result of a reclassification of the capital stock of the
Debt Security Issuer or the exchange or conversion of one class or series of the
capital stock of the Debt Security Issuer for another class or series of the
capital stock of the Debt Security Issuer, (ii) the purchase of fractional
interests in shares of the capital stock of the Debt Security Issuer pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in Common Stock of the Debt Security Issuer, (iv) any declaration
of a dividend in connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (v) payments under
the Securities Guarantees, (vi) purchases of Common Stock of the Debt Security
Issuer related to the issuance of Common Stock of the Debt Security Issuer or
rights under any of the Debt Security Issuer's benefit plans for its directors,
officers or employees and (vii) obligations under any dividend reinvestment and
stock purchase plans).
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates, which shall be fifteen days prior to the relevant payment dates, which
payment dates correspond to the record and interest payment dates on the Debt
Securities. The relevant record dates for the Common Securities shall be the
same record dates as for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debt Security Issuer having failed to make a payment under the
Debt Securities, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable
on the Securities is not a Business Day, then payment of the Distributions
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)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
[(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into Common Stock following such record date;
provided, further that if the date of any redemption of related Debt Securities
falls between such record date and such corresponding payment date, the amount
of such Distribution shall include accumulated and unpaid Distributions accrued
to but excluding such date of redemption and such payment shall be made to the
converting holder.]
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(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
The Debt Security Issuer will have the right at any time to cause the Trust
to be dissolved with the result that, after satisfaction of creditors of the
Trust, Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities and the Common
Securities will be distributed on a pro rata basis to the Holders of the
Preferred Securities and the Common Securities in liquidation of such Holders'
interests in the Trust, within 90 days following notice given to the Holders of
the Preferred Securities, subject to the Regular Trustees' receipt of an opinion
of nationally recognized independent counsel experienced in such matters to the
effect that the Holders will not recognize any income, gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and such distribution to Holders of Preferred Securities.
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the Holders of
the Securities on the date of the Liquidation will be entitled to receive out of
the assets of the Trust available for distribution to Holders of Securities
after satisfaction of liabilities of creditors an amount equal to the aggregate
of the stated liquidation amount of $50 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, Debt Securities in
an aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall have been distributed on a Pro
Rata basis to the Holders of the Securities in exchange for such Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) The Debt Securities will mature on _________ ___, _____, and may be
redeemed, in whole or in part, [at any time on or after ___________ ____, _____,
or] at any time in certain circumstances upon the occurrence of a Tax Event (as
defined below). Upon the repayment of the Debt Securities in whole or in part,
whether at maturity, upon redemption (either at the option of the Debt Security
Issuer or pursuant to a Tax Event as described below) or otherwise, the proceeds
from such repayment or payment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debt Securities so repaid or redeemed at a redemption
price per Security equal to the redemption price of the Debt Securities,
together with accrued and unpaid Distributions thereon to, but excluding, the
date of the redemption,
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payable in cash (the "Redemption Price"). Holders will be given not less than 30
nor more than 60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Preferred Securities will be redeemed Pro Rata and the
Preferred Securities to be redeemed will be as described in Section 4(f) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may with the consent of the Debt Security Issuer, except in certain
limited circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors, cause Debt Securities
held by the Institutional Trustee, having an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate identical to
the Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that such dissolution and distribution shall be conditioned on (i) the Regular
Trustees' receipt of an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and the distribution of Debt Securities, (ii) in the case of a Tax Event, the
Debt Security Issuer or the Trust being unable to avoid, within the 90 Day
Period, the Tax Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable measure that
has no adverse effect on the Trust, the Debt Security Issuer, the Sponsor or the
Holders of the Securities ("Ministerial Action"), and (iii) the Debt Security
Issuer's prior written consent to such dissolution and distribution.
Furthermore, if (i) after receipt of a Dissolution Tax Opinion (as defined
hereinafter) by the Regular Trustees, the Debt Security Issuer has received an
opinion (a "Redemption Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Debt Security Issuer would be precluded
from deducting the interest on the Debt Securities for United States federal
income tax purposes even after the Debt Securities were distributed to the
Holders of Securities in liquidation of such Holders' interests in the Trust as
described in this Section 4(c), or (ii) the Regular Trustees shall have been
informed by such tax counsel that it cannot deliver a No Recognition Opinion to
the Trust, the Debt Security Issuer shall have the right, upon not less than 30
nor more than 60 days' notice, to redeem the Debt Securities, in whole or in
part, at a redemption price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, for cash within 90 days following the
occurrence of such Tax Event. Following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the Debt
Securities so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that, if at the time there is available to
the Debt Security Issuer or the Trust the opportunity to eliminate, within such
90 day
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period, the Tax Event by taking some Ministerial Action, the Trust or the Debt
Security Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after __________ ___, ____,
as a result of (a) any amendment to, clarification of, or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, including
any notice or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification, change or Administrative Action is made known, which amendment,
clarification, change or Administrative Action is effective or such
pronouncement or decision is announced, in each case, on or after, ________ ___,
____, there is the creation by such amendment, clarification, change or
Administrative Action of more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debt Securities,
(ii) the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes (other than withholding taxes), duties or
other governmental charges, or (iii) interest paid in cash by the Debt Security
Issuer to the Trust on the Debt Securities is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, by the Debt Security
Issuer for United States federal income tax purposes. Notwithstanding the
foregoing, a Tax Event shall not include any change in tax law that requires the
Debt Security Issuer for United States federal income tax purposes to defer
taking a deduction for any original issue discount ("OID") that accrues with
respect to the Debt Securities until the interest payment related to such OID is
paid by the Debt Security Issuer in cash; provided, that such change in tax law
does not create more than an insubstantial risk that the Debt Security Issuer
will be prevented from taking a deduction for OID accruing with respect to the
Debt Securities at a date that is no later than the date the interest payment
related to such OID is actually paid by the Debt Security Issuer in cash.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority on or after _________ ___, _____ (a "Change in 1940 Act Law"), there
is more than an insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
After the date fixed by the Regular Trustees for any distribution of Debt
Securities upon dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) The Depository Trust Company (the "Depositary")
or its nominee (or any successor Clearing Agency or
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its nominee), as the record Holder of the Preferred Securities held in global
form, will receive a registered certificate or certificates representing the
Debt Securities held in global form to be delivered upon such distribution, and
(iii) certificates representing Securities held in definitive form, except for
certificates representing Preferred Securities held by the Depositary or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest (including Compound Interest (as
defined in the Indenture) equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debt Security Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or prior to the date of
redemption.
(e) (i) Notice of any redemption of, or notice of distribution of Debt
Securities in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debt Securities.
For purposes of the calculation of the date of redemption or exchange and
the dates on which notices are given pursuant to this Section 4(e), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or by such
other means suitable to assure delivery of such written notice, to Holders
of Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder of Securities shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder of
Securities.
(ii) In addition to the Redemption/Distribution Notice to be
provided to the Holders of Securities pursuant to clause (i) of this
Section 4(e), the Debt Security Issuer or the Trust shall give public
notice of any such redemption by the issuance of a press release through
the services of the Dow Jones Broad Tape, Reuters News Service and
Bloomberg News Service.
(f) In the event that fewer than all the outstanding Securities are to be
redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder of Preferred Securities, it being understood that, in respect of
Preferred Securities registered in the name of and held of record by the
Depositary or its nominee (or any successor Clearing Agency or its nominee) or
any nominee, the distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by such agency or
nominee.
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(g) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued for a redemption
if the Debt Securities are redeemed as set out in the Indenture (which notice
will be irrevocable), then (i) with respect to Preferred Securities held in
book-entry form by 12:00 noon, New York City time, on the redemption date,
provided that the Debt Security Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption of the Debt
Securities, the Institutional Trustee will deposit irrevocably with the
Depositary or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to such Preferred
Securities and will give the Depository irrevocable instructions and authority
to pay the Redemption Price to the Holders of such Preferred Securities, and
(ii) with respect to Preferred Securities issued in definitive form and Common
Securities, provided that the Debt Security Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related redemption of
the Debt Securities, the Institutional Trustee will pay the relevant Redemption
Price to the Holders of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given in
connection with a redemption and funds deposited as required, then from and
after the required date of such deposit, distributions will cease to accrue on
the Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of the Holders
of such Securities to receive the Redemption Price, but without interest on such
Redemption Price. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day falls in
the next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
Neither the Regular Trustees nor the Trust shall be required (i) in the
event of any redemption in part, to issue, register the transfer of or exchange
any Securities during a period beginning at the opening of business 15 days
before any selection for redemption of Securities and ending at the close of
business on the earliest date in which the relevant Redemption/Distribution
Notice is deemed to have been given to all holders of Securities to be so
redeemed or (ii) to register the transfer of or exchange any Securities selected
for redemption, in whole or in part, except for the unredeemed portion of any
Securities being redeemed in part.
(h) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to (i) in respect of Preferred Securities held in global
form, the Depositary or its nominee (or any successor Clearing Agency or its
nominee), (ii) with respect to Preferred Securities held in definitive form, to
the Holders thereof, and (ii)i) in respect of the Common Securities, to the
Holders thereof.
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(i) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or otherwise.
[5. Conversion Rights.
-----------------
The Holders of Securities shall have the right at any time, beginning
________ ___, ____ through the close of business on ________ ___, ____ (or, in
the case of Securities called for redemption, prior to the close of business
on the Business Day prior to the redemption date), at their option, to cause the
Conversion Agent to convert Securities, on behalf of the converting Holders,
into shares of Common Stock in the manner described herein on and subject to the
following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debt Securities theretofore held by the Trust on the basis of one
Security per $___ principal amount of Debt Securities, and immediately convert
such amount of Debt Securities into fully paid and nonassessable shares of
Common Stock at an initial rate of ____ shares of Common Stock per $____
principal amount of Debt Securities (which is equivalent to a conversion price
of $_____ per share of Common Stock, subject to certain adjustments set forth in
the Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Securities into Common Stock, the Holder shall
submit to the Conversion Agent at its office an irrevocable request to convert
Securities on behalf of such Holder (the "Conversion Request"), together, if the
Securities are in certificated form, with such certificates. The Conversion
Request shall (i) set forth the number of Securities to be converted and the
name or names, if other than the Holder, in which the shares of Common Stock
should be issued and (ii) direct the Conversion Agent (a) to exchange such
Securities for a portion of the Debt Securities held by the Trust (at the rate
of exchange specified in the preceding paragraph) and (b) to immediately convert
such Debt Securities on behalf of such Holder, into Common Stock (at the
conversion rate specified in the preceding paragraph). The Conversion Agent
shall notify the Trust of the Holder's election to exchange Securities for a
portion of the Debt Securities held by the Trust and the Trust shall, upon
receipt of such notice, deliver to the Conversion Agent the appropriate
principal amount of Debt Securities for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify McKesson of the Holder's
election to convert such Debt Securities into shares of Common Stock. Holders
of Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date; provided, however, that if the date of any redemption of the related Debt
Securities falls between such record date and the related Distribution payment
date, the amount of such Distribution shall include accumulated and unpaid
Distributions accrued to but excluding such date of redemption, and such payment
shall be made to the converting Holder. Except as provided above, neither the
Trust nor the Sponsor will make, or be required to make, any payment, allowance
or adjustment upon any conversion on account of any accumulated and unpaid
Distributions accrued
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on the Securities (including any Additional Amounts accrued thereon) surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, except to the extent that
such shares are held of record on the record date for any such distributions.
Securities shall be deemed to have been converted immediately prior to the close
of business on the day on which a Notice of Conversion relating to such
Securities is received by the Trust in accordance with the foregoing provision
(the "Conversion Date"). The Person or Persons entitled to receive Common Stock
issuable upon conversion of the Debt Securities shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, McKesson shall issue
and deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless otherwise directed by
the Holder in the notice of conversion and the Conversion Agent shall distribute
such certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
_________________ as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debt Securities held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debt Securities into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Section and to deliver to the Trust a new Debt Security
or Debt Securities for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion of Securities, but in lieu thereof such fractional interest will be
paid in cash by McKesson, in an amount based on the Closing Price of the Common
Stock on the date such Securities are surrendered for conversion, to the
Conversion Agent, which in turn will make such payment to the Holder or Holders
of Securities so converted.
(e) McKesson shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debt Securities, free from any preemptive or other similar rights, such
number of shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debt Securities then outstanding. Notwithstanding the
foregoing, McKesson shall be entitled to deliver upon conversion of Debt
Securities, shares of Common Stock reacquired and held in the treasury of
McKesson (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debt Securities shall be duly authorized, validly issued
and fully paid and nonassessable. The Trust shall deliver the shares of Common
Stock received upon conversion of the Debt Securities to the converting Holder
free and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Each of McKesson and the Trust
shall
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prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be required by
law, and shall comply with all applicable requirements as to registration or
qualification of Common Stock (and all requirements to list Common Stock
issuable upon conversion of Debt Securities that are at the time applicable), in
order to enable McKesson to lawfully issue Common Stock to the Trust upon
conversion of the Debt Securities and the Trust to lawfully deliver Common Stock
to each Holder upon conversion of the Securities.
(f) McKesson will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Debt Securities
and the delivery of the shares of Common Stock by the Trust upon conversion of
the Securities. McKesson shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Trust the amount of
any such tax, or has established to the satisfaction of the Trust that such tax
has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or as set
forth in this Annex I to the Declaration or to the Declaration itself or
otherwise require the Institutional Trustee or the Trust to pay any amounts on
account of such withholdings.
(h) The term "Closing Price" with respect to any security on any day means
the last reported sale price, regular way on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the NYSE Composite Tape,
or, if such security is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the principal interdealer quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
interdealer quotation system, the average of the closing bid and asked prices of
such security in the over-the-counter market on the day in question as reported
by the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors (or any
committee duly authorized by the Board of Directors) of the Debt Security Issuer
for that purpose or, if not so available in such manner, as otherwise determined
in good faith by the Board of Directors (or any committee duly authorized by the
Board of Directors) of the Debt Security Issuer.]
6. Voting and Other Rights - Preferred Securities.
----------------------------------------------
(a) Except as provided under Sections 6(b) and 8 of this Annex I to the
Declaration and as otherwise required by law and the Declaration, the Holders of
the Preferred Securities will not have voting rights.
[(b) If (i) the Trust fails to make Distributions in full on the Preferred
Securities for 6 consecutive quarterly Distribution periods; or (ii) an Event of
Default occurs and is continuing (each, an "Appointment Event"), then the
Holders of the Preferred Securities, acting as a single class, will be entitled
by the vote of Holders of Preferred Securities representing a Majority in
liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee in accordance with paragraph 5.2(a)(ii)(B) of the Declaration. Any
Holder of Preferred Securities (other than the Sponsor or any Affiliate of the
Sponsor) will have the right to nominate any Person to be appointed as Special
Regular Trustee. For purposes of determining whether the Trust has failed to pay
Distributions in full for 6 consecutive quarterly Distribution periods,
Distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly Distribution periods
terminating on or prior to the date of payment of such cumulative Distribution.
Not later than 30 days after such right to appoint a Special Regular Trustee
arises, the Regular Trustees will convene a meeting for the purpose of
appointing a Special Regular Trustee. If the Regular Trustees fail to convene
such meeting within such 30-day period, the Holders of Preferred Securities
representing 25% in liquidation amount of the outstanding Preferred Securities
will be entitled to convene such meeting in accordance with Section 12.2 of the
Declaration. The record date for such meeting will be the close of business on
the Business Day next preceding the day on which notice of the meeting is sent
to Holders of Preferred Securities. The provisions of the Declaration relating
to the convening and conduct of the meetings of the Holders will apply with
respect to any such meeting. If, at any such meeting, Holders of less than a
Majority in liquidation amount of Preferred Securities entitled to vote for the
appointment of a Special Regular Trustee vote for such appointment, no Special
Regular Trustee shall be appointed. Any Special Regular Trustee may be removed
without cause at any time by the Holders of Preferred Securities representing a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(b)(iii) of the Declaration. The Holders of 25% in liquidation amount
of the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for such
meeting will be the close of business on the Business Day next preceding the day
on which notice of the meeting is sent to Holders of Preferred Securities. Any
Special Regular Trustee appointed shall cease to be a Special Regular Trustee as
provided in Section 5.6(c) of the Declaration. Notwithstanding the appointment
of any such Special Regular Trustee, the Debt Security Issuer shall retain all
rights under the Indenture, including the right to extend the interest payment
period on the Debt Securities, and any extension for a period not exceeding 20
quarterly interest periods will not constitute an Event of Default in respect of
the Debt Securities.]
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(c) Subject to the requirements set forth in this paragraph, the Holders of
a Majority in liquidation amount of the Preferred Securities then outstanding,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or may direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debt Securities, to (i) exercise the
remedies available under the Indenture with respect to the Debt Securities, (ii)
waive any past default and its consequences that is waivable under the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debt Securities shall be due and payable, provided,
however, that if an Event of Default under the Indenture has occurred and is
continuing then the holders of 25% of the aggregate liquidation amount of the
Preferred Securities then outstanding may direct the Institutional Trustee to
declare the principal of and interest on the Debt Securities immediately due and
payable; and provided, further, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Debt Securities then outstanding (a "Super
Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Preferred Securities which the
relevant Super Majority represents of the aggregate principal amount of the Debt
Securities then outstanding. The Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee as set
forth above, the Institutional Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Institutional Trustee has obtained an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust as a result of such action. If the
Institutional Trustee fails to enforce its rights under the Debt Securities, any
Holder of Preferred Securities may institute a legal proceeding against any
person to enforce the Institutional Trustee's rights under the Debt Securities.
If a Declaration Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debt Security Issuer to pay interest or
principal on the Debt Securities on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debt Securities having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such Holder (a "Direct Action") on or
after the respective due date specified in the Debt Securities. In connection
with such Direct Action, the rights of the Holders of Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent
of any payment made by the Issuer to such Holder of Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debt Securities.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter
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upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debt Securities in accordance with the Declaration and the terms
of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 7(b), 7(c) and 8 of this Annex I of
the Declaration and as otherwise required by law and the Declaration, the
Holders of the Common Securities will not have voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the Debt
Security Trustee, or exercising any trust or power conferred on the Debt
Security Trustee with respect to the Debt Securities, (ii) waive any past
default and its consequences that is waivable under the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debt Securities shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the relevant
Super Majority, the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debt Securities outstanding.
The Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debt Security Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the
I-14
<PAGE>
Holders of the Common Securities under this paragraph unless the Institutional
Trustee has obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the Debt
Securities in accordance with the Declaration and the terms of the Securities.
8. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Securities voting together as a
single class, will be entitled to vote on such amendment or proposal (but not on
any other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities then outstanding affected thereby;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities then outstanding.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debt Securities is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debt Securities,
the Institutional Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities then outstanding,
voting together as a single class; provided,
I-15
<PAGE>
however, that where a consent under the Indenture would require the consent of
the relevant Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities then outstanding which the relevant Super
Majority represents of the aggregate principal amount of the Debt Securities
then outstanding; provided, further, that the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Securities under this Section 8(b) unless the Institutional Trustee has obtained
an opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust as a result of
such action.
9. Pro Rata.
--------
A reference in these terms of the Securities to any distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first in cash to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
10. Ranking.
-------
The Preferred Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where a Declaration Event of
Default occurs and is continuing, the rights of Holders of the Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
I-16
<PAGE>
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee or the
Common Securities Guarantee (as may be appropriate), and the Indenture to a
Holder without charge on written request to the Sponsor at its principal place
of business.
I-17
<PAGE>
EXHIBIT A-1
[FORM OF [CONVERTIBLE] PREFERRED SECURITY CERTIFICATE]
[IF THE [CONVERTIBLE] PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - THIS [CONVERTIBLE] PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN
THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS [CONVERTIBLE] PREFERRED SECURITY IS EXCHANGEABLE FOR
[CONVERTIBLE] PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS [CONVERTIBLE] PREFERRED SECURITY (OTHER THAN
A TRANSFER OF THIS [CONVERTIBLE] PREFERRED SECURITY 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
LIMITED CIRCUMSTANCES.
UNLESS THIS [CONVERTIBLE] PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY [CONVERTIBLE] PREFERRED SECURITY 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.]
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] PREFERRED SECURITIES:
CUSIP NO.:
Certificate Evidencing [Convertible] Preferred Securities
of
McKESSON FINANCING TRUST III
A1-1
<PAGE>
____% Trust [Convertible] Preferred Securities
(liquidation amount $___ per Trust [Convertible] Preferred Security)
McKesson Financing Trust III, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
____________________ (the "Holder") is the registered owner of [convertible]
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the ___% Trust [Convertible] Preferred
Securities (liquidation amount $____ per Trust [Convertible] Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of ___________ ___, _____,
as the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Preferred Securities as set forth in Annex I to
the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the
Preferred Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee and the
Indenture to the Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debt Securities.
Unless the Institutional Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, _____.
McKesson Financing Trust III
By:
-----------------------------------------------
Name:
Title: Trustee
Solely as trustee and not in his individual
capacity
A1-3
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Declaration.
Dated: _____________ ____, _____
[THE FIRST NATIONAL BANK OF
CHICAGO],
as Institutional Trustee or as Authentication Agent
By: BY:
-------------------------- --------------------------
Authorized Signatory Authorized Signatory
A1-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ____% (the "Coupon Rate") of the stated liquidation amount of $___ per
Preferred Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debt Securities held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from __________ ___, _____ and will
be payable quarterly in arrears, on ________ ____, _________ ____, _________ ___
and ________ ___ of each year, commencing on ________ ___, _______, which
payment dates shall correspond to the interest payment dates on the Debt
Securities, to Holders of record at the close of business on the regular record
date for such Distribution which shall be the close of business 15 days prior to
such Distribution payment date unless otherwise provided in the Declaration.
The Debt Security Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the Debt
Securities for a period not exceeding 20 consecutive quarters (each an
"Extension Period"); provided that no Extension Period shall last beyond the
date of the maturity or any redemption date of the Debt Securities and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any
such Extension Period, the Debt Security Issuer may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
or extend beyond the maturity or any redemption date of the Debt Securities.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debt Security Issuer may commence a new Extension Period, subject to
the above requirements.
The Preferred Securities shall be redeemable as provided in the Declaration.
[The Preferred Securities shall be convertible into shares of Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debt Securities and (ii) the immediate conversion of such Debt Securities into
Debt Security Issuer Common Stock, in the manner and according to the terms set
forth in the Declaration.]
A1-5
<PAGE>
[CONVERSION REQUEST]
[To: [The First National Bank of Chicago],
as Institutional Trustee of McKesson Financing Trust III
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of McKesson Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ___________ ___, _____, by [William A. Armstrong],
[Richard H. Hawkins] and [Nancy A. Miller], as Regular Trustees, [First Chicago
Delaware Inc.], as Delaware Trustee, [The First National Bank of Chicago], as
Institutional Trustee, McKesson Corporation, as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debt Securities (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debt Securities on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.]
A1-6
<PAGE>
[Date: _________, ____
in whole _____ in part _____
Number of Preferred Securities to be converted:
______________
If a name or names other than the undersigned, please indicate
in the spaces below the name or names in which the shares of
Common Stock are to be issued, along with the address or
addresses of such person or persons
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Signature
Please Print or Typewrite Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Signature Guarantee:/*/
-------------------------------------
- ---------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
A1-7
<PAGE>
[FORM OF ASSIGNMENT FOR DEFINITIVE PREFERRED SECURITY]
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 security and hereby irrevocably constitutes and appoints
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
Dated:
------------------------------
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee/*/
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- -----------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A1-8
<PAGE>
SCHEDULE I
CHANGES TO NUMBER OF PREFERRED SECURITIES IN GLOBAL SECURITY
Number of Preferred
Securities by which this
Global Security Is To Be Remaining Preferred
Reduced or Increased, Securities Represented
and Reason for by this
Date Reduction or Increase Global Security Notation Made By
- -------- ------------------------ ------------------------ -----------------
A1-9
<PAGE>
EXHIBIT A-2
[FORM OF [CONVERTIBLE] COMMON SECURITY CERTIFICATE]
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 UNLESS SUCH OFFER AND SALE ARE REGISTERED UNDER OR ARE EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT. THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH IN THE
DECLARATION REFERRED TO BELOW.
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] COMMON SECURITIES:
Certificate Evidencing [Convertible] Common Securities
of
McKESSON FINANCING TRUST III
____% [Convertible] Common Securities
(liquidation amount $____ per [Convertible] Common Security)
McKesson Financing Trust III, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________ (the "Holder") is the registered owner
of [convertible] common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the ___%
[Convertible] Common Securities (liquidation amount $____ per [Convertible]
Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of __________ ___, _____, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Common Securities as set forth in Annex I to the
Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent
A2-1
<PAGE>
provided therein. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debt Securities.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of ________, _____.
McKesson Financing Trust III
By:
------------------------------------------------
Name:
Title: Trustee
Solely as trustee and not in his individual
capacity
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum, of ___% (the "Coupon Rate") of the stated liquidation amount of $____ per
Common Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debt Securities held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accrue from __________ ___, ____ and will be payable
quarterly in arrears, on _______ ___, ________ ___, _______ ___ and ________ ___
of each year, commencing on _________ ___, ____, which payment dates shall
correspond to the interest payment dates on the Debt Securities, to Holders of
record at the close of business on the regular record date for such Distribution
which shall be the close of business 15 days prior to such Distribution payment
date unless otherwise provided in the Declaration. The Debt Security Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debt Securities for a period
not exceeding 20 consecutive quarters (each an "Extension Period"), provided
that no Extension Period shall last beyond the date of maturity of the Debt
Securities and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debt Security Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the date of maturity of the Debt Securities. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debt Security Issuer may commence a new Extension Period, subject to the above
requirements.
The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debt
Securities and (ii) the immediate conversion of such Debt Securities into Debt
Security Issuer Common Stock, in the manner and according to the term set forth
in the Declaration.]
A2-4
<PAGE>
[CONVERSION REQUEST]
[To: [The First National Bank of Chicago],
as Institutional Trustee of McKesson Financing Trust III
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of McKesson Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _________ ___, ____, by [William A. Armstrong],
[Richard H. Hawkins] and [Nancy A. Miller], as Regular Trustees, [First Chicago
Delaware Inc.], as Delaware Trustee, [The First National Bank of Chicago], as
Institutional Trustee, McKesson Corporation, as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Common Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Common Securities for a portion of the Debt Securities (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Common Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debt Securities on behalf of the undersigned,
into Common Stock (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.]
A2-5
<PAGE>
[Date: _______________, ____
in whole _____ in part _____
Number of Common Securities to be converted:
____________________
If a name or names other than the undersigned, please indicate
in the spaces below the name or names in which the shares of
Common Stock are to be issued, along with the address or
addresses of such person or persons
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Signature
Please Print or Typewrite Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Signature Guarantee:/*/
---------------------------------------
- ----------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
A2-6
<PAGE>
FORM OF ASSIGNMENT FOR SECURITY [OR
COMMON STOCK ISSUABLE UPON CONVERSION] THEREOF
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 security and hereby irrevocably constitutes and appoints ___________
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
Dated:
------------------------
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee/*/
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- -----------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A2-7
<PAGE>
EXHIBIT B
SPECIMEN OF DEBT SECURITY
B-1
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
C-1
<PAGE>
Exhibit 4.10
- --------------------------------------------------------------------------------
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
McKESSON FINANCING TRUST IV
Dated as of _________ ____, _____
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.................................................. 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application............................. 8
SECTION 2.2. Lists of Holders of Securities............................... 8
SECTION 2.3. Reports by the Institutional Trustee......................... 9
SECTION 2.4. Periodic Reports to Institutional Trustee.................... 9
SECTION 2.5. Evidence of Compliance with Conditions Precedent............. 9
SECTION 2.6. Events of Default; Waiver.................................... 9
SECTION 2.7. Event of Default; Notice.................................... 11
ARTICLE III
ORGANIZATION
SECTION 3.1. Name........................................................ 11
SECTION 3.2. Office...................................................... 12
SECTION 3.3. Purpose..................................................... 12
SECTION 3.4. Authority................................................... 12
SECTION 3.5. Title to Property of the Trust.............................. 13
SECTION 3.6. Powers and Duties of the Regular Trustees................... 13
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees........ 16
SECTION 3.8. Powers and Duties of the Institutional Trustee.............. 17
SECTION 3.9. Certain Duties and Responsibilities of the Institutional
Trustee..................................................... 19
SECTION 3.10. Certain Rights of Institutional Trustee..................... 20
SECTION 3.11. Delaware Trustee............................................ 22
SECTION 3.12. Execution of Documents...................................... 23
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities...... 23
SECTION 3.14. Duration of Trust........................................... 23
SECTION 3.15. Mergers..................................................... 23
</TABLE>
i
<PAGE>
<TABLE>
ARTICLE IV
SPONSOR
<S> <C>
SECTION 4.1. Sponsor's Purchase of Common Securities..................... 25
SECTION 4.2. Responsibilities of the Sponsor............................. 25
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees.......................................... 26
SECTION 5.2. Delaware Trustee............................................ 26
SECTION 5.3. Institutional Trustee; Eligibility.......................... 26
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally........................................... 27
SECTION 5.5. Regular Trustees............................................ 27
SECTION 5.6. Appointment, Removal and Resignation of Trustees............ 28
SECTION 5.7. Vacancies Among Trustees.................................... 29
SECTION 5.8. Effect of Vacancies......................................... 29
SECTION 5.9. Meetings.................................................... 30
SECTION 5.10. Delegation of Power......................................... 30
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business. 30
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions ............................................. 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities..................... 31
SECTION 7.2. Execution and Authentication................................ 31
SECTION 7.3. Form and Dating............................................. 32
SECTION 7.4. Paying Agent................................................ 33
</TABLE>
ii
<PAGE>
<TABLE>
ARTICLE VIII
TERMINATION OF TRUST
<S> <C>
SECTION 8.1. Termination of Trust........................................ 33
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities...................................... 34
SECTION 9.2. Transfer of Certificates.................................... 35
SECTION 9.3. Deemed Security Holders..................................... 36
SECTION 9.4. Book Entry Interests........................................ 36
SECTION 9.5. Notices to Clearing Agency.................................. 37
SECTION 9.6. Appointment of Successor Clearing Agency.................... 38
SECTION 9.7. Definitive Preferred Security Certificates Under Certain
Circumstances............................................... 38
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates........... 39
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1. Liability................................................... 39
SECTION 10.2. Exculpation................................................. 40
SECTION 10.3. Fiduciary Duty.............................................. 40
SECTION 10.4. Indemnification............................................. 41
SECTION 10.5. Outside Business............................................ 44
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year................................................. 44
SECTION 11.2. Certain Accounting Matters.................................. 44
SECTION 11.3. Banking..................................................... 45
SECTION 11.4. Withholding................................................. 45
</TABLE>
iii
<PAGE>
<TABLE>
ARTICLE XII
AMENDMENTS AND MEETINGS
<S> <C>
SECTION 12.1. Amendments.................................................. 46
SECTION 12.2. Meetings of the Holders of Securities; Action by Written
Consent..................................................... 48
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee..... 50
SECTION 13.2. Representations and Warranties of Delaware Trustee.......... 50
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Notices..................................................... 51
SECTION 14.2. Governing Law............................................... 52
SECTION 14.3. Intention of the Parties.................................... 52
SECTION 14.4. Headings.................................................... 52
SECTION 14.5. Successors and Assign....................................... 53
SECTION 14.6. Partial Enforceability...................................... 53
SECTION 14.7. Counterparts................................................ 53
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(b) .................................................. 5.3(c) & (d)
311(a) .................................................. 2.2(b)
311(b) .................................................. 2.2(b)
312(b) .................................................. 2.2(b)
313 .................................................. 2.3
313(d) .................................................. 2.3
314 .................................................. 2.4
314(a) .................................................. 3.6(j)
314(c) .................................................. 2.5
316(a) .................................................. 2.6(a)-(c)&(e)
317(b) .................................................. 3.8(h)
</TABLE>
- ---------------------
* This Cross-Reference table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
FORM OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
McKESSON FINANCING TRUST IV
____________ ___, ____
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ____________ ____, _____, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established McKesson Financing Trust
IV (the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of ____________ ___, ______, (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on April 23, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debt
Securities (as defined herein) of the Debt Security Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitutes the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.
Unless the context otherwise requires:
<PAGE>
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits of or to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent [or Conversion Agent]/1/.
["Appointment Event" means an event defined in the terms of the Preferred
Securities set forth in ANNEX I which entitles the Holders of a Majority in
liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee.]
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in New York, New York or Wilmington, Delaware are
permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code (S)3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Preferred Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
- -----------------------
/1/ Insert bracketed language relating to conversion throughout the document if
the Securities are convertible.
2
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means ___________ ___, _____.
"Closing Price" has the meaning specified in Annex I.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement to be dated as
of ________ ___, ______ of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
["Common Stock" means the common stock of McKesson Corporation, a Delaware
corporation, par value $.01 per share, and any other shares of common stock as
may constitute "Common Stock" under the Indenture.]
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
["Conversion Agent" has the meaning specified in Section 7.4.]
"Corporate Trust Office" means the office of the Institutional Trustee at
which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at [One North State Street, 9th Floor,
Chicago, Illinois 60602], Attention: [Corporate Trust Services Division].
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
"Debt Securities" means the series of Debt Securities to be issued by the
Debt Security Issuer under the Indenture to be held by the Institutional
Trustee, a specimen certificate for such series of Debt Securities being Exhibit
B.
3
<PAGE>
"Debt Security Issuer" means McKesson Corporation, a Delaware corporation,
in its capacity as issuer of the Debt Securities under the Indenture.
"Debt Security Trustee" means ___________________, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Declaration Event of Default" means an Event of Default under the Debt
Securities.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.4.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debt Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4(a).
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means each Company Indemnified Person and each
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of __________ ____, ____ between
the Debt Security Issuer and the Debt Security Trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
4
<PAGE>
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidated Distribution" has the meaning specified in the terms of the
Securities as set forth in Annex I.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Offered Securities" means the Preferred Securities, the Preferred
Securities Guarantee, the Debt Securities[, the shares of Common Stock issuable
upon conversion of the Preferred Securities and the Rights attached thereto].
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
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, in the opinion of each such officer, such
condition or covenant has been complied with.
"Option Closing Date" means the date of closing of any sale of Additional
Securities (as defined in the Purchase Agreement).
"Paying Agent" has the meaning specified in Section 3.8(h).
5
<PAGE>
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement to be dated
as of ___________ ___, ______, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Purchase Agreement" means the Purchase Agreement for the offering and sale
of Preferred Securities in the form of Exhibit C.
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee, any
officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rights" has the meaning specified in the Rights Agreement, dated October
21, 1994, between the Sponsor and The First Chicago Trust Company of New York.
6
<PAGE>
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
["Special Regular Trustee" means a Regular Trustee appointed by the Holders
of a Majority in liquidation amount of the Preferred Securities in accordance
with Section 5.6(a)(iii).]
"Sponsor" or "McKesson" means McKesson Corporation, a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debt Securities, (ii) any cash on deposit
in, or owing to, the Institutional Trustee Account and (iii) all proceeds and
rights in respect of the foregoing to be held by the Institutional Trustee
pursuant to the terms of this Declaration for the benefit of the
Securityholders.
"25% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 25% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
7
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions. The Trust Indenture Act shall be
applicable to this Declaration except as otherwise set forth herein, as if the
Securities had been sold pursuant to an effective registration statement.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If, and to the extent that, any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317, inclusive,
of the Trust Indenture Act, such duties imposed under the Trust Indenture Act
shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list in such form as the Institutional
Trustee may reasonably require of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that, neither
the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in the
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity), provided that, the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
8
<PAGE>
SECTION 2.3. Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by (S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Institutional
Trustee is for informational purposes only and the Institutional Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Sponsor's compliance with any of its covenants hereunder (as to which the
Institutional Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred Securities
may by vote on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default in respect of the Preferred Securities and its
consequences, provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debt Securities (a "Super Majority")
to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities that the
relevant Super Majority represents of the aggregate principal amount of the
Debt Securities outstanding.
9
<PAGE>
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debt Securities outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Institutional Trustee shall act solely on behalf of the Holders of the
Preferred Securities and only the Holders of the Preferred Securities will have
the right to direct the Institutional Trustee to act in accordance with the
terms of the Securities. The foregoing provisions of this Section 2.6(b) shall
be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as permitted
by the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
10
<PAGE>
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the occurrence of
an Event of Default actually known to a Responsible Officer of the Institutional
Trustee, transmit by mail, first class postage prepaid, to the Holders of the
Securities, notices of all such defaults with respect to the Securities unless
such defaults have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section 2.7(a) being hereby defined to be an
Event of Default as defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debt Securities or in the payment of
any sinking fund installment established for the Debt Securities, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities. Any such notice given pursuant to this Section 2.7(a)
shall state that an Event of Default under the Indenture also constitutes an
Event of Default under this Declaration.
(b) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.1(a) and 5.1(b) of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1. Name.
The Trust is named "McKesson Financing Trust IV" as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
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SECTION 3.2. Office.
