EXHIBIT 1.1
MCKESSON CORPORATION
Underwriting Agreement
January 24, 2002
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
McKesson Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its debt securities identified in
Schedule I hereto (the "Securities"), to be issued under the indenture specified
in Schedule I hereto (the "Indenture") between the Company and the Trustee
identified in such Schedule (the "Trustee"). If the firm or firms listed in
Schedule II hereto include only the firm or firms listed in Schedule I hereto,
then the terms "Underwriters" and "Representatives", as used herein, shall each
be deemed to refer to such firm or firms.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of Securities
Act of 1933, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Securities Act"), a registration statement (the
file numbers of which are set forth in Schedule I hereto) on Form S-3, relating
to, among other things, certain debt securities (the "Shelf Securities") to be
issued from time to time by the Company. The Company also has filed with, or
proposes to file with, the Commission pursuant to Rule 424 under the Securities
Act, a prospectus supplement specifically relating to the Securities (the
"Prospectus Supplement") together with the prospectus covering the Shelf
Securities. The registration statement as amended to the date of this Agreement
is hereinafter referred to as the "Registration Statement" and the related
prospectus covering the Shelf Securities in the form first used to confirm sales
of the Securities is hereinafter referred to as the "Basic Prospectus". The
Basic Prospectus as supplemented by the Prospectus Supplement in the form first
used to confirm sales of the Securities is hereinafter referred to as the
"Prospectus". If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462
Registration Statement. Any reference in this Agreement to the Registration
Statement, the Basic Prospectus, any preliminary form of Prospectus (a
"preliminary prospectus") previously filed with the Commission pursuant to Rule
424 or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
any documents filed under the Exchange Act after the date of this Agreement, or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be, which are deemed to be incorporated by reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Securities to the several
Underwriters as hereinafter provided, and each Underwriter, on the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Company the respective principal amount of Securities set forth opposite such
Underwriter's name in Schedule II hereto at the purchase prices set forth in
Schedule I hereto plus accrued interest, if any, from the date specified in
Schedule I hereto to the date of payment and delivery.
2. The Company understands that the several Underwriters intend (i) to
make a public offering of their respective portions of the Securities and (ii)
initially to offer the Securities upon the terms set forth in the Prospectus.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives, no later than noon the Business Day (as defined below) prior to
the Closing Date (as defined below), on the date and at the time and place set
forth in Schedule I hereto (or at such other time and place on the same or such
other date, not later than the fifth Business Day (as defined below) thereafter,
as you and the Company may agree in writing). As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in the city of New York. The time and date of such payment and
delivery with respect to the Securities are referred to herein as the "Closing
Date".
Payment for the Securities shall be made against delivery to the nominee
of The Depository Trust Company for the respective accounts of the several
Underwriters of the Securities of one or more global notes (the "Global Note")
representing the Securities, with any transfer taxes payable in connection with
the transfer to the Underwriters of the Securities duly paid by the Company. The
Global Note will be made available for inspection by the Representatives at the
office of the Trustee at The Bank of New York, 20 Broad Street, Lower Level, New
York, New York 10005, not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date.
