<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
McKESSON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
<TABLE>
<S> <C> <C>
DELAWARE 5122 94-3207296
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
McKESSON PLAZA
ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 983-8300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S EXECUTIVE OFFICES)
----------------
NANCY A. MILLER
VICE PRESIDENT AND CORPORATE SECRETARY
McKESSON CORPORATION
McKESSON PLAZA, ONE POST STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 983-8300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPY TO:
IVAN D. MEYERSON GREGG A. NOEL
VICE PRESIDENT AND GENERAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER
McKESSON CORPORATION & FLOM LLP
McKESSON PLAZA, ONE POST STREET 300 SOUTH GRAND AVENUE
SAN FRANCISCO, CALIFORNIA 94104 LOS ANGELES, CALIFORNIA 90071
(415) 983-8300 (213) 687-5000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If any of the Securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING PRICE AGGREGATE
SECURITIES TO BE TO BE PER SECURITY OFFERING PRICE AMOUNT OF
REGISTERED REGISTERED (1)(2) (1)(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6.30% Exchange Notes due
March 1, 2005.......... $150,000,000 100% $150,000,000 $44,250
- --------------------------------------------------------------------------------------
6.40% Exchange Notes due
March 1, 2008.......... $150,000,000 100% $150,000,000 $44,250
- --------------------------------------------------------------------------------------
Total................... $300,000,000 100% $300,000,000 $88,500
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purposes of computing the registration fee in
accordance with Rule 457 of the Securities Act.
(2) Exclusive of accrued interest, if any.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 1, 1998
PROSPECTUS
OFFERS TO EXCHANGE
$150,000,000 6.30% EXCHANGE NOTES DUE MARCH 1, 2005 AND
$150,000,000 6.40% EXCHANGE NOTES DUE MARCH 1, 2008
OF
McKESSON CORPORATION
THE EXCHANGE OFFERS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1998, UNLESS EXTENDED.
McKesson Corporation, a Delaware corporation (the "Company" or "McKesson"),
is hereby offering (the "Exchange Offers"), upon the terms and subject to the
conditions set forth in this Prospectus and the accompanying applicable Letter
of Transmittal (the "Letter of Transmittal"), to exchange an aggregate
principal amount of up to $300,000,000 of its 6.30% Exchange Notes due March 1,
2005 (the "Exchange Notes due 2005") and 6.40% Exchange Notes due March 1, 2008
(the "Exchange Notes due 2008," and with the Exchange Notes due 2005,
collectively, the "Exchange Notes"), which exchange has been registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
registration statement of which this Prospectus is a part, for its 6.30% Notes
due March 1, 2005 (the "Private Notes due 2005," and with the Exchange Notes
due 2005, the "Notes due 2005") and 6.40% Notes due March 1, 2008 (the "Private
Notes due 2008," and with the Exchange Notes due 2008, the "Notes due 2008,"
and with the Private Notes due 2005, collectively, the "Private Notes"),
respectively, which Private Notes were issued on February 24, 1998 (the
"Closing Date"). The forms and terms of the Exchange Notes and the
corresponding Private Notes are identical in all material respects except that
(i) the exchange will have been registered under the Securities Act, and
therefore, the Exchange Notes will not bear legends restricting the transfer
thereof and (ii) holders of the Exchange Notes will not be entitled to certain
rights of holders of the Private Notes ("Holders") under the Registration
Rights Agreement (as defined herein), which rights will terminate upon the
consummation of the Exchange Offers. The Exchange Notes will evidence the same
indebtedness as the corresponding Private Notes (which they replace) and will
be entitled to the benefits of an indenture dated as of March 11, 1997
governing the Private Notes and the Exchange Notes (the "Indenture"). The
Private Notes and the Exchange Notes are sometimes referred to herein
collectively as the "Notes." See "The Exchange Offers" and "Description of
Notes."
The Exchange Notes will be, as are the Private Notes, redeemable as a whole
or in part, at the option of the Company, at any time at a redemption price
equal to the greater of (i) 100% of their principal amount and (ii) the sum of
the present values of the remaining scheduled payments of principal and
interest thereon discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Yield (as defined herein) plus 10 basis points for each series of
Exchange Notes, plus in each case accrued interest to the date of redemption.
See "Description of Notes--Optional Redemption."
(Continued on following page)
-----------
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DESCRIPTION OF CERTAIN RISKS TO
BE CONSIDERED BY HOLDERS WHO TENDER THEIR PRIVATE NOTES IN THE EXCHANGE OFFERS.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The date of this Prospectus is , 1998
<PAGE>
(Continued from previous page)
McKESSON WILL ACCEPT FOR EXCHANGE ANY AND ALL VALIDLY TENDERED PRIVATE NOTES
NOT WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON 1998, UNLESS
ANY OF THE EXCHANGE OFFERS ARE EXTENDED BY McKESSON IN ITS SOLE DISCRETION
(THE "EXPIRATION DATES"). TENDERS OF PRIVATE NOTES MAY BE WITHDRAWN AT ANY
TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE APPLICABLE EXPIRATION
DATE. THE EXCHANGE OFFERS ARE NOT CONDITIONED UPON ANY MINIMUM PRINCIPAL
AMOUNT OF PRIVATE NOTES BEING TENDERED FOR EXCHANGE. PRIVATE NOTES MAY BE
TENDERED ONLY IN INTEGRAL MULTIPLES OF $1,000. IN THE EVENT McKESSON
TERMINATES THE EXCHANGE OFFERS AND DOES NOT ACCEPT FOR EXCHANGE ANY PRIVATE
NOTES, McKESSON WILL PROMPTLY RETURN ALL PREVIOUSLY TENDERED PRIVATE NOTES TO
THE HOLDERS THEREOF.
Prior to the Exchange Offers, there has been no public market for the Notes.
McKesson does not intend to list the Notes on any securities exchange or to
seek approval for quotation through any automated quotation system. There can
be no assurance that an active market for the Notes will develop. To the
extent that a market for the Notes does develop, the market value of the Notes
will depend on market conditions (such as yields on alternative investments),
general economic conditions, McKesson's financial condition and certain other
factors. Such conditions might cause the Notes, to the extent that they are
traded, to trade at a significant discount from face value. See "Risk
Factors--Absence of Public Market."
The Exchange Notes are being offered hereunder in order to satisfy certain
obligations of McKesson contained in the Registration Rights Agreement. See
"The Exchange Offers--Consequences of Failure to Exchange" for a discussion of
McKesson's belief, based on interpretations by the staff (the "Staff") of the
Securities and Exchange Commission (the "Commission") as set forth in no
action letters issued to third parties, as to the transferability of the
Exchange Notes upon satisfaction of certain conditions. Each broker-dealer
that receives Exchange Notes for its own account pursuant to the Exchange
Offers must acknowledge that it will deliver a prospectus in connection with
any resale of such Exchange Notes. Each Letter of Transmittal states that by
so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Private Notes acquired by such broker-
dealer as a result of market-making activities or other trading activities.
The Company has agreed that, ending on the close of business on the 180th day
following the Expiration Date (as defined herein), it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
McKesson will not receive any proceeds from, and has agreed to bear the
expenses of, the Exchange Offers. No underwriter is being used in connection
with the Exchange Offers.
THE EXCHANGE OFFERS ARE NOT BEING MADE TO, NOR WILL McKESSON ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF PRIVATE NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFERS OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
2
<PAGE>
AVAILABLE INFORMATION
This Prospectus constitutes part of a Registration Statement on Form S-4
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act
with respect to the Exchange Notes. This Prospectus omits certain of the
information contained in the Registration Statement, and reference hereby is
made to the Registration Statement and to the exhibits thereto for further
information with respect to the Company and the Exchange Notes offered hereby.
Any statements contained herein concerning the provisions of any document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission or incorporated by reference herein are not necessarily complete,
and, in each instance, reference is made to the copy of such document so filed
for a more complete description of the matter involved. Each such statement
herein is qualified in its entirety by such reference.
Each of the Company and AmeriSource Health Corporation ("AmeriSource") 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 may be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the following Regional Offices of the
Commission: Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of such material may also be obtained 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 and AmeriSource) that file
electronically with the Commission (at http://www.sec.gov). The McKesson
common stock is listed on each of the New York Stock Exchange (the "NYSE") and
the Pacific Exchange, Inc. (the "PE"), and the AmeriSource common stock is
listed on the NYSE. Reports, proxy statements and other information relating
to each of McKesson and AmeriSource can be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005 and, in the case of McKesson,
at the offices of the PE, 301 Pine Street, San Francisco, California 94104.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in this Prospectus the following
documents previously filed or to be filed by the Company with the Commission
pursuant to the Exchange Act:
1. Annual Report of the Company on Form 10-K for the fiscal year ended
March 31, 1997 (the "Form 10-K").
2. Quarterly Reports of the Company on Form 10-Q for the quarters ended
June 30, 1997, September 30, 1997 and December 31, 1997.
3. Current Reports of the Company on Form 8-K dated November 22, 1996 (as
amended by Amendment No. 1 on Form 8-K/A filed on January 21, 1997 as
further amended by Amendment No. 2 on Form 8-K/A, filed on April 28, 1997),
April 7, 1997, June 13, 1997, June 24, 1997, September 5, 1997, September
24, 1997, October 31, 1997, February 24, 1998 and March 19, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
3
<PAGE>
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
PERSON, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL
OF THE FOREGOING DOCUMENTS INCORPORATED HEREIN BY REFERENCE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR SUCH DOCUMENTS SHALL BE
DIRECTED TO NANCY A. MILLER, VICE PRESIDENT AND CORPORATE SECRETARY, McKESSON
CORPORATION, McKESSON PLAZA, ONE POST STREET, SAN FRANCISCO, CALIFORNIA 94104
(TELEPHONE NUMBER (415) 983-8301). IN ORDER TO INSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY 5 BUSINESS DAYS PRIOR TO THE
APPLICABLE EXPIRATION DATE.
4
<PAGE>
PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in its
entirety by the detailed information appearing elsewhere in the Prospectus or
incorporated by reference herein.
THE COMPANY
McKesson is the 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,
processes and markets pure drinking water. The Company's objective is to become
the world leader in health care supply and comprehensive pharmaceutical
management across the entire supply chain, from manufacturer to patient. For a
more complete discussion of the Company and its recent acquisitions, see "The
Company."
THE EXCHANGE OFFERS
Securities Offered ......... The Company is offering to exchange pursuant to
the Exchange Offers up to (i) $150,000,000
principal amount of Exchange Notes due 2005 for
$150,000,000 principal amount of Private Notes
due 2005 and (ii) $150,000,000 principal amount
of Exchange Notes due 2008 for $150,000,000
principal amount of Private Notes due 2008, all
of which have been registered under the
Securities Act. The forms and terms of the
Exchange Notes and the corresponding Private
Notes are identical in all material respects,
except for certain transfer restrictions and
registration rights relating to the Private Notes
and except that Holders of Private Notes of
Exchange Offers that have not been consummated by
October 7, 1998 will be entitled to liquidated
damages in an amount equal to 0.25% per annum on
the Private Notes held by such Holders.
Liquidated damages, if any, will accrue from and
including October 8, 1998 and will cease to
accrue from the consummation of the applicable
Exchange Offer.
The Exchange Offers......... The Exchange Notes are being offered in exchange
for a like principal amount of corresponding
Private Notes. The issuance of the Exchange Notes
is intended to satisfy obligations of the Company
contained in the Registration Rights Agreement.
The Exchange Notes evidence the same debt as the
Private Notes and will be issued, and Holders
thereof are entitled to the same benefits as
Holders of the Private Notes, under the
Indenture. See "The Exchange Offers."
Tenders, Expiration Date,
Withdrawals................. The Exchange Offers will expire at 5:00 p.m., New
York City time, on , 1998, or such later
time and date to which any of them may be
extended by the Company in its sole discretion.
Tenders of Private Notes may be withdrawn at any
time prior to 5:00 p.m., New York City time on
the applicable Expiration Date. Private Notes not
accepted for exchange for any reason will be
returned without expense to the tendering holder
thereof as promptly as practicable after the
expiration or termination of the applicable
Exchange Offer. See "The Exchange Offers."
5
<PAGE>
Procedures for Tendering
Private Notes .............. Brokers, dealers, commercial banks, trust
companies and other nominees who hold Private
Notes through the Depository Trust Company
("DTC") must effect tenders by book-entry
transfer in accordance with DTC's Automated
Tender Offer Program ("ATOP"). Beneficial owners
of Private Notes registered in the name of a
broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person
promptly if they wish to tender Private Notes
pursuant to the Exchange Offers. Tendering
Holders of Private Notes that do not use ATOP
must complete and sign the applicable Letter of
Transmittal (the YELLOW Letter of Transmittal for
the Private Notes due 2005 and the BLUE Letter of
Transmittal for the Private Notes due 2008) in
accordance with the instructions contained
therein and forward the same by mail, facsimile
or hand delivery, together with any other
required documents, to the Exchange Agent, either
with the certificates of the Private Notes to be
tendered or in compliance with the specified
procedures for guaranteed delivery of Private
Notes. Tendering holders of Private Notes that
use ATOP will, by so doing, acknowledge that they
are bound by the terms of the applicable Letter
of Transmittal. See "The Exchange Offers--
Procedures for Tendering Private Notes."
Letters of Transmittal and certificates
representing Private Notes should not be sent to
the Company. Such documents should only be sent
to the Exchange Agent.
Federal Income Tax
Consequences ............... The exchange pursuant to the Exchange Offers will
not be a taxable transaction for Federal income
tax purposes. See "Certain United States Federal
Tax Consequences."
Exchange Agent ............. The First National Bank of Chicago is serving as
Exchange Agent (the "Exchange Agent") in
connection with the Exchange Offers.
6
<PAGE>
CONSEQUENCES OF FAILURE TO EXCHANGE PRIVATE NOTES
PURSUANT TO THE EXCHANGE OFFERS AND CERTAIN REQUIREMENTS FOR TRANSFER OF
EXCHANGE NOTES
Holders of Private Notes who do not exchange their Private Notes for the
corresponding Exchange Notes pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of the Private Notes and the restrictions on transfer of such Private Notes as
set forth in the legend thereon as a consequence of the issuance of the Private
Notes pursuant to exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, the Private Notes may not be offered or sold, unless
registered under the Securities Act, except pursuant to an exemption from, or
in a transaction not subject to, the Securities Act and applicable state
securities laws. The Company does not currently anticipate that it will
register Private Notes under the Securities Act. See "Description of Notes--
Registration Rights." Based on existing interpretations by the Staff, as set
forth in several no-action letters to third parties, and subject to the
immediately following sentence, the Company believes that Exchange Notes issued
pursuant to the Exchange Offers in exchange for Private Notes may be offered
for resale, resold and otherwise transferred by the holders thereof (other than
holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act. However,
any purchaser of Private Notes who is an affiliate of the Company within the
meaning of Rule 405 under the Securities Act ("affiliate") or who intends to
participate in the Exchange Offers for the purpose of distributing the Exchange
Notes, or any broker-dealer who purchased the Private Notes from the Company to
resell pursuant to Rule 144A under the Securities Act ("Rule 144A") or any
other available exemption under the Securities Act, (i) will not be able to
rely on the interpretations of the Staff set forth in the above-mentioned no-
action letters, (ii) will not be entitled to tender its Private Notes in the
Exchange Offers and (iii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any sale or
transfer of the Private Notes unless such sale or transfer is made pursuant to
an exemption from such requirements. The Company does not intend to request the
Commission to consider, and the Commission has not considered, the Exchange
Offers in the context of a no-action letter and there can be no assurance that
the Staff would make a similar determination with respect to the Exchange
Offers as in such other circumstances.
Each Holder of the Private Notes who wishes to exchange the Private Notes for
Exchange Notes in the Exchange Offers will be required to represent that (i) it
is not an affiliate of the Company, (ii) the Exchange Notes to be received by
it were acquired in the ordinary course of its business and (iii) at the time
of the Exchange Offers, it has no arrangement with any person to participate in
the distribution within the meaning of the Securities Act ("distribution") of
the Exchange Notes. Each broker-dealer that receives Exchange Notes for its own
account in exchange for Private Notes, where such Private Notes were acquired
by such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution." The
information set forth above concerning certain interpretations of and positions
taken by the Staff is not intended to constitute legal advice, and prospective
investors should consult their own legal advisors with respect to such matters.
7
<PAGE>
THE EXCHANGE NOTES
The forms and terms of the Exchange Notes and the corresponding Private Notes
are identical in all material respects except for certain transfer restrictions
and registration rights relating to the Private Notes and except that Holders
of Private Notes of Exchange Offers that have not been consummated by October
7, 1998 will be entitled to liquidated damages in an amount equal to 0.25% per
annum on the Private Notes held by such Holders. Liquidated damages, if any,
will accrue from and including October 8, 1998 and will cease to accrue from
the consummation of the applicable Exchange Offer. The Exchange Notes will bear
interest from the most recent date to which interest has been paid on the
applicable Private Notes or, if no interest has been paid, from February 24,
1998. Accordingly, if the relevant record date for interest payment occurs
after the consummation of the applicable Exchange Offer, registered holders of
such Exchange Notes on such record date will receive interest accruing from the
most recent date to which interest has been paid or, if no interest has been
paid, from February 24, 1998. If, however, the relevant record date for
interest payment occurs prior to the consummation of the applicable Exchange
Offer, registered holders of such Private Notes on such record date will
receive interest accruing from the most recent date to which interest has been
paid or, if no interest has been paid, from February 24, 1998. Holders of
Private Notes whose Private Notes are accepted for exchange will not receive
any payment in respect of accrued interest on such Private Notes otherwise
payable on any interest payment date the record date for which occurs on or
after consummation of the Exchange Offers.
Securities Offered ......... Up to (i) $150,000,000 principal amount of
Exchange Notes due 2005 and (ii) $150,000,000
principal amount of Exchange Notes due 2008.
Interest Rates; Payment
Dates ...................... Interest on the Exchange Notes due 2005 and the
Exchange Notes due 2008 will accrue at the rates
of 6.30%, and 6.40% per annum, respectively,
payable semiannually in arrears on March 1 and
September 1 of each year, commencing September 1,
1998, to the persons in whose name the Exchange
Notes are registered at the close of business on
the immediately preceding February 15th and
August 15th, respectively.
Maturity Dates ............. Exchange Notes due 2005: March 1, 2005.
Exchange Notes due 2008: March 1, 2008.
Optional Redemption ........ The Exchange Notes due 2005 and the Exchange
Notes due 2008 will be redeemable as a whole or
in part, at the option of the Company, at any
time at a redemption price equal to the greater
of (i) 100% of their principal amount and (ii)
the sum of the present values of the remaining
scheduled payments of principal and interest
thereon discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the
applicable Treasury Yield plus 10 basis points
for each series of Exchange Notes, plus in each
case accrued interest to the date of redemption.
Ranking .................... The Exchange Notes will constitute unsecured,
unsubordinated obligations of the Company.
Payment of the principal of and interest on the
Exchange Notes will rank pari passu with all
other unsecured, unsubordinated debt of the
Company. The Exchange Notes will rank pari passu
in right of payment to the Private Notes. See
"Description of Notes--General."
8
<PAGE>
Certain Covenants .......... The Indenture contains certain covenants,
including limitations on the ability of the
Company to: (i) incur certain liens; (ii) engage
in certain sale and lease-back transactions; or
(iii) engage in mergers, consolidations or
transfer or lease its assets substantially as an
entirety to another person. See "Description of
Notes--Certain Covenants of the Company."
Use of Proceeds ............ The Company will not receive any proceeds from
the Exchange Offers.
Registration Rights ........ Holders of Exchange Notes are not entitled to any
registration rights with respect to the Exchange
Notes. Pursuant to the Registration Rights
Agreement, McKesson agreed to file, at its
expense, a registration statement with respect to
the Exchange Offers. The Registration Statement
of which this Prospectus is a part constitutes
the registration statement for the Exchange
Offers. See "Description of Notes--Registration
Rights."
RISK FACTORS
Prospective holders of Exchange Notes should consider carefully all of the
information set forth in this Prospectus and, in particular, should evaluate
the specific factors set forth under "Risk Factors" before making a decision to
tender their Private Notes in the Exchange Offers.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the matters discussed under the captions "Risk Factors,"
"Financial Review," "The Company" and elsewhere in this Prospectus or in the
information incorporated by reference herein may constitute forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Certain of such forward-looking statements can be
identified by the use of forward-looking terminology such as, "believes,"
"expects," "may," "will," "should," "seeks," "approximately," "intends,"
"plans," "estimates," or "anticipates" or the negative thereof or other
comparable terminology, or by discussions of strategy, plans or intentions.
Forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those projected. These include the
speed of integration of acquired businesses, continued competitive pressures,
success of strategic initiatives, the changing United States health care
environment and other factors discussed herein or incorporated by reference
herein.
9
<PAGE>
RISK FACTORS
Prospective holders of Exchange Notes should consider carefully all of the
information set forth in this Prospectus and, in particular, should evaluate
the following risks before making a decision to tender their Private Notes in
the Exchange Offers.
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE
NOTES
Holders of Private Notes who do not exchange their Private Notes for
corresponding Exchange Notes pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of the Private Notes and the restrictions on transfer of such Private Notes as
set forth in the legend thereon as a consequence of the issuance of the
Private Notes pursuant to exemptions from, or in transactions not subject to,
the registration requirements of the Securities Act and applicable state
securities laws. In general, the Private Notes may not be offered or sold,
unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. The Company does not currently anticipate that it will
register Private Notes under the Securities Act. See "Description of Notes--
Registration Rights." To the extent that Private Notes are tendered and
accepted in the Exchange Offers, the trading market for the remaining
untendered Private Notes could be adversely affected. Based on existing
interpretations by the Staff, as set forth in several no-action letters to
third parties, and subject to the immediately following sentence, the Company
believes that Exchange Notes issued pursuant to the Exchange Offers in
exchange for Private Notes may be offered for resale, resold and otherwise
transferred by the holders thereof (other than holders who are broker-dealers)
without further compliance with the registration and prospectus delivery
provisions of the Securities Act. However, any purchaser of Private Notes who
is an affiliate of the Company or who intends to participate in the Exchange
Offers for the purpose of distributing the Exchange Notes, or any broker-
dealer who purchased the Private Notes from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act, (i) will
not be able to rely on the interpretations of the Staff set forth in the
above-mentioned no-action letters, (ii) will not be entitled to tender its
Private Notes in the Exchange Offers and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Private Notes unless such sale or
transfer is made pursuant to an exemption from such requirements. The Company
does not intend to request the Commission to consider, and the Commission has
not considered, the Exchange Offers in the context of a no-action letter and
there can be no assurance that the Staff would make a similar determination
with respect to the Exchange Offers as in such other circumstances.
Each Holder of the Private Notes who wishes to exchange the Private Notes
for Exchange Notes in the Exchange Offers will be required to represent that
(i) it is not an affiliate of the Company, (ii) the Exchange Notes to be
received by it were acquired in the ordinary course of its business and (iii)
at the time of the Exchange Offers, it has no arrangement with any person to
participate in the distribution of the Exchange Notes. Each broker-dealer that
receives Exchange Notes for its own account pursuant to the Exchange Offers
must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. See "Plan of Distribution." The Letters of
Transmittal state that by so acknowledging and by delivering a Prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Private Notes acquired
by such broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, ending on the close of business on
the 180th day following the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
EXCHANGE OFFERS PROCEDURES
Subject to the conditions set forth under "The Exchange Offers--Certain
Conditions to the Exchange Offers," delivery of Exchange Notes in exchange for
corresponding Private Notes tendered and accepted for exchange pursuant to the
Exchange Offers will be made only after timely receipt by the Exchange Agent
of (i) a
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Book-Entry Confirmation (as defined below) evidencing the tender of such
Private Notes through ATOP or (ii) certificates representing such Private
Notes, a properly completed and duly executed applicable Letter of
Transmittal, with any required signature guarantees, and all other required
documents. See "The Exchange Offers--Procedures for Tendering Private Notes."
Therefore, Holders of the Private Notes desiring to tender such Private Notes
in exchange for corresponding Exchange Notes should allow sufficient time to
ensure timely delivery. The Company is under no duty to give notification of
defects or irregularities with respect to tenders of Private Notes for
exchange. Private Notes that are not tendered or that are tendered but not
accepted by the Company for exchange will, following consummation of the
Exchange Offers, continue to be subject to the existing restrictions upon
transfer thereof under the Securities Act and, upon consummation of the
Exchange Offers, certain registration rights under the Registration Rights
Agreement will terminate.
RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS
An element of the Company's growth strategy is to pursue strategic
acquisitions that either expand or complement 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.
In September 1997, the Company entered into a merger agreement (the "Merger
Agreement") to acquire AmeriSource. On March 3, 1998, the U.S. Federal Trade
Commission (the "FTC") voted to block the proposed merger (the "Merger"). On
March 9, 1998, the FTC filed a complaint with the United States District Court
for the District of Columbia seeking a preliminary injunction to halt the
Merger. On March 18, 1998, McKesson and AmeriSource each announced that they
will oppose the FTC's motion for a preliminary injunction. A pre-trial hearing
on the matter is set for May 11, 1998. Although the Merger and the
transactions contemplated thereby have been approved by stockholders of both
companies, there can be no assurance that McKesson and AmeriSource will
prevail in their opposition to the FTC's request for a preliminary injunction,
that the Merger will be completed, or that it will be completed as
contemplated or what the results of the Merger might be.
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.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
To the extent that Private Notes are tendered and accepted in the applicable
Exchange Offer, the trading market for the remaining untendered Private Notes
could be adversely affected. There is no existing trading market for the
Exchange Notes. Although Salomon Brothers Inc, BancAmerica Robertson Stephens
and J.P. Morgan Securities Inc. (collectively, the "Initial Purchasers") have
advised the Company that they currently intend to make a market in the
Exchange Notes, they are not obligated to do so and may discontinue such
market making at any time without
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notice. In addition, such market making activity will be subject to the limits
imposed by the Securities Act and the Exchange Act. Accordingly, there can be
no assurance that any market for the Exchange Notes will develop, or, if one
does develop, that it will be maintained. If an active market for the Exchange
Notes fails to develop or be sustained, the trading price of the Exchange
Notes could be materially adversely affected. The Company does not intend to
apply for listing or quotation of the Exchange Notes on any securities
exchange, stock market or interdealer quotation system.
COMPUTER TECHNOLOGIES
McKesson relies heavily on computer technologies to operate its business.
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 cost
could change due to unanticipated technological difficulties, project vendor
delays and project vendor cost overruns.
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THE COMPANY
GENERAL
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
and comprehensive pharmaceutical management across the entire supply chain,
from manufacturer to patient. In pursuit of this goal, the Company has
completed a number of acquisitions in its core health care business. Since
late 1995, the Company has acquired General Medical Inc. (now "McKesson
General Medical"), the nation's leading distributor of medical and surgical
supplies to the total acute care, physician care and extended care market, the
pharmaceutical distribution business of FoxMeyer Corporation ("FoxMeyer"),
Automated Healthcare, Inc. (now "McKesson Automated Healthcare, Inc."), a
manufacturer of automated pharmaceutical dispensing equipment for hospitals,
and Ogden BioServices Corporation (now "McKesson BioServices Corporation"), a
provider of support services to government and commercial organizations
engaged in pharmaceutical research and development. In addition, on September
23, 1997, the Company announced an agreement to acquire AmeriSource, a leading
distributor of pharmaceutical and related health care products and services.
However, the FTC is seeking a preliminary injunction to block the Merger.
The Company conducts its operations through two operating business segments
which generated annual sales in fiscal 1997 of $12.9 billion, approximately
98% of which were generated by the Health Care Services segment and
approximately 2% of which were generated primarily by Water Products. In
fiscal 1997, operating profits for the Health Care Services business and the
Water Products business were $92.8 million (including charges for
restructuring, asset impairment, write-off of in-process purchased technology
and other operating items of $140.0 million) and $34.6 million (including $7.0
million of charges for asset impairment), respectively.
The principal executive offices of the Company are located at McKesson
Plaza, One Post Street, San Francisco, California 94104, and the telephone
number is (415) 983-8300.
RECENT ACQUISITIONS AND DISPOSITIONS
McKesson has undertaken several initiatives in recent years to further focus
the Company on its core health care business:
. In September 1997, the Company signed a definitive merger agreement
providing for the Company to acquire AmeriSource.
. In March 1997, the Company disposed of Millbrook Distribution Services
Inc. ("Millbrook"), a non-health care business, for an amount on an
after-tax basis which approximated Millbrook's book value.
. In March 1997, the Company sold its Aqua-Vend vended water business
("Aqua-Vend"), a unit of Water Products.
. In February 1997, the Company acquired McKesson General Medical for
approximately $775 million.
. In December 1996, the Company disposed of its 55% equity interest in
Armor All Products Corporation ("Armor All"), a non-health care business.
. In November 1996, the Company acquired FoxMeyer out of bankruptcy for
approximately $598 million.
. In April 1996, the Company acquired McKesson Automated Healthcare, Inc.
for approximately $65 million.
. In December 1995, the Company acquired McKesson BioServices Corporation
for approximately $20 million.
McKESSON HEALTH CARE SERVICES
Through its Health Care Services segment, the Company is the leading
distributor of ethical and proprietary drugs and health and beauty care
products in North America, generating approximately 73% of the Company's
operating profits from continuing operations in fiscal 1997. U.S. health care
operations also include Healthcare
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Delivery Systems, Inc. ("HDS") and McKesson BioServices Corporation, through
which the Company provides marketing and other support services to
pharmaceutical manufacturers; McKesson Automated Healthcare, Inc., a business
that specializes in the manufacture and sale of automated pharmaceutical
dispensing systems for hospitals; Zee Medical, Inc., a distributor of first-
aid and safety products and supplies to industrial and commercial customers;
and McKesson General Medical, the nation's leading supplier of medical-
surgical supplies to the full range of alternate-site health care facilities,
including physicians and clinics (primary care), long-term care and home-care
sites (extended care), and the third largest distributor of medical-surgical
supplies to hospitals (acute care). International operations include Medis
Health and Pharmaceutical Services Inc. ("Medis"), a wholly-owned subsidiary
and the largest pharmaceutical distributor in Canada; and the Company's 22.7%
equity interest in Nadro, S.A. de C.V., the largest pharmaceutical distributor
in Mexico.
The Company's domestic distribution operations supply pharmaceuticals and
health and beauty care products to independent and chain pharmacies,
hospitals, alternate-site health care facilities, food stores and mass
merchandisers in all fifty states. Using the names Economost(R) and
Econolink(R) and a number of related service marks, the Company has promoted
electronic order entry systems and a wide range of computerized merchandising
and asset management services for pharmaceutical retailers and hospitals. The
Company also supplies computer-based practice management systems to
pharmaceutical retailers. The Company believes that its financial strength,
purchasing leverage, nationwide network of distribution centers, and advanced
logistics and information technologies provide competitive advantages to its
pharmaceutical distribution operations.
Health Care Services serves three primary customer segments: institutional
providers (including hospitals, health care facilities and pharmacy service
operators), retail independent pharmacies and retail chains which represented
approximately 32%, 35% and 33%, respectively, of U.S. Health Care Services
revenues in the third fiscal quarter of 1998.
Health Care Services has been organized into three groups to address the
specific needs of the Company's key market segments and the pharmaceutical
manufacturers: McKesson Health Systems Group, McKesson Pharmaceutical Services
and International Group, and McKesson Customer Operations Group.
McKESSON HEALTH SYSTEMS GROUP. McKesson Health Systems Group comprises
McKesson Health Systems, McKesson General Medical, and McKesson Automated
Healthcare Inc. These three business units provide distribution services for
pharmaceuticals, medical and surgical products, automated technologies, and
related logistics and management information systems support to the
institutional market, which includes hospitals, alternate-site providers, and
integrated health networks. The McKesson Health Systems unit serves the
pharmaceutical and supply management needs of hospitals, health care
organizations, and integrated health networks. McKesson General Medical
provides medical-surgical supply management across the continuum of care,
including acute care, primary care and extended care. McKesson Automated
Healthcare, Inc. manufactures and markets automated pharmacy systems,
including the RxOBOT(TM) system, a robotic pharmacy dispensing and utilization
tracking system that enables hospitals to lower pharmacy costs while
significantly improving the accuracy of pharmaceutical dispensing.
McKESSON PHARMACEUTICAL SERVICES AND INTERNATIONAL GROUP. McKesson
Pharmaceutical Services and International Group combines the Company's
pharmaceutical procurement and product management functions in a single group
that is focused on (i) helping manufacturers meet their marketing goals and
(ii) creating affiliation programs and information technologies for the
Company's retail customers. The linkage of these functions allows the Company
to enhance the flow of pharmaceutical products from manufacturers to retailers
to patients through advanced marketing programs and information services,
including the Valu-Rite(R), Valu-Rite/CareMaxSM and Health Mart(R) retail
networks, the OmniLink(R) centralized pharmacy technology platform, which
offers streamlined transaction processing through OmniLink's connectivity with
managed care organizations while promoting compliance with managed care plans,
and Pay$ystems, which provides 24-hour advanced funding of third-party
reimbursements. The group includes HDS, which performs specialized logistics
and patient services for manufacturers, and McKesson BioServices Corporation,
which provides biomedical support services to the pharmaceutical and
biotechnology industries, the U.S. Government, universities and institutions,
and contract research organizations. Also included in this group is Medis, the
largest pharmaceutical distributor in Canada.
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MCKESSON CUSTOMER OPERATIONS GROUP. McKesson Customer Operations Group
comprises the Company's pharmaceutical distribution operations and retail
pharmacy sales and service, addressing the needs of independent pharmacies,
retail pharmacy chains, food stores and mass merchandisers. The Company is in
the process of implementing its Acumax(R) Plus warehouse management system in
its pharmaceutical distribution centers, providing real-time inventory
statistics and tracking product from the receiving dock to shipping through
scanned bar-code information with accuracy levels of more than 99%. This
ensures that the right product arrives at the right time and place for both
the Company's customers and their patients.
MCKESSON WATER PRODUCTS COMPANY
Water Products is a leading provider in the $3.4 billion bottled water
industry in the United States. It is one of the largest bottled water
companies in most of the geographic markets in which it competes. In fiscal
1997, Water Products generated $34.6 million in pretax operating profit, and
its operating margin was 13%. Water Products is primarily engaged in the
processing and sale of bottled drinking water delivered to more than 530,000
homes and businesses under its Sparkletts(R), Alhambra(R), and Crystal(TM)
brands in California, Arizona, Nevada, Oklahoma, Washington, Texas and New
Mexico. It also sells packaged water through retail stores.
AMERISOURCE MERGER AGREEMENT
On September 23, 1997, the Company and AmeriSource announced the execution
of a definitive Merger Agreement providing for the Company to acquire
AmeriSource. On March 3, 1998, the FTC voted to block the proposed Merger. On
March 9, 1998, the FTC filed a complaint with the United States District Court
for the District of Columbia seeking a preliminary injunction to halt the
Merger. On March 18, 1998, McKesson and AmeriSource each announced that they
will oppose the FTC's motion for preliminary injunction. A pre-trial hearing
on the matter is set for May 11, 1998. Although the Merger and the
transactions contemplated thereby have been approved by stockholders of both
companies, there can be no assurance that McKesson and AmeriSource will
prevail in their opposition to the FTC's request for a preliminary injunction,
that the Merger will be completed, or that it will be completed as
contemplated or what the results of the Merger might be.
Under the terms of the Merger Agreement, stockholders of AmeriSource would
receive a fixed exchange ratio of 1.42 shares of McKesson Common Stock for
each share of AmeriSource common stock. The Company would issue up to 36.4
million new shares of Common Stock in the Merger, and would assume the long-
term debt of AmeriSource which was approximately $781.0 million at December
31, 1997. The merger of the two companies has been structured as a tax-free
transaction and would be accounted for as a pooling of interests. The combined
company would operate under the McKesson name and would be headquartered in
San Francisco. Upon completion of the Merger, R. David Yost, currently
president and chief executive officer of AmeriSource, would become group
president of the AmeriSource Services Group and a McKesson corporate vice
president. Also upon completion of the Merger, McKesson's board of directors
would be expanded from nine to twelve members, which would include Mr. Yost
and two other directors from the current AmeriSource board.
AmeriSource has reported that it is one of the nation's top three
distributors in serving the hospital and managed care market segment and the
fourth largest full-service wholesale distributor of pharmaceutical products
and related health care services in the United States. AmeriSource is a
publicly traded company for which certain information is available. See
"Available Information."
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
as described in this Prospectus, the Company will receive tendered Private
Notes in like principal amount, the terms of which are identical in all
material respect to those of the Exchange Notes. The Private Notes surrendered
in exchange for the Exchange Notes will be retired and cancelled and cannot be
reissued. Accordingly, the issuance of the Exchange Notes will not result in
any change in the indebtedness of the Company.
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THE EXCHANGE OFFERS
PURPOSE OF THE EXCHANGE OFFERS
The Private Notes were sold by the Company on the Closing Date to the
Initial Purchasers, pursuant to a Purchase Agreement entered into by the
Company and the Initial Purchasers on February 19, 1998 (the "Purchase
Agreement"). The Initial Purchasers subsequently sold the Private Notes to
"qualified institutional buyers," as defined in Rule 144A, in reliance on Rule
144A. As a condition to the sale of the Private Notes, the Company and the
Initial Purchasers entered into the Registration Rights Agreement on February
24, 1998 (the "Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement, the Company agreed that, unless the Exchange Offers are not
permitted by applicable law or Commission policy, it would file with the
Commission a registration statement under the Securities Act with respect to
the Exchange Notes and use its reasonable efforts to cause such registration
statement to become effective under the Securities Act within 180 days after
the Closing Date. A copy of the Registration Rights Agreement has been filed
as an exhibit to the Registration Statement. The Registration Statement is
intended to satisfy certain of the Company's obligations under the
Registration Rights Agreement and the Purchase Agreement.
TERMS OF THE EXCHANGE OFFERS
Promptly after the Registration Statement has been declared effective, the
Company will offer Exchange Notes in exchange for surrender of the
corresponding Private Notes. The Company will keep the Exchange Offers open
for not less than 30 calendar days (or longer if required by applicable law)
after the date on which notice of the Exchange Offers is mailed to the holders
of the Private Notes. For each Private Note validly tendered to the Company
pursuant to the Exchange Offers and not withdrawn by the Holder thereof, the
Holder of such Private Note will receive a corresponding Exchange Note having
a principal amount equal to the principal amount of such surrendered Private
Note. The Exchange Notes will bear interest from the most recent date to which
interest has been paid on the applicable Private Notes or, if no interest has
been paid, from February 24, 1998. Accordingly, if the relevant record date
for interest payment occurs after the consummation of the applicable Exchange
Offer registered holders of such Exchange Notes on such record date will
receive interest accruing from the most recent date to which interest has been
paid or, if no interest has been paid, from February 24, 1998. If, however,
the relevant record date for interest payment occurs prior to the consummation
of the applicable Exchange Offer registered holders of such Private Notes on
such record date will receive interest accruing from the most recent date to
which interest has been paid or, if no interest has been paid, from February
24, 1998. Holders of Private Notes whose Private Notes are accepted for
exchange will not receive any payment in respect of accrued interest on such
Private Notes otherwise payable on any interest payment date the record date
for which occurs on or after consummation of the Exchange Offers. The Exchange
Notes evidence the same debt as the corresponding Private Notes and are issued
under and are entitled to the same benefits under the Indenture as the Private
Notes.