The address of the principal office of the Trust is c/o McKesson
Corporation, McKesson Plaza, One Post Street, San Francisco, CA, 94104. On at
least ten Business Days written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3. Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debt
Securities, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4. Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that the registration statement referred to
in Section 3.6, including any amendments thereto, shall, subject to Section
3.4(d), be signed by all of the Regular Trustees; and
(d) A Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of executing any documents which the Regular Trustees have
power and authority to cause the Trust to execute pursuant to Section 3.6.
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SECTION 3.5. Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debt Securities and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The
Holders of Securities shall not have legal title to any part of the assets of
the Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities, and
provided further, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a simultaneous
issuance of both Preferred Securities and Common Securities on the Closing Date
and Option Closing Date, if any;
(b) in connection with the issue and sale of the Securities, at the
direction of the Sponsor, to:
(i) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form S-3 prepared by
the Sponsor, including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file an application, prepared by the Sponsor, at
such time as determined by the Sponsor, to the New York Stock Exchange or
any other national stock exchange for listing, or quotation on an
interdealer quotation system, of the Preferred Securities;
(iii) execute and deliver letters, documents, or instruments with The
Depository Trust Company relating to the Preferred Securities;
(iv) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A, including
any amendments thereto, prepared by the Sponsor relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act;
(v) execute and enter into the Purchase Agreement and other related
agreements providing for the sale of the Securities;
(vi) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the
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Preferred Securities in any State in which the Sponsor has determined to
qualify or register such Preferred Securities for sale or resale, as the
case may be; and
(vii) take all actions and perform such duties as may be required of
the Regular Trustees to open checking, deposit or similar banking accounts
as may be necessary in connection with the issuance and sale of the
Securities;
(c) to acquire the Debt Securities with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debt Securities to be held of
record in the name of the Institutional Trustee for the benefit of the Holders
of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of (S)316 (c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants, and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
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(l) to act as, or appoint another Person to act as, registrar, transfer
agent, Paying Agent [and Conversion Agent] for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debt Security Issuer of its election to defer payments
of interest on the Debt Securities by extending the interest payment period
under the Indenture;
(n) to execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debt Security Issuer to ensure that the
Debt Securities will be treated as indebtedness of the Debt Security Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders or
vary the terms of the Preferred Securities;
(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
(r) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to Section 11.2 herein; and
(s) to the extent provided in this Declaration, the winding up of the
affairs of and liquidation of the Trust and the preparation, execution and
filing of the Certificate of Cancellation with the Secretary of State of the
State of Delaware.
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The Regular Trustees must exercise the powers set forth in this Section 3.6
in a manner that is consistent with the purposes and functions of the Trust set
out in Section 3.3, and the Regular Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Sponsor.
The Trust initially appoints the Institutional Trustee as transfer agent
and registrar for the Preferred Securities.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to engage in any activity other than as
required or authorized by this Declaration. In particular the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the Debt
Securities, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debt Securities;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever except as
permitted by the terms of this Declaration;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration or Annex I hereto,
(A) direct the time, method and place of exercising any trust or power
conferred upon the Debt Security Trustee with respect to the Debt
Securities, (B) waive any past default that is not waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debt Securities shall be due and payable, or (D)
consent to any amendment, modification
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or termination of the Indenture or the Debt Securities where such consent
shall be required unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause more than an
insubstantial risk that (x) the Trust will be deemed an Investment Company
required to be registered under the Investment Company Act or (y) the Trust
will not be classified as a grantor trust for United States federal income
tax purposes.
SECTION 3.8. Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debt Securities shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debt Securities shall vest automatically in each
Person who may hereafter be appointed as Institutional Trustee in accordance
with Section 5.6. Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Debt Securities have been
executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debt Securities to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Institutional Trustee Account") in the name of and under the
exclusive control of the Institutional Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in respect
of the Debt Securities held by the Institutional Trustee, deposit such
funds into the Institutional Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the Common Securities
from the Institutional Trustee Account in accordance with Section 6.1.
Funds in the Institutional Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The Institutional Trustee
Account shall be an account that is maintained with a banking institution
the rating on whose long-term unsecured indebtedness is at least equal to
the rating assigned to the Preferred Securities (or, if the Preferred
Securities are not rated, the rating assigned to McKesson's senior debt) by
a "nationally recognized statistical rating organization," as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debt Securities are redeemed or mature;
(iii) engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Trust Property in accordance
with the terms of this Declaration; and
(iv) to the extent provided for in this Declaration, take such
ministerial actions necessary in connection with the winding up of the
affairs of and liquidation of the Trust and
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the preparation, execution and filing of the Certificate of Cancellation
with the Secretary of State of the State of Delaware.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with, an Event of Default of which a Responsible Officer of
the Institutional Trustee has actual knowledge, or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided however, that if a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debt Security
Issuer to pay interest or principal on the Debt Securities on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debt Securities
and provided, further, that if the Institutional Trustee fails to enforce its
rights under the Debt Securities, any Holder of Preferred Securities may
institute a legal proceeding against any person to enforce the Institutional
Trustee's rights under the Debt Securities. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Preferred Securities to the extent of any payment
made by the Debt Security Issuer to such Holder of Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debt Securities.
(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debt Securities under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debt Securities subject to the rights of the Holders pursuant to
the terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or Liquidation
Distributions on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Institutional Trustee.
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(i) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee shall
be determined solely by the express provisions of this Declaration and
the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of the Institutional
Trustee, the Institutional Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Institutional Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
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(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional 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 of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional 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 it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debt Securities and
the Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debt Securities or the payment of any taxes or assessments levied thereon
or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
SECTION 3.10. Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument,
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opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Sponsor or any of its Affiliates, and
may include any of its employees. The Institutional Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to (a) require the Holders of Preferred Securities to offer such
indemnity in the event such Holders direct the Institutional Trustee to
take any action it is empowered to take under this Declaration following an
Event of Default or (b) relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Institutional 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,
direction, consent, order, bond, debenture, note, other evidence of
indebted-
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ness or other paper or document, but the Institutional Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Institutional Trustee (i) may request written
instructions from the Holders of the Securities which instructions may only
be given by the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee under
the terms of the Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration; and
(xii) the Institutional Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the
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duties and responsibilities of the Regular Trustees, the Institutional Trustee
or the Trustees generally (except as may be required under the Business Trust
Act) described in this Declaration. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of (S) 3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents.
Except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall, subject to Section 3.4(d), be signed by
all of the Regular Trustees.
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for _________ (__) years from __________ ___,
_____.
SECTION 3.15. Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities")
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so long as the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Debt Security Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debt Securities;
(iii) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(iv) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
Successor Entity);
(v) such Successor Entity has a purpose identical to that of the
Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders'
interest in the Successor Entity);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or such Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(vii) the Sponsor guarantees the obligations of the Successor Entity
under the Successor Securities at least to the extent provided by the
Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger or replacement would cause
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the Trust or the Successor Entity to be classified as other than a grantor trust
for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common Securities
issued by the Trust, in an amount at least equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2. Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Securities, including any amendments
thereto;
(b) prepare for execution and filing by the Trust of an application,
prepared by the Sponsor, at such time as determined by the Sponsor, to the New
York Stock Exchange or any other national stock exchange for listing, or
quotation on an interdealer quotation system, of the Preferred Securities;
(c) prepare for execution and filing by the Trust of documents, or
instruments to be delivered to The Depository Trust Company relating to the
Preferred Securities;
(d) prepare for execution and filing by the Trust of a registration
statement on Form 8-A, including any amendments thereto, prepared by the Sponsor
relating to the registration of the Preferred Securities under Section 12(b) of
the Exchange Act;
(e) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Preferred Securities and to do any and
all such acts, other than actions which must be taken by the Trust, and advise
the Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States; and
(f) to negotiate the terms of the Purchase Agreement providing for the sale
of the Preferred Securities.
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ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, [and except as provided in clause
(ii) below and Section 5.6(a)(iii) with respect to the Special Regular Trustee,]
the number of Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; provided, however, that the
number of Trustees shall in no event be less than two (2); provided further,
that (i) one Trustee, in the case of a natural person, shall be a person who is
a resident of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee"); [(ii) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event has occurred and is continuing
and the Holders of a Majority in liquidation amount of the Preferred Securities
appoint a Special Regular Trustee in accordance with Section 5.6(a)(iii) and the
terms of the Preferred Securities; (iii) unless a Special Regular Trustee has
been appointed (which appointment shall not impair the right of the Holders of
Common Securities to increase or decrease the number of, or to appoint, remove
or replace, Trustees (other than the Special Regular Trustee as provided
herein), there shall be at least one Trustee who is any employee of, or is
affiliated with the Sponsor ([together with any Special Regular Trustee] a
"Regular Trustee");] and (iv) one Trustee shall be the Institutional Trustee,
and such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2. Delaware Trustee.
If required by the Business Trust Act, one Trustee shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law;
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
The Initial Delaware Trustee shall be: [First Chicago Delaware Inc.]
SECTION 5.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), 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.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be: [The First National Bank
of Chicago].
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5. Regular Trustees.
The initial Regular Trustees shall be:
[William A. Armstrong]
[Richard H. Hawkins]
[Nancy A. Miller]
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any
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power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall, subject to Section
3.4(d), be signed by all of the Regular Trustees.
SECTION 5.6. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, [other than with respect to
the Special Trustee,] by written instrument executed by the Sponsor;
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities; and
[(iii) if an Appointment Event has occurred and is continuing, one
additional Regular Trustee (the "Special Regular Trustee") may be
appointed, who need not be an Affiliate of the Sponsor, by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities,
voting as a class.]
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor;
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor; and
[(iii) the Trustee that acts as Special Regular Trustee may only be
removed (otherwise than by the operation of Section 5.6(c)), by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities
voting as a class.]
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation; provided
--------
that a Special Regular Trustee shall only hold office while an Appointment Event
is continuing and shall cease to hold office immediately after the Appointment
Event pursuant to which the Special Regular Trustee was appointed and all other
Appointment Events cease to be continuing. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Institutional
Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Institutional
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Trustee and delivered to the Trust, the Sponsor and the resigning
Institutional Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the holders of the Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
[(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the resignation to the
Sponsor and the Trust or such later date specified in the resignation
during which period the Holders of the Preferred Securities shall have the
right to appoint a successor Special Regular Trustee as provided in this
Article V.]
[(d) Any action taken by Holders of Preferred Securities pursuant to this
Article V to appoint or remove a Special Regular Trustee upon the occurrence of
an Appointment Event shall be taken at a meeting of Holders of Preferred
Securities convened for such purpose or by written consent as provided in
Section 12.2.
(e) No amendment may be made to this Section 5.6 or Section 5.1, which
would change the rights of Holders of Preferred Securities to appoint, remove or
replace a Special Regular Trustee except with the consent of the Holders of a
Majority in liquidation amount of the Preferred Securities.]
(f) the Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Institutional Trustee
as the case may be if the Institutional Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 5.6.
(g) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.
(h) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7. Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur, until such vacancy is filled by the appointment of
a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
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SECTION 5.9. Meetings.
If there is more than one Regular Trustee, meetings of the Regular Trustees
shall be held from time to time upon the call of any Regular Trustee. Regular
meetings of the Regular Trustees may be held at a time and place fixed by
resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustee or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10. Delegation of Power.
A Regular Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 his or her power for the
purposes of executing any documents contemplated in Section 3.6, including any
registration statement or amendment thereto filed with the Commission, or making
any other governmental filing.
The Regular Trustees shall have power to delegate from time to time to such
of their number or to officers of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to
the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
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ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.
Holders of Securities shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debt Security Issuer makes a payment of
interest (including Compound Interest (as [to be] defined in the Indenture) and
Additional Sums (as [to be] defined in the Indenture)), premium and/or principal
on the Debt Securities held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class of
[convertible] preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of [convertible] common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and non-
assessable.
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of and shall
be bound by this Declaration.
SECTION 7.2. Execution and Authentication.
(a) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. In case any Regular Trustee of the Trust who shall have signed any of
the Securities shall cease to be such
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Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declaration any
such person was not such a Regular Trustee.
(b) One Regular Trustee shall sign the Preferred Securities for the Trust
by manual or facsimile signature. Unless otherwise determined by the Trust,
such signature shall, in the case of Common Securities, be a manual signature.
A Preferred Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Institutional Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Preferred Securities for original
issue.
The Institutional Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Institutional Trustee may do so.
Each reference in this Declaration to authentication by the Institutional
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Institutional Trustee to deal with the Company or an
Affiliate.
SECTION 7.3. Form and Dating.
The Preferred Securities and the Institutional Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates may be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular Trustees, as evidenced
by their execution thereof. The Securities may have letters, numbers,
notations, other marks of identification or designation or other changes or
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice and such legends or endorsements required by law, stock
exchange rule and agreements to which the Trust is subject, if any (provided
that any such notation, legend or endorsement is in a form acceptable to the
Trust). The Trust at the direction of the Sponsor shall furnish any such legend
not contained in Exhibit A-1 to the Institutional Trustee in writing. Each
Preferred Security Certificate shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and, to the extent applicable, the Institutional Trustee and the
Sponsor, by their execution and delivery of this Declaration, expressly agree to
such terms and provisions and to be bound thereby.
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SECTION 7.4. Paying Agent. The Trust shall maintain in the Borough of
Manhattan, City of New York, State of New York, an office or agency where
Preferred Securities not held in book-entry only form may be presented for
payment ("Paying Agent"). [The Trust shall maintain an office or agency where
Securities may be presented for conversion ("Conversion Agent").] The Trust may
appoint the Paying Agent [and the Conversion Agent] and may appoint one or more
additional paying agents [and one or more additional conversion agents] in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent [and the term "Conversion Agent" includes any additional
conversion agent]. The Trust may change any Paying Agent [or Conversion Agent]
without prior notice to any Holder. The Trust shall notify the Institutional
Trustee in writing of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as Paying
Agent [or Conversion Agent], the Institutional Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent [or Conversion Agent].
The Trust shall act as Paying Agent [and Conversion Agent] for the Common
Securities.
The Trust initially appoints _________________, ___________________,
_____________, __________, ____ _______, Attention: ____________ as Paying Agent
[and Conversion Agent] for the Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor or the Holder of the Common
Securities;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Holder of the Common
Securities; the filing of a certificate of cancellation with respect to the
Trust after having obtained the consent of at least a Majority in
liquidation amount of the Securities voting together as a single class to
file such certificate of cancellation; or the revocation of the Sponsor's
charter or the charter of the Holder of the Common Securities and the
expiration of 90 days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, the Trust or the Holder of the Common Securities;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
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(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Debt Securities held by the Institutional
Trustee shall have been distributed to the Holders of Securities in
exchange for all of the Securities;
(vi) upon the written direction to the Institutional Trustee from the
Sponsor at any time to terminate the Trust and, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, the
distribution of Debt Securities to Holders in exchange for the Securities,
subject to the Regular Trustees' receipt of an opinion of nationally
recognized independent counsel experienced in such matters to the effect
that the holders of the Preferred Securities will not recognize any income,
gain or loss for United States federal income tax purposes as a result of
the dissolution of the Trust and such distribution to Holders;
[(vii) upon the distribution of the Sponsor's Common Stock to all
Holders of Preferred Securities upon conversion of all outstanding
Preferred Securities;]
(viii) the expiration of the term of the Trust on ________ ____,
_____; or
(ix) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such
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transfer shall not violate the Securities Act and is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to register
under the Investment Company Act or the transferee would become an
Investment Company required to register under the Investment Company Act.
(d) Each Common Security that bears or is required to bear the legend set
forth in this Section 9.1(d) shall be subject to the restrictions on transfer
provided in the legend set forth in this Section 9.1(d), unless such
restrictions on transfer shall be waived by the written consent of the Regular
Trustees, and the Holder of each such Common Security, by such securityholder's
acceptance thereof, agrees to be bound by such restrictions on transfer. As
used in this Section 9.1(d) and in Section 9.1(e), the term "transfer"
encompasses any sale, pledge, transfer or other disposition of any such Common
Security.
Any certificate evidencing a Common Security shall bear a legend in
substantially the following form, unless otherwise agreed by the Regular
Trustees (with written notice thereof to the Institutional 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 UNLESS SUCH OFFER AND SALE ARE
REGISTERED UNDER OR ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT.
THE TRANSFER OF THE SECURITY EVIDENCED HEREBY IS ALSO SUBJECT TO THE
RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW.
SECTION 9.2. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and
of transfers of Certificates, which will be effected without charge, but only
upon payment in respect of any tax or other government charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder
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hereunder upon the receipt by such transferee of a Certificate. By acceptance of
a Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.3. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4. Book Entry Interests.
(a) So long as Preferred Securities are eligible for book-entry settlement
with the Clearing Agency or unless otherwise required by law, all Preferred
Securities that are so eligible may be represented by one or more fully
registered Preferred Security Certificates (each, a "Global Certificate") in
global form to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section 9.7
below. The transfer and exchange of beneficial interests in any such Security
in global form shall be effected through the Clearing Agency in accordance with
this Declaration and the procedures of the Clearing Agency therefor.
(b) Except as provided below, beneficial owners of a Preferred 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
Preferred Security in global form.
(c) Any Global Certificate may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Declaration as may be required by the Clearing Agency, by any
national securities exchange or by the National Association of Securities
Dealers, Inc. as may be required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities
exchange or interdealer quotation system upon which the Preferred 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
Preferred Securities are subject.
(d) Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners of a Preferred Security in global
form pursuant to Section 9.7:
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(i) the provisions of this Section 9.4 shall be in full force and
effect with respect to such Preferred Securities;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of such Preferred Securities and the
sole holder of the Global Certificates and shall have no obligation to the
Preferred Security Beneficial Owners of such Preferred Securities;
(iii) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners of
Preferred Securities in global form shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Preferred Security Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants. The Clearing
Agency will make book-entry transfers among Clearing Agency Participants
and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants provided, that solely for
the purposes of determining whether the Holders of the requisite amount of
Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Preferred Security Certificates have not
been issued, the Trustees may conclusively rely on, and shall be protected
in relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Preferred Securities
Beneficial Owners' votes or assigning the right to vote on any matter to
any other Persons either in whole or in part.
(e) Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in this Section 9.4(e)), a Preferred Security in global
form may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee to a successor Clearing Agency or a nominee
of such successor Clearing Agency.
SECTION 9.5. Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until Definitive Preferred
Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
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SECTION 9.6. Appointment of Successor Clearing Agency.
If any Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities, if such Clearing Agency ceases to perform such services, or if at
any time such Clearing Agency ceases to be a clearing agency registered as such
under the Exchange Act when such Clearing Agency is required to be so registered
to act as such depositary, then the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Preferred
Securities.
SECTION 9.7. Definitive Preferred Security Certificates Under Certain
Circumstances.
If:
(a) a Clearing Agency notifies the Trust that it is unwilling or unable to
continue its services as securities depositary with respect to the Preferred
Securities, if at any time such Clearing Agency ceases to be a clearing agency
registered as such under the Exchange Act when such Clearing Agency is required
to be so registered to act as such depositary and no successor Clearing Agency
shall have been appointed pursuant to Section 9.6 within 90 days of such
notification;
(b) the Regular Trustees (with the consent of the Sponsor), in their sole
discretion determine that the Preferred Securities in global form shall be
exchanged for certificated Preferred Securities; or
(c) there shall have occurred and be continuing an Event of Default;
then:
(d) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(e) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners of such Preferred Securities in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said instructions of
the Clearing Agency. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Preferred Securities may be listed, or to conform to usage.
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At such time as all interests in a Preferred Security in global form have
been redeemed, [converted,] exchanged, repurchased or canceled, such Preferred
Security in global form shall be, upon receipt thereof, canceled by the Trust in
accordance with standing procedures and instructions of the Clearing Agency.
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the Regular
Trustees such security or indemnity as may be required by them to keep each of
them harmless,
then:
in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Institutional Trustee or any Regular Trustee on
behalf of the Trust shall execute and deliver, in exchange for, or in lieu of,
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Institutional Trustee or the Regular Trustees may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1. Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
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(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of the
Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
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(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities, the Indemnified Person shall resolve such
conflict of interest, take such action or provide such terms, considering
in each case the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. Indemnification.
(a) (i) the Debt Security Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, adminis trative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or 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
Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful.
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(ii) The Debt Security Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit 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 Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debt
Security Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) or (ii). Such determination shall be
made (1) by the Regular Trustees by a majority vote of a quorum consisting
of such Regular Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion, or (3) by the Common Security Holder of
the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debt Security Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debt Security Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debt Security Issuer if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) by the
Common Security Holder of the Trust, that, based upon the facts known to
the Regular Trustees,
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counsel or the Common Security Holder at the time such determination is
made, such Company Indemnified Person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that
such Company Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or Common
Security Holder reasonably determine that such person deliberately breached
his duty to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debt
Security Issuer or Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debt Security Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any
repeal or modification of this Section 10.4(a) shall not affect any rights
or obligations then existing.
(vii) The Debt Security Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debt Security Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a)
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debt Security Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i)
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through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person 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 or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the resignation or removal of
the Institutional Trustee or the Delaware Trustee, as the case may be.
SECTION 10.5. Outside Business.
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
shall have the right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Institutional
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the same as the
fiscal year of the Company.
SECTION 11.2. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books, records and supporting documents,
which shall reflect in detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting in compliance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for the United States federal income
tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the
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end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Sponsor shall cause to be prepared and delivered to each of the
Holders of Securities, within 90 days after the end of each Fiscal Year of the
Sponsor, annual financial statements of the Sponsor, including a balance sheet
of the Sponsor as of the end of such Fiscal Year, and the related statements of
income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority, an annual United States federal income tax return,
on a Form 1041 or such other form required by United States federal income tax
law, and any other annual income tax returns required to be filed by the Regular
Trustees on behalf of the Trust with any state or local taxing authority.
SECTION 11.3. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debt Securities held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4. Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made,
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the Trust may reduce subsequent Distributions by the amount of such withholding.
Furthermore, if withholding is imposed on payments of interest on the Debt
Securities, to the extent such withholding is attributable to ownership by a
specific Holder of Preferred Securities, the amount withheld shall be deemed a
distribution in the amount of the withholding to such specific Holder.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
Except as otherwise provided in this Declaration or by any applicable terms
of the Securities,
(a) this Declaration may only be amended by a written instrument approved
and executed by the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees) and:
(i) if the amendment affects the rights, powers, duties, obligations
or immunities of the Institutional Trustee, also by the Institutional
Trustee; and
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, also by the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
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(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees [(other than
a Special Regular Trustee)] shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
[(g) the rights of Holders of Preferred Securities to appoint or remove a
Special Regular Trustee shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Preferred Securities;] and
(h) notwithstanding Section 12.1(c), this Declaration may be amended from
time to time by the Holders of a Majority in liquidation amount of the Common
Securities and the Institutional Trustee, without the consent of the Holders of
the Preferred Securities to:
(i) cure any ambiguity, correct or supplement any provision in this
Declaration that may be inconsistent with any other provision, or to make
any other provisions with respect to matters or questions arising under
this Declaration, which shall not be inconsistent with the other provisions
of this Declaration; or
(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that the Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an investment company
under the Investment Company Act;
provided, however, such action shall not adversely affect in any material
respect the interests of any Holder of Securities;
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(i) this Declaration may be amended by the Holders of a Majority in
liquidation amount of the Common Securities and the Institutional Trustee if:
(i) the Holders of a Majority in liquidation amount of the Preferred
Securities consent to such amendment and
(ii) the Regular Trustees have received an opinion of nationally
recognized independent counsel experienced in such matters to the effect
that such amendment or the exercise of any power granted to the Regular
Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or
the Trust's exemption from status as an "investment company" under the
Investment Company Act,
provided, that without the consent of each Holder of Securities, this
Declaration may not be amended to:
(x) change the amount or timing of any distribution on the Securities
or otherwise adversely affect the amount of any distribution required to be
made in respect of the Securities as of a specified date or
(y) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
(j) Any amendments of this Declaration shall become effective when notice
thereof is given to Holders of Securities.
SECTION 12.2. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Preferred Securities are listed
or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least 25% in
liquidation amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
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(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal, valid
and binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee, of the Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation, duly organized, validly
existing and in good standing, with corporate power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration.
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(b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal place
of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
McKesson Financing Trust IV
c/o McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
[First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801]
Attention: ____________________
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(c) if given to the Institutional Trustee, at its Corporate Trust Office's
mailing address set forth below (or such other address as the Institutional
Trustee may give notice of to the Holders of the Securities).
[The First National Bank of Chicago
One North State Street, 9/th/ Floor
Chicago, Illinois 60602]
Attention: [Corporate Trust Services Division]
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2. GOVERNING LAW.
THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
SECTION 14.3. Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 14.4. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
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SECTION 14.5. Successors and Assign.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 14.6. Partial Enforceability.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7. Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
------------------------------------------------------
[WILLIAM A. ARMSTRONG], as Regular Trustee
Solely as trustee and not in [his] individual capacity
------------------------------------------------------
[RICHARD H. HAWKINS], as Regular Trustee
Solely as trustee and not in [his] individual capacity
------------------------------------------------------
[NANCY A. MILLER], as Regular Trustee
Solely as trustee and not in [her] individual capacity
[FIRST CHICAGO DELAWARE INC.], as Delaware Trustee
By:
--------------------------------------------------
Name:
Title:
[THE FIRST NATIONAL BANK OF CHICAGO],
as Institutional Trustee
By:
--------------------------------------------------
Name:
Title:
McKESSON CORPORATION, as Sponsor
By:
--------------------------------------------------
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
____% TRUST CONVERTIBLE PREFERRED SECURITIES
_____% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of ____________ ____, ______ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the [Convertible] Preferred Securities and the
[Convertible] Common Securities are set out below (each capitalized term used
but not defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Offering Memorandum referred to
below):
1. Designation and Number.
----------------------
(a) [Convertible] Preferred Securities. __________ [Convertible]
----------------------------------
Preferred Securities of the Trust (__________ [Convertible] Preferred
Securities if the Underwriter's over-allotment option is exercised in full) with
an aggregate liquidation amount with respect to the assets of the Trust of
______________ Dollars ($__________) (_____________ Dollars ($___________) if
the Underwriter's over-allotment option is exercised in full), and a liquidation
amount with respect to the assets of $____ per [convertible] preferred security,
are hereby designated for the purposes of identification only as "___% Trust
[Convertible] Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such letters, numbers,
notations, other means of identification or designation or other changes or
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice and such legends or endorsements required by law, state
exchange rule and agreements to which the Trust is subject, if any (provided
that any such notation, legend or endorsement is in a form acceptable to the
Trust).
(b) [Convertible] Common Securities. ________ [Convertible] Common
-------------------------------
Securities of the Trust (_________ [Convertible] Common Securities if the
Underwriter's over-allotment option is exercised in full) with an aggregate
liquidation amount with respect to the assets of the Trust of _____________
Dollars ($_________) (_____________ Dollars ($__________) if the Underwriter's
over-allotment option is exercised in full), and a liquidation amount with
respect to the assets of the Trust of $____ per [convertible] common security,
are hereby designated for the purposes of identification only as "___%
[Convertible] Common Securities" (the "Common Securities"). The Common
Securities Certificates evidencing the Common Securities shall be in the form of
Exhibit A-2 to the Declaration, with such letters, numbers, notations, other
means of identification or designation or other changes or additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice and
such legends or endorsements required by law, state exchange rule and agreements
to which the Trust is subject, if any (provided that any such notation, legend
or endorsement is in a form acceptable to the Trust).
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2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ___% (the "Coupon Rate") of the stated liquidation amount of $___ per
Security, such rate being the rate of interest payable on the Debt Securities to
be held by the Institutional Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes such interest payable unless otherwise stated. A Distribution
is payable only to the extent that payments are made in respect of the Debt
Securities held by the Institutional Trustee and to the extent the Institutional
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
____________ ____, ______ and will be payable quarterly in arrears, on _______
___, _________ ___, ___________ ____ and __________ ___ of each year, commencing
on _________ ___, _____, except as otherwise described below. So long as the
Debt Security Issuer shall not be in default in the payment of interest on the
Debt Securities, the Debt Security Issuer has the right under the Indenture to
defer payments of interest on the Debt Securities by extending the interest
payment period from time to time on the Debt Securities for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debt Securities,
provided that no Extension Period shall last beyond the date of maturity or any
redemption date of the Debt Securities. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debt Security Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the maturity or
any redemption date of the Debt Securities. Payments of accrued Distributions
and, to the extent permitted by applicable law, accrued interest thereon shall
be payable on the Distribution payment date on which the relevant Extension
Period terminates and shall be payable to Holders as they appear on the books
and records of the Trust at the close of business on the record date next
preceding such Distribution payment date. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debt Security Issuer may
commence a new Extension Period, subject to the above requirements. Each
Extension Period, if any, will end on an interest payment date for the Debt
Securities; such date will also be a Distribution payment date for the
Securities. In the event that the Debt Security Issuer exercises its right to
defer payment of interest, then during such Extension Period the Debt Security
Issuer shall not (a) declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, or (b) make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Debt Security Issuer that rank pari passu with or
junior in interest to the Debt Securities or make any
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guarantee payments with respect to any guarantee by the Debt Security Issuer of
the debt securities of any subsidiary of the Debt Security Issuer if such
guarantee ranks pari passu with or junior in interest to the Debt Securities
(other than (i) as a result of a reclassification of the capital stock of the
Debt Security Issuer or the exchange or conversion of one class or series of the
capital stock of the Debt Security Issuer for another class or series of the
capital stock of the Debt Security Issuer, (ii) the purchase of fractional
interests in shares of the capital stock of the Debt Security Issuer pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in Common Stock of the Debt Security Issuer, (iv) any declaration
of a dividend in connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (v) payments under
the Securities Guarantees, (vi) purchases of Common Stock of the Debt Security
Issuer related to the issuance of Common Stock of the Debt Security Issuer or
rights under any of the Debt Security Issuer's benefit plans for its directors,
officers or employees and (vii) obligations under any dividend reinvestment and
stock purchase plans).
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the relevant record
dates, which shall be fifteen days prior to the relevant payment dates, which
payment dates correspond to the record and interest payment dates on the Debt
Securities. The relevant record dates for the Common Securities shall be the
same record dates as for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debt Security Issuer having failed to make a payment under the
Debt Securities, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable
on the Securities is not a Business Day, then payment of the Distributions
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)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
[(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into Common Stock following such record date;
provided, further that if the date of any redemption of related Debt Securities
falls between such record date and such corresponding payment date, the amount
of such Distribution shall include accumulated and unpaid Distributions accrued
to but excluding such date of redemption and such payment shall be made to the
converting holder.]
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(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
The Debt Security Issuer will have the right at any time to cause the Trust
to be dissolved with the result that, after satisfaction of creditors of the
Trust, Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities and the Common
Securities will be distributed on a pro rata basis to the Holders of the
Preferred Securities and the Common Securities in liquidation of such Holders'
interests in the Trust, within 90 days following notice given to the Holders of
the Preferred Securities, subject to the Regular Trustees' receipt of an opinion
of nationally recognized independent counsel experienced in such matters to the
effect that the Holders will not recognize any income, gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and such distribution to Holders of Preferred Securities.
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the Holders of
the Securities on the date of the Liquidation will be entitled to receive out of
the assets of the Trust available for distribution to Holders of Securities
after satisfaction of liabilities of creditors an amount equal to the aggregate
of the stated liquidation amount of $50 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, Debt Securities in
an aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall have been distributed on a Pro
Rata basis to the Holders of the Securities in exchange for such Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) The Debt Securities will mature on _________ ___, _____, and may be
redeemed, in whole or in part, [at any time on or after ___________ ____, _____,
or] at any time in certain circumstances upon the occurrence of a Tax Event (as
defined below). Upon the repayment of the Debt Securities in whole or in part,
whether at maturity, upon redemption (either at the option of the Debt Security
Issuer or pursuant to a Tax Event as described below) or otherwise, the proceeds
from such repayment or payment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debt Securities so repaid or redeemed at a redemption
price per Security equal to the redemption price of the Debt Securities,
together with accrued and unpaid Distributions thereon to, but excluding, the
date of the redemption,
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payable in cash (the "Redemption Price"). Holders will be given not less than 30
nor more than 60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Preferred Securities will be redeemed Pro Rata and the
Preferred Securities to be redeemed will be as described in Section 4(f) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may with the consent of the Debt Security Issuer, except in certain
limited circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors, cause Debt Securities
held by the Institutional Trustee, having an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate identical to
the Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that such dissolution and distribution shall be conditioned on (i) the Regular
Trustees' receipt of an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and the distribution of Debt Securities, (ii) in the case of a Tax Event, the
Debt Security Issuer or the Trust being unable to avoid, within the 90 Day
Period, the Tax Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable measure that
has no adverse effect on the Trust, the Debt Security Issuer, the Sponsor or the
Holders of the Securities ("Ministerial Action"), and (iii) the Debt Security
Issuer's prior written consent to such dissolution and distribution.
Furthermore, if (i) after receipt of a Dissolution Tax Opinion (as defined
hereinafter) by the Regular Trustees, the Debt Security Issuer has received an
opinion (a "Redemption Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Debt Security Issuer would be precluded
from deducting the interest on the Debt Securities for United States federal
income tax purposes even after the Debt Securities were distributed to the
Holders of Securities in liquidation of such Holders' interests in the Trust as
described in this Section 4(c), or (ii) the Regular Trustees shall have been
informed by such tax counsel that it cannot deliver a No Recognition Opinion to
the Trust, the Debt Security Issuer shall have the right, upon not less than 30
nor more than 60 days' notice, to redeem the Debt Securities, in whole or in
part, at a redemption price equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, for cash within 90 days following the
occurrence of such Tax Event. Following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the Debt
Securities so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that, if at the time there is available to
the Debt Security Issuer or the Trust the opportunity to eliminate, within such
90 day
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period, the Tax Event by taking some Ministerial Action, the Trust or the Debt
Security Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an opinion
of nationally recognized independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after __________ ___, ____,
as a result of (a) any amendment to, clarification of, or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, including
any notice or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification, change or Administrative Action is made known, which amendment,
clarification, change or Administrative Action is effective or such
pronouncement or decision is announced, in each case, on or after, ________ ___,
____, there is the creation by such amendment, clarification, change or
Administrative Action of more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accrued or received on the Debt Securities,
(ii) the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes (other than withholding taxes), duties or
other governmental charges, or (iii) interest paid in cash by the Debt Security
Issuer to the Trust on the Debt Securities is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, by the Debt Security
Issuer for United States federal income tax purposes. Notwithstanding the
foregoing, a Tax Event shall not include any change in tax law that requires the
Debt Security Issuer for United States federal income tax purposes to defer
taking a deduction for any original issue discount ("OID") that accrues with
respect to the Debt Securities until the interest payment related to such OID is
paid by the Debt Security Issuer in cash; provided, that such change in tax law
does not create more than an insubstantial risk that the Debt Security Issuer
will be prevented from taking a deduction for OID accruing with respect to the
Debt Securities at a date that is no later than the date the interest payment
related to such OID is actually paid by the Debt Security Issuer in cash.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority on or after _________ ___, _____ (a "Change in 1940 Act Law"), there
is more than an insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
After the date fixed by the Regular Trustees for any distribution of Debt
Securities upon dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) The Depository Trust Company (the "Depositary")
or its nominee (or any successor Clearing Agency or
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its nominee), as the record Holder of the Preferred Securities held in global
form, will receive a registered certificate or certificates representing the
Debt Securities held in global form to be delivered upon such distribution, and
(iii) certificates representing Securities held in definitive form, except for
certificates representing Preferred Securities held by the Depositary or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest (including Compound Interest (as
defined in the Indenture)) equal to accrued and unpaid Distributions on such
Securities until such certificates are presented to the Debt Security Issuer or
its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or prior to the date of
redemption.
(e) (i) Notice of any redemption of, or notice of distribution of Debt
Securities in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debt Securities.
For purposes of the calculation of the date of redemption or exchange and
the dates on which notices are given pursuant to this Section 4(e), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or by such
other means suitable to assure delivery of such written notice, to Holders
of Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Securities at the address of each such Holder appearing in
the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder of Securities shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder of
Securities.
(ii) In addition to the Redemption/Distribution Notice to be
provided to the Holders of Securities pursuant to clause (i) of this
Section 4(e), the Debt Security Issuer or the Trust shall give public
notice of any such redemption by the issuance of a press release through
the services of the Dow Jones Broad Tape, Reuters News Service and
Bloomberg News Service.
(f) In the event that fewer than all the outstanding Securities are to be
redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder of Preferred Securities, it being understood that, in respect of
Preferred Securities registered in the name of and held of record by the
Depositary or its nominee (or any successor Clearing Agency or its nominee) or
any nominee, the distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by such agency or
nominee.
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(g) If Securities are to be redeemed and the Trust gives a Redemption/
Distribution Notice, which notice may only be issued for a redemption if the
Debt Securities are redeemed as set out in the Indenture (which notice will be
irrevocable), then (i) with respect to Preferred Securities held in book-entry
form by 12:00 noon, New York City time, on the redemption date, provided that
the Debt Security Issuer has paid the Institutional Trustee a sufficient amount
of cash in connection with the related redemption of the Debt Securities, the
Institutional Trustee will deposit irrevocably with the Depositary or its
nominee (or successor Clearing Agency or its nominee) funds sufficient to pay
the applicable Redemption Price with respect to such Preferred Securities and
will give the Depository irrevocable instructions and authority to pay the
Redemption Price to the Holders of such Preferred Securities, and (ii) with
respect to Preferred Securities issued in definitive form and Common Securities,
provided that the Debt Security Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption of the Debt
Securities, the Institutional Trustee will pay the relevant Redemption Price to
the Holders of such Securities by check mailed to the address of the relevant
Holder appearing on the books and records of the Trust on the redemption date.