4. The Company represents and warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by
the Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company, threatened by the Commission; and the Registration
Statement and Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) comply, or
will comply, as the case may be, in all material respects with the
Securities Act and the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
"Trust Indenture Act"), and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the date of the Prospectus and any amendment or
supplement thereto, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and the
Prospectus, as amended or supplemented at the Closing Date, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations and
warranties shall not apply to (i) that part of the Registration
Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee,
and (ii) statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein;
(b) the documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(c) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and
the results of their operations and the changes in their consolidated
cash flows for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a
consistent basis (except as otherwise noted therein), and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein;
(d) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in the State of
California; and the Company is duly qualified to transact business and
is in good standing in each other jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(e) McKesson Medical-Surgical Inc., a Virginia corporation, is
the Company's sole significant subsidiary, as defined by Rule 1-02(w) of
Regulation S-X under the Securities Act (the "Significant Subsidiary"),
and has been duly incorporated, is existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(f) this Agreement has been duly authorized, executed and
delivered by the Company;
(g) the Securities have been duly authorized by the Company and,
when duly executed and authenticated in the manner provided for in the
Indenture and delivered to and paid for by the Underwriters as described
in the Prospectus, will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture, enforceable against
the Company in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles (regardless
of whether enforcement is sought in a proceeding at law or in equity)
and except to the extent that rights to indemnification and contribution
may be limited by applicable law;
(h) the Indenture has been duly authorized by the Company and,
when duly executed and delivered by the Company and assuming the due
authorization, execution and delivery of the Indenture by the Trustee,
will be a valid and binding obligation of the Company, enforceable
against it in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of
whether enforcement is sought in a proceeding at law or in equity) and
except to the extent that rights to indemnification and contribution may
be
limited by applicable law; and the Indenture has been qualified under
the Trust Indenture Act;
(i) the execution and delivery by the Company of this Agreement,
the Indenture and the Securities (collectively, the "Operative
Instruments"), and the consummation by the Company of the transactions
contemplated thereby, including the issuance and sale of the Securities,
(A) will not violate or conflict with or result in any contravention of
any provision of the General Corporation Law of the State of Delaware
(the "DGCL"), or (B) conflict with the charter or by-laws of the
Company, or (C) constitute a violation of, or a breach or default under
the laws of any agreement, contract, bond, indenture or other instrument
binding upon the Company or any of its subsidiaries that is material to
the Company and its subsidiaries, taken as a whole, (D) violate or
conflict with, or result in any contravention of, any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary of the Company, except for a
violation, conflict or contravention which would not have a material
adverse effect on the condition, financial or otherwise, or the earnings
or business affairs of, the Company and its subsidiaries taken as a
whole, (E) do not and will not result in the imposition of any lien,
charge or encumbrance upon any assets of the Company or any of its
subsidiaries, pursuant to the terms of any agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any
of them or any of their respective properties is bound, except for any
liens, charges or encumbrances which would not have a material adverse
effect on the condition, financial or otherwise, or the earnings or
business affairs of, the Company and its subsidiaries taken as a whole,
and (F) do not require any consent, approval, authorization or order of,
or qualification with, any governmental body or agency, except such as
may be required by the securities or Blue Sky laws of the various
states, the Securities Act, the Exchange Act, the Trust Indenture Act
and the securities laws of any jurisdiction outside the United States in
which the Securities are offered;
(j) there are no legal or governmental proceedings pending or,
to the best of the Company's knowledge, threatened to which the Company
or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject (i) which are
required to be described in the documents incorporated by reference in
the Registration Statement or Prospectus and are not so described or
(ii) which could reasonably be expected to result in a material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole, or in the power or ability of the Company to perform its
obligations under the Operative Instruments or to consummate any of the
transactions contemplated by the Prospectus or the Operative
Instruments; provided, however, that the Company makes no representation
or warranty or comment with respect to the "Accounting Litigation"
described under the caption "Legal Proceedings" in the Prospectus other
than as set forth in the last paragraph under "Financial Review - Legal
Proceedings - Accounting Litigation" in the Prospectus. There are no
contracts or other documents that are required to be described in the
documents incorporated by reference in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
(k) the Company is not and, after giving effect to the issuance
of the Securities and the application of the proceeds therefrom as
described in the Prospectus, will not be an "investment company", as
such term is defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act");
(l) Deloitte & Touche LLP, who have audited certain financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants as
required by the Securities Act and the rules and regulations thereunder;
(m) each of the Company and its subsidiaries owns, possesses or
has the right to use the material intellectual property employed by it
in connection with the business conducted by it as of the date hereof,
except as otherwise described in the Prospectus;
(n) each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
(collectively, "Permits") of and from, and has made all declarations and
filings with, all federal, state, provincial, local and other
governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to
obtain or file could not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
Neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Permits which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(o) the Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or regulated wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(p) there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole, except as otherwise disclosed or incorporated by
reference in the Prospectus;
(q) there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement); and
(r) other than the registration rights granted to certain
holders of approximately 25,000 shares of common stock of the Company,
there are no contracts, agreements or understandings between the
Company, on the one hand, and any person, on the other hand, granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities in any
registration statement filed by the Company under the Securities Act.