In the event that (i) the Company is permitted under the law and currently
prevailing interpretations of the Commission's staff to effect the Exchange
Offers and the Registration Statement is not declared effective on or prior to
the 180th day following the Closing Date, (ii) either of the Exchange Offers
are not consummated and the applicable Shelf Registration Statement (as
defined herein) is not declared effective on or prior to the 225th day
following the Closing Date or (iii) after a Shelf Registration Statement is
declared effective, it thereafter ceases to be effective or the Shelf
Registration Statement or the related Prospectus ceases to be usable in
connection with resales of Private Notes or Exchange Notes, as the case may
be, covered by such Shelf Registration Statement for the period specified in
the Registration Rights Agreement due to certain circumstances (each such
event referred to in clauses (i) through (iii) above a "Registration
Default"), then the Company will pay to each Holder of any applicable Private
Notes, accruing from and including the next day following such Registration
Default (or if such Registration Default has been cured, from and including
the next day following the next Registration Default), liquidated damages in
an amount equal to 0.25% per annum of the principal amount of the Private
Notes held by such Holder, which provision for liquidated damages will
continue until such Registration Default has been cured. Any amounts of
Liquidated Damages due pursuant to the foregoing paragraphs will be payable in
cash on March 1 and September 1 of each year to the holders of record on the
preceding February 15 and August 15, respectively.
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PERIOD FOR TENDERING PRIVATE NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying applicable Letter of Transmittal (which together
constitute the Exchange Offers), the Company will accept for exchange Private
Notes which are properly tendered on or prior to the Expiration Date and not
withdrawn as permitted below. As used herein, the term "Expiration Date" means
5:00 p.m., New York City time, on , 1998; provided, however, that if the
Company, in its sole discretion, has extended the period of time for which any
of the Exchange Offers are open, the term "Expiration Date" means the latest
time and date to which the applicable Exchange Offer is extended.
As of the date of this Prospectus, $150,000,000 aggregate principal amount
of the Private Notes due 2005 and $150,000,000 aggregate principal amount of
the Private Notes due 2008 are outstanding. This Prospectus, together with the
applicable Letter of Transmittal, is first being sent on or about , 1998,
to all holders of Private Notes known to the Company. The Company's obligation
to accept Private Notes for exchange pursuant to the Exchange Offers are
subject to certain conditions as set forth below under "--Certain Conditions
to the Exchange Offers."
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which any of the Exchange Offers are open,
and thereby delay acceptance for exchange of any Private Notes, by giving oral
or written notice of such extension to the Holders thereof as described below.
During any such extension, all Private Notes previously tendered will remain
subject to the Exchange Offers and may be accepted for exchange by the
Company. Any Private Notes not accepted for exchange for any reason will be
returned without expense to the tendering Holder thereof as promptly as
practicable after the expiration or termination of the applicable Exchange
Offer.
Private Notes tendered in the Exchange Offers must be in integral multiples
of $1,000.
The Company expressly reserves the right (i) to terminate any or all of the
Exchange Offers, and not to accept for exchange any Private Notes not
therefore accepted for exchange, upon the occurrence of any of the events
specified below under "--Certain Conditions to the Exchange Offers" and
(ii) to amend any or all of the Exchange Offers. The Company will give oral or
written notice of any extension, amendment, non-acceptance or termination to
the Holders of the Private Notes as promptly as practicable, such notice in
the case of any extension to be issued by means of a press release or other
public announcement no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
PROCEDURES FOR TENDERING PRIVATE NOTES
The tender to the Company of Private Notes by a Holder thereof as set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering Holder and the Company upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
applicable Letter of Transmittal.
Book-Entry Transfer. For purposes of the Exchange Offers, the Exchange Agent
will establish an account with respect to the Private Notes at DTC within two
business days after the date of this Prospectus. Any tendering financial
institution that is a participant in DTC's book-entry transfer facility system
must make a book-entry delivery of the Private Notes by causing DTC to
transfer such Private Notes into the Exchange Agent's account at DTC in
accordance with DTC's ATOP procedure for transfers. Such holder of Private
Notes using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date (or comply with the guaranteed delivery procedures set forth
below). DTC will verify such acceptance, execute a book-entry transfer of the
tendered Private Notes into the Exchange Agent's account at DTC and then send
to the Exchange Agent confirmation of such book-entry transfer, including an
agent's message confirming that DTC has received an express acknowledgment
from such holder that such holder has received and agrees to be bound by the
applicable Letter of Transmittal and that the Company may enforce the
applicable Letter of Transmittal against such holder (a "Book-Entry
Confirmation").
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A beneficial owner of Private Notes that are held by or registered in the
name of a broker, dealer, commercial bank, trust company or other nominee or
custodian is urged to contact such entity promptly if such beneficial owner
wishes to participate in the Exchange Offers.
Certificates. If the tender is not made through ATOP, certificates
representing Private Notes, as well as the applicable Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any
required signature guarantees, and any other documents required by the
applicable Letter of Transmittal, must be received by the Exchange Agent at
its address set forth under "--Exchange Agent" on or prior to the Expiration
Date in order for such tender to be effective (or the guaranteed delivery
procedures set forth below must be complied with).
If less than all of the Private Notes are tendered, a tendering holder
should fill in the amount of Private Notes being tendered in the appropriate
box on the applicable Letter of Transmittal. The entire amount of Private
Notes delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated.
THE METHOD OF DELIVERY OF PRIVATE NOTES, LETTERS OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH
DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED,
WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR PRIVATE
NOTES SHOULD BE SENT TO THE COMPANY.
Signature Guarantees. Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed unless the Private Notes
surrendered for exchange pursuant thereto are tendered (i) by a registered
holder of the Private Notes who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on such Letter of
Transmittal or (ii) for the account of a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is
a participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (each, an "Eligible Institution" and, collectively,
"Eligible Institutions"). In the event that signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantees must be by an Eligible Institution. If Private
Notes are registered in the name of a person other than a signer of a Letter
of Transmittal, the Private Notes surrendered for exchange must be endorsed
by, or be accompanied by a written instrument or instruments of transfer or
exchange, in satisfactory form as determined by the Company in its sole
discretion, duly executed by, the registered Holder with the signature thereon
guaranteed by an Eligible Institution.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of Private Notes
tendered for exchange will be determined by the Company in its sole
discretion, which determination shall be final and binding. The Company
reserves the absolute right to reject any and all tenders of any particular
Private Notes not properly tendered or to not accept any particular Private
Notes which acceptance might, in the judgment of the Company or its counsel,
be unlawful. The Company also reserves the absolute right to waive any defects
or irregularities or conditions of the Exchange Offers as to any particular
Private Notes either before or after the Expiration Date (including the right
to waive the ineligibility of any Holder who seeks to tender Private Notes in
the Exchange Offers). The interpretation of the terms and conditions of the
Exchange Offers as to any particular Private Notes either before or after the
Expiration Date (including the applicable Letter of Transmittal and the
instructions thereto) by the Company shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of Private Notes for exchange must be cured within such reasonable
period of time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give
notification of any defect or irregularity with respect to any tender of
Private Notes for exchange, nor shall any of them incur any liability for
failure to give such notification.
If a Letter of Transmittal is signed by a person or persons other than the
registered holder or holders of Private Notes, such Private Notes must be
endorsed or accompanied by appropriate powers of attorney, in either case
signed exactly as the name or names of the registered holder or holders that
appear on the Private Notes.
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If a Letter of Transmittal or any Private Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted.
By tendering, each Holder of the Private Notes will represent to the Company
that, among other things, (i) it is not an affiliate of the Company, (ii) the
Exchange Notes to be received by it were acquired in the ordinary course of
its business and (iii) at the time of the Exchange Offers, it has no
arrangement with any person to participate in the distribution of the Exchange
Notes. If any Holder is an affiliate of the Company or intends to participate
in the Exchange Offers for the purpose of distributing the Exchange Notes, or
any broker-dealer who purchased the Private Notes from the Company to resell
pursuant to Rule 144A or any other available exemption under the Securities
Act, (i) will not be able to rely on the interpretations of the Staff set
forth in the above-mentioned no-action letters, (ii) will not be entitled to
tender its Private Notes in the Exchange Offers and (iii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Private Notes unless such sale or
transfer is made pursuant to an exemption from such requirements. Each broker-
dealer that receives Exchange Notes for its own account in exchange for
Private Notes, where such Private Notes were acquired by such broker-dealer as
a result of market-making activities or other trading activities, must
acknowledge that it will deliver a Prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution." Each Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
ACCEPTANCE OF PRIVATE NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the applicable
Exchange Offers, the Company will accept, promptly after the applicable
Expiration Date, all applicable Private Notes properly tendered and will issue
the applicable Exchange Notes promptly after acceptance of such Private Notes.
See "--Certain Conditions to the Exchange Offers." For purposes of the
Exchange Offers, the Company shall be deemed to have accepted properly
tendered Private Notes for exchange when, as and if the Company has given oral
or written notice thereof to the Exchange Agent, with written confirmation of
any oral notice to be given promptly thereafter.
In all cases, issuance of Exchange Notes for Private Notes that are accepted
for exchange pursuant to the Exchange Offers will be made only after timely
receipt by the Exchange Agent of (i) a Book-Entry Confirmation with respect to
such Private Notes or (ii) certificates for such Private Notes and a properly
completed and duly executed applicable Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and all other required
documents. If any tendered Private Notes are not accepted for any reason set
forth in the terms and conditions of the Exchange Offers or if Private Notes
are submitted for a greater principal amount than the holder desired to
exchange, such unaccepted or non-exchanged Private Notes will be returned
without expense to the tendering holder thereof (or, in the case of Private
Notes tendered by book-entry transfer into the Exchange Agent's account at DTC
pursuant to the book-entry procedures described above, such non-exchanged
Private Notes will be credited to an account maintained with DTC) as promptly
as practicable after the expiration or termination of the applicable Exchange
Offer.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Private Notes desires to tender such Private
Notes and the Private Notes are not immediately available, or time will not
permit such holder's Private Notes or other required documents to reach the
Exchange Agent before the applicable Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if (i) the tender is made by or through an Eligible Institution, (ii)
prior to the applicable Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Company (by
telegram, telex, facsimile transmission, mail or hand delivery), setting forth
the name and address of the holder of Private Notes and the amount of Private
Notes tendered, stating that the tender
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is being made thereby and guaranteeing that within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Private Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and any other
documents required by the applicable Letter of Transmittal will be deposited
by the Eligible Institution with the Exchange Agent, and (iii) (a) a Book-
Entry Confirmation or (b) the certificates for all physically tendered Private
Notes, in proper form for transfer, and a duly executed applicable Letter of
Transmittal (or facsimile thereof) with any required signature guarantees, and
all other documents required by such Letter of Transmittal, are received by
the Exchange Agent within three NYSE trading days after the date of execution
of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Private Notes may be withdrawn at any time prior to the
applicable Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by telegram, facsimile transaction (receipt confirmed by telephone)
or letter to the Exchange Agent at its address as set forth below under "--
Exchange Agent" on or prior to the applicable Expiration Date. Any such notice
of withdrawal must specify the name of the person having tendered the Private
Notes to be withdrawn, identify the Private Notes to be withdrawn (including
the series and the principal amount of such Private Notes), and (where
certificates for Private Notes have been transmitted) specify the name in
which such Private Notes are registered, if different from that of the
withdrawing holder. If certificates for Private Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing holder must also submit the certificate numbers
of the particular certificates to be withdrawn and signed notice of withdrawal
with signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Private Notes have been tendered pursuant to the
procedure for book entry transfer described above, any notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawn Private Notes and otherwise comply with the procedures of such
facility. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Private Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offers. Any Private Notes which have been tendered
for exchange but which are not exchanged for any reason will be returned to
the Holder thereof without cost to such Holder (or, in the case of Private
Notes tendered by book-entry transfer into the Exchange Agent's account at DTC
pursuant to the book-entry transfer procedures described above, such Private
Notes will be credited to an account maintained with DTC for the Private
Notes) as soon as practicable after withdrawal, rejection of tender or
termination of the applicable Exchange Offer. Properly withdrawn Private Notes
may be retendered by following one of the procedures described under "--
Procedures for Tendering Private Notes" above at any time on or prior to the
applicable Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFERS
Notwithstanding any other provision of the applicable Exchange Offer, the
Company shall not be required to accept for exchange, or to issue Exchange
Notes in exchange for, any applicable Private Notes and may terminate the
applicable Exchange Offer, if at any time before the acceptance of such
Private Notes for exchange or the exchange of the applicable Exchange Notes
for such Private Notes, any of the following events shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order of decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission with respect to the
applicable Exchange Offer; or
(b) such acceptance or issuance would violate applicable law or any
applicable interpretation of the Staff of the Commission; or
(c) there shall have occurred (i) any general suspension of or general
limitation on prices for, or trading in, securities on any national
securities exchange or in the over-the-counter market, (ii) any limitation
by any governmental agency or authority which may adversely affect the
ability of the Company to complete the transactions contemplated by any of
the Exchange Offers, (iii) a declaration of a banking moratorium or
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any suspension of payments in respect of banks in the United States or any
limitation by any governmental agency or authority which adversely affects
the extension of credit or (iv) a commencement of a war, armed hostilities
or other similar international calamity directly or indirectly involving
the United States, or, in the case of any of the foregoing existing at the
time of the commencement of the Exchange Offers, a material acceleration or
worsening thereof; or
(d) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Company and its subsidiaries taken as a whole that, in the
sole judgment of the Company, is or may be adverse to the Company, or the
Company shall have become aware of facts that, in the sole judgment of the
Company, have or may have adverse significance with respect to the value of
any of the Private Notes or the Exchange Notes;
which in the sole judgment of the Company in any case, and regardless of the
circumstances (including any action by the Company) giving rise to any event
described above, prohibits the Company from or makes it inadvisable for the
Company to proceed with any of the Exchange Offers and/or with such acceptance
for exchange or with such exchange.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition or may be waived by the Company in whole or in part at any time
and from time to time in its sole discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Private Notes
tendered, and no Exchange Notes will be issued in exchange for any such
Private Notes, if at such time any stop order shall be threatened or in effect
with respect to the Registration Statement or the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended (the "TIA").
EXCHANGE AGENT
The First National Bank of Chicago has been appointed as the Exchange Agent
for the Exchange Offers. All executed Letters of Transmittal should be
directed to the Exchange Agent as set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the
applicable Letter of Transmittal and requests for Notices of Guaranteed
Delivery should be directed to the Exchange Agent addressed as follows:
By Mail: By Hand or Overnight Delivery:
(Registered or Certified Mail
recommended)
The First National Bank of Chicago The First National Bank of Chicago
c/o First Chicago Trust c/o First Chicago Trust
Company of New York Company of New York
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, New York 10005 New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF LETTERS OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
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FEES AND EXPENSES
The Company will not make any payment to brokers, dealers, or others
soliciting acceptances of the Exchange Offers.
The Company will pay certain other expenses to be incurred in connection
with the Exchange Offers, including the fees and expenses of the Exchange
Agent, accounting and certain legal fees.
TRANSFER TAXES
Holders who tender their Private Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that Holders who
instruct the Company to register Exchange Notes in the name of, or request
that Private Notes not tendered or not accepted in the Exchange Offers be
returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Private Notes who do not exchange their Private Notes for the
corresponding Exchange Notes pursuant to the Exchange Offers will continue to
be subject to the provisions in the Indenture regarding transfer and exchange
of the Private Notes and the restrictions on transfer of such Private Notes as
set forth in the legend thereon as a consequence of the issuance of the
Private Notes pursuant to exemptions from, or in transactions not subject to,
the registration requirements of the Securities Act and applicable state
securities laws. In general, the Private Notes may not be offered or sold,
unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. The Company does not currently anticipate that it will
register Private Notes under the Securities Act. See "Description of the
Notes--Registration Rights." To the extent that Private Notes are tendered and
accepted in the Exchange Offers, the trading market for the remaining
untendered Private Notes could be adversely affected. Issuance of the Exchange
Notes in exchange for Private Notes pursuant to the Exchange Offers will be
made only after timely receipt by the Exchange Agent of (i) a Book-Entry
Confirmation with respect to such Private Notes or (ii) certificates for such
Private Notes and a properly completed and duly executed applicable Letter of
Transmittal (or facsimile thereof), with any required signature guarantees and
all other required documents. Therefore, Holders of the Private Notes desiring
to tender such Private Notes in exchange for corresponding Exchange Notes
should allow sufficient time to ensure timely delivery. The Company is under
no duty to give notification of defects or irregularities with respect to
tenders of Private Notes for exchange. Private Notes that are not tendered or
that are tendered but not accepted by the Company for exchange will, following
consummation of the applicable Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof under the Securities Act and, upon
consummation of the applicable Exchange Offer, certain registration rights
under the Registration Rights Agreement will terminate.
Based on existing interpretations by the Staff, as set forth in several no-
action letters to third parties, and subject to the immediately following
sentence, the Company believes that Exchange Notes issued pursuant to the
Exchange Offers in exchange for Private Notes may be offered for resale,
resold and otherwise transferred by the holders thereof (other than holders
who are broker-dealers) without further compliance with the registration and
prospectus delivery provisions of the Securities Act. However, any purchaser
of Private Notes who is an affiliate of the Company or who intends to
participate in the Exchange Offers for the purpose of distributing the
Exchange Notes, or any broker-dealer who purchased the Private Notes from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (i) will not be able to rely on the interpretations of the
Staff set forth in the above-mentioned no-action letters, (ii) will not be
entitled to tender its Private Notes in the Exchange Offers and (iii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Private Notes
unless such sale or transfer is made pursuant to an exemption from such
requirements. The Company does not intend to request the Commission to
consider, and the Commission has not considered, the Exchange Offers in the
context of a no-action letter and there can be no assurance that the Staff
would make a similar determination with respect to the Exchange Offers as in
such other circumstances.
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Each Holder of the Private Notes who wishes to exchange the Private Notes
for Exchange Notes in the Exchange Offers will be required to represent that
(i) it is not an affiliate of the Company, (ii) the Exchange Notes to be
received by it were acquired in the ordinary course of its business and (iii)
at the time of the Exchange Offers, it has no arrangement with any person to
participate in the distribution of the Exchange Notes. Each broker-dealer that
receives Exchange Notes for its own account in exchange for Private Notes,
where such Private Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution."
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DESCRIPTION OF NOTES
The Private Notes were issued and the Exchange Notes will be issued pursuant
to an Indenture, dated as of March 11, 1997 (the "Indenture") between the
Company and The First National Bank of Chicago, as trustee (the "Trustee"), a
copy of which is filed as an exhibit to the Registration Statement of which
this Prospectus constitutes a part. Upon the effectiveness of the Registration
Statement, the Indenture will be subject to and governed by the TIA. The
Private Notes and the Exchange Notes are treated as two series of Notes under
the Indenture and holders thereof are entitled to the benefit of the
Indenture. Accordingly, unless specifically stated to the contrary, the
following description applies equally to all Notes. The following summary of
certain provisions of the Indenture and the Notes does not purport to be
complete and such summary is subject to the detailed provisions of the
Indenture to which reference is hereby made for a full description of such
provisions, including the definition of certain terms used herein, and for
other information regarding the Notes. Wherever particular sections or defined
terms of the Indenture are referred to, such sections or defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference. As used under this
caption, the term "Company" means McKesson Corporation and not any of its
subsidiaries unless otherwise expressly stated or the context otherwise
requires. The forms and terms of the Exchange Notes and the corresponding
Private Notes are identical in all material respects, except for certain
transfer restrictions and registration rights relating to the Private Notes
and except that Holders of Private Notes of Exchange Offers that have not been
consummated by October 7, 1998 will be entitled to liquidated damages in an
amount equal to 0.25% per annum on the Private Notes held by such Holders.
Liquidated damages, if any, will accrue from and including October 8, 1998 and
will cease to accrue from the consummation of the applicable Exchange Offer.
GENERAL
The Exchange Notes due 2005 will be unsecured, unsubordinated obligations of
the Company limited in aggregate principal amount to $150 million and will
mature on March 1, 2005. The Exchange Notes due 2008 will be unsecured,
unsubordinated obligations of the Company limited in aggregate principal
amount to $150 million and will mature on March 1, 2008.
Payment of the principal of and interest on the Exchange Notes will rank
pari passu with all other unsecured, unsubordinated debt of the Company. The
Exchange Notes due 2005 and the Exchange Notes due 2008 will be redeemable in
whole or in part at any time at the option of the Company. See "--Optional
Redemption." The Exchange Notes will not be entitled to the benefit of any
mandatory redemption or sinking fund. The Indenture does not limit the amount
of additional indebtedness the Company or any of its subsidiaries may incur.
The Indenture does not limit the amount of notes, debentures or other
evidences of indebtedness ("Debt Securities") that the Company may issue
thereunder and provides that Debt Securities may be issued from time to time
in one or more series. As of the date of this Prospectus, $525 million of Debt
Securities were outstanding under the Indenture in addition to the Private
Notes.
The Exchange Notes will bear interest from February 24, 1998 at the
respective rates per annum set forth on the cover page of this Prospectus and
such interest will be payable semiannually in arrears on March 1 and September
1 of each year, commencing on September 1, 1998, to the persons in whose names
the Exchange Notes are registered at the close of business on the immediately
preceding February 15 and August 15, respectively. Interest on the Exchange
Notes will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from February 24, 1998. Principal of,
premium, if any, and interest on the Exchange Notes will be payable, and the
transfer of Exchange Notes will be registrable, at the office or agency of the
Company to be maintained for such purpose in the Borough of Manhattan, The
City of New York, except that, at the option of the Company, interest may be
paid by mailing a check to the address of the person entitled thereto as it
appears on the Exchange Notes register. Exchange Notes may be presented for
exchange at the corporate trust offices of the Trustee. Such services will be
provided without charge, other than any tax or other governmental charge
payable in connection therewith, but subject to the limitations provided in
the Indenture.
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Interest on the Exchange Notes will be computed on the basis of a 360-day
year comprised of twelve 30-day months. The amount of interest payable for any
period shorter than a full semi-annual period for which interest is computed
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which principal, premium, if any, or
interest is payable on the Exchange Notes is not a Business Day (as defined in
the Indenture), then payment of the principal, premium, if any, or interest
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay). The Exchange Notes will be issued in integral multiples of $1,000.
For each Private Note accepted for exchange, the holder of such Private Note
will receive a corresponding Exchange Note having a principal amount equal to
that of the surrendered Private Note.
BOOK ENTRY; DELIVERY AND FORM
The certificates representing the Exchange Notes will be issued in fully
registered form. Except as set forth below, the Exchange Notes will be
deposited with, or on behalf of, DTC, and registered in the name of Cede & Co.
("Cede"), as DTC's nominee in the form of one or more global Exchange Note
certificates (the "Global Securities") for each of the Exchange Notes due 2005
and the Exchange Notes due 2008, respectively.
Except as set forth below, the record ownership of any Global Security may
be transferred, in whole or in part, only to DTC, another nominee of DTC or to
a successor of DTC or its nominee. Investors may hold their interests in any
of the Global Securities directly through DTC, or indirectly through
organizations which are participants in DTC ("Participants"). Transfers
between Participants will be effected in the ordinary way in accordance with
DTC rules and will be settled in immediately available funds.
Investors who are not Participants may beneficially own interests in a
Global Security held by DTC only through Participants, including certain
banks, brokers, dealers, trust companies and other parties that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly, and have indirect access to the DTC system ("Indirect
Participants"). So long as Cede, as the nominee of DTC, is the registered
owner of any Global Security, Cede for all purposes will be considered the
sole holder of such Global Security. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have
certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form, and will not be
considered the holder thereof.
Neither McKesson nor the Trustee (nor any registrar or paying agent) will
have any responsibility for the performance by DTC or its Participants or
Indirect Participants of its obligations under the rules and procedures
governing, its operations. DTC has advised McKesson that it will take any
action permitted to be taken by a holder of Exchange Notes only at the
direction of one or more Participants whose accounts are credited with DTC
interests in a Global Security.
DTC has advised McKesson as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions, such as transfers and pledges, among Participants
in deposited securities through electronic book-entry changes to accounts of
its Participants, thereby eliminating the need for physical movement of
securities certificates. Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
Certain of such Participants (or their representatives), together with other
entities, own DTC. The Rules applicable to DTC and its Participants are on
file with the Commission.
Purchases of Exchange Notes under the DTC system must be made by or through
Participants, which will receive a credit for the Exchange Notes on DTC's
records. The ownership interest of each actual purchaser of each Exchange Note
(a "Beneficial Owner") is in turn to be recorded on the Participants and
Indirect
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<PAGE>
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Participant or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Exchange Notes are to be accomplished
by entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Exchange Notes, except in the event that use of the
book-entry system for the Exchange Notes is discontinued.
The deposit of Exchange Notes with DTC and their registration in the name of
Cede effect no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Exchange Notes; DTC's records reflect only the
identity of the Participants to whose accounts such Exchange Notes are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in each Global Security.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time. Redemption notices shall be sent to Cede. If less than all of
the Exchange Notes due 2005 or the Exchange Notes due 2008 are being redeemed,
DTC's practice is to determine by lot the interest of each Participant in such
Exchange Notes to be redeemed.
Principal and interest payments on the Exchange Notes will be made to DTC by
wire transfer of immediately available funds. DTC's practice is to credit
Participants' accounts on the payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payment on the payable date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers
in bearer form or registered in "street name," and will be the responsibility
of such Participant and not of DTC or McKesson, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of McKesson, disbursement
of such payments to Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Participants and Indirect Participants. Neither McKesson nor
the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Certificated Notes. DTC may discontinue providing its services as securities
depositary with respect to the Exchange Notes at any time by giving reasonable
notice to McKesson. In the event that DTC notifies McKesson that it is
unwilling or unable to continue as depositary for any Global Security or if at
any time DTC ceases to be a clearing agency registered as such under the
Exchange Act when DTC is required to be so registered to act as such
depositary and no successor depositary shall have been appointed within 90
days of such notification or of McKesson becoming aware of DTC's ceasing to be
so registered, as the case may be, certificates for the relevant Exchange
Notes will be printed and delivered in exchange for interests in such Global
Security. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for relevant Exchange Notes registered in such
names as DTC shall direct. It is expected that such instructions will be based
upon directions received by DTC from its Participants with respect to
ownership of beneficial interests in such Global Security.
McKesson may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event,
certificates representing the Exchange Notes will be printed and delivered.
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The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that McKesson believes to be reliable, but
McKesson does not take responsibility for the accuracy thereof.
OPTIONAL REDEMPTION
The Exchange Notes will be redeemable as a whole or in part, at the option
of the Company, at any time at a redemption price equal to the greater of (i)
100% of their principal amount and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to
the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the applicable Treasury Yield plus 10
basis points for each series of Exchange Notes, plus in each case accrued
interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the applicable
Comparable Treasury Issue, assuming a price for the applicable Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to
the applicable Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Exchange Notes due 2005 or Exchange Notes due
2008, as applicable, that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Exchange Notes due 2005 or Exchange Notes due 2008, as applicable.
"Independent Investment Banker" means Salomon Brothers Inc and its successor
or, if such firm is unwilling or unable to select the applicable Comparable
Treasury Issue, an independent investment banking institution of national
standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the applicable Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such business day, (A) the
average of the applicable Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices of the applicable Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted
in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on
the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, BancAmerica
Robertson Stephens and J.P. Morgan Securities Inc., and their respective
successors; provided however, that if any of the foregoing shall cease to be a
primary U.S. Government Securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer.
Holders of Exchange Notes to be redeemed will receive notice thereof by
first-class mail at least 10 and not more than 60 days prior to the date fixed
for redemption.
CERTAIN COVENANTS OF THE COMPANY
Definitions. The term "Attributable Debt" shall mean in connection with a
sale and lease-back transaction the lesser of (a) the fair value of the assets
subject to such transaction or (b) the present value of the obligations of the
lessee for net rental payments during the term of any lease discounted at the
rate of interest set forth or implicit in the terms of such lease or, if not
practicable to determine such rate, the weighted average interest rate
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per annum borne by the Debt Securities of each series outstanding pursuant to
the Indenture and subject to limitations on sale and lease-back transaction
covenants, compounded semiannually in either case as determined by the
principal accounting or financial officer of the Company. The term
"Subsidiary" shall mean any corporation of which at least a majority of the
outstanding stock having voting power under ordinary circumstances for the
election of the board of directors of said corporation shall at the time be
owned by the Company or by the Company and one or more Subsidiaries or by one
or more Subsidiaries. The term "Consolidated Subsidiary" shall mean any
Subsidiary substantially all the property of which is located, and
substantially all the operations of which are conducted, in the United States
of America whose financial statements are consolidated with those of the
Company in accordance with generally accepted accounting principles. The term
"Exempted Debt" shall mean the sum of the following as of the date of
determination: (i) Indebtedness of the Company and its Consolidated
Subsidiaries incurred after the date of issuance of the Private Notes and
secured by liens not permitted by the limitation on liens provisions, and (ii)
Attributable Debt of the Company and its Consolidated Subsidiaries in respect
of every sale and lease-back transaction entered into after the date of
issuance of the Private Notes, other than leases permitted by the limitation
on sale and lease-back provisions. The term "Indebtedness" shall mean all
items classified as indebtedness on the most recently available consolidated
balance sheet of the Company and its Consolidated Subsidiaries, in accordance
with generally accepted accounting principles.
Limitation on Liens. The Company covenants that, so long as any of the Notes
remain outstanding, it will not, nor will it permit any Consolidated
Subsidiary, to create or assume any Indebtedness for money borrowed which is
secured by a lien (as defined) upon any assets, whether now owned or hereafter
acquired, of the Company or any such Consolidated Subsidiary without equally
and ratably securing the Notes by a lien ranking ratably with and equally to
such secured Indebtedness, except that the foregoing restriction shall not
apply to (a) liens on assets of any corporation existing at the time such
corporation becomes a Consolidated Subsidiary; (b) liens on assets existing at
the time of acquisition thereof, or to secure the payment of the purchase
price of such assets, or to secure indebtedness incurred or guaranteed by the
Company or a Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon, which
indebtedness is incurred or guaranteed prior to, at the time of or within 360
days after such acquisition (or in the case of real property, completion of
such improvement or construction or commencement of full operation of such
property, whichever is later); (c) liens securing indebtedness owed by any
Consolidated Subsidiary to the Company or another wholly owned Subsidiary; (d)
liens on any assets of a corporation existing at the time such corporation is
merged into or consolidated with the Company or a Subsidiary or at the time of
a purchase, lease or other acquisition of the assets of a corporation or firm
as an entirety or substantially as an entirety by the Company or a Subsidiary;
(e) liens on any assets of the Company or a Consolidated Subsidiary in favor
of the United States of America or any state thereof, or in favor of any other
country, or political subdivision thereof, to secure certain payments pursuant
to any contract or statute or to secure any indebtedness incurred or
guaranteed for the purpose of financing all or any part of the purchase price
(or, in the case of real property, the cost of construction) of the assets
subject to such liens (including, but not limited to, liens incurred in
connection with pollution control, industrial revenue or similar financing);
(f) any extension, renewal or replacement (or successive extensions, renewals
or replacements) in whole or in part, of any lien referred to in the foregoing
clauses (a) to (e), inclusive; (g) certain statutory liens or other similar
liens arising in the ordinary course of business of the Company or a
Consolidated Subsidiary, or certain liens arising out of government contracts;
(h) certain pledges, deposits or liens made or arising under the worker's
compensation or similar legislation or in certain other circumstances; (i)
certain liens in connection with legal proceedings, including certain liens
arising out of judgments or awards; (j) liens for certain taxes or
assessments, landlord's liens and liens and charges incidental to the conduct
of the business or the ownership of the assets of the Company or of a
Consolidated Subsidiary, which were not incurred in connection with the
borrowing of money and which do not, in the opinion of the Company, materially
impair the use of such assets in the operation of the business of the Company
or such Consolidated Subsidiary or the value of such assets for the purposes
thereof or (k) liens relating to accounts receivable of the Company or any of
its Subsidiaries which have been sold, assigned or otherwise transferred to
another Person in a transaction classified as a sale of accounts receivable in
accordance with generally accepted accounting principles (to the extent the
sale by the Company or the applicable Subsidiary is deemed to give rise
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to a lien in favor of the purchaser thereof in such accounts receivable or the
proceeds thereof). Notwithstanding the above, the Company or any Consolidated
Subsidiary may, without securing the Notes, create or assume any Indebtedness
which is secured by a lien which would otherwise be subject to the foregoing
restrictions, provided that after giving effect thereto the Exempted Debt then
outstanding at such time does not exceed 10% of the total assets of the
Company and its Subsidiaries on a consolidated basis.
Limitation on Sale and Lease-Back Transactions. Sale and lease-back
transactions (except such transactions involving leases for less than three
years) by the Company or any Consolidated Subsidiary of any assets are
prohibited unless (a) the Company or such Consolidated Subsidiary would be
entitled to incur Indebtedness secured by a lien on the assets to be leased in
an amount at least equal to the Attributable Debt in respect of such
transaction without equally and ratably securing the Exchange Notes, or (b)
the proceeds of the sale of the assets to be leased are at least equal to
their fair market value and the proceeds are applied to the purchase or
acquisition (or, in the case of real property, the construction) of assets or
to the retirement of indebtedness. The foregoing limitation will not apply, if
at the time the Company or any Consolidated Subsidiary enters into such sale
and lease-back transaction, and after giving effect thereto, Exempted Debt
does not exceed 10% of the total assets of the Company and its Subsidiaries on
a consolidated basis.
SUCCESSOR CORPORATION
The Indenture provides that the Company shall not consolidate or merge with
or into, or transfer or lease its assets substantially as an entirety to any
person unless the Company shall be the continuing corporation, or the
successor corporation or person to which such assets are transferred or leased
shall be a corporation organized under the laws of the United States, any
state thereof or the District of Columbia and shall expressly assume the
Company's obligations on the Debt Securities and under the Indenture, and
immediately after giving effect to such transaction no Event of Default (as
defined in the Indenture) shall have occurred and be continuing, and certain
other conditions are met. Upon assumption of the Company's obligations by a
person to whom such assets are transferred or leased, subject to certain
exceptions, the Company shall be discharged from all obligations under the
Notes and the Indenture.
This covenant would not apply to any recapitalization transaction, a change
of control of the Company or a highly leveraged transaction unless such
transaction or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety. There are no covenants or other provisions in the Indenture
providing for a put or increased interest or that would otherwise afford
holders of Notes protection in the event of a recapitalization transaction, a
change of control of the Company or a highly leveraged transaction.
EVENTS OF DEFAULT
An Event of Default is defined under the Indenture with respect to Debt
Securities of each series as being: (a) default in payment of all or any part
of the principal of, or premium, if any, on any Debt Securities of such series
when due, either at maturity, upon any redemption, by declaration or
otherwise; (b) default for 30 days in payment of any interest on any Debt
Securities of such series; (c) default in payment of any sinking fund
installment when due by the terms of the Debt Securities of such series; (d)
default for 60 days after written notice as provided in the Indenture in the
observance or performance of any other covenant or agreement in the Debt
Securities of such series or in the Indenture, other than a covenant included
in the Indenture solely for the benefit of a series of Debt Securities other
than such series; or (e) certain events of bankruptcy, insolvency or
reorganization.
The Indenture provides that (a) if an Event of Default due to the default in
payment of principal, premium, if any, or interest on any series of Debt
Securities, or due to the default in the performance or breach of any other
covenant or agreement of the Company applicable to the Debt Securities of such
series but not applicable to all outstanding Debt Securities, shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the Debt Securities of such series may declare the
principal of all Debt
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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 the Trustee to institute such action and shall have offered the
Trustee reasonable indemnity, the Trustee shall not have instituted such
action within 60 days of such request and the Trustee shall not have received
direction inconsistent with such written request by the holders of a majority
in principal amount of the Debt Securities of such series then outstanding.
The Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any
default that exists.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or decrease its obligations under the Indenture as
set forth below.
Under terms satisfactory to the Trustee, the Company may discharge certain
obligations to holders of any series of Debt Securities which have not already
been delivered to the Trustee for cancellation and which have either become
due and payable or are by their terms due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
Trustee cash or U.S. Government Obligations (as defined in the Indenture), as
trust funds in an amount certified to be sufficient to pay when due, whether
at maturity, upon redemption or otherwise, the principal of, premium, if any,
and interest on such Debt Securities.
The Company may also discharge any and all of its obligations to holders of
any series of Debt Securities at any time ("defeasance"), but may not thereby
avoid its duty to register the transfer or exchange of such series of Debt
Securities, to replace any temporary, mutilated, destroyed, lost or stolen
series of Debt Securities or to maintain an office or agency in respect of
such series of Debt Securities. Under terms satisfactory to the Trustee, the
Company may instead be released with respect to any outstanding series of Debt
Securities from the obligations imposed by certain provisions of the Indenture
(which contain the covenants described above limiting liens, consolidations,
mergers, transfers and leases and certain dispositions) and omit to comply
with such sections without creating an Event of Default ("covenant
defeasance"). Defeasance or covenant defeasance may be effected only if, among
other things: (i) the Company irrevocably deposits with the Trustee cash or
U.S. Government Obligations, as trust funds in an amount certified to be
sufficient to pay at maturity (or upon redemption) the principal, premium, if
any, and interest on all outstanding Debt Securities of such series and (ii)
the Company delivers to the Trustee an opinion of counsel to the effect that
the holders of such series of Debt Securities will not recognize income, gain
or loss for United States Federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States Federal income tax
treatment of principal, premium and interest payments on such series
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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 the date of the Indenture, since such a result
would not occur under current tax law.
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in the Indenture, provided that such cure or
correction does not adversely affect the holders of Debt Securities, (e)
establish the forms or terms of Debt Securities of any series and (f) evidence
the acceptance of appointment by a successor trustee.
The Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of all series then outstanding
and affected (voting as one class), to add any provisions to, or change in any
manner or eliminate any of the provisions of, the Indenture or modify in any
manner the rights of the holders of the Debt Securities of each series so
affected; provided that the Company and the Trustee may not, without the
consent of the holder of each outstanding Debt Security affected thereby, (a)
extend the final maturity of any Debt Security, or reduce the principal amount
thereof or premium thereon, if any, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption
thereof or change the currency in which the principal thereof, premium, if
any, or interest thereon is payable or reduce the amount of the principal of
any Debt Security issued with original issue discount that is payable upon
acceleration or provable in bankruptcy or alter certain provisions of the
Indenture relating to the Debt Securities not denominated in U.S. dollars or
impair the right to institute suit for the enforcement of any payment on any
Debt Security when due or (b) reduce the aforesaid percentage in principal
amount of Debt Securities of any series, the consent of the holders of which
is required for any such modification.