If a Redemption/Distribution Notice shall have been given in connection with a
redemption and funds deposited as required, then from and after the required
date of such deposit, distributions will cease to accrue on the Securities so
called for redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on such Redemption Price. If
any date fixed for redemption of Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the Redemption Price in respect of any Securities is improperly
withheld or refused and not paid either by the Institutional Trustee or by the
Sponsor as guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accrue from the original
redemption date to the actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
Neither the Regular Trustees nor the Trust shall be required (i) in the
event of any redemption in part, to issue, register the transfer of or exchange
any Securities during a period beginning at the opening of business 15 days
before any selection for redemption of Securities and ending at the close of
business on the earliest date in which the relevant Redemption/Distribution
Notice is deemed to have been given to all holders of Securities to be so
redeemed or (ii) to register the transfer of or exchange any Securities selected
for redemption, in whole or in part, except for the unredeemed portion of any
Securities being redeemed in part.
(h) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to (i) in respect of Preferred Securities held in global
form, the Depositary or its nominee (or any successor Clearing Agency or its
nominee), (ii) with respect to Preferred Securities held in definitive form, to
the Holders thereof, and (iii) in respect of the Common Securities, to the
Holders thereof.
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(i) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or otherwise.
[5. Conversion Rights.
-----------------
The Holders of Securities shall have the right at any time, beginning
________ ___, ____ through the close of business on ________ ___, ____ (or, in
the case of Securities called for redemption, prior to the close of business on
the Business Day prior to the redemption date), at their option, to cause the
Conversion Agent to convert Securities, on behalf of the converting Holders,
into shares of Common Stock in the manner described herein on and subject to the
following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debt Securities theretofore held by the Trust on the basis of one
Security per $___ principal amount of Debt Securities, and immediately convert
such amount of Debt Securities into fully paid and nonassessable shares of
Common Stock at an initial rate of ____ shares of Common Stock per $____
principal amount of Debt Securities (which is equivalent to a conversion price
of $_____ per share of Common Stock, subject to certain adjustments set forth in
the Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Securities into Common Stock, the Holder shall
submit to the Conversion Agent at its office an irrevocable request to convert
Securities on behalf of such Holder (the "Conversion Request"), together, if the
Securities are in certificated form, with such certificates. The Conversion
Request shall (i) set forth the number of Securities to be converted and the
name or names, if other than the Holder, in which the shares of Common Stock
should be issued and (ii) direct the Conversion Agent (a) to exchange such
Securities for a portion of the Debt Securities held by the Trust (at the rate
of exchange specified in the preceding paragraph) and (b) to immediately convert
such Debt Securities on behalf of such Holder, into Common Stock (at the
conversion rate specified in the preceding paragraph). The Conversion Agent
shall notify the Trust of the Holder's election to exchange Securities for a
portion of the Debt Securities held by the Trust and the Trust shall, upon
receipt of such notice, deliver to the Conversion Agent the appropriate
principal amount of Debt Securities for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify McKesson of the Holder's
election to convert such Debt Securities into shares of Common Stock. Holders
of Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date; provided, however, that if the date of any redemption of the related Debt
Securities falls between such record date and the related Distribution payment
date, the amount of such Distribution shall include accumulated and unpaid
Distributions accrued to but excluding such date of redemption, and such payment
shall be made to the converting Holder. Except as provided above, neither the
Trust nor the Sponsor will make, or be required to make, any payment, allowance
or adjustment upon any conversion on account of any accumulated and unpaid
Distributions accrued
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on the Securities (including any Additional Amounts accrued thereon) surrendered
for conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock issued upon such conversion, except to the extent that
such shares are held of record on the record date for any such distributions.
Securities shall be deemed to have been converted immediately prior to the close
of business on the day on which a Notice of Conversion relating to such
Securities is received by the Trust in accordance with the foregoing provision
(the "Conversion Date"). The Person or Persons entitled to receive Common Stock
issuable upon conversion of the Debt Securities shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, McKesson shall issue
and deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless otherwise directed by
the Holder in the notice of conversion and the Conversion Agent shall distribute
such certificate or certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
_________________ as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debt Securities held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debt Securities into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Section and to deliver to the Trust a new Debt Security
or Debt Securities for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion of Securities, but in lieu thereof such fractional interest will be
paid in cash by McKesson, in an amount based on the Closing Price of the Common
Stock on the date such Securities are surrendered for conversion, to the
Conversion Agent, which in turn will make such payment to the Holder or Holders
of Securities so converted.
(e) McKesson shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
the Debt Securities, free from any preemptive or other similar rights, such
number of shares of Common Stock as shall from time to time be issuable upon the
conversion of all the Debt Securities then outstanding. Notwithstanding the
foregoing, McKesson shall be entitled to deliver upon conversion of Debt
Securities, shares of Common Stock reacquired and held in the treasury of
McKesson (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debt Securities shall be duly authorized, validly issued
and fully paid and nonassessable. The Trust shall deliver the shares of Common
Stock received upon conversion of the Debt Securities to the converting Holder
free and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Each of McKesson and the Trust
shall
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prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be required by
law, and shall comply with all applicable requirements as to registration or
qualification of Common Stock (and all requirements to list Common Stock
issuable upon conversion of Debt Securities that are at the time applicable), in
order to enable McKesson to lawfully issue Common Stock to the Trust upon
conversion of the Debt Securities and the Trust to lawfully deliver Common Stock
to each Holder upon conversion of the Securities.
(f) McKesson will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Debt Securities
and the delivery of the shares of Common Stock by the Trust upon conversion of
the Securities. McKesson shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Trust the amount of
any such tax, or has established to the satisfaction of the Trust that such tax
has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or as set
forth in this Annex I to the Declaration or to the Declaration itself or
otherwise require the Institutional Trustee or the Trust to pay any amounts on
account of such withholdings.
(h) The term "Closing Price" with respect to any security on any day means
the last reported sale price, regular way on such day, or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, in either case as reported on the NYSE Composite Tape,
or, if such security is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the principal interdealer quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
interdealer quotation system, the average of the closing bid and asked prices of
such security in the over-the-counter market on the day in question as reported
by the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors (or any
committee duly authorized by the Board of Directors) of the Debt Security Issuer
for that purpose or, if not so available in such manner, as otherwise determined
in good faith by the Board of Directors (or any committee duly authorized by the
Board of Directors) of the Debt Security Issuer.]
6. Voting and Other Rights - Preferred Securities.
----------------------------------------------
(a) Except as provided under Sections 6(b) and 8 of this Annex I to the
Declaration and as otherwise required by law and the Declaration, the Holders of
the Preferred Securities will not have voting rights.
[(b) If (i) the Trust fails to make Distributions in full on the Preferred
Securities for 6 consecutive quarterly Distribution periods; or (ii) an Event of
Default occurs and is continuing (each, an "Appointment Event"), then the
Holders of the Preferred Securities, acting as a single class, will be entitled
by the vote of Holders of Preferred Securities representing a Majority in
liquidation amount of the Preferred Securities to appoint a Special Regular
Trustee in accordance with paragraph 5.6(a)(iii) of the Declaration. Any
Holder of Preferred Securities (other than the Sponsor or any Affiliate of the
Sponsor) will have the right to nominate any Person to be appointed as Special
Regular Trustee. For purposes of determining whether the Trust has failed to pay
Distributions in full for 6 consecutive quarterly Distribution periods,
Distributions shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly Distribution periods
terminating on or prior to the date of payment of such cumulative Distribution.
Not later than 30 days after such right to appoint a Special Regular Trustee
arises, the Regular Trustees will convene a meeting for the purpose of
appointing a Special Regular Trustee. If the Regular Trustees fail to convene
such meeting within such 30-day period, the Holders of Preferred Securities
representing 25% in liquidation amount of the outstanding Preferred Securities
will be entitled to convene such meeting in accordance with Section 12.2 of the
Declaration. The record date for such meeting will be the close of business on
the Business Day next preceding the day on which notice of the meeting is sent
to Holders of Preferred Securities. The provisions of the Declaration relating
to the convening and conduct of the meetings of the Holders will apply with
respect to any such meeting. If, at any such meeting, Holders of less than a
Majority in liquidation amount of Preferred Securities entitled to vote for the
appointment of a Special Regular Trustee vote for such appointment, no Special
Regular Trustee shall be appointed. Any Special Regular Trustee may be removed
without cause at any time by the Holders of Preferred Securities representing a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(b)(iii) of the Declaration. The Holders of 25% in liquidation amount
of the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for such
meeting will be the close of business on the Business Day next preceding the day
on which notice of the meeting is sent to Holders of Preferred Securities. Any
Special Regular Trustee appointed shall cease to be a Special Regular Trustee as
provided in Section 5.6(c) of the Declaration. Notwithstanding the appointment
of any such Special Regular Trustee, the Debt Security Issuer shall retain all
rights under the Indenture, including the right to extend the interest payment
period on the Debt Securities, and any extension for a period not exceeding 20
quarterly interest periods will not constitute an Event of Default in respect of
the Debt Securities.]
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(c) Subject to the requirements set forth in this paragraph, the Holders of
a Majority in liquidation amount of the Preferred Securities then outstanding,
voting separately as a class, may direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or may direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debt Securities, to (i) exercise the
remedies available under the Indenture with respect to the Debt Securities, (ii)
waive any past default and its consequences that is waivable under the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debt Securities shall be due and payable, provided,
however, that if an Event of Default under the Indenture has occurred and is
continuing then the holders of 25% of the aggregate liquidation amount of the
Preferred Securities then outstanding may direct the Institutional Trustee to
declare the principal of and interest on the Debt Securities immediately due and
payable; and provided, further, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Debt Securities then outstanding (a "Super
Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Preferred Securities which the
relevant Super Majority represents of the aggregate principal amount of the Debt
Securities then outstanding. The Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee as set
forth above, the Institutional Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Institutional Trustee has obtained an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust as a result of such action. If the
Institutional Trustee fails to enforce its rights under the Debt Securities, any
Holder of Preferred Securities may institute a legal proceeding against any
person to enforce the Institutional Trustee's rights under the Debt Securities.
If a Declaration Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debt Security Issuer to pay interest or
principal on the Debt Securities on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debt Securities having a principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such Holder (a "Direct Action") on or
after the respective due date specified in the Debt Securities. In connection
with such Direct Action, the rights of the Holders of Common Securities will be
subrogated to the rights of such Holder of Preferred Securities to the extent
of any payment made by the Issuer to such Holder of Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debt Securities.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter
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upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debt Securities in accordance with the Declaration and the terms
of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 7(b), 7(c) and 8 of this Annex I of
the Declaration and as otherwise required by law and the Declaration, the
Holders of the Common Securities will not have voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the Debt
Security Trustee, or exercising any trust or power conferred on the Debt
Security Trustee with respect to the Debt Securities, (ii) waive any past
default and its consequences that is waivable under the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debt Securities shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the relevant
Super Majority, the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debt Securities outstanding.
The Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debt Security Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the
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Holders of the Common Securities under this paragraph unless the Institutional
Trustee has obtained an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the Debt
Securities in accordance with the Declaration and the terms of the Securities.
8. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Securities voting together as a
single class, will be entitled to vote on such amendment or proposal (but not on
any other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities then outstanding affected thereby;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities then outstanding.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debt Securities is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debt Securities,
the Institutional Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities then outstanding,
voting together as a single class; provided,
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however, that where a consent under the Indenture would require the consent of
the relevant Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities then outstanding which the relevant Super
Majority represents of the aggregate principal amount of the Debt Securities
then outstanding; provided, further, that the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Securities under this Section 8(b) unless the Institutional Trustee has obtained
an opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust as a result of
such action.
9. Pro Rata.
--------
A reference in these terms of the Securities to any distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first in cash to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
10. Ranking.
-------
The Preferred Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where a Declaration Event of
Default occurs and is continuing, the rights of Holders of the Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
I-16
<PAGE>
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee or the
Common Securities Guarantee (as may be appropriate), and the Indenture to a
Holder without charge on written request to the Sponsor at its principal place
of business.
I-17
<PAGE>
EXHIBIT A-1
[FORM OF [CONVERTIBLE] PREFERRED SECURITY CERTIFICATE]
[IF THE [CONVERTIBLE] PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - THIS [CONVERTIBLE] PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN
THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS [CONVERTIBLE] PREFERRED SECURITY IS EXCHANGEABLE FOR
[CONVERTIBLE] PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS [CONVERTIBLE] PREFERRED SECURITY (OTHER THAN
A TRANSFER OF THIS [CONVERTIBLE] PREFERRED SECURITY 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
LIMITED CIRCUMSTANCES.
UNLESS THIS [CONVERTIBLE] PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY [CONVERTIBLE] PREFERRED SECURITY 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.]
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] PREFERRED SECURITIES:
CUSIP NO.:
Certificate Evidencing [Convertible] Preferred Securities
of
McKESSON FINANCING TRUST IV
A1-1
<PAGE>
____% Trust [Convertible] Preferred Securities
(liquidation amount $___ per Trust [Convertible] Preferred Security)
McKesson Financing Trust IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
____________________ (the "Holder") is the registered owner of [convertible]
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the ___% Trust [Convertible] Preferred
Securities (liquidation amount $____ per Trust [Convertible] Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of ___________ ___, _____,
as the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Preferred Securities as set forth in Annex I to
the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the
Preferred Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Preferred Securities Guarantee and the
Indenture to the Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debt Securities.
Unless the Institutional Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, _____.
McKesson Financing Trust IV
By:
------------------------------------------
Name:
Title: Trustee
Solely as trustee and not in his individual
capacity
A1-3
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Declaration.
Dated: _____________ ____, _____
[THE FIRST NATIONAL BANK OF CHICAGO],
as Institutional Trustee or as Authentication Agent
By: By:
---------------------------------- -----------------------------
Authorized Signatory Authorized Signatory
A1-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ____% (the "Coupon Rate") of the stated liquidation amount of $___ per
Preferred Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debt Securities held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from __________ ___, _____ and will
be payable quarterly in arrears, on ________ ____, _________ ____, _________ ___
and ________ ___ of each year, commencing on ________ ___, _______, which
payment dates shall correspond to the interest payment dates on the Debt
Securities, to Holders of record at the close of business on the regular record
date for such Distribution which shall be the close of business 15 days prior to
such Distribution payment date unless otherwise provided in the Declaration.
The Debt Security Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the Debt
Securities for a period not exceeding 20 consecutive quarters (each an
"Extension Period"); provided that no Extension Period shall last beyond the
date of the maturity or any redemption date of the Debt Securities and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any
such Extension Period, the Debt Security Issuer may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
or extend beyond the maturity or any redemption date of the Debt Securities.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debt Security Issuer may commence a new Extension Period, subject to
the above requirements.
The Preferred Securities shall be redeemable as provided in the Declaration.
[The Preferred Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Preferred Securities for a portion of the Debt
Securities and (ii) the immediate conversion of such Debt Securities into Debt
Security Issuer Common Stock, in the manner and according to the terms set forth
in the Declaration.]
A1-5
<PAGE>
[CONVERSION REQUEST]
[To: [The First National Bank of Chicago],
as Institutional Trustee of McKesson Financing Trust IV
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of McKesson Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ___________ ___, _____, by [William A. Armstrong],
[Richard H. Hawkins] and [Nancy A. Miller], as Regular Trustees, [First Chicago
Delaware Inc.], as Delaware Trustee, [The First National Bank of Chicago], as
Institutional Trustee, McKesson Corporation, as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debt Securities (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debt Securities on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.]
A1-6
<PAGE>
[Date: _______________, ____
in whole _____ in part _____
Number of Preferred Securities to be converted: ____________________
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Common Stock are
to be issued, along with the address or addresses of such person or
persons
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Signature
Please Print or Typewrite Name and Address, Including Zip Code, and
Social Security or Other Identifying Number
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Signature Guarantee:/*/
----------------------------------------------
- -------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
A1-7
<PAGE>
[FORM OF ASSIGNMENT FOR DEFINITIVE PREFERRED SECURITY]
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 security and hereby irrevocably constitutes and appoints
-------------
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
Dated:
----------------------------
Signature(s) --------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee/*/
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- ----------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A1-8
<PAGE>
SCHEDULE I
CHANGES TO NUMBER OF PREFERRED SECURITIES IN GLOBAL SECURITY
<TABLE>
<CAPTION>
Number of Preferred
Securities by which this
Global Security Is To Be Remaining Preferred
Reduced or Increased, Securities Represented
and Reason for by this
Date Reduction or Increase Global Security Notation Made By
- -------- ------------------------- ----------------------- ----------------
<S> <C> <C> <C>
</TABLE>
A1-9
<PAGE>
EXHIBIT A-2
[FORM OF [CONVERTIBLE] COMMON SECURITY CERTIFICATE]
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 UNLESS SUCH OFFER AND SALE ARE REGISTERED UNDER OR ARE EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT. THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH IN THE
DECLARATION REFERRED TO BELOW.
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] COMMON SECURITIES:
Certificate Evidencing [Convertible] Common Securities
of
McKESSON FINANCING TRUST IV
____% [Convertible] Common Securities
(liquidation amount $____ per [Convertible] Common Security)
McKesson Financing Trust IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________ (the "Holder") is the registered owner
of [convertible] common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the ___%
[Convertible] Common Securities (liquidation amount $____ per [Convertible]
Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of __________ ___, _____, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Common Securities as set forth in Annex I to the
Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent
A2-1
<PAGE>
provided therein. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debt Securities.
A2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of ________, _____.
McKesson Financing Trust IV
By:
---------------------------------------
Name:
Title: Trustee
Solely as trustee and not in his
individual capacity
A2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum, of ___% (the "Coupon Rate") of the stated liquidation amount of $____ per
Common Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debt Securities held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accrue from __________ ___, ____ and will be payable
quarterly in arrears, on _______ ___, ________ ___, _______ ___ and ________ ___
of each year, commencing on _________ ___, ____, which payment dates shall
correspond to the interest payment dates on the Debt Securities, to Holders of
record at the close of business on the regular record date for such Distribution
which shall be the close of business 15 days prior to such Distribution payment
date unless otherwise provided in the Declaration. The Debt Security Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debt Securities for a period
not exceeding 20 consecutive quarters (each an "Extension Period"), provided
that no Extension Period shall last beyond the date of maturity of the Debt
Securities and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debt Security Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the date of maturity of the Debt Securities. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debt Security Issuer may commence a new Extension Period, subject to the above
requirements.
The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debt
Securities and (ii) the immediate conversion of such Debt Securities into Debt
Security Issuer Common Stock, in the manner and according to the term set forth
in the Declaration.]
A2-4
<PAGE>
[CONVERSION REQUEST]
[To: [The First National Bank of Chicago],
as Institutional Trustee of McKesson Financing Trust IV
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of McKesson Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of _________ ___, ____, by [William A. Armstrong],
[Richard H. Hawkins] and [Nancy A. Miller], as Regular Trustees, [First Chicago
Delaware Inc.], as Delaware Trustee, [The First National Bank of Chicago], as
Institutional Trustee, McKesson Corporation, as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be issued
pursuant to the Declaration. Pursuant to the aforementioned exercise of the
option to convert these Common Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Common Securities for a portion of the Debt Securities (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Common Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debt Securities on behalf of the undersigned,
into Common Stock (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.]
A2-5
<PAGE>
[Date: _______________, ____
in whole _____ in part _____
Number of Common Securities to be converted: ____________________
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Common Stock are
to be issued, along with the address or addresses of such person or
persons
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
Signature
Please Print or Typewrite Name and Address, Including Zip Code, and
Social Security or Other Identifying Number
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
Signature Guarantee:/*/
------------------------------------------
- -------------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)]
A2-6
<PAGE>
FORM OF ASSIGNMENT FOR SECURITY [OR
COMMON STOCK ISSUABLE UPON CONVERSION] THEREOF
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 security and hereby irrevocably constitutes and appoints
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
Dated:
----------------------------
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee/*/
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- -----------------
/*/ (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A2-7
<PAGE>
EXHIBIT B
SPECIMEN OF DEBT SECURITY
B-1
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
C-1
<PAGE>
Exhibit 4.11
FORM OF STOCK WARRANT AGREEMENT
_________________________________________________________
McKESSON CORPORATION
and
______________________
As Warrant Agent
______________________
WARRANT AGREEMENT
Dated as of ____________, ____
______________________
_________________________________________________________
<PAGE>
TABLE OF CONTENTS(1)
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties...................................................................... 1
Recitals..................................................................... 1
ARTICLE I
ISSUANCE, EXECUTION AND AUTHENTICATION
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates............................... 1
Section 1.2 Form of Warrant Certificate.................................... 1
Section 1.3 Execution and Authentication of Warrant Certificates........... 2
Section 1.4 Temporary Warrant Certificates................................. 3
Section 1.5 Payment of Taxes............................................... 3
Section 1.6 Definition of Holder........................................... 3
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price.................................................. 3
Section 2.2 Duration of Warrants........................................... 4
Section 2.3 Exercise of Warrants........................................... 4
Section 2.4 Reservation of Shares.......................................... 5
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 Call of Warrants by the Corporation............................ 5
Section 3.2 Adjustment of Exercise Price and Number
of Shares Purchasable or Number of Warrants............... 5
</TABLE>
- -----------------
(1) The Table of Contents is not a part of the Warrant Agreement.
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IV
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 Registration, Exchange and Transfer of Warrant Certificates.... 9
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant Certificates...... 10
Section 4.3 Persons Deemed Owners.......................................... 10
Section 4.4 Cancellation of Warrant Certificates........................... 11
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Stockholders Conferred by Warrants or Warrant
Certificates.............................................. 11
Section 5.2 Holder of Warrant Certificate May Enforce Rights............... 11
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent.................................................. 11
Section 6.2 Conditions of Warrant Agent's Obligations...................... 12
Section 6.3 Resignation, Removal and Appointment of Successor.............. 13
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Corporation and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions... 15
Section 7.2 Rights and Duties of Successor Corporation..................... 15
Section 7.3 Amendment...................................................... 15
Section 7.4 Notices and Demands to the Corporation and Warrant Agent....... 16
Section 7.5 Notices to Warrant Holders..................................... 16
Section 7.6 Addresses...................................................... 17
Section 7.7 Governing Law.................................................. 17
Section 7.8 Delivery of Prospectus......................................... 17
Section 7.9 Obtaining of Governmental Approvals............................ 17
Section 7.10 Persons Having Rights under Warrant Agreement.................. 18
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 7.11 Headings....................................................... 18
Section 7.12 Counterparts................................................... 18
Section 7.13 Inspection of Agreement........................................ 18
</TABLE>
Exhibit A - Form of Warrant Certificate
iii
<PAGE>
THIS WARRANT AGREEMENT, dated as of __________, ____, between McKesson
Corporation, a corporation duly organized and existing under the laws of the
State of Delaware (the "Corporation") and ____________, a [corporation]
[national banking association] organized and existing under the laws of
_____________, as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Corporation proposes to sell [If Offered Securities and
-------------------------
Warrants - [title of Offered Securities being offered] (the "Offered
- --------
Securities") with] warrant certificates (such warrant certificates and other
warrant certificates issued pursuant to this Agreement herein called the
"Warrant Certificates") evidencing one or more warrants (the "Warrants" or,
individually, a "Warrant") each representing the right to purchase ____ shares
of [name of security] (the "Stock") [describe terms of securities including
liquidation preference in the case of preferred stock] [If common stock is
------------------
issued -- The term "Stock" shall include the associated rights to purchase the
- ------
Series A Junior Participating Preferred Stock.]; and
WHEREAS, the Corporation desires the Warrant Agent to act on behalf of
the Corporation, and the Warrant Agent is willing to so act, in connection with
the issuance, exchange, exercise and replacement of the Warrant Certificates,
and in this Agreement wishes to set forth, among other things, the form and
provisions of the Warrant Certificates and the terms and conditions on which
they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, EXECUTION AND AUTHENTICATION
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates. [If Warrants alone --
-------------------------------- -----------------
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If Offered Securities and Warrants -- Warrant Certificates shall be [initially]
- -----------------------------------
issued in units with the Offered Securities and shall [not] be separately
transferable [before __________, ____ (the "Detachable Date")]. Each such
unit shall consist of a Warrant Certificate or Certificates evidencing an
aggregate of __________ Warrants.] Each Warrant evidenced thereby shall
represent the right, subject to the provisions contained herein and therein, to
purchase one share of Stock.
Section 1.2 Form of Warrant Certificate. The Warrant Certificates
---------------------------
(including the Form(s) of Exercise [and Assignment] to be set forth on the
reverse thereof) shall be in substantially the form set forth in Exhibit A
hereto, shall be printed, lithographed or engraved on steel engraved borders (or
in any other manner determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such
<PAGE>
determination) and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which the
Warrant Certificates may be listed or as may, consistently herewith, be
determined by the officers executing such Warrant Certificates, with the
execution thereof by such officers conclusively evidencing such determination.
Section 1.3 Execution and Authentication of Warrant Certificates.
----------------------------------------------------
The Warrant Certificates shall be executed on behalf of the Corporation by its
President and Chief Executive Officer, one of its Vice Presidents (any reference
to a Vice President of the Company herein shall be deemed to include any Vice
President of the Company whether or not designated by a number or a word or
words added before or after the title "Vice President"), its Treasurer or its
Controller, under its corporate seal reproduced thereon attested to by its
Secretary or any Assistant Secretary. The signature of any of these officers on
the Warrant Certificates may be manual or facsimile.
Warrant Certificates may be executed by the Corporation and delivered
to the Warrant Agent upon the execution of this Warrant Agreement or from time
to time thereafter. The Warrant Agent shall, upon receipt of Warrant
Certificates duly executed on behalf of the Corporation, authenticate Warrant
Certificates evidencing Warrants representing the right to purchase shares of
Stock and shall deliver such Warrant Certificates to or upon the order of the
Corporation. Subsequent to such original issuance of the Warrant Certificates,
the Warrant Agent shall authenticate a Warrant Certificate only if the Warrant
Certificate is issued in exchange or in substitution for one or more previously
authenticated Warrant Certificates or in connection with their transfer, as
hereinafter provided.
Each Warrant Certificate shall be dated the date of its authentication
by the Warrant Agent.
No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
authenticated by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Corporation shall
be conclusive evidence, and the only evidence, that the Warrant Certificate so
authenticated has been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at the time the proper officers of the Corporation shall
bind the Corporation, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Warrant Certificates or did not hold such offices at the date of such Warrant
Certificates.
2
<PAGE>
Section 1.4 Temporary Warrant Certificates. Pending the preparation
------------------------------
of definitive Warrant Certificates, the Corporation may execute, and upon the
order of the Corporation the Warrant Agent shall authenticate and deliver,
temporary Warrant Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced substantially of the tenor of the definitive
Warrant Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, with the execution thereof by
such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Corporation will
cause definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at the corporate trust office of
the Warrant Agent [or _________], without charge to the Holder (as defined in
Section 1.6 below). Upon surrender for cancellation of any one or more temporary
Warrant Certificates, the Corporation shall execute and the Warrant Agent shall
authenticate and deliver in exchange therefor definitive Warrant Certificates
representing the same aggregate number of Warrants. Until so exchanged, the
temporary Warrant Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Warrant Certificates.
Section 1.5 Payment of Taxes. The Corporation will pay all stamp
----------------
taxes and other duties, if any, to which, under the laws of the United States of
America or any State or political subdivision thereof, this Agreement or the
original issuance of the Warrant Certificates may be subject.
Section 1.6 Definition of Holder. The term "Holder" as used herein
--------------------
shall mean [If Offered Securities and Warrants which are not immediately
------------------------------------------------------------
detachable -- prior to the Detachable Date, the registered owner of the Offered
- ----------
Security to which such Warrant Certificate was initially attached, and, after
such Detachable Date,] the person in whose name at the time such Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.1. [If Offered Securities and
-------------------------
Warrants which are not immediately detachable -- Prior to the Detachable Date,
- ---------------------------------------------
the Corporation will, or will cause the registrar of the Offered Securities to,
make available to the Warrant Agent current information as to Holders of the
Offered Securities.]
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price. During the period set forth in Section
-------------
2.2, each Warrant shall entitle the Holder thereof, subject to the provisions of
this Agreement, to pur-
3
<PAGE>
chase from the Corporation one share of Stock at the exercise price of $_______.
Such exercise price of each Warrant is referred to in this Agreement as the
"Exercise Price."
Section 2.2 Duration of Warrants. Any Warrant evidenced by a Warrant
--------------------
Certificate may be exercised at any time, as specified herein, on or after [the
date thereof] [________, ____] and at or before 5:00 p.m. New York City time on
________, ____ (the "Expiration Date"). Each Warrant not exercised at or before
the close of business on the Expiration Date shall become void, and all rights
of the Holder of the Warrant Certificate evidencing such Warrant under this
Agreement or otherwise shall cease.
Section 2.3 Exercise of Warrants. (a) During the period specified
--------------------
in Section 2.2, any whole number of Warrants may be exercised by surrendering
the Warrant Certificate evidencing such Warrants at the place or at the places
set forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, [in cash or by certified check or
official bank check in New York Clearing House funds] [by bank wire transfer in
immediately available funds,] of the Exercise Price for each Warrant exercised.
The date on which payment in full of the Exercise Price for a Warrant and the
duly executed and completed Warrant Certificate are received by the Warrant
Agent shall be deemed to be the date on which such Warrant is exercised. The
Warrant Agent shall deposit all funds received by it as payment for the exercise
of Warrants to the account of the Corporation maintained with it for such
purpose and shall advise the Corporation by telephone at the end of each day on
which such a payment is received of the amount so deposited to its account. The
Warrant Agent shall promptly confirm such telephonic advice to the Corporation
in writing.
(b) The Warrant Agent shall from time to time, as promptly as
practicable after the exercise of any Warrants in accordance with the terms and
conditions of this Agreement and the Warrant Certificates, advise the
Corporation of (i) the number of Warrants so exercised, (ii) the instructions of
each Holder of the Warrant Certificates evidencing such Warrants with respect to
delivery of the certificate or certificates representing shares of Stock to
which such Holder is entitled upon such exercise, and instructions of such
Holder as to delivery of Warrant Certificates evidencing the balance, if any, of
the Warrants remaining after such exercise, and (iii) such other information as
the Corporation shall reasonably require.
(c) As soon as practicable after the exercise of any Warrants, the
Corporation shall issue to or upon the order of the Holder of the Warrant
Certificate evidencing such Warrants, a certificate or certificates representing
the number of shares of Stock to which such Holder is entitled in such name or
names as may be directed by such Holder; and, if fewer than all of the Warrants
evidenced by such Warrant Certificate were exercised, the Corporation shall
execute and an authorized officer of the Warrant Agent shall manually
authenticate and deliver a new Warrant Certificate evidencing the number of
Warrants remaining unexercised.
4
<PAGE>
(d) The Corporation shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with any
transfer involved in the issuance of the Stock; and in the event that any such
transfer is involved, the Corporation shall not be required to issue or deliver
any shares of Stock until such tax or other charge shall have been paid or it
has been established to the Corporation's satisfaction that no such tax or other
charge is due.
Section 2.4 Reservation of Shares. For the purpose of enabling it to
---------------------
satisfy any obligation to issue shares of Stock upon exercise of Warrants, the
Corporation will, at all times through the close of business on the Expiration
Date, reserve and keep available, free from preemptive rights and out of its
aggregate authorized but unissued shares of Stock, the number of shares of Stock
deliverable upon the exercise of all outstanding Warrants. In addition, so long
as the Stock is listed on a stock exchange or is quoted on an interdealer
quotation system, the Corporation will use its best efforts to list, or to be
quoted, as the case may be, subject to notice of issuance, the Stock issuable
upon the exercise of the Warrants on any such stock exchange or interdealer
quotation system, as the case may be.
The Corporation covenants that all shares of Stock issued upon
exercise of the Warrants will, upon issuance in accordance with the terms of
this Agreement, be fully paid and nonassessable and free from all taxes, liens,
charges and security interests created by or imposed upon the Corporation with
respect to the issuance and holding thereof.
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 [Call of Warrants by the Corporation. If Warrants issued
----------------------------------- ------------------
hereunder are callable by the Corporation -- The Corporation shall have the
- ------------------------------------------
right to call and repurchase any or all Warrants on or after ________, ____
(the "Call Date") and upon the occurrence of [discuss events or circumstances
under which Corporation may call the Warrants] (the "Call Terms") at a price of
$ ________ per Warrant (the "Call Price"). Notice of such Call Price, Call Date
and Call Terms shall be given to registered holders of Warrants in the manner
provided in Section 7.5.]
Section 3.2 Adjustment of Exercise Price and Number of Shares
-------------------------------------------------
Purchasable or Number of Warrants. The Exercise Price, the number of shares of
- ---------------------------------
Stock purchasable upon the exercise of each Warrant and the number of Warrants
outstanding are subject to adjustment from time to time upon the occurrence of
the events enumerated in this Section 3.2.
(a) If the Corporation shall (i) pay a dividend in or make a
distribution of shares of its capital stock, whether shares of Stock or shares
of its capital stock of any other class, (ii) subdivide its outstanding shares
of Stock, (iii) combine its outstanding shares of Preferred Stock into a smaller
number of shares of Stock or (iv) issue any shares of its capital
5
<PAGE>
stock in a reclassification of the Stock (including any such reclassification in
connection with a consolidation or merger in which the Corporation is the
continuing corporation), the number of shares of Stock purchasable upon exercise
of each Warrant immediately prior thereto shall be adjusted so that the holder
of each Warrant shall be entitled to receive the kind and number of shares of
Stock or other securities of the Corporation which such holder would have owned
or have been entitled to receive after the happening of any of the events
described above, had such Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event, retroactive to immediately after the record date,
if any, for such event.
(b) If the Corporation shall issue rights, options or warrants to all
holders of its outstanding Stock, without any charge to such holders, entitling
them to subscribe for or purchase shares of Stock at a price per share that is
lower than the market price per share of Stock (as defined in paragraph (e)
below) at the record date mentioned below, the number of shares of Stock
thereafter purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of shares of Stock theretofore purchasable upon exercise
of each Warrant by a fraction, of which the numerator shall be (i) the number of
shares of Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of additional shares of Stock offered for subscription
or purchase, and of which the denominator shall be (ii) the number of shares of
Stock outstanding on the date of issuance of such rights, options or warrants
plus the number of shares which the aggregate offering price of the total number
of shares of Stock so offered would purchase at the market price per share of
Stock at such record date. Such adjustment shall be made whenever such rights,
options or warrants are issued, and shall become effective retroactive to
immediately after the record date for the determination of stockholders entitled
to receive such rights, options or warrants. If at the end of the period during
which such rights, options or warrants are exercisable, not all rights, options
or warrants shall have been exercised, the adjusted number of shares of Stock
purchasable upon exercise of the Warrants shall be immediately readjusted to
what it would have been if the adjustments made in the foregoing formula had
been based on the number of shares actually issued.
(c) If the Corporation shall distribute to all holders of its shares
of Stock evidences of its indebtedness or assets (excluding cash dividends or
distributions payable out of capital surplus and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Stock (excluding those referred to in paragraph (b) above),
then in each case the number of shares of Stock thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of shares
of Stock theretofore purchasable upon the exercise of each Warrant, by a
fraction, of which the numerator shall be (i) the then current market price per
share of Stock (as defined in paragraph (e) below) on the date of such
distribution, and of which the denominator shall be (ii) the then current market
6
<PAGE>
price per share of Stock less the then fair value (as determined by the Board of
Directors of the Corporation, whose determination shall be conclusive) of the
portion of the assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants or convertible or exchangeable
securities applicable to one share of Stock. Such adjustment shall be made
whenever any such distribution is made, and shall become effective on the date
of distribution retroactive to immediately after the record date for the
determination of stockholders entitled to receive such distribution. If at the
end of the period during which such rights, options or warrants or convertible
or exchangeable securities are exercisable, not all rights, options or warrants
or convertible or exchangeable securities shall have been exercised, the
adjusted number of shares of Stock purchasable upon exercise of the Warrants
shall be immediately readjusted to what it would have been if the adjustments
made in the foregoing formula had been based on the number of shares actually
issued.
(d) In the event of any capital reorganization or any
reclassification of the Stock (except as provided in paragraphs (a) through (c)
above), any holder of Warrants upon exercise thereof shall be entitled to
receive, in lieu of the Stock to which he or she would have become entitled upon
exercise immediately prior to such reorganization or reclassification, the
shares (of any class or classes) or other securities or property of the
Corporation that he or she would have been entitled to receive at the same
aggregate Exercise Price upon such reorganization or reclassification if his or
her Warrants had been exercised immediately prior thereto.
(e) For the purpose of any computation under paragraphs (b) and (c)
of this Section 3.02, the current or closing market price per share of Stock at
any date shall be deemed to be the average of the daily closing prices for _____
consecutive trading days commencing __________ trading days before the date of
such computation. The closing price for each day shall be [the last sale price]
for such day, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange (the "NYSE") or if the Stock is not
listed on the NYSE, then on the principal United States national securities
exchange on which the Stock is listed or quoted. If the Stock is not listed or
quoted on any United States national securities exchange, then the current or
closing market price per share of Stock shall be determined by the Board of
Directors of the Corporation in good faith.