5. The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to file the Prospectus in a form approved by you pursuant to
Rule 424 under the Securities Act not later than the Commission's close
of business on the second Business Day following the date of
determination of the offering price of the Securities or, if applicable,
such earlier time as may be required by Rule 424(b);
(b) to furnish to each Representative and counsel for the
Underwriters, at the expense of the Company, a conformed copy of the
Registration Statement (as originally filed) and each amendment thereto,
in each case including exhibits and documents incorporated by reference
therein and, during the period mentioned in paragraph (e) below, to
furnish each of the Underwriters as many copies of the Prospectus
(including all amendments and supplements thereto) and documents
incorporated by reference therein as you may reasonably request;
(c) from the date hereof and prior to the Closing Date, to
furnish to you a copy of any proposed amendment or supplement to the
Registration Statement or the Prospectus, for your review, and not to
file any such proposed amendment or supplement to which you reasonably
object;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such
same period, to advise you promptly, and to confirm such advice in
writing, (i) when any amendment to the Registration Statement shall have
become effective, (ii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose, and (iv) of the receipt
by the Company of any notification with respect to any suspension of the
qualification of the Securities for offer and sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and
to use its reasonable best efforts to
prevent the issuance of any such stop order or notification and, if
issued, to obtain as soon as possible the withdrawal thereof;
(e) so long as the Underwriters are required by law to deliver a
Prospectus in connection with sales or solicitations of offers to
purchase the Securities, if any event shall occur as a result of which
it is necessary in the opinion of counsel for the Company and of counsel
for the Underwriters to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary in the opinion of such counsel to amend or supplement the
Prospectus to comply with applicable law, the Company shall promptly
prepare and furnish, at the expense of the Company, to the Underwriters
and to the dealers (whose names and addresses you will furnish to the
Company) to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the statements
in the Prospectus as so amended or supplemented will not, in the light
of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with applicable law;
(f) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request, to comply with such laws as to permit the
continuance of sales and dealings in such jurisdictions until the
earlier of (i) one year after the date of this Agreement and (ii) as
long as may be necessary to complete the distribution of such
securities; provided, however, that the Company shall not be required
to qualify as a foreign corporation, to file a general consent to
service of process in any such jurisdiction or to take any other action
that would subject the Company to service of process in any suits other
than those arising out of the offering of the Securities or to taxation
in respect of doing business in any jurisdiction in which it is not
otherwise subject;
(g) to make generally available to its security holders and to
you as soon as practicable an earnings statement which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the
Commission promulgated thereunder covering a period of at least twelve
months beginning with the first fiscal quarter of the Company occurring
after the "effective date" (as defined in Rule 158) of the Registration
Statement;
(h) during the period beginning on the date hereof and
continuing to and including the Business Day following the Closing Date,
not to offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, any debt securities of or guaranteed by the
Company which are substantially similar to the Securities;
(i) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated pursuant to
the terms of this Agreement, to pay or cause to be paid all costs and
expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs
and expenses (i) incident to the preparation, issuance, execution,
authentication and
delivery of the Securities, including any expenses of the Trustee and
any transfer or other taxes payable in connection with the issuance,
sale or delivery of the Securities to the Underwriters, (ii) incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the
Securities under the laws of such jurisdictions as the Underwriters may
designate (including fees of counsel for the Underwriters and their
disbursements), (iv) related to any filing with National Association of
Securities Dealers, Inc. (the "NASD"), (v) in connection with the
printing (including word processing and duplication costs) and delivery
of this Agreement, the Indenture, the Preliminary and Supplemental Blue
Sky Memoranda and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided, (vi)
payable to rating agencies in connection with the rating of the
Securities, (vii) any expenses incurred by the Company in connection
with a "road show" presentation to potential investors; (viii) the cost
and charges of any transfer agents, registrars and depositories; and
(ix) the fees and expenses, if any, incurred in connection with the
deposit of the Global Notes with The Depository Trust Company.