CONCERNING THE TRUSTEE
The First National Bank of Chicago is the Trustee under the Indenture. All
payments of principal of, premium, if any, and interest on and all
registration, transfer, exchange, authentication and delivery (including
authentication and delivery on original issuance of the Notes) of, the Notes
will be effected by the Trustee at an office designated by the Trustee in New
York, New York.
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict or resign.
In case of any conflicting interest relating to the Trustee's duties with
respect to the Notes, the Trustee shall either eliminate such conflicting
interest or, except as otherwise provided in the TIA, resign.
The holders of a majority in principal amount of any series of Debt
Securities then outstanding will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee with respect to such series of Debt Securities, provided that such
direction would not conflict with any rule of law or with the Indenture, would
not be unduly prejudicial to the rights of another holder of the Debt
Securities, and would not involve the Trustee in personal liability. The
Indenture provides that in case an Event of Default shall occur and be known
to the Trustee (and not be cured), the Trustee will be required to use the
degree of care of a prudent man in the conduct of his own affairs in the
exercise of its power. Subject to such provisions, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request of any of the holders of the Debt Securities, unless they shall
have offered to the Trustee security and indemnity satisfactory to it.
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The Trustee is one of a number of banks with which the Company and its
subsidiaries maintain ordinary banking and trust relationships. With respect
to the sale of trust convertible preferred securities issued by a subsidiary
of the Company, the Trustee also serves as trustee under the indenture
pursuant to which convertible subordinated debt of the Company was issued, a
guarantee agreement of the Company issued with respect to such trust
convertible preferred securities and a declaration of trust related to the
issuance of such trust convertible preferred securities. With respect to the
sale of the Company's 6.60% Notes due 2000, 6 7/8% Notes due 2002 and 7.65%
Debentures due 2027, the Trustee also serves as trustee under the indenture
pursuant to which such debt was issued. In addition, the Trustee also serves
as trustee under an indenture pursuant to which 6.55% Senior Notes due 2002 of
a subsidiary were issued.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, STOCKHOLDERS OR INCORPORATORS
The Indenture provides that no past, present or future director, officer,
employee, stockholder or incorporator of the Company or any successor
corporation shall have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation, by reason of such person's or
entity's status as such director, officer, stockholder or incorporator.
REGISTRATION RIGHTS
Holders of Exchange Notes are not entitled to any registration rights with
respect to the Exchange Notes. Pursuant to the Registration Rights Agreement,
holders of Private Notes are entitled to certain registration rights. Under
the Registration Rights Agreement, the Company has agreed, for the benefit of
the holders of Private Notes, that it will, at its expense (i) file a
registration statement with the Commission with respect to the Exchange Offers
and (ii) use its reasonable efforts to cause such registration statement to be
declared effective under the Securities Act by August 23, 1998. The
Registration Statement of which the Prospectus is a part constitutes the
registration statement for the Exchange Offers.
If, (i) because of any change in law or in currently prevailing
interpretations of the Staff the Company is not permitted to effect any of the
Exchange Offers, (ii) any of the Exchange Offers are not consummated by
October 7, 1998, or (iii) in the case of any holder that participates in the
Exchange Offers, such holder does not receive applicable Exchange Notes on the
date of the exchange that may be sold without restriction under state and
Federal securities laws (other than due solely to the status of such holder as
an affiliate of the Company within the meaning of the Securities Act or as a
broker-dealer), then in each case, the Company will (x) promptly deliver to
the applicable holders written notice thereof and (y) at the Company's sole
expense (a) as promptly as practicable, file a shelf registration covering
resales of the applicable Private Notes (the "Shelf Registration Statement"),
(b) use its reasonable efforts to cause the Shelf Registration Statement to be
declared effective under the Securities Act and (c) use its reasonable best
efforts to keep effective the Shelf Registration Statement until the earlier
of two years (or, if Rule 144(k) is amended to provide a shorter restrictive
period, such shorter period) after the Closing Date or such time as all of the
applicable Private Notes have been sold thereunder. The Company will, in the
event that a Shelf Registration Statement is filed, provide to each applicable
holder copies of the prospectus that is a part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement for
the applicable Private Notes has become effective and take certain other
actions as are required to permit unrestricted resales of the applicable
Private Notes. A holder that sells Private Notes pursuant to the Shelf
Registration Statement will be required to be named as a selling security
holder in the related prospectus and to deliver a prospectus to purchasers,
will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales and will be bound by the
provisions of the Registration Rights Agreement that are applicable to such a
holder (including certain indemnification rights and obligations).
The Registration Rights Agreement is governed by, and construed in
accordance with, the laws of the State of New York. The summary herein of
certain provisions of the Registration Rights Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the Registration Rights Agreement, a copy of which is
attached as an exhibit to the Registration Statement of which this Prospectus
forms a part and is available upon request to the Company.
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CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a general discussion of certain United States Federal income
tax consequences associated with the exchange of Private Notes for Exchange
Notes and the acquisition and disposition of the Exchange Notes by a holder who
holds the Exchange Notes as "capital assets" (generally, property held for
investment). This discussion is based upon the United States Federal income tax
laws, regulations, rulings and decisions now in effect, which are subject to
change, possibly retroactively. This discussion does not cover all aspects of
Federal income taxation that may be relevant to holders, in light of their
specific circumstances, particularly holders subject to special tax treatment
(such as insurance companies, financial institutions, tax exempt organizations
or foreign persons, except to the extent described below). Prospective
investors are urged to consult their tax advisors regarding the United States
Federal tax consequences of acquiring, holding, and disposing of the Exchange
Notes, as well as any tax consequences that may arise under the laws of any
foreign, state, local, or other taxing jurisdiction.
For purposes of this discussion, a "U.S. holder" means a holder that is a
citizen or resident of the United States, a corporation, partnership, or other
entity created or organized in the United States or under the laws of the
United States or of any political subdivision thereof, an estate whose income
is includible in gross income for United States Federal income tax purposes
regardless of its source, or a trust whose administration is subject to the
primary supervision of a United States court and which has one or more United
States fiduciaries who have the authority to control all substantial decisions
of the trust. A "Non-U.S. holder" means a beneficial owner of Exchange Notes
who is not a U.S. holder.
U.S. HOLDERS
Exchange of Notes. There will be no Federal income tax consequences to a
holder exchanging Private Notes for Exchange Notes pursuant to the Exchange
Offers, and such a holder will have the same adjusted tax basis and holding
period in the Exchange Notes as it had in the Private Notes immediately before
the exchange.
Disposition of Exchange Notes. In general, the holder of an Exchange Note
will recognize gain or loss upon the sale, redemption, retirement or other
disposition of the Exchange Note measured by the difference between the amount
of cash and the fair market value of property received (except to the extent
attributable to the payment of accrued interest), and the holder's adjusted tax
basis in the Exchange Note. Subject to the market discount rules discussed
below, the gain or loss on the sale or other disposition of an Exchange Note
should be long-term capital gain or loss, provided the holder has a holding
period for the Exchange Note (which would include the holding period of the
Private Note) of more than one year. In the case of a U.S. holder who is an
individual, any capital gain recognized on the sale or other disposition of an
Exchange Note generally will be subject to a maximum U.S. Federal income tax
rate of (i) 28 percent if such U.S. holder's holding period is more than one
year and not more than 18 months and (ii) 20 percent if such U.S. holder's
holding period exceeds 18 months.
Market Discount on Resale. Holders, other than original purchasers of Private
Notes in the original offering, should be aware that the resale of the Exchange
Notes may be affected by the market discount provisions of the Code. These
rules generally provide that if a subsequent holder of an Exchange Note
purchases it at a market discount in excess of statutorily defined de minimis
amount, and thereafter recognizes gain upon a disposition (including a partial
redemption) of the Exchange Note, the lesser of such gain or the portion of the
market discount that accrued while the Exchange Note was held by such holder
will be treated as ordinary interest income at the time of the disposition. The
rules also provide that a holder who acquires an Exchange Note at a market
discount may be required to defer a portion of any interest expense that may
otherwise be deductible on any indebtedness incurred or maintained to purchase
or carry such Exchange Note until the holder disposes of such Exchange Note in
a taxable transaction. If a holder of an Exchange Note elects to include market
discount in income currently, both of the foregoing rules would not apply.
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NON-U.S. HOLDERS
Under present United States Federal income and estate tax law, assuming
certain certification requirements are satisfied (which include identification
of the beneficial owner of the instrument), and subject to the discussion of
backup withholding below:
(a) payments of interest on the Exchange Notes to any Non-U.S. holder
will not be subject to United States Federal income or withholding tax,
provided that (1) the holder does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of McKesson
entitled to vote, (2) the holder is not (i) a bank receiving interest
pursuant to a loan agreement entered into in the ordinary course of its
trade or business, or (ii) a controlled foreign corporation that is related
to McKesson through stock ownership, and (3) such interest payments are not
effectively connected with the conduct of a United States trade or business
of the holder;
(b) a holder of an Exchange Note who is a Non-U.S. holder will not be
subject to the United States Federal income tax on gain realized on the
sale, exchange, or other disposition of an Exchange Note, unless (1) such
holder is an individual who is present in the United States for 183 days or
more during the taxable year and certain other requirements are met, or (2)
the gain is effectively connected with the conduct of a United States trade
or business of the holder; and
(c) if interest on the Exchange Notes is exempt from withholding of
United States Federal income tax under the rules described above, the
Exchange Notes will not be included in the estate of a deceased Non-U.S.
holder for United States Federal estate tax purposes.
The certification referred to above may be made on an Internal Revenue
Service Form W-8 or substantially similar substitute form.
INFORMATION REPORTING AND BACKUP WITHHOLDING
A U.S. holder may be subject to backup withholding at a rate of 31% with
respect to interest paid on or proceeds derived from the sale or other
disposition of an Exchange Note, unless the U.S. holder (i) is a corporation
or comes within certain other exempt categories or (ii) provides a taxpayer
identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules.
Under temporary United States Treasury regulations, United States
information reporting requirements and backup withholding tax will generally
not apply to interest paid on the Exchange Notes to a Non-U.S. holder at an
address outside the United States. Payments by a United States office of a
broker of the proceeds of a sale of the Exchange Notes are subject to both
backup withholding at a rate of 31% and information reporting unless the
holder certifies its Non-U.S. holder status under penalties of perjury or
otherwise establishes an exemption. Information reporting requirements (but
not backup withholding) will also apply to payments of the proceeds of sales
of the Exchange Notes by foreign offices of United States brokers, or foreign
brokers with certain types of relationships to the United States, unless the
broker has documentary evidence in its records that the holder is a Non-U.S.
holder and certain other conditions are met, or the holder otherwise
establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules will be refunded or credited against the holder's
United States Federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service.
On October 6, 1997, the United States Treasury Department issued final
Treasury regulations governing information reporting and the certification
procedures regarding withholding and backup withholding on certain amounts
paid to Non-U.S. holders after December 31, 1999. The new Treasury regulations
would alter the procedures for claiming the benefits of an income tax treaty
and may change the certification procedures relating to the receipt by
intermediaries of payments on behalf of a beneficial owner of an Exchange
Note. Holders of the Exchange Notes should consult their tax advisors
concerning the effect, if any, of such new Treasury regulations on an
investment in the Exchange Notes.
34
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account pursuant
to the Exchange Offers must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Notes received in exchange for Private
Notes where such Private Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has
agreed that, starting on the applicable Expiration Date and ending on the
close of business on the 180th day following such Expiration Date, it will
make this Prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale. In addition, until 1998,
all dealers effecting transactions in the Exchange Notes may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offers may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells Exchange Notes that were
received by it for its own account pursuant to the Exchange Offers and any
broker or dealer that participates in a distribution of such Exchange Notes
may be deemed to be an "underwriter" within the meaning of the Securities Act
and any profit of any such resale of Exchange Notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. Each Letter of Transmittal states that
by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such
documents in the applicable Letter of Transmittal. The Company has agreed to
pay all expenses incident to the Exchange Offers (including the expenses of
any Special Counsel for the holders of the Private Notes) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Private Notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
EXPERTS
The consolidated financial statements of McKesson and the related financial
statement schedule incorporated in this Registration Statement by reference
from McKesson's Annual Report on Form 10-K for the year ended March 31, 1997
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 16, 1997 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 accounting and auditing.
35
<PAGE>
LEGAL MATTERS
The validity of the Exchange Notes offered hereby will be passed upon for
McKesson by Skadden, Arps, Slate, Meagher & Flom LLP.
36
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE EXCHANGE NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE EXCHANGE NOTES
OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
Available Information...................................................... 3
Incorporation of Certain Documents by Reference............................ 3
Prospectus Summary......................................................... 5
Consequences of Failure to Exchange Private Notes.......................... 7
The Exchange Notes......................................................... 8
Special Note Regarding Forward-Looking Statements.......................... 9
Risk Factors............................................................... 10
The Company................................................................ 13
Use of Proceeds............................................................ 15
The Exchange Offers........................................................ 16
Description of Notes....................................................... 24
Certain United States Federal Tax Consequences............................. 33
Plan of Distribution....................................................... 35
Experts.................................................................... 35
Legal Matters.............................................................. 36
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
McKESSON CORPORATION
OFFERS TO EXCHANGE
$150,000,000 6.30% EXCHANGE NOTES
DUE MARCH 1, 2005 AND
$150,000,000 6.40% EXCHANGE NOTES
DUE MARCH 1, 2008
----------------
PROSPECTUS
----------------
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VIII of the Restated By-Laws of the Company, in accordance with the
provisions of Section 145 of the General Corporation Law of Delaware (the
"Delaware Corporation Law"), provides that the Company shall indemnify any
person in connection with any threatened, pending or completed legal
proceeding (other than a legal proceeding by or in the right of the Company)
by reason of the fact that he is or was a director or officer of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred in connection with such
legal proceeding if he acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, if he had no reasonable
cause to believe that his conduct was unlawful. If the legal proceeding is by
or in the right of the Company, the director or officer may be indemnified by
the Company against expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of such legal
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, except that he may
not be indemnified in respect of any claim, issue or matter as to which he
shall have been adjudged to be liable to the Company unless a court determines
otherwise.
Article VIII of McKesson's Restated By-Laws allows the Company to maintain
director and officer liability insurance on behalf of any person who is or was
a director or officer of the Company or such person who serves or served as
director, officer, employee or agent of another corporation, partnership or
other enterprise at the request of the Company.
Article VI of McKesson's Restated Certificate of Incorporation, in
accordance with Section 102(b)(7) of the Delaware Corporation Law, provides
that no director of the Company shall be personally liable to the Company or
its stockholders for monetary damages for any breach of his fiduciary duty as
a director; provided, however, that such clause shall not apply to any
liability of a director (1) for any breach of his duty of loyalty to the
Registrant or its stockholders, (2) for acts or omissions that are not in good
faith or involve intentional misconduct or a knowing violation of the law, (3)
under Section 174 of the Delaware Corporation Law, or (4) for any transaction
from which the director derived an improper personal benefit.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. EXHIBITS
The Exhibits listed in the following Exhibit Index are filed as part of the
Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.1 Indenture between the Company and The First National Bank of Chicago,
dated as of March 11, 1997 (Exhibit 4.1(1)).
4.2 Officer's Certificate relating to the Private Notes.
4.3 Form of Officer's Certificate relating to the Exchange Notes.
4.4 Form of 6.30% Notes due March 1, 2005 (included in Exhibit A to Annex
A to Exhibit 4.2 above).
4.5 Form of 6.40% Notes due March 1, 2008 (included in Exhibit A to Annex
B to Exhibit 4.2 above).
4.6 Form of 6.30% Exchange Notes due March 1, 2005 (included in Exhibit A
to Annex A to Exhibit 4.3 above).
4.7 Form of 6.40% Exchange Notes due March 1, 2008 (included in Exhibit A
to Annex B to Exhibit 4.3 above).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality
of the Exchange Notes being registered hereby.*
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to certain tax
matters.
10.1 Registration Rights Agreement, dated as of February 24, 1998, among
the Company and the Initial Purchasers.
23.1 Independent Auditors' Consent.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
24.1 Power of Attorney.
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The First National Bank of Chicago, as Trustee
under the Indenture.
99.1 Form of Letter of Transmittal for 6.30% Notes due March 1, 2005.
99.2 Form of Letter of Transmittal for 6.40% Notes due March 1, 2008.
99.3 Form of Notice of Guaranteed Delivery.
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
99.5 Form of Letter to Clients.
99.6 Form of Exchange Agent Agreement.
</TABLE>
- --------
(1) Incorporated by reference to designated exhibit to Amendment No. 1 to the
Company's Registration Statement on Form S-4 filed with Commission on July
22, 1997, File No. 333-30899.
* To be filed by amendment.
ITEM 22. UNDERTAKINGS.
The undersigned hereby undertakes as follows:
(a) That for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is
II-2
<PAGE>
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the Securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
(c) To respond to requests for information that is incorporated by reference
into the Prospectus pursuant to Item 4, 10(b), 11 or 13 of Form S-4, within
one business day of receipt of such request, and to send the incorporated
documents by first-class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
the Registration Statement through the date of responding to the request.
(d) To supply by means of a post-effective amendment all information
concerning any transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when it
became effective.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-4 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SAN FRANCISCO, STATE OF CALIFORNIA, ON THE 1ST DAY
OF APRIL, 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 BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED.
SIGNATURE TITLE
* President and Chief
- ------------------------------------- Executive Officer and
MARK A. PULIDO Director
(principal executive officer)
* Vice President and
- ------------------------------------- Chief Financial Officer
RICHARD H. HAWKINS (principal financial officer)
* Controller
- ------------------------------------- (principal accounting officer)
HEIDI E. YODOWITZ
* Director;
- ------------------------------------- Chairman of the Board
ALAN SEELENFREUND
* Director
- -------------------------------------
MARY G.F. BITTERMAN
* Director
- -------------------------------------
TULLY M. FRIEDMAN
* Director
- -------------------------------------
JOHN M. PIETRUSKI
II-4
<PAGE>
* Director
- -------------------------------------
DAVID S. POTTRUCK
* Director
- -------------------------------------
CARL E. REICHARDT
* Director
- -------------------------------------
JANE E. SHAW
* Director
- -------------------------------------
ROBERT H. WATERMAN, JR.
*By: /s/ Nancy A. Miller
----------------------------------
NANCY A. MILLER
ATTORNEY-IN-FACT
II-5
<PAGE>
Exhibit 4.2
OFFICER'S CERTIFICATE
---------------------
The undersigned, McKesson Corporation, a Delaware corporation (the
"Corporation"), hereby certifies through Nancy A. Miller, its Vice President and
Corporate Secretary, pursuant to Sections 2.3, 2.4 and 11.5 of the Indenture,
dated as of March 11, 1997 (the "Indenture"), by and between the Company, as
Issuer, and The First National Bank of Chicago, a national association, as
Trustee, as follows:
1. Pursuant to the terms of the resolutions adopted by the Board of Directors
of the Corporation (the "Board of Directors") dated January 28, 1998 and the
Finance Committee of the Board of Directors dated February 9, 1998 and the
actions of officers of the Corporation on February 19, 1998, the terms of the
Corporation's 6.30% Notes due March 1, 2005 and 6.40% Notes due March 1, 2008
(collectively, the "Notes") set forth in Annex A and Annex B, respectively,
------- -------
attached hereto have been duly adopted by the Corporation.
2. The forms and terms of the Notes have been established pursuant to Sections
2.1 and 2.3 of the Indenture and comply with the Indenture.
3. She has read Section 2.3 of the Indenture, read such other documents as she
deemed necessary and made such other inquiries as she deemed necessary to make
the certifications in paragraph 2, 3 and 4 hereof.
4. All conditions precedent provided for in the Indenture relating to the
issuance of the Notes have been complied with.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized officer as of this 24/th/ day of February, 1998.
McKESSON CORPORATION
By: /s/ Nancy A. Miller
-------------------------------
Nancy A. Miller
Vice President and
Corporate Secretary
<PAGE>
ANNEX A
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "6.30% Notes due
-----------
March 1, 2005" (the "Notes due 2005").
2. Aggregate Principal Amount. The Notes due 2005 shall be limited in
--------------------------
aggregate principal amount to $150,000,000 (except for Notes due 2005
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes due 2005 pursuant to Section 2.8,
2.9, 2.11, 8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Notes due 2005 shall be denominated in
---------------------
Dollars.
4. Maturity. The date on which the principal of the Notes due 2005 is
--------
payable is March 1, 2005.
5. Rate of Interest; Interest Payment Date; Regular Record Dates. Each
-------------------------------------------------------------
Note due 2005 shall bear interest from February 24, 1998 at 6.30% per annum
until the principal thereof is paid. Such interest shall be payable
semiannually in arrears on March 1 and September 1 of each year, commencing
on September 1, 1998, to the persons in whose names the Notes due 2005 are
registered at the close of business on the immediately preceding February
15 and August 15, respectively. Interest on the Notes due 2005 shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance. Interest on
the Notes due 2005 shall be computed on the basis of a 360-day year
comprised of twelve 30-day months. The amount of interest payable for any
period shorter than a full semi-annual period for which interest is
computed will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which principal, premium,
if any, or interest is payable on the Notes due 2005 is not a Business Day,
then payment of the principal, premium, if any, or interest payable on such
date will be made on the next
1
<PAGE>
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and interest on
----------------
the Notes due 2005 shall be payable, and the transfer of Notes due 2005
shall be registrable, at the office or agency of the Issuer to be
maintained for such purpose in the Borough of Manhattan, The City of New
York, except that, at the option of the Issuer, interest may be paid by
mailing a check to the address of the person entitled thereto as it appears
on the Notes due 2005 register; provided, however, that while any Notes due
2005 are represented by a Registered Global Security, payment of principal
of, premium, if any, or interest on the Notes due 2005 may be made by wire
transfer to the account of the Depositary or its nominee.
7. Optional Redemption. The Notes due 2005 may be redeemed as a whole
-------------------
or in part, at the option of the Issuer, at any time at a redemption price
equal to the greater of (i) 100% of their principal amount or (ii) the sum
of the present values of the remaining scheduled payments of principal and
interest thereon discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Yield plus 10 basis points, plus accrued interest to the date of
redemption. Holders of the Notes due 2005 to be redeemed will receive
notice thereof by first-class mail at least 10 and not more than 60 days
prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date. "Comparable Treasury
Issue" means the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of
the Notes due 2005 that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of
the Notes due 2005. "Independent Investment Banker" means Salomon
Brothers Inc and its successor or, if such firm is unwilling or
2
<PAGE>
unable to select the Comparable Treasury Issue, an independent investment
banking institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all
such Quotations. "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices of the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m. on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, BancAmerica
Robertson Stephens and J.P. Morgan Securities Inc., and their respective
successors; provided however, that if any of the foregoing shall cease to
be a primary U.S. Government Securities dealer in New York City (a "Primary
Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer.
8. Mandatory Redemption. The Notes due 2005 are not mandatorily
--------------------
redeemable and are not entitled to the benefit of a sinking fund or any
analogous provisions.
9. Denominations. The Notes due 2005 shall be issued initially in
-------------
minimum denominations of $250,000 and shall be issued in integral multiples
of $1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the Notes due
--------------------------------
2005 shall be payable upon declaration of acceleration pursuant to Section
5.1 of the Indenture.
3
<PAGE>
11. Payment Currency. Principal and interest on the Notes due 2005
----------------
shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on the
---------------------------
Notes due 2005 shall not be payable in a currency other than Dollars.
13. Payment Currency - Index. The principal of and interest on the
------------------------
Notes due 2005 shall not be determined with reference to an index based on
a coin or currency.
14. Registered Securities. The Notes due 2005 shall be issuable as
---------------------
Registered Securities. The Notes due 2005 may be issued as Registered
Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Notes due 2005 held by a Person that is not a U.S. Person in respect
of taxes or similar charges withheld or deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will govern
-----------------------
the transferability of Notes due 2005 in definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Notes due 2005. The
Depository Trust Company shall initially serve as the Depositary for the
Registered Global Security representing Notes due 2005.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in Section
5.1 of the Indenture with respect to the Notes due 2005. There shall be the
following additions to the covenants of the Issuer set forth in Article III
with respect to the Notes due 2005:
Limitation on Liens. The Issuer covenants that, so long as any
of the Notes due 2005 remain outstanding, it shall not, nor shall it permit
any Consolidated Subsidiary to, create or assume any Indebtedness for money
borrowed which is secured by a mortgage, pledge, security interest or
lien ("liens") of or upon any assets, whether now owned or hereafter
acquired, of the Issuer or
4
<PAGE>
any such Consolidated Subsidiary without equally and ratably securing the
Notes due 2005 by a lien ranking ratably with and equal to (or at the
option of the Issuer, senior to) such secured Indebtedness, except that the
foregoing restriction shall not apply to (a) liens on any assets of any
corporation existing at the time such corporation becomes a Consolidated
Subsidiary; (b) liens on any assets existing at the time of acquisition of
such assets by the Issuer or a Consolidated Subsidiary, or liens to secure
the payment of all or any part of the purchase price of such assets upon
the acquisition of such assets by the Issuer or a Consolidated Subsidiary
or to secure any indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary prior to, at the time of, or within 360 days after
such acquisition (or in the case of real property, the completion of
construction (including any improvements on an existing asset) or
commencement of full operation of such asset, whichever is later) which
indebtedness is incurred or guaranteed for the purpose of financing all or
any part of the purchase price thereof or, in the case of real property,
construction or improvements thereon; provided, however, that in the case
of any such acquisition, construction or improvement, the lien shall not
apply to any assets theretofore owned by the Issuer or a Consolidated
Subsidiary, other than, in the case of any such construction or
improvement, any real property on which the property so constructed, or the
improvement, is located, or to secure the payment of the purchase price of
such assets, or to secure indebtedness incurred or guaranteed by the Issuer
or a Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon, which
indebtedness is incurred or guaranteed prior to, at the time of or within
360 days after such acquisition (or in the case of real property,
completion of such improvement or construction or commencement of full
operation of such property, whichever is later); (c) liens on any assets
securing indebtedness owed by any Consolidated Subsidiary to the Issuer or
another wholly owned Subsidiary; (d) liens on any assets of a corporation
existing at the time such corporation is merged into or consolidated with
the Issuer or a Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an entirety or
substantially as an entirety by the Issuer or a Subsidiary; (e) liens on
any assets of the Issuer or a Consolidated Subsidiary in favor of the
United States of America or any state thereof, or any department, agency or
instrumentality or political subdivision of the United States of
5
<PAGE>
America or any State thereof, or in favor of any other country, or any
political subdivision thereof, to secure partial, progress, advance or
other payments pursuant to any contract or statute or to secure any
indebtedness incurred or guaranteed for the purpose of financing all or any
part of the purchase price (or, in the case of real property, the cost of
construction) of the assets subject to such liens (including, but not
limited to, liens incurred in connection with pollution control, industrial
revenue or similar financing); (f) any extension, renewal or replacement
(or successive extensions, renewals or replacements), in whole or in part,
of any lien referred to in the foregoing clauses (a) to (e), inclusive;
provided, however, that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or a part of the
assets which secured the lien so extended, renewed or replaced (plus
improvements and construction on such real property); (g) liens imposed by
law, such as mechanics', workmen's, repairmen's, materialmen's, carriers',
warehousemen's, vendors' or other similar liens arising in the ordinary
course of business, or governmental (federal, state or municipal) liens
arising out of contracts for the sale of products or services by the Issuer
or any Consolidated Subsidiary, or deposits or pledges to obtain the
release of any of the foregoing liens; (h) pledges, liens or deposits under
worker's compensation laws or similar legislation and liens or judgments
thereunder which are not currently dischargeable, or in connection with
bids, tenders, contracts (other than for the payment of money) or leases to
which the Issuer or any Consolidated Subsidiary is a party, or to secure
public or statutory obligations of the Issuer or any Consolidated
6
<PAGE>
Subsidiary, or in connection with obtaining or maintaining self-insurance
or to obtain the benefits of any law, regulation or arrangement pertaining
to unemployment insurance, old age pensions, social security or similar
matters, or to secure surety, appeal or customs bonds to which the Issuer
or any Consolidated Subsidiary is a party, or in litigation or other
proceedings such as, but not limited to, interpleader proceedings, and
other similar pledges, liens or deposits made or incurred in the ordinary
course of business; (i) liens created by or resulting from any litigation
or other proceeding which is being contested in good faith by appropriate
proceedings, including liens arising out of judgements or awards against
the Issuer or any Consolidated Subsidiary with respect to which the Issuer
or such Consolidated Subsidiary is in good faith prosecuting an appeal or
proceedings for review or for which the time to make an appeal has not yet
expired; or final unappealable judgment liens which are satisfied within 15
days of the date of judgment; or liens incurred by the Issuer or any
Consolidated Subsidiary for the purpose of obtaining a stay or discharge in
the course of any litigation or other proceedings to which the Issuer or
such Consolidated Subsidiary is a party; (j) liens for taxes or assessments
or governmental charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty, or which are being contested in good
faith by appropriate proceedings; landlord's liens on property held under
lease; and any other liens or charges incidental to the conduct of the
business of the Issuer or any Consolidated Subsidiary or the ownership of
the assets of any of them which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which do not,
in the opinion of the Issuer, materially impair the use of such assets in
the operation of the business of the Issuer or such Consolidated Subsidiary
or the value of such assets for the purposes thereof; or (k) liens relating
to accounts receivable of the Company or any of its Subsidiaries which have
been sold, assigned or otherwise transferred to another Person in a
transaction classified as a sale of accounts receivable in accordance with
generally accepted accounting principles (to the extent the sale by the
Company or the applicable Subsidiary is deemed to give rise to a lien in
favor of the purchaser thereof in such accounts receivable or the
proceedings thereof). Notwithstanding the above, the Issuer or any
Consolidated Subsidiary may, without securing the Notes due 2005, create or
assume any Indebtedness which is secured by a lien which would otherwise be
subject to the foregoing restrictions, provided that at the time of such
creation or assumption, after giving effect thereto, Exempted Debt does not
exceed 10% of the total assets of the Issuer and its Subsidiaries on a
consolidated basis, determined in accordance with generally accepted
accounting principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Notes due 2005 remain outstanding, it
will not, nor shall it permit any Consolidated Subsidiary to, enter into
any sale and lease-back transaction with respect to any assets, other than
any sale leaseback transaction (involving a lease for a term of not more
than three years), unless
7
<PAGE>
either (a) the Issuer or such Consolidated Subsidiary would be entitled to
incur Indebtedness secured by a lien on the assets to be leased in an
amount at least equal to the Attributable Debt in respect of such
transaction without equally and ratably securing the Notes due 2005
pursuant to clauses (a) through (j) inclusive of the covenant with respect
to "Limitation on Liens" above, or (b) the proceedings of the sale of the
assets to be leased are at least equal to their fair market value (as
determined by the Board of Directors of the Issuer) and the proceeds are
applied to the purchase or acquisition (or, in the case of real property,
the construction) of assets or to the retirement (other than at maturity or
pursuant to a mandatory sinking fund or mandatory redemption provision) of
indebtedness. The foregoing limitation shall not apply, if at the time the
Issuer or any Consolidated Subsidiary enters into such sale and lease-back
transaction, and after giving effect thereto, Exempted Debt does not exceed
10% of the total assets of the Issuer and its Subsidiaries on a
consolidated basis, determined in accordance with generally accepted
accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the lesser of
(a) the fair value of the assets subject to such transaction or (b) the
present value (discounted at the rate of interest set forth in or implicit
in the terms of such lease or, if it is not practicable to determine such
rate, the weighted average interest rate per annum borne by all series of
Securities then Outstanding and subject to the Limitation on Sale and
Leaseback Transactions compounded semiannually, in either case as
determined by the principal accounting or financial officer of the Issuer)
of the obligations of the Issuer or any Consolidated Subsidiary for net
rental payments during the remaining term of all leases (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended). The term "net rental payments" under any lease of
any period shall mean the sum of the rental and other payments required to
be paid in such period by the lessee thereunder, not including, however,
any amounts required to be paid by such lessee (whether or not designated
as rental or additional rental) on account of maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or similar
charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of
sales,
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<PAGE>
maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges. The term "Consolidated
Subsidiary" shall mean any Subsidiary substantially all the property of
which is located, and substantially all the operations of which are
conducted, in the United States of America whose financial statements are
consolidated with those of the Issuer in accordance with generally
accepted accounting principles. The term "Exempted Debt" shall mean the
sum of the following as of the date of determination: (i) Indebtedness of
the Issuer and its Consolidated Subsidiaries incurred after the date of
issuance of the Notes and secured by liens not permitted to be created or
assumed pursuant to the covenant with respect to "Limitation on Liens"
above, and (ii) Attributable Debt of the Issuer and its Consolidated
Subsidiaries in respect of every sale and lease-back transaction entered
into after the date of issuance of the Notes, other than leases expressly
permitted by the covenant with respect to "Limitation on Sale and Lease-
Back Transactions" above. The term "Indebtedness" shall mean all items
classified as indebtedness on the most recently available consolidated
balance sheet of the Issuer and its Consolidated Subsidiaries, in
accordance with generally accepted accounting principles.
19. Conversion and Exchange. The Notes due 2005 shall not be
-----------------------
convertible into or exchangeable into any other security; provided that
this provision shall not limit the Issuer's ability to consummate an
exchange offer as contemplated by the Registration Rights Agreement, dated
as of February 24, 1998, by and among the Issuer, Salomon Brothers Inc,
BancAmerica Robertson Stephens and J.P. Morgan Securities Inc.
20. Other Terms. The Notes due 2005 shall have the other terms and
-----------
shall be substantially in the form set forth in the form of Notes due 2005
attached hereto as Exhibit A. In case of any conflict between this Annex A
and the Notes due 2005 in the form attached hereto as Exhibit A, the form
of the Notes due 2005 shall control.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
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<PAGE>
EXHIBIT A
[FORM OF FACE OF NOTE DUE MARCH 1, 2005]
[IF THE NOTE DUE 2005 IS TO BE A GLOBAL SECURITY, INSERT THE FOLLOWING
- - - THIS NOTE DUE 2005 IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS NOTE DUE 2005 IS EXCHANGEABLE FOR NOTES DUE
2005 REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
THIS NOTE DUE 2005 (OTHER THAN A TRANSFER OF THIS NOTE DUE 2005 AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE DUE 2005 IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE DUE 2005 ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
McKESSON CORPORATION
6.30% NOTE DUE MARCH 1, 2005
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A NOTE DUE 2005 SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM, UNLESS
OTHERWISE AGREED
<PAGE>
BY THE ISSUER (WITH WRITTEN NOTICE THEREOF TO THE TRUSTEE): THE SECURITY
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO McKESSON CORPORATION (THE
"ISSUER") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR
THE SECURITIES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY
PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE FOR THE SECURITIES. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR A
2
<PAGE>
PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE FOR THE SECURITIES, SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THE ISSUER OR THE TRUSTEE MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.]
[ADDITIONAL LEGEND FOR REGULATION S NOTES: THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS AVAIL-
ABLE.]
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, _____________________________,
the principal sum of _________________________ Dollars ($______) on March 1,
2005 and to pay interest on said principal sum from February 24, 1998, or from
the most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1998,
at the rate of 6.30% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Note due 2005 is not a Business Day,
then payment of principal or interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of such delay). The interest installment so payable, and
punctually paid or duly provided for, on any Interest
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<PAGE>
Payment Date will, as provided in the Indenture (referred to on the reverse
hereof) be paid to the person in whose name this Note due 2005 is registered at
the close of business on the record date for such interest installment, which
shall be the close of business on the immediately preceding February 15 and
August 15 prior to such Interest Payment Date, as applicable. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered holders on such record date and may be paid to the
person in whose name this Note due 2005 is registered at the close of business
on a subsequent record date (which shall be not less than five Business Days
prior to the date of payment of such defaulted interest), notice whereof shall
be given by mail by or on behalf of the Issuer to the registered holders of
Notes due 2005 not less than 15 days preceding such subsequent record date, all
as more fully provided in the Indenture. The principal of and the interest on
this Note due 2005 shall be payable at the office or agency of the Issuer
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Issuer by check mailed to the person entitled thereto at such
address as shall appear in the registry books of the Issuer; provided, further
that for so long as this Note due 2005 is represented by a Registered Global
Security, payment of principal, premium, if any, or interest on this Note due
2005 may be made by wire transfer to the account of the Depositary or its
nominee.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture (as defined
below), by the manual signature of one of its authorized officers, this Note due
2005 shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Capitalized terms used in this Note due 2005 which are defined in the
Indenture shall have the respective meanings assigned to them in the Indenture.
The provisions of this Note due 2005 are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
4
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By: ___________________________
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
This Note due 2005 is one of a duly authorized series of securities
(the "Securities") of the Issuer designated as its 6.30% Notes due March 1, 2005
(the "Notes due 2005"). The Securities are all issued or to be issued under
and pursuant to an Indenture, dated as of March 11, 1997 (the "Indenture"), duly
executed and delivered between the Issuer and The First National Bank of
Chicago, a national banking association (the "Trustee," which term includes any
successor Trustee with respect to the Securities under the Indenture), to which
the Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Issuer, the Trustee
and the holders of the Securities and the terms upon which the Notes due 2005
are to be authenticated and delivered. The terms of individual series of
Securities may vary with respect to interest rate or interest rate formulas,
issue dates, maturity, redemption, repayment, currency of payment and otherwise.
Except as set forth below, this Note due 2005 is not redeemable and is
not entitled to the benefit of a sinking fund or any analogous provision.
This Note due 2005 is redeemable as a whole or in part, at the option
of the Issuer, at any time at a redemption price equal to the greater of (i)
100% of its principal amount or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Yield plus 10 basis points, plus accrued
interest to the date of redemption. The Holder of this Note due 2005 will
receive notice thereof by first-class mail at least 10 and not more than 60 days
prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. "Comparable Treasury Issue" means the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Note due 2005 that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Note due 2005. "Independent
Investment Banker" means Salomon Brothers Inc and its successor or, if such firm
is unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
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<PAGE>
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices of the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption
date. "Reference Treasury Dealer" means each of Salomon Brothers Inc,
BancAmerica Robertson Stephens and J.P. Morgan Securities Inc., and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government Securities dealer in New York City (a
"Primary Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer.