(f) Whenever the number of shares of [NAME OF SECURITY] purchasable
upon the exercise of each Warrant is adjusted as herein provided, the Exercise
Price payable upon the exercise of each Warrant shall be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of shares purchasable upon the exercise of
each Warrant immediately prior to such adjustment, and of which the denominator
shall be the number of shares so purchasable immediately thereafter.
7
<PAGE>
(g) The Corporation may elect, on or after the date of any adjustment
required by paragraphs (a) through (d) of this Section 3.2, to adjust the number
of Warrants in substitution for an adjustment in the number of shares of Stock
purchasable upon the exercise of a Warrant. Each of the Warrants outstanding
after such adjustment of the number of Warrants shall be exercisable for the
same number of shares of Stock as immediately prior to such adjustment. Each
Warrant held of record prior to such adjustment of the number of Warrants shall
become that number of Warrants (calculated to the nearest hundredth) obtained by
dividing the Exercise Price in effect prior to adjustment of the Exercise Price
by the Exercise Price in effect after adjustment of the Exercise Price. The
Corporation shall notify the holders of Warrants, in the same manner as provided
in the first paragraph of Section 7.5, of its election to adjust the number of
Warrants, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Exercise Price is adjusted or any day thereafter. Upon each
adjustment of the number of Warrants pursuant to this paragraph (g) the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Warrants on such record date Warrant Certificates
evidencing, subject to paragraph (h), the additional Warrants to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Warrant Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Corporation, new Warrant Certificates evidencing all the Warrants to be
issued, executed and registered in the manner specified in Section 1 (and which
may bear, at the option of the Corporation, the adjusted Exercise Price) and
shall be registered in the names of the holders of record of Warrant
Certificates on the record date specified in the notice.
(h) The Corporation shall not be required to issue fractions of
Warrants on any distribution of Warrants to holders of Warrant Certificates
pursuant to paragraph (g) or to distribute Warrant Certificates that evidence
fractional Warrants. In lieu of such fractional Warrants, there shall be paid
to the registered holders of the Warrant Certificates with regard to which such
fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant on the trading day
immediately prior to the date on which such fractional Warrant would have been
otherwise issuable (the "Valuation Date"). For purposes of this paragraph (h),
the current market value of a Warrant shall be the aggregate closing market
price on the Valuation Date (determined as set forth in paragraph (e)) of all
shares of Stock issuable upon exercise of one Warrant plus the fair value (as
determined by the Board of Directors of the Corporation, whose determination
shall be conclusive) of any other assets or securities purchasable upon exercise
of one Warrant less the Exercise Price of one Warrant.
(i) Notwithstanding any adjustment pursuant to Section 3.2 in the
number of shares of Stock purchasable upon the exercise of a Warrant, the
Corporation shall not be required to issue fractions of shares of Stock upon
exercise of the Warrants or to distribute certificates which evidence fractional
shares. In lieu of fractional shares, there shall
8
<PAGE>
be paid to the registered holders of Warrant Certificates at the time such
Warrant Certificates are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of a share of Stock. For purposes
of this paragraph (i), the current market value of a share of Stock shall be the
closing market price (determined as set forth in paragraph (e)) of a share of
Stock for the trading day immediately prior to the date of such exercise.
(j) No adjustment in the number of shares of Stock purchasable upon
exercise of the Warrant need be made unless the adjustment would require an
increase or decrease of at least 0.5%. Any adjustment that is not made shall be
carried forward and taken into account in any subsequent adjustment, provided
that no such adjustment shall be deferred beyond the date on which a Warrant is
exercised. All calculations under this Article III shall be made to the nearest
1/1000th of a share.
(k) To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the amount of cash into which such
Warrants are exercisable. Interest will not accrue on the cash.
ARTICLE IV
REGISTRATION, EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 Registration, Exchange and Transfer of Warrant
----------------------------------------------
Certificates. The Warrant Agent shall keep, at its corporate trust office [and
- ------------
at _________], books in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and transfers of outstanding
Warrant Certificates.
[If Offered Securities and Warrants which are immediately detachable -
-------------------------------------------------------------------
- - Prior to the Detachable Date, a Warrant Certificate may be exchanged or
transferred only together with the Offered Security to which such Warrant
Certificate was initially attached, and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Offered Security.
Additionally, on or prior to the Detachable Date, each transfer or exchange of
an Offered Security [on the register of the Offered Securities] shall operate
also to transfer or exchange the Warrant Certificate or Certificates to which
such Offered Security was initially attached. After the Detachable Date, upon]
[If Offered Securities and Warrants which are immediately detachable or if
-------------------------------------------------------------------------
Warrants alone -- Upon] surrender at the corporate trust office of the Warrant
- --------------
Agent [or _________] of Warrant Certificates properly endorsed [or accompanied
by appropriate instruments of transfer] and accompanied by written instructions
for [transfer or] exchange, all in form satisfactory to the Corporation and the
Warrant Agent, such Warrant Certificates may be exchanged for other Warrant
Certificates or may be transferred in whole or in part; provided that Warrant
Certificates issued in exchange for [or upon transfer of] surrendered Warrant
Certificates shall evidence the same aggregate number of Warrants as the Warrant
Certificates so surrendered. No service charge shall be made for any exchange
[or
9
<PAGE>
transfer] of Warrant Certificates, but the Corporation may require payment of a
sum sufficient to cover any stamp or other tax or governmental charge that may
be imposed in connection with any such exchange [or transfer]. Whenever any
Warrant Certificates are so surrendered for exchange [or transfer], the
Corporation shall execute and an authorized officer of the Warrant Agent shall
manually authenticate and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates as so requested. The Warrant Agent
shall not be required to effect any exchange [or transfer] which would result in
the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a
number of full Warrants and a fraction of a Warrant. All Warrant Certificates
issued upon any exchange [or transfer] of Warrant Certificates shall evidence
the same obligations, and be entitled to the same benefits under this Agreement,
as the Warrant Certificates surrendered for such exchange [or transfer].
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant
--------------------------------------------
Certificates. If any mutilated Warrant Certificate is surrendered to the
- ------------
Warrant Agent, the Corporation shall execute and an officer of the Warrant Agent
shall manually authenticate and deliver in exchange therefor a new Warrant
Certificate of like tenor and bearing a number not contemporaneously
outstanding. If there shall be delivered to the Corporation and the Warrant
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Warrant Certificate and of the ownership thereof and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Corporation or
the Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Corporation shall execute and upon its request an officer of the
Warrant Agent shall manually authenticate and deliver, in lieu of any such
destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of like
tenor and bearing a number not contemporaneously outstanding. Upon the issuance
of any new Warrant Certificate under this Section, the Corporation 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 Warrant Agent) connected therewith. Every new Warrant
Certificate issued pursuant to this Section in lieu of any destroyed, lost or
stolen Warrant Certificate shall evidence an original additional contractual
obligation of the Corporation, whether or not the destroyed, lost or stolen
Warrant Certificate shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Agreement equally and proportionately with
any and all other Warrant Certificates duly issued hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Warrant Certificates.
Section 4.3 Persons Deemed Owners. [If Offered Securities and
--------------------- -------------------------
Warrants which are not immediately detachable -- Prior to the Detachable Date,
- ---------------------------------------------
the Corporation, the Warrant Agent and all other persons may treat the owner of
any Offered Security as the owner of the Warrant Certificates initially attached
thereto for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced by such Warrant Certificates, any notice
to the contrary notwithstanding. After the Detachable Date, and] Prior to due
present-
10
<PAGE>
ment of a Warrant Certificate for registration of transfer, the Corporation, the
Warrant Agent and all other persons may treat the Holder as the owner thereof
for any purpose and as the person entitled to exercise the rights represented by
the Warrants evidenced thereby, any notice to the contrary notwithstanding.
Section 4.4 Cancellation of Warrant Certificates. Any Warrant
------------------------------------
Certificate surrendered for exchange[, transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Corporation, be delivered to the
Warrant Agent, and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by it and shall not be reissued and,
except as expressly permitted by this Agreement, no Warrant Certificate shall
be issued hereunder in lieu or in exchange thereof. The Corporation may at any
time deliver to the Warrant Agent for cancellation any Warrant Certificates
previously issued hereunder which the Corporation may have acquired in any
manner whatsoever, and all Warrant Certificates so delivered shall be promptly
cancelled by the Warrant Agent. All cancelled Warrant Certificates held by the
Warrant Agent shall be disposed of, as instructed by the Corporation, subject to
applicable law.
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Stockholders Conferred by Warrants or
--------------------------------------------------
Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby shall
- --------------------
entitle the Holder thereof to any of the rights of a stockholder, including,
without limitation, the right to receive dividends (except in certain cases for
adjustments as expressly provided in Article III hereof).
Section 5.2 Holder of Warrant Certificate May Enforce Rights.
------------------------------------------------
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of the Warrant Agent, any stockholder
or the Holder of any other Warrant Certificate, may, on its own behalf and for
its own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Corporation suitable to enforce or otherwise in respect
of its right to exercise the Warrant or Warrants evidenced by his or her Warrant
Certificate in the manner provided in the Warrant Certificates and in this
Agreement.
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent. The Corporation hereby appoints
-------------
____________ as Warrant Agent of the Corporation in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein set
forth, and ___________ hereby accepts such appointment. The Warrant Agent shall
have the power and authority granted to and
11
<PAGE>
conferred upon it in the Warrant Certificates and hereby and such further power
and authority to act on behalf of the Corporation as the Corporation may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such power and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
Section 6.2 Conditions of Warrant Agent's Obligations. The Warrant
-----------------------------------------
Agent accepts its obligations herein set forth, upon the terms and conditions
hereof, including the following, to all of which the Corporation agrees and to
all of which the rights hereunder of the Holders from time to time of the
Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Corporation agrees
--------------------------------
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Corporation for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred by the Warrant Agent in connection with the services
rendered hereunder by the Warrant Agent. The Corporation also agrees to
indemnify the Warrant Agent for, and hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Warrant Agent, arising out of or in connection with its acting as such Warrant
Agent hereunder, including the reasonable costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance at any time of its powers or duties hereunder. The obligations of
the Corporation under this subsection (a) shall survive the exercise of the
Warrant Certificates and the resignation or removal of the Warrant Agent.
(b) Agent for the Corporation. In acting under this Warrant
-------------------------
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Corporation and does not assume any obligation or
relationship of agency or trust for or with any of the owners or holders of the
Warrant Certificates.
(c) Counsel. The Warrant Agent may consult with counsel, which may
-------
include counsel for the Corporation, and the written advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered, or omitted by it hereunder in good faith and in reliance
thereon.
(d) Documents. The Warrant Agent shall be protected and shall incur
---------
no liability for or in respect of any action taken or omitted by it in reliance
upon any notice, direction, consent, certificate, affidavit, statement or other
paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, any of its officers,
--------------------
directors and employees, or any other agent of the Corporation, in its
individual or any other capacity, may become the owner of, or acquire any
interest in, any Warrant Certificates, with the same rights that it would have
if it were not such Warrant Agent, officer, director, employee or other agent,
and, to the extent permitted by applicable law, it may engage or be
12
<PAGE>
interested in any financial or other transaction with the Corporation and may
act on, or as depositary, trustee or agent for, any committee or body of holders
of securities or other obligations of the Corporation as freely as if it were
not such Warrant Agent, officer, director, employee or other agent.
(f) No Liability for Interest. The Warrant Agent shall not be under
-------------------------
any liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates unless
otherwise agreed to in writing by the Corporation and the Warrant Agent and
except for the negligence of the Warrant Agent.
(g) No Liability for Invalidity. The Warrant Agent shall not incur
---------------------------
any liability with respect to the validity of this Agreement or any of the
Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent shall
-------------------------------------
not be responsible for any of the Recitals or representations contained herein
or in the Warrant Certificates (except as to the Warrant Agent's Certificate of
Authentication thereon), all of which are made solely by the Corporation.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
----------------------
perform such duties as are herein and in the Warrant Certificates specifically
set forth and no implied duties or obligations shall be read into this Agreement
or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall
not be under any obligation to take any action hereunder which may tend to
involve it in any expense or liability, the payment of which within a reasonable
time is not, in its reasonable opinion, assured to it. The Warrant Agent shall
not be accountable or under any duty or responsibility for the use by the
Corporation of any of the Warrant Certificates authenticated by the Warrant
Agent and delivered by it to the Corporation pursuant to this Agreement or for
the application by the Corporation of the proceeds of the Warrant Certificates
or any exercise of the Warrants evidenced thereby. The Warrant Agent shall have
no duty or responsibility in case of any default by the Corporation in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from a Holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to initiate
or attempt to initiate any proceedings at law or otherwise or, except as
provided in Section 7.4 hereof, to make any demand upon the Corporation.
Section 6.3 Resignation, Removal and Appointment of Successor. (a)
-------------------------------------------------
The Corporation agrees, for the benefit of the Holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent hereunder
until all of the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Corporation of such intention on its part, specifying the
date on which it desires its resignation to become effective; provided that,
without the consent of the Corpora-
13
<PAGE>
tion, such date shall not be less than three months after the date on which such
notice is given. The Warrant Agent hereunder may be removed at any time by the
filing with it of an instrument in writing signed by or on behalf of the
Corporation and specifying such removal and the date on which the Corporation
expects such removal to become effective. Such resignation or removal shall take
effect upon the appointment by the Corporation of a successor Warrant Agent
(which shall be a bank or trust company organized and doing business under the
laws of the United States of America, any State thereof or the District of
Columbia and authorized under such laws to exercise corporate trust powers) by
an instrument in writing filed with such successor Warrant Agent and the
acceptance of such appointment by such successor Warrant Agent pursuant to
Section 6.3(d).
(c) In case at any time the Warrant Agent shall resign, or be
removed, or shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or shall file a voluntary petition in bankruptcy or make an
assignment for the benefit of its creditors or consent to the appointment of a
receiver or custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property
shall be appointed, or if an order of any court shall be entered approving any
petition filed by or against it under the provisions of any applicable
bankruptcy or similar law, or if any public officer shall have taken charge or
control of the Warrant Agent or of its property or affairs, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Corporation by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
latter of such appointment, the Warrant Agent so superseded shall cease to be
the Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Corporation an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Warrant Agent, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
14
<PAGE>
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Corporation and Sales,
--------------------------------------------------------
Leases and Conveyances Permitted Subject to Certain Conditions. The Corporation
- --------------------------------------------------------------
may consolidate with, or sell or convey all or substantially all of its assets
to, or merge with or into any other corporation, provided that in any such case,
either the Corporation shall be the continuing corporation, or the corporation
(if other than the Corporation) formed by such consolidation or into which the
Corporation is merged or the corporation which acquired by purchase or
conveyance all or substantially all of the assets of the Corporation shall
expressly assume the obligations of the Corporation hereunder.
Section 7.2 Rights and Duties of Successor Corporation. In case of
------------------------------------------
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Corporation, with the same effect as if it
had been named herein, and the predecessor corporation, except in the event of a
lease, shall be relieved of any further obligation under this Agreement and the
Warrants. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Corporation, any or all of
the shares of Stock issuable pursuant to the terms hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in Stock
thereafter to be issued as may be appropriate.
Section 7.3 Amendment. This Agreement [If preferred stock is to be
--------- ---------------------------
issued upon exercise of the Warrants -- and the certificate of designations of
- ------------------------------------
such series of Stock (the "Certificate of Designations")] may be amended by the
parties hereto, without the consent of the Holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or curing, correcting or supplementing
any defective provision contained herein, or making such provisions in regard to
matters or questions arising under this Agreement [If preferred stock is to be
---------------------------
issued upon exercise of the Warrants -- or the Certificate of Designations] as
- ------------------------------------
the Corporation may deem necessary or desirable; provided that such action shall
not adversely affect the interests of the Holders of the Warrant Certificates in
any material respect. Any amendment or supplement to this Agreement [If
--
preferred stock is to be issued upon exercise of the Warrants -- or the
- -------------------------------------------------------------
Certificate of Designations] or the Warrants that has a material adverse effect
on the interests of Holders of any series of Warrants shall require the written
consent of the Holders of a majority of the then outstanding Warrants of such
series [If preferred stock is to be issued upon exercise of the Warrants --
----------------------------------------------------------------
(provided that if Stock has been issued, then the consent of holders of a
majority of the then outstanding Warrants of such series and the Stock voting as
a class shall instead be required)]. The consent of each Holder of a Warrant
affected shall be required for any amendment pursuant to which the Warrant
15
<PAGE>
Price would be increased or the number of shares of Stock purchasable upon
exercise of Warrants would be decreased. The Warrant Agent may, but shall not be
obligated to, enter into any amendment to this Agreement which affects the
Warrant Agent's own rights, duties or immunities under this Agreement or
otherwise.
Section 7.4 Notices and Demands to the Corporation and Warrant Agent.
--------------------------------------------------------
If the Warrant Agent shall receive any notice or demand addressed to the
Corporation by the Holder of a Warrant Certificate pursuant to the provisions of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Corporation.
Section 7.5 Notices to Warrant Holders. Upon any adjustment of the
--------------------------
number of shares purchasable upon exercise of each Warrant, the Exercise Price
or the number of Warrants outstanding pursuant to Section 3.2, the Corporation
within _______ calendar days thereafter shall (i) cause to be filed with the
Warrant Agent a certificate of a firm of independent public accountants of
recognized standing selected by the Corporation (who may be the regular auditors
of the Corporation) setting forth the Exercise Price and either the number of
shares of Stock and other securities or assets purchasable upon exercise of each
Warrant or the additional number of Warrants to be issued for each previously
outstanding Warrant, as the case may be, after such adjustment and setting forth
in reasonable detail the method of calculation and the facts upon which such
adjustment are made, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of the Warrant Certificates at such holder's address
appearing on the Warrant Register written notice of such adjustments by first-
class mail, postage prepaid. Where appropriate, such notice may be given in
advance and included as part of the notice required to be mailed under the
provisions of this Section 7.5.
Pursuant to Sections 3.1 [add other sections as applicable], the
Corporation shall cause written notice of such Call Price, Call Date and Call
Terms [reference other items as applicable], as the case may be, to be given as
soon as practicable to the Warrant Agent and to each of the registered holders
of the Warrant Certificates by first class mail, postage prepaid, at such
holder's address appearing on the Warrant Register. In addition to the written
notice referred to in the preceding sentence, the Corporation shall make a
public announcement in a daily morning newspaper of general circulation in
__________ of such Call Price, Call Date, and Call Terms [reference other items
as applicable], as the case may be, at least once a week for two successive
weeks prior to the implementation of such terms.
If:
(a) the Corporation shall declare any dividend payable in any
securities upon its shares of Stock or make any distribution (other than a cash
dividend) to the holders of its shares of Stock; or
16
<PAGE>
(b) the Corporation shall offer to the holders of its shares of Stock
any additional shares of Stock or securities convertible into shares of Stock or
any right to subscribe thereto; or
(c) there shall be a dissolution, liquidation or winding up of the
Corporation (other than in connection with a consolidation, merger, or sale of
all or substantially all of its property, assets, and business as an entirety);
then the Corporation shall (i) cause written notice of such event to be filed
with the Warrant Agent and shall cause written notice of such event to be given
to each of the registered holders of the Warrant Certificates at such holder's
address appearing on the Warrant Register, by first-class mail, postage prepaid,
and (ii) make a public announcement in a daily newspaper of general circulation
in ___________________ of such event, such giving of notice and publication to
be completed at least ________ calendar days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription rights, or
for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. The failure
to give the notice required by this Section 7.5 or any defect therein shall not
affect the legality or validity of any distribution, right, warrant,
dissolution, liquidation or winding up or the vote upon or any other action
taken in connection therewith.
Section 7.6 Addresses. Any communications from the Corporation to
---------
the Warrant Agent with respect to this Agreement shall be addressed to
_______________, Attention: ________________, and any communications from the
Warrant Agent to the Corporation with respect to this Agreement shall be
addressed to McKesson Corporation, One Post Street, San Francisco, California
90071, Attention: [ ] (or such other address as shall be specified in
writing by the Warrant Agent or by the Corporation).
SECTION 7.7 GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT
-------------
CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
Section 7.8 Delivery of Prospectus. The Corporation will furnish to
----------------------
the Warrant Agent sufficient copies of a prospectus, appropriately supplemented,
relating to the Stock (the "Prospectus"), and the Warrant Agent agrees that upon
the exercise of any Warrant Certificate, the Warrant Agent will deliver to the
person designated to receive a certificate representing shares of Stock, prior
to or concurrently with the delivery of such Securities, a Prospectus.
Section 7.9 Obtaining of Governmental Approvals. The Corporation
-----------------------------------
will from time to time take all action which may be necessary to obtain and keep
effective any and all
17
<PAGE>
permits, consents and approvals of governmental agencies and authorities and
securities acts filings under United States Federal and State laws (including,
without limitation, to the extent required, the maintenance of the effectiveness
of a registration statement in respect of the Stock under the Securities Act of
1933, as amended), which may be or become required in connection with exercise
of the Warrant Certificates and the original issuance and delivery of the Stock.
Section 7.10 Persons Having Rights Under Warrant Agreement. Nothing
---------------------------------------------
in this Agreement expressed or implied and nothing that may be inferred from any
of the provisions herein is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Corporation, the Warrant Agent
and the Holders of the Warrant Certificates any right, remedy or claim under or
by reason of this Agreement or of any covenant, condition, stipulation, promise
or agreement hereof; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Corporation and the Warrant Agent and their successors and of the
Holders of the Warrant Certificates.
Section 7.11 Headings. The Article and Section headings herein and
--------
the Table of Contents are for convenience of reference only and shall not affect
the construction hereof.
Section 7.12 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
Section 7.13 Inspection of Agreement. A copy of this Agreement shall
-----------------------
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent [and at ___________] for inspection by the Holder of any
Warrant Certificate. The Warrant Agent may require such Holder to submit its
Warrant Certificate for inspection by it.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, and their respective corporate seal to be hereunto affixed and
attested, all as of the day and year first above written.
McKESSON CORPORATION
By:
-------------------------------------
Name:
[SEAL] Title:
Attest
- -----------------------------
[Assistant] Secretary
[SEAL] Attest:
- -----------------------------
[Assistant] Secretary
[NAME OF WARRANT AGENT]
By:
-------------------------------------
Name:
Title:
[SEAL]
Attest:
- -----------------------------
[Assistant] Secretary
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[Face]
<TABLE>
<S> <C>
Form of Legend if Offered Securities with [Prior to ___________, this Warrant Certif-
- ----------------------------------------- icate may be transferred or exchanged if
Warrants which are not immediately detach- and only if the [Title of Security] to which
- ------------------------------------------ it was initially attached is so transferred or
able exchanged.]
- -----
Form of Legend if Warrants are not immedi- [Prior to _________________, Warrants
- ------------------------------------------ evidenced by this Warrant Certificate can-
ately exercisable not be exercised.]
- -----------------
</TABLE>
EXERCISABLE ONLY IF AUTHENTICATED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER THE CLOSE OF BUSINESS ON ____________, ____
McKESSON CORPORATION
Warrant Certificate representing
Warrants to purchase
[name of security]
as described herein.
--------------------
No. __________ Warrants
This certifies that __________ or registered assigns is the registered
owner of the above indicated number of Warrants, each Warrant entitling such
registered owner to purchase, at any time [after the close of business on
_________, ____, and] on or before the close of business on ________, ____, one
share of the [designation of [name of security]] ("Stock") of McKesson
Corporation (the "Corporation"), on the following basis.* During such period,
each Warrant shall entitle the Holder thereof, subject to the provisions of the
Warrant
- -------------------
* Complete and modify the following provisions as appropriate to reflect the
terms of the Warrants.
A-1
<PAGE>
Agreement (as defined below), to purchase from the Corporation one share
of Stock at the exercise price of $ ________ (the "Exercise Price"). The Holder
of this Warrant Certificate may exercise the Warrants evidenced hereby, in whole
or in part, by surrendering this Warrant Certificate, with the purchase form set
forth hereon duly completed, accompanied by payment in full, in lawful money of
the United States of America, [in cash or by certified check or official bank
check in New York Clearing House funds or by bank wire transfer in immediately
available funds], the Exercise Price for each Warrant exercised, to the Warrant
Agent (as hereinafter defined), at the corporate trust office of [name of
Warrant Agent], or its successor, as warrant agent (the "Warrant Agent") [or at
________], the addresses specified on the reverse hereof and upon compliance
with and subject to the conditions set forth herein and in the Warrant
Agreement.
The term "Holder" as used herein shall mean [If Offered Debt
---------------
Securities with Warrants which are not immediately detachable -- prior to
- -------------------------------------------------------------
________, ____ (the "Detachable Date"), the registered owner of the
Corporation's [title of Offered Securities] to which such Warrant Certificate
was initially attached, and after such Detachable Date,] the person in whose
name at the time such Warrant Certificate shall be registered upon the books to
be maintained by the Warrant Agent for that purpose pursuant to Section 4.1 of
the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase shares of Stock. Upon any exercise of fewer than all
of the Warrants evidenced by this Warrant Certificate, there shall be issued to
the registered owner hereof a new Warrant Certificate evidencing the number of
Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ________, ____ (the "Warrant Agreement"), between
the Corporation and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent
[and at ________].
[If Offered Securities with Warrants which are not immediately
-------------------------------------------------------------
detachable--prior to ________, ____ (the "Detachable Date"), this Warrant
- ----------
Certificate may be exchanged or transferred only together with the [title of
Offered Security] (the "Offered Security") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Security. Additionally, on or
prior to the Detachable Date, each transfer of such Offered Security on the
register of the Offered Securities shall operate also to transfer this Warrant
Certificate. After the Detachable Date, this] [If Offered Debt Securities with
-------------------------------
Warrants which are immediately detachable or Warrants alone--This] Warrant
- -----------------------------------------------------------
Certificate and all rights hereunder, may be transferred when surrendered at the
corporate trust office of the Warrant Agent [or ________] by the registered
A-2
<PAGE>
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the limitations provided in the Warrant Agreement.
[If Offered Securities with Warrants which are not immediately
-------------------------------------------------------------
detachable--Except as provided in the immediately preceding paragraph, after]
- ----------
[If Offered Debt Securities with Warrants which are immediately detachable or
- -----------------------------------------------------------------------------
Warrants alone-After] authentication by the Warrant Agent and prior to the
- --------------
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or at
______________________] for Warrant Certificates representing the same aggregate
number of Warrants.
This Warrant Certificate shall not entitle the registered owner hereof
to any of the rights of a stockholder, including, without limitation, the right
to receive dividends.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid obligatory for any purpose
until authenticated by the Warrant Agent.
A-3
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated: _______________
McKESSON CORPORATION
By:
___________________________________
Attest:
_____________________________
Certificate of Authentication
This is one of the Warrant Certificates referred to in the within-
mentioned Warrant Agreement.
_____________________________
As Warrant Agent
By: _________________________
Authorized Signature
A-4
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this Warrant
Certificate must pay [in cash or by certified check or by bank wire transfer in
immediately available funds], the Exercise Price in full for each of the
Warrants exercised, to _________, Corporate Trust Department, ____________,
Attn: [or ____________], which payment should specify the name of the Holder of
this Warrant Certificate and the number of Warrants exercised by such Holder.
In addition, the Holder of this Warrant Certificate should complete the
information required below and present in person or mail by registered mail this
Warrant Certificate to the Warrant Agent at the addresses set forth below.
[FORM OF EXERCISE]
(To be executed upon exercise of Warrants.)
The undersigned hereby irrevocably elects to exercise Warrants,
represented by this Warrant Certificate, to purchase ________ shares of the
[designation of [name of security]] ("Stock") of McKesson Corporation and
represents that he or she has tendered payment for such shares of Stock [in cash
or by certified check official bank check in New York Clearing House funds or by
bank wire transfer in immediately available funds] to the order of McKesson
Corporation, c/o Treasurer, in the amount of $________ in accordance with the
terms hereof. The undersigned requests that said shares of Stock be registered
in such names and delivered, all as specified in accordance with the
instructions set forth below.
If said number of shares of Stock is less than all of the shares of
Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of the Warrants evidenced hereby
be issued and delivered to the undersigned unless otherwise specified in the
instructions below.
A-5
<PAGE>
Dated:
Name ___________________________
(Please Print)
_________________________
(Insert Social Security
or Other Identifying
Number of Holder)
Address ________________________
________________________________
________________________________
Signature (Signature must conform in all respects to
name of holder as specified on the face of the Warrant
Certificate and 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 Warrant Agent, 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 Warrant Agent in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
This Warrant may be exercised at the following addresses:
By hand at _______________________________
_______________________________
_______________________________
By mail at _______________________________
_______________________________
_______________________________
(Instructions as to form and delivery of certificates representing shares of
Stock and/or Warrant Certificates):
A-6
<PAGE>
[FORM OF ASSIGNMENT]
(TO BE EXECUTED TO TRANSFER
THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED ____________________________ hereby sells, assigns
and transfers unto
----------------------------------------
Please print name and address
(including zip code)
Please insert social security or
other identifying number
______________________
_________________________________________________________
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint __________, Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution.
Dated:
___________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate and 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 Warrant Agent, 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 Warrant Agent in addition
to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.)]
Signature Guaranteed:
_________________________
A-7
<PAGE>
Exhibit 4.12
FORM OF DEBT SECURITIES WARRANT AGREEMENT
- --------------------------------------------------------------------------------
McKESSON CORPORATION
and
____________________
As Warrant Agent
_________________
WARRANT AGREEMENT
Dated as of _________ __, ____
_________________
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS/1/
<TABLE>
<CAPTION>
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<S> <C>
Parties................................................................................ 1
Recitals............................................................................... 1
ARTICLE I
ISSUANCE, EXECUTION AND COUNTERSIGNATURE
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates.......................................... 2
Section 1.2 Form of Warrant Certificates.............................................. 2
Section 1.3 Execution and Authentication of Warrant Certificates...................... 2
Section 1.4 Temporary Warrant Certificates............................................ 3
Section 1.5 Payment of Taxes.......................................................... 4
Section 1.6 Definition of Holder...................................................... 4
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price............................................................. 4
Section 2.2 Duration of Warrants...................................................... 5
Section 2.3 Exercise of Warrants...................................................... 5
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 [Call of Warrants by the Corporation]..................................... 6
</TABLE>
- ----------------------
/1/ The Table of Contents is not a part of the Warrant Agreement.
i
<PAGE>
<TABLE>
<CAPTION>
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----
<S> <C>
ARTICLE IV
[REGISTRATION,] EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 [Registration,] Exchange and Transfer of Warrant Certificates............. 6
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant Certificates................. 7
Section 4.3 Persons Deemed Owners..................................................... 8
Section 4.4 Cancellation of Warrant Certificates...................................... 8
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Holders of Warrant Debt Securities Conferred by
Warrants or Warrant Certificates..................................... 9
Section 5.2 Holder of Warrant Certificate May Enforce Rights.......................... 9
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent............................................................. 9
Section 6.2 Conditions of Warrant Agent's Obligations................................. 9
Section 6.3 Resignation, Removal and Appointment of Successor......................... 11
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Corporation and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions.............. 13
Section 7.2 Rights and Duties of Successor Corporation................................ 13
Section 7.3 Amendment................................................................. 13
Section 7.4 Notice and Demands to the Corporation and Warrant Agent................... 14
Section 7.5 Notices to Warrant Holders................................................ 14
Section 7.6 Addresses................................................................. 14
Section 7.7 Governing Law............................................................. 14
Section 7.8 Delivery of Prospectus.................................................... 14
</TABLE>
ii
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<TABLE>
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----
<S> <C>
Section 7.9 Obtaining of Governmental Approvals....................................... 15
Section 7.10 Persons Having Rights under Warrant Agreement............................. 15
Section 7.11 Headings.................................................................. 15
Section 7.12 Counterparts.............................................................. 15
Section 7.13 Inspection of Agreement................................................... 15
</TABLE>
Exhibit A - Form of Warrant Certificate
iii
<PAGE>
THIS WARRANT AGREEMENT, dated as of __________,____, between McKesson
Corporation, a corporation duly organized and existing under the laws of the
State of Delaware (the "Corporation") and _____________________, a [corporation]
[national banking association] organized and existing under the laws of
_______________, as Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Corporation has entered into an Indenture (the
"Indenture") dated as of ____________, ____ with [ ] as
trustee (such trustee, and any successors to such trustee, herein called the
"Trustee"), providing for the issuance from time to time, in one or more series,
of its [Senior] [Senior Subordinated] [Subordinated] [Junior Subordinated] Debt
Securities; and
WHEREAS, the Corporation proposes to sell [If Offered Debt Securities
--------------------------
and Warrants -- [title of Debt Securities being offered] (the "Offered Debt
- ------------
Securities") with] warrant certificates (such warrant certificates and other
warrant certificates issued pursuant to this Agreement herein called the
"Warrant Certificates") evidencing one or more warrants ("Warrants" or,
individually, a "Warrant") representing the right to purchase [title of Debt
Securities purchasable through exercise of Warrants] (the "Warrant Debt
Securities"); and
WHEREAS, the Corporation desires the Warrant Agent to act on behalf of
the Corporation, and the Warrant Agent is willing to so act, in connection with
the issuance, exchange, exercise and replacement of the Warrant Certificates,
and in this Agreement wishes to set forth, among other things, the form and
provisions of the Warrant Certificates and the terms and conditions on which
they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
1
<PAGE>
ARTICLE I
ISSUANCE, EXECUTION AND COUNTERSIGNATURE
OF WARRANT CERTIFICATES
Section 1.1 Issuance of Warrant Certificates. [If Warrants alone --
-------------------------------- -----------------
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If Offered Debt Securities and Warrants -- Warrant Certificates shall be
- ----------------------------------------
[initially] issued in units with the Offered Debt Securities and shall [not] be
separately transferable [before ____________,____ (the "Detachable Date")].
Each such unit shall consist of a Warrant Certificate or Certificates evidencing
an aggregate of ____ Warrants for each $___________ principal amount of Offered
Debt Securities.] Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase Warrant Debt
Securities in the aggregate principal amount of $________.
Section 1.2 Form of Warrant Certificates. The Warrant Certificates
----------------------------
(including the Form[s] of Exercise [and Assignment] to be set forth on the
reverse thereof) shall be in substantially the form set forth in Exhibit A
hereto, shall be printed, lithographed or engraved on steel engraved borders (or
in any other manner determined by the officers executing such Warrant
Certificates, with the execution thereof by such officers conclusively
evidencing such determination) and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which the
Warrant Certificates may be listed or as may, consistently herewith, be
determined by the officers executing such Warrant Certificates, with the
execution thereof by such officers conclusively evidencing such determination.
Section 1.3 Execution and Authentication of Warrant Certificates.
----------------------------------------------------
The Warrant Certificates shall be executed on behalf of the Corporation by its
President and Chief Executive Officer, one of its Vice Presidents (any reference
to a Vice President of the Company herein shall be deemed to include any Vice
President of the Company whether or not designated by a number or a word or
words added before or after the title "Vice President"), its Treasurer or its
Controller under its corporate seal reproduced thereon attested to by its
Secretary or any Assistant Secretary. The signature of any of these officers on
the Warrant Certificates may be manual or facsimile.
Warrant Certificates evidencing the right to purchase an aggregate
principal amount not exceeding $____________ of Warrant Debt Securities (except
as provided in Sections 1.4, 2.3(c), 4.1 and 4.2) may be executed by the
Corporation and delivered to the Warrant Agent upon the execution of this
Warrant Agreement or from time to time thereafter.
2
<PAGE>
The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on
behalf of the Corporation, authenticate Warrant Certificates evidencing Warrants
representing the right to purchase up to $_____________ aggregate principal
amount of Warrant Debt Securities and shall deliver such Warrant Certificates to
or upon the order of the Corporation. Subsequent to such original issuance of
the Warrant Certificates, the Warrant Agent shall authenticate a Warrant
Certificate only if the Warrant Certificate is issued in exchange or
substitution for one or more previously authenticated Warrant Certificates [If
--
registered Warrants -- or in connection with their transfer], as hereinafter
- -------------------
provided.
Each Warrant Certificate shall be dated the date of its authentication
by the Warrant Agent.
No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby shall be exercisable, until such Warrant Certificate has been
authenticated by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Corporation shall
be conclusive evidence, and the only evidence, that the Warrant Certificate so
authenticated has been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at the time the proper officers of the Corporation shall
bind the Corporation, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Warrant Certificates or did not hold such offices at the date of such Warrant
Certificates.
Section 1.4 Temporary Warrant Certificates. Pending the preparation
------------------------------
of definitive Warrant Certificates, the Corporation may execute, and upon the
order of the Corporation the Warrant Agent shall authenticate and deliver,
temporary Warrant Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced, substantially of the tenor of the
definitive Warrant Certificates in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Warrant Certificates may determine, with the execution
thereof by such officers conclusively evidencing such determination.