6. The several obligations of the Underwriters hereunder shall be
subject to the following conditions:
(a) the representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date as if made on
and as of the Closing Date and the Company shall have complied with all
agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act; no
stop order suspending the effectiveness of the Registration Statement
shall be in effect, and no proceedings for such purpose shall be pending
before or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to your satisfaction;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the
earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your
judgment, is so material and adverse as to make it, in your
judgment, impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus;
(b) the Underwriters shall have received on the Closing Date a
certificate, dated that Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (c)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of its conditions on its part to be performed or satisfied
hereunder on or before the Closing Date. The officers of the Company
delivering such certificate may rely upon the best of their knowledge as
to proceedings threatened;
(c) the Underwriters shall have received on the Closing Date an
opinion of Ivan D. Meyerson, Senior Vice President and General Counsel
of the Company, dated the Closing Date, to the effect that:
(i) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Delaware with the corporate power and authority under such laws
to own, lease and operate its properties and conduct its
business as described in the Prospectus;
(ii) the Company is duly qualified to transact business
as a foreign corporation and is in good standing in the State of
California and the Company is duly qualified to transact
business and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts
business of a type, that would make such qualification
necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) the Significant Subsidiary is a corporation duly
incorporated, existing and in good standing under the laws of
the state of its incorporation with the corporate power and
authority under such laws to own, lease and operate its
properties and conduct its business as described in the
Prospectus;
(iv) the Significant Subsidiary is duly qualified to
transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent
that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(v) the statements in the Company's most recent Annual
Report on Form 10-K under the caption "Legal Proceedings" as
amended and/or
supplemented by the statements regarding legal proceedings in
the Company's Current Reports on Form 8-K and Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus, in
each case insofar as such statements purport to summarize legal
matters, documents or proceedings referred to therein, fairly
summarize such legal matters, documents or proceedings in all
material respects;
(vi) each document incorporated by reference in the
Registration Statement or Prospectus, when it was filed,
appeared on its face to be appropriately responsive in all
material respects with the requirements of the Exchange Act and
the applicable rules and regulations of the Commission
thereunder, and the Registration Statement, as of the date of
filing of the Annual Report of the Company on Form 10-K for the
year ended March 31, 2001, and the Prospectus, as of the date of
the Prospectus Supplement, appeared on their face to be
appropriately responsive in all material respects to the
requirements of the Securities Act, except that in each case
such counsel does not express any opinion as to the financial
statements and related notes and schedules and other financial
data included or incorporated by reference therein or excluded
therefrom or the exhibits to the Registration Statement and,
except to the extent expressly stated in paragraph 6(e)(v), such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus;
(vii) the execution and delivery by the Company of each
of the Operative Instruments, and the consummation by the
Company of the transactions contemplated thereby, including the
issuance and sale of the Securities, will not (A) conflict with
the charter or by-laws of the Company, (B) violate or conflict
with, or result in any contravention of, any applicable law, (C)
to the best of such counsel's knowledge, constitute a violation
of, or a breach or default under the terms of any agreement,
contract, bond, indenture or other instrument binding upon the
Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, (D) to the best
of such counsel's knowledge, violate or conflict with or result
in any contravention of any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any subsidiary of the Company, except for a
violation, conflict or contravention which would not have a
material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Company
and its subsidiaries taken as a whole, (E) to the best of such
counsel's knowledge, do not and will not result in the
imposition of any lien, charge or encumbrance upon any assets of
the Company or any of its subsidiaries, pursuant to the terms of
any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of their
respective properties is bound, except for any liens, charges or
encumbrances which would not have a material adverse effect on
the condition, financial or otherwise, or the earnings or
business affairs of, the Company and its subsidiaries taken as a
whole;
(viii) no governmental approval, which has not been
obtained or taken and is not in full force and effect, is
required to authorize, or is required in connection with, the
execution or delivery of each of the Operative Instruments by
the Company or the consummation by the Company of the
transactions contemplated thereby. Such counsel may state that
"applicable laws" means the DGCL and those laws, rules and
regulations of the State of California and the federal laws of
the United States of America, in each case, which, in such
counsel's experience, are normally applicable to transactions of
the type contemplated by this Agreement and the other Operative
Instruments (other than the United States federal securities