If an Event of Default with respect to the Notes due 2005 shall occur
and be continuing, the principal of all the Notes due 2005 may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding Note
due 2005 affected thereby, (i) extend the final maturity of the principal of any
Security or reduce the principal amount thereof or reduce the rate or extend the
time of payment of interest thereon, or reduce any amount payable on redemption
thereof or make the principal thereof (including any amount in respect of
original issue discount), or interest thereon payable in any coin or currency
other than that provided in the Securities or Coupons or in accordance with the
terms thereof, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof or the amount thereof provable in bankruptcy or alter certain provisions
of the Indenture relating to Securities not denominated in Dollars or the
Judgment
7
<PAGE>
Currency of such Securities or impair or affect the right of any Securityholder
to institute suit for the enforcement of any payment thereof when due or, if the
Securities provide therefor, any right of repayment at the option of the
Securityholder or (ii) reduce the aforesaid percentage in principal amount of
Securities of any series issued under such Indenture, the consent of the holders
of which is required for any such modification. It is also provided in the
Indenture that, with respect to certain defaults or Events of Default regarding
the Securities of any series, the holders of a majority in aggregate principal
Outstanding of the Securities of each such series, each such series voting as a
separate class (or, of all Securities, as the case may be voting as a single
class) may under certain circumstances waive all defaults with respect to each
such series (or with respect to all the Securities, as the case may be) and
rescind and annul a declaration of default and its consequences, but no such
waiver or rescission and annulment shall extend to or affect any subsequent
default or shall impair any right consequent thereto. The preceding sentence
shall not, however, apply to a default in the payment of the principal of or
interest on any of the Securities.
No reference herein to the Indenture and no provision of this Note due
2005 or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note due 2005 at the time, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note due 2005 may be registered on the
registry books of the Issuer, upon surrender of this Note due 2005 for
registration of transfer at the office or agency of the Issuer maintained by the
Issuer for such purpose in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or by its attorney duly authorized in writing, and thereupon one or more new
Notes due 2005 of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes due 2005 are issuable only in registered form in minimum
denominations of $250,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes due 2005 are exchangeable for a like aggregate principal amount
of Notes due 2005 as requested by the holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
8
<PAGE>
Prior to due presentment of this Note due 2005 for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the person in whose name this Note due 2005 is registered as the owner
hereof for all purposes, whether or not this Note due 2005 be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
THE INDENTURE AND THIS NOTE DUE 2005 SHALL BE DEEMED TO BE A CONTRACT
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.
9
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Note due 2005 and hereby irrevocably constitutes and appoints
________ attorney to transfer the said Note due 2005 on the books of the Issuer,
with full power of substitution in the premises.
In connection with any transfer of the within Note due 2005 occurring prior to
the Transfer Restriction Termination Date, the undersigned confirms that such
Note due 2005 is being transferred:
__ To McKesson Corporation or a subsidiary thereof; or
__ Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
__ To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
__ Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
__ Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended; or
__ Pursuant to an effective registration statement.
<PAGE>
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
__ The transferee is an Affiliate of the Issuer.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Note due 2005 in every particular without
alteration or enlargement or any change whatsoever.
- --------------------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal Amount
of Notes due 2005
by which this Global
Security is to be Remaining
Reduced or Increased, Principal
and Reason for Amount of this
Date Reduction or Increase Global Security Notation Made By
- ------ --------------------- --------------- ----------------
</TABLE>
<PAGE>
ANNEX B
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "6.40% Notes due
-----------
March 1, 2008" (the "Notes due 2008").
2. Aggregate Principal Amount. The Notes due 2008 shall be limited in
--------------------------
aggregate principal amount to $150,000,000 (except for Notes due 2008
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes due 2008 pursuant to Section 2.8,
2.9, 2.11, 8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Notes due 2008 shall be denominated in
---------------------
Dollars.
4. Maturity. The date on which the principal of the Notes due 2008 is
--------
payable is March 1, 2008.
5. Rate of Interest; Interest Payment Date; Regular Record Dates. Each
-------------------------------------------------------------
Note due 2008 shall bear interest from February 24, 1998 at 6.40% per annum
until the principal thereof is paid. Such interest shall be payable
semiannually in arrears on March 1 and September 1 of each year, commencing
on September 1, 1998, to the persons in whose names the Notes due 2008 are
registered at the close of business on the immediately preceding February
15 and August 15, respectively. Interest on the Notes due 2008 shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance. Interest on
the Notes due 2008 shall be computed on the basis of a 360-day year
comprised of twelve 30-day months. The amount of interest payable for any
period shorter than a full semi-annual period for which interest is
computed will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which principal, premium,
if any, or interest is payable on the Notes due 2008 is not a Business Day,
then payment of the principal, premium, if any, or interest payable on such
date will be made on the next
1
<PAGE>
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and interest on
----------------
the Notes due 2008 shall be payable, and the transfer of Notes due 2008
shall be registrable, at the office or agency of the Issuer to be
maintained for such purpose in the Borough of Manhattan, The City of New
York, except that, at the option of the Issuer, interest may be paid by
mailing a check to the address of the person entitled thereto as it appears
on the Notes due 2008 register; provided, however, that while any Notes
due 2008 are represented by a Registered Global Security, payment of
principal of, premium, if any, or interest on the Notes due 2008 may be
made by wire transfer to the account of the Depositary or its nominee.
7. Optional Redemption. The Notes due 2008 may be redeemed as a whole
-------------------
or in part, at the option of the Issuer, at any time at a redemption
price equal to the greater of (i) 100% of their principal amount or (ii)
the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Yield plus 10 basis points, plus accrued interest
to the date of redemption. Holders of the Notes due 2008 to be redeemed
will receive notice thereof by first-class mail at least 10 and not more
than 60 days prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date. "Comparable Treasury
Issue" means the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of
the Notes due 2008 that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of
the Notes due 2008. "Independent Investment Banker" means Salomon
Brothers Inc and its successor or, if such firm is unwilling or
2
<PAGE>
unable to select the Comparable Treasury Issue, an independent investment
banking institution of national standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all
such Quotations. "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices of the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m. on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, BancAmerica
Robertson Stephens and J.P. Morgan Securities Inc., and their respective
successors; provided however, that if any of the foregoing shall cease to
be a primary U.S. Government Securities dealer in New York City (a "Primary
Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer.
8. Mandatory Redemption. The Notes due 2008 are not mandatorily
--------------------
redeemable and are not entitled to the benefit of a sinking fund or any
analogous provisions.
9. Denominations. The Notes due 2008 shall be issued initially in
-------------
minimum denominations of $250,000 and shall be issued in integral
multiples of $1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the Notes due
--------------------------------
2008 shall be payable upon declaration of acceleration pursuant to Section
5.1 of the Indenture.
3
<PAGE>
11. Payment Currency. Principal and interest on the Notes due 2008
----------------
shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on the
---------------------------
Notes due 2008 shall not be payable in a currency other than Dollars.
13. Payment Currency - Index. The principal of and interest on the
------------------------
Notes due 2008 shall not be determined with reference to an index based on
a coin or currency.
14. Registered Securities. The Notes due 2008 shall be issuable as
---------------------
Registered Securities. The Notes due 2008 may be issued as Registered
Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Notes due 2008 held by a Person that is not a U.S. Person in respect
of taxes or similar charges withheld or deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will govern
-----------------------
the transferability of Notes due 2008 in definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Notes due 2008. The
Depository Trust Company shall initially serve as the Depositary for the
Registered Global Security representing Notes due 2008.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in Section
5.1 of the Indenture with respect to the Notes due 2008. There shall be the
following additions to the covenants of the Issuer set forth in Article III
with respect to the Notes due 2008:
Limitation on Liens. The Issuer covenants that, so long as any
of the Notes due 2008 remain outstanding, it shall not, nor shall it permit
any Consolidated Subsidiary to, create or assume any Indebtedness for money
borrowed which is secured by a mortgage, pledge, security interest or
lien ("liens") of or upon any assets, whether now owned or hereafter
acquired, of the Issuer or
4
<PAGE>
any such Consolidated Subsidiary without equally and ratably securing the
Notes due 2008 by a lien ranking ratably with and equal to (or at the
option of the Issuer, senior to) such secured Indebtedness, except that the
foregoing restriction shall not apply to (a) liens on any assets of any
corporation existing at the time such corporation becomes a Consolidated
Subsidiary; (b) liens on any assets existing at the time of acquisition of
such assets by the Issuer or a Consolidated Subsidiary, or liens to secure
the payment of all or any part of the purchase price of such assets upon
the acquisition of such assets by the Issuer or a Consolidated Subsidiary
or to secure any indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary prior to, at the time of, or within 360 days after
such acquisition (or in the case of real property, the completion of
construction (including any improvements on an existing asset) or
commencement of full operation of such asset, whichever is later) which
indebtedness is incurred or guaranteed for the purpose of financing all or
any part of the purchase price thereof or, in the case of real property,
construction or improvements thereon; provided, however, that in the case
of any such acquisition, construction or improvement, the lien shall not
apply to any assets theretofore owned by the Issuer or a Consolidated
Subsidiary, other than, in the case of any such construction or
improvement, any real property on which the property so constructed, or the
improvement, is located, or to secure the payment of the purchase price of
such assets, or to secure indebtedness incurred or guaranteed by the Issuer
or a Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon, which
indebtedness is incurred or guaranteed prior to, at the time of or within
360 days after such acquisition (or in the case of real property,
completion of such improvement or construction or commencement of full
operation of such property, whichever is later); (c) liens on any assets
securing indebtedness owed by any Consolidated Subsidiary to the Issuer or
another wholly owned Subsidiary; (d) liens on any assets of a corporation
existing at the time such corporation is merged into or consolidated with
the Issuer or a Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an entirety or
substantially as an entirety by the Issuer or a Subsidiary; (e) liens on
any assets of the Issuer or a Consolidated Subsidiary in favor of the
United States of America or any state thereof, or any department, agency or
instrumentality or political subdivision of the United States of
5
<PAGE>
America or any State thereof, or in favor of any other country, or any
political subdivision thereof, to secure partial, progress, advance or
other payments pursuant to any contract or statute or to secure any
indebtedness incurred or guaranteed for the purpose of financing all or any
part of the purchase price (or, in the case of real property, the cost of
construction) of the assets subject to such liens (including, but not
limited to, liens incurred in connection with pollution control, industrial
revenue or similar financing); (f) any extension, renewal or replacement
(or successive extensions, renewals or replacements), in whole or in part,
of any lien referred to in the foregoing clauses (a) to (e), inclusive;
provided, however, that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or a part of the
assets which secured the lien so extended, renewed or replaced (plus
improvements and construction on such real property); (g) liens imposed by
law, such as mechanics', workmen's, repairmen's, materialmen's, carriers',
warehousemen's, vendors' or other similar liens arising in the ordinary
course of business, or governmental (federal, state or municipal) liens
arising out of contracts for the sale of products or services by the Issuer
or any Consolidated Subsidiary, or deposits or pledges to obtain the
release of any of the foregoing liens; (h) pledges, liens or deposits under
worker's compensation laws or similar legislation and liens or judgments
thereunder which are not currently dischargeable, or in connection with
bids, tenders, contracts (other than for the payment of money) or leases to
which the Issuer or any Consolidated Subsidiary is a party, or to secure
public or statutory obligations of the Issuer or any Consolidated
Subsidiary, or in connection with obtaining or maintaining self-insurance
or to obtain the benefits of any law, regulation or arrangement pertaining
to unemployment insurance, old age pensions, social security or similar
matters, or to secure surety, appeal or customs bonds to which the Issuer
or any Consolidated Subsidiary is a party, or in litigation or other
proceedings such as, but not limited to, interpleader proceedings, and
other similar pledges, liens or deposits made or incurred in the ordinary
course of business; (i) liens created by or resulting from any litigation
or other proceedings which is being contested in good faith by appropriate
proceedings, including liens arising out of judgements or awards against
the Issuer or any Consolidated
6
<PAGE>
Subsidiary with respect to which the Issuer or such Consolidated Subsidiary
is in good faith prosecuting an appeal or proceedings for review or for
which the time to make an appeal has not yet expired; or final unappealable
judgment liens which are satisfied within 15 days of the date of judgment;
or liens incurred by the Issuer or any Consolidated Subsidiary for the
purpose of obtaining a stay or discharge in the course of any litigation or
other proceedings to which the Issuer or such Consolidated Subsidiary is a
party; (j) liens for taxes or assessments or governmental charges or levies
not yet due or delinquent, or which can thereafter be paid without penalty,
or which are being contested in good faith by appropriate proceedings;
landlord's liens on property held under lease; and any other liens or
charges incidental to the conduct of the business of the Issuer or any
Consolidated Subsidiary or the ownership of the assets of any of them which
were not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not, in the opinion of the
Issuer, materially impair the use of such assets in the operation of the
business of the Issuer or such Consolidated Subsidiary or the value of such
assets for the purposes thereof; or (k) liens relating to accounts
receivable of the Company or any of its Subsidiaries which have been sold,
assigned or otherwise transferred to another Person in a transaction
classified as a sale of accounts receivable in accordance with generally
accepted accounting principles (to the extent the sale by the Company or
the applicable Subsidiary is deemed to give rise to a lien in favor of the
purchaser thereof in such accounts receivable or the proceedings thereof).
Notwithstanding the above, the Issuer or any Consolidated Subsidiary may,
without securing the Notes due 2008, create or assume any Indebtedness
which is secured by a lien which would otherwise be subject to the
foregoing restrictions, provided that at the time of such creation or
assumption, after giving effect thereto, Exempted Debt does not exceed 10%
of the total assets of the Issuer and its Subsidiaries on a consolidated
basis, determined in accordance with generally accepted accounting
principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Notes due 2008 remain outstanding, it
will not, nor shall it permit any Consolidated Subsidiary to, enter into
any sale and lease-back transaction with respect to any assets, other than
any sale leaseback transaction (involving a lease for a term of not more
than three years), unless
7
<PAGE>
either (a) the Issuer or such Consolidated Subsidiary would be entitled to
incur Indebtedness secured by a lien on the assets to be leased in an
amount at least equal to the Attributable Debt in respect of such
transaction without equally and ratably securing the Notes due 2008
pursuant to clauses (a) through (j) inclusive of the covenant with respect
to "Limitation on Liens" above, or (b) the proceedings of the sale of the
assets to be leased are at least equal to their fair market value (as
determined by the Board of Directors of the Issuer) and the proceeds are
applied to the purchase or acquisition (or, in the case of real property,
the construction) of assets or to the retirement (other than at maturity
or pursuant to a mandatory sinking fund or mandatory redemption provision)
of indebtedness. The foregoing limitation shall not apply, if at the time
the Issuer or any Consolidated Subsidiary enters into such sale and lease-
back transaction, and after giving effect thereto, Exempted Debt does not
exceed 10% of the total assets of the Issuer and its Subsidiaries on a
consolidated basis, determined in accordance with generally accepted
accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the lesser of
(a) the fair value of the assets subject to such transaction or (b) the
present value (discounted at the rate of interest set forth in or implicit
in the terms of such lease or, if it is not practicable to determine such
rate, the weighted average interest rate per annum borne by all series of
Securities then Outstanding and subject to the Limitation on Sale and
Leaseback Transactions compounded semiannually, in either case as
determined by the principal accounting or financial officer of the Issuer)
of the obligations of the Issuer or any Consolidated Subsidiary for net
rental payments during the remaining term of all leases (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended). The term "net rental payments" under any lease of
any period shall mean the sum of the rental and other payments required to
be paid in such period by the lessee thereunder, not including, however,
any amounts required to be paid by such lessee (whether or not designated
as rental or additional rental) on account of maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or similar
charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of
sales, maintenance
8
<PAGE>
and repairs, reconstruction, insurance, taxes, assessments, water rates or
similar charges. The term "Consolidated Subsidiary" shall mean any
Subsidiary substantially all the property of which is located, and
substantially all the operations of which are conducted, in the United
States of America whose financial statements are consolidated with those
of the Issuer in accordance with generally accepted accounting principles.
The term "Exempted Debt" shall mean the sum of the following as of the date
of determination: (i) Indebtedness of the Issuer and its Consolidated
Subsidiaries incurred after the date of issuance of the Notes and secured
by liens not permitted to be created or assumed pursuant to the covenant
with respect to "Limitation on Liens" above, and (ii) Attributable Debt of
the Issuer and its Consolidated Subsidiaries in respect of every sale and
lease-back transaction entered into after the date of issuance of the
Notes, other than leases expressly permitted by the covenant with respect
to "Limitation on Sale and Lease-Back Transactions" above. The term
"Indebtedness" shall mean all items classified as indebtedness on the most
recently available consolidated balance sheet of the Issuer and its
Consolidated Subsidiaries, in accordance with generally accepted accounting
principles.
19. Conversion and Exchange. The Notes due 2008 shall not be
-----------------------
convertible into or exchangeable into any other security; provided that
this provision shall not limit the Issuer's ability to consummate an
exchange offer as contemplated by the Registration Rights Agreement, dated
as of February 24, 1998, by and among the Issuer, Salomon Brothers Inc,
BancAmerica Robertson Stephens and J. P. Morgan Securities Inc.
20. Other Terms. The Notes due 2008 shall have the other terms and
-----------
shall be substantially in the form set forth in the form of Notes due 2008
attached hereto as Exhibit A. In case of any conflict between this Annex A
and the Notes due 2008 in the form attached hereto as Exhibit A, the form
of the Notes due 2008 shall control.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
9
<PAGE>
EXHIBIT A
[FORM OF FACE OF NOTE DUE MARCH 1, 2008]
[IF THE NOTE DUE 2008 IS TO BE A GLOBAL SECURITY, INSERT THE FOLLOWING
- - - THIS NOTE DUE 2008 IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS NOTE DUE 2008 IS EXCHANGEABLE FOR
NOTES DUE 2008 REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND
NO TRANSFER OF THIS NOTE DUE 2008 (OTHER THAN A TRANSFER OF THIS NOTE DUE 2008
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE DUE 2008 IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY NOTE DUE 2008 ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
McKESSON CORPORATION
6.40% NOTE DUE MARCH 1, 2008
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A NOTE DUE 2008 SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM, UNLESS
OTHERWISE AGREED
<PAGE>
BY THE ISSUER (WITH WRITTEN NOTICE THEREOF TO THE TRUSTEE): THE SECURITY
EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO McKESSON CORPORATION (THE
"ISSUER") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR
THE SECURITIES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (E) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY
PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE FOR THE SECURITIES. IF THE PROPOSED
2
<PAGE>
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO
IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE FOR THE SECURITIES, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE ISSUER OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.]
[ADDITIONAL LEGEND FOR REGULATION S NOTES: THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.]
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, _____________________________,
the principal sum of _________________________ Dollars ($______) on March 1,
2008 and to pay interest on said principal sum from February 24, 1998, or from
the most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1998,
at the rate of 6.40% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Note due 2008 is not a Business Day,
then payment of principal or interest payable on such date will be made on the
next succeeding day that is a Business
3
<PAGE>
Day (and without any interest or other payment in respect of such delay). The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture (referred to on the
reverse hereof) be paid to the person in whose name this Note due 2008 is
registered at the close of business on the record date for such interest
installment, which shall be the close of business on the immediately preceding
February 15 and August 15 prior to such Interest Payment Date, as applicable.
Any such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such record date and
may be paid to the person in whose name this Note due 2008 is registered at the
close of business on a subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted interest), notice
whereof shall be given by mail by or on behalf of the Issuer to the registered
holders of Notes due 2008 not less than 15 days preceding such subsequent record
date, all as more fully provided in the Indenture. The principal of and the
interest on this Note due 2008 shall be payable at the office or agency of the
Issuer maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Issuer by check mailed to the person entitled thereto at such
address as shall appear in the registry books of the Issuer; provided, further
that for so long as this Note due 2008 is represented by a Registered Global
Security, payment of principal, premium, if any, or interest on this Note due
2008 may be made by wire transfer to the account of the Depositary or its
nominee.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture (as defined
below), by the manual signature of one of its authorized officers, this Note due
2008 shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Capitalized terms used in this Note due 2008 which are defined in the
Indenture shall have the respective meanings assigned to them in the Indenture.
The provisions of this Note due 2008 are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
4
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By: ___________________________
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
This Note due 2008 is one of a duly authorized series of securities
(the "Securities") of the Issuer designated as its 6.40% Notes due March 1, 2008
(the "Notes due 2008"). The Securities are all issued or to be issued under
and pursuant to an Indenture, dated as of March 11, 1997 (the "Indenture"), duly
executed and delivered between the Issuer and The First National Bank of
Chicago, a national banking association (the "Trustee," which term includes any
successor Trustee with respect to the Securities under the Indenture), to which
the Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Issuer, the Trustee
and the holders of the Securities and the terms upon which the Notes due 2008
are to be authenticated and delivered. The terms of individual series of
Securities may vary with respect to interest rate or interest rate formulas,
issue dates, maturity, redemption, repayment, currency of payment and otherwise.
Except as set forth below, this Note due 2008 is not redeemable and is
not entitled to the benefit of a sinking fund or any analogous provision.
This Note due 2008 is redeemable as a whole or in part, at the option
of the Issuer, at any time at a redemption price equal to the greater of (i)
100% of its principal amount or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Yield plus 10 basis points, plus accrued
interest to the date of redemption. The Holder of this Note due 2008 will
receive notice thereof by first-class mail at least 10 and not more than 60 days
prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. "Comparable Treasury Issue" means the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Note due 2008 that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Note due 2008. "Independent
Investment Banker" means Salomon Brothers Inc and its successor or, if such firm
is unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by
6
<PAGE>
the Trustee. "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices of the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption
date. "Reference Treasury Dealer" means each of Salomon Brothers Inc,
BancAmerica Robertson Stephens and J.P. Morgan Securities Inc., and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government Securities dealer in New York City (a
"Primary Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer.
If an Event of Default with respect to the Notes due 2008 shall occur
and be continuing, the principal of all the Notes due 2008 may be declared due
and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding Note
due 2008 affected thereby, (i) extend the final maturity of the principal of any
Security or reduce the principal amount thereof or reduce the rate or extend the
time of payment of interest thereon, or reduce any amount payable on redemption
thereof or make the principal thereof (including any amount in respect of
original issue discount), or interest thereon payable in any coin or currency
other than that provided in the Securities or Coupons or in accordance with the
terms thereof, or reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the
7
<PAGE>
maturity thereof or the amount thereof provable in bankruptcy or alter certain
provisions of the Indenture relating to Securities not denominated in Dollars or
the Judgment Currency of such Securities or impair or affect the right of any
Securityholder to institute suit for the enforcement of any payment thereof when
due or, if the Securities provide therefor, any right of repayment at the option
of the Securityholder or (ii) reduce the aforesaid percentage in principal
amount of Securities of any series issued under such Indenture, the consent of
the holders of which is required for any such modification. It is also provided
in the Indenture that, with respect to certain defaults or Events of Default
regarding the Securities of any series, the holders of a majority in aggregate
principal amount Outstanding of the Securities of each such series, each such
series voting as a separate class (or, of all Securities, as the case may be
voting as a single class) may under certain circumstances waive all defaults
with respect to each such series (or with respect to all the Securities, as the
case may be) and rescind and annul a declaration of default and its
consequences, but no such waiver or rescission and annulment shall extend to or
affect any subsequent default or shall impair any right consequent thereto. The
preceding sentence shall not, however, apply to a default in the payment of the
principal of or interest on any of the Securities.
No reference herein to the Indenture and no provision of this Note due
2008 or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note due 2008 at the time, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note due 2008 may be registered on the
registry books of the Issuer, upon surrender of this Note due 2008 for
registration of transfer at the office or agency of the Issuer maintained by the
Issuer for such purpose in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or by its attorney duly authorized in writing, and thereupon one or more new
Notes due 2008 of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes due 2008 are issuable only in registered form in minimum
denominations of $250,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes due 2008 are exchangeable for a like aggregate principal amount
of Notes due 2008 as requested by the holder surrendering the same.
8
<PAGE>
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Note due 2008 for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the person in whose name this Note due 2008 is registered as the owner
hereof for all purposes, whether or not this Note due 2008 be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
THE INDENTURE AND THIS NOTE DUE 2008 SHALL BE DEEMED TO BE A CONTRACT
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.
9
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Note due 2008 and hereby irrevocably constitutes and appoints
________ attorney to transfer the said Note due 2008 on the books of the Issuer,
with full power of substitution in the premises.
In connection with any transfer of the within Note due 2008 occurring prior to
the Transfer Restriction Termination Date, the undersigned confirms that such
Note due 2008 is being transferred:
__ To McKesson Corporation or a subsidiary thereof; or
__ Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
__ To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
__ Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
__ Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended; or
__ Pursuant to an effective registration statement.
<PAGE>
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
__ The transferee is an Affiliate of the Issuer.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Note due 2008 in every particular without
alteration or enlargement or any change whatsoever.
- --------------------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal Amount
of Notes due 2008
by which this Global
Security is to be Remaining
Reduced or Increased, Principal
and Reason for Amount of this
Date Reduction or Increase Global Security Notation Made By
- ---- --------------------- --------------- ----------------
</TABLE>
<PAGE>
Exhibit 4.3
FORM OF OFFICER'S CERTIFICATE
-----------------------------
The undersigned, McKesson Corporation, a Delaware corporation (the
"Corporation"), hereby certifies through Nancy A. Miller, its Vice President and
Corporate Secretary, pursuant to Sections 2.3, 2.4 and 11.5 of the Indenture,
dated as of March 11, 1997 (the "Indenture"), by and between the Company, as
Issuer, and The First National Bank of Chicago, a national association, as
Trustee, as follows:
1. Pursuant to the terms of the resolutions adopted by the Board of Directors
of the Corporation (the "Board of Directors") dated January 28, 1998 and the
Finance Committee of the Board of Directors dated February 9, 1998 and the
actions of officers of the Corporation on February 19, 1998, the terms of the
Corporation's 6.30% Exchange Notes due March 1, 2005 and 6.40% Exchange Notes
due March 1, 2008 (collectively, the "Exchange Notes") set forth in Annex A and
-------
Annex B, respectively, attached hereto have been duly adopted by the
- -------
Corporation.
2. The forms and terms of the Exchange Notes have been established pursuant to
Sections 2.1 and 2.3 of the Indenture and comply with the Indenture.
3. She has read Section 2.3 of the Indenture, read such other documents as she
deemed necessary and made such other inquiries as she deemed necessary to make
the certifications in paragraph 2, 3 and 4 hereof.
4. All conditions precedent provided for in the Indenture relating to the
issuance of the Exchange Notes have been complied with.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized officer as of this day of
, 1998.
McKESSON CORPORATION
By: ________________________________________
Nancy A. Miller
Vice President and
Corporate Secretary
<PAGE>
ANNEX A
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "6.30% Exchange
-----------
Notes due March 1, 2005" (the "Exchange Notes due 2005").
2. Aggregate Principal Amount. The Exchange Notes due 2005 shall be
--------------------------
limited in aggregate principal amount to $150,000,000 (except for Exchange
Notes due 2005 authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Exchange Notes due 2005
pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Exchange Notes due 2005 shall be
---------------------
denominated in Dollars.
4. Maturity. The date on which the principal of the Exchange Notes
--------
due 2005 is payable is March 1, 2005.
5. Rate of Interest; Interest Payment Date; Regular Record Dates. Each
-------------------------------------------------------------
Exchange Note due 2005 shall bear interest from February 24, 1998 at 6.30%
per annum until the principal thereof is paid. Such interest shall be
payable semiannually in arrears on March 1 and September 1 of each year,
commencing on September 1, 1998, to the persons in whose names the Exchange
Notes due 2005 are registered at the close of business on the immediately
preceding February 15 and August 15, respectively. Interest on the
Exchange Notes due 2005 shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance. Interest on the Exchange Notes due 2005 shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The amount of interest payable for any period shorter than a full semi-
annual period for which interest is computed will be computed on the basis
of the actual number of days elapsed per 30-day month. In the event that
any date on which principal, premium, if any, or
1
<PAGE>
interest is payable on the Exchange Notes due 2005 is not a Business Day,
then payment of the principal, premium, if any, or interest payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay).
6. Place of Payment. Principal of, premium, if any, and interest on
----------------
the Exchange Notes due 2005 shall be payable, and the transfer of Exchange
Notes due 2005 shall be registrable, at the office or agency of the Issuer
to be maintained for such purpose in the Borough of Manhattan, The City of
New York, except that, at the option of the Issuer, interest may be paid by
mailing a check to the address of the person entitled thereto as it appears
on the Exchange Notes due 2005 register; provided, however, that while any
Exchange Notes due 2005 are represented by a Registered Global Security,
payment of principal of, premium, if any, or interest on the Exchange Notes
due 2005 may be made by wire transfer to the account of the Depositary or
its nominee.
7. Optional Redemption. The Exchange Notes due 2005 may be redeemed
-------------------
as a whole or in part, at the option of the Issuer, at any time at a
redemption price equal to the greater of (i) 100% of their principal amount
or (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Yield plus 10 basis points, plus accrued interest
to the date of redemption. Holders of the Exchange Notes due 2005 to be
redeemed will receive notice thereof by first-class mail at least 10 and
not more than 60 days prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principle amount) equal to the
Comparable Treasury Price for such redemption date. "Comparable Treasury
Issue" means the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of
the Exchange Notes due 2005 that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the
remaining term of the Exchange Notes due 2005. "Independent Investment
2
<PAGE>
Banker" means Salomon Brothers Inc and its successor or, if such firm is
unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the
Trustee. "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) on the third business day preceding such redemption date, as set
forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all
such Quotations. "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices of the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m. on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, BancAmerica
Robertson Stephens and J.P. Morgan Securities Inc., and their respective
successors; provided however, that if any of the foregoing shall cease to
be a primary U.S. Government Securities dealer in New York City (a "Primary
Treasury Dealer"), the Issuer shall substitute therefor another Primary
Treasury Dealer.
8. Mandatory Redemption. The Exchange Notes due 2005 are not
--------------------
mandatorily redeemable and are not entitled to the benefit of a sinking
fund or any analogous provisions.
9. Denominations. The Exchange Notes due 2005 shall be issued
-------------
initially in minimum denominations of $250,000 and shall be issued in
integral multiples of $1,000 in excess thereof.
3
<PAGE>
10. Amount Payable Upon Acceleration. The principal of the Exchange
--------------------------------
Notes due 2005 shall be payable upon declaration of acceleration pursuant
to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Exchange Notes
----------------
due 2005 shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on the
---------------------------
Exchange Notes due 2005 shall not be payable in a currency other than
Dollars.
13. Payment Currency - Index. The principal of and interest on the
------------------------
Exchange Notes due 2005 shall not be determined with reference to an index
based on a coin or currency.
14. Registered Securities. The Exchange Notes due 2005 shall be
---------------------
issuable as Registered Securities. The Exchange Notes due 2005 may be
issued as Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Exchange Notes due 2005 held by a Person that is not a U.S. Person
in respect of taxes or similar charges withheld or deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will govern
-----------------------
the transferability of Exchange Notes due 2005 in definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Exchange Notes due
2005. The Depository Trust Company shall initially serve as the Depositary
for the Registered Global Security representing Exchange Notes due 2005.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in Section
5.1 of the Indenture with respect to the Exchange Notes due 2005. There
shall be the following additions to the covenants of the Issuer set forth
in Article III with respect to the Exchange Notes due 2005:
4
<PAGE>
Limitation on Liens. The Issuer covenants that, so long as any
of the Exchange Notes due 2005 remain outstanding, it shall not, nor shall
it permit any Consolidated Subsidiary to, create or assume any Indebtedness
for money borrowed which is secured by a mortgage, pledge, security
interest or lien ("liens") of or upon any assets, whether now owned or
hereafter acquired, of the Issuer or any such Consolidated Subsidiary
without equally and ratably securing the Exchange Notes due 2005 by a lien
ranking ratably with and equal to (or at the option of the Issuer, senior
to) such secured Indebtedness, except that the foregoing restriction shall
not apply to (a) liens on any assets of any corporation existing at the
time such corporation becomes a Consolidated Subsidiary; (b) liens on any
assets existing at the time of acquisition of such assets by the Issuer or
a Consolidated Subsidiary, or liens to secure the payment of all or any
part of the purchase price of such assets upon the acquisition of such
assets by the Issuer or a Consolidated Subsidiary or to secure any
indebtedness incurred or guaranteed by the Issuer or a Consolidated
Subsidiary prior to, at the time of, or within 360 days after such
acquisition (or in the case of real property, the completion of
construction (including any improvements on an existing asset) or
commencement of full operation of such asset, whichever is later which
indebtedness is incurred or guaranteed for the purpose of financing all or
any part of the purchase price thereof or, in the case of real property,
construction or improvements thereon; provided, however, that in the case
of any such acquisition, construction or improvement, the lien shall not
apply to any assets theretofore owned by the Issuer or a Consolidated
Subsidiary, other than, in the case of any such construction or
improvement, any real property on which the property so constructed, or the
improvement, is located, or to secure the payment of the purchase price of
such assets, or to secure indebtedness incurred or guaranteed by the Issuer
or a Consolidated Subsidiary for the purpose of financing the
purchase price of such assets or improvements or construction thereon,
which indebtedness is incurred or guaranteed prior to, at the time of or
within 360 days after such acquisition (or in the case of real property,
completion of such improvement or construction or commencement of full
operation of such property, whichever is later); (c) liens on any assets
securing indebtedness owed by any Consolidated Subsidiary to the Issuer or
another wholly owned Subsidiary; (d) liens on any assets of a corporation
existing at the time such corporation is merged into
5
<PAGE>
or consolidated with the Issuer or a Subsidiary or at the time of a
purchase, lease or other acquisition of the assets of a corporation or firm
as an entirety or substantially as an entirety by the Issuer or a
Subsidiary; (e) liens on any assets of the Issuer or a Consolidated
Subsidiary in favor of the United States of America or any state thereof,
or any department, agency or instrumentality or political subdivision of
the United States of America or any state thereof, or in favor of any other
country, or any political subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or statute or to secure
any indebtedness incurred or guaranteed for the purpose of financing all or
any part of the purchase price (or, in the case of real property, the cost
of construction) of the assets subject to such liens (including, but not
limited to, liens incurred in connection with pollution control, industrial
revenue or similar financing); (f) any extension, renewal or replacement
(or successive extensions, renewals or replacements), in whole or
in part, of any lien referred to in the foregoing clauses (a) to (e),
inclusive; provided, however, that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of indebtedness so
secured at the time of such extension, renewal or replacement, and that
such extension, renewal or replacement shall be limited to all or a part of
the assets which secured the lien so extended, renewed or replaced (plus
improvements and construction on such real property); (g) liens imposed by
law, such as mechanics', workmen's, repairmen's, materialmen's, carriers',
warehousemen's, vendors' or other similar liens arising in the ordinary
course of business, or governmental (federal, state or municipal) liens
arising out of contracts for the sale of products or services by the Issuer
or any Consolidated Subsidiary, or deposits or pledges to obtain the
release of any of the foregoing liens; (h) pledges, liens or deposits under
worker's compensation laws or similar legislation and liens or judgments
thereunder which are not currently dischargeable, or in connection with
bids, tenders, contracts (other than for the payment of money) or leases to
which the Issuer or any Consolidated Subsidiary is a party, or to secure
public or statutory obligations of the Issuer or any Consolidated
Subsidiary, or in connection with obtaining or maintaining self-insurance
or to obtain the benefits of any law, regulation or arrangement pertaining
to unemployment insurance, old age pensions, social security or similar
matters, or to secure surety, appeal or customs bonds to which the Issuer
or any Consolidated
6
<PAGE>
Subsidiary is a party, or in litigation or other proceedings such as, but
not limited to, interpleader proceedings, and other similar pledges, liens
or deposits made or incurred in the ordinary course of business; (i) liens
created by or resulting from any litigation or other proceeding
which is being contested in good faith by appropriate proceedings,
including liens arising out of judgements or awards against the Issuer or
any Consolidated Subsidiary with respect to which the Issuer or such
Consolidated Subsidiary is in good faith prosecuting an appeal or
proceedings for review or for which the time to make an appeal has not yet
expired; or final unappealable judgment liens which are satisfied within 15
days of the date of judgment; or liens incurred by the Issuer or any
Consolidated Subsidiary for the purpose of obtaining a stay or discharge in
the course of any litigation or other proceeding to which the Issuer or
such Consolidated Subsidiary is a party; (j) liens for taxes or assessments
or governmental charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty, or which are being contested in good
faith by appropriate proceedings; landlord's liens on property held
under lease; and any other liens or charges incidental to the conduct of
the business of the Issuer or any Consolidated Subsidiary or the ownership
of the assets of any of them which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which do not,
in the opinion of the Issuer, materially impair the use of such assets in
the operation of the business of the Issuer or such Consolidated Subsidiary
or the value of such assets for the purposes thereof; or (k) liens relating
to accounts receivable of the Company or any of its Subsidiaries which have
been sold, assigned or otherwise transferred to another Person in a
transaction classified as a sale of accounts receivable in accordance with
generally accepted accounting principles (to the extent the sale by the
Company or the applicable Subsidiary is deemed to give rise to a lien in
favor of the purchaser thereof in such accounts receivable or the proceeds
thereof). Notwithstanding the above, the Issuer or any Consolidated
Subsidiary may, without securing the Exchange Notes due 2005, create or
assume any Indebtedness which is secured by a lien which would otherwise be
subject to the foregoing restrictions, provided that at the time of such
creation or assumption, after giving effect thereto, Exempted Debt does not
exceed 10% of the total assets of the Issuer and its Subsidiaries on a
consolidated basis, deter-
7
<PAGE>
mined in accordance with generally accepted accounting principles.
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Exchange Notes due 2005 remain
outstanding, it will not, nor shall it permit any Consolidated Subsidiary
to, enter into any sale and lease-back transaction with respect to any
assets, other than any sale lease-back transactions (involving a lease for
a term of not more than three years), unless either (a) the Issuer or such
Consolidated Subsidiary would be entitled to incur Indebtedness secured by
a lien on the assets to be leased in an amount at least equal to the
Attributable Debt in respect of such transaction without equally and
ratably securing the Exchange Notes due 2005 pursuant to clauses (a)
through (k) inclusive of the covenant with respect to "Limitation on Liens"
above, or (b) the proceeds of the sale of the assets to be leased are at
least equal to their fair market value (as determined by the Board of
Directors of the Issuer) and the proceeds are applied to the purchase or
acquisition (or, in the case of real property, the construction) of assets
or to the retirement (other than at maturity or pursuant to a mandatory
sinking fund or mandatory redemption provision) of indebtedness. The
foregoing limitation shall not apply, if at the time the Issuer or any
Consolidated Subsidiary enters into such sale and lease-back transaction,
and after giving effect thereto, Exempted Debt does not exceed 10% of the
total assets of the Issuer and its Subsidiaries on a consolidated basis,
determined in accordance with generally accepted accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the lesser of
(a) the fair value of the assets subject to such transaction or (b) the
present value (discounted at the rate of interest set forth in or implicit
in the terms of such lease or, if it is not practicable to determine such
rate, the weighted average interest rate per annum borne by all series of
Securities then Outstanding and subject to the Limitation on Sale and
Lease-Back Transactions compounded semiannually, in either case as
determined by the principal accounting or financial officer of the Issuer)
of the obligations of the Issuer or any Consolidated Subsidiary for net
rental payments during the remaining term of all leases (including any
period for which such lease has been extended or
8
<PAGE>
may, at the option of the lessor, be extended). The term "net rental pay-
ments" under any lease of any period shall mean the sum of the rental and
other payments required to be paid in such period by the lessee thereunder,
not including, however, any amounts required to be paid by such lessee
(whether or not designated as rental or additional rental) on account of
maintenance and repairs, reconstruction, insurance, taxes, assessments,
water rates or similar charges required to be paid by such lessee
thereunder or any amounts required to be paid by such lessee thereunder
contingent upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or similar
charges. The term "Consolidated Subsidiary" shall mean any Subsidiary
substantially all the property of which is located, and substantially all
the operations of which are conducted, in the United States of America
whose financial statements are consolidated with those of the Issuer in
accordance with generally accepted accounting principles. The term
"Exempted Debt" shall mean the sum of the following as of the date of
determination: (i) Indebtedness of the Issuer and its Consolidated
Subsidiaries incurred after February 24, 1998 and secured by liens not
permitted to be created or assumed pursuant to the covenant with respect to
"Limitation on Liens" above, and (ii) Attributable Debt of the Issuer and
its Consolidated Subsidiaries in respect of every sale and lease-back
transaction entered into after February 24, 1998, other than leases
expressly permitted by the covenant with respect to "Limitation on Sale and
Lease-Back Transactions" above. The term "Indebtedness" shall mean all
items classified as indebtedness on the most recently available
consolidated balance sheet of the Issuer and its Consolidated Subsidiaries,
in accordance with generally accepted accounting principles.