If temporary Warrant Certificates are issued, the Corporation will
cause definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary
Warrant Certificates shall be exchangeable for definitive Warrant Certificates
upon surrender of the temporary Warrant Certificates at the corporate trust
office of the Warrant Agent [or ], without charge to the Holder (as
defined in Section 1.6 below). Upon surrender for cancellation of any one or
more temporary
3
<PAGE>
Warrant Certificates the Corporation shall execute and the Warrant Agent shall
authenticate and deliver in exchange therefor definitive Warrant Certificates
representing the same aggregate number of Warrants. Until so exchanged, the
temporary Warrant Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Warrant Certificates.
Section 1.5 Payment of Taxes. The Corporation will pay all stamp
----------------
taxes and other duties, if any, to which, under the laws of the United States of
America or any State or political subdivision thereof, this Agreement or the
original issuance of the Warrant Certificates may be subject.
Section 1.6 Definition of Holder. The term "Holder" as used herein
--------------------
shall mean [If Offered Debt Securities and Warrants which are not immediately
-----------------------------------------------------------------
detachable --, prior to the Detachable Date, the registered owner of the Offered
- ----------
Debt Security to which such Warrant Certificate was initially attached, and,
after such Detachable Date,] [if bearer Warrants, the bearer of such Warrant
Certificates] [if registered Warrants, the person in whose name at the time such
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose pursuant to Section 4.1]. [If Offered Debt
---------------
Securities and Warrants which are not immediately detachable -- Prior to the
- ------------------------------------------------------------
Detachable Date, the Corporation will, or will cause the registrar of the
Offered Debt Securities to, make available to the Warrant Agent current
information as to Holders of the Offered Debt Securities.]
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
Section 2.1 Warrant Price. During the period from ____________, ____
-------------
through and including ____________, ____, each Warrant shall entitle the Holder
thereof, subject to the provisions of this Agreement, to purchase from the
Corporation the principal amount of Warrant Debt Securities stated in the
Warrant Certificate at the exercise price of __% of the principal amount thereof
[plus accrued amortization, if any, of the original issue discount of the
Warrant Debt Securities] [plus accrued interest, if any, from the most recent
date from which interest shall have been paid on the Warrant Debt Securities or,
if no interest shall have been paid on the Warrant Debt Securities, from
____________, ____]. [In each case, the original issue discount ($__________
for each $1,000 principal amount of Warrant Debt Securities) will be amortized
at a % annual rate, computed on a[n] [semi-]annual basis [using a 360-day
year consisting of twelve 30-day months].] Such exercise price of each Warrant
is referred to in this Agreement as the "Exercise Price."
4
<PAGE>
Section 2.2 Duration of Warrants. Any Warrant evidenced by a Warrant
--------------------
Certificate may be exercised at any time, as specified herein, on or after [the
date thereof] [__________, _______] and at or before 5:00 p.m. New York City
time on ____________, ________ (the "Expiration Date"). Each Warrant not
exercised at or before the close of business on the Expiration Date shall become
void, and all rights of the Holder of the Warrant Certificate evidencing such
Warrant under this Agreement or otherwise shall cease.
Section 2.3 Exercise of Warrants. (a) During the period specified in
--------------------
Section 2.2, any whole number of Warrants may be exercised by surrendering the
Warrant Certificate evidencing such Warrants at the place or at the places set
forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, [in cash or by certified check or
official bank check in New York Clearing House funds] [by surrender of the
[specified aggregate amount of [identified securities]] [by bank wire transfer
in immediately available funds], of the Exercise Price for each Warrant
exercised. The date on which payment in full of the Exercise Price for a
Warrant and the duly executed and completed Warrant Certificate are received by
the Warrant Agent shall be deemed to be the date on which such Warrant is
exercised. The Warrant Agent shall deposit all funds received by it as payment
for the exercise of Warrants to the account of the Corporation maintained with
it for such purpose and shall advise the Corporation by telephone at the end of
each day on which such a payment is received of the amount so deposited to its
account. The Warrant Agent shall promptly confirm such telephonic advice to the
Corporation in writing.
(c) The Warrant Agent shall from time to time, as promptly as
practicable after the exercise of any Warrants in accordance with the terms and
conditions of this Agreement and the Warrant Certificates, advise the
Corporation and the Trustee of (i) the number of Warrants so exercised, (ii) the
instructions of each Holder of the Warrant Certificates evidencing such Warrants
with respect to delivery of the Warrant Debt Securities to which such Holder is
entitled upon such exercise, and instructions of such Holder as to delivery of
Warrant Certificates evidencing the balance, if any, of the Warrants remaining
after such exercise, and (iii) such other information as the Corporation or the
Trustee shall reasonably require.
(e) As soon as practicable after the exercise of any Warrants, the
Corporation shall issue, pursuant to the Indenture, in authorized denominations,
to or upon the order of the Holder of the Warrant Certificate evidencing such
Warrants, the Warrant Debt Security or Warrant Debt Securities to which such
Holder is entitled in fully registered form, registered in such name or names as
may be directed by such Holder; and, if fewer than all of the Warrants evidenced
by such Warrant Certificate were exercised, the Corporation shall execute
5
<PAGE>
and an authorized officer of the Warrant Agent shall manually authenticate and
deliver a new Warrant Certificate evidencing the number of Warrants remaining
unexercised.
(g) The Corporation shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with any
transfer involved in the issue of the Warrant Debt Securities; and in the event
that any such transfer is involved, the Corporation shall not be required to
issue or deliver any Warrant Debt Securities until such tax or other charge
shall have been paid or it has been established to the Corporation's
satisfaction that no such tax or other charge is due.
ARTICLE III
OTHER TERMS OF WARRANTS
Section 3.1 [Call of Warrants by the Corporation. If Warrants issued
----------------------------------- ------------------
hereunder are callable by the Corporation -- The Corporation shall have the
- -----------------------------------------
right to call and repurchase any or all Warrants on or after ________, ____ (the
"Call Date") and upon the occurrence of [describe events or circumstances under
which Corporation may call the Warrants] (the "Call Terms") at a price of
$ ________ per Warrant (the "Call Price"). Notice of such Call Price, Call Date
and Call Terms shall be given to registered holders of Warrants in the manner
provided in Section 7.5.]
ARTICLE IV
[REGISTRATION,] EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
Section 4.1 [Registration,] Exchange and Transfer of Warrant
------------------------------------------------
Certificates. [If registered Warrants -- The Warrant Agent shall keep, at its
- ------------ -----------------------
corporate trust office [and at _____________], books in which, subject to such
reasonable regulations as it may prescribe, it shall register Warrant
Certificates and transfers of outstanding Warrant Certificates].
[If Offered Debt Securities and Warrants which are not immediately
------------------------------------------------------------------
detachable -- Prior to the Detachable Date, a Warrant Certificate may be
- ----------
exchanged or transferred only together with the Offered Debt Security to which
such Warrant Certificate was initially attached, and only for the purpose of
effecting, or in conjunction with, an exchange or transfer of such Offered Debt
Security. Additionally, on or prior to the Detachable Date, each transfer or
exchange of an Offered Debt Security [on the register of the Offered Debt
Securities] shall
6
<PAGE>
operate also to transfer or exchange the Warrant Certificate or Certificates to
which such Offered Debt Security was initially attached. After the Detachable
Date, upon] [If Offered Debt Securities and Warrants which are immediately
-------------------------------------------------------------
detachable or if Warrants alone -- Upon] surrender at the corporate trust office
- -------------------------------
of the Warrant Agent [or _______________] of Warrant Certificates properly
endorsed [or accompanied by appropriate instruments of transfer] and accompanied
by written instructions for [transfer or] exchange, all in a form satisfactory
to the Corporation and the Warrant Agent, such Warrant Certificates may be
exchanged for other Warrant Certificates [If registered Warrants -- or may
----------------------
be transferred in whole or in part]; provided that Warrant Certificates issued
in exchange for [or upon transfer of] surrendered Warrant Certificates shall
evidence the same aggregate number of Warrants as the Warrant Certificates so
surrendered. No service charge shall be made for any exchange [or transfer] of
Warrant Certificates, but the Corporation may require payment of a sum
sufficient to cover any stamp or other tax or governmental charge that may be
imposed in connection with any such exchange [or transfer]. Whenever any Warrant
Certificates are so surrendered for exchange [or transfer], the Corporation
shall execute and an authorized officer of the Warrant Agent shall manually
authenticate and deliver to the person or persons entitled thereto a Warrant
Certificate or Warrant Certificates as so requested. The Warrant Agent shall not
be required to effect any exchange [or transfer] which would result in the
issuance of a Warrant Certificate evidencing a fraction of a Warrant or a number
of full Warrants and a fraction of a Warrant. All Warrant Certificates issued
upon any exchange [or transfer] of Warrant Certificates shall evidence the same
obligations, and be entitled to the same benefits under this Agreement, as the
Warrant Certificates surrendered for such exchange [or transfer].
Section 4.2 Mutilated, Destroyed, Lost or Stolen Warrant
--------------------------------------------
Certificates. If any mutilated Warrant Certificate is surrendered to the
- ------------
Warrant Agent, the Corporation shall execute and an officer of the Warrant Agent
shall manually authenticate and deliver in exchange therefor a new Warrant
Certificate of like tenor and bearing a number not contemporaneously
outstanding. If there shall be delivered to the Corporation and the Warrant
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Warrant Certificate and of the ownership thereof and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Corporation or
the Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Corporation shall execute and upon its request an officer of the
Warrant Agent shall manually authenticate and deliver, in lieu of any such
destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of like
tenor and bearing a number not contemporaneously outstanding. Upon the issuance
of any new Warrant Certificate under this Section, the Corporation 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 Warrant Agent) connected therewith. Every new Warrant
Certificate issued pursuant to this Section in lieu of any destroyed, lost or
stolen Warrant Certificate
7
<PAGE>
shall evidence an original additional contractual obligation of the Corporation,
whether or not the destroyed, lost or stolen Warrant Certificate shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Warrant
Certificates duly issued hereunder. The provisions of this Section are exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Warrant Certificates.
Section 4.3 Persons Deemed Owners. [If Offered Debt Securities and
--------------------- ------------------------------
Warrants which are not immediately detachable -- Prior to the Detachable Date,
- ---------------------------------------------
the Corporation, the Warrant Agent and all other persons may treat the
registered owner of any Offered Debt Security as the owner of the Warrant
Certificates initially attached thereto for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced by such
Warrant Certificates, any notice to the contrary notwithstanding. After the
Detachable Date,] [If registered Warrants -- and prior to due presentment of a
----------------------
Warrant Certificate for registration of transfer, the] [If Offered Debt
---------------
Securities and Warrants which are immediately detachable or Warrants alone --
- --------------------------------------------------------------------------
The] Corporation, the Warrant Agent and all other persons may treat the Holder
as the owner thereof for any purpose and as the person entitled to exercise the
rights represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.
Section 4.4 Cancellation of Warrant Certificates. Any Warrant
------------------------------------
Certificate surrendered for exchange [, transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Corporation, be delivered to the
Warrant Agent, and [If Warrant Certificates are issued in bearer form -- ,
--------------------------------------------------
except as provided below,] all Warrant Certificates surrendered or so delivered
to the Warrant Agent shall be promptly cancelled by it and shall not be reissued
and, except as expressly permitted by this Agreement, no Warrant Certificate
shall be issued hereunder in lieu or in exchange thereof. [If Warrant
----------
Certificates are issued in bearer form -- Warrant Certificates delivered to the
- --------------------------------------
Warrant Agent in exchange for Warrant Certificates of other denominations may be
retained by the Warrant Agent for reissue as authorized hereunder.] The
Corporation may at any time deliver to the Warrant Agent for cancellation any
Warrant Certificates previously issued hereunder which the Corporation may have
acquired in any manner whatsoever, and all Warrant Certificates so delivered
shall be promptly cancelled by the Warrant Agent. All cancelled Warrant
Certificates held by the Warrant Agent shall be disposed of, as instructed by
the Corporation, subject to applicable law.
8
<PAGE>
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights as Holders of Warrant Debt Securities Conferred
---------------------------------------------------------
by Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced
- -----------------------------------
thereby shall entitle the Holder thereof to any of the rights of a Holder of the
Warrant Debt Securities, including, without limitation, the right to receive the
payment of principal of (or premium, if any) or interest, if any, on the Warrant
Debt Securities or to enforce any of the covenants in the Indenture.
Section 5.2 Holder of Warrant Certificate May Enforce Rights.
------------------------------------------------
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the
holder of any Warrant Debt Securities or the Holder of any other Warrant
Certificate, may, on its own behalf and for its own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Corporation
suitable to enforce or otherwise in respect of its right to exercise the Warrant
or Warrants evidenced by his or her Warrant Certificate in the manner provided
in the Warrant Certificates and in this Agreement.
ARTICLE VI
CONCERNING THE WARRANT AGENT
Section 6.1 Warrant Agent. The Corporation hereby appoints
-------------
________________________ as Warrant Agent of the Corporation in respect of the
Warrants and the Warrant Certificates upon the terms and subject to the
conditions herein set forth, and ____________________________ hereby accepts
such appointment. The Warrant Agent shall have the power and authority granted
to and conferred upon it in the Warrant Certificates and hereby and such further
power and authority to act on behalf of the Corporation as the Corporation may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such power and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
Section 6.2 Conditions of Warrant Agent's Obligations. The Warrant
-----------------------------------------
Agent accepts its obligations herein set forth, upon the terms and conditions
hereof, including the following, to all of which the Corporation agrees and to
all of which the rights hereunder of the Holders from time to time of the
Warrant Certificates shall be subject:
9
<PAGE>
(a) Compensation and Indemnification. The Corporation agrees promptly
--------------------------------
to pay the Warrant Agent the compensation to be agreed upon with the Corporation
for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including reasonable counsel fees)
incurred by the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Corporation also agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Warrant Agent, arising out of
or in connection with its acting as such Warrant Agent hereunder, including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance at any time of its powers or
duties hereunder. The obligations of the Corporation under this subsection (a)
shall survive the exercise of the Warrant Certificates and the resignation or
removal of the Warrant Agent.
(b) Agent for the Corporation. In acting under this Warrant
-------------------------
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Corporation and does not assume any obligation or
relationship of agency or trust for or with any of the owners or Holders of the
Warrant Certificates.
(c) Counsel. The Warrant Agent may consult with counsel, which may
-------
include counsel for the Corporation, and the written advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(d) Documents. The Warrant Agent shall be protected and shall incur
---------
no liability for or in respect of any action taken or omitted by it in reliance
upon any notice, direction, consent, certificate, affidavit, statement or other
paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, any of its officers,
--------------------
directors and employees, or any other agent of the Corporation, in its
individual or any other capacity, may become the owner of, or acquire any
interest in, any Warrant Certificates, with the same rights that it would have
if it were not such Warrant Agent, officer, director, employee or other agent,
and, to the extent permitted by applicable law, it may engage or be interested
in any financial or other transaction with the Corporation and may act on, or as
depositary, trustee or agent for, any committee or body of holders of Warrant
Debt Securities or other obligations of the Corporation as freely as if it were
not such Warrant Agent, officer, director, employee or other agent. Nothing in
this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting
as Trustee under the Indenture.
10
<PAGE>
(f) No Liability for Interest. The Warrant Agent shall not be under
-------------------------
any liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates unless
otherwise agreed to in writing by the Corporation and the Warrant Agent and
except for the negligence of the Warrant Agent.
(g) No Liability for Invalidity. The Warrant Agent shall not incur
---------------------------
any liability with respect to the validity of this Agreement or any of the
Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent shall
-------------------------------------
not be responsible for any of the recitals or representations contained herein
or in the Warrant Certificates (except as to the Warrant Agent's Certificate of
Authentication thereon), all of which are made solely by the Corporation.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
----------------------
perform such duties as are herein and in the Warrant Certificates specifically
set forth and no implied duties or obligations shall be read into this Agreement
or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall
not be under any obligation to take any action hereunder which may tend to
involve it in any expense or liability, the payment of which within a reasonable
time is not, in its reasonable opinion, assured to it. The Warrant Agent shall
not be accountable or under any duty or responsibility for the use by the
Corporation of any of the Warrant Certificates authenticated by the Warrant
Agent and delivered by it to the Corporation pursuant to this Agreement or for
the application by the Corporation of the proceeds of the Warrant Certificates
or any exercise of the Warrants evidenced thereby. The Warrant Agent shall have
no duty or responsibility in case of any default by the Corporation in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the Warrant Debt Securities or in the case of the receipt of
any written demand from a Holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceeding at law or
otherwise or, except as provided in Section 7.4 hereof, to make any demand upon
the Corporation.
Section 6.3 Resignation, Removal and Appointment of Successor. (a)
-------------------------------------------------
The Corporation agrees, for the benefit of the Holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent hereunder
until all of the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Corporation of such intention on its part, specifying the
date on which it desires its resignation to become effective; provided that,
without the consent of the Corporation, such date shall not be less than three
months after the date on which such notice is given.
11
<PAGE>
The Warrant Agent hereunder may be removed at any time by the filing with it of
an instrument in writing signed by or on behalf of the Corporation and
specifying such removal and the date on which the Corporation expects such
removal to become effective. Such resignation or removal shall take effect upon
the appointment by the Corporation of a successor Warrant Agent (which shall be
a bank or trust company organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia and
authorized under such laws to exercise corporate trust powers) by an instrument
in writing filed with such successor Warrant Agent and the acceptance of such
appointment by such successor Warrant Agent pursuant to Section 6.3(d).
(c) In case at any time the Warrant Agent shall resign, or be
removed, or shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or shall file a voluntary petition in bankruptcy or make an
assignment for the benefit of its creditors or consent to the appointment of a
receiver or custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property
shall be appointed, or if an order of any court shall be entered approving any
petition filed by or against it under the provisions of any applicable
bankruptcy or similar law, or if any public officer shall have taken charge or
control of the Warrant Agent or of its property or affairs, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Corporation by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
latter of such appointment, the Warrant Agent so superseded shall cease to be
Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Corporation an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Warrant Agent, provided that it shall be qualified as aforesaid,
12
<PAGE>
shall be the successor Warrant Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Consolidations and Mergers of the Corporation and Sales,
--------------------------------------------------------
Leases and Conveyances Permitted Subject to Certain Conditions. To the extent
- --------------------------------------------------------------
permitted in the Indenture, the Corporation may consolidate with, or sell or
convey all or substantially all of its assets to, or merge with or into any
other corporation.
Section 7.2 Rights and Duties of Successor Corporation. In case of
------------------------------------------
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Corporation, with the same effect as if it
had been named herein, and the predecessor corporation, except in the event of a
lease, shall be relieved of any further obligation under this Agreement and the
Warrants. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Corporation, any or all of
the Warrant Debt Securities issuable pursuant to the terms hereof. All the
Warrant Debt Securities so issued shall in all respects have the same legal rank
and benefit under the Indenture as the Warrant Debt Securities theretofore or
thereafter issued in accordance with the terms of this Agreement and the
Indenture.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Warrant Debt Securities thereafter to be issued as may be appropriate.
Section 7.3 Amendment. This Agreement [and the Indenture] may be
---------
amended by the parties hereto, without the consent of the Holder of any Warrant
Certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective provision contained herein, or making such
provisions in regard to matters or questions arising under this Agreement [or
the Indenture] as the Corporation may deem necessary or desirable; provided that
such action shall not adversely affect the interests of the Holders of the
Warrant Certificates in any material respect. Any amendment or supplement to
this Agreement[, the Indenture] or the Warrants that has a material adverse
effect on the interests of Holders of any series of Warrants shall require the
written consent of Holders of a majority of the then outstanding Warrants of
such series [(provided that if Warrant Debt Securities have been issued, then
the consent of Holders of a majority of the then outstanding Warrants of such
13
<PAGE>
series and the Warrant Debt Securities voting as a class shall instead be
required)]. The consent of each Holder of a Warrant affected shall be required
for any amendment pursuant to which the Warrant Price would be increased or the
number of Debt Securities purchasable upon exercise of Warrants would be
decreased. The Warrant Agent may, but shall not be obligated to, enter into any
amendment to this Agreement which affects the Warrant Agent's own rights, duties
or immunities under this Agreement or otherwise.
Section 7.4 Notice and Demands to the Corporation and Warrant Agent.
-------------------------------------------------------
If the Warrant Agent shall receive any notice or demand addressed to the
Corporation by the Holder of a Warrant Certificate pursuant to the provisions of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Corporation.
Section 7.5 Notices to Warrant Holders. Pursuant to Sections 3.1 [add
-------- ---------------------------
other sections as applicable], the Corporation shall cause written notice of
such Call Price, Call Date and Call Terms [reference other items as applicable],
as the case may be, to be given as soon as practicable to the Warrant Agent and
to each of the registered holders of the Warrant Certificates by first class
mail, postage prepaid, at such holder's address appearing on the Warrant
Register. In addition to the written notice referred to in the preceding
sentence, the Corporation shall make a public announcement in a daily morning
newspaper of general circulation in __________ of such Call Price, Call Date,
and Call Terms [reference other items as applicable], as the case may be, at
least once a week for two successive weeks prior to the implementation of such
terms.
Section 7.6 Addresses. Any communications from the Corporation to the
---------
Warrant Agent with respect to this Agreement shall be addressed to ____________,
Attention: ___________________, and any communications from the Warrant Agent
to the Corporation with respect to this Agreement shall be addressed to McKesson
Corporation, One Post Street, San Francisco, California 90071, Attention:
Corporate Secretary (or such other address as shall be specified in writing by
the Warrant Agent or by the Corporation).
SECTION 7.7 GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
-------------
ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.
Section 7.8 Delivery of Prospectus. The Corporation will furnish to
----------------------
the Warrant Agent sufficient copies of a prospectus, appropriately supplemented,
relating to the Warrant Debt Securities (the "Prospectus"), and the Warrant
Agent agrees that, upon the exercise of any Warrant Certificate, the Warrant
Agent will deliver to the person designated to
14
<PAGE>
receive Warrant Debt Securities, prior to or concurrently with the delivery of
such Securities, a Prospectus.
Section 7.9 Obtaining of Governmental Approvals. The Corporation will
-----------------------------------
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under United States Federal and
State laws (including, without limitation, to the extent required, the
maintenance of the effectiveness of a registration statement in respect of the
Warrant Debt Securities under the Securities Act of 1933, as amended), which may
be or become required in connection with the exercise of the Warrant
Certificates and the original issuance and delivery of the Warrant Debt
Securities.
Section 7.10 Persons Having Rights under Warrant Agreement. Nothing in
---------------------------------------------
this Agreement expressed or implied and nothing that may be inferred from any of
the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Corporation, the Warrant Agent
and the Holders of the Warrant Certificates any right, remedy or claim under or
by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement hereof; and all covenants, conditions, stipulations,
promises and agreements contained in this Agreement shall be for the sole and
exclusive benefit of the Corporation and the Warrant Agent and their successors
and of the Holders of the Warrant Certificates.
Section 7.11 Headings. The Article and Section headings herein and the
--------
Table of Contents are for convenience of reference only and shall not affect the
construction hereof.
Section 7.12 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
Section 7.13 Inspection of Agreement. A copy of this Agreement shall
-----------------------
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent [and at ____________] for inspection by the Holder of any
Warrant Certificate. The Warrant Agent may require such Holder to submit its
Warrant Certificate for inspection by it.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, and their respective corporate seal to be hereunto affixed and
attested, all as of the day and year first above written.
McKESSON CORPORATION
By______________________________________________
Name:
Title:
[SEAL]
Attest:
_______________________
[NAME OF WARRANT AGENT]
By______________________________________________
Name:
Title:
[SEAL]
Attest:
_______________________
[Assistant Secretary]
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[Face]
<TABLE>
<S> <C>
Form of Legend if Offered Debt [Prior to __________, this Warrant
- ------------------------------ Certificate may be transferred or
Securities with Warrants which are exchanged if and only if the [Title
- ---------------------------------- of Offered Debt Security] to which it
not immediately detachable: was initially attached is so
- -------------------------- transferred or exchanged.]
Form of Legend if Warrants are not [Prior to ____________, Warrants
- ---------------------------------- evidenced by this Warrant Certificate
immediately exercisable: cannot be exercised.]
- -----------------------
</TABLE>
EXERCISABLE ONLY IF AUTHENTICATED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER THE CLOSE OF BUSINESS ON _______, ____
McKESSON CORPORATION
Warrant Certificate representing
Warrants to purchase
[Title of Warrant Debt Securities]
as described herein
----------------------
No. _________ Warrants
This certifies that [the bearer is the] [_______________________ or
registered assigns is the registered] owner of the above indicated number of
Warrants, each Warrant entitling such [bearer [If Offered Debt Securities and
------------------------------
Warrants which are not immediately detachable --, subject to the bearer
- ---------------------------------------------
qualifying as a "Holder" of this Warrant Certificate, as hereinafter defined]
[registered owner] to purchase, at any time [after the close of business on
_________, ____, and] on or before the close of business on __________, ____,
$_______ principal amount of [Title of Warrant Debt Securities] (the "Warrant
Debt Securities") of
A - 1
<PAGE>
McKESSON Corporation (the "Corporation"), issued or to be issued under the
Indenture (as hereinafter defined), on the following basis./*/ [During the
period from ________, ____ through and including ________, ____, each Warrant
shall entitle the Holder thereof, subject to the provisions of the Warrant
Agreement (as defined below), to purchase from the Corporation the principal
amount of Warrant Debt Securities stated above in this Warrant Certificate at
the exercise price of ___% of the principal amount thereof [plus accrued
amortization, if any, of the original issue discount of the Warrant Debt
Securities] [plus accrued interest, if any, from the most recent date from which
interest shall have been paid on the Warrant Debt Securities or, if no interest
shall have been paid on the Warrant Debt Securities, from __________, ____]; [in
each case, the original issue discount ($________ for each $1,000 principal
amount of Warrant Debt Securities) will be amortized at a ___% annual rate,
computed on a[n] [semi-]annual basis[, using a 360-day year consisting of twelve
30-day months] [(the "Exercise Price")]. The Holder of this Warrant Certificate
may exercise the Warrants evidenced hereby, in whole or in part, by surrendering
this Warrant Certificate, with the purchase form set forth hereon duly
completed, accompanied [by payment in full, in lawful money of the United States
of America, [in cash or by certified check or official bank check in New York
Clearing House funds] [by bank wire transfer in immediately available funds]]
[by surrender of the [specified aggregate principal amount of [identified
securities]], the Exercise Price for each Warrant exercised, to the Warrant
Agent (as hereinafter defined), at the corporate trust office of [name of
Warrant Agent], or its successor as warrant agent (the "Warrant Agent") [or at
________,] at the addresses specified on the reverse hereof and upon compliance
with and subject to the conditions set forth herein and in the Warrant
Agreement. This Warrant Certificate may be exercised only for the purchase of
Warrant Debt Securities in the principal amount of [$1,000] or any integral
multiple thereof.
The term "Holder" as used herein shall mean [If Offered Debt
---------------
Securities and Warrants which are not immediately detachable -- , prior to
- ------------------------------------------------------------
___________, ____ (the "Detachable Date"), the registered owner of the
Corporation's [title of Offered Debt Securities] to which such Warrant
Certificate was initially attached, and after such Detachable Date,] [the bearer
of such Warrant Certificate] [the person in whose name at the time such Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.01 of the Warrant Agreement].
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Debt Securities in registered form. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the
- -----------------------------
/*/ Complete and modify the following provisions as appropriate to reflect the
terms of the Warrants and the Warrant Debt Securities.
A - 2
<PAGE>
[bearer] [registered owner] hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ____________, ____ (the "Warrant Agreement"),
between the Corporation and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office at the Warrant Agent [and at ____________].
The Warrant Debt Securities to be issued and delivered upon the
exercise of warrants evidenced by this Warrant Certificate will be issued under
and in accordance with an Indenture (the "Indenture"), dated as of ___________,
___ between the Corporation and ______________________________________________,
as trustee (such trustee, and any successors to such trustee, the "Trustee") and
will be subject to the terms and provisions contained in the Warrant Debt
Securities and in the Indenture. Copies of the Indenture, including the form of
the Warrant Debt Securities, are on file at the corporate trust office of the
Trustee [and at ____________________].
[If Offered Debt Securities and Warrants which are not immediately
-----------------------------------------------------------------
detachable -- Prior to ___________, ____ (the "Detachable Date"), this Warrant
- ----------
Certificate may be exchanged or transferred only together with the [title of
Offered Debt Security] (the "Offered Debt Security") to which this Warrant
Certificate was initially attached, and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Offered Debt Security.
Additionally, on or prior to the Detachable Date each transfer of such Offered
Debt Security on the register of the Offered Debt Securities shall operate also
to transfer this Warrant Certificate. After the Detachable Date, this] [If
--
Offered Debt Securities and Warrants which are immediately detachable or
- ------------------------------------------------------------------------
Warrants alone -- This] Warrant Certificate, and all rights hereunder, may be
- --------------
transferred [If bearer Warrants -- by delivery and the Corporation and the
------------------
Warrant Agent may treat the bearer hereof as the owner for all purposes] [If
--
registered Warrants -- when surrendered at the corporate trust office of the
- -------------------
Warrant Agent [or ___________] by the registered owner or his assigns, in person
or by an attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement].
[If Offered Debt Securities and Warrants which are not immediately
-----------------------------------------------------------------
detachable -- Except as provided in the immediately preceding paragraph, after]
- ----------
[If Offered Debt Securities and Warrants which are immediately detachable or
---------------------------------------------------------------------------
Warrants alone -- After] authentication by the Warrant Agent and prior to the
- --------------
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office at the Warrant Agent [or at
A - 3
<PAGE>
_______________] for Warrant Certificates representing the same aggregate number
of Warrants.
This Warrant Certificate shall not entitle the [bearer] [registered
owner] hereof to any of the rights of a [registered] [holder] of the Warrant
Debt Securities, including, without limitation, the right to receive payments of
principal (and premium, if any) or interest, if any, on the Warrant Debt
Securities or to enforce any of the covenants of the Indenture.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid or obligatory for any
purpose until authenticated by the Warrant Agent.
A - 4
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated:_______________
McKESSON CORPORATION
By:__________________________________________
Attest:
_____________________________
Certificate of Authentication
This is one of the Warrant Certificates referred to in the within-
mentioned Warrant Agreement.
_____________________________
As Warrant Agent
By:__________________________
Authorized Signature
A - 5
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this Warrant
Certificate must pay [in cash or by certified check or official bank check in
New York Clearing House funds or by bank wire transfer in immediately available
funds], the Exercise Price in full for each of the Warrants exercised, to
_______________, Corporate Trust Department, ______________, Attn: _____________
[or ________________], which payment should specify the name of the Holder of
this Warrant Certificate and the number of Warrants exercised by such Holder.
In addition, the Holder of this Warrant Certificate should complete the
information required below and present in person or mail by registered mail this
Warrant Certificate to the Warrant Agent at the addresses set forth below.
[FORM OF EXERCISE]
(To be executed upon exercise of Warrants.)
The undersigned hereby irrevocably elects to exercise ____ Warrants,
represented by this Warrant Certificate, to purchase $________ principal amount
of the [Title of Warrant Debt Securities] (the "Warrant Debt Securities") of
McKESSON Corporation and represents that he has tendered payment for such
Warrant Debt Securities [in cash or by certified check or official bank check in
New York Clearing House funds or by bank wire transfer in immediately available
funds] to the order of McKesson Corporation, c/o Treasurer, in the amount of
$_________ in accordance with the terms hereof. The undersigned requests that
said principal amount of Warrant Debt Securities be in fully registered form, in
the authorized denominations, registered in such names and delivered, all as
specified in accordance with the instructions set forth below.
If said principal amount of Warrant Debt Securities is less than all
of the Warrant Debt Securities purchasable hereunder, the undersigned requests
that a new Warrant Certificate representing the remaining balance of the
Warrants evidenced hereby be issued and delivered to the undersigned unless
otherwise specified in the instructions below.
A - 6
<PAGE>
Dated:
<TABLE>
<S> <C>
Name
__________________________________
______________________________________ Address
(Insert Social Security or Other _______________________________
Identifying Number of Holder) ______________________________________
Signature [If registered warrant --
---------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate and
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 Warrant Agent,
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 Warrant Agent in addition to, or
in substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.)]
</TABLE>
This Warrant may be exercised at the following addresses:
By hand at _______________________________
_______________________________
_______________________________
_______________________________
By mail at _______________________________
_______________________________
_______________________________
_______________________________
(Instructions as to form and delivery of Warrant Debt Securities and/or Warrant
Certificates):
A - 7
<PAGE>
[FORM OF ASSIGNMENT]
(TO BE EXECUTED TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED ____________________ hereby sells, assigns and
transfers unto
_________________________________________
(Please print name and
address including zip code)
Please insert social security or other
identifying number
______________________________
________________________________________________________________________________
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint ________________, Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution.
Dated:
__________________________________________________________
Signature
(Signature must conform in all respects to name of holder
as specified on the face of the Warrant Certificate and 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 Warrant Agent,
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 Warrant Agent in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
Signature Guaranteed:
____________________________
A - 8
<PAGE>
Exhibit 4.13
- --------------------------------------------------------------------------------
FORM
OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
MCKESSON FINANCING TRUST II
Dated as of [ ]
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................. 4
SECTION 2.2 Lists of Holders................................................................. 4
SECTION 2.3 Reports by the Preferred Guarantee Trustee....................................... 4
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.................................. 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................. 5
SECTION 2.6 Events of Default; Waiver........................................................ 5
SECTION 2.7 Event of Default; Notice......................................................... 5
SECTION 2.8 Conflicting Interests............................................................ 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee............................. 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.................................... 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee....... 9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee: Eligibility......................................... 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustee.............. 10
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................................................ 11
SECTION 5.2 Waiver of Notice and Demand...................................................... 11
SECTION 5.3 Obligations Not Affected......................................................... 12
SECTION 5.4 Rights of Holders................................................................ 12
SECTION 5.5 Guarantee of Payment............................................................. 13
SECTION 5.6 Subrogation...................................................................... 13
SECTION 5.7 Independent Obligations.......................................................... 13
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions....................................................... 13
SECTION 6.2 Subordination.................................................................... 14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...................................................................... 14
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation...................................................................... 15
SECTION 8.2 Indemnification.................................................................. 15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................................................... 16
SECTION 9.2 Amendments....................................................................... 16
SECTION 9.3 Notices.......................................................................... 16
SECTION 9.4 Benefit.......................................................................... 17
SECTION 9.5 Governing Law.................................................................... 17
</TABLE>
iii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of [ ], is executed and delivered by McKesson Corporation, a
Delaware corporation (the "Guarantor"), and [ ], as trustee (the
"Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
McKesson Financing Trust II, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of [ ], among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof up to [ ] preferred securities (the
"Preferred Securities"), having a liquidation amount of $[ ] per Preferred
Security designated the [ ] Preferred Securities.
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture) has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
1
<PAGE>
(b) terms defined in the Declaration as at the date of execution of this
Preferred Securities Guarantee have the same meaning when used in this Preferred
Securities Guarantee unless otherwise defined in this Preferred Securities
Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified; a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice versa.
"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person provided, however, that the Authorized Officer signing
an Officers' Certificate given pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting officer
of such Person.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at [ ], Attention:
[ ].
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" means (a) a failure by the Guarantor to perform any of
its payments or other obligations under this Preferred Securities Guarantee or
(b) if applicable, the failure by the Guarantor to deliver Common Stock upon an
appropriate election by a Holder of Preferred Securities to convert the
Preferred Securities into shares of Common Stock.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the
Declaration) that are required to be paid on such Preferred Securities to the
extent the Issuer shall have funds available therefor, (ii) the redemption price
(the "Redemption Price"), and all accrued and unpaid Distributions to the date
of redemption, to the extent the Issuer has funds available therefor, with
respect to any Preferred Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary dissolution, winding-up or
2
<PAGE>
termination of the Issuer (other than in connection with the redemption of all
of the Preferred Securities or the distribution of the Debt Securities to the
Holders in exchange for Preferred Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders of
Preferred Securities then outstanding upon the liquidation of the Issuer (in
either case, the "Liquidation Distribution"). If an Event of Default (as defined
in the Indenture) has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [ ], between the
Guarantor and [ ], as trustee.
"Majority in liquidation amount of the Preferred Securities" means, except
as provided in the terms of the Preferred Securities, or except as provided by
the Trust Indenture Act, a vote by Holder(s), voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Preferred 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.
"Preferred Guarantee Trustee" means [ ], until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Preferred Securities Guarantee and thereafter
means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
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"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) Upon its public offering pursuant to the registration requirements of
the Securities Act, this Preferred Securities Guarantee will be subject to the
provisions of the Trust Indenture Act that will be required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") (i) within 14 days
after each record date for payment of Distributions, as of such record date, and
(ii) at any other time, within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee, provided that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information (if any) as are required by Section 314 and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, the manner and at the times required by Section 314 of the Trust
Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee, transmit by mail, first class postage prepaid, to
the Holders, notices of all such Events of Default unless such defaults have
been cured before the giving of such notice, provided that the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice thereof, or a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of this Preferred Securities
Guarantee shall have obtained actual knowledge thereof.
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SECTION 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and succession of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and shall use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee,
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and the Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants
or obligations shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee 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 of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or re-registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee 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,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder.