laws, state and foreign securities or blue sky laws, antifraud
laws and the rules and regulations of the NASD), without our
having made any special investigation as to the applicability of
any other law, rule or regulation, and which are not the subject
of a specific opinion herein referring expressly to a particular
law or laws; "governmental authorities" means any court,
regulatory body, administrative agency or governmental body of
the State of California or the United States of America having
jurisdiction over the Company under "applicable laws"; and
"governmental approval" means any consent, approval, license,
authorization or validation of, or filing, qualification or
registration with, any "governmental authority" required to be
made or obtained by the Company pursuant to "applicable laws",
other than any consent, approval, license, authorization,
validation, filing, qualification or registration which may have
become applicable as a result of the involvement of any other
party (other than the Company) in the transactions contemplated
by this Agreement and the other Operative Instruments or because
of such parties' legal or regulatory status or because of any
other facts specifically pertaining to such parties;
(ix) to the best of such counsel's knowledge, there are
no legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its
subsidiaries is subject (i) which are required to be described
in the documents incorporated by reference in the Registration
Statement and Prospectus and are not so described or (ii) which
could reasonably be expected to result in a material adverse
change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its
subsidiaries, taken as a whole, or in the power or ability of
the Company to perform its obligations under the Operative
Instruments or to consummate any of the transactions
contemplated by any of the Operative Instruments. In rendering
such opinion such counsel may state that such counsel expresses
no opinion or comment with respect to the "Accounting
Litigation" described under the caption "Legal Proceedings" in
the Prospectus other than as set forth in the last paragraph
under "Financial Review - Legal Proceedings - Accounting
Litigation" in the Prospectus. To the best of such counsel's
knowledge, there are no contracts or other documents that are
required to be described in the documents incorporated by
reference in the Registration Statement and Prospectus or to be
filed as exhibits to such incorporated documents that are not
described or filed as required; and
(x) the Registration Statement was declared effective
under the Securities Act on June 30, 1998. The Company has been
orally advised by the Commission that no stop order suspending
the effectiveness of the Registration Statement has been issued
and to the best of such counsel's knowledge, no proceedings for
that purpose have been instituted or are pending or threatened
by the Commission.
In addition such counsel shall state that such counsel or his
representatives have participated in the preparation of the Registration
Statement and Prospectus and the documents filed by the Company with the
Commission and incorporated by reference therein and in conferences with
officers and other representatives of the Company, representatives of
the independent accountants for the Company, representatives of the
Underwriters and counsel for the Underwriters at which the contents of
the Registration Statement and Prospectus, the documents filed by the
Company with the Commission and incorporated by reference therein and
related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and has made no independent check or
verification thereof (except as otherwise indicated above), on the basis
of the foregoing, such counsel shall state that no facts have come to
such counsel's attention that have led such counsel to believe that the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of the date of the
Prospectus Supplement and as of the date hereof, contained or contains
an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that such counsel expresses no opinion or
belief with respect to the financial statements, schedules and other
financial data included or incorporated by reference therein or excluded
therefrom or the exhibits to the Registration Statement, including the
Form T-1. In addition, in rendering such opinion, such counsel shall
state that such opinion is limited to matters arising under the laws of
the State of California, the DGCL and the federal laws of the United
States of America.
Such opinion delivered on closing date may contain such
qualifications and assumptions normally contained in such opinions in
similar transactions;
(f) the Underwriters shall have received on the Closing Date an
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to
the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated and is
validly existing and in good standing under the laws of the
State of Delaware;
(ii) the statements in the Prospectus under the caption
"Description of Debt Securities" and "Description of Notes"
insofar as such statements purport to
summarize certain provisions of the Securities and Indenture
fairly summarize such provisions in all material respects;
(iii) this Agreement has been duly authorized, executed
and delivered by the Company;
(iv) the Indenture has been duly authorized, executed
and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Trustee) is
a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except (a) to
the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, and (ii)
general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law) and (b) such
counsel may state that they express no opinion (i) as to the
applicability or effect of any fraudulent transfer, preference
or similar law on the Indenture or any transactions contemplated
thereby, (ii) as to the enforceability of any rights to
contribution or indemnification which may be violative of the
public policy underlying any law, rule or regulation (including
any federal or state securities law, rule or regulation) and
(iii) as to the enforceability of the Indenture or the
Securities to the extent it provides for interest on interest,
interest in violation of the usury laws or waiver of the usury