19. Conversion and Exchange. The Exchange Notes due 2005 shall not
-----------------------
be convertible into or exchangeable into any other security.
20. Other Terms. The Exchange Notes due 2005 shall have the other
-----------
terms and shall be substantially in the form set forth in the form of
Exchange Notes due 2005 attached hereto as Exhibit A. In case of any
conflict between this Annex A and the Exchange Notes due 2005 in the form
attached hereto as Exhibit A, the form of the Exchange Notes due 2005 shall
control.
9
<PAGE>
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
10
<PAGE>
EXHIBIT A
[FORM OF FACE OF EXCHANGE NOTE DUE MARCH 1, 2005]
[IF THE EXCHANGE NOTE DUE 2005 IS TO BE A GLOBAL SECURITY, INSERT THE
FOLLOWING - - THIS EXCHANGE NOTE DUE 2005 IS A BOOK-ENTRY SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS EXCHANGE NOTE DUE 2005 IS
EXCHANGEABLE FOR EXCHANGE NOTES DUE 2005 REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS EXCHANGE NOTE DUE 2005
(OTHER THAN A TRANSFER OF THIS EXCHANGE NOTE DUE 2005 AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS EXCHANGE NOTE DUE 2005 IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY EXCHANGE NOTE DUE 2005 ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
McKESSON CORPORATION
6.30% EXCHANGE NOTE DUE MARCH 1, 2005
<PAGE>
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, _____________________________,
the principal sum of _________________________ Dollars ($______) on March 1,
2005 and to pay interest on said principal sum from February 24, 1998, or from
the most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1998,
at the rate of 6.30% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Exchange Note due 2005 is not a
Business Day, then payment of principal or interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of such delay). The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Exchange Note due 2005 is registered at the
close of business on the record date for such interest installment, which shall
be the close of business on the immediately preceding February 15 and August 15
prior to such Interest Payment Date, as applicable. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered holders on such record date and may be paid to the
person in whose name this Exchange Note due 2005 is registered at the close of
business on a subsequent record date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest), notice whereof
shall be given by mail by or on behalf of the Issuer to the registered holders
of Exchange Notes due 2005 not less than 15 days preceding such subsequent
record date, all as more fully provided in the Indenture. The principal of and
the interest on this Exchange Note due 2005 shall be payable at the office or
agency of the Issuer maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Issuer by check mailed to the person entitled thereto
at such address as shall appear in the registry books of the Issuer; provided,
further that for so long as this Exchange Note due 2005 is represented by a
Registered Global Security, payment of principal, premium,
2
<PAGE>
if any, or interest on this Exchange Note due 2005 may be made by wire
transfer to the account of the Depositary or its nominee.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture (as defined
below), by the manual signature of one of its authorized officers, this Exchange
Note due 2005 shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
Capitalized terms used in this Exchange Note due 2005 which are
defined in the Indenture shall have the respective meanings assigned to them in
the Indenture.
The provisions of this Exchange Note due 2005 are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By: ___________________________
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
This Exchange Note due 2005 is one of a duly authorized series of
securities (the "Securities") of the Issuer designated as its 6.30% Exchange
Notes due March 1, 2005 (the "Exchange Notes due 2005"). The Securities are
all issued or to be issued under and pursuant to an Indenture, dated as of March
11, 1997 (the "Indenture"), duly executed and delivered between the Issuer and
The First National Bank of Chicago, a national banking association (the
"Trustee," which term includes any successor Trustee with respect to the
Securities under the Indenture), to which the Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Trustee and the holders of the
Securities and the terms upon which the Exchange Notes due 2005 are to be
authenticated and delivered. The terms of individual series of Securities may
vary with respect to interest rate or interest rate formulas, issue dates,
maturity, redemption, repayment, currency of payment and otherwise.
Except as set forth below, this Exchange Note due 2005 is not
redeemable and is not entitled to the benefit of a sinking fund or any analogous
provision.
This Exchange Note due 2005 is redeemable as a whole or in part, at
the option of the Issuer, at any time at a redemption price equal to the greater
of (i) 100% of its principal amount or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Yield plus 10 basis points, plus accrued
interest to the date of redemption. The Holder of this Exchange Note due 2005
will receive notice thereof by first-class mail at least 10 and not more than 60
days prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. "Comparable Treasury Issue" means the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Exchange Note due 2005
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Exchange Note due 2005.
"Independent Investment Banker" means Salomon Brothers Inc and its successor or,
if such firm is unwilling or unable to select the Comparable
5
<PAGE>
Treasury Issue, an independent investment banking institution of national
standing appointed by the Trustee. "Comparable Treasury Price" means, with
respect to any redemption date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third business day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices of the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date. "Reference Treasury Dealer" means each of
Salomon Brothers Inc, BancAmerica Robertson Stephens and J.P. Morgan Securities
Inc., and their respective successors; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government Securities dealer in New
York City (a "Primary Treasury Dealer"), the Issuer shall substitute therefor
another Primary Treasury Dealer.
If an Event of Default with respect to the Exchange Notes due 2005
shall occur and be continuing, the principal of all the Exchange Notes due 2005
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding
Exchange Note due 2005 affected thereby, (i) extend the final maturity of the
principal of any Security or reduce the principal amount thereof or reduce the
rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or make the principal thereof (including any
amount in respect of original issue discount), or interest thereon payable in
any coin or currency other than that provided in the Securities or
6
<PAGE>
Coupons or in accordance with the terms thereof, or reduce the amount of
principal of an Original Issue Discount Security that would be due and payable
upon an acceleration of the maturity thereof or the amount thereof provable in
bankruptcy or alter certain provisions of the Indenture relating to Securities
not denominated in Dollars or the Judgment Currency of such Securities or impair
or affect the right of any Securityholder to institute suit for the enforcement
of any payment thereof when due or, if the Securities provide therefor, any
right of repayment at the option of the Securityholder or (ii) reduce the
aforesaid percentage in principal amount of Securities of any series issued
under such Indenture, the consent of the holders of which is required for any
such modification. It is also provided in the Indenture that, with respect to
certain defaults or Events of Default regarding the Securities of any series,
the holders of a majority in aggregate principal amount Outstanding of the
Securities of each such series, each such series voting as a separate class (or,
of all Securities, as the case may be voting as a single class) may under
certain circumstances waive all defaults with respect to each such series (or
with respect to all the Securities, as the case may be) and rescind and annul a
declaration of default and its consequences, but no such waiver or rescission
and annulment shall extend to or affect any subsequent default or shall impair
any right consequent thereto. The preceding sentence shall not, however, apply
to a default in the payment of the principal of or interest on any of the
Securities.
No reference herein to the Indenture and no provision of this Exchange
Note due 2005 or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Exchange Note due 2005 at the time, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Exchange Note due 2005 may be registered
on the registry books of the Issuer, upon surrender of this Exchange Note due
2005 for registration of transfer at the office or agency of the Issuer
maintained by the Issuer for such purpose in the Borough of Manhattan, The City
of New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the holder hereof or by its attorney duly authorized in writing, and thereupon
one or more new Exchange Notes due 2005 of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Exchange Notes due 2005 are issuable only in registered form in
minimum denominations of $250,000 and integral multiples of $1,000 in excess
thereof.
7
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the Exchange Notes due 2005 are exchangeable for a like aggregate
principal amount of Exchange Notes due 2005 as requested by the holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Exchange Note due 2005 for
registration of transfer, the Issuer, the Trustee and any agent of the Issuer or
the Trustee may treat the person in whose name this Exchange Note due 2005 is
registered as the owner hereof for all purposes, whether or not this Exchange
Note due 2005 be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
THE INDENTURE AND THIS EXCHANGE NOTE DUE 2005 SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
8
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR EXCHANGE NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
_________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Exchange Note due 2005 and hereby irrevocably constitutes and
appoints ________ attorney to transfer the said Exchange Note due 2005 on the
books of the Issuer, with full power of substitution in the premises.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Exchange Note due 2005 in every particular
without alteration or enlargement or any change whatsoever.
- ---------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal Amount
of Exchange Notes due
2005 by which this Global
Security is to be Remaining
Reduced or Increased, Principal
and Reason for Amount of this
Date Reduction or Increase Global Security Notation Made By
- ------ -------------------------- --------------- ----------------
</TABLE>
<PAGE>
ANNEX B
Pursuant to Section 2.3 of the Indenture, dated as of March 11, 1997
(the "Indenture"), between McKesson Corporation (the "Issuer") and The First
National Bank of Chicago, a national banking association, as trustee (the
"Trustee"), the terms of a series of securities to be issued pursuant to the
Indenture are as follows:
1. Designation. The designation of the securities is "6.40% Exchange
-----------
Notes due March 1, 2008" (the "Exchange Notes due 2008").
2. Aggregate Principal Amount. The Exchange Notes due 2008 shall be
--------------------------
limited in aggregate principal amount to $150,000,000 (except for Exchange
Notes due 2008 authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Exchange Notes due 2008
pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Exchange Notes due 2008 shall be
---------------------
denominated in Dollars.
4. Maturity. The date on which the principal of the Exchange Notes
--------
due 2008 is payable is March 1, 2008.
5. Rate of Interest; Interest Payment Date; Regular Record Dates. Each
-------------------------------------------------------------
Exchange Note due 2008 shall bear interest from February 24, 1998 at 6.40%
per annum until the principal thereof is paid. Such interest shall be
payable semiannually in arrears on March 1 and September 1 of each year,
commencing on September 1, 1998, to the persons in whose names the Exchange
Notes due 2008 are registered at the close of business on the immediately
preceding February 15 and August 15, respectively. Interest on the
Exchange Notes due 2008 shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance. Interest on the Exchange Notes due 2008 shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The amount of interest payable for any period shorter than a full semi-
annual period for which interest is computed will be computed on the basis
of the actual number of days elapsed per 30-day month. In the event that
any date on which principal, premium, if any, or interest is payable on the
Exchange Notes due 2008 is not a Business Day, then payment of the
principal, premium, if any, or
1
<PAGE>
interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of
any such delay).
6. Place of Payment. Principal of, premium, if any, and interest on
----------------
the Exchange Notes due 2008 shall be payable, and the transfer of Exchange
Notes due 2008 shall be registrable, at the office or agency of the Issuer
to be maintained for such purpose in the Borough of Manhattan, The City of
New York, except that, at the option of the Issuer, interest may be paid by
mailing a check to the address of the person entitled thereto as it appears
on the Exchange Notes due 2008 register; provided, however, that while any
Exchange Notes due 2008 are represented by a Registered Global Security,
payment of principal of, premium, if any, or interest on the Exchange
Notes due 2008 may be made by wire transfer to the account of the
Depositary or its nominee.
7. Optional Redemption. The Exchange Notes due 2008 may be redeemed
-------------------
as a whole or in part, at the option of the Issuer, at any time at a
redemption price equal to the greater of (i) 100% of their principal amount
or (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Yield plus 10 basis points, plus accrued interest
to the date of redemption. Holders of the Exchange Notes due 2008 to be
redeemed will receive notice thereof by first-class mail at least 10 and
not more than 60 days prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date. "Comparable Treasury
Issue" means the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of
the Exchange Notes due 2008 that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the
remaining term of the Exchange Notes due 2008. "Independent Investment
2
<PAGE>
Banker" means Salomon Brothers Inc and its successor or, if such firm is
unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the
Trustee. "Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) on the third business day preceding such redemption date, as set
forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all
such Quotations. "Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked prices of the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such
redemption date. "Reference Treasury Dealer" means each of Salomon
Brothers Inc, BancAmerica Robertson Stephens and J.P. Morgan Securities
Inc., and their respective successors; provided however, that if any of
the foregoing shall cease to be a primary U.S. Government Securities dealer
in New York City (a "Primary Treasury Dealer"), the Issuer shall substitute
therefor another Primary Treasury Dealer.
8. Mandatory Redemption. The Exchange Notes due 2008 are not
--------------------
mandatorily redeemable and are not entitled to the benefit of a sinking
fund or any analogous provisions.
9. Denominations. The Exchange Notes due 2008 shall be issued
-------------
initially in minimum denominations of $250,000 and shall be issued in
integral multiples of $1,000 in excess thereof.
3
<PAGE>
10. Amount Payable Upon Acceleration. The principal of the Exchange
--------------------------------
Notes due 2008 shall be payable upon declaration of acceleration pursuant
to Section 5.1 of the Indenture.
11. Payment Currency. Principal and interest on the Exchange Notes
----------------
due 2008 shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on the
---------------------------
Exchange Notes due 2008 shall not be payable in a currency other than
Dollars.
13. Payment Currency - Index. The principal of and interest on the
------------------------
Exchange Notes due 2008 shall not be determined with reference to an index
based on a coin or currency.
14. Registered Securities. The Exchange Notes due 2008 shall be
---------------------
issuable as Registered Securities. The Exchange Notes due 2008 may be
issued as Registered Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
------------------
on the Exchange Notes due 2008 held by a Person that is not a U.S. Person
in respect of taxes or similar charges withheld or deducted.
16. Definitive Certificates. Section 2.8 of the Indenture will govern
-----------------------
the transferability of Exchange Notes due 2008 in definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
-----------------------------------
serve as the registrar and the paying agent for the Exchange Notes due
2008. The Depository Trust Company shall initially serve as the Depositary
for the Registered Global Security representing Exchange Notes due 2008.
18. Events of Default; Covenants. There shall be no deletions from,
----------------------------
modifications or additions to the Events of Default set forth in Section
5.1 of the Indenture with respect to the Exchange Notes due 2008. There
shall be the following additions to the covenants of the Issuer set forth
in Article III with respect to the Exchange Notes due 2008:
4
<PAGE>
Limitation on Liens. The Issuer covenants that, so long as any
of the Exchange Notes due 2008 remain outstanding, it shall not, nor shall
it permit any Consolidated Subsidiary to, create or assume any Indebtedness
for money borrowed which is secured by a mortgage, pledge, security
interest or lien ("liens") of or upon any assets, whether now owned or
hereafter acquired, of the Issuer or any such Consolidated Subsidiary
without equally and ratably securing the Exchange Notes due 2008 by a lien
ranking ratably with and equal to (or at the option of the Issuer, senior
to) such secured Indebtedness, except that the foregoing restriction shall
not apply to (a) liens on any assets of any corporation existing at the
time such corporation becomes a Consolidated Subsidiary; (b) liens on any
assets existing at the time of acquisition of such assets by the Issuer or
a Consolidated Subsidiary, or liens to secure the payment of all or any
part of the purchase price of such assets upon the acquisition of such
assets by the Issuer or a Consolidated Subsidiary or to secure any
indebtedness incurred or guaranteed by the Issuer or a Consolidated
Subsidiary prior to, at the time of, or within 360 days after such
acquisition (or in the case of real property, the completion of
construction (including any improvements on an existing asset) or
commencement of full operation of such asset, whichever is later) which
indebtedness is incurred or guaranteed for the purpose of financing all or
any part of the purchase price thereof or, in the case of real property,
construction or improvements thereon; provided, however, that in the case
of any such acquisition, construction or improvement, the lien shall not
apply to any assets theretofore owned by the Issuer or a Consolidated
Subsidiary, other than, in the case of any such construction or
improvement, any real property on which the property so constructed, or the
improvement, is located, or to secure the payment of the purchase price of
such assets, or to secure indebtedness incurred or guaranteed by the Issuer
or a Consolidated Subsidiary for the purpose of financing the purchase
price of such assets or improvements or construction thereon, which
indebtedness is incurred or guaranteed prior to, at the time of or within
360 days after such acquisition (or in the case of real property,
completion of such improvement or construction or commencement of full
operation of such property, whichever is later); (c) liens on any assets
securing indebtedness owed by any Consolidated Subsidiary to the Issuer or
another wholly owned Subsidiary; (d) liens on any assets of a corporation
existing at the time such corporation is merged into or consolidated with
the
5
<PAGE>
Issuer or a Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an entirety or
substantially as an entirety by the Issuer or a Subsidiary; (e) liens on
any assets of the Issuer or a Consolidated Subsidiary in favor of the
United States of America or any state thereof, or any department, agency or
instrumentality or political subdivision of the United States of America or
any state thereof, or in favor of any other country, or any political
subdivision thereof, to secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness incurred
or guaranteed for the purpose of financing all or any part of the purchase
price (or, in the case of real property, the cost of construction)
of the assets subject to such liens (including, but not limited to, liens
incurred in connection with pollution control, industrial revenue or
similar financing); (f) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part, of
any lien referred to in the foregoing clauses (a) to (e), inclusive;
provided, however, that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, and that such
extension, renewal or replacement shall be limited to all or a part of the
assets which secured the lien so extended, renewed or replaced (plus
improvements and construction on such real property); (g) liens imposed by
law, such as mechanics', workmen's, repairmen's, materialmen's,
carriers', warehousemen's, vendors' or other similar liens arising in the
ordinary course of business, or governmental (federal, state or
municipal) liens arising out of contracts for the sale of products or
services by the Issuer or any Consolidated Subsidiary, or deposits or
pledges to obtain the release of any of the foregoing liens; (h) pledges,
liens or deposits under worker's compensation laws or similar legislation
and liens or judgments thereunder which are not currently dischargeable, or
in connection with bids, tenders, contracts (other than for the payment of
money) or leases to which the Issuer or any Consolidated Subsidiary is a
party, or to secure public or statutory obligations of the Issuer or any
Consolidated Subsidiary, or in connection with obtaining or maintaining
self-insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age pensions,
social security or similar matters, or to secure surety, appeal or customs
bonds to which the Issuer or any Consolidated Subsidiary is a party, or in
litigation or other
6
<PAGE>
proceedings such as, but not limited to, interpleader proceedings, and
other similar pledges, liens or deposits made or incurred in the ordinary
course of business; (i) liens created by or resulting from any litigation
or other proceeding which is being contested in good faith by appropriate
proceedings, including liens arising out of judgements or awards against
the Issuer or any Consolidated Subsidiary with respect to which the Issuer
or such Consolidated Subsidiary is in good faith prosecuting an appeal or
proceedings for review or for which the time to make an appeal has not yet
expired; or final unappealable judgment liens which are satisfied within 15
days of the date of judgment; or liens incurred by the Issuer or any
Consolidated Subsidiary for the purpose of obtaining a stay or discharge in
the course of any litigation or other proceeding to which the Issuer or
such Consolidated Subsidiary is a party; (j) liens for taxes or assessments
or governmental charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty, or which are being contested in good
faith by appropriate proceedings; landlord's liens on property held under
lease; and any other liens or charges incidental to the conduct of the
business of the Issuer or any Consolidated Subsidiary or the ownership of
the assets of any of them which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which do not,
in the opinion of the Issuer, materially impair the use of such assets in
the operation of the business of the Issuer or such Consolidated Subsidiary
or the value of such assets for the purposes thereof; or (k) liens relating
to accounts receivable of the Company or any of its Subsidiaries which have
been sold, assigned or otherwise transferred to another Person in a
transaction classified as a sale of accounts receivable in accordance with
generally accepted accounting principles (to the extent the sale by the
Company or the applicable Subsidiary is deemed to give rise to a lien in
favor of the purchaser thereof in such accounts receivable or the proceeds
thereof). Notwithstanding the above, the Issuer or any Consolidated
Subsidiary may, without securing the Exchange Notes due 2008, create or
assume any Indebtedness which is secured by a lien which would otherwise be
subject to the foregoing restrictions, provided that at the time of such
creation or assumption, after giving effect thereto, Exempted Debt does not
exceed 10% of the total assets of the Issuer and its Subsidiaries on a
consolidated basis, determined in accordance with generally accepted
accounting principles.
7
<PAGE>
Limitation on Sale and Lease-Back Transactions. The Issuer
covenants that, so long as any of the Exchange Notes due 2008 remain
outstanding, it will not, nor shall it permit any Consolidated Subsidiary
to, enter into any sale and lease-Back transaction with respect to any
assets, other than any sale lease-back transaction (involving a lease for
a term of not more than three years), unless either (a) the Issuer or such
Consolidated Subsidiary would be entitled to incur Indebtedness secured by
a lien on the assets to be leased in an amount at least equal to the
Attributable Debt in respect of such transaction without equally and
ratably securing the Exchange Notes due 2008 pursuant to clauses (a)
through (k) inclusive of the covenant with respect to "Limitation on Liens"
above, or (b) the proceeds of the sale of the assets to be leased are at
least equal to their fair market value (as determined by the Board of
Directors of the Issuer) and the proceeds are applied to the purchase or
acquisition (or, in the case of real property, the construction) of assets
or to the retirement (other than at maturity or pursuant to a mandatory
sinking fund or mandatory redemption provision) of indebtedness. The
foregoing limitation shall not apply, if at the time the Issuer or any
Consolidated Subsidiary enters into such sale and lease-back transaction,
and after giving effect thereto, Exempted Debt does not exceed 10% of the
total assets of the Issuer and its Subsidiaries on a consolidated basis,
determined in accordance with generally accepted accounting principles.
The term "Attributable Debt" in connection with a sale and lease-
back transaction shall mean, as of the date of determination, the lesser of
(a) the fair value of the assets subject to such transaction or (b) the
present value (discounted at the rate of interest set forth in or implicit
in the terms of such lease or, if it is not practicable to determine such
rate, the weighted average interest rate per annum borne by all series of
Securities then Outstanding and subject to the Limitation on Sale and
Lease-Back Transactions compounded semiannually, in either case as
determined by the principal accounting or financial officer of the Issuer)
of the obligations of the Issuer or any Consolidated Subsidiary for net
rental payments during the remaining term of all leases (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended). The term "net rental payments" under any lease of any
period shall mean the sum of the rental and other payments required to be
paid in such
8
<PAGE>
period by the lessee thereunder, not including, however, any amounts
required to be paid by such lessee (whether or not designated as rental or
additional rental) on account of maintenance and repairs, reconstruction,
insurance, taxes, assessments, water rates or similar charges required to
be paid by such lessee thereunder or any amounts required to be paid by
such lessee thereunder contingent upon the amount of sales, maintenance and
repairs, reconstruction, insurance, taxes, assessments, water rates or
similar charges. The term "Consolidated Subsidiary" shall mean any
Subsidiary substantially all the property of which is located, and
substantially all the operations of which are conducted, in the United
States of America whose financial statements are consolidated with those
of the Issuer in accordance with generally accepted accounting principles.
The term "Exempted Debt" shall mean the sum of the following as of the date
of determination: (i) Indebtedness of the Issuer and its Consolidated
Subsidiaries incurred after February 24, 1998 and secured by liens not
permitted to be created or assumed pursuant to the covenant with respect
to "Limitation on Liens" above, and (ii) Attributable Debt of the Issuer
and its Consolidated Subsidiaries in respect of every sale and lease-back
transaction entered into after February 24, 1998, other than leases
expressly permitted by the covenant with respect to "Limitation on Sale and
Lease-Back Transactions" above. The term "Indebtedness" shall mean all
items classified as indebtedness on the most recently available
consolidated balance sheet of the Issuer and its Consolidated Subsidiaries,
in accordance with generally accepted accounting principles.
19. Conversion and Exchange. The Exchange Notes due 2008 shall not
-----------------------
be convertible into or exchangeable into any other security.
20. Other Terms. The Exchange Notes due 2008 shall have the other
-----------
terms and shall be substantially in the form set forth in the form of
Exchange Notes due 2008 attached hereto as Exhibit A. In case of any
conflict between this Annex A and the Exchange Notes due 2008 in the form
attached hereto as Exhibit A, the form of the Exchange Notes due 2008 shall
control.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
9
<PAGE>
EXHIBIT A
[FORM OF FACE OF EXCHANGE NOTE DUE MARCH 1, 2008]
[IF THE EXCHANGE NOTE DUE 2008 IS TO BE A GLOBAL SECURITY, INSERT THE
FOLLOWING - - THIS EXCHANGE NOTE DUE 2008 IS A BOOK-ENTRY SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS EXCHANGE NOTE DUE 2008 IS
EXCHANGEABLE FOR EXCHANGE NOTES DUE 2008 REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS EXCHANGE NOTE DUE 2008
(OTHER THAN A TRANSFER OF THIS EXCHANGE NOTE DUE 2008 AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS EXCHANGE NOTE DUE 2008 IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY EXCHANGE NOTE DUE 2008 ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. ________
McKESSON CORPORATION
6.40% EXCHANGE NOTE DUE MARCH 1, 2008
McKesson Corporation, a Delaware corporation (the "Issuer," which term
includes any successor corporation under the Indenture hereinafter referred to),
for
<PAGE>
value received, hereby promises to pay to, _____________________________,
the principal sum of _________________________ Dollars ($______) on March 1,
2008 and to pay interest on said principal sum from February 24, 1998, or from
the most recent interest payment date to which interest has been paid or duly
provided for, semiannually in arrears on March 1 and September 1 (each such
date, an "Interest Payment Date") of each year commencing on September 1, 1998,
at the rate of 6.40% per annum until the principal hereof shall have become due
and payable.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year comprised of twelve 30-day months. The
amount of interest payable for any period shorter than a full semi-annual period
for which interest is computed, will be computed on the basis of the actual
number of days elapsed per 30-day month. In the event that any date on which
the principal or interest payable on this Exchange Note due 2008 is not a
Business Day, then payment of principal or interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of such delay). The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Exchange Note due 2008 is registered at the
close of business on the record date for such interest installment, which shall
be the close of business on the immediately preceding February 15 and August 15
prior to such Interest Payment Date, as applicable. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered holders on such record date and may be paid to the
person in whose name this Exchange Note due 2008 is registered at the close of
business on a subsequent record date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest), notice whereof
shall be given by mail by or on behalf of the Issuer to the registered holders
of Exchange Notes due 2008 not less than 15 days preceding such subsequent
record date, all as more fully provided in the Indenture. The principal of and
the interest on this Exchange Note due 2008 shall be payable at the office or
agency of the Issuer maintained for that purpose in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Issuer by check mailed to the person entitled thereto
at such address as shall appear in the registry books of the Issuer; provided,
further that for so long as this Exchange Note due 2008 is represented by a
Registered Global Security, payment of principal, premium, if any, or interest
on this Exchange Note due 2008 may be made by wire transfer to the account of
the Depositary or its nominee.
2
<PAGE>
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee (as defined below) under the Indenture (as defined
below), by the manual signature of one of its authorized officers, this Exchange
Note due 2008 shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
Capitalized terms used in this Exchange Note due 2008 which are
defined in the Indenture shall have the respective meanings assigned to them in
the Indenture.
The provisions of this Exchange Note due 2008 are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its corporate
seal to be imprinted hereon.
McKESSON CORPORATION
By: ___________________________
Nancy A. Miller
Vice President and
Corporate Secretary
Attest:
By: ____________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: _____________________
Authorized Officer
Dated: ___________________
<PAGE>
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
This Exchange Note due 2008 is one of a duly authorized series of
securities (the "Securities") of the Issuer designated as its 6.40% Exchange
Notes due March 1, 2008 (the "Exchange Notes due 2008"). The Securities are
all issued or to be issued under and pursuant to an Indenture, dated as of March
11, 1997 (the "Indenture"), duly executed and delivered between the Issuer and
The First National Bank of Chicago, a national banking association (the
"Trustee," which term includes any successor Trustee with respect to the
Securities under the Indenture), to which the Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Trustee and the holders of the
Securities and the terms upon which the Exchange Notes due 2008 are to be
authenticated and delivered. The terms of individual series of Securities may
vary with respect to interest rate or interest rate formulas, issue dates,
maturity, redemption, repayment, currency of payment and otherwise.
Except as set forth below, this Exchange Note due 2008 is not
redeemable and is not entitled to the benefit of a sinking fund or any analogous
provision.
This Exchange Note due 2008 is redeemable as a whole or in part, at
the option of the Issuer, at any time at a redemption price equal to the greater
of (i) 100% of its principal amount or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Yield plus 10 basis points, plus accrued
interest to the date of redemption. The Holder of this Exchange Note due 2008
will receive notice thereof by first-class mail at least 10 and not more than 60
days prior to the date fixed for redemption.
"Treasury Yield" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. "Comparable Treasury Issue" means the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Exchange Note due 2008
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Exchange Note due 2008.
"Independent Investment Banker" means Salomon Brothers Inc and its successor or,
if such firm is unwilling or unable to select the Comparable
5
<PAGE>
Treasury Issue, an independent investment banking institution of national
standing appointed by the Trustee. "Comparable Treasury Price" means, with
respect to any redemption date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third business day preceding such redemption date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices of the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date. "Reference Treasury Dealer" means each of
Salomon Brothers Inc, BancAmerica Robertson Stephens and J.P. Morgan Securities
Inc., and their respective successors; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government Securities dealer in New
York City (a "Primary Treasury Dealer"), the Issuer shall substitute therefor
another Primary Treasury Dealer.
If an Event of Default with respect to the Exchange Notes due 2008
shall occur and be continuing, the principal of all the Exchange Notes due 2008
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities of all series issued under such
Indenture then outstanding and affected (voting as one class) to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the
Securities of each series or Coupons so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each Outstanding
Exchange Note due 2008 affected thereby, (i) extend the final maturity of the
principal of any Security or reduce the principal amount thereof or reduce the
rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or make the principal thereof (including any
amount in respect of original issue discount), or interest thereon payable in
any coin or currency other than that provided in the Securities or
6
<PAGE>
Coupons or in accordance with the terms thereof, or reduce the amount of
principal of an Original Issue Discount Security that would be due and payable
upon an acceleration of the maturity thereof or the amount thereof provable in
bankruptcy or alter certain provisions of the Indenture relating to Securities
not denominated in Dollars or the Judgment Currency of such Securities or impair
or affect the right of any Securityholder to institute suit for the enforcement
of any payment thereof when due or, if the Securities provide therefor, any
right of repayment at the option of the Securityholder or (ii) reduce the
aforesaid percentage in principal amount of Securities of any series issued
under such Indenture, the consent of the holders of which is required for any
such modification. It is also provided in the Indenture that, with respect to
certain defaults or Events of Default regarding the Securities of any series,
the holders of a majority in aggregate principal amount Outstanding of the
Securities of each such series, each such series voting as a separate class (or,
of all Securities, as the case may be voting as a single class) may under
certain circumstances waive all defaults with respect to each such series (or
with respect to all the Securities, as the case may be) and rescind and annul a
declaration of default and its consequences, but no such waiver or rescission
and annulment shall extend to or affect any subsequent default or shall impair
any right consequent thereto. The preceding sentence shall not, however, apply
to a default in the payment of the principal of or interest on any of the
Securities.
No reference herein to the Indenture and no provision of this Exchange
Note due 2008 or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Exchange Note due 2008 at the time, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Exchange Note due 2008 may be registered
on the registry books of the Issuer, upon surrender of this Exchange Note due
2008 for registration of transfer at the office or agency of the Issuer
maintained by the Issuer for such purpose in the Borough of Manhattan, The City
of New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the holder hereof or by its attorney duly authorized in writing, and thereupon
one or more new Exchange Notes due 2008 of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Exchange Notes due 2008 are issuable only in registered form in
minimum denominations of $250,000 and integral multiples of $1,000 in excess
thereof.
7
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, the Exchange Notes due 2008 are exchangeable for a like aggregate
principal amount of Exchange Notes due 2008 as requested by the holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Prior to due presentment of this Exchange Note due 2008 for
registration of transfer, the Issuer, the Trustee and any agent of the Issuer or
the Trustee may treat the person in whose name this Exchange Note due 2008 is
registered as the owner hereof for all purposes, whether or not this Exchange
Note due 2008 be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
THE INDENTURE AND THIS EXCHANGE NOTE DUE 2008 SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
8
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR EXCHANGE NOTES
THAT ARE NOT GLOBAL SECURITIES]
For value received _____________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
_________________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Exchange Note due 2008 and hereby irrevocably constitutes and
appoints ________ attorney to transfer the said Exchange Note due 2008 on the
books of the Issuer, with full power of substitution in the premises.
Dated: ____________________________
___________________________
___________________________
Signature(s)
_____________________________
Signature Guarantee/1/
NOTICE: The above signature(s) of the holder(s) hereof must correspond with the
name(s) written on the face of this Exchange Note due 2008 in every particular
without alteration or enlargement or any change whatsoever.
- ------------------------
/1/ (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal Amount
of Exchange Notes due
2008 by which this
Global Security is to be Remaining
Reduced or Increased, Principal
and Reason for Amount of this
Date Reduction or Increase Global Security Notation Made By
- ------ ------------------------- --------------- ----------------
</TABLE>
<PAGE>
Exhibit 8.1
[NYO LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
April 1, 1998
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, California 94104
Ladies and Gentlemen:
We have acted as special counsel to McKesson Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-4 (such Registration Statement being
hereinafter referred to as the "Registration Statement"), to be filed by the
Company with the Securities and Exchange Commission (the "Commission") on the
date hereof, with respect to the registration under the Securities Act of 1933,
as amended (the "Securities Act"), by the Company of its offers to exchange (the
"Exchange Offers") an aggregate principal amount of up to $300,000,000 of its
6.30% Exchange Notes due March 1, 2005 and 6.40% Exchange Notes due March 1,
2008 (together the "Exchange Notes") for a like principal amount of 6.30% Notes
due March 1, 2005 and 6.40% Notes due March 1, 2008 (together the "Private
Notes"). The Private Notes have been and the Exchange Notes will be issued
pursuant to an indenture dated as of March 11, 1997 (the "Indenture"), between
the Company and The First National Bank of Chicago, as trustee (the "Trustee").
We hereby confirm that, although the discussion set forth in the
Registration Statement under the heading "CERTAIN UNITED STATES FEDERAL TAX
CONSEQUENCES" does not purport to discuss all possible United States federal
income tax consequences of the acquisition, ownership, and disposition of the
Exchange Notes, in our opinion such discussion constitutes, in all material
respects, a fair and accurate summary of the United States federal income tax
consequences of the acquisition, ownership, and disposition of the Exchange
Notes, based upon current law. There can be no assurances
<PAGE>
McKesson Corporation
April 1, 1998
Page 2
that any of the opinions expressed herein will be accepted by the Internal
Revenue Service, or if challenged, by a court.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 8.1 to the Registration Statement. We also consent to the use of our
name under the heading "Legal Matters" in the Registration Statement. In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission promulgated thereunder. This opinion is expressed
as of the date hereof unless otherwise expressly stated and we disclaim any
undertaking to advise you of any subsequent changes of the facts stated or
assumed herein or any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE>
Exhibit 10.1
McKESSON CORPORATION
$150,000,000 6.30% Notes due March 1, 2005
$150,000,000 6.40% Notes due March 1, 2008
REGISTRATION RIGHTS AGREEMENT
New York, New York
February 24, 1998
Salomon Brothers Inc
BancAmerica Robertson Stephens
J.P. Morgan Securities Inc.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs and Mesdames:
McKesson Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell (the "Initial Placement") to Salomon Brothers Inc ("Salomon
Brothers"), BancAmerica Robertson Stephens and J.P. Morgan Securities Inc.
(collectively, the "Purchasers"), upon the terms set forth in a purchase
agreement, dated as of February 19, 1998 (the "Purchase Agreement"),
$150,000,000 of the Company's 6.30% Notes due March 1, 2005 and $150,000,000 of
the Company's 6.40% Notes due March 1, 2008 (each, a "Series of Notes" and,
collectively, the "Notes"). The Notes will be issued under an Indenture dated as
of March 11, 1997 (the "Indenture") between the Company and The First National
Bank of Chicago, as trustee (the "Trustee"). As an inducement to the Purchasers
to enter into the Purchase Agreement and in satisfaction of a condition to your
obligations thereunder, the Company agrees with you, (i) for your benefit and
(ii) for the benefit of the holders from time to time (each of the foregoing a
"Holder" and together the "Holders") of the Notes or the Exchange Notes (as
defined herein), as follows:
1. Definitions. Capitalized terms used herein without definition
-----------
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
---
regulations of the Commission promulgated thereunder.
"Affiliate" shall have the same meaning given to that term in Rule 405
---------
of the Act of any successor rule thereunder.
"Closing Date" has the meaning set forth in the Purchase Agreement.
------------
<PAGE>
"Commission" means the Securities and Exchange Commission.
----------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Notes" means the two Series of Exchange Notes, collectively.
--------------
"Exchange Offer Registration Period" means the 180-day period
----------------------------------
following the issuance of the Exchange Notes, exclusive of any period during
which any stop order shall be in effect suspending the effectiveness of the
Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
-------------------------------------
of the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include any Purchaser)
-----------------
which is a broker-dealer electing to exchange Notes acquired for its own account
as a result of market-making activities or other trading activities for Exchange
Notes.
"Final Memorandum" has the meaning set forth in the Purchase
----------------
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
------
"Indenture" has the meaning set forth in the preamble hereto.
---------
"Initial Placement" has the meaning set forth in the preamble hereto.
-----------------
"Liquidated Damages" has the meaning set forth in Section 7(a) hereof.
------------------
"Majority Holders" means the Holders of a majority of the aggregate
----------------
principal amount of securities registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment
---------------------
bankers and manager or managers that shall administer an underwritten offering.
"Notes" has the meaning set forth in the preamble hereto.
-----
"Prospectus" means the prospectus included in any Registration
----------
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Notes or the Exchange Notes, covered by such Registration
2
<PAGE>
Statement, and all amendments and supplements to the Prospectus, including post-
effective amendments.
"Registered Exchange Offer" means the proposed offer to the Holders to
-------------------------
issue and deliver to such Holders, with respect to each Series of Notes, a like
principal amount of the corresponding Series of Exchange Notes, in exchange for
the Notes.