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(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders and the signature of the Preferred
Guarantee Trustee or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to inquire as to
the authority of the Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions.
(xi) The Preferred Securities Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee: Eligibility.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), 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.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed
and has accepted such appointment by written instrument executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee
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Trustee has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Preferred Guarantee Trustee and delivered to
the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of resignation or removal, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders. The Guarantor will honor all obligations, if any,
relating to the conversion of the Preferred Securities into the Common Stock of
the Guarantor as set forth in the Declaration and the Indenture.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right or remedy to require a proceeding
first against the Issuer or any other Person before proceeding directly against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
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The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debt Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receiver ship, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities then outstanding have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or to direct the
exercise of any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
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(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a guarantee
payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of this Preferred Securities Guarantee for
such payment.
SECTION 5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if (i) the
Guarantor has exercised its option to defer interest payments on the Debt
Securities by extending the interest payment period and such extension period,
or any extension thereof, shall be continuing, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under this Preferred
Securities Guarantee or (iii) there shall have occurred and be continuing an
Event of Default under the Declaration or any
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event that, with the giving of notice or lapse of time or both, would constitute
an Event of Default under the Declaration, then the Guarantor shall not (a)
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire, or make any liquidation payment with respect to, any
of its capital stock or (b) make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities of the Guarantor
that rank pari passu with or junior in interest to the Debt Securities or make
any guarantee payment with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks pari passu
with or junior in interest to the Debt Securities (other than (i) as a result of
a reclassification of the capital stock of the Guarantor or the exchange or
conversion of one class or series of the capital stock of the Guarantor for
another class or series of the capital stock of the Guarantor, (ii) the purchase
of fractional interests in shares of the capital stock of the Guarantor pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in Common Stock of the Guarantor, (iv) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the Guarantee
and Common Securities Guarantee, (vi) purchases of Common Stock of the Guarantor
related to the issuance of Common Stock of the Guarantor or rights under any of
the Guarantor's benefit plans for its directors, officers or employees and (vii)
obligations under any dividend reinvestment and stock purchase plans).
SECTION 6.2 Subordination.
This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor (except any liabilities that may be pari
passu expressly by their terms), (ii) pari passu with the most senior preferred
or preference stock now or hereafter issued by the Guarantor and with any
guaranty now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor and (iii) senior
to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Preferred Securities Guarantee shall terminate as to each Holder upon
(i) full payment of the Redemption Price and accrued and unpaid distributions
with respect to all Preferred Securities, (ii) the distribution of the Common
Stock to such Holder upon the conversion of such Holder's Preferred Securities
into the Common Stock, (iii) the distribution of the Debt Securities to the
Holders of the Preferred Securities or (iv) full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer. This
Preferred Securities Guarantee shall terminate completely upon full payment of
the amounts payable in accordance with the Declaration. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sum paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VII
INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person 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 the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 8.2 shall survive the termination of
this Preferred Securities Guarantee or the resignation or removal of the
Preferred Guarantee Trustee.
When the Preferred Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity permitted
by Section 9.1 of the Indenture or any sale, transfer or lease of the
Guarantor's assets to another entity permitted by Section 9.1 of the Indenture,
the Guarantor may not assign its rights or delegate its obligations under this
Preferred Securities Guarantee without the prior approval of the holders of at
least a Majority in liquidation amount of the Preferred Securities then
outstanding.
SECTION 9.2 Amendments.
Except with respect to any changes that do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of the Preferred Securities then outstanding. The provisions of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 9.3 Notices.
All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee
Trustee's mailing address set forth below (or such other address as the
Preferred Guarantee Trustee may give notice of to the Holders of the Preferred
Securities):
Attention: [ ]
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(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities):
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
McKESSON CORPORATION, as Guarantor
By: ______________________________________
Name:
Title:
[ ], as Preferred Guarantee Trustee
By: ______________________________________
Name:
Title:
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Exhibit 4.14
- --------------------------------------------------------------------------------
FORM
OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
MCKESSON FINANCING TRUST III
Dated as of [ ]
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................. 4
SECTION 2.2 Lists of Holders................................................................. 4
SECTION 2.3 Reports by the Preferred Guarantee Trustee....................................... 4
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.................................. 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................. 5
SECTION 2.6 Events of Default; Waiver........................................................ 5
SECTION 2.7 Event of Default; Notice......................................................... 5
SECTION 2.8 Conflicting Interests............................................................ 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee............................. 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.................................... 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee....... 9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee: Eligibility......................................... 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustee.............. 10
</TABLE>
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<TABLE>
<S> <C>
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................................................ 11
SECTION 5.2 Waiver of Notice and Demand...................................................... 11
SECTION 5.3 Obligations Not Affected......................................................... 12
SECTION 5.4 Rights of Holders................................................................ 12
SECTION 5.5 Guarantee of Payment............................................................. 13
SECTION 5.6 Subrogation...................................................................... 13
SECTION 5.7 Independent Obligations.......................................................... 13
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions....................................................... 13
SECTION 6.2 Subordination.................................................................... 14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...................................................................... 14
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation...................................................................... 15
SECTION 8.2 Indemnification.................................................................. 15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................................................... 16
SECTION 9.2 Amendments....................................................................... 16
SECTION 9.3 Notices.......................................................................... 16
SECTION 9.4 Benefit.......................................................................... 17
SECTION 9.5 Governing Law.................................................................... 17
</TABLE>
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of [ ], is executed and delivered by McKesson Corporation, a
Delaware corporation (the "Guarantor"), and [ ], as trustee (the
"Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
McKesson Financing Trust III, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of [ ], among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof up to [ ] preferred securities (the
"Preferred Securities"), having a liquidation amount of $[ ] per Preferred
Security designated the [ ] Preferred Securities.
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture) has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
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(b) terms defined in the Declaration as at the date of execution of this
Preferred Securities Guarantee have the same meaning when used in this Preferred
Securities Guarantee unless otherwise defined in this Preferred Securities
Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified; a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice versa.
"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person provided, however, that the Authorized Officer signing
an Officers' Certificate given pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting officer
of such Person.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at [ ], Attention:
[ ].
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" means (a) a failure by the Guarantor to perform any of
its payments or other obligations under this Preferred Securities Guarantee or
(b) if applicable, the failure by the Guarantor to deliver Common Stock upon an
appropriate election by a Holder of Preferred Securities to convert the
Preferred Securities into shares of Common Stock.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the
Declaration) that are required to be paid on such Preferred Securities to the
extent the Issuer shall have funds available therefor, (ii) the redemption price
(the "Redemption Price"), and all accrued and unpaid Distributions to the date
of redemption, to the extent the Issuer has funds available therefor, with
respect to any Preferred Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary dissolution, winding-up or
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termination of the Issuer (other than in connection with the redemption of all
of the Preferred Securities or the distribution of the Debt Securities to the
Holders in exchange for Preferred Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders of
Preferred Securities then outstanding upon the liquidation of the Issuer (in
either case, the "Liquidation Distribution"). If an Event of Default (as defined
in the Indenture) has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [ ], between the
Guarantor and [ ], as trustee.
"Majority in liquidation amount of the Preferred Securities" means, except
as provided in the terms of the Preferred Securities, or except as provided by
the Trust Indenture Act, a vote by Holder(s), voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Preferred 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.
"Preferred Guarantee Trustee" means [ ], until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Preferred Securities Guarantee and thereafter
means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
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"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) Upon its public offering pursuant to the registration requirements of
the Securities Act, this Preferred Securities Guarantee will be subject to the
provisions of the Trust Indenture Act that will be required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") (i) within 14 days
after each record date for payment of Distributions, as of such record date, and
(ii) at any other time, within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee, provided that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information (if any) as are required by Section 314 and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, the manner and at the times required by Section 314 of the Trust
Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee, transmit by mail, first class postage prepaid, to
the Holders, notices of all such Events of Default unless such defaults have
been cured before the giving of such notice, provided that the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice thereof, or a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of this Preferred Securities
Guarantee shall have obtained actual knowledge thereof.
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SECTION 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and succession of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and shall use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee,
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and the Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants
or obligations shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee 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 of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or re-registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee 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,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder.
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(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders and the signature of the Preferred
Guarantee Trustee or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to inquire as to
the authority of the Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions.
(xi) The Preferred Securities Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee: Eligibility.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), 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.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed
and has accepted such appointment by written instrument executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee
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Trustee has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Preferred Guarantee Trustee and delivered to
the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of resignation or removal, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders. The Guarantor will honor all obligations, if any,
relating to the conversion of the Preferred Securities into the Common Stock of
the Guarantor as set forth in the Declaration and the Indenture.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right or remedy to require a proceeding
first against the Issuer or any other Person before proceeding directly against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
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The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debt Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receiver ship, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities then outstanding have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or to direct the
exercise of any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
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(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a guarantee
payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of this Preferred Securities Guarantee for
such payment.
SECTION 5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if (i) the
Guarantor has exercised its option to defer interest payments on the Debt
Securities by extending the interest payment period and such extension period,
or any extension thereof, shall be continuing, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under this Preferred
Securities Guarantee or (iii) there shall have occurred and be continuing an
Event of Default under the Declaration or any
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event that, with the giving of notice or lapse of time or both, would constitute
an Event of Default under the Declaration, then the Guarantor shall not (a)
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire, or make any liquidation payment with respect to, any
of its capital stock or (b) make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities of the Guarantor
that rank pari passu with or junior in interest to the Debt Securities or make
any guarantee payment with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks pari passu
with or junior in interest to the Debt Securities (other than (i) as a result of
a reclassification of the capital stock of the Guarantor or the exchange or
conversion of one class or series of the capital stock of the Guarantor for
another class or series of the capital stock of the Guarantor, (ii) the purchase
of fractional interests in shares of the capital stock of the Guarantor pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in Common Stock of the Guarantor, (iv) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the Guarantee
and Common Securities Guarantee, (vi) purchases of Common Stock of the Guarantor
related to the issuance of Common Stock of the Guarantor or rights under any of
the Guarantor's benefit plans for its directors, officers or employees and (vii)
obligations under any dividend reinvestment and stock purchase plans).
SECTION 6.2 Subordination.
This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor (except any liabilities that may be pari
passu expressly by their terms), (ii) pari passu with the most senior preferred
or preference stock now or hereafter issued by the Guarantor and with any
guaranty now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor and (iii) senior
to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Preferred Securities Guarantee shall terminate as to each Holder upon
(i) full payment of the Redemption Price and accrued and unpaid distributions
with respect to all Preferred Securities, (ii) the distribution of the Common
Stock to such Holder upon the conversion of such Holder's Preferred Securities
into the Common Stock, (iii) the distribution of the Debt Securities to the
Holders of the Preferred Securities or (iv) full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer. This
Preferred Securities Guarantee shall terminate completely upon full payment of
the amounts payable in accordance with the Declaration. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sum paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VII
INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person 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 the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 8.2 shall survive the termination of
this Preferred Securities Guarantee or the resignation or removal of the
Preferred Guarantee Trustee.
When the Preferred Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity permitted
by Section 9.1 of the Indenture or any sale, transfer or lease of the
Guarantor's assets to another entity permitted by Section 9.1 of the Indenture,
the Guarantor may not assign its rights or delegate its obligations under this
Preferred Securities Guarantee without the prior approval of the holders of at
least a Majority in liquidation amount of the Preferred Securities then
outstanding.
SECTION 9.2 Amendments.
Except with respect to any changes that do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of the Preferred Securities then outstanding. The provisions of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 9.3 Notices.
All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee
Trustee's mailing address set forth below (or such other address as the
Preferred Guarantee Trustee may give notice of to the Holders of the Preferred
Securities):
Attention: [ ]
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(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities):
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
McKESSON CORPORATION, as Guarantor
By: ______________________________________
Name:
Title:
[ ], as Preferred Guarantee Trustee
By: ______________________________________
Name:
Title:
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Exhibit 4.15
- --------------------------------------------------------------------------------
FORM
OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
MCKESSON FINANCING TRUST IV
Dated as of [ ]
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................. 4
SECTION 2.2 Lists of Holders................................................................. 4
SECTION 2.3 Reports by the Preferred Guarantee Trustee....................................... 4
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.................................. 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................. 5
SECTION 2.6 Events of Default; Waiver........................................................ 5
SECTION 2.7 Event of Default; Notice......................................................... 5
SECTION 2.8 Conflicting Interests............................................................ 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee............................. 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.................................... 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred Securities Guarantee....... 9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee: Eligibility......................................... 10
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustee.............. 10
</TABLE>
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<TABLE>
<S> <C>
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................................................ 11
SECTION 5.2 Waiver of Notice and Demand...................................................... 11
SECTION 5.3 Obligations Not Affected......................................................... 12
SECTION 5.4 Rights of Holders................................................................ 12
SECTION 5.5 Guarantee of Payment............................................................. 13
SECTION 5.6 Subrogation...................................................................... 13
SECTION 5.7 Independent Obligations.......................................................... 13
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions....................................................... 13
SECTION 6.2 Subordination.................................................................... 14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...................................................................... 14
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation...................................................................... 15
SECTION 8.2 Indemnification.................................................................. 15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................................................... 16
SECTION 9.2 Amendments....................................................................... 16
SECTION 9.3 Notices.......................................................................... 16
SECTION 9.4 Benefit.......................................................................... 17
SECTION 9.5 Governing Law.................................................................... 17
</TABLE>
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of [ ], is executed and delivered by McKesson Corporation, a
Delaware corporation (the "Guarantor"), and [ ], as trustee (the
"Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
McKesson Financing Trust IV, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of [ ], among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof up to [ ] preferred securities (the
"Preferred Securities"), having a liquidation amount of $[ ] per Preferred
Security designated the [ ] Preferred Securities.
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture) has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
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(b) terms defined in the Declaration as at the date of execution of this
Preferred Securities Guarantee have the same meaning when used in this Preferred
Securities Guarantee unless otherwise defined in this Preferred Securities
Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified; a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice versa.
"Authorized Officer" of a Person means any Person that is authorized to
legally bind such Person provided, however, that the Authorized Officer signing
an Officers' Certificate given pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting officer
of such Person.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at [ ], Attention:
[ ].
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" means (a) a failure by the Guarantor to perform any of
its payments or other obligations under this Preferred Securities Guarantee or
(b) if applicable, the failure by the Guarantor to deliver Common Stock upon an
appropriate election by a Holder of Preferred Securities to convert the
Preferred Securities into shares of Common Stock.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the
Declaration) that are required to be paid on such Preferred Securities to the
extent the Issuer shall have funds available therefor, (ii) the redemption price
(the "Redemption Price"), and all accrued and unpaid Distributions to the date
of redemption, to the extent the Issuer has funds available therefor, with
respect to any Preferred Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary dissolution, winding-up or
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termination of the Issuer (other than in connection with the redemption of all
of the Preferred Securities or the distribution of the Debt Securities to the
Holders in exchange for Preferred Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders of
Preferred Securities then outstanding upon the liquidation of the Issuer (in
either case, the "Liquidation Distribution"). If an Event of Default (as defined
in the Indenture) has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of [ ], between the
Guarantor and [ ], as trustee.
"Majority in liquidation amount of the Preferred Securities" means, except
as provided in the terms of the Preferred Securities, or except as provided by
the Trust Indenture Act, a vote by Holder(s), voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Preferred 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.
"Preferred Guarantee Trustee" means [ ], until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Preferred Securities Guarantee and thereafter
means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
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"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) Upon its public offering pursuant to the registration requirements of
the Securities Act, this Preferred Securities Guarantee will be subject to the
provisions of the Trust Indenture Act that will be required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") (i) within 14 days
after each record date for payment of Distributions, as of such record date, and
(ii) at any other time, within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee, provided that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information (if any) as are required by Section 314 and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, the manner and at the times required by Section 314 of the Trust
Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee, transmit by mail, first class postage prepaid, to
the Holders, notices of all such Events of Default unless such defaults have
been cured before the giving of such notice, provided that the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice thereof, or a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of this Preferred Securities
Guarantee shall have obtained actual knowledge thereof.
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SECTION 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and succession of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and shall use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee,
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and the Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants
or obligations shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Preferred Guarantee 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 of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or re-registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee 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,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder.
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(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders and the signature of the Preferred
Guarantee Trustee or its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required to inquire as to
the authority of the Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions.
(xi) The Preferred Securities Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee: Eligibility.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), 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.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Preferred Guarantee Trustee has been appointed
and has accepted such appointment by written instrument executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee
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Trustee has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Preferred Guarantee Trustee and delivered to
the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of resignation or removal, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders. The Guarantor will honor all obligations, if any,
relating to the conversion of the Preferred Securities into the Common Stock of
the Guarantor as set forth in the Declaration and the Indenture.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right or remedy to require a proceeding
first against the Issuer or any other Person before proceeding directly against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
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The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debt Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receiver ship, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities then outstanding have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or to direct the
exercise of any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
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(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a guarantee
payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of this Preferred Securities Guarantee for
such payment.
SECTION 5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if (i) the
Guarantor has exercised its option to defer interest payments on the Debt
Securities by extending the interest payment period and such extension period,
or any extension thereof, shall be continuing, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under this Preferred
Securities Guarantee or (iii) there shall have occurred and be continuing an
Event of Default under the Declaration or any
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event that, with the giving of notice or lapse of time or both, would constitute
an Event of Default under the Declaration, then the Guarantor shall not (a)
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire, or make any liquidation payment with respect to, any
of its capital stock or (b) make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities of the Guarantor
that rank pari passu with or junior in interest to the Debt Securities or make
any guarantee payment with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks pari passu
with or junior in interest to the Debt Securities (other than (i) as a result of
a reclassification of the capital stock of the Guarantor or the exchange or
conversion of one class or series of the capital stock of the Guarantor for
another class or series of the capital stock of the Guarantor, (ii) the purchase
of fractional interests in shares of the capital stock of the Guarantor pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in Common Stock of the Guarantor, (iv) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the Guarantee
and Common Securities Guarantee, (vi) purchases of Common Stock of the Guarantor
related to the issuance of Common Stock of the Guarantor or rights under any of
the Guarantor's benefit plans for its directors, officers or employees and (vii)
obligations under any dividend reinvestment and stock purchase plans).
SECTION 6.2 Subordination.
This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor (except any liabilities that may be pari
passu expressly by their terms), (ii) pari passu with the most senior preferred
or preference stock now or hereafter issued by the Guarantor and with any
guaranty now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor and (iii) senior
to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Preferred Securities Guarantee shall terminate as to each Holder upon
(i) full payment of the Redemption Price and accrued and unpaid distributions
with respect to all Preferred Securities, (ii) the distribution of the Common
Stock to such Holder upon the conversion of such Holder's Preferred Securities
into the Common Stock, (iii) the distribution of the Debt Securities to the
Holders of the Preferred Securities or (iv) full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer. This
Preferred Securities Guarantee shall terminate completely upon full payment of
the amounts payable in accordance with the Declaration. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sum paid under the Preferred Securities or under this Preferred
Securities Guarantee.
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ARTICLE VII
INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person 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 the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 8.2 shall survive the termination of
this Preferred Securities Guarantee or the resignation or removal of the
Preferred Guarantee Trustee.
When the Preferred Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity permitted
by Section 9.1 of the Indenture or any sale, transfer or lease of the
Guarantor's assets to another entity permitted by Section 9.1 of the Indenture,
the Guarantor may not assign its rights or delegate its obligations under this
Preferred Securities Guarantee without the prior approval of the holders of at
least a Majority in liquidation amount of the Preferred Securities then
outstanding.
SECTION 9.2 Amendments.
Except with respect to any changes that do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of the Preferred Securities then outstanding. The provisions of the
Declaration with respect to meetings of Holders apply to the giving of such
approval.
SECTION 9.3 Notices.
All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee
Trustee's mailing address set forth below (or such other address as the
Preferred Guarantee Trustee may give notice of to the Holders of the Preferred
Securities):
Attention: [ ]
16
<PAGE>
(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities):
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Attention: General Counsel
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
17
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
McKESSON CORPORATION, as Guarantor
By: ______________________________________
Name:
Title:
[ ], as Preferred Guarantee Trustee
By: ______________________________________
Name:
Title:
18
<PAGE>
Exhibit 4.18
________________________________________________________________________________
McKESSON CORPORATION
and
_________________________________,
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
____________
DEPOSIT AGREEMENT
____________
Dated as of ____________ ___, ___
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Parties....................................................................... 1
Recitals...................................................................... 1
ARTICLE I
DEFINITIONS
"Certificate of Designations"................................................. 1
"Certificate of Incorporation"................................................ 1
"Common Stock"................................................................ 1
"Company"..................................................................... 1
"Corporate Office"............................................................ 2
"Deposit Agreement"........................................................... 2
"Depositary".................................................................. 2
"Depositary Share"............................................................ 2
"Depositary's Agent".......................................................... 2
"New York Office"............................................................. 2
"Receipt"..................................................................... 2
"record holder"............................................................... 2
"Registrar"................................................................... 2
"Securities Act".............................................................. 2
"Stock"....................................................................... 3
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER,
REDEMPTION AND CONVERSION OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts.................................. 3
SECTION 2.02. Temporary Receipts............................................. 4
SECTION 2.03. Deposit of Stock; Execution and Delivery of Receipts
in Respect Thereof............................................. 4
SECTION 2.04. Redemption and Conversion of Stock............................. 5
SECTION 2.05. Register of Transfer of Receipts............................... 7
SECTION 2.06. Combination and Split-ups of Receipts.......................... 8
SECTION 2.07. Surrender of Receipts and Withdrawal of Stock.................. 8
</TABLE>
i
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<TABLE>
<S> <C>
SECTION 2.08. Limitations on Execution and Delivery, Transfer
Split-up, Combination, Surrender and Exchange of
Receipts and Withdrawal or Deposit of Stock.................. 9
SECTION 2.09. Lost Receipts, etc........................................... 9
SECTION 2.10. Cancellation and Destruction of Surrendered Receipts......... 10
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS
AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information............ 10
SECTION 3.02. Payment of Taxes or Other Governmental Charges............... 10
SECTION 3.03. Withholding.................................................. 11
SECTION 3.04. Representations and Warranties as to Stock................... 11
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01. Cash Distributions........................................... 11
SECTION 4.02. Distributions Other Than Cash................................ 12
SECTION 4.03. Subscription Rights, Preferences or Privileges............... 12
SECTION 4.04. Notice of Dividends, Fixing of Record Date for
Holders of Receipts.......................................... 13
SECTION 4.05. Voting Rights................................................ 13
SECTION 4.06. Changes Affecting Stock and Reclassifications,
Recapitalizations, etc....................................... 14
SECTION 4.07. Reports...................................................... 14
SECTION 4.08. Lists of Receipt Holders..................................... 14
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by
the Depositary; the Registrar................................ 15
SECTION 5.02. Prevention or Delay in Performance by the Depositary,
the Depositary's Agents, the Registrar or the Company........ 15
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Company........................ 16
SECTION 5.04. Resignation and Removal of the Depositary,
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Appointment of Successor Depositary.......................... 17
SECTION 5.05. Corporate Notices and Reports................................ 18
SECTION 5.06. Deposit of Stock by the Company.............................. 19
SECTION 5.07. Indemnification by the Company............................... 19
SECTION 5.08. Fees, Charges and Expenses................................... 19
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment.................................................... 19
SECTION 6.02. Termination.................................................. 20
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts................................................. 21
SECTION 7.02. Exclusive Benefits of Parties................................ 21
SECTION 7.03. Invalidity of Provisions..................................... 21
SECTION 7.04. Notices...................................................... 21
SECTION 7.05. Depositary's Agents.......................................... 22
SECTION 7.06. Holders of Receipts Are Parties.............................. 22
SECTION 7.07. Governing Law................................................ 22
SECTION 7.08. Headings..................................................... 23
EXHIBIT A................................................................... A-1
</TABLE>
iii
<PAGE>
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of ________ ___, ____, among McKesson
Corporation, a Delaware corporation, ___________________________, a ________
banking corporation, as Depositary, and all holders from time to time of
Receipts issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide as hereinafter set forth in
this Deposit Agreement, for the deposit of shares of Stock with the Depositary,
as agent for the beneficial owners of the Stock, for the purposes set forth in
this Deposit Agreement and for the issuance hereunder of the Receipts evidencing
Depositary Shares representing an interest in the Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form annexed as
Exhibit A to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:
"Certificate of Designations" shall mean the Certificate of
Designations establishing and setting forth the rights, preferences, privileges
and limitations of the Stock.
"Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation, as amended and restated from time to time, of the Company.
"Common Stock" shall mean the Company's Common Stock, par value $0.01
per share.
"Company" shall mean McKesson Corporation, a Delaware corporation, and
its successors.
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<PAGE>
"Corporate Office" shall mean the office of the Depositary in
__________, ______________ at which at any particular time its business in
respect of matters governed by this Deposit Agreement shall be administered,
which at the date of this Deposit Agreement is located at
______________________.
"Deposit Agreement" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time.
"Depositary" shall mean _________________________________, as
Depositary hereunder, and any successor as Depositary hereunder.
"Depositary Share" shall mean the rights evidenced by the Receipts
executed and delivered hereunder, including the interests in Stock granted to
holders of Receipts pursuant to the terms and conditions of the Deposit
Agreement. Each Depositary Share shall represent an interest in __________ of a
share of Stock deposited with the Depositary hereunder and the same
proportionate interest in any and all other property received by the Depositary
in respect of such share of Stock and held under this Deposit Agreement.
Subject to the terms of this Deposit Agreement, each record holder of a Receipt
evidencing a Depositary Share or Shares is entitled, proportionately, to all the
rights, preferences and privileges of the Stock represented by such Depositary
Share or Shares, including the dividend, voting and liquidation rights contained
in the Certificate of Designations, and to the benefits of all obligations and
duties of the Company in respect of the Stock under the Certificate of
Designations and the Certificate of Incorporation.
"Depositary's Agent" shall mean an agent appointed by the Depositary
as provided, and for the purposes specified, in Section 7.05.
"New York Office" shall mean the facility maintained by the Depositary
in the Borough of Manhattan, The City of New York for accepting, executing and
delivering Receipts and other instruments prior to processing such instruments
at the Corporate Office, which facility at the date of this Deposit Agreement is
located at ______________________.
"Receipt" shall mean a Depositary Receipt executed and delivered
hereunder, in substantially the form of Exhibit A hereto, evidencing Depositary
Share or Shares, as the same may be, amended from time to time in accordance
with the provisions hereof.
"record holder" or "holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books maintained by or on
behalf of the Depositary for such purpose.
"Registrar" shall mean any bank or trust company appointed to register
ownership and transfers of Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2
<PAGE>
"Stock" shall mean shares of the Company's ___________ Series
Preferred Stock, $0.01 par value.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER,
REDEMPTION AND CONVERSION OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts.
-----------------------------
Receipts shall be engraved or printed or lithographed on steel-
engraved borders and shall be substantially in the form set forth in Exhibit A
annexed to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided. Receipts shall be executed by the
Depositary by the manual signature of a duly authorized signatory of the
Depositary; provided, however, that such signature may be a facsimile if a
Registrar (other than the Depositary) shall have countersigned the Receipts by
manual signature of a duly authorized signatory of the Registrar. No Receipt
shall be entitled to any benefits under this Deposit Agreement or be valid or
obligatory for any purpose unless it shall have been executed as provided in the
preceding sentence. The Depositary shall record on its books each Receipt
executed as provided above and delivered as hereinafter provided. Receipts
bearing the facsimile signature of anyone who was at any time a duly authorized
officer of the Depositary shall bind the Depositary, notwithstanding that such
officer has ceased to hold such office prior to the delivery of such Receipts.
Receipts may be issued in denominations of any number of whole
Depositary Shares. All Receipts shall be dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Stock or the Depositary Shares may be listed
or to conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Receipts are subject by
reason of the date of issuance of the Stock or otherwise.
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer shall be transferable by delivery with the same effect as
in the case of a negotiable instrument; provided, however, that the Depositary
may, notwithstanding any notice to the contrary, treat the record holder thereof
at such time as the absolute owner thereof for the purpose of determining the
3
<PAGE>
person entitled to distributions of dividends or other distributions or to any
notice provided for in this Deposit Agreement and for all other purposes.
SECTION 2.02. Temporary Receipts.
------------------
Pending the preparation of definitive Receipts, the Depositary may,
upon written order of the Company, issue temporary Receipts substantially
identical to (and entitling the holders thereof to all the rights pertaining to)
the definitive Receipts but not in definitive form. Definitive Receipts will be
prepared thereafter without unreasonable delay, and such temporary Receipts will
be exchangeable for definitive Receipts at the Company's expense.
SECTION 2.03. Deposit of Stock; Execution and Delivery of Receipts in
-------------------------------------------------------
Respect Thereof.
- ---------------
Subject to the terms and conditions of this Deposit Agreement, the
Company or any holder of Stock may deposit such Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for the
Stock to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a properly executed instrument of transfer in form satisfactory
to the Depositary, together with (a) all such certifications as may be required
by the Depositary in accordance with the provisions of this Deposit Agreement
and (b) a written order of the Company or such holder, as the case may be,
directing the Depositary to execute and deliver to or upon the written order of
the person or persons stated in such order a Receipt or Receipts for the number
of Depositary Shares representing such deposited Stock.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary shall, as soon as transfer and registration can be
accomplished, present such certificate or certificates to the registrar and
transfer agent of the Stock for transfer and registration in the name of the
Depositary or its nominee of the Stock being deposited. Deposited Stock shall
be held by the Depositary in an account to be established by the Depositary at
the Corporate Office.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver, to or upon the order of the person or
persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section 2.03, a Receipt or Receipts for the number
of whole Depositary Shares representing the Stock so deposited and registered in
such name or names as may be requested by such person or persons. The
Depositary shall execute and deliver such Receipt or Receipts at the New York
Office, except that, at the request, risk and expense of any person requesting
such delivery and for the account of such person, such delivery may be made at
such other place as may be designated by such person. In each case, delivery
will be made only upon payment by such person to the Depositary of all taxes and
other governmental charges and any fees payable in connection with such deposit
and the transfer of the deposited Stock.
4
<PAGE>
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
SECTION 2.04. Redemption and Conversion of Stock.*
----------------------------------
Whenever the Company shall elect to redeem or be required to convert
shares of Stock into shares of Common Stock in accordance with the Certificate
of Designations, it shall (unless otherwise agreed in writing with the
Depositary) give the Depositary in its capacity as Depositary not less than 5
business days' prior notice of the proposed date of the mailing of a notice of
redemption or conversion of Stock and the simultaneous redemption or conversion
of the Depositary Shares representing the Stock to be redeemed or converted and
of the number of such shares of Stock held by the Depositary to be redeemed or
converted. The Depositary shall, as directed by the Company in writing, mail,
first class postage prepaid, notice of the redemption or conversion of Stock and
the proposed simultaneous redemption or conversion of the Depositary Shares
representing the Stock to be redeemed or converted, not less than 30 and not
more than 60 days prior to the date fixed for redemption or conversion of such
Stock and Depositary Shares, to the record holders of the Receipts evidencing
the Depositary Shares to be so redeemed or converted, at the addresses of such
holders as the same appear on the records of the Depositary; provided, that if
the effectiveness of a Merger or Consolidation (as defined in the Certificate of
Designations) makes it impracticable to provide at least 30 days' notice, the
Depositary shall provide such notice as soon as practicable prior to such
effectiveness. Any such notice shall also be published in the same manner as
notices of redemption or conversion of Stock are required to be published
pursuant to the Certificate of Designations. Notwithstanding the foregoing,
neither failure to mail or publish any such notice to one or more such holders
nor any defect in any notice shall affect the sufficiency of the proceedings for
redemption or conversion. The Company shall provide the Depositary with such
notice, and each such notice shall state: the redemption or conversion date; the
number of Depositary Shares to be redeemed or converted; if fewer than all the
Depositary Shares held by any holder are to be redeemed, the number of such
Depositary Shares held by such holder to be so redeemed; in the case of a call
for redemption, the call price payable upon redemption and the Current Market
Price (as defined in the Certificate of Designations to be used to calculate the
number of shares of Common Stock deliverable upon redemption; whether the
Company is exercising any option to deliver shares of Common Stock in lieu of
any cash consideration pursuant to the Certificate of Designations and the
Current Market Price to be used to calculate the number of such shares; the
place or places where Receipts evidencing Depositary Shares to be redeemed or
converted are to be surrendered for redemption or conversion; whether the
Company is depositing with a bank or trust company on or before the redemption
or conversion date, the shares of Common Stock and cash, if any, payable by the
Company and the proposed date of such deposit; the amount of accrued and unpaid
dividends payable per
- ---------------------
*
This section to be modified to discuss specific redemption or conversion
terms of the Stock, if any.
5
<PAGE>
share of Stock to be redeemed or converted to and including such redemption or
conversion date, as the case may be, and that dividends in respect of the Stock
represented by the Depositary Shares to be redeemed or converted will cease to
accrue on such redemption or conversion date (unless the Company shall default
in delivering shares of Common Stock and cash, if any, at the time and place
specified in such notice). On the date of any such redemption or conversion, the
Depositary shall surrender the certificate or certificates held by the
Depositary evidencing the number of shares of Stock to be redeemed or converted
in the manner specified in the notice of redemption or conversion of Stock
provided by the Company pursuant to the Certificate of Designations. The
Depositary shall, thereafter, redeem or convert the number of Depositary Shares
representing such redeemed or converted Stock upon the surrender of Receipts
evidencing such Depositary Shares in the manner provided in the notice sent to
record holders of Receipts; provided, that the Depositary shall have received,
upon surrendering such certificate or certificates as aforesaid, a sufficient
number of shares of Common Stock to convert or redeem such number of Depositary
Shares (including, in the event that the Company elects pursuant to the
Certificate of Designations to exercise any option to deliver shares of Common
Stock in lieu of any cash consideration payable on the Effective Date (as
defined in the Certificate of Designations) of any Merger or Consolidation, a
number of shares of Common Stock equal to such cash consideration (as determined
in the manner set forth in the Certificate of Designations)), plus any accrued
and unpaid dividends payable with respect thereto to and including the date of
any such redemption or conversion and any other cash consideration payable on
the Effective Date of a Merger or Consolidation (other than any dividends or
other cash consideration payable on the Effective Date of a Merger or
Consolidation that the Company has elected to pay in shares of Common Stock
pursuant to the Certificate of Designations) as instructed and calculated by the
Company. In case fewer than all the outstanding Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed shall be selected by the
Depositary by lot or on a pro rata basis.
Notice having been mailed by the Depositary as aforesaid, from and
after the redemption or conversion date (unless the Company shall have failed to
redeem or convert the shares of Stock to be redeemed or converted by it upon the
surrender of the certificate or certificates therefor by the Depositary as
described in the preceding paragraph), the Depositary Shares called for
redemption or subject to conversion shall be deemed no longer to be outstanding
and all rights of the holders of Receipts evidencing such Depositary Shares
(except the right to receive the shares of Common Stock and cash, if any,
payable upon redemption or conversion upon surrender of such Receipts) shall, to
the extent of such Depositary Shares, cease and terminate. Upon surrender in
accordance with said notice of the Receipts evidencing such Depositary Shares
(properly endorsed or assigned for transfer, if the Depositary shall so
require), such Depositary Shares shall be converted into or redeemed for shares
of Common Stock at a rate equal to ______________ of the number of shares of
Common Stock delivered, and the holders thereof shall be entitled to
______________ of the cash, if any, payable, in respect of the shares of Stock
pursuant to the Certificate of Designations. The foregoing shall be subject
further to the terms and conditions of the Certificate of Designations.
6
<PAGE>
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the shares of Common Stock
and all accrued and unpaid dividends to and including the date fixed for
redemption payable in respect of the Depositary Shares called for redemption, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.
To the extent that Depositary Shares are converted into or redeemed
for shares of Common Stock and all of such shares of Common Stock cannot be
distributed to the record holders of Receipts converted or called for redemption
without creating fractional interests in such shares, the Depositary may, with
the consent of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
(at public or private sale) of such shares of Common Stock at such place or
places and upon such terms as it may deem proper, and the net proceeds of any
such sale shall, subject to Section 3.02, be distributed or made available for
distribution to such record holders that would otherwise receive fractional
interests in such shares of Common Stock.
The Depositary shall not be required (a) to issue, transfer or
exchange any Receipts for a period beginning at the opening of business 15 days
next preceding any selection of Depositary Shares and Stock to be redeemed and
ending at the close of business on the day of the mailing of notice of
redemption of Depositary Shares or (b) to transfer or exchange for another
Receipt any Receipt evidencing Depositary Shares called or being called for
redemption, in whole or in part, or subject to conversion except as provided in
the second preceding paragraph of this Section 2.04.
Any funds deposited by the Company with the Depositary for any
Depositary Shares that are not claimed after a period of two years from the date
such funds are so deposited will be returned to the Company.
SECTION 2.05. Register of Transfer of Receipts.
