Exhibit 4.2
OFFICER'S CERTIFICATE
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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,
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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.
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
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Nancy A. Miller
Vice President and
Corporate Secretary
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
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March 1, 2005" (the "Notes due 2005").
2. Aggregate Principal Amount. The Notes due 2005 shall be limited in
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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
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Dollars.
4. Maturity. The date on which the principal of the Notes due 2005 is
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payable is March 1, 2005.
5. Rate of Interest; Interest Payment Date; Regular Record Dates. Each
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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
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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
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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
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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
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
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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
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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
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2005 shall be payable upon declaration of acceleration pursuant to Section
5.1 of the Indenture.
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11. Payment Currency. Principal and interest on the Notes due 2005
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shall be payable in Dollars.
12. Payment Currency - Election. The principal of and interest on the
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Notes due 2005 shall not be payable in a currency other than Dollars.
13. Payment Currency - Index. The principal of and interest on the
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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
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Registered Securities. The Notes due 2005 may be issued as Registered
Global Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts
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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
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the transferability of Notes due 2005 in definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially
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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,
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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
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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
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
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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
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either (a) the Issuer or such Consolidated Subsidiary would be entitled to
incur Indebtedness secured by a lien on the assets to be leased in an
amount at least equal to the Attributable Debt in respect of such
transaction without equally and ratably securing the 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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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
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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
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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.
9
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
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
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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
3
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
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: ___________________
[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)
6
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
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
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
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.
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.)
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount
of Notes due 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
- ------ --------------------- --------------- ----------------
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
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
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
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
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
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
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
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
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
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
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
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
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
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: ___________________
[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
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
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
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
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.
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.)
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Securities
Principal Amount
of Notes due 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
- ---- --------------------- --------------- ----------------