"Registration Statement" means any Exchange Offer Registration
----------------------
Statement or Shelf Registration Statement that covers any of the Notes or the
Exchange Notes pursuant to the provisions of this Agreement, and amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Series of Exchange Notes" means, in respect of each Series of Notes,
------------------------
a like principal amount of debt securities of the Company identical in all
material respects to, and entitled to substantially the same benefits of such
Series of Notes.
"Series of Notes" has the meaning set forth in the preamble hereto.
---------------
"Shelf Registration" means a registration effected pursuant to Section
------------------
3 hereof.
"Shelf Registration Event" has the meaning set forth in Section 3
------------------------
hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
-------------------------
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
----------------------------
of the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Notes or the Exchange Notes, as applicable, on an appropriate form
under Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, and amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Special Counsel" means Mayer, Brown & Plan or such other counsel as
---------------
shall be specified by the Majority Holders of securities included in the
relevant Registration Statement, the fees and expenses of which will be paid by
the Company pursuant to Section 5 hereof.
"Trustee" has the meaning set forth in the preamble hereto.
-------
"Underwriter" means any underwriter of Notes in connection with an
-----------
offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offers: Resales of Exchange Notes By
--------------------------------------------------------
Exchanging Dealers. (a) The Company shall prepare and file with the Commission
- ------------------
the Exchange Offer
3
<PAGE>
Registration Statement. The Company shall use its reasonable efforts to cause
the Exchange Offer Registration Statement to become effective under the Act
within 180 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offers,
it being the objective of such Registered Exchange Offers to enable each Holder
electing to exchange Notes for Exchange Notes (assuming that such Holder is not
an affiliate of the Company within the meaning of the Act, acquires the Exchange
Notes in the ordinary course of such Holder's business and has no arrangements
with any person to participate in the distribution (within the meaning of the
Act) of the Exchange Notes) to transfer such Exchange Notes from and after their
receipt without any limitations or restrictions under the Act and without
material restrictions under the securities laws of a substantial proportion of
the several states of the United States.
(c) In connection with the Registered Exchange Offers, the Company
shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offers open for not less
than 30 days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offers with an address in the Borough of Manhattan, The City
of New York; and
(iv) comply in all material respects with all applicable
laws.
(d) As soon as practicable after the close of each of the
Registered Exchange Offers, the Company shall:
(i) accept for exchange all Notes validly tendered and not
withdrawn pursuant to the applicable Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all Notes so
accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
to each Holder of tendered Notes, Exchange Notes of the appropriate
series equal in principal amount to the Notes of such Holder so
accepted for exchange therefor.
(e) The Purchasers and the Company acknowledge that, pursuant to
interpretations by the Commission's staff of Section 5 of the Act, and in the
absence of an
4
<PAGE>
applicable exemption therefrom, each Exchanging Dealer is required to deliver a
Prospectus in connection with a sale of any Exchange Notes received by such
Exchanging Dealer pursuant to the Registered Exchange Offers in exchange for
Notes acquired for its own account as a result of market-making activities or
other trading activities. Accordingly, the Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto
in the forepart of the Exchange Offer Registration Statement in a
section setting forth details of the Registered Exchange Offers, and
in Annex C hereto in the underwriting or plan of distribution section
of the Prospectus forming a part of the Exchange Offer Registration
Statement, and include the information set forth in Annex D hereto in
each Letter of Transmittal delivered pursuant to each Registered
Exchange Offer; and
(ii) use its reasonable efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during the
Exchange Offer Registration Period for delivery of the Prospectus
forming a part thereof by Exchanging Dealers in connection with sales
of Exchange Securities received pursuant to the Registered Exchange
Offers, as contemplated by Section 4(h) below.
(f) In the event that the Purchasers determine that they are not
eligible to participate in the Registered Exchange Offers with respect to the
exchange of Notes constituting any portion of their initial unsold allotment, at
the request of the Purchasers, the Company shall issue and deliver to the
Purchasers, in exchange for such Notes, a like principal amount of Exchange
Notes (provided that such Exchange Notes shall include legends with respect to
restrictions on transfer), and the Company shall, starting on the date of
effectiveness of the Exchange Offer Registration Statement and ending on the
close of business on the 180th day following such date, make available as many
copies of the Exchange Offer Registration Statement prospectus, as amended or
supplemented, as reasonably requested by the Purchasers. The Company shall seek
to cause the CUSIP Service Bureau to issue the same CUSIP number(s) for such
securities as for the corresponding Series of Exchange Notes issued pursuant to
the Registered Exchange Offers. The Purchasers agree to promptly notify the
Company in writing following the resale of their initial allotment of Notes.
3. Shelf Registration. If, (i) because of any change in law or in
------------------
currently prevailing interpretations thereof by the Commission's staff, the
Company determines upon advice of its outside counsel that it is not permitted
to effect either of the Registered Exchange Offers as contemplated by Section 2
hereof, or (ii) for any other reason either of the Registered Exchange Offers
are not consummated within 225 days of the Closing Date, or (iii) in the case of
any Holder that participates in either of the' Registered Exchange Offers, such
Holder does not receive applicable freely tradeable Exchange Notes on the date
of the exchange (other than due solely to the status of such Holder as an
affiliate of the Company within the meaning of the Act or as a broker-dealer)
(it being understood that, for purposes of this Section 3, (x) the requirement
that the Purchasers deliver a Prospectus containing the information required by
Items 507 and/or 508 of Regulation S-K under the Act in connection with sales of
Exchange
5
<PAGE>
Notes acquired in exchange for such Notes shall result in such Exchange Notes
being not "freely tradeable" but (y) the requirement that an Exchanging Dealer
deliver a Prospectus in connection with sales of Exchange Notes acquired in the
Registered Exchange Offers in exchange for Notes acquired as a result of market-
making activities or other trading activities shall not result in such Exchange
Notes being not "freely tradeable") (the events described in clauses (i), (ii)
and (iii) of this paragraph are each referred to herein as a "Shelf Registration
Event"), the following provisions shall apply:
(a) The Company shall promptly deliver to the applicable Holders
written notice of a Shelf Registration Event and, as promptly as practicable,
file with the Commission and thereafter use its reasonable efforts to cause to
be declared effective under the Act, a Shelf Registration Statement relating to
the offer and sale of the applicable Notes or the applicable Exchange Notes, as
the case may be, by the applicable Holders from time to time in accordance with
the methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement; provided, however, that with respect to Exchange Notes
-------- -------
received by the Purchasers in exchange for Notes constituting any portion of an
unsold allotment, the Company may, if permitted by current interpretations by
the Commission's staff; file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required by Regulation S-K
Items 507 and/or 508, as applicable, in satisfaction of their obligations under
this paragraph (a) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration Statement.
(b) The Company shall use its reasonable efforts to keep such Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by such Holders for a period of two years (or,
if Rule l44(k) is amended to provide a shorter restrictive period, such shorter
period) or such shorter period that will terminate when all the Notes or
Exchange Notes, as applicable, covered by such Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement (in any such case, such
period being called the "Shelf Registration Period").
4. Registration Procedures. In connection with any Shelf
-----------------------
Registration Statement and, to the extent specified, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to each Purchaser, prior to the
filing thereof with the Commission, a copy of any Shelf Registration Statement
and any Exchange Offer Registration Statement, and each amendment thereof and
each amendment or supplement, if any, to the Prospectus included therein and the
Company shall, if reasonably requested, promptly incorporate in such
Registration Statement, such information and comments as the Purchasers
reasonably agree with the Company and its counsel should be included therein
provided that the Company shall not be required to take any action under this
Section 4(a) that is not in the reasonable opinion of counsel for the Company in
compliance with applicable law.
6
<PAGE>
(b) The Company shall ensure that subject to Section 4(k), (i) any
Registration Statement and any amendment thereto and any Prospectus forming a
part thereof and any amendment or supplement thereto complies in all material
respects with the Act, (ii) any Registration Statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (iii) any Prospectus forming
part of any Registration Statement, and any amendment or supplement to such
Prospectus, does not, during the period when delivery thereof is required,
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
(c) (1) The Company shall advise the Purchasers and, in the case
of a Shelf Registration Statement, the Holders of securities covered thereby
and, if requested by you or any such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto
has been filed with the Commission and when a Registration Statement
or any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to a Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise the Purchasers and, in the
case of a Shelf Registration Statement, the Holders of securities
covered thereby, and, in the case of an Exchange Offer Registration
Statement, any Exchanging Dealer which has provided in writing to
the Company a telephone or facsimile number and address for notices,
and, if requested by you or any such Holder or Exchanging Dealer,
confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included therein for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iii) of the suspension of the use of a Prospectus.
7
<PAGE>
(d) Subject to Section 4(k), the Company shall use its reasonable
efforts to prevent the issuance or obtain the withdrawal of any order suspending
the effectiveness or use of any Registration Statement at the earliest possible
time.
(e) The Company shall furnish to each Holder of securities included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits (including those incorporated by
reference).
(f) Subject to Section 4(k), the Company shall, during the Shelf
Registration Period, as promptly as is reasonably practicable deliver to each
Holder of securities included within the coverage of any Shelf Registration
Statement, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request; and
subject to Section 4(k), the Company consents to the use of the Prospectus or
any amendment or supplement thereto as to which no notice has been given
pursuant to paragraph 4(c)(2) by each of the selling Holders of securities in
connection with the offering and sale of the securities covered by the
Prospectus or any amendment or supplement thereto.
(g) The Company shall furnish to each Exchanging Dealer which so
requests, without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, any documents incorporated by reference therein, and,
if the Exchanging Dealer so requests in writing, all exhibits (including those
incorporated by reference).
(h) Subject to Section 4(k), the Company shall, during the Exchange
Offer Registration Period, promptly deliver to each Exchanging Dealer, without
charge, as many copies of the Prospectus included in such Exchange Offer
Registration Statement and any amendment or supplement thereto as such
Exchanging Dealer may reasonably request for delivery by such Exchanging Dealer
in connection with a sale of Exchange Notes received by it pursuant to the
Registered Exchange Offer; and subject to Section 4(k), the Company consents to
the use of the Prospectus or any amendment or supplement thereto as to which no
notice has been given pursuant to paragraph 4(c)(2) by any such Exchanging
Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offers or the effectiveness of a
Registration Statement, the Company shall, if required by applicable law,
register or qualify or cooperate with the Holders of securities included therein
and their respective counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Holders reasonably request in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such United States jurisdictions of the securities
8
<PAGE>
covered by such Registration Statement; provided, however, that the Company
-------- -------
will not be required to (i) qualify generally to do business or as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Section 4(i), (ii) file any
general consent to service of process in any jurisdiction where it is not as of
the date hereof so subject or (iii) subject itself to taxation in any
jurisdiction where it is not otherwise subject.
(j) Unless the applicable securities shall be in book-entry only form,
the Company shall cooperate with the Holders of Notes to facilitate the timely
preparation and delivery of certificates representing Notes to be sold pursuant
to any Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request prior to sales
of Notes pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraphs
(c)(l)(ii), (c)(2)(i) or (c)(2)(iii) above, the Company agrees to notify the
Purchasers, and in the case of a Shelf Registration Statement, the Holders of
securities covered thereby, to suspend use of the Prospectus and the Company
shall prepare, using its reasonable efforts to do so as soon as possible, a
post-effective amendment to any Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document so
that, as thereafter delivered to purchasers of the securities included therein,
the Prospectus will not include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading and the
Purchasers, and in the case of a Shelf Registration Statement, the Holders of
securities covered thereby, shall suspend use of such Prospectus until the
Company has amended or supplemented such Prospectus so that such Prospectus does
not contain any such untrue statement or omission.
(l) The Company shall use its reasonable efforts to cause The
Depository Trust Company ("DTC") on the first business day following the
effective date of any Shelf Registration Statement hereunder or as soon as
possible thereafter to remove (i) from any existing CUSIP number assigned to any
Series of Notes, any designation indicating that such Notes are "restricted
securities," which efforts shall include delivery to DTC of a letter executed by
the Company substantially in the form of Annex E hereto and (ii) any other stop
or restriction on DTC's system with respect to such Notes. In the event the
Company is unable to cause DTC to take the actions described in the immediately
preceding sentence, the Company shall take such actions as Salomon Brothers may
reasonably request to provide, as soon as practicable, a CUSIP number for each
Series of Notes registered under such Registration Statement and to cause such
CUSIP numbers to be assigned to such Notes (or to the maximum aggregate
principal amount of such Notes to which such number(s) may be assigned). Upon
compliance with the foregoing requirements of this Section 4(1), the Company
shall provide the Trustee with printed certificates for each Series of Notes, in
a form eligible for deposit with DTC.
9
<PAGE>
(m) The Company shall use its reasonable efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act.
(n) The Company may require each Holder of securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding such Holder and the distribution of such securities by
such Holder as the Company may from time to time reasonably require for
inclusion in such Registration Statement and securities of a Holder which does
not provide information necessary for inclusion in such Registration Statement
may be omitted from any Shelf Registration Statement.
(o) The Company shall, if reasonably requested, and in no event more
than three times, promptly incorporate in a Prospectus supplement or post-
effective amendment to a Shelf Registration Statement, such information as the
Managing Underwriters and Holders of a majority in aggregate principal amount of
each Series of Notes reasonably agree with the Company and its counsel should be
included therein and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment provided
that the Company shall not be required to take any action under this Section
4(o) that is not in the reasonable opinion of counsel for the Company in
compliance with applicable law.
(p) In the case of any Shelf Registration Statement, the Company shall
enter into such customary agreements (including underwriting agreements) and
take all other appropriate and reasonably required actions in connection
therewith in order to expedite or facilitate the registration or the disposition
of the applicable Notes or the applicable Exchange Notes, as the case may be,
and in connection therewith, if an underwriting agreement is entered into, cause
the same to contain indemnification provisions and procedures no less favorable
than those set forth in Section 6 (or such other provisions and procedures
acceptable to the Holders of a majority in aggregate principal amount of each
applicable Series of Notes and the Managing Underwriters, if any) with respect
to all parties to be indemnified pursuant to Section 6.
(q) In the case of any Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by the Holders of securities to be
registered thereunder, subject to their acceptance of the provisions of this
Section 4(q), any underwriter participating in any distribution pursuant to such
Registration Statement, and any Special Counsel, accountant or other agent
retained by such Holders or any such underwriter, all relevant financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries as shall reasonably be required in connection with the
discharge of their due diligence obligations; (ii) cause the Company's officers,
directors and employees and any relevant trustee to supply all relevant
information reasonably requested by such Holders or any such underwriter,
Special
10
<PAGE>
Counsel, accountant or agent in connection with any such Registration
Statement as is customary for similar due diligence examinations; provided,
--------
however, that, in the case of clause (i) and (ii) above, any information
- -------
that is designated in writing by the Company, in good faith, as confidential at
the time of delivery of such information shall be kept confidential by such
Holders and any such underwriter, Special Counsel, accountant or agent, unless
such disclosure is made in connection with a court proceeding or as required by
law after notice has been given to the Company of such pending disclosure and a
reasonable opportunity has been provided, whenever reasonably possible, for the
Company to obtain an appropriate protective order for the information to be
disclosed, or such information becomes available to the public generally or
through a third party without an accompanying obligation of confidentiality;
and provided further, however, that the foregoing inspection and information
-------- ------- -------
gathering shall be coordinated on behalf of such Holders and the other parties
entitled thereto by the Special Counsel and other parties; (iii) make such
representations and warranties to the Holders of securities registered
thereunder and the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in secondary offerings and covering
such matters as are customarily covered in representations and warranties
requested in secondary offerings; (iv) obtain opinions of counsel to the Company
and updates thereof addressed to each selling Holder and the underwriters, if
any, covering such matters and with such exceptions as are customarily covered
or taken in opinions requested in secondary offerings; (v) obtain "cold comfort"
letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each selling Holder
of securities registered thereunder and the underwriters, if any, in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with secondary offerings; and (vi) deliver such documents
and certificates as may be reasonably requested by the Majority Holders and the
Managing Underwriters, if any, or their counsel including those to evidence
compliance with Section 4(k) and with conditions customarily contained in the
underwriting agreement or other agreement entered into by the Company. The
foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
4(q) shall be performed at (A) the effectiveness of such Registration Statement
and each post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(r) In the case of any Exchange Offer Registration Statement, if
requested by the Purchasers, the Company shall (i) make reasonably available for
inspection by the Purchasers, subject to their acceptance of the provisions of
this Section 4(r), and any Special Counsel, accountant or other agent retained
by the Purchasers, all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries as shall reasonably
be required in connection with the discharge of their due diligence obligations;
(ii) cause the Company's officers, directors and employees and any relevant
trustee to supply all relevant information reasonably
11
<PAGE>
requested by the Purchasers or any such Special Counsel, accountant or
agent in connection with any such Registration Statement as is customary
for similar due diligence examinations; provided however, that, in the case
----------------
of clause (i) and (ii) above, any information that is designated in writing by
the Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Purchasers and any such Special
Counsel, accountant or agent, unless such disclosure is made in connection with
a court proceeding or as required by law after notice has been given to the
Company of such pending disclosure and a reasonable opportunity has been
provided, whenever reasonably possible, for the Company to obtain an appropriate
protective order for the information to be disclosed, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality; and provided further, however,
---------------- -------
that the foregoing inspection and information gathering shall be coordinated on
behalf of the Purchasers and other parties entitled thereto by the Special
Counsel and other parties; (iii) make such representations and warranties to the
Purchasers, in form, substance and scope as are customarily made by issuers to
underwriters in secondary offerings and covering such matters as are customarily
covered in representations and warranties requested in secondary offerings; and
(iv) deliver such documents and certificates as may be reasonably requested by
the Purchasers or their counsel, including those to evidence compliance with
Section 4(k) and with conditions customarily contained in underwriting
agreements. The foregoing actions set forth in clauses (iii) and (iv) of this
Section 4(r) shall be performed, if requested by the Purchasers, at the closing
of each of the Registered Exchange Offers and the effective date of any post-
effective amendment to the Exchange Offer Registration Statement.
5. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of their obligations under Sections
2, 3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the applicable Holders for the reasonable fees and disbursements of
the Special Counsel designated in connection therewith, and, in the case of any
Exchange Offer Registration Statement, will reimburse the Purchasers for the
reasonable fees and disbursements of the Special Counsel acting in connection
therewith.
6. Indemnification; Contribution.
-----------------------------
(a) The Company agrees to indemnify and hold harmless each Holder and
each person, if any, who controls any Holder within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or any amendment thereof, including all documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary Prospectus or any Prospectus (or
12
<PAGE>
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Holder furnished to the Company in writing by such
Holder expressly for use therein. The Company shall also indemnify each
Exchanging Dealer participating in the offering and sale of the Notes and each
person who controls any such Exchanging Dealer (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) to the same extent and with the
same limitations as provided above with respect to the indemnification of the
Holders of the Notes.
The foregoing notwithstanding, the Company shall not be liable to the
extent that such losses, claims, damages or liabilities arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Prospectus that is a preliminary Prospectus if (i)
such indemnified person failed to send or deliver a copy of the Prospectus with
or prior to the delivery or written confirmation of the sale of the Notes giving
rise to such losses, claims, damages or liabilities and (ii) the Prospectus
would have corrected such untrue statement or omission.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Company's directors, the Company's officers who
sign a Registration Statement, and each person, if any, who controls the Company
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement or any amendment thereof, any preliminary
Prospectus or any Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only the
reference to information relating to such Holder furnished to the Company in
writing by such Holder expressly for use in such Registration Statement,
preliminary Prospectus, Prospectus or any amendments or supplements thereto. In
no event shall the liability of any Holder of the Notes hereunder be greater in
amount than the net dollar amount of the proceeds received by such Holder from
the sale of the Notes giving rise to such indemnification obligation.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two proceeding paragraphs,
such person (the "indemnified party") shall promptly notify the person against
-----------------
whom such indemnity may be sought (the "indemnifying party") in writing and
------------------
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable
13
<PAGE>
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and, the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Holders and all persons, if any, who
control any Holders within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, and (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company and each
person, if any, who controls the Company within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Company and any such
control persons of the Company, such firm shall be designated in writing by the
Company. In the case of any such separate firm for the Holders or any such
control persons of any Holders, such firm shall be designated in writing on
behalf of the Majority Holders. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability or reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other
14
<PAGE>
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by such indemnifying party or by such indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this paragraph are several in proportion
to the respective number of the Notes they have sold pursuant to a Registration
Statement, and not joint.
(e) The Company and the Holders agree that it would not be just or
equitable if contribution pursuant to Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section 6. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in paragraph (d) of this Section 6
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, a Holder of the Notes shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Notes sold by such indemnifying party and distributed
to the public were offered to the public pursuant to any Registration Statement
exceeds the amount of any damages which such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder or any person controlling any Holder, or the Company or any person
controlling the Company and (iii) the sale of any Notes by any Holder.
7. Liquidated Damages Under Certain Circumstances. (a) Liquidated
----------------------------------------------
damages ("Liquidated Damages") shall become payable in respect of the Notes as
follows if any of the following events occur (each such event in clauses (i)
through (iii) below, a "Registration Default"):
(i) in the event that the Company is permitted under the law
and currently prevailing interpretations of the Commission's staff
to effect the Registered Exchange Offers and the Exchange Offer
Registration Statement is not declared effective on or prior to the
180th day following the Closing Date;
(ii) either of the Registered Exchange Offers are not
consummated and the applicable Shelf Registration Statement is not
declared effective on or prior to the 225th day following the
Closing Date; or
15
<PAGE>
(iii) after a Shelf Registration Statement is declared
effective, (A) such Shelf Registration Statement ceases to be
effective prior to the end of the Shelf Registration Period (except as
permitted in paragraph (b) of this Section 7); (B) such Shelf
Registration Statement or the related Prospectus ceases to be useable
in connection with resales of Notes or Exchange Notes, as the case may
be, covered by such Shelf Registration Statement prior to the end of
the Shelf Registration Period (except as permitted in paragraph (b) of
this Section 7) because (1) the Company determines that any event
occurs as a result of which the related Prospectus forming part of
such Shelf Registration Statement would include any untrue statement
of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under
which they were made not misleading, (2) the Company determines that
it shall be necessary to amend such Shelf Registration Statement, or
supplement the related Prospectus, to comply with the Act or the
Exchange Act or the rules thereunder, or (3) the Company determines
that it is advisable to suspend use of the Prospectus for a discrete
period of time due to pending material corporate developments or
similar material events that have not yet been publicly disclosed and
as to which the Company believes public disclosure will be prejudicial
to the Company.
Liquidated Damages shall accrue on the applicable Notes or the
applicable Exchange Notes, as the case may be, over and above the interest rate
set forth in the title to the applicable Notes or the applicable Exchange Notes,
as the case may be, following the occurrence of each Registration Default set
forth in clauses (i) and (ii) above from and including the next day following
each such Registration Default, in each case at a rate equal to 0.25% per annum;
provided, however, that in any case, if one or more Registration Defaults
- -------- -------
referred to in Section 7(a)(iii) occurs and continues for more than 60 days
(whether or not consecutive) in any twelve month period (the 61st day being
referred to as the "Default Day") then from the Default Day until the earlier of
(i) the date such Shelf Registration Statement is again deemed effective or is
useable, (ii) the date that is the second anniversary of the Closing Date (or,
if Rule 144(k) of the Act is amended to provide a shorter restrictive period,
such shorter period) or (iii) the date of which all the Notes are sold pursuant
to such Shelf Registration Statement, Liquidated Damages shall accrue at a rate
of 0.25% per annum; provided, further, that the aggregate amount of Liquidated
-------- -------
Damages payable pursuant to this Section 7 will in no event exceed 0.25% per
annum. The Liquidated Damages attributable to each Registration Default shall
cease to accrue from the date such Registration Default is cured.
(b) A Registration Default referred to in Section 7(a)(iii) shall be
deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related Prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to such Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related Prospectus or
16
<PAGE>
(y) the occurrence of other material events or developments with respect to the
Company that would need to be described in such Registration Statement or the
related Prospectus and (ii) in the case of clause (y), the Company is proceeding
promptly and in good faith to amend or supplement such Registration Statement
and related Prospectus to describe such events.
(c) Any amounts of Liquidated Damages due pursuant to the foregoing
paragraphs will be payable in cash on March 1 and September 1 of each year to
the holders of record on the preceding February 15 and August 15, respectively.
8. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to the Notes that is inconsistent with the rights granted
to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding aggregate
principal amount of each Series of Notes (or, after the consummation of any
Exchange Offer in accordance with Section 2 hereof, of each Series of Exchange
Notes); provided, however, that, with respect to any matter that affects the
-------- -------
rights of any Purchaser hereunder, the Company shall obtain the written consent
of the Purchasers. Notwithstanding the foregoing (except the foregoing proviso),
a waiver or consent to departure from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose Notes are being
sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Holders of a
majority of each Series of Notes, determined on the basis of Notes being sold
rather than registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 8(c),
which address initially is, with respect to each Holder, the address of
such Holder maintained by the Registrar under the Indenture, with a copy in
like manner to Salomon Brothers;
(2) if to you, initially at the address set forth in the Purchase
Agreement; and
(3) if to the Company, initially at the address set forth in the
Purchase Agreement.
17
<PAGE>
All such notices and communications shall be deemed to have been duly
given when received.
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Notes and/or Exchange Notes. The Company
hereby agrees to extend the benefits of this Agreement to any Holders of Notes
and/or Exchange Notes and any such Holder may enforce the provisions of this
Agreement as if an original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
(i) Securities Held By the Company, etc. Whenever the consent or
-----------------------------------
approval of Holders of a specified percentage of principal amount of Notes or
Exchange Notes is required hereunder, Notes or Exchange Notes, as applicable,
held by the Company or their respective Affiliates (other than subsequent
Holders of Notes or Exchange Notes if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Notes or Exchange Notes)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
18
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Company and you.
Very truly yours,
McKESSON CORPORATION
By: /s/ Nicholas A. Loiacono
-------------------------------
Name: Nicholas A. Loiacono
Title: Vice President, Finance
Accepted, February 24, 1998
SALOMON BROTHERS INC
BANCAMERICA ROBERTSON STEPHENS
J.P. MORGAN SECURITIES INC.
By: SALOMON BROTHERS INC
By: /s/ Anne Clarke Wolff
---------------------------------
Name:
Title:
<PAGE>
ANNEX A
Annex A
-------
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offers must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. Each Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Notes acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, ending on the close of business on the
180th day following the Expiration Date (as defined herein), it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
<PAGE>
ANNEX B
Annex B
-------
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Notes, where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution."
<PAGE>
ANNEX C
Plan of Distribution
--------------------
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offers must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Notes where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities. The Company has
agreed that, starting on the applicable Expiration Date and ending on the close
of business on the 180th day following such Expiration Date, it will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until 199 , all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sale of Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offers may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such Exchange Notes. Any broker-
dealer that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offers and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Act and any profit of any such resale of Exchange Notes and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. Each Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the applicable Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offers (including the expenses of any Special
Counsel for the holders of the Notes) other than commissions or concessions of
any brokers or dealers and will indemnify the holders of the Notes (including
any broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
<PAGE>
ANNEX D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:________________________________________________________________________
Address:______________________________________________________________________
______________________________________________________________________
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Notes, it represents that the Notes to
be exchanged for Exchange Notes were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such Exchange Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Act.
<PAGE>
ANNEX E
FORM OF LETTER TO BE PROVIDED BY ISSUER TO
THE DEPOSITORY TRUST COMPANY
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, CA 94104
___________________, 1998
The Depository Trust Company
55 Water Street, 49th Floor
New York, NY 10041
Attn: General Counsel's Office
Ladies and Gentlemen:
We refer to the Letter of Representations, dated , 1998 (the
"Letter of Representations"), from McKesson Corporation (the "Issuer") and The
First National Bank of Chicago, as trustee (the "Trustee") to the Depository
Trust Company ("DTC") regarding the Issuer's 6.30% Notes due March 1, 2005 and
6.40% Notes due March 1, 2008 (the "Old Securities"). The CUSIP numbers of the
Old Securities are and , respectively, for qualified
institutional buyers, and , respectively, for buyers who
were sold Old Securities in compliance with Regulation S under the Securities
Act of 1933, as amended and and , respectively, for
institutional accredited investors. The Issuer and the Trustee hereby agree and
notify DTC that as of , 1998, the Securities and Exchange
Commission declared effective a Registration Statement (File No. )
with respect to an offering of the Issuer's % Exchange Notes due
, 2005 and % Exchange Notes due , 2008 (the "New Securities")
(CUSIP Nos. and , respectively) in exchange for the Old
Securities. Following the consummation of the exchange offer and the
cancellation of the global securities representing the Old Securities, the
Issuer and the Trustee agree that, with the exception of the Representations for
Rule 144A Securities attached thereto, the Letter of Representations and any
applicable riders thereto shall remain in full force and effect with respect to
the New Securities.
Very Truly yours.
McKESSON CORPORATION
By: __________________________________
Name:
Title:
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By: __________________________________
Name:
Title:
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: __________________________________
Name:
Title:
<PAGE>
Exhibit 23.1
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration
Statement of McKesson Corporation ("McKesson") on Form S-4 of our report dated
May 16, 1997 on McKesson's consolidated financial statements and consolidated
supplementary financial schedule, both such reports appearing in the Annual
Report on Form 10-K of McKesson Corporation for the year ended March 31, 1997,
and our report on FoxMeyer Corporation's consolidated financial statements
dated June 28, 1996 (March 18, 1997 as to paragraph seven of Note Q), which
report expresses an unqualified opinion and includes an explanatory paragraph
relating to the sale of the principal assets of FoxMeyer corporation and its
Chapter 7 bankruptcy filing, appearing in the Current Report on Form 8-K/A of
McKesson Corporation filed with the Securities and Exchange Commission on April
28, 1997.
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
Dallas, Texas
March 31, 1998
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
Each of the undersigned directors and each of the undersigned officers of
McKesson Corporation, a Delaware corporation (the "Company"), does hereby
constitute and appoint Ivan D. Meyerson and Nancy A. Miller, and each of them,
as his or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead in any and all capacities, to execute and deliver in his or her name
and on his or her behalf:
(a) one or more Registration Statements (with all exhibits thereto) of the
Company on Form S-4 or any other appropriate form proposed to be filed by the
Company with the Securities and Exchange Commission (the "SEC") (including,
without limitation, Registration Statements filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended, or any successor thereto (the
"Securities Act")) for the purpose of registering under the Securities Act,
issues of notes substantially similar to the Company's 6.30% Notes due March 1,
2005 and 6.40% Notes due March 1, 2008 (collectively, the "Notes");
(b) any and all supplements and amendments (including, without limitation,
post-effective amendments) to such Registration Statements; and
(c) any and all other documents and instruments in connection with the
registration of the Notes which such attorneys-in-fact and agents, or any one of
them, deem necessary or advisable to enable the Company to comply with (i) the
Securities Act, the Securities Exchange Act of 1934, as amended, and the other
federal securities laws of the United States of America and the rules,
regulations and requirements of the SEC in respect of any thereof; (ii) the
securities or Blue Sky laws of any state or other governmental subdivision of
the United States of America; and (iii) the securities or similar applicable
laws of any foreign jurisdiction;
and each of the undersigned hereby grants unto such attorneys-in-fact and
agents, and each of them, or his or her substitute or substitutes, each and
every act and thing
<PAGE>
requisite and necessary to be done in and about the premises as fully as to all
intents and purposes as he or she might or could do in person, and does hereby
ratify and confirm as his or her own acts and deeds all that such attorneys-in-
fact and agents, and each of them, or his or her substitute or substitutes,
shall lawfully do or cause to be done by virtue hereof. Each one of such
attorneys-in-fact and agents shall have, and may exercise, all of the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of
attorney this 25th day of March, 1998.
/s/ Mark A. Pulido /s/ John M. Pietruski
- -------------------------- --------------------------
Mark A. Pulido John M. Pietruski
/s/ Richard H. Hawkins /s/ David S. Pottruck
- -------------------------- --------------------------
Richard H. Hawkins David S. Pottruck
/s/ Heidi E. Yodowitz /s/ Carl E. Reichardt
- -------------------------- --------------------------
Heidi E. Yodowitz Carl E. Reichardt
/s/ Alan Seelenfreund /s/ Jane E. Shaw
- -------------------------- --------------------------
Alan Seelenfreund Jane E. Shaw
/s/ Mary G. F. Bitterman /s/ Robert H. Waterman, Jr.
- -------------------------- --------------------------
Mary G. F. Bitterman Robert H. Waterman, Jr.
/s/ Tully M. Friedman
- --------------------------
Tully M. Friedman
2
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) _____
_____________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_____________________
McKESSON CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 94-3207296
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
McKESSON PLAZA ONE POST STREET
San Francisco, CA 94104
(Address of principal executive offices) (Zip Code)
6.30% Exchange Notes due March 1, 2005
6.40% Exchange Notes due March 1, 2008
(Title of Indenture Securities)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
------------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 26th day of March, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /s/ Steven M. Wagner
------------------------------------------
STEVEN M. WAGNER
VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
SUNAMERICA INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 2,
1996 (REGISTRATION NO. 333-14201).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 26, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between McKesson
Corporation and The First National Bank of Chicago, as Trustee, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ Steven M. Wagner
-----------------------------------------
STEVEN M. WAGNER
VICE PRESIDENT
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31,1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400
Dollar Amounts in ----
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and
coin(1)............................................... 0081 4,267,336 1.a.
b. Interest-bearing balances(2).......................... 0071 6,893,837 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B,
column A)............................................. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B,
column D)............................................. 1773 5,691,722 2.b.
3. Federal funds sold and securities purchased under
agreements to resell..................................... 1350 6,339,940 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from
Schedule RC-C)........................................ RCFD 2122 25,202,984 4.a.
b. LESS: Allowance for loan and lease losses............. RCFD 3123 419,121 4.b.
c. LESS: Allocated transfer risk reserve................. RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance,
and reserve (item 4.a minus 4.b and 4.c)................ 2125 24,783,863 4.d.
5. Trading assets (from Schedule RD-D)...................... 3545 6,703,332 5.
6. Premises and fixed assets (including capitalized
leases).................................................. 2145 743,426 6.
7. Other real estate owned (from Schedule RC-M)............. 2150 7,727 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M)................ 2130 134,959 8.
9. Customers' liability to this bank on acceptances
outstanding.............................................. 2155 644,340 9.
10. Intangible assets (from Schedule RC-M)................... 2143 268,501 10.
11. Other assets (from Schedule RC-F)........................ 2160 2,004,432 11.
12. Total assets (sum of items 1 through 11)................. 2170 58,483,415 12.
</TABLE>
__________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1).................................. RCON 2200 21,756,846 13.a
(1) Noninterest-bearing(1).................................... RCON 6631 9,197,227 13.a.1
(2) Interest-bearing.......................................... RCON 6636 559,619 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................ RCFN 2200 14,811,410 13.b.
(1) Noninterest bearing....................................... RCFN 6631 332,801 13.b.1
(2) Interest-bearing.......................................... RCFN 6636 14,478,609 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,535,422 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 43,763 15.a
b. Trading liabilities (from Schedule RC-D)...................... RCFD 3548 6,523,239 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less................ RCFD 2332 1,360,165 16.a
b. With a remaining maturity of one year through three years A547 576,492 16.b
c. With a remaining maturity of more than three years............ A548 703,981 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding RCFD 2920 644,341 18
19. Subordinated notes and debentures (2)............................ RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)........................... RCFD 2930 1,322,077 20
21. Total liabilities (sum of items 13 through 20)................... RCFD 2948 53,987,736 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.................... RCFD 3838 0 23
24. Common stock..................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock)......... RCFD 3839 2,999,001 25
26. a. Undivided profits and capital reserves........................ RCFD 3632 1,273,239 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities................................................... RCFD 8434 24,096 26.b.
27. Cumulative foreign currency translation adjustments.............. RCFD 3284 (1,515) 27
28. Total equity capital (sum of items 23 through 27)................ RCFD 3210 4,495,679 28
29. Total liabilities and equity capital (sum of items 21 and 28).... RCFD 3300 58,483,415 29
</TABLE>
<TABLE>
<CAPTION>
Memorandum
<S> <C>
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that Number
best describes the most comprehensive level of auditing work performed ---------------
for the bank by independent external auditors as of any date during 1996............. RCFD 6724.. N/A M.1
---------------
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
McKESSON CORPORATION
OFFER TO EXCHANGE ITS 6.30% EXCHANGE NOTES DUE MARCH 1, 2005
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 6.30% NOTES DUE MARCH 1, 2005
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1998, UNLESS EXTENDED. TENDERED
SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER
Delivery To: The First National Bank of Chicago (the "Exchange Agent")
By Mail: By Hand or Overnight Delivery:
(Registered or Certified
Mail recommended)
The First National Bank of Chicago The First National Bank of Chicago
c/o First Chicago Trust c/o First Chicago Trust
Company of New York Company of New York
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, New York 10005 New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus dated , 1998 (the "Prospectus") of McKesson Corporation (the
"Company") and this Letter of Transmittal (the "Letter of Transmittal"), which
together constitute the Company's offer (the "Exchange Offer") to exchange an
aggregate principal amount of up to $150,000,000 6.30% Exchange Notes due
March 1, 2005 (the "Exchange Notes due 2005") for a like principal amount of
the Company's outstanding 6.30% Notes due March 1, 2005 (the "Private Notes
due 2005").
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Company in its sole discretion, extends the Exchange
Offer. The Company reserves the right to extend the Exchange Offer at its
discretion, in which event the term "Expiration Date" shall mean the time and
date when the Exchange Offer as so extended shall expire. The Company shall
notify the holders of the Private Notes due 2005 of any extension by means of
a press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
<PAGE>
The Exchange Notes due 2005 will bear interest from the most recent date to
which interest has been paid on the Private Notes due 2005 or, if no interest
has been paid, from February 24, 1998. Accordingly, if the relevant record
date for interest payment occurs after the consummation of the Exchange Offer,
registered holders of Exchange Notes due 2005 on such record date will receive
interest accruing from the most recent date to which interest has been paid
or, if no interest has been paid, from February 24, 1998. If, however, the
relevant record date for interest payments occurs prior to the consummation of
the Exchange Offer, registered holders of Private Notes due 2005 on such
record date will receive interest accruing from the most recent date to which
interest has been paid or, if no interest has been paid, from February 24,
1998. Holders of Private Notes due 2005 whose Private Notes due 2005 are
accepted for exchange will not receive any payment in respect of accrued
interest on such Private Notes due 2005 otherwise payable on any interest
payment date the record date for which occurs on or after consummation of the
Exchange Offer.
The Exchange Offer is not conditioned upon any minimum principal amount of
Private Notes due 2005 being tendered for exchange. However, the Exchange
Offer is subject to certain conditions. Please see the Prospectus under the
section entitled "The Exchange Offers--Certain Conditions to the Exchange
Offers."