--------------------------------
Subject to the terms and conditions of this Deposit Agreement, the
Depositary shall register on its books from time to time transfers of Receipts
upon any surrender thereof at the Corporate Office, the New York Office or such
other office as the Depositary may designate for such purpose, by the record
holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer, together with
evidence of the payment of any transfer taxes as may be required by law. Upon
such surrender, the Depositary shall execute a new Receipt or Receipts and
deliver the same to or upon the order of the person entitled thereto evidencing
the same aggregate number of Depositary Shares evidenced by the Receipt or
Receipts surrendered.
7
<PAGE>
SECTION 2.06. Combination and Split-ups of Receipts.
-------------------------------------
Upon surrender of a Receipt or Receipts at the Corporate Office, the
New York Office or such other office as the Depositary may designate for the
purpose of effecting a split-up or combination of Receipts, subject to the terms
and conditions of this Deposit Agreement, the Depositary shall execute and
deliver a new Receipt or Receipts in the authorized denominations requested
evidencing the same aggregate number of Depositary Shares evidenced by the
Receipt or Receipts surrendered; provided, however, that the Depositary shall
not issue any Receipt evidencing a fractional Depositary Share.
SECTION 2.07. Surrender of Receipts and Withdrawal of Stock.*
---------------------------------------------
Any holder of a Receipt or Receipts may withdraw any or all of the
Stock (but only in whole shares of Stock) represented by the Depositary Shares
evidenced by such Receipts and all money and other property, if any, represented
by such Depositary Shares by surrendering such Receipt or Receipts at the
Corporate Office, the New York Office or at such other office as the Depositary
may designate for such withdrawals. After such surrender, without unreasonable
delay, the Depositary shall deliver to such holder, or to the person or persons
designated by such holder as hereinafter provided, the whole number of shares of
Stock and all such money and other property, if any, represented by the
Depositary Shares evidenced by the Receipt or Receipts so surrendered for
withdrawal. If the Receipt or Receipts delivered by the holder to the
Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of whole Depositary Shares
representing the whole number of shares of Stock to be withdrawn, the Depositary
shall at the same time, in addition to such whole number of shares of Stock and
such money and other property, if any, to be withdrawn, deliver to such holder,
or (subject to Section 2.05) upon his order, a new Receipt or Receipts
evidencing such excess number of whole Depositary Shares. Delivery of the Stock
and such money and other property being withdrawn may be made by the delivery of
such certificates, documents of title and other instruments as the Depositary
may deem appropriate, which, if required by the Depositary, shall be properly
endorsed or accompanied by proper instruments of transfer.
If the Stock and the money and other property being withdrawn are to
be delivered to a person or persons other than the record holder of the Receipt
or Receipts being surrendered for withdrawal of Stock, such holder shall execute
and deliver to the Depositary a written order so directing the Depositary and
the Depositary may require that the Receipt or Receipts surrendered by such
holder for withdrawal of such shares of Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank and that the
signature on such instrument of transfer be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature
- ----------------------
* This Section to be modified to reflect any restrictions on withdrawal of
underlying securities.
8
<PAGE>
guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange
Act of 1934, as amended.
The Depositary shall deliver the Stock and the money and other
property, if any, represented by the Depositary Shares evidenced by Receipts
surrendered for withdrawal, without unreasonable delay, at the office at which
such Receipts were surrendered, except that, at the request, risk and expense of
the holder surrendering such Receipt or Receipts and for the account of the
holder thereof, such delivery may be made, without unreasonable delay, at such
other place as may be designated by such holder.
SECTION 2.08. Limitations on Execution and Delivery, Transfer, Split-
------------------------------------------------------
up, Combination, Surrender and Exchange of Receipts and Withdrawal or Deposit of
- --------------------------------------------------------------------------------
Stock.
- -----
As a condition precedent to the execution and delivery, registration
of transfer, split-up, combination, surrender or exchange of any Receipt, the
delivery of any distribution thereon or the withdrawal or deposit of Stock, the
Depositary, any of the Depositary's Agents or the Company may require any or all
of the following: (a) payment to it of a sum sufficient for the payment (or, in
the event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge with respect
thereto (including any such tax or charge with respect to the Stock being
deposited or withdrawn or with respect to the Common Stock or other securities
or property of the Company being issued upon conversion or redemption); (b)
production of proof satisfactory to it as to the identity and genuineness of any
signature; and (c) compliance with such reasonable regulations, if any, as the
Depositary or the Company may establish not inconsistent with the provisions of
this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against
Stock or the registration of transfer, split-up, combination, surrender or
exchange of outstanding Receipts and the withdrawal of deposited Stock may be
suspended (a) during any period when the register of stockholders of the Company
is closed, (b) if any such action is deemed necessary or advisable by the
Depositary, any of the Depositary's Agents or the Company at any time or from
time to time because of any requirement of law or of any government or
governmental body or commission, or under any provision of this Deposit
Agreement, or (c) with the approval of the Company, for any other reason.
Without limitation of the foregoing, the Depositary shall not knowingly accept
for deposit under this Deposit Agreement any shares of Stock that are required
to be registered under the Securities Act unless a registration statement under
the Securities Act is in effect as to such shares of Stock.
SECTION 2.09. Lost Receipts, etc.
------------------
In case any Receipt shall be mutilated or destroyed or lost or stolen,
the Depositary shall execute and deliver a Receipt of like form and tenor in
exchange and substitution for such mutilated Receipt or in lieu of and in
substitution for such destroyed, lost or stolen Receipt unless the Depositary
has notice that such Receipt has been acquired by a bona fide purchaser;
9
<PAGE>
provided, however, that the holder thereof provides the Depositary with (a)
evidence satisfactory to the Depositary of such destruction, loss or theft of
such Receipt, of the authenticity thereof and of his ownership thereof, (b)
reasonable indemnification satisfactory to the Depositary or the payment of any
charges incurred by the Depositary in obtaining insurance in lieu of such
indemnification and (c) payment of any expense (including fees, charges and
expenses of the Depositary) in connection with such execution and delivery.
SECTION 2.10. Cancellation and Destruction of Surrendered Receipts.
----------------------------------------------------
All Receipts surrendered to the Depositary or any Depositary's Agent
shall be cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so
cancelled.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information.
-------------------------------------------------
Any person presenting Stock for deposit or any holder of a Receipt may
be required from time to time to file such proof of residence or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold or delay the delivery of any
Receipt, the registration of transfer, redemption, conversion or exchange of any
Receipt, the withdrawal of the Stock represented by the Depositary Shares
evidenced by any Receipt or the distribution of any dividend or other
distribution until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges.
----------------------------------------------
If any tax or other governmental charge shall become payable by or on
behalf of the Depositary with respect to (a) any Receipt, (b) the Depositary
Shares evidenced by such Receipt, (c) the Stock (or fractional interest therein)
or other property represented by such Depositary Shares, or (d) any transaction
referred to in Section 4.06, such tax (including transfer, issuance or
acquisition taxes, if any) or governmental charge shall be payable by the holder
of such Receipt, who shall pay the amount thereof to the Depositary. Until such
payment is made, registration of transfer of any Receipt or any split-up or
combination thereof or any withdrawal of the Stock or money or other property,
if any, represented by the Depositary Shares evidenced by such Receipt may be
refused, any dividend or other distribution may be withheld and any part or all
of the Stock or other property (including Common Stock received in connection
with a
10
<PAGE>
conversion or redemption of Stock) represented by the Depositary Shares
evidenced by such Receipt may be sold for the account of the holder thereof
(after attempting by reasonable means to notify such holder prior to such sale).
Any dividend or other distribution so withheld and the proceeds of any such sale
may be applied to any payment of such tax or other governmental charge, the
holder of such Receipt remaining liable for any deficiency.
SECTION 3.03. Withholding.
-----------
The Depositary shall act as the tax withholding agent for any
payments, distributions and exchanges made with respect to the Depositary
Shares and Receipts, and the Stock, Common Stock or other securities or assets
represented thereby (collectively, the "Securities"). The Depositary shall be
responsible with respect to the Securities for the timely (a) collection and
deposit of any required withholding or backup withholding tax, and (b) filing of
any information returns or other documents with federal (and other applicable)
taxing authorities.
SECTION 3.04. Representations and Warranties as to Stock.
------------------------------------------
In the case of the initial deposit of the Stock, the Company and, in
the case of subsequent deposits thereof, each person so depositing Stock under
this Deposit Agreement shall be deemed thereby to represent and warrant that
such Stock and each certificate therefor are valid and that the person making
such deposit is duly authorized to do so. Such representations and warranties
shall survive the deposit of the Stock and the issuance of Receipts therefor.
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01. Cash Distributions.
------------------
Whenever the Depositary shall receive any cash dividend or other cash
distribution on the Stock, the Depositary shall, subject to Section 3.02,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.04 such amounts of such sum as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders; provided, however, that in case the Company or
the Depositary shall be required by law to withhold and does withhold from any
cash dividend or other cash distribution in respect of the Stock an amount on
account of taxes, the amount made available for distribution or distributed in
respect of Depositary Shares shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any owner of
Depositary Shares a fraction of one cent and any balance not so distributable
shall be held by the Depositary (without
11
<PAGE>
liability for interest thereon) and shall be added to and be treated as part of
the next sum received by the Depositary for distribution to record holders of
Receipts then outstanding.
SECTION 4.02. Distributions Other Than Cash.
-----------------------------
Whenever the Depositary shall receive any distribution other than
cash, rights, preferences or privileges upon the Stock, the Depositary shall,
subject to Section 3.02, distribute to record holders of Receipts on the record
date fixed pursuant to Section 4.04 such amounts of the securities or property
received by it as are, as nearly as practicable, in proportion to the respective
numbers of Depositary Shares evidenced by the Receipts held by such holders, in
any manner that the Depositary and the Company may deem equitable and
practicable for accomplishing such distribution. If, in the opinion of the
Company after consultation with the Depositary, such distribution cannot be made
proportionately among such record holders, or if for any other reason (including
any tax withholding or securities law requirement), the Depositary deems,
after consultation with the Company, such distribution not to be feasible, the
Depositary may, with the approval of the Company which approval shall not be
unreasonably withheld, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including the sale (at public or
private sale) of the securities or property thus received, or any part thereof,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Section 3.02, be distributed or made
available for distribution, as the case may be, by the Depositary to record
holders of Receipts as provided by Section 4.01 in the case of a distribution
received in cash.
SECTION 4.03. Subscription Rights, Preferences or Privileges.
----------------------------------------------
If the Company shall at any time offer or cause to be offered to the
persons in whose names Stock is registered on the books of the Company any
rights, preferences or privileges to subscribe for or to purchase any securities
or any rights, preferences or privileges of any other nature, such rights,
preferences or privileges shall in each such instance be made available by the
Depositary to the record holders of Receipts in such manner as the Company shall
instruct (including by the issue to such record holders of warrants representing
such rights, preferences or privileges); provided, however, that (a) if at the
time of issue or offer of any such rights, preferences or privileges the Company
determines and instructs the Depositary that it is not lawful or feasible to
make such rights, preferences or privileges available to some or all holders of
Receipts (by the issue of warrants or otherwise) or (b) if and to the extent
instructed by holders of Receipts who do not desire to exercise such rights,
preferences or privileges, the Depositary shall then, in each case, and if
applicable laws or the terms of such rights, preferences or privileges so
permit, sell such rights, preferences or privileges of such holders at public or
private sale, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall be distributed by the Depositary to the
record holders of Receipts entitled thereto as provided by Section 4.01 in the
case of a distribution received in cash.
12
<PAGE>
If registration under the Securities Act of the securities to which
any rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold such securities, the Company shall promptly file
a registration statement pursuant to the Securities Act with respect to such
rights, preferences or privileges and securities and use its best efforts and
take all steps available to it to cause such registration statement to become
effective sufficiently in advance of the expiration of such rights, preferences
or privileges to enable such holders to exercise such rights, preferences or
privileges. In no event shall the Depositary make available to the holders of
Receipts any right, preference or privilege to subscribe for or to purchase any
securities unless and until such registration statement shall have become
effective or unless the offering and sale of such securities to such holders are
exempt from registration under the provisions of the Securities Act.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its reasonable best efforts to take such action or obtain such authorization,
consent or permit sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges.
SECTION 4.04. Notice of Dividends, Fixing of Record Date for Holders
------------------------------------------------------
of Receipts.
- -----------
Whenever (a) any cash dividend or other cash distribution shall become
payable, or any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
Stock, or (b) the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice or of the mandatory conversion of, or any election on the part of the
Company to call for the redemption of, any shares of Stock, the Depositary shall
in each such instance fix a record date (which shall be the same date as the
record date fixed by the Company with respect to the Stock) for the
determination of the holders of Receipts (i) who shall be entitled to receive
such dividend, distribution, rights, preferences or privileges or the net
proceeds of the sale thereof, or (ii) who shall be entitled to give instructions
for the exercise of voting rights at any such meeting or to receive notice of
such meeting or of such conversion or redemption.
SECTION 4.05. Voting Rights.
-------------
Upon receipt of notice of any meeting at which the holders of Stock
are entitled to vote, the Depositary shall, as soon as practicable thereafter,
mail to the record holders of Receipts a notice, which shall be provided by the
Company and which shall contain (a) such information as is contained in such
notice of meeting, (b) a statement that the holders of Receipts at the close of
business on a specified record date fixed pursuant to Section 4.04 will be
entitled, subject to any applicable provision of law, the Certificate of
Incorporation or the Certificate of Designations, to instruct the Depositary
as to the exercise of the voting rights pertaining to the Stock represented
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<PAGE>
by their respective Depositary Shares and (c) a brief statement as to the manner
in which such instructions may be given. Upon the written request of a holder of
a Receipt on such record date, the Depositary shall endeavor insofar as
practicable to vote or cause to be voted the Stock represented by the Depositary
Shares evidenced by such Receipt in accordance with the instructions set forth
in such request. The Company hereby agrees to take all reasonable action that
may be deemed necessary by the Depositary in order to enable the Depositary to
vote such Stock or cause such Stock to be voted. In the absence of specific
instructions from the holder of a Receipt, the Depositary will abstain from
voting to the extent of the Stock represented by the Depositary Shares evidenced
by such Receipt.
SECTION 4.06. Changes Affecting Stock and Reclassifications,
----------------------------------------------
Recapitalizations, etc.
- ----------------------
Upon any split-up, consolidation or any other reclassification of
Stock, or upon any recapitalization, reorganization, merger, amalgamation or
consolidation affecting the Company or to which it is a party (other than a
Merger or Consolidation) or sale of all or substantially all of the Company's
assets, the Depositary shall treat any shares of stock or other securities or
property (including cash) that shall be received by the Depositary in exchange
for or upon conversion of or in respect of the Stock as new deposited property
under this Deposit Agreement, and Receipts then outstanding shall thenceforth
represent the proportionate interests of holders thereof in the new deposited
property so received in exchange for or upon conversion or in respect of such
Stock. In any such case the Depositary may, in its discretion, with the
approval of the Company, execute and deliver additional Receipts, or may call
for the surrender of all outstanding Receipts to be exchanged for new Receipts
specifically describing such new deposited property.
SECTION 4.07. Reports.
-------
The Depositary shall make available for inspection by holders of
Receipts at the Corporate Office, the New York Office and at such other places
as it may from time to time deem advisable during normal business hours any
reports and communications received from the Company that are received by the
Depositary as the holder of Stock.
SECTION 4.08. Lists of Receipt Holders.
------------------------
Promptly upon request from time to time by the Company, the Depositary
shall furnish to it a list, as of a recent date, of the names, addresses and
holdings of Depositary Shares of all persons in whose names Receipts are
registered on the books of the Depositary. At the expense of the Company, the
Company shall have the right to inspect transfer and registration records of the
Depositary, any Depositary's Agent or the Registrar, take copies thereof and
require the Depositary, any Depositary's Agent or the Registrar to supply copies
of such portions of such records as the Company may request.
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<PAGE>
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies, Transfer Books by the
-------------------------------------------------------
Depositary; the Registrar.
- -------------------------
Upon execution of this Deposit Agreement in accordance with its terms,
the Depositary shall maintain (a) at the New York Office facilities for the
execution and delivery, registration, registration of transfer, surrender and
exchange, split-up, combination, redemption and conversion of Receipts and
deposit and withdrawal of Stock and (b) at the Corporate Office and at the
offices of the Depositary's Agents, if any, facilities for the delivery,
registration, registration of transfer, surrender and exchange, split-up,
combination, conversion and redemption of Receipts and deposit and withdrawal
of Stock, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all reasonable times shall
be open for inspection by the record holders of Receipts; provided that any such
holder requesting to exercise such right shall certify to the Depositary that
such inspection shall be for a proper purpose reasonably related to such
person's interest as an owner of Depositary Shares. The Depositary shall
consult with the Company upon receipt of any request for inspection. The
Depositary may close such books, at any time or from time to time, when deemed
expedient by it in connection with the performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the
Stock represented by such Depositary Shares shall be listed on one or more
stock exchanges, the Depositary shall, with the approval of the Company, appoint
a Registrar for registry of such Receipts or Depositary Shares in accordance
with the requirements of such exchange or exchanges. Such Registrar (which may
be the Depositary if so permitted by the requirements of such exchange or
exchanges) may be removed and a substitute registrar appointed by the Depositary
upon the request or with the approval of the Company. In addition, if the
Receipts, such Depositary Shares or such Stock are listed on one or more stock
exchanges, the Depositary will, at the request of the Company, arrange such
facilities for the delivery, registration, registration of transfer, surrender
and exchange, split-up, combination, redemption or conversion of such Receipts,
such Depositary Shares or such Stock as may be required by law or applicable
stock exchange regulations.
SECTION 5.02. Prevention or Delay in Performance by the Depositary,
-----------------------------------------------------
the Depositary's Agents, the Registrar or the Company.
- -----------------------------------------------------
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall incur any liability to any holder of any Receipt, if by
reason of any provision of any
15
<PAGE>
present or future law or regulation thereunder of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Registrar or any Depositary's Agent, by reason of any provision, present or
future, of the Certificate of Incorporation or the Certificate of Designations
or, in the case of the Company, the Depositary, the Registrar or any
Depositary's Agent, by reason of any act of God or war or other circumstances
beyond the control of the relevant party, the Depositary, any Depositary's
Agent, the Registrar or the Company shall be prevented or forbidden from doing
or performing any act or thing that the terms of this Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
the Registrar or the Company incur any liability to any holder of a Receipt (a)
by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of this Deposit Agreement provide
shall or may be done or performed, or (b) by reason of any exercise of, or
failure to exercise, any discretion provided for in this Deposit Agreement
except, in the case of the Depositary, any Depositary's Agent or the Registrar,
if any such exercise or failure to exercise discretion is caused by its
negligence or bad faith.
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents,
-------------------------------------------------------
the Registrar and the Company.
- -----------------------------
The Company assumes no obligation and shall be subject to no liability
under this Deposit Agreement or the Receipts to holders or other persons, except
to perform in good faith such obligations as are specifically set forth and
undertaken by it to perform in this Deposit Agreement. Each of the Depositary,
the Depositary's Agents and the Registrar assumes no obligation and shall be
subject to no liability under this Deposit Agreement or the Receipts to holders
or other persons, except to perform such obligations as are specifically set
forth and undertaken by it to perform in this Deposit Agreement without
negligence or bad faith.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding with respect to Stock, Depositary Shares,
Receipts or Common Stock that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be liable for any action or any failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of a Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
The Depositary, any Depositary's Agent, the Registrar and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
The Depositary, the Registrar and any Depositary's Agent may own and
deal in any class of securities of the Company and its affiliates and in
Receipts or Depositary Shares. The
16
<PAGE>
Depositary may also act as transfer agent or registrar of any of the securities
of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
shall be deemed to be an "issuer" of the Stock, the Depositary Shares, the
Receipts or the Common Stock issued upon conversion or redemption of the Stock
under the federal securities laws or applicable state securities laws, it being
expressly understood and agreed that the Depositary and any Depositary's Agent
are acting only in a ministerial capacity as Depositary for the Stock; provided,
however, that the Depositary agrees to comply with all information reporting and
withholding requirements applicable to it under law or this Deposit Agreement in
its capacity as Depositary.
Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent makes any representation or has any
responsibility as to the validity of the Registration Statement pursuant to
which the Depositary Shares are registered under the Securities Act, the Stock,
the Depositary Shares or any instruments referred to therein or herein, or as to
the correctness of any statement made therein or herein; provided, however, that
the Depositary is responsible for its representations in this Deposit Agreement.
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Stock at any time deposited with the Depositary hereunder or
of the Depositary Shares, as to the validity or sufficiency of this Deposit
Agreement, as to the value of the Depositary Shares or as to any right, title or
interest of the record holders of Receipts in and to the Depositary Shares
except that the Depositary hereby represents and warrants as follows: (a) the
Depositary has been duly organized and is validly existing and in good standing
under the laws of the State of ____________, with full power, authority and
legal right under such law to execute, deliver and carry out the terms of this
Deposit Agreement; (b) this Deposit Agreement has been duly authorized, executed
and delivered by the Depositary; and (c) this Deposit Agreement constitutes a
valid and binding obligation of the Depositary, enforceable against the
Depositary in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law). The Depositary
shall not be accountable for the use or application by the Company of the
Depositary Shares or the Receipts or the proceeds thereof.
SECTION 5.04. Resignation and Removal of the Depositary, Appointment
------------------------------------------------------
of Successor Depositary.
- -----------------------
The Depositary may at any time resign as Depositary hereunder by
written notice via registered mail of its election to do so delivered to the
Company, such resignation to take
17
<PAGE>
effect upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by written
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 45 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company, having its principal office in the United States of America and having
a combined capital and surplus of at least $50,000,000. If a successor
depositary shall not have been appointed in 45 days, the resigning or removed
Depositary may petition a court of competent jurisdiction to appoint a successor
depositary. Every successor depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall promptly
execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all rights, title and interest in the Stock and any moneys or property held
hereunder to such successor and shall deliver to such successor a list of the
record holders of all outstanding Receipts. Any successor depositary shall
promptly mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
depositary may execute the Receipts either in the name of the predecessor
depositary or in the name of the successor depositary.
SECTION 5.05. Corporate Notices and Reports.
-----------------------------
The Company agrees that it will deliver to the Depositary, and the
Depositary will, promptly after receipt thereof, transmit to the record holders
of Receipts, in each case at the address recorded in the Depositary's books,
copies of all notices and reports (including financial statements) required by
law, by the rules of any national securities exchange upon which the Stock, the
Depositary Shares or the Receipts are listed or by the Certificate of
Incorporation and the Certificate of Designations to be furnished by the Company
to holders of Stock. Such transmission will be at the Company's expense and the
Company will provide the Depositary with such number of copies of such documents
as the Depositary may reasonably request. In addition, the Depositary will
transmit to the record holders of Receipts at the Company's expense such other
documents as may be requested by the Company.
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SECTION 5.06. Deposit of Stock by the Company.
-------------------------------
The Company agrees with the Depositary that neither the Company nor
any company controlled by the Company will at any time deposit any Stock if such
Stock is required to be registered under the provisions of the Securities Act
and no registration statement is at such time in effect as to such Stock.
SECTION 5.07. Indemnification by the Company.
------------------------------
The Company agrees to indemnify the Depositary, any Depositary's Agent
and any Registrar against, and hold each of them harmless from, any liability,
costs and expenses (including reasonable fees and expenses of counsel) that may
arise out of or in connection with its acting as Depositary, Depositary's Agent
or Registrar, respectively, under this Deposit Agreement and the Receipts,
except for any liability arising out of negligence, bad faith or willful
misconduct on the part of any such person or persons.
SECTION 5.08. Fees, Charges and Expenses.
--------------------------
No fees, charges and expenses of the Depositary or any Depositary's
Agent hereunder or of any Registrar shall be payable by any person other than
the Company, except for any taxes and other governmental charges and except as
provided in this Deposit Agreement. If, at the request of a holder of a
Receipt, the Depositary incurs fees, charges or expenses for which it is not
otherwise liable hereunder, such holder or other person will be liable for such
fees, charges and expenses. All other fees, charges and expenses of the
Depositary and any Depositary's Agent hereunder and of any Registrar
(including, in each case, reasonable fees and expenses of counsel) incident to
the performance of their respective obligations hereunder will be paid from time
to time upon consultation and agreement between the Depositary and the Company
as to the amount and nature of such fees, charges and expenses.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment.
---------
The form of the Receipts and any provision of this Deposit Agreement
may at any time and from time to time be amended by agreement between the
Company and the Depositary in any respect that they may deem necessary or
desirable. Any amendment that shall impose or increase any fees, taxes or
charges payable by holders of Receipts (other than taxes and other governmental
charges, fees and other expenses payable by holders pursuant to the terms hereof
or of the Receipts), or that otherwise prejudice any substantial existing right
of holders of Receipts, shall not become effective as to outstanding Receipts
until the expiration of 30 days after notice of
19
<PAGE>
such amendment shall have been mailed to the record holders of outstanding
Receipts. Every holder of an outstanding Receipt at the time any such amendment
becomes effective shall be deemed, by continuing to hold such Receipt, to
consent and agree to such amendment and to be bound by this Deposit Agreement as
amended thereby. In no event shall any amendment impair the right, subject to
the provisions of Sections 2.03, 2.06 and 2.07 and Article III, of any owner of
any Depositary Shares to surrender the Receipt evidencing such Depositary Shares
with instructions to the Depositary to deliver to the holder the Stock and all
money and other property, if any, represented thereby, except in order to comply
with mandatory provisions of applicable law.
SECTION 6.02. Termination.
-----------
Whenever so directed by the Company, the Depositary will terminate
this Deposit Agreement by mailing notice of such termination to the record
holders of all Receipts then outstanding at least 30 days prior to the date
fixed in such notice for such termination. The Depositary may likewise
terminate this Deposit Agreement if at any time 60 days shall have expired after
the Depositary shall have delivered to the Company a written notice of its
election to resign and a successor depositary shall not have been appointed and
accepted its appointment as provided in Section 5.04. In either case, on a date
not less than 60 days after such notice, the Depositary shall deliver or make
available for delivery to holders of Receipts, upon surrender of such Receipts
evidencing Depositary Shares, such number of whole or fractional shares of the
Stock as are represented by the Depositary Shares.
This Deposit Agreement shall automatically terminate after all
outstanding Depositary Shares have been redeemed or there has been a final
distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution has been
distributed to the holders of the Receipts.
If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the holders
thereof and shall not give any further notices (other than notice of such
termination) or perform any further acts under this Deposit Agreement, except as
provided below and that the Depositary shall continue to collect dividends and
other distributions pertaining to Stock, shall sell rights, preferences or
privileges as provided in this Deposit Agreement and shall continue to deliver
the Stock and any money and other property represented by Receipts, without
liability for interest thereon, upon surrender thereof by the holders thereof.
At any time after the expiration of two years from the date of termination, the
Depositary may sell Stock then held hereunder at public or private sale, at such
places and upon such terms as it deems proper and may thereafter hold in a
segregated account the net proceeds of any such sale, together with any money
and other property held by it hereunder, without liability for interest, for the
benefit, pro rata in accordance with their holdings, of the holders of Receipts
that have not heretofore been surrendered. After making such sale, the
Depositary shall be discharged from all obligations under this Deposit Agreement
except to account for such net proceeds and money and other property. Upon the
termination of this Deposit Agreement, the
20
<PAGE>
Company shall be discharged from all obligations under this Deposit Agreement
except for its obligations to the Depositary, any Depositary's Agent and any
Registrar under Sections 5.07 and 5.08. [In the event this Deposit Agreement is
terminated, the Company hereby agrees to use its best efforts to list the
underlying Stock on the New York Stock Exchange, Inc.]
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts.
------------
This Deposit Agreement may be executed by the Company and the
Depositary in separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed an original, but all such counterparts
taken together shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Deposit Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Deposit Agreement. Copies of this Deposit Agreement shall be filed with the
Depositary and the Depositary's Agents and shall be open to inspection during
business hours at the Corporate Office and the New York Office and the
respective offices of the Depositary's Agents, if any, by any holder of a
Receipt.
SECTION 7.02. Exclusive Benefits of Parties.
-----------------------------
This Deposit Agreement is for the exclusive benefit of the parties
hereto, and their respective successors hereunder, and shall not be deemed to
give any legal or equitable right, remedy or claim to any other person
whatsoever.
SECTION 7.03. Invalidity of Provisions.
------------------------
In case any one or more of the provisions contained in this Deposit
Agreement or in the Receipts should be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.
SECTION 7.04. Notices.
-------
Any notices to be given to the Company hereunder or under the Receipts
shall be in writing and shall be deemed to have been duly given if personally
delivered or sent by mail, or by telegram or telex or telecopier confirmed by
letter, addressed to the Company at One Post Street, San Francisco, California
94104, Attention: Corporate Secretary, or at any other place to which the
Company may have transferred its principal executive office.
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<PAGE>
Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Depositary at the Corporate Office.
Any notices given to any record holder of a Receipt hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to such record holder at the address of such
record holder as it appears on the books of the Depositary or, if such holder
shall have filed with the Depositary a written request that notices intended for
such holder be mailed to some other address, at the address designated in such
request.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a telegram or telex or telecopier message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any telegram or telex or telecopier message received by
it from the other or from any holder of a Receipt, notwithstanding that such
telegram or telex or telecopier message shall not subsequently be confirmed by
letter as aforesaid.
SECTION 7.05. Depositary's Agents.
-------------------
The Depositary may, with the approval of the Company which approval
shall not be unreasonably withheld, from time to time appoint one or more
Depositary's Agents to act in any respect for the Depositary for the purposes of
this Deposit Agreement and may vary or terminate the appointment of such
Depositary's Agents.
SECTION 7.06. Holders of Receipts Are Parties.
-------------------------------
Notwithstanding that holders of Receipts have not executed and
delivered this Deposit Agreement or any counterpart thereof, the holders of
Receipts from time to time shall be deemed to be parties to this Deposit
Agreement and shall be bound by all of the terms and conditions, and be entitled
to all of the benefits, hereof and of the Receipts by acceptance of delivery of
Receipts.
SECTION 7.07. GOVERNING LAW.
-------------
THIS DEPOSIT AGREEMENT AND THE RECEIPTS AND ALL RIGHTS HEREUNDER AND
THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
22
<PAGE>
SECTION 7.08. Headings.
--------
The headings of articles and sections in this Deposit Agreement and in
the form of the Receipt set forth in Exhibit A hereto have been inserted for
convenience only and are not to be regarded as a part of this Deposit Agreement
or to have any bearing upon the meaning or interpretation of any provision
contained herein or in the Receipts.
23
<PAGE>
IN WITNESS WHEREOF, McKesson Corporation and ________________ have
duly executed this Deposit Agreement as of the day and year first above set
forth and all holders of Receipts shall become parties hereto by and upon
acceptance by them of delivery of Receipts issued in accordance with the terms
hereof.
McKESSON CORPORATION
Attest:
By:_______________________ By:___________________________
Authorized Officer
______________________________
Attest:
By:_______________________ By:___________________________
Authorized Signatory
24
<PAGE>
EXHIBIT A
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES
EACH REPRESENTING ______________ OF A SHARE OF
_______________ SERIES PREFERRED
STOCK
OF
McKESSON CORPORATION
(Incorporated under the Laws of the State of Delaware)
No.
_________________________________ (the "Depositary") hereby certifies
that ____________ is the registered owner of ___________ Depositary Shares (the
"Depositary Shares"), each Depositary Share representing ______________ of a
share of ____________________________ Preferred Stock, $0.01 par value (the
"Stock"), of McKesson Corporation, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"), and the same
proportionate interest in any and all other property received by the Depositary
in respect of such shares of Stock and held by the Depositary under the Deposit
Agreement (as defined below). Subject to the terms of the Deposit Agreement,
each owner of a Depositary Share is entitled, proportionately, to all the
rights, preferences and privileges of the Stock represented thereby, including
the dividend, voting, liquidation and other rights contained in the Certificate
of Designations establishing the rights, preferences, privileges and limitations
of the Stock (the "Certificate of Designations"), copies of which are on file at
the office of the Depositary at which at any particular time its business in
respect of matters governed by the Deposit Agreement shall be administered,
which at the time of the execution of the Deposit Agreement is located at
________________, ______________, ____ ______ (the "Corporate Office").
This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any purpose
unless this Receipt shall have been executed manually or, if a Registrar for the
Receipts (other than the Depositary) shall have been appointed, by facsimile by
the Depositary by the signature of a duly authorized signatory and, if executed
by facsimile signature of the Depositary, shall have been countersigned manually
by such Registrar by the signature of a duly authorized signatory.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK. THE
DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE DESCRIPTION SET
FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE COMPANY
SUMMARIZING CERTAIN PROVISIONS OF THE
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<PAGE>
DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE
DEPOSITARY MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY,
GENUINENESS OR SUFFICIENCY OF ANY STOCK AT ANY TIME DEPOSITED WITH THE
DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE
VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE
DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF
THE DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY SHARES.
The Company will furnish to any holder of this Receipt without charge,
upon request addressed to its executive office, a full statement of the
designation, relative rights, preferences and limitations of the shares of each
authorized class, and of each class of preferred stock authorized to be issued,
so far as the same may have been fixed, and a statement of the authority of the
Board of Directors of the Company to designate and fix the relative rights,
preferences and limitations of other classes.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.
Dated:
______________________________,
as Depositary and Registrar
By:___________________________
Authorized Signatory
A-2
<PAGE>
[FORM OF REVERSE
OF DEPOSITARY RECEIPT]
1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of
---------------------
which this Receipt is one, are made available upon the terms and conditions set
forth in the Deposit Agreement, dated as of _________ ____, _____ (the "Deposit
Agreement"), among the Company, the Depositary and all holders from time to
time of Receipts. The Deposit Agreement (copies of which are on file at the
Corporate Office, the office maintained by the Depositary in the Borough of
Manhattan, the City of New York which at the time of the execution of the
Deposit Agreement is located at ________________________ (the "New York Office")
and at the office of any agent of the Depositary) sets forth the rights of
holders of Receipts and the rights and duties of the Depositary. The statements
made on the face and the reverse of this Receipt are summaries of certain
provisions of the Deposit Agreement and are subject to the detailed provisions
thereof, to which reference is hereby made. In the event of any conflict
between the provisions of this Receipt and the provisions of the Deposit
Agreement, the provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
-----------
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
3. Redemption and Conversion of Stock.* Whenever the Company
----------------------------------
shall elect to redeem or be required to convert shares of Stock into shares of
Common Stock in accordance with the Certificate of Designations, it shall
(unless otherwise agreed in writing with the Depositary) give the Depositary in
its capacity as Depositary not less than 5 business days' prior notice of the
proposed date of the mailing of a notice of redemption or conversion of Stock
and the simultaneous redemption or conversion of the Depositary Shares
representing the Stock to be redeemed or converted and of the number of such
shares of Stock held by the Depositary to be redeemed or converted. The
Depositary shall, as directed by the Company in writing, mail, first class
postage prepaid, notice of the redemption or conversion of Stock and the
proposed simultaneous redemption or conversion of Depositary Shares representing
the Stock to be redeemed or converted, not less than 30 and not more than 60
days prior to the date fixed for redemption or conversion of such Stock and
Depositary Shares, to the record holders of the Receipts evidencing the
Depositary Shares to be so redeemed or converted, at the addresses of such
holders as the same appear on the records of the Depositary; provided, that if
the effectiveness of a Merger or Consolidation (as defined in the Certificate
of Designations) makes it impracticable to provide at least 30 days' notice, the
Depositary shall provide such notice as soon as practicable prior to such
effectiveness. Any such notice shall also be published in the same manner as
notices of redemption or conversion of the Stock are required to be published
pursuant to the Certificate of Designations. On the date of any such
redemption or conversion, the Depositary shall surrender the certificate or
certificates held by the Depositary evidencing the
- --------------------
* This section to be modified to discuss specific redemption or conversion
terms of the Stock, if any.
A-3
<PAGE>
number of shares of Stock to be redeemed or converted in the manner specified in
the notice of redemption or conversion of Stock provided by the Company pursuant
to the Certificate of Designations. The Depositary shall, thereafter, redeem or
convert the number of Depositary Shares representing such redeemed or converted
Stock upon the surrender of Receipts evidencing such Depositary Shares in the
manner provided in the notice sent to record holders of Receipts; provided, that
the Depositary shall have received, upon surrendering such certificate or
certificates as aforesaid, a sufficient number of shares of Common Stock to
convert or redeem such number of Depositary Shares (including, in the event that
the Company elects pursuant to the Certificate of Designations to exercise any
option to deliver shares of Common Stock in lieu of any cash consideration
payable on the Effective Date (as defined in the Certificate of Designations)
of any Merger or Consolidation, a number of shares of Common Stock equal to such
cash consideration (as determined in the manner set forth in the Certificate of
Designations)), plus any accrued and unpaid dividends payable with respect
thereto to and including the date of any such redemption or conversion and any
other cash consideration payable on the Effective Date of a Merger or
Consolidation (other than any dividends or other cash consideration payable on
the Effective Date of a Merger or Consolidation that the Company has elected to
pay in shares of Common Stock pursuant to the Certificate of Designations). In
case fewer than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed shall be selected by the Depositary by lot or
on a pro rata basis. Notice having been mailed and published as aforesaid, from
and after the redemption or conversion date (unless the Company shall have
failed to redeem or convert the shares of Stock to be redeemed or converted by
it upon the surrender of the certificate or certificates therefor by the
Depositary as described above), the Depositary Shares called for redemption or
subject to conversion shall be deemed no longer to be outstanding and all rights
of the holders of Receipts evidencing such Depositary Shares (except the right
to receive the shares of Common Stock and cash, if any, payable upon redemption
or conversion upon surrender of such Receipts) shall, to the extent of such
Depositary Shares, cease and terminate. Upon surrender in accordance with said
notice of the Receipts evidencing such Depositary Shares (properly endorsed or
assigned for transfer, if the Depositary shall so require), such Depositary
Shares shall be converted into or redeemed for shares of Common Stock at a rate
equal to ______________ of the number of shares of Common Stock delivered, and
the holders thereof shall be entitled to ______________ of the cash, if any,
payable, in respect of the shares of Stock pursuant to the Certificate of
Designations. The foregoing is subject further to the terms and conditions of
the Certificate of Designations. If fewer than all of the Depositary Shares
evidenced by this Receipt are called for redemption, the Depositary will deliver
to the holder of this Receipt upon its surrender to the Depositary, together
with shares of Common Stock and all accrued and unpaid dividends to and
including the date fixed for redemption payable in respect of the Depositary
Shares called for redemption, a new Receipt evidencing the Depositary Shares
evidenced by such prior Receipt and not called for redemption.