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of Private Notes due 2005 in any jurisdiction in
which the making or acceptance of the Exchange Offer would not be in
compliance with the laws of such jurisdiction.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus. As used herein, the term "Holder" means a holder
of Private Notes due 2005, including any participant ("DTC Participant") in
the book-entry transfer facility system of The Depository Trust Company
("DTC") whose name appears on a security position listing as the owner of the
Private Notes due 2005. As used herein, the term "Certificates" means physical
certificates representing Private Notes due 2005.
To participate in the Exchange Offer, Holders must tender by (a) book-entry
transfer pursuant to the procedures set forth in the Prospectus under "The
Exchange Offers--Procedures for Tendering Private Notes," or (b) forwarding
Certificates herewith. Holders who are DTC Participants tendering by book-
entry transfer must execute such tender through the Automated Tender Offer
Program ("ATOP") of DTC. A Holder using ATOP should transmit its acceptance to
DTC on or prior to the Expiration Date. DTC will verify such acceptance,
execute a book-entry transfer of the tendered Private Notes due 2005 into the
Exchange Agent's account at DTC and then send to the Exchange Agent
confirmation of such book-entry transfer (a "Book-Entry Confirmation"),
including an agent's message ("Agent's Message") confirming that DTC has
received an express acknowledgement from such Holder that such Holder has
received and agrees to be bound by this Letter of Transmittal and that the
Company may enforce this Letter of Transmittal against such Holder. The Book-
Entry Confirmation must be received by the Exchange Agent in order for the
tender relating thereto to be effective. Book-entry transfer to DTC in
accordance with DTC's procedures does not constitute delivery of the Book-
Entry Confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as this Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in order for such
tender to be effective.
Holders of Private Notes due 2005 who cannot complete the procedures for
delivery by book-entry transfer of such Private Notes due 2005 on a timely
basis or who cannot deliver their Certificates for such Private Notes due 2005
and all other required documents to the Exchange Agent on or prior to the
Expiration Date, must, in order to participate in the Exchange Offer, tender
their Private Notes due 2005 according to the guaranteed delivery procedures
set forth in the Prospectus under "The Exchange Offers--Procedures for
Tendering Private Notes due 2005."
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE FOLLOWING BOX
2
<PAGE>
List below the Private Notes due 2005 to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate numbers
and principal amount of Private Notes due 2005 should be listed on a separate
signed schedule affixed hereto.
DESCRIPTION OF PRIVATE NOTES DUE 2005
(SEE INSTRUCTIONS 2, 3, AND 8)
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------
1 2 3
- -------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF
PRIVATE NOTES DUE 2005
AGGREGATE PRINCIPAL TENDERED(2) (MUST BE IN
TITLE OF SECURITIES AND AMOUNT OF PRIVATE DENOMINATIONS OF $1,000 OR
CERTIFICATE NUMBER(S)(1) NOTES DUE 2005 INTEGRAL MULTIPLES THEREOF)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
<S> <C> <C> <C>
Total
</TABLE>
(1) Certificate numbers not required if Private Notes due 2005 are being
tendered by book-entry transfer.
(2) Unless otherwise indicated, a holder will be deemed to have tendered ALL
of the Private Notes due 2005 represented in column 2.
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2005 ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:_________________________________________________
Account Number:________________________________________________________________
Transaction Code Number:_______________________________________________________
3
<PAGE>
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2005 ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT
AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):_______________________________________________
Window Ticket Number (if any):_________________________________________________
Date of Execution of Notice of Guaranteed Delivery:____________________________
If delivered by book-entry transfer, complete the following:
Account Number:________________________________________________________________
Transaction Code Number:_______________________________________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:__________________________________________________________________________
Address:_______________________________________________________________________
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Private Notes due 2005 indicated above. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Subject to, and effective upon, the acceptance for exchange of the Private
Notes due 2005 tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest
in and to such Private Notes due 2005 as are being tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent its
agent and attorney-in-fact (with full knowledge that the Exchange Agent also
acts as the agent of the Company) with respect to the tendered Private Notes
due 2005 with full power of substitution to (i) deliver certificates for such
Private Notes due 2005 to the Company and deliver all accompanying evidences
of transfer and authenticity to, or upon the order of, the Company (ii)
present such Private Notes due 2005 for transfer on the books of the Company
and (iii) receive for the account of the Company all benefits and otherwise
exercise all rights of the beneficial ownership of such Private Notes due
2005, all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed to be irrevocable and
coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Private Notes due
2005 tendered hereby and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that (i) any
Exchange Notes due 2005 acquired in exchange for Private Notes due 2005
tendered hereby will have been acquired in the ordinary course of business of
the person receiving such Exchange Notes due 2005, whether or not such person
is the undersigned, (ii) neither the holder nor any such other person has an
arrangement or understanding with any person to participate in the
"distribution" of such Exchange Notes due 2005 within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") and (iii) neither
the holder nor any such other person is an "affiliate" of the Company as
described in Rule 405 under the Securities Act.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to
third parties, that the Exchange Notes due 2005 issued in exchange for the
Private Notes due 2005 pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than
holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act.
However, the undersigned acknowledges that any purchaser of Private Notes due
2005 who is an affiliate of the Company within the meaning of Rule 405 under
the Securities Act or who intends to participate in the Exchange Offer for the
purpose of distributing the Exchange Notes, or any broker-dealer who purchased
the Private Notes from the Company to resell pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act (i)
will not be able to rely on the interpretations of the staff of the Commission
set forth in the above-mentioned no-action letters, (ii) will not be entitled
to tender its Private Notes due 2005 in the Exchange Offer and (iii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Private Notes
due 2005 unless such sale or transfer is made pursuant to an exemption from
such requirements. The undersigned also acknowledges that the Company has not
sought its own no-action letter and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of the
Exchange Notes due 2005. If the undersigned is a broker-dealer that
5
<PAGE>
will receive Exchange Notes due 2005 for its own account in exchange for
Private Notes due 2005, it represents that the Private Notes due 2005 to be
exchanged for Exchange Notes due 2005 were acquired by it as a result of
market-making activities or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes
due 2005; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment, transfer and sale of the Private Notes
due 2005 tendered hereby. All authority conferred or agreed to be conferred in
this Letter of Transmittal and every obligation of the undersigned hereunder
shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in the instructions contained in this Letter of
Transmittal.
For the purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Private Notes due 2005 when, as and if the Company
has given oral and written notice thereof to the Exchange Agent.
If any tendered Private Notes due 2005 are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Private Notes due 2005 will be returned (or, in the case of Private
Notes due 2005 tendered by book-entry transfer through DTC, will be promptly
credited to an account maintained at DTC), without expense, to the undersigned
at the address shown below or at a different address as may be indicated
herein under the "Special Delivery Instructions" as promptly as practicable
after the Expiration Date.
The undersigned understands that tenders of Private Notes due 2005 pursuant
to the procedures described under the section entitled "The Exchange Offers--
Procedures for Tendering Private Notes" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes due 2005 (and, if
applicable, substitute certificates representing Private Notes due 2005 for
any Private Notes due 2005 not exchanged) in the name(s) of the undersigned
or, in the case of a book-entry delivery of Private Notes due 2005, please
credit the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under the box entitled "Special Delivery Instructions"
below, please send the Exchange Notes due 2005 (and, if applicable, substitute
certificates representing Private Notes due 2005 for any Private Notes due
2005 not exchanged) to the undersigned at the address shown above in the box
entitled "Description of Private Notes due 2005." In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the certificates representing the Exchange Notes due
2005 issued in exchange for the Private Notes due 2005 accepted for exchange
in the name(s) of, and return any certificates for Private Notes due 2005 not
tendered or not exchanged to, the person(s) so indicated. The undersigned
understands that the Company has no obligation pursuant to the "Special
Issuance Instructions" and "Special Delivery Instructions" to transfer any
Private Notes due 2005 from the name of the registered holder(s) thereof if
the Company does not accept for exchange any of the Private Notes due 2005 so
tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF PRIVATE
NOTES DUE 2005" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED
TO HAVE TENDERED THE PRIVATE NOTES DUE 2005 AS SET FORTH IN SUCH BOX ABOVE.
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
I hereby TENDER the Private Notes due 2005 described above in the box
entitled "Description of Private Notes due 2005" pursuant to the terms of the
Exchange Offer.
X___________________________________ __________________________________, 1998
X___________________________________ __________________________________, 1998
X___________________________________ __________________________________, 1998
Signature(s) of Owner(s) Date
If a holder is tendering any Private Notes due 2005, this Letter of
Transmittal must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Private Notes due 2005 or on a
security position listing or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or
other person acting in a fiduciary or representative capacity, please set
forth full title. See Instruction 4.
Name(s):________________________________________________________________________
(Please Type or Print)
________________________________________________________________________________
Capacity:_______________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 4)
Signature(s) Guaranteed by an Eligible Institution:_____________________________
(Authorized Signature)
________________________________________________________________________________
(Title)
________________________________________________________________________________
(Name of Firm)
________________________________________________________________________________
(Area Code and Telephone Number)
Dated: _______________________, 1998
7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5) (SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if To be completed ONLY if
certificates for Private Notes due certificates for Private Notes due
2005 not exchanged and/or Exchange 2005 not exchanged and/or Exchange
Notes due 2005 are to be issued in Notes due 2005 are to be sent to
the name of and sent to someone someone other than the person or
other than the person or person(s) persons whose signature(s)
whose signature(s) appear(s) on appear(s) on this Letter of
this Letter of Transmittal above, Transmittal above or to such
or if Private Notes due 2005 person or persons at an address
delivered by book-entry transfer other than shown in the box
which are not accepted for entitled "Description of Private
exchange are to be returned by Notes due 2005" on this Letter of
credit to an account maintained at Transmittal above.
DTC other than the account
indicated above.
Issue Exchange Notes due 2005 Mail Exchange Notes due 2005
and/or Private Notes due 2005 to: and/or Private Notes due 2005 to:
Name_______________________________ Name_______________________________
(Please Type or Print) (Please Type or Print)
_______________________________ _______________________________
(Please Type or Print) (Please Type or Print)
Address____________________________ Address____________________________
____________________________ ____________________________
(Zip Code) (Zip Code)
___________________________________
Employer Identification or
Social Security Number
(Complete Substitute Form W-9)
[_]Credit unexchanged Private
Notes due 2005 delivered by
book-entry transfer to the DTC
account set forth below.
___________________________________
(DTC Account Number, if
applicable)
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
This Letter to Transmittal is to be completed either if (a) Certificates are
to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Exchange
Offers--Procedures for Tendering Private Notes" in the Prospectus and an
Agent's Message is not delivered. Holders who are DTC Participants tendering
by book-entry transfer must execute such tender through DTC's ATOP system. A
holder using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date. DTC will verify such acceptance, execute a book-entry
transfer of the tendered Private Notes due 2005 into the Exchange Agent's
account at DTC and then send to the Exchange Agent a Book-Entry Confirmation,
including an Agent's Message confirming that DTC has received an express
acknowledgement from such holder that such holder has received and agrees to
be bound by this Letter of Transmittal and that the Company may enforce this
Letter of Transmittal against such holder. The Book-Entry Confirmation must be
received by the Exchange Agent in order for the tender relating thereto to be
effective. Book-entry transfer to DTC in accordance with DTC's procedure does
not constitute delivery of the Book-Entry Confirmation to the Exchange Agent.
Private Notes due 2005 tendered hereby must be in denominations of $1,000 and
integral multiples thereof.
If the tender is not made through ATOP, certificates representing Private
Notes due 2005, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by the Prospectus and this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date in order for such tender to be
effective.
Holders who wish to tender their Private Notes due 2005 and (i) whose
Private Notes due 2005 are not immediately available, or (ii) cannot deliver
their Private Notes due 2005, this Letter of Transmittal or any other
documents required hereby to the Exchange Agent prior to the Expiration Date
or (iii) who cannot comply with the procedures for book-entry transfer on a
timely basis must tender their Private Notes due 2005 according to the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (i) such tender must be made through an Eligible Institution (as
defined below); (ii) prior to the Expiration Date, the Exchange Agent must
have received from the Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Company (by fax transmission, mail or hand delivery) setting forth the
name and address of the holder, the certificate number(s) of such Private
Notes due 2005 (except in the case of book-entry tenders) and the principal
amount of Private Notes due 2005 tendered, stating that the tender is being
made thereby and guaranteeing that, within three NYSE trading days after the
Expiration Date, this Letter of Transmittal (or a copy hereof) together with
the certificate(s) representing the Private Notes due 2005 (except in the case
of book-entry tenders) and any other required documents will be deposited by
the Eligible Institution with the Exchange Agent; and (iii) such properly
completed and executed Letter of Transmittal (or a copy hereof), as well as
all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Private Notes due 2005 in proper form
for transfer or a Book-Entry Confirmation with respect to such Private Notes
due 2005, must be received by the Exchange Agent within three NYSE trading
days after the Expiration Date, all as provided in the Prospectus under the
section entitled "The Exchange Offers--Guaranteed Delivery Procedures." Any
holder who wishes to tender his Private Notes due 2005 pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to the Expiration Date.
As used in this Letter of Transmittal, "Eligible Institution" shall mean a
firm which is a member of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States.
All questions as to the validity, eligibility (including time of receipt),
acceptance and withdrawal of tendered Private Notes due 2005 will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and
all Private Notes due 2005 not
9
<PAGE>
properly tendered or any Private Notes due 2005 the Company's acceptance of
which would, in the opinion of counsel for the Company, be unlawful. The
Company also reserves the right to waive any defects, irregularities or
conditions of tender as to particular Private Notes due 2005. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the instructions in this Letter of Transmittal) shall be final and binding on
all parties. Unless waived, any defects or irregularities in connection with
tenders of Private Notes due 2005 must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Private Notes due 2005, nor shall
any of them incur any liability for failure to give such notification. Tenders
of Private Notes due 2005 will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any Private Notes due
2005 received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
See "The Exchange Offers" in the Prospectus.
2. TENDER BY HOLDER.
Only a holder of Private Notes due 2005 may tender such Private Notes due
2005 in the Exchange Offer. Any beneficial owner whose Private Notes due 2005
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on behalf of such
beneficial owner. If such beneficial owner wishes to tender on such owner's
own behalf; such owner must, prior to completing and executing this Letter of
Transmittal and delivering such owner's Private Notes due 2005, either make
appropriate arrangements to register ownership of the Private Notes due 2005
in such owner's name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
3. PARTIAL TENDERS AND WITHDRAWALS.
Tenders of Private Notes due 2005 will be accepted only in denominations of
$1,000 and integral multiples thereof. If less than all the Private Notes due
2005 are to be tendered, the tendering holder(s) should fill in the aggregate
principal amount of Private Notes due 2005 to be tendered in the box above
entitled "Description of Private Notes due 2005--Principal Amount of Private
Notes due 2005 Tendered." A reissued certificate representing the balance of
nontendered Private Notes due 2005 will be sent to such tendering holder
(except in the case of book-entry tenders), unless otherwise provided in the
appropriate box on this Letter of Transmittal, promptly after the Expiration
Date. ALL OF THE PRIVATE NOTES DUE 2005 DELIVERED TO THE EXCHANGE AGENT WILL
BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
Any holder who has tendered Private Notes due 2005 may withdraw the tender
by delivering written notice of withdrawal to the Exchange Agent prior to the
Expiration Date. For a withdrawal to be effective, a written notice of
withdrawal must be received by telegram, facsimile transaction (receipt
confirmed by telephone) or letter to the Exchange Agent at its address as set
forth on the first page of this Letter of Transmittal on or prior to the
Expiration Date. Any such notice of withdrawal must specify the name of the
person having tendered the Private Notes due 2005 to be withdrawn, identify
the Private Notes due 2005 to be withdrawn (including the principal amount of
such Private Notes due 2005), and (where certificates for Private Notes due
2005 have been transmitted) specify the name in which such Private Notes due
2005 are registered, if different from that of the withdrawing holder. If
certificates for Private Notes due 2005 have been delivered or otherwise
identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing holder must also submit the certificate numbers
of the particular certificates to be withdrawn and signed notice of withdrawal
with signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Private Notes due 2005 have been tendered pursuant to
the procedure for book entry transfer described above, any notice of
withdrawal must specify the name and number of the account at DTC to be
credited with the withdrawn Private Notes due 2005 and otherwise comply with
the procedures of such facility. All questions as to the validity, form and
eligibility
10
<PAGE>
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Private
Notes due 2005 so withdrawn will be deemed not to have been validly tendered
for exchange for purposes of the Exchange Offer. Any Private Notes due 2005
which have been tendered for exchange but which are not exchanged for any
reason will be returned to the Holder thereof without cost to such Holder (or,
in the case of Private Notes due 2005 tendered by book-entry transfer into the
Exchange Agent's account at DTC pursuant to the book-entry transfer procedures
described above, such Private Notes due 2005 will be credited to an account
maintained with DTC for the Private Notes due 2005) as soon as practicable
after withdrawal, rejection of tender or termination of the Exchange Offer.
Properly withdrawn Private Notes due 2005 may be retendered by following one
of the procedures described herein at any time on or prior to the Expiration
Date. See "The Exchange Offers--Withdrawal Rights" in the Prospectus.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURE.
If this Letter of Transmittal is signed by the registered holder of the
Private Notes due 2005 tendered hereby, the signature must correspond exactly
with the name as written on the face of the certificates (if applicable)
without any change whatsoever.
If any tendered Private Notes due 2005 are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Private Notes due 2005 are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Private Notes due 2005 specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If,
however, the Exchange Notes due 2005 to be issued, or any untendered Private
Notes due 2005 are to be reissued, to a person other than the registered
holder, then endorsements of any certificates transmitted hereby or separate
bond powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate bond powers, in
either case signed exactly as the name or names of the registered holder(s)
appear(s) on the certificate(s).
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted.
Endorsements on certificates for Private Notes due 2005 or signatures on
bond powers required by this Instruction 4 must be guaranteed by an Eligible
Institution which is a member of (a) the Securities Transfer Agents Medallion
Program, (b) the New York Stock Exchange Medallion Signature Program or (c)
the Stock Exchange Medallion Program.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Private Notes due 2005 are tendered: (i) by
a registered holder of such Private Notes due 2005 (which term, for purposes
of the Exchange Offer, includes any participant in the DTC system whose name
appears on a security position listing as the holder of such Private Notes due
2005) who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on this Letter of Transmittal; or (ii) for
the account of an Eligible Institution.
11
<PAGE>
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Private Notes due 2005 should indicate in the
applicable box the name and address in or to which Exchange Notes due 2005
issued pursuant to the Exchange Offer and/or substitute certificates
evidencing Private Notes due 2005 not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Private Notes due 2005 by book-entry transfer may
request that Private Notes due 2005 not exchanged be credited to such account
maintained at the DTC as such holder may designate hereon. If no such
instructions are given, such Private Notes due 2005 not exchanged will be
returned to the name or address of the person signing this Letter of
Transmittal.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Private Notes due 2005 to them or their order pursuant to the Exchange
Offer. If however, Exchange Notes due 2005 and/or substitute Private Notes due
2005 not exchanged are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Private
Notes due 2005 tendered hereby, or if tendered Private Notes due 2005 are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
transfer of Private Notes due 2005 to the Company or their order pursuant to
the Exchange Offer, the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence or payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Private Notes due 2005 specified in
this Letter of Transmittal.
7. WAIVER OF CONDITION.
Subject to the terms and conditions set forth in the Prospectus, the Company
reserves the absolute right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Private Notes due 2005, by execution of
this Letter of Transmittal, shall waive any right to receive notice of the
acceptance of their Private Notes due 2005 for exchange.
Neither the Company nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE NOTES DUE 2005.
Any holder whose Private Notes due 2005 have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
QUESTIONS RELATING TO THE PROCEDURE FOR TENDERING, AS WELL AS REQUESTS FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL, MAY BE
DIRECTED TO THE EXCHANGE AGENT, AT THE ADDRESS INDICATED ON THE FIRST PAGE OF
THIS LETTER OF TRANSMITTAL OR BY TELEPHONE AT (212) 240-8801.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a registered holder of Private Notes due
2005 or Exchange Notes due 2005 is required to provide the Trustee (as payor)
with such holder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below or otherwise establish a basis for exemption from
backup withholding. If such holder is an individual, the TIN is his social
security number. If the Trustee is not provided with the correct TIN, a $50
penalty may be imposed by the Internal Revenue Service, and payments made to
such holder with respect to Private Notes due 2005 or Exchange Notes due 2005
may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Trustee a properly completed Internal Revenue Service Form W-8, signed
under penalties of perjury, attesting to that holder's exempt status. A Form
W-8 can be obtained from the Trustee.
If backup withholding applies, the Trustee is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional U.S. federal income tax. Rather, the U.S. federal income tax
liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Private Notes
due 2005 or Exchange Notes due 2005, the holder is required to provide the
Trustee with: (i) the holder's correct TIN by completing the form below,
certifying that the TIN provided on Substitute Form W-9 is correct (or that
such holder is awaiting a TIN) and that (A) such holder is exempt from backup
withholding, (B) the holder has not been notified by the Internal Revenue
Service that the holder is subject to backup withholding as a result of
failure to report all interest or dividends or (C) the Internal Revenue
Service has notified the holder that the holder is no longer subject to backup
withholding; and (ii) if applicable, an adequate basis for exemption.
13
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE "IMPORTANT TAX INFORMATION" ABOVE)
PAYER'S NAME: THE FIRST NATIONAL BANK OF CHICAGO
PART 1--PLEASE PROVIDE YOUR TIN:__________________
TIN IN THE BOX AT RIGHT AND Social Security
CERTIFY BY SIGNING AND Number or
SUBSTITUTE DATING BELOW. Employee
Identification Number
--------------------------------------------------------
FORM W-9 PART 2--CERTIFICATION--Under PART 3
penalties of perjury, I certify
that:
DEPARTMENT OF THE (1) The number shown on this form Awaiting TIN [_]
TREASURY is my correct Taxpayer
INTERNAL REVENUE Identification Number (or I am
SERVICE waiting for a number to be
issued to me) and
PAYER'S REQUEST FOR (2) I am not subject to backup
TAXPAYER withholding because (i) I am
IDENTIFICATION exempt from backup
NUMBER (TIN) withholding, (ii) I have not
been notified by the Internal
Revenue Service ("IRS") that I
am subject to backup
withholding as a result of a
failure to report all interest
or dividends, or (iii) the IRS
has notified me that I am no
longer subject to backup
withholding.
--------------------------------------------------------
Certificate Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS
stating that you are no longer subject to backup
withholding, do not cross out such item (2).
SIGNATURE ___________________________________________
DATE_________________________________________________
NAME_________________________________________________
(Please Print)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
14
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the Notes due
2005 shall be retained until I provide a taxpayer identification number to
the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the
Internal Revenue Service as backup withholding and 31% of all reportable
payments made to me thereafter will be withheld and remitted to the Internal
Revenue Service until I provide a taxpayer identification number.
----------------------------------- -----------------------------------
Signature(s) Date
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH THE
CERTIFICATES FOR PRIVATE NOTES DUE 2005 (IF APPLICABLE) AND ALL OTHER REQUIRED
DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
15
<PAGE>
EXHIBIT 99.2
LETTER OF TRANSMITTAL
McKESSON CORPORATION
OFFER TO EXCHANGE ITS 6.40% EXCHANGE NOTES DUE MARCH 1, 2008
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 6.40% NOTES DUE MARCH 1, 2008
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1998, UNLESS EXTENDED. TENDERED
SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER
Delivery To: The First National Bank of Chicago (the "Exchange Agent")
By Mail: By Hand or Overnight Delivery:
(Registered or Certified
Mail recommended)
The First National Bank of Chicago The First National Bank of Chicago
c/o First Chicago Trust c/o First Chicago Trust
Company of New York Company of New York
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, New York 10005 New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus dated , 1998 (the "Prospectus") of McKesson Corporation (the
"Company") and this Letter of Transmittal (the "Letter of Transmittal"), which
together constitute the Company's offer (the "Exchange Offer") to exchange an
aggregate principal amount of up to $150,000,000 6.40% Exchange Notes due
March 1, 2008 (the "Exchange Notes due 2008") for a like principal amount of
the Company's outstanding 6.40% Notes due March 1, 2008 (the "Private Notes
due 2008").
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Company in its sole discretion, extends the
Exchange Offer. The Company reserves the right to extend the Exchange Offer at
its discretion, in which event the term "Expiration Date" shall mean the time
and date when the Exchange Offer as so extended shall expire. The Company
shall notify the holders of the Private Notes due 2008 of any extension by
means of a press release or other public announcement no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date.
<PAGE>
The Exchange Notes due 2008 will bear interest from the most recent date to
which interest has been paid on the Private Notes due 2008 or, if no interest
has been paid, from February 24, 1998. Accordingly, if the relevant record
date for interest payment occurs after the consummation of the Exchange Offer,
registered holders of Exchange Notes due 2008 on such record date will receive
interest accruing from the most recent date to which interest has been paid
or, if no interest has been paid, from February 24, 1998. If, however, the
relevant record date for interest payments occurs prior to the consummation of
the Exchange Offer, registered holders of Private Notes due 2008 on such
record date will receive interest accruing from the most recent date to which
interest has been paid or, if no interest has been paid, from February 24,
1998. Holders of Private Notes due 2008 whose Private Notes due 2008 are
accepted for exchange will not receive any payment in respect of accrued
interest on such Private Notes due 2008 otherwise payable on any interest
payment date the record date for which occurs on or after consummation of the
Exchange Offer.
The Exchange Offer is not conditioned upon any minimum principal amount of
Private Notes due 2008 being tendered for exchange. However, the Exchange
Offer is subject to certain conditions. Please see the Prospectus under the
section entitled "The Exchange Offers--Certain Conditions to the Exchange
Offers."
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of Private Notes due 2008 in any jurisdiction in
which the making or acceptance of the Exchange Offer would not be in
compliance with the laws of such jurisdiction.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus. As used herein, the term "Holder" means a holder
of Private Notes due 2008, including any participant ("DTC Participant") in
the book-entry transfer facility system of The Depository Trust Company
("DTC") whose name appears on a security position listing as the owner of the
Private Notes due 2008. As used herein, the term "Certificates" means physical
certificates representing Private Notes due 2008.
To participate in the Exchange Offer, Holders must tender by (a) book-entry
transfer pursuant to the procedures set forth in the Prospectus under "The
Exchange Offers--Procedures for Tendering Private Notes," or (b) forwarding
Certificates herewith. Holders who are DTC Participants tendering by book-
entry transfer must execute such tender through the Automated Tender Offer
Program ("ATOP") of DTC. A Holder using ATOP should transmit its acceptance to
DTC on or prior to the Expiration Date. DTC will verify such acceptance,
execute a book-entry transfer of the tendered Private Notes due 2008 into the
Exchange Agent's account at DTC and then send to the Exchange Agent
confirmation of such book-entry transfer (a "Book-Entry Confirmation"),
including an agent's message ("Agent's Message") confirming that DTC has
received an express acknowledgement from such Holder that such Holder has
received and agrees to be bound by this Letter of Transmittal and that the
Company may enforce this Letter of Transmittal against such Holder. The Book-
Entry Confirmation must be received by the Exchange Agent in order for the
tender relating thereto to be effective. Book-entry transfer to DTC in
accordance with DTC's procedures does not constitute delivery of the Book-
Entry Confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as well as this Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in order for such
tender to be effective.
Holders of Private Notes due 2008 who cannot complete the procedures for
delivery by book-entry transfer of such Private Notes due 2008 on a timely
basis or who cannot deliver their Certificates for such Private Notes due 2008
and all other required documents to the Exchange Agent on or prior to the
Expiration Date, must, in order to participate in the Exchange Offer, tender
their Private Notes due 2008 according to the guaranteed delivery procedures
set forth in the Prospectus under "The Exchange Offers--Procedures for
Tendering Private Notes due 2008."
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE FOLLOWING BOX
2
<PAGE>
List below the Private Notes due 2008 to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate numbers
and principal amount of Private Notes due 2008 should be listed on a separate
signed schedule affixed hereto.
DESCRIPTION OF PRIVATE NOTES DUE 2008
(SEE INSTRUCTIONS 2, 3, AND 8)
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------
1 2 3
- -------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT OF
PRIVATE NOTES DUE 2008
AGGREGATE PRINCIPAL TENDERED(2) (MUST BE IN
TITLE OF SECURITIES AND AMOUNT OF PRIVATE DENOMINATIONS OF $1,000 OR
CERTIFICATE NUMBER(S)(1) NOTES DUE 2008 INTEGRAL MULTIPLES THEREOF)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
<S> <C> <C> <C>
Total
</TABLE>
(1) Certificate numbers not required if Private Notes due 2008 are being
tendered by book-entry transfer.
(2) Unless otherwise indicated, a holder will be deemed to have tendered ALL
of the Private Notes due 2008 represented in column 2.
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2008 ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:_________________________________________________
Account Number:________________________________________________________________
Transaction Code Number:_______________________________________________________
3
<PAGE>
[_]CHECK HERE IF TENDERED PRIVATE NOTES DUE 2008 ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT
AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):_______________________________________________
Window Ticket Number (if any):_________________________________________________
Date of Execution of Notice of Guaranteed Delivery:____________________________
If delivered by book-entry transfer, complete the following:
Account Number:________________________________________________________________
Transaction Code Number:_______________________________________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:__________________________________________________________________________
Address:_______________________________________________________________________
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Private Notes due 2008 indicated above. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Subject to, and effective upon, the acceptance for exchange of the Private
Notes due 2008 tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Company all right, title and interest
in and to such Private Notes due 2008 as are being tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent its
agent and attorney-in-fact (with full knowledge that the Exchange Agent also
acts as the agent of the Company) with respect to the tendered Private Notes
due 2008 with full power of substitution to (i) deliver certificates for such
Private Notes due 2008 to the Company and deliver all accompanying evidences
of transfer and authenticity to, or upon the order of, the Company (ii)
present such Private Notes due 2008 for transfer on the books of the Company
and (iii) receive for the account of the Company all benefits and otherwise
exercise all rights of the beneficial ownership of such Private Notes due
2008, all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed to be irrevocable and
coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Private Notes due
2008 tendered hereby and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that (i) any
Exchange Notes due 2008 acquired in exchange for Private Notes due 2008
tendered hereby will have been acquired in the ordinary course of business of
the person receiving such Exchange Notes due 2008, whether or not such person
is the undersigned, (ii) neither the holder nor any such other person has an
arrangement or understanding with any person to participate in the
"distribution" of such Exchange Notes due 2008 within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") and (iii) neither
the holder nor any such other person is an "affiliate" of the Company as
described in Rule 405 under the Securities Act.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to
third parties, that the Exchange Notes due 2008 issued in exchange for the
Private Notes due 2008 pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than
holders who are broker-dealers) without further compliance with the
registration and prospectus delivery provisions of the Securities Act.
However, the undersigned acknowledges that any purchaser of Private Notes due
2008 who is an affiliate of the Company within the meaning of Rule 405 under
the Securities Act or who intends to participate in the Exchange Offer for the
purpose of distributing the Exchange Notes, or any broker-dealer who purchased
the Private Notes from the Company to resell pursuant to Rule 144A under the
Securities Act or any other available exemption under the Securities Act (i)
will not be able to rely on the interpretations of the staff of the Commission
set forth in the above-mentioned no-action letters, (ii) will not be entitled
to tender its Private Notes due 2008 in the Exchange Offer and (iii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or transfer of the Private Notes
due 2008 unless such sale or transfer is made pursuant to an exemption from
such requirements. The undersigned also acknowledges that the Company has not
sought its own no-action letter and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances.
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of the
Exchange Notes due 2008. If the undersigned is a broker-dealer that
5
<PAGE>
will receive Exchange Notes due 2008 for its own account in exchange for
Private Notes due 2008, it represents that the Private Notes due 2008 to be
exchanged for Exchange Notes due 2008 were acquired by it as a result of
market-making activities or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes
due 2008; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment, transfer and sale of the Private Notes
due 2008 tendered hereby. All authority conferred or agreed to be conferred in
this Letter of Transmittal and every obligation of the undersigned hereunder
shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in the instructions contained in this Letter of
Transmittal.
For the purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Private Notes due 2008 when, as and if the Company
has given oral and written notice thereof to the Exchange Agent.
If any tendered Private Notes due 2008 are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Private Notes due 2008 will be returned (or, in the case of Private
Notes due 2008 tendered by book-entry transfer through DTC, will be promptly
credited to an account maintained at DTC), without expense, to the undersigned
at the address shown below or at a different address as may be indicated
herein under the "Special Delivery Instructions" as promptly as practicable
after the Expiration Date.
The undersigned understands that tenders of Private Notes due 2008 pursuant
to the procedures described under the section entitled "The Exchange Offers--
Procedures for Tendering Private Notes" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of
the Exchange Offer.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes due 2008 (and, if
applicable, substitute certificates representing Private Notes due 2008 for
any Private Notes due 2008 not exchanged) in the name(s) of the undersigned
or, in the case of a book-entry delivery of Private Notes due 2008, please
credit the account indicated above maintained at DTC. Similarly, unless
otherwise indicated under the box entitled "Special Delivery Instructions"
below, please send the Exchange Notes due 2008 (and, if applicable, substitute
certificates representing Private Notes due 2008 for any Private Notes due
2008 not exchanged) to the undersigned at the address shown above in the box
entitled "Description of Private Notes due 2008." In the event that both
"Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the certificates representing the Exchange Notes due
2008 issued in exchange for the Private Notes due 2008 accepted for exchange
in the name(s) of, and return any certificates for Private Notes due 2008 not
tendered or not exchanged to, the person(s) so indicated. The undersigned
understands that the Company has no obligation pursuant to the "Special
Issuance Instructions" and "Special Delivery Instructions" to transfer any
Private Notes due 2008 from the name of the registered holder(s) thereof if
the Company does not accept for exchange any of the Private Notes due 2008 so
tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF PRIVATE
NOTES DUE 2008" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED
TO HAVE TENDERED THE PRIVATE NOTES DUE 2008 AS SET FORTH IN SUCH BOX ABOVE.
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
I hereby TENDER the Private Notes due 2008 described above in the box
entitled "Description of Private Notes due 2008" pursuant to the terms of the
Exchange Offer.
X___________________________________ __________________________________, 1998
X___________________________________ __________________________________, 1998
X___________________________________ __________________________________, 1998
Signature(s) of Owner(s) Date
If a holder is tendering any Private Notes due 2008, this Letter of
Transmittal must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Private Notes due 2008 or on a
security position listing or by any person(s) authorized to become
registered holder(s) by endorsements and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, officer or
other person acting in a fiduciary or representative capacity, please set
forth full title. See Instruction 4.
Name(s):________________________________________________________________________
(Please Type or Print)
________________________________________________________________________________
Capacity:_______________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 4)
Signature(s) Guaranteed by an Eligible Institution:_____________________________
(Authorized Signature)
________________________________________________________________________________
(Title)
________________________________________________________________________________
(Name of Firm)
________________________________________________________________________________
(Area Code and Telephone Number)
Dated: _______________________, 1998
7
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5) (SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if To be completed ONLY if
certificates for Private Notes due certificates for Private Notes due
2008 not exchanged and/or Exchange 2008 not exchanged and/or Exchange
Notes due 2008 are to be issued in Notes due 2008 are to be sent to
the name of and sent to someone someone other than the person or
other than the person or person(s) persons whose signature(s)
whose signature(s) appear(s) on appear(s) on this Letter of
this Letter of Transmittal above, Transmittal above or to such
or if Private Notes due 2008 person or persons at an address
delivered by book-entry transfer other than shown in the box
which are not accepted for entitled "Description of Private
exchange are to be returned by Notes due 2008" on this Letter of
credit to an account maintained at Transmittal above.
DTC other than the account
indicated above.
Issue Exchange Notes due 2008 Mail Exchange Notes due 2008
and/or Private Notes due 2008 to: and/or Private Notes due 2008 to:
Name_______________________________ Name_______________________________
(Please Type or Print) (Please Type or Print)
_______________________________ _______________________________
(Please Type or Print) (Please Type or Print)
Address____________________________ Address____________________________
____________________________ ____________________________
(Zip Code) (Zip Code)
___________________________________
Employer Identification or
Social Security Number
(Complete Substitute Form W-9)
[_]Credit unexchanged Private
Notes due 2008 delivered by
book-entry transfer to the DTC
account set forth below.
___________________________________
(DTC Account Number, if
applicable)
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
This Letter to Transmittal is to be completed either if (a) Certificates are
to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Exchange
Offers--Procedures for Tendering Private Notes" in the Prospectus and an
Agent's Message is not delivered. Holders who are DTC Participants tendering
by book-entry transfer must execute such tender through DTC's ATOP system. A
holder using ATOP should transmit its acceptance to DTC on or prior to the
Expiration Date. DTC will verify such acceptance, execute a book-entry
transfer of the tendered Private Notes due 2008 into the Exchange Agent's
account at DTC and then send to the Exchange Agent a Book-Entry Confirmation,
including an Agent's Message confirming that DTC has received an express
acknowledgement from such holder that such holder has received and agrees to
be bound by this Letter of Transmittal and that the Company may enforce this
Letter of Transmittal against such holder. The Book-Entry Confirmation must be
received by the Exchange Agent in order for the tender relating thereto to be
effective. Book-entry transfer to DTC in accordance with DTC's procedure does
not constitute delivery of the Book-Entry Confirmation to the Exchange Agent.
Private Notes due 2008 tendered hereby must be in denominations of $1,000 and
integral multiples thereof.
If the tender is not made through ATOP, certificates representing Private
Notes due 2008, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by the Prospectus and this Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the Expiration Date in order for such tender to be
effective.
Holders who wish to tender their Private Notes due 2008 and (i) whose
Private Notes due 2008 are not immediately available, or (ii) cannot deliver
their Private Notes due 2008, this Letter of Transmittal or any other
documents required hereby to the Exchange Agent prior to the Expiration Date
or (iii) who cannot comply with the procedures for book-entry transfer on a
timely basis must tender their Private Notes due 2008 according to the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (i) such tender must be made through an Eligible Institution (as
defined below); (ii) prior to the Expiration Date, the Exchange Agent must
have received from the Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Company (by fax transmission, mail or hand delivery) setting forth the
name and address of the holder, the certificate number(s) of such Private
Notes due 2008 (except in the case of book-entry tenders) and the principal
amount of Private Notes due 2008 tendered, stating that the tender is being
made thereby and guaranteeing that, within three NYSE trading days after the
Expiration Date, this Letter of Transmittal (or a copy hereof) together with
the certificate(s) representing the Private Notes due 2008 (except in the case
of book-entry tenders) and any other required documents will be deposited by
the Eligible Institution with the Exchange Agent; and (iii) such properly
completed and executed Letter of Transmittal (or a copy hereof), as well as
all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Private Notes due 2008 in proper form
for transfer or a Book-Entry Confirmation with respect to such Private Notes
due 2008, must be received by the Exchange Agent within three NYSE trading
days after the Expiration Date, all as provided in the Prospectus under the
section entitled "The Exchange Offers--Guaranteed Delivery Procedures." Any
holder who wishes to tender his Private Notes due 2008 pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to the Expiration Date.
As used in this Letter of Transmittal, "Eligible Institution" shall mean a
firm which is a member of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States.
All questions as to the validity, eligibility (including time of receipt),
acceptance and withdrawal of tendered Private Notes due 2008 will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and
all Private Notes due 2008 not
9
<PAGE>
properly tendered or any Private Notes due 2008 the Company's acceptance of
which would, in the opinion of counsel for the Company, be unlawful. The
Company also reserves the right to waive any defects, irregularities or
conditions of tender as to particular Private Notes due 2008. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the instructions in this Letter of Transmittal) shall be final and binding on
all parties. Unless waived, any defects or irregularities in connection with
tenders of Private Notes due 2008 must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Private Notes due 2008, nor shall
any of them incur any liability for failure to give such notification. Tenders
of Private Notes due 2008 will not be deemed to have been made until such
defects or irregularities have been cured or waived. Any Private Notes due
2008 received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
See "The Exchange Offers" in the Prospectus.
2. TENDER BY HOLDER.
Only a holder of Private Notes due 2008 may tender such Private Notes due
2008 in the Exchange Offer. Any beneficial owner whose Private Notes due 2008
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on behalf of such
beneficial owner. If such beneficial owner wishes to tender on such owner's
own behalf; such owner must, prior to completing and executing this Letter of
Transmittal and delivering such owner's Private Notes due 2008, either make
appropriate arrangements to register ownership of the Private Notes due 2008
in such owner's name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
3. PARTIAL TENDERS AND WITHDRAWALS.
Tenders of Private Notes due 2008 will be accepted only in denominations of
$1,000 and integral multiples thereof. If less than all the Private Notes due
2008 are to be tendered, the tendering holder(s) should fill in the aggregate
principal amount of Private Notes due 2008 to be tendered in the box above
entitled "Description of Private Notes due 2008--Principal Amount of Private
Notes due 2008 Tendered." A reissued certificate representing the balance of
nontendered Private Notes due 2008 will be sent to such tendering holder
(except in the case of book-entry tenders), unless otherwise provided in the
appropriate box on this Letter of Transmittal, promptly after the Expiration
Date. ALL OF THE PRIVATE NOTES DUE 2008 DELIVERED TO THE EXCHANGE AGENT WILL
BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
Any holder who has tendered Private Notes due 2008 may withdraw the tender
by delivering written notice of withdrawal to the Exchange Agent prior to the
Expiration Date. For a withdrawal to be effective, a written notice of
withdrawal must be received by telegram, facsimile transaction (receipt
confirmed by telephone) or letter to the Exchange Agent at its address as set
forth on the first page of this Letter of Transmittal on or prior to the
Expiration Date. Any such notice of withdrawal must specify the name of the
person having tendered the Private Notes due 2008 to be withdrawn, identify
the Private Notes due 2008 to be withdrawn (including the principal amount of
such Private Notes due 2008), and (where certificates for Private Notes due
2008 have been transmitted) specify the name in which such Private Notes due
2008 are registered, if different from that of the withdrawing holder. If
certificates for Private Notes due 2008 have been delivered or otherwise
identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing holder must also submit the certificate numbers
of the particular certificates to be withdrawn and signed notice of withdrawal
with signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Private Notes due 2008 have been tendered pursuant to
the procedure for book entry transfer described above, any notice of
withdrawal must specify the name and number of the account at DTC to be
credited with the withdrawn Private Notes due 2008 and otherwise comply with
the procedures of such facility. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties.
Any Private Notes due 2008 so withdrawn will be deemed not to have been
10
<PAGE>
validly tendered for exchange for purposes of the Exchange Offer. Any Private
Notes due 2008 which have been tendered for exchange but which are not
exchanged for any reason will be returned to the Holder thereof without cost
to such Holder (or, in the case of Private Notes due 2008 tendered by book-
entry transfer into the Exchange Agent's account at DTC pursuant to the book-
entry transfer procedures described above, such Private Notes due 2008 will be
credited to an account maintained with DTC for the Private Notes due 2008) as
soon as practicable after withdrawal, rejection of tender or termination of
the Exchange Offer. Properly withdrawn Private Notes due 2008 may be
retendered by following one of the procedures describe herein at any time on
or prior to the Expiration Date. See "The Exchange Offers--Withdrawal Rights"
in the Prospectus.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURE.
If this Letter of Transmittal is signed by the registered holder of the
Private Notes due 2008 tendered hereby, the signature must correspond exactly
with the name as written on the face of the certificates (if applicable)
without any change whatsoever.
If any tendered Private Notes due 2008 are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Private Notes due 2008 are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Private Notes due 2008 specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If,
however, the Exchange Notes due 2008 to be issued, or any untendered Private
Notes due 2008 are to be reissued, to a person other than the registered
holder, then endorsements of any certificates transmitted hereby or separate
bond powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate bond powers, in
either case signed exactly as the name or names of the registered holder(s)
appear(s) on the certificate(s).
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted.
Endorsements on certificates for Private Notes due 2008 or signatures on
bond powers required by this Instruction 4 must be guaranteed by an Eligible
Institution which is a member of (a) the Securities Transfer Agents Medallion
Program, (b) the New York Stock Exchange Medallion Signature Program or (c)
the Stock Exchange Medallion Program.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Private Notes due 2008 are tendered: (i) by
a registered holder of such Private Notes due 2008 (which term, for purposes
of the Exchange Offer, includes any participant in the DTC system whose name
appears on a security position listing as the holder of such Private Notes due
2008) who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on this Letter of Transmittal; or (ii) for
the account of an Eligible Institution.
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Private Notes due 2008 should indicate in the
applicable box the name and address in or to which Exchange Notes due 2008
issued pursuant to the Exchange Offer and/or substitute certificates
11
<PAGE>
evidencing Private Notes due 2008 not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Private Notes due 2008 by book-entry transfer may
request that Private Notes due 2008 not exchanged be credited to such account
maintained at the DTC as such holder may designate hereon. If no such
instructions are given, such Private Notes due 2008 not exchanged will be
returned to the name or address of the person signing this Letter of
Transmittal.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Private Notes due 2008 to them or their order pursuant to the Exchange
Offer. If however, Exchange Notes due 2008 and/or substitute Private Notes due
2008 not exchanged are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Private
Notes due 2008 tendered hereby, or if tendered Private Notes due 2008 are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
transfer of Private Notes due 2008 to the Company or their order pursuant to
the Exchange Offer, the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence or payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will be
billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Private Notes due 2008 specified in
this Letter of Transmittal.
7. WAIVER OF CONDITION.
Subject to the terms and conditions set forth in the Prospectus, the Company
reserves the absolute right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Private Notes due 2008, by execution of
this Letter of Transmittal, shall waive any right to receive notice of the
acceptance of their Private Notes due 2008 for exchange.
Neither the Company nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE NOTES DUE 2008.
Any holder whose Private Notes due 2008 have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
QUESTIONS RELATING TO THE PROCEDURE FOR TENDERING, AS WELL AS REQUESTS FOR
ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL, MAY BE
DIRECTED TO THE EXCHANGE AGENT, AT THE ADDRESS INDICATED ON THE FIRST PAGE OF
THIS LETTER OF TRANSMITTAL OR BY TELEPHONE AT (212) 240-8801.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a registered holder of Private Notes due
2008 or Exchange Notes due 2008 is required to provide the Trustee (as payor)
with such holder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below or otherwise establish a basis for exemption from
backup withholding. If such holder is an individual, the TIN is his social
security number. If the Trustee is not provided with the correct TIN, a $50
penalty may be imposed by the Internal Revenue Service, and payments made to
such holder with respect to Private Notes due 2008 or Exchange Notes due 2008
may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Trustee a properly completed Internal Revenue Service Form W-8, signed
under penalties of perjury, attesting to that holder's exempt status. A Form
W-8 may be obtained from the Trustee.
If backup withholding applies, the Trustee is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional U.S. federal income tax. Rather, the U.S. federal income tax
liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Private Notes
due 2008 or Exchange Notes due 2008, the holder is required to provide the
Trustee with: (i) the holder's correct TIN by completing the form below,
certifying that the TIN provided on Substitute Form W-9 is correct (or that
such holder is awaiting a TIN) and that (A) such holder is exempt from backup
withholding, (B) the holder has not been notified by the Internal Revenue
Service that the holder is subject to backup withholding as a result of
failure to report all interest or dividends or (C) the Internal Revenue
Service has notified the holder that the holder is no longer subject to backup
withholding; and (ii) if applicable, an adequate basis for exemption.
13
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE "IMPORTANT TAX INFORMATION" ABOVE)
PAYER'S NAME: THE FIRST NATIONAL BANK OF CHICAGO
PART 1--PLEASE PROVIDE YOUR TIN:__________________
TIN IN THE BOX AT RIGHT AND Social Security
CERTIFY BY SIGNING AND Number or
SUBSTITUTE DATING BELOW. Employee
Identification Number
--------------------------------------------------------
FORM W-9 PART 2--CERTIFICATION--Under PART 3
penalties of perjury, I certify
that:
DEPARTMENT OF THE (1) The number shown on this form Awaiting TIN [_]
TREASURY is my correct Taxpayer
INTERNAL REVENUE Identification Number (or I am
SERVICE waiting for a number to be
issued to me) and
PAYER'S REQUEST FOR (2) I am not subject to backup
TAXPAYER withholding because (i) I am
IDENTIFICATION exempt from backup
NUMBER (TIN) withholding, (ii) I have not
been notified by the Internal
Revenue Service ("IRS") that I
am subject to backup
withholding as a result of a
failure to report all interest
or dividends, or (iii) the IRS
has notified me that I am no
longer subject to backup
withholding.
--------------------------------------------------------
Certificate Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS
stating that you are no longer subject to backup
withholding, do not cross out such item (2).
SIGNATURE ___________________________________________
DATE_________________________________________________
NAME_________________________________________________
(Please Print)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT
TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
14
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments made to me on account of the Notes due
2008 shall be retained until I provide a taxpayer identification number to
the Exchange Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to the
Internal Revenue Service as backup withholding and 31% of all reportable
payments made to me thereafter will be withheld and remitted to the Internal
Revenue Service until I provide a taxpayer identification number.
----------------------------------- -----------------------------------
Signature(s) Date
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH THE
CERTIFICATES FOR PRIVATE NOTES DUE 2008 (IF APPLICABLE) AND ALL OTHER REQUIRED
DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
15
<PAGE>
Exhibit 99.3
NOTICE OF GUARANTEED DELIVERY FOR
McKESSON CORPORATION
This form or one substantially equivalent hereto must be used to accept the
Exchange Offers of McKesson Corporation (the "Company") made pursuant to the
Prospectus, dated , 1998 (the "Prospectus"), if certificates for the
outstanding 6.30% Notes due March 1, 2005 and 6.40% Notes due March 1, 2008 of
the Company (the "Private Notes") are not immediately available or if the
procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach The First National Bank
of Chicago (the "Exchange Agent") prior to 5:00 p.m., New York City time, on
the Expiration Date of the applicable Exchange Offer. Such form may be
delivered or transmitted by telegram, telex, facsimile transmission, mail or
hand delivery to the Exchange Agent as set forth below. In addition, in order
to utilize the guaranteed delivery procedure to tender Private Notes pursuant
to the Exchange Offers, completed, signed and dated applicable Letters of
Transmittal (or facsimiles thereof) must also be received by the Exchange
Agent prior to 5:00 p.m., New York City time, on the applicable Expiration
Date. Capitalized terms not defined herein are used as defined in the
Prospectus.
Delivery To: The First National Bank of Chicago, Exchange Agent
By Mail: By Hand or Overnight Delivery:
(Registered or Certified
Mail recommended)
The First National Bank of Chicago The First National Bank of Chicago
c/o First Chicago Trust c/o First Chicago Trust
Company of New York Company of New York
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, New York 10005 New York, New York 10005
Facsimile Transmissions:
(Eligible Institutions Only)
(212) 240-8938
To Confirm by Telephone
or for Information Call:
(212) 240-8801
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON SUCH LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letters of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Private Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offers--Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of 6.30% Notes due
March 1, 2005 Tendered:*
$ ___________________________________
If 6.30% Notes due March 1, 2005
_____________________________________ will be delivered by book-entry
Certificate Nos. (if available) transfer to The Depository Trust
Company, provide account number.
Total Principal Amount Represented
by Certificate(s) for 6.30% Notes
due March 1, 2005 :
Account Number: _____________________
If 6.40% Notes due March 1, 2008
$ ___________________________________ will be delivered by book-entry
transfer to The Depository Trust
Company, provide account number
Principal Amount of 6.40% Notes due
March 1, 2008 Tendered:
Account Number: _____________________
$ ___________________________________
_____________________________________
Certificate Nos. (if available)
Total Principal Amount Represented
by Certificate(s) for 6.40% Notes
due March 1, 2008:
- --------
* Must be denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
- -------------------------------------------------------------------------------
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES,
SUCCESSORS AND ASSIGNS OF THE UNDERSIGNED.
- -------------------------------------------------------------------------------
PLEASE SIGN HERE
X ___________________________________ ____________
X ___________________________________ ____________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: ______________
This Notice of Guaranteed Delivery must be signed by the holder(s) of
Private Notes as their name(s) appear(s) on certificates for Private Notes or
on a security position listing, or by person(s) authorized to become
registered holder(s) by endorsement and documents transmitted with this Notice
of Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Capacity: __________________________________________________________________
Address(es): __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of a registered national securities exchange, or a
member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the
United States, hereby guarantees that the certificates representing the
principal amount of Private Notes tendered hereby in proper form for transfer,
or timely confirmation of the book-entry transfer of such Private Notes into
the Exchange Agent's account at The Depository Trust Company pursuant to the
procedures set forth in "The Exchange Offers--Guaranteed Delivery Procedures"
section of the Prospectus, together with properly completed and duly executed
Letters of Transmittal (or a manually signed facsimile thereof) with any
required signature guarantee and any other documents required by the Letters
of Transmittal, will be received by the Exchange Agent at the address set
forth above, no later than three New York Stock Exchange trading days after
the date of execution hereof.
_____________________________________ ___________________________________
Name of Firm Authorized Signature
_____________________________________ ___________________________________
Address Title
_____________________________________ Name: _____________________________
Zip Code (Please Type or Print)
Area Code and Tel. No. ______________ Dated: ____________________________
NOTE: DO NOT SEND CERTIFICATES FOR PRIVATE NOTES WITH THIS FORM. CERTIFICATES
FOR PRIVATE NOTES SHOULD ONLY BE SENT WITH YOUR LETTERS OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.4
McKESSON CORPORATION
OFFERS FOR ALL OUTSTANDING
6.30% NOTES DUE MARCH 1, 2005 AND
6.40% NOTES DUE MARCH 1, 2008
IN EXCHANGE FOR
6.30% EXCHANGE NOTES DUE MARCH 1, 2005 AND
6.40% EXCHANGE NOTES DUE MARCH 1, 2008
TO:BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
McKesson Corporation (the "Company") is offering, upon and subject to the
terms and conditions set forth in the Prospectus, dated , 1998 (the
"Prospectus"), and the enclosed Letters of Transmittal (the "Letters of
Transmittal"), to exchange (the "Exchange Offers") its 6.30% Exchange Notes
due March 1, 2005 and 6.40% Exchange Notes due March 1, 2008, which have been
registered under the Securities Act of 1933, as amended (the "Exchange
Notes"), for its outstanding 6.30% Notes due March 1, 2005 and 6.40% Notes due
March 1, 2008 (the "Private Notes"), respectively. The Exchange Offers are
being made in order to satisfy certain obligations of the Company contained in
the Registration Rights Agreement dated February 24, 1998, by and among the
Company and the initial purchasers referred to therein.
We are requesting that you contact your clients for whom you hold Private
Notes regarding the Exchange Offers. For your information and for forwarding
to your clients for whom you hold Private Notes registered in your name or in
the name of your nominee, or who hold Private Notes registered in their own
names, we are enclosing the following documents:
1. Prospectus dated , 1998;
2. Each of the three Letters of Transmittal for your use and for the
information of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offers if certificates for Private Notes are not immediately available or
time will not permit all required documents to reach the Exchange Agent
prior to the applicable Expiration Date (as defined below) or if the
procedure for book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account
you hold Private Notes registered in your name or the name of your nominee,
with space provided for obtaining such clients' instructions with regard to
the Exchange Offers;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to The First National Bank of Chicago, the
Exchange Agent for the Private Notes.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFERS WILL EXPIRE AT 5:00
P.M, NEW YORK CITY TIME, ON , 1998, UNLESS ANY OF THE EXCHANGE OFFERS
ARE EXTENDED BY THE COMPANY (THE "EXPIRATION DATES"). PRIVATE NOTES TENDERED
PURSUANT TO THE EXCHANGE OFFERS MAY BE WITHDRAWN AT ANY TIME BEFORE THE
APPLICABLE EXPIRATION DATE.
To participate in the Exchange Offers, your clients must tender by having
you execute for them a book-entry transfer of tendered Private Notes into the
account of The First National Bank of Chicago, as Exchange Agent, at The
Depository Trust Company ("DTC") using DTC's Automated Tender Offer Program.
(Your clients may also tender by having certificates representing the Private
Notes, duly executed and properly completed
<PAGE>
applicable Letters of Transmittal (or facsimile thereof), with any required
signature guarantees, and any other required documents delivered to such
Exchange Agent.) The Letters of Transmittal and the Prospectus should be
consulted for complete instructions and information about participation in the
Exchange Offers.
If holders of Private Notes wish to tender, but it is impracticable for them
to forward their certificates for Private Notes prior to the expiration of the
applicable Exchange Offer or to comply with the book-entry transfer procedures
on a timely basis, a tender may be effected by following the guaranteed
delivery procedures described in the Prospectus under "The Exchange Offers--
Guaranteed Delivery Procedures."
The Company will, upon request, reimburse brokers, dealers, commercial banks
and trust companies for reasonable and necessary costs and expenses incurred
by them in forwarding the Prospectus and the related documents to the
beneficial owners of Private Notes held by them as nominee or in a fiduciary
capacity. The Company will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Private Notes pursuant to the Exchange Offers,
except as set forth in Instruction 6 of the applicable Letters of Transmittal.
Any inquiries you may have with respect to the Exchange Offers, or requests
for additional copies of the enclosed materials, should be directed to The
First National Bank of Chicago, the Exchange Agent for the Private Notes, at
its address and telephone number set forth on the front of the Letters of
Transmittal.
Very truly yours,
McKESSON CORPORATION
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF
EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFERS, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE PROSPECTUS OR THE APPLICABLE LETTERS OF TRANSMITTAL.
Enclosures
2
<PAGE>
EXHIBIT 99.5
McKESSON CORPORATION
OFFERS FOR ALL OUTSTANDING
6.30% NOTES DUE MARCH 1, 2005 AND
6.40% NOTES DUE MARCH 1, 2008
IN EXCHANGE FOR
6.30% EXCHANGE NOTES DUE MARCH 1, 2005 AND
6.40% EXCHANGE NOTES DUE MARCH 1, 2008
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated , 1998 (the
"Prospectus"), and the related Letters of Transmittal (the "Letters of
Transmittal"), relating to the offers (the "Exchange Offers") of McKesson
Corporation (the "Company") to exchange its 6.30% Exchange Notes due March 1,
2005 and 6.40% Exchange Notes due March 1, 2008, which have been registered
under the Securities Act of 1933, as amended (the "Exchange Notes"), for its
outstanding 6.30% Notes due March 1, 2005 and 6.40% Notes due March 1, 2008
(the "Private Notes"), respectively, upon the terms and subject to the
conditions described in the Prospectus and the applicable Letters of
Transmittal. The Exchange Offers are being made in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement
dated February 24, 1998, by and among the Company and the initial purchasers
referred to therein.
This material is being forwarded to you as the beneficial owner of the
Private Notes carried by us in your account but not registered in your name. A
TENDER OF SUCH PRIVATE NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf any or all of the Private Notes held by us for your account,
pursuant to the terms and conditions set forth in the enclosed Prospectus and
applicable Letters of Transmittal.
Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender your Private Notes on your behalf in accordance with
the provisions of the Exchange Offers. The Exchange Offers will expire at 5:00
p.m., New York City time, on , 1998, unless any of the Exchange Offers are
extended by the Company (the "Expiration Dates"). Any Private Notes tendered
pursuant to the Exchange Offers may be withdrawn at any time before the
applicable Expiration Date.
Your attention is directed to the following:
1. The Exchange Offers are for any and all Private Notes.
2. The Exchange Offers are subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offers--Certain Conditions
to the Exchange Offers."
3. Any transfer taxes incident to the transfer of Private Notes from the
holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the applicable Letters of Transmittal.
4. The Exchange Offers expire at 5:00 p.m., New York City time, on ,
1998, unless any of the Exchange Offers are extended by the Company.
If you wish to have us tender any or all of your Private Notes, please so
instruct us by completing, executing and returning to us the instruction form
on the back of this letter. THE LETTERS OF TRANSMITTAL ARE FURNISHED TO YOU
FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER YOUR
PRIVATE NOTES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFERS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offers made by McKesson
Corporation with respect to its Private Notes.
This will instruct you to tender the Private Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related applicable Letters of Transmittal.
Please tender the Private Notes held by you for my account as indicated
below:
Aggregate Principal Amount of
Private Notes
6.30% Notes due March 1, 2005
-------------------------------
6.40% Notes due March 1, 2008
-------------------------------
[_] Please do not tender any Private Notes held
by you for my account
Dated: , 1998
---------------------------------
-------------------------------
Signature(s)
-------------------------------
-------------------------------
-------------------------------
Please print name(s) here
-------------------------------
-------------------------------
Address(es)
-------------------------------
Area Code and Telephone Number
-------------------------------
Tax Identification or Social
Security No(s).
None of the Private Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Private Notes held by
us for your account.
<PAGE>
Exhibit 99.6
___________ ___, 1998
The First National Bank of Chicago
One North State Street
9th Floor
Chicago, IL 60602
Attention: Corporate Trust Services Division
Ladies and Gentlemen:
McKesson Corporation, a Delaware corporation (the "Company"), proposes to
make offers (the "Exchange Offers") to exchange any and all of its outstanding
6.30% Notes due March 1, 2005 and 6.40% Notes due March 1, 2008 (together, the
"Private Notes") for its 6.30% Exchange Notes due March 1, 2005 and 6.40%
Exchange Notes due March 1, 2008 (together, the "Exchange Notes"), respectively.
The terms and conditions of the Exchange Offers as currently contemplated are
set forth in a prospectus, dated __________ ____, 1998 (the "Prospectus"), to be
distributed to all record holders of the Private Notes. A copy of the Prospectus
is attached hereto as Exhibit A. The Private Notes and the Exchange Notes are
collectively referred to herein as the "Notes." Capitalized terms used but not
defined herein shall have the same meaning given them in the Prospectus.
A copy of each of the forms of the Letters of Transmittal, the form of the
Notice of Guaranteed Delivery, the form of Letter to Brokers, Dealers and the
form of Letter to Clients are attached hereto as Exhibit B.
The Company hereby appoints The First National Bank of Chicago to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offers.
References hereinafter to "you" shall refer to The First National Bank of
Chicago.
The Exchange Offers are expected to be commenced by the Company on or about
_____________ ___, 1998. The Letters of Transmittal accompanying the Prospectus
(or in the case of book entry securities, the ATOP system) are to be used by the
holders of the Private Notes to accept the Exchange Offers and contain
instructions with respect to (i) the delivery of certificates for Private Notes
tendered in connection therewith and (ii) the book entry transfer of Notes to
the Exchange Agent's account.
The Exchange Offers shall expire at 5:00 P.M., New York City time, on
___________ ___, 1998 or on such later date or time to which the Company may
extend any of the Exchange Offers (the "Expiration Dates"). Subject to the
terms and conditions set forth in the Prospectus, the Company expressly reserves
the right to extend any of the Exchange Offers from time to time by giving oral
(to be confirmed in writing) or written notice to you before 9:00 A.M., New York
City time, on the Business Day following the previously scheduled applicable
Expiration Date.
<PAGE>
The Company expressly reserves the right (i) to terminate any of the
Exchange Offers, and not to accept for exchange any Private Notes not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange Offers specified in the Prospectus under the caption "The
Exchange Offers -- Certain Conditions to the Exchange Offers" and (ii) to amend
any or all of the Exchange Offers. The Company will give you prompt oral
(confirmed in writing) or written notice of any amendment, termination or
nonacceptance of Private Notes.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are specifically
set forth in the section of the Prospectus captioned "The Exchange Offers" or as
specifically set forth herein; provided, however, that in no way will your
general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Private Notes at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Exchange Offers within two Business Days after the date of the Prospectus,
and any financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Private Notes by causing
the Book-Entry Transfer Facility to transfer such Private Notes into your
account in accordance with the Book-Entry Transfer Facility's Automated Tender
Offer Program ("ATOP").
3. You are to examine each of the Letters of Transmittal and certificates
for Private Notes (or confirmation of book-entry transfer into your account at
the Book-Entry Transfer Facility) and any other documents delivered or mailed to
you by or for holders of the Private Notes to ascertain whether: (i) the Letters
of Transmittal and any such other documents are duly executed and properly
completed in accordance with instructions set forth therein and (ii) the Private
Notes have otherwise been properly tendered. In each case where the Letters of
Transmittal or any other document has been improperly completed or executed or
any of the certificates for Private Notes are not in proper form for transfer or
some other irregularity in connection with the acceptance of the Exchange Offers
exists, you will endeavor to inform such holders of the need for fulfillment of
all requirements and to take any other action as may be necessary or advisable
to cause such irregularity to be corrected.
4. With the approval of any Vice President of the Company (a "Designated
Officer") (such approval, if given orally, to be confirmed in writing) or any
other party designated by any such Designated Officer in writing, you are
authorized to waive any irregularities in connection with any tender of Private
Notes pursuant to the Exchange Offers.
5. Tenders of Private Notes may be made only as set forth in the Letters of
Transmittal and in the section of the Prospectus captioned "The Exchange
Offers--Procedures for Tendering Private Notes," and Private Notes shall be
considered properly tendered to you only when tendered in accordance with the
procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Private Notes which any
Designated Officer of the Company shall approve as having been properly tendered
shall be considered to be properly tendered. Such approval, if given orally,
shall be confirmed in writing.
2
<PAGE>
6. You shall advise the Company with respect to any Private Notes received
subsequent to the Expiration Dates and accept its instructions with respect to
disposition of such Private Notes.
7. You shall accept tenders:
(a) in cases where the Private Notes are registered in two or more names
only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letters of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of such person's authority so to act is submitted; and
(c) from persons other than the registered holder of Private Notes provided
that customary transfer requirements, including satisfaction of any applicable
transfer taxes, are fulfilled.
You shall accept partial tenders of Private Notes where so indicated and as
permitted in the Letters of Transmittal and deliver certificates for Private
Notes to the transfer agent for division and return any untendered Private Notes
to the holder (or such other person as may be designated in the Letters of
Transmittal) as promptly as practicable after expiration or termination of the
applicable Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to any of the
Exchange Offers, the Company will notify you (such notice, if given orally, to
be confirmed in writing) of its acceptance, promptly after the applicable
Expiration Date, of all Private Notes properly tendered and you, on behalf of
the Company, will exchange such Private Notes for the corresponding Exchange
Notes and cause such Private Notes to be canceled by the Private Notes Trustee.
Delivery of Exchange Notes will be made on behalf of the Company by you at the
rate of $1,000 principal amount of Exchange Notes for each $1,000 principal
amount of the corresponding series of Private Notes tendered promptly after
notice (such notice, if given orally, to be confirmed in writing) of acceptance
of said Private Notes by the Company; provided, however, that in all cases,
Private Notes tendered pursuant to any of the Exchange Offers will be exchanged
only after timely receipt by you of (i) a Book-Entry Confirmation (as defined in
the Prospectus) with respect to such Private Notes or (ii) certificates for such
Private Notes and a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) with any required signature guarantees and all other
required documents. You shall issue Exchange Notes only in denominations of
$1,000 or any integral multiple thereof. Private Notes may be tendered in
denominations of $1,000 or any integral multiple thereof.
9. Tenders pursuant to the Exchange Offers are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letters of Transmittal, Private Notes tendered pursuant to the Exchange Offers
may be withdrawn at any time on or prior to the applicable Expiration Date.
10. The Company shall not be required to exchange any Private Notes
tendered if any of the conditions set forth in the Exchange Offers are not met.
Notice of any decision by the Company not to exchange any Private Notes tendered
shall be given orally (and confirmed in writing) by the Company to you.
3
<PAGE>
11. If, pursuant to the Exchange Offers, the Company does not accept for
exchange all or part of the Private Notes tendered because of an invalid tender,
the occurrence of certain other events set forth in the Prospectus under the
caption "The Exchange Offers -- Certain Conditions to the Exchange Offers" or
otherwise, you shall promptly after the expiration or termination of the
applicable Exchange Offer return those certificates for unaccepted Private Notes
(or effect appropriate book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that are in your
possession, to the persons who deposited them.
12. All certificates for reissued Private Notes, unaccepted Private Notes
or for Exchange Notes shall be forwarded (a) by first-class certified mail,
return receipt requested, under a blanket surety bond protecting you and the
Company from loss or liability arising out of the non-receipt or non-delivery of
such certificates; (b) by registered mail insured separately for the replacement
value of each of such certificates or (c) by effectuating appropriate book-entry
transfer.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically set
forth in the section of the Prospectus captioned "The Exchange Offers," the
Letters of Transmittal or herein or as may be subsequently agreed to in writing
by you and the Company;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates or the Private Notes represented thereby deposited with you
pursuant to the Exchange Offers, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offers
or the Letters of Transmittal or any other disclosure materials delivered in
connection therewith;
(c) shall not be obligated to take any legal action hereunder which might
in your reasonable judgment involve any expense or liability, unless you shall
have been furnished with indemnity reasonably satisfactory to you;
(d) may reasonably rely on and shall be protected in acting in reliance
upon any certificate, instrument, opinion, notice, letter, telegram or other
document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request, agreement or
other instrument whatsoever not only as to its due execution and validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, which you shall in good faith believe to be
genuine or to have been signed or represented by a proper person or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any Designated Officer of the Company;
4
<PAGE>
(g) may consult with counsel satisfactory to you, including counsel for the
Company, with respect to any questions relating to your duties and
responsibilities and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted to be taken by you hereunder in good faith and in accordance with the
advice or opinion of such counsel, provided that you shall promptly notify the
Company of any action taken or omitted by you in reliance upon such advice or
opinion; and
(h) shall not advise any person tendering Private Notes pursuant to the
Exchange Offers as to the wisdom of making such tender or as to the market value
or decline or appreciation in market value of any Private Notes.
15. You shall take such action as may from time to time be requested by the
Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letters of Transmittal and the
Notice of Guaranteed Delivery or such other forms as may be approved from time
to time by the Company, to all persons requesting such documents and to accept
and comply with telephone requests for information relating to the Exchange
Offers, provided that such information shall relate only to the procedures for
accepting (or withdrawing from) the Exchange Offers. The Company will furnish
you with copies of such documents at your request. All other requests for
information relating to the Exchange Offers shall be directed to the Company,
Attention: Nancy A. Miller, Vice President and Corporate Secretary.
16. You shall advise by facsimile transmission or telephone, and promptly
thereafter confirm in writing to Nancy A. Miller, Vice President and Corporate
Secretary of the Company, and such other person or persons as the Company may
request, daily (and more frequently during the weeks immediately preceding the
Expiration Dates) and as otherwise requested, as to the number of Private Notes
which have been tendered pursuant to the Exchange Offers and the items received
by you pursuant to this Agreement, separately reporting and giving cumulative
totals as to items properly received and items improperly received. In addition,
you will also inform, and cooperate in making available to, the Company or any
such other person or persons, upon oral request made from time to time, such
other information as it or such person reasonably requests. Such cooperation
shall include, without limitation, the granting by you to the Company and such
person as the Company may request, of access to those persons on your staff who
are responsible for receiving tenders, in order to ensure that immediately prior
to any of the Expiration Dates the Company shall have received information in
sufficient detail to enable it to decide whether to extend any of the Exchange
Offers. You shall prepare a final list of all persons whose tenders were
accepted, the aggregate principal amount of Private Notes tendered, the
aggregate principal amount of Private Notes accepted and deliver said list to
the Company promptly after the applicable Expiration Date.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities.
18. You hereby expressly waive any lien, encumbrance or right of set-off
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
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19. For services rendered as Exchange Agent hereunder, you shall be
entitled to compensation as set forth on Schedules I, II and III attached
hereto, plus reasonable out-of-pocket expenses and reasonable attorneys' fees,
incurred in connection with your services hereunder, within thirty days
following receipt by the Company of an itemized statement of such expenses and
fees in reasonable detail.
20. (a) The Company covenants and agrees to indemnify and hold you (which
for purposes of this paragraph shall include your directors, officers and
employees) harmless in your capacity as Exchange Agent hereunder from and
against any and all loss, liability, cost, damage, expense and claim, including
but not limited to reasonable attorneys' fees and reasonable expenses, incurred
by you as a result of, arising out of or in connection with the performance by
you of your duties under this Agreement or the compliance by you with the
instructions set forth herein or delivered hereunder; provided, however, that
the Company shall not be liable for indemnification or otherwise for any loss,
liability, cost, damage, expense or claim arising out of your gross negligence
or willful misconduct. In no case shall the Company be liable under this
indemnity with respect to any claim against you unless the Company shall be
notified by you, by letter or by facsimile confirmed by letter, of the written
assertion of a claim against you or of any other action commenced against you,
promptly after you shall have received any such written assertion or notice of
commencement of action. The Company shall be entitled to participate at its own
expense in the defense of any such claim or other action, and, if the Company so
elects, the Company may assume the defense of any suit brought to enforce any
such claim; provided that the Company shall not be entitled to assume the
defense of any such action if the named parties to such action include both the
Company and you and representation of both parties by the same legal counsel
would, in the written opinion of counsel to you, be inappropriate due to actual
or potential conflicting interests between them. In the event that the Company
shall assume the defense of any such suit or threatened action in respect of
which indemnification may be sought hereunder, the Company shall not be liable
for the fees and expenses of any counsel thereafter retained by you. The Company
shall not be liable under this paragraph for the reasonable fees and reasonable
expenses of more than one legal counsel for you.
(b) You agree that, without the prior written consent of the Company (which
consent shall not be unreasonably withheld), you will not settle, compromise or
consent to the entry of any pending or threatened claim, action, or proceeding
in respect of which indemnification could be sought in accordance with the
indemnification provisions of this Agreement (whether or not you or the Company
or any of its controlling persons is an actual or potential party to such claim,
action or proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Company and controlling persons from all liability
arising out of such claim, action or proceeding.
21. You shall arrange to comply with all requirements under the tax laws of
the United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service. The Company understands that you are required in certain instances to
withhold an amount equal to 31% of the payments made with respect to (i)
interest on the Exchange Notes and (ii) proceeds from the sale, exchange,
redemption or retirement of the Exchange Notes from holders who have not
supplied their correct Taxpayer Identification Number or required certification,
or holders from whom you have been instructed by the Internal Revenue Service to
withhold. Such funds will be turned over to the Internal Revenue Service in
accordance with applicable regulations.
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22. You shall notify the Company of the amount of any transfer taxes
payable in respect of the exchange of Private Notes and, upon receipt of written
approval from the Company, you shall deliver or cause to be delivered, in a
timely manner to each governmental authority to which any transfer taxes are
payable in respect of the exchange of Private Notes, your check in the amount of
all transfer taxes so payable, and the Company shall reimburse you for the
amount of any and all transfer taxes payable in respect of the exchange of
Private Notes; provided, however, that you shall reimburse the Company for
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
23. THIS AGREEMENT AND YOUR APPOINTMENT AS EXCHANGE AGENT HEREUNDER SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
AND WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND SHALL INURE TO THE
BENEFIT OF, AND THE OBLIGATIONS CREATED HEREBY SHALL BE BINDING UPON, THE
SUCCESSORS AND ASSIGNS OF EACH OF THE PARTIES HERETO, AND NO OTHER PERSON SHALL
HAVE ANY RIGHTS HEREUNDER.
24. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
27. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or facsimile number set forth below:
If to the Company:
McKesson Corporation
McKesson Plaza
One Post Street
San Francisco, CA 94104
Facsimile: (415) 983-8826
Attention: Nancy A. Miller
Vice President and Corporate Secretary
If to the Exchange Agent:
The First National Bank of Chicago
c/o First Chicago Trust Company of New York
14 Wall Street
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8th Floor, Window 2
New York, New York 10005
Facsimile: (212) 240-8938
Attention: Corporate Trust Administration
With a copy to:
The First National Bank of Chicago
One North State Street
9th Floor
Chicago, IL 60602
Facsimile: (312) 407-1708
Attention: Janice Ott Rotunno
28. Unless terminated earlier by the parties hereto, this Agreement shall
terminate 180 days following the last Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 20 and 22 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for Notes, funds or property then held by you as
Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of
the date hereof.
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Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
McKESSON CORPORATION
By: _____________________________
Name: Nancy A. Miller
Title: Vice President and Corporate Secretary
Accepted as the date
first above written:
THE FIRST NATIONAL BANK OF CHICAGO, as Exchange Agent
By: _________________________________
Name: Steve Wagner
Title: Vice President
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SCHEDULE I
THE FIRST NATIONAL BANK OF CHICAGO
FEE SCHEDULE
EXCHANGE AGENT SERVICES
McKESSON CORPORATION - 6.30% EXCHANGE NOTES DUE MARCH 1, 2005
I. Exchange Agency
A fee for the receipt of exchanged 6.30% Exchange Notes of McKesson
Corporation will be charged at $6.50 per letter of transmittal. The total
charge will be subject to a minimum of $2,000 and maximum of $5,000.
This fee covers examination and execution of all required documentation,
receipt of transmittal letters, reporting as required to the Company and
communication with DTC.
II. Miscellaneous
Fees for services not specifically covered in this schedule will be
assessed in amounts commensurate with the services rendered.
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SCHEDULE II
THE FIRST NATIONAL BANK OF CHICAGO
FEE SCHEDULE
EXCHANGE AGENT SERVICES
McKESSON CORPORATION - 6.40% EXCHANGE NOTES DUE MARCH 1, 2008
I. Exchange Agency
A fee for the receipt of exchanged 6.40% Exchange Notes of McKesson
Corporation will be charged at $6.50 per letter of transmittal. The total
charge will be subject to a minimum of $2,000 and maximum of $5,000.
This fee covers examination and execution of all required documentation,
receipt of transmittal letters, reporting as required to the Company and
communication with DTC.
II. Miscellaneous
Fees for services not specifically covered in this schedule will be assessed
in amounts commensurate with the services rendered.
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