4. Surrender of Receipts and Withdrawal of Stock. Upon surrender of
---------------------------------------------
this Receipt to the Depositary at the Corporate Office, the New York Office or
at such other offices as the Depositary may designate, and subject to the
provisions of the Deposit Agreement, the holder hereof is entitled to withdraw,
and to obtain delivery, without unreasonable delay, to or upon the
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<PAGE>
order of such holder, any or all of the Stock (but only in whole shares of
Stock) and all money and other property, if any, at the time represented by the
Depositary Shares evidenced by this Receipt; provided, however, that, in the
event this Receipt shall evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the whole number of shares of Stock to
be withdrawn, the Depositary shall, in addition to such whole number of shares
of Stock and such money and other property, if any, to be withdrawn, deliver, to
or upon the order of such holder, a new Receipt or Receipts evidencing such
excess number of whole Depositary Shares.
5. Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7
----------------------------------
and 8 below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Corporate Office or the New
York Office, or at such other offices as the Depositary may designate, properly
endorsed or accompanied by a properly executed instrument of transfer, and upon
such transfer the Depositary shall sign and deliver a Receipt or Receipts to or
upon the order of the person entitled thereto, all as provided in and subject to
the Deposit Agreement. This Receipt may be split into other Receipts or
combined with other Receipts into one Receipt evidencing the same aggregate
number of Depositary Shares evidenced by the Receipt or Receipts surrendered;
provided, however, that the Depositary shall not issue any Receipt evidencing a
fractional Depositary Share.
6. Conditions to Signing and Delivery, Transfer, etc., of Receipts.
---------------------------------------------------------------
Prior to the execution and delivery, registration of transfer, split-up,
combination, surrender or exchange of this Receipt, the delivery of any
distribution hereon or the withdrawal or deposit of Stock, the Depositary, any
of the Depositary's Agents or the Company may require any or all of the
following: (a) payment to it of a sum sufficient for the payment (or, in the
event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge with respect
thereto (including any such tax or charge with respect to Stock being deposited
or withdrawn or with respect to Common Stock or other securities or property of
the Company being issued upon conversion or redemption); (b) production of proof
satisfactory to it as to the identity and genuineness of any signature and (c)
compliance with such reasonable regulations, if any, as the Depositary or the
Company may establish not inconsistent with the Deposit Agreement. Any person
presenting Stock for deposit, or any holder of this Receipt, may be required to
file such proof of information, to execute such certificates and to make such
representations and warranties as the Depositary or the Company may reasonably
deem necessary or proper. The Depositary or the Company may withhold or delay
the delivery of this Receipt, the registration of transfer, redemption,
conversion or exchange of this Receipt, the withdrawal of the Stock represented
by the Depositary Shares evidenced by this Receipt or the distribution of any
dividend or other distribution until such proof or other information is filed,
such certificates are executed or such representations and warranties are made.
7. Suspension of Delivery, Transfer, etc. The deposit of Stock may
-------------------------------------
be refused and the delivery of this Receipt against Stock or the registration of
transfer, split-up, combination, surrender or exchange of this Receipt and the
withdrawal of deposited Stock may be suspended (a) during any period when the
register of stockholders of the Company is closed, (b) if any such
A-5
<PAGE>
action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission,
or under any provision of the Deposit Agreement, or (c) with the approval of the
Company, for any other reason. The Depositary shall not be required (a) to
issue, transfer or exchange any Receipts for a period beginning at the opening
of business 15 days next preceding any selection of Depositary Shares and Stock
to be redeemed and ending at the close of business on the day of the mailing of
notice of redemption of Depositary Shares or (b) to transfer or exchange for
another Receipt any Receipt evidencing Depositary Shares called or being called
for redemption, in whole or in part, or subject to conversion except as provided
in the last sentence of Paragraph 3.
8. Payment of Taxes or Other Governmental Charges. If any tax or
----------------------------------------------
other governmental charge shall become payable by or on behalf of the
Depositary with respect to (a) this Receipt, (b) the Depositary Shares evidenced
by this Receipt, (c) the Stock (or fractional interest therein) or other
property represented by such Depositary Shares, or (d) any transaction referred
to in Section 4.06, of the Deposit Agreement, such tax (including transfer,
issuance or acquisition taxes, if any) or governmental charge shall be payable
by the holder of this Receipt, who shall pay the amount thereof to the
Depositary. Until such payment is made, registration of transfer of this
Receipt or any split-up or combination hereof or any withdrawal of the Stock or
money or other property, if any, represented by the Depositary Shares evidenced
by this Receipt may be refused, any dividend or other distribution may be
withheld and any part or all of the Stock or other property (including Common
Stock received in connection with a conversion or redemption of Stock)
represented by the Depositary Shares evidenced by this Receipt may be sold for
the account of the holder hereof (after attempting by reasonable means to notify
such holder prior to such sale). Any dividend or other distribution so withheld
and the proceeds of any such sale may be applied to any payment of such tax or
other governmental charge, the holder of this Receipt remaining liable for any
deficiency.
9. Amendment. The form of the Receipts and any provision of the
---------
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect that they may deem
necessary or desirable. Any amendment that shall impose or increase any fees,
taxes or charges payable by holders of Receipts (other than taxes and other
governmental charges, fees and other expenses payable by holders as provided
herein or in the Deposit Agreement), or that shall otherwise prejudice any
substantial existing right of holders of Receipts, shall not become effective as
to outstanding Receipts until the expiration of 30 days after such notice of
such amendment shall have been given to the record holders of outstanding
Receipts. The holder of this Receipt at the time any such amendment becomes
effective shall be deemed, by continuing to hold this Receipt, to consent and
agree to such amendment and to be bound by the Deposit Agreement as amended
thereby. In no event shall any amendment impair the right, subject to the
provisions of Paragraphs 3, 4, 6, 7 and 8 hereof and of Sections 2.04, 2.07 and
2.08 and Article III of the Deposit Agreement, of the owner of the Depositary
Shares evidenced by this Receipt to surrender this Receipt with instructions to
the Depositary to deliver
A-6
<PAGE>
to the holder the Stock and all money and other property, if any, represented
thereby, except in order to comply with mandatory provisions of applicable law.
10. Fees, Charges and Expenses. The Company will pay all fees,
--------------------------
charges and expenses of the Depositary, except for taxes (including transfer
taxes, if any) and other governmental charges and such charges as are expressly
provided in the Deposit Agreement to be at the expense of persons depositing
Stock, holders of Receipts or other persons.
11. Title to Receipts. It is a condition of this Receipt, and every
-----------------
successive holder hereof by accepting or holding the same consents and agrees,
that title to this Receipt (and to the Depositary Shares evidenced hereby), when
properly endorsed or accompanied by a properly executed instrument of transfer,
is transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that the Depositary may, notwithstanding any
notice to the contrary, treat the record holder hereof at such time as the
absolute owner hereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement and for all other purposes.
12. Dividends and Distributions. Whenever the Depositary shall
---------------------------
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to the provisions of the Deposit Agreement, distribute
to record holders of Receipts such amounts of such sums as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required by law to withhold and does
withhold from any cash dividend or other cash distribution in respect of the
Stock an amount on account of taxes, the amount made available for distribution
or distributed in respect of Depositary Shares shall be reduced accordingly.
The Depositary shall distribute or make available for distribution, as the case
may be, only such amount, however, as can be distributed without attributing to
any owner of Depositary Shares a fraction of one cent and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to record holders of Receipts then
outstanding.
13. Subscription Rights, Preferences or Privileges. If the Company
----------------------------------------------
shall at any time offer or cause to be offered to the persons in whose name
Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the Deposit
Agreement, be made available by the Depositary to the record holders of Receipts
in such manner as the Company shall instruct.
14. Notice of Dividends, Fixing of Record Date. Whenever (a) any
------------------------------------------
cash dividend or other cash distribution shall become payable, or any
distribution other than cash shall be made, or any rights, preferences or
privileges shall at any time be offered, with respect to the Stock, or (b) the
Depositary shall receive notice of any meeting at which holders of Stock are
entitled to vote or of which holders of Stock are entitled to notice or of the
mandatory conversion of, or any
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<PAGE>
election on the part of the Company to call for redemption of, any shares of
Stock, the Depositary shall in each such instance fix a record date (which
shall be the same date as the record date fixed by the Company with respect to
the Stock) for the determination of the holders of Receipts (i) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or (ii) who shall be
entitled to give instructions for the exercise of voting rights at any such
meeting or of such meeting or to receive notice of such conversion or
redemption.
15. Voting Rights. Upon receipt of notice of any meeting at which
-------------
the holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice, which
shall contain (a) such information as is contained in such notice of meeting,
(b) a statement that the holders of Receipts at the close of business on a
specified record date determined as provided in Paragraph 14 will be entitled,
subject to any applicable provision of law, the Certificate of Incorporation or
the Certificate of Designations, to instruct the Depositary as to the exercise
of the voting rights pertaining to the Stock represented by their respective
Depositary Shares, and (c) a brief statement as to the manner in which such
instructions may be given. Upon the written request of a holder of this Receipt
on such record date the Depositary shall endeavor insofar as practicable to vote
or cause to be voted the Stock represented by the Depositary Shares evidenced by
this Receipt in accordance with the instructions set forth in such request. The
Company hereby agrees to take all reasonable action that may be deemed necessary
by the Depositary in order to enable the Depositary to vote such Stock or cause
such Stock to be voted. In the absence of specific instructions from the holder
of this Receipt, the Depositary will abstain from voting to the extent of the
Stock represented by the Depositary Shares evidenced by this Receipt.
16. Reports, Inspection of Transfer Books. The Depositary shall make
-------------------------------------
available for inspection by holders of Receipts at the Corporate Office, the New
York Office and at such other places as it may from time to time deem advisable
during normal business hours any reports and communications received from the
Company that are received by the Depositary as the holder of Stock. The
Depositary shall keep books at the Corporate Office for the registration and
transfer of Receipts, which books at all reasonable times will be open for
inspection by the record holders of Receipts; provided that any such holder
requesting to exercise such right shall certify to the Depositary that such
inspection shall be for a proper purpose reasonably related to such person's
interest as an owner of Depositary Shares.
17. Liability of the Depositary, the Depositary's Agents, the
---------------------------------------------------------
Registrar and the Company. Neither the Depositary nor any Depositary's Agent
- -------------------------
nor the Registrar nor the Company shall incur any liability to any holder of
this Receipt, if by reason of any provision of any present or future law or
regulation thereunder of any governmental authority or, in the case of the
Depositary, the Registrar or any Depositary's Agent, by reason of any provision
present or future, of the Certificate of Incorporation or the Certificate of
Designations or, in the case of the Company, the Depositary, the Registrar or
any Depositary's Agent, by reason of any act of God or war or other
circumstances beyond the control of the relevant party, the Depositary, any
Depositary's Agent,
A-8
<PAGE>
the Registrar or the Company shall be prevented or forbidden from doing or
performing any act or thing that the terms of the Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
the Registrar or the Company incur any liability to any holder of this Receipt
(a) by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of the Deposit Agreement provide
shall or may be done or performed, or (b) by reason of any exercise of, or
failure to exercise, any discretion provided for in the Deposit Agreement
except, in the case of the Depositary, any Depositary's Agent or the Registrar,
if such exercise or failure to exercise discretion is caused by its negligence
or bad faith.
18. Obligations of the Depositary, the Depositary's Agents, the
-----------------------------------------------------------
Registrar and the Company. The Company assumes no obligation and shall be
- -------------------------
subject to no liability under the Deposit Agreement or this Receipt to the
holder hereof or other persons, except to perform in good faith such obligations
as are specifically set forth and undertaken by it to perform in the Deposit
Agreement. Each of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject to no liability under the Deposit
Agreement or this Receipt to the holder hereof or other persons, except to
perform such obligations as are specifically set forth and undertaken by it to
perform in the Deposit Agreement without negligence or bad faith.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding with respect to Stock, Depositary Shares or
Receipts or Common Stock that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company will be liable for any action or failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of this Receipt or any other
person believed by it in good faith to be competent to give such advice or
information.
19. Termination of Deposit Agreement. Whenever so directed by the
--------------------------------
Company, the Depositary will terminate this Deposit Agreement by mailing notice
of such termination to the record holders of all Receipts then outstanding at
least 60 days prior to the date fixed in such notice for such termination. The
Depositary may likewise terminate the Deposit Agreement if at any time 60 days
shall have expired after the Depositary shall have delivered to the Company a
written notice of its election to resign and a successor depositary shall not
have been appointed and accepted its appointment as provided in Section 5.04 of
the Deposit Agreement. In either case, on a date not less than 60 days after
such notice, the Depositary shall deliver or make available for delivery to
holders of Receipts, upon surrender of the such Receipts evidencing Depositary
Shares, such number of whole or fractional shares of the Stock as are
represented by the Depositary Shares.
A-9
<PAGE>
The Deposit Agreement shall automatically terminate after all
outstanding Depositary Shares have been redeemed or there has been a final
distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution has been
distributed to the holders of the Receipts.
Upon the termination of the Deposit Agreement, the Company shall be
discharged from all obligations thereunder except for its obligations to the
Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and
5.08 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination of
the Deposit Agreement, the Depositary thereafter shall discontinue all functions
and be discharged from all obligations as provided in the Deposit Agreement,
except as specifically provided therein.
20. GOVERNING LAW. THE DEPOSIT AGREEMENT AND THIS RECEIPT AND ALL
-------------
RIGHTS THEREUNDER AND HEREUNDER AND PROVISIONS THEREOF AND HEREOF SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
A-10
<PAGE>
FORM OF ASSIGNMENT
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 Receipt and all rights and interests represented by the Depositary
Shares evidenced thereby, and hereby irrevocably constitutes and appoints
_________________________________ attorney to transfer the same on the books of
the within-named Depositary, with full power of substitution in the premises.
Dated: _________________________
Signature(s) ______________________________________
______________________________________
______________________________________
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- ------------------
* (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A-11
<PAGE>
EXHIBIT 5.1
[NYO LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
June 30, 1998
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"), McKesson Financing Trust II, McKesson Financing
Trust III and McKesson Financing Trust IV, each a statutory business trust
created under the Business Trust Act of the State of Delaware (each a "Trust"
and collectively, the "Trusts"), in connection with the preparation of the
Registration Statement on Form S-3 (Nos. 333-50985, 333-50985-01, 333-50985-02
and 333-50985-03) (such Registration Statement being hereinafter referred to as
the "Registration Statement") filed by the Company and Trusts with the
Securities and Exchange Commission (the "Commission") with respect to the
registration under the Securities Act of 1933, as amended (the "Act"), of (i)
the Company's (a) unsecured senior debt securities, senior subordinated debt
securities, subordinated debt securities and junior subordinated debt securities
(collectively, the "Debt Securities"), which may be issued pursuant to an
indenture (as amended or supplemented, the "Indenture"), between the Company and
a trustee, (b) shares of Series Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), which may be represented by depositary shares (the
"Depositary Shares") evidenced by depositary receipts (the "Receipts"), which
may be issued under deposit agreements (the "Deposit Agreements") to be entered
into by the Company in respect of the Depositary Shares; (c) shares of Common
Stock, $0.01 par value per share (and the associated right to purchase the
Series A Junior Participating Preferred Stock of the Company,
<PAGE>
McKesson Corporation
June 30, 1998
Page 2
collectively the "Common Stock"); (d) warrants to purchase Debt Securities (the
"Debt Warrants") which may be issued under warrant agreements (the "Debt Warrant
Agreements") to be entered into by the Company in respect of the Debt Warrants;
warrants to purchase Preferred Stock or Common Stock (the "Equity Warrants" and
together with the Debt Warrants, the "Warrants"), which may be issued under
warrant agreements (the "Equity Warrant Agreement" and together with the Debt
Warrant Agreements, the "Warrant Agreements") to be entered into by the Company
in respect of the Equity Warrants; (e) stock purchase contracts, including
prepaid purchase contracts, ("Stock Purchase Contracts") to purchase Common
Stock, which may be issued under a purchase contract agreement (the "Purchase
Contract Agreement") to be entered into by the Company in respect of the Stock
Purchase Contracts; (f) stock purchase units ("Stock Purchase Units"), each
representing ownership of a Stock Purchase Contract and any of the Debt
Securities, debt obligations of third parties, including U.S. Treasury
securities, or Preferred Securities (as defined below) of a Trust, securing a
holder's obligation to purchase Common Stock under a Stock Purchase Contact; (g)
guarantees by the Company of the Preferred Securities (the "Preferred Securities
Guarantee") to be issued under one or more guarantee agreements (each a
"Guarantee Agreement") to be entered into by the Company; and (ii) the Trusts'
preferred securities (the "Preferred Securities" and, together with the Debt
Securities, the Preferred Stock, the Depositary Shares, the Common Stock, the
Warrants, the Stock Purchase Contracts, and the Stock Purchase Units, the
"Offered Securities") which are to be issued by each Trust pursuant to their
respective Amended and Restated Declaration of Trust (each an "Amended
Declaration").
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement; (ii) the form of the Indenture filed as an exhibit to the
Registration Statement; (iii) the forms of underwriting agreements filed as
exhibits to the Registration Statement to be entered into by the Company and one
or more underwriters to be named in connection with any underwritten offering of
equity or debt securities; (iv) the form of the Guarantee
<PAGE>
McKesson Corporation
June 30, 1998
Page 3
Agreements filed as exhibits to the Registration Statement; (v) the forms of
Warrant Agreements filed as exhibits to the Registration Statement; (vi) the
form of Deposit Agreement filed as an exhibit to the Registration Statement;
(vii) the Restated Certificate of Incorporation and Restated By-Laws of the
Company as currently in effect; (viii) the Certificate of Trust of each of the
Trusts filed with the Secretary of State of the State of Delaware on April 24,
1998; (ix) the Declaration of Trust of each of the Trusts dated as of April 23,
1998 (the "Declaration of Trust"); (x) the Forms of the Amended Declarations of
each of the Trusts filed as exhibits to the Registration Statement; (xi) a
specimen certificate representing the Common Stock; and (xii) certain
resolutions of the Board of Directors of the Company relating to the
transactions contemplated by the Registration Statement, the Trusts and related
matters (the "Board Resolutions"). We have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company and the
Trusts, we have assumed that such parties had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof on such parties. [We have also assumed that the execution and delivery
by the Company and the Trusts, as applicable, of the Indenture, the Offered
Securities, the Warrant Agreements, the Deposit Agreements, the Purchase
Contract Agreements, and the Guarantee Agreements and the performance of their
respective obligations thereunder do not and will not violate, conflict with or
constitute a default under (i) any agreement or instrument to which the Company,
the Trusts or their respective properties is subject (except that we do not make
the assumption set forth in this clause (i) with respect to the Restated
Certificate of Incorporation or the Restated By-Laws of the Company or the
Certificate of Trust, Declaration of Trust or Amended Declaration of the
respective
<PAGE>
McKesson Corporation
June 30, 1998
Page 4
Trusts, (ii) any law, rule, or regulation to which the Company or the Trusts are
subject (except that we do not make the assumption set forth in this clause (ii)
with respect to the Delaware Business Trust Act, the Delaware General
Corporation Law (the "DGCL") or those laws, rules and regulations of the State
of New York and the United States of America (other than securities or other
anti-fraud laws) which, in our experience, are normally applicable to
transactions of the type contemplated by the Registration Statement, but without
our having made any special investigation concerning any other laws, rules or
regulations), (iii) any judicial or regulatory order or decree of any
governmental authority or (iv) any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any governmental
authority. As to any facts material to the opinions expressed herein which we
did not independently establish or verify, we have relied upon oral or written
statements and representations of officers and other representatives of the
Company, each of the Trusts and others.
We do not express any opinion as to the laws of any jurisdiction other
than the laws of the State of New York, the DGCL and the Business Trust Act of
the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that:
1. With respect to any series of Debt Securities (the "Offered Debt
Securities"), when (i) the Indenture has been duly authorized executed and
delivered by a trustee qualified to act under the Trust Indenture Act of 1939;
(ii) the authorized officers of the Company have taken all necessary corporate
action to fix and determine the terms of the Offered Debt Securities in
accordance with the Board Resolutions; (iii) the terms of the Offered Debt
Securities and of their issuance and sale have been duly established in
conformity with the Indenture so as not to violate any applicable law, the
Restated Certificate of Incorporation or Restated By-laws of the Company or
result in a default under or breach of any agreement or instrument binding upon
the Company, and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company; (iv) the
Indenture has been duly executed and delivered by the Company; and (v) the
Offered Debt Securities have been duly executed and authenticated in accordance
with the terms of the Indenture and duly
<PAGE>
McKesson Corporation
June 30, 1998
Page 5
delivered to the purchasers thereof upon payment of the agreed-upon
consideration therefor, the issuance and sale of the Offered Debt Securities
(including any Offered Debt Securities duly issued (A) upon exchange or
conversion of any shares of Preferred Stock that are exchangeable or convertible
into Debt Securities, (B) upon the exercise of any Warrants exercisable for Debt
Securities or (C) as part of Stock Purchase Units) will have been duly
authorized, and the Offered Debt Securities will be valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that (x) enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or similar laws now
or hereinafter in effect relating to or affecting the enforcement of creditors'
rights generally, (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), (3)
requirements that a claim with respect to any Offered Debt Securities
denominated other than in United States dollars (or a judgment denominated other
than in United States dollars in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law and (4) governmental authority to limit, delay or prohibit the
making of payments outside the United States or in foreign currency or composite
currency and (y) the waiver contained in Section 6.6 of the Indenture may be
deemed unenforceable.
2. With respect to the shares of any series of Preferred Stock (the
"Offered Preferred Stock"), when (i) the Board of Directors of the Company or an
authorized committee thereof has taken all necessary corporate action to fix and
determine the terms of the Offered Preferred Stock in accordance with the Board
Resolutions, including the adoption of a Certificate of Designation for such
Preferred Stock in the form required by applicable law; (ii) such Certificate of
Designation has been duly filed with the Secretary of State of the State of
Delaware; (iii) certificates representing the shares of the Offered Preferred
Stock have been manually signed by an authorized officer of the transfer agent
and registrar for the Offered Preferred Stock and registered by such transfer
agent and registrar, and delivered to the purchasers thereof; and (iv) the
Company receives consideration per share for the Offered Preferred Stock (A) in
such amount (not less than the par value per share) as may be determined by the
Board of Directors of the Company or an authorized committee thereof in the form
of
<PAGE>
McKesson Corporation
June 30, 1998
Page 6
cash, services rendered, personal property, real property, leases of real
property, or a combination thereof or (B) in an amount not less than the amount
of consideration determined to be capital, in any of the above-stated forms, and
a binding obligation of the purchaser to pay the balance of such purchase price,
the issuance and sale of the shares of Offered Preferred Stock will have been
duly authorized, and such shares will be validly issued, fully paid and
nonassessable.
3. With respect to Depositary Shares representing fractional
interests in any series of Preferred Stock, when (i) the Board of Directors of
the Company or an authorized committee thereof has taken all necessary corporate
action to fix and determine the terms of the Depositary Shares and the related
series of Preferred Stock in accordance with the Board Resolutions, including
the adoption of a Certificate of Designation for such related series of
Preferred Stock in the form required by applicable law; (ii) such Certificate of
Designation has been duly filed with the Secretary of State of the State of
Delaware; (iii) the terms of the Depositary Shares and of their issuance and
sale have been duly established in conformity with the Deposit Agreement so as
not to violate any applicable law, the Restated Certificate of Incorporation or
Amended By-laws of the Company or result in a default under or breach of any
agreement or instrument binding upon the Company, and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company; (iv) the applicable Deposit Agreement has been
duly executed and delivered; (v) the related series of Preferred Stock has been
duly authorized and validly issued in accordance with the laws of the State of
Delaware and delivered to the depositary for deposit in accordance with the
Deposit Agreement; and (vi) the Receipts evidencing the Depositary Shares have
been duly issued against deposit of the related series of Preferred Stock with
the depositary in accordance with the Deposit Agreement, the issuance and sale
of the Depositary Shares will be validly issued and the Receipts will entitle
the holders thereof to the rights specified therein and in the Deposit
Agreement.
4. With respect to the shares of Common Stock (the "Offered Common
Stock"), when (i) the Board of Directors of the Company or an authorized
committee thereof has taken all necessary corporate action to authorize the
issuance and
<PAGE>
McKesson Corporation
June 30, 1998
Page 7
sale of the Offered Common Stock in accordance with the Board Resolutions; (ii)
certificates representing the shares of the Offered Common Stock in the form of
the specimen certificates examined by us have been manually signed by an
authorized officer of the transfer agent and registrar for the Common Stock and
registered by such transfer agent and registrar, and delivered to the purchasers
thereof; and (iii) the Company receives consideration per share of the Offered
Common Stock (A) in such amount (not less than the par value per share) as may
be determined by the Board of Directors of the Company or an authorized
committee thereof in the form of cash, services rendered, personal property,
real property, leases of real property, or a combination thereof or (B) in an
amount not less than the amount of consideration determined to be capital, in
any of the above-stated forms, and a binding obligation of the purchaser to pay
the balance of such purchase price, the issuance and sale of the shares of
Offered Common Stock (including any Offered Common Stock duly issued (1) upon
exchange or conversion of any Debt Securities or shares of Preferred Stock that
are exchangeable or convertible into Common Stock, (2) upon the exercise of any
Warrants exercisable for Common Stock or (3) as part of Stock Purchase Units)
will have been duly authorized, and such Offered Common Stock will be validly
issued, fully paid and nonassessable.
5. With respect to any Warrants (the "Offered Warrants"), when (i)
the Board of Directors of the Company or an authorized committee thereof has
taken all necessary corporate action to fix and determine the terms of the
Offered Warrants in accordance with the Board Resolutions; (ii) the terms of the
Offered Warrants and of their issuance and sale have been duly established in
conformity with the applicable Warrant Agreement so as not to violate any
applicable law, the Restated Certificate of Incorporation or Restated By-laws of
the Company or result in a default under or breach of any agreement or
instrument binding upon the Company, and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
the Company; (iii) the applicable Warrant Agreement has been duly executed and
delivered; and (iv) the Offered Warrants have been duly executed and
authenticated in accordance with the terms of the applicable Warrant Agreement
and duly delivered to the purchasers thereof upon payment of the agreed-upon
consideration therefor, the issuance and sale of the Offered Warrants will have
been duly authorized,
<PAGE>
McKesson Corporation
June 30, 1998
Page 8
and the Offered Warrants will be valid and binding obligations of the Company
entitled to the benefits of the applicable Warrant Agreement and enforceable
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by (A) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws now or
hereinafter in effect relating to or affecting the enforcement of creditors'
rights generally, (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), (C)
requirements that a claim with respect to any Offered Warrants denominated other
than in United States dollars (or a judgment denominated other than in United
States dollars in respect of such claim) be converted into United States dollars
at a rate of exchange prevailing on a date determined pursuant to applicable law
and (D) governmental authority to limit, delay or prohibit the making of
payments outside the United States or in foreign currency or composite currency.
6. With respect to the Preferred Securities (the "Offered Preferred
Securities"), when (i) the trustees of the applicable Trust have taken all
necessary action to adopt the Amended Declaration and to fix and determine the
terms of the Offered Preferred Securities in accordance with the Amended
Declarations; (ii) the terms of the Offered Preferred Securities and of their
issuance and sale have been duly established in conformity with the Amended
Declaration so as not to violate any applicable law, the applicable Certificate
of Trust, Declaration of Trust and Amended Declaration or result in a default
under or a breach of any agreement or instrument binding upon the Trust and the
Company, and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the applicable Trust and the
Company; and (iii) the Offered Preferred Securities have been duly issued and
delivered by the applicable Trust as contemplated by the Registration Statement
and the prospectus supplement relating thereto, the issuance and sale of the
Offered Preferred Securities will have been duly authorized for issuance and
represent, subject to paragraph 7 below, fully paid nonassessable undivided
beneficial interests in the assets of the applicable Trust.
7. The holders of the Offered Preferred Securities will be entitled
to the same limitation of personal liability extended to stockholders of private
<PAGE>
McKesson Corporation
June 30, 1998
Page 9
corporations for profit organized under the DGCL. We bring to your attention,
however, that the holders of the Offered Preferred Securities of each Trust may
be obligated, pursuant to the Amended Declaration of such Trust, to (i) provide
indemnity and/or security in connection with, and pay taxes or governmental
charges arising from, transfers of Offered Preferred Securities and the issuance
of replacement Offered Preferred Securities and (ii) provide security and
indemnity in connection with requests of or directions to the Institutional
Trustee (as defined therein) to exercise its rights and powers under the
applicable Amended Declaration.
8. With respect to the Guarantees (the "Offered Guarantees"), when
(i) the trustees of the applicable Trust have taken all necessary action to
adopt the Amended Declaration and to fix and determine the terms of the Offered
Preferred Securities in accordance with the terms of the applicable Amended
Declaration; (ii) the Board of Directors of the Company or an authorized
committee thereof has taken all necessary corporate action to fix and determine
the terms of the Guarantees in accordance with the Board Resolution; (iii) the
terms of the Offered Preferred Securities and the related Offered Guarantee and
the issuance and sale thereof have been duly established in conformity with the
applicable Amended Declaration and applicable Guarantee Agreement, respectively,
so as not to violate any applicable law, the applicable Certificate of Trust,
Declaration of Trust and Amended Declaration, the Restated Certificate of
Incorporation and Restated By-laws of the Company, respectively, or result in a
default under or a breach of any agreement or instrument binding upon the Trust
and the Company, and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the applicable Trust
and the Company; (iv) the applicable Guarantee Agreement has been duly executed
and delivered; (v) the Offered Preferred Securities have been duly issued and
delivered by the applicable Trust as contemplated by the Registration Statement
and the prospectus supplement relating thereto; (vi) certificates representing
the Offered Preferred Securities have been manually signed by an authorized
officer of the transfer agent and registrar for the Offered Preferred Securities
and registered by such transfer agent and registrar, and delivered to the
purchasers thereof; and (vii) the applicable Trust receives the agreed-upon
consideration therefor, the Offered Guarantee will be a valid and binding
obligation of the Company enforceable in accordance with its terms
<PAGE>
McKesson Corporation
June 30, 1998
Page 10
except to the extent that (A) enforcement thereof may be limited by (x)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
similar laws now or hereinafter in effect relating to or affecting the
enforcement of creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity), and (y) the waiver contained in Section 8.2 of the Guarantee Agreements
may be deemed unenforceable.
9. With respect to the Stock Purchase Contracts (the "Offered Stock
Purchase Contracts"), when (i) the Board of Directors of the Company or any
authorized committee thereof has taken all necessary corporate action to fix and
determine the terms of the Offered Stock Purchase Contracts in accordance with
the Board Resolutions; (ii) the terms of the Offered Stock Purchase Contracts
and of their issuance and sale have been duly established in conformity with the
related Purchase Contract Agreement as contemplated by the Registration
Statement and the applicable prospectus supplement so as not to violate any
applicable law, the Restated Certificate of Incorporation or Restated By-laws of
the Company, or result in a default under or breach of any agreement or
instrument binding on the Company, and so as to comply with any requirements or
restrictions imposed by any court or governmental body having jurisdiction over
the Company; (iii) the related Purchase Contract Agreement has been duly
executed and delivered; and (iv) the Offered Stock Purchase Contracts have been
duly executed and authenticated in accordance with the terms of the related
Purchase Contract Agreement and duly delivered to the purchasers thereof upon
the payment of the agreed-upon consideration therefor, the issuance and sale of
the Offered Stock Purchase Contracts will have been duly authorized, and the
related Purchase Contract Agreement will be a valid and binding obligation of
the Company and enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (x) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or similar laws now
or hereinafter in effect relating to or affecting the enforcement of creditors'
rights generally and (y) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
<PAGE>
McKesson Corporation
June 30, 1998
Page 11
10. With respect to the Stock Purchase Units (the "Offered Stock
Purchase Units"), when (i) the Board of Directors of the Company or any
authorized committee thereof has taken all necessary corporate action to fix and
determine the terms of the Offered Stock Purchase Units and the related Stock
Purchase Contracts in accordance with the Board Resolutions; (ii) the terms of
the Offered Stock Purchase Units and the related Stock Purchase Contracts and of
their issuance and sale have been duly established in conformity with the
related Purchase Contract Agreement and as contemplated by the Registration
Statement and the applicable prospectus supplement so as not to violate any
applicable law, the Restated Certificate of Incorporation or Restated By-laws of
the Company or result in a default under or breach of any agreement or
instrument binding on the Company, and so as to comply with any requirements or
restrictions imposed by any court or governmental body having jurisdiction over
the Company; (iii) the terms of the collateral arrangements and agreements
relating to such Stock Purchase Units have been duly established and such
agreements have been duly executed and delivered and, in each case so as not to
violate any applicable law, the Restated Certificate of Incorporation or
Restated By-laws of the Company or result in a default under or breach of any
agreement or instrument binding on the Company, and so as to comply with any
requirements or restrictions imposed by any court or governmental body having
jurisdiction over the Company (iv) the related Purchase Contract Agreement has
been duly executed and delivered; and (v) the Offered Stock Purchase Units and
the related Stock Purchase Contracts have been duly executed and authenticated
in accordance with the terms thereof and duly delivered to the purchasers
thereof upon the payment of the agreed-upon consideration therefor, the issuance
and sale of the Stock Purchase Units will have been duly authorized, and the
Stock Purchase Units will be valid and binding obligations of the Company and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (x) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws now or
hereinafter in effect relating to or affecting the enforcement of creditors'
rights generally and (y) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
<PAGE>
McKesson Corporation
June 30, 1998
Page 12
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission. This opinion is expressed as of the
date hereof, and we disclaim any undertaking to advise you of any subsequent
changes in the facts stated or assumed herein or of any subsequent changes in
applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE>
Exhibit 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(dollars in millions)
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
------ ------ ------- -------- ------
<S> <C> <C> <C> <C> <C>
Income (Loss) from Continuing
Operations $154.9 $ 5.1 $ 120.7 $(150.1) $ 69.3
Taxes on Income (Loss) and Tax Benefit
of Dividends on Preferred Securities
of Subsidiary Grantor Trust of $4.0
in 1998 and $0.4 in 1997 94.6 30.9 76.2 96.6 45.0
Fixed Charges (1) 130.3 68.0 53.1 52.8 47.3
------ ------ ------ ------- ------
Earnings Available For Fixed Charges $379.8 $104.0 $250.0 $ (0.7) $161.6
====== ====== ====== ======= ======
Fixed Charges (1) $130.3 $ 68.0 $ 53.1 $ 52.8 $ 47.3
Preferred Stock Dividends - - - 5.0 10.2
------ ------ ------ ------- ------
Combined Fixed Charges and
Preferred Stock Dividends $130.3 $ 68.0 $ 53.1 $ 57.8 $ 57.5
====== ====== ====== ======= ======
Ratio of Earnings to Fixed Charges 2.91x 1.53x 4.71x (0.01)x 3.42x
====== ====== ====== ======= ======
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends 2.91x 1.53x 4.71x (0.01)x 2.81x
====== ====== ====== ======= ======
</TABLE>
(1) Fixed charges consist of interest expense, the portion of rental expense
under operating leases deemed by the Company to be representative of the
interest factor and dividends on preferred securities of a subsidiary
grantor trust.
(2) Earnings were inadequate to cover fixed charges by $53.5 million and
combined fixed charges and preferred stock dividends by $58.5 million in
fiscal 1995.
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to the
Registration Statement of McKesson Corporation ("McKesson") on Form S-3 of our
reports dated May 18, 1998 on McKesson's consolidated financial statements and
consolidated supplementary financial schedule, appearing in and incorporated by
reference in the Annual Report on Form 10-K of McKesson Corporation for the year
ended March 31, 1998, 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 such
Registration Statement.
/s/ Deloitte & Touche L.L.P.
San Francisco, California
Dallas, Texas
June 30, 1998