laws;
(v) the Securities have been duly authorized and
executed by the Company and, when issued and delivered by the
Company against payment therefore in accordance with the terms
of the Indenture, the Securities will constitute valid and
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in accordance
with their terms, except (a) to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally, and (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or
at law), and (b) such counsel may state that they express no
opinion (i) as to the applicability or effect of any fraudulent
transfer, preference or similar law on the Indenture or any
transactions contemplated thereby, (ii) as to the enforceability
of any rights to contribution or indemnification which may be
violative of the public policy underlying any law, rule or
regulation (including any federal or state securities law, rule
or regulation) and (iii) as to the enforceability of the
Indenture or the Securities to the extent it provides for
interest on interest, interest in violation of the usury laws or
waiver of the usury laws;
(vi) the execution and delivery by the Company of each
of the Operative Instruments and the consummation by the Company
of the transactions contemplated thereby, including the issuance
and sale of the Securities, will not (a) conflict with the
charter or by-laws of the Company, or (b) violate or conflict
with, or result in any contravention of, any applicable law;
(vii) no governmental approval, which has not been
obtained or taken and is not in full force and effect, is
required to authorize, or is required in connection with, the
execution and delivery of each of the Operative Instruments by
the Company or the consummation by the Company of the
transactions contemplated thereby. Such counsel may state that
"applicable laws" means the DGCL and those laws, rules and
regulations of the State of California, the State of New York,
and the federal laws of the United States of America, in each
case, which, in such counsel's experience, are normally
applicable to transactions of the type contemplated by this
Agreement and the other Operative Instruments (other than the
United States federal securities laws, state and foreign
securities or blue sky laws, antifraud laws and the rules and
regulations of the NASD), without our having made any special
investigation as to the applicability of any other law, rule or
regulation, and which are not the subject of a specific opinion
herein referring expressly to a particular law or laws;
"governmental authorities" means any court, regulatory body,
administrative agency or governmental body of the State of
California or the State of New York or the United States of
America having jurisdiction over the Company under "applicable
laws"; and "governmental approval" means any consent, approval,
license, authorization or validation of, or filing,
qualification or registration with, any "governmental authority"
required to be made or obtained by the Company pursuant to
"applicable laws", other than any consent, approval, license,
authorization, validation, filing, qualification or registration
which may have become applicable as a result of the involvement
of any other party (other than the Company) in the transactions
contemplated by this Agreement and the other Operative
Instruments or because of such parties' legal or regulatory
status or because of any other facts specifically pertaining to
such parties;
(viii) the Company is not, and after giving effect to
the issuance of the Securities and the application of the
proceeds as described under the caption "Use of Proceeds" in the
Prospectus, will not be an "investment company" as such term is
defined in the Investment Company Act; and
(ix) the Prospectus, as supplemented by the Prospectus
Supplement, as of the date of the Prospectus Supplement,
appeared on its face to be appropriately responsive in all
material respects to the requirements of the Securities Act and
the Rules and Regulations, except that such counsel does not
express any opinion as to the financial statements and related
notes and schedules and other financial data included or
incorporated by reference therein or excluded therefrom, or the
exhibits to the Registration Statement, and, except to the
extent expressly stated in paragraph 6(f)(ii), such counsel does
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or Prospectus.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and
Prospectus and in conferences with officers and other representatives of
the Company, representatives of the independent accountants
for the Company, representatives of the Underwriters and counsel for the
Underwriters at which the contents of the Registration Statement and
Prospectus and related matters were discussed. Such counsel may state
that they did not participate in the preparation of the documents
incorporated by reference in the Registration Statement or Prospectus
but have, however, reviewed such documents and discussed the business
and affairs of the Company with officers and other representatives of
the Company. Such counsel may state that such counsel is not passing
upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and has made no independent check or
verification thereof (except as otherwise indicated above). On the basis
of the foregoing, such counsel shall state that no facts have come to
such counsel's attention that have led such counsel to believe that the
Prospectus, as of the date of the Prospectus Supplement and as of the
date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
such counsel expresses no opinion or belief with respect to the
financial statements, schedules and other financial data included or
incorporated by reference therein or excluded therefrom or the exhibits
to the Registration Statement, including the Form T-1. In addition, in
rendering such opinion, such counsel may state that such opinion is
limited to matters arising under the laws of the State of California,
the State of New York, the DGCL and the federal laws of the United
States of America.
Such opinion delivered on the Closing Date may contain
qualifications and assumptions normally contained in such opinions in
similar transactions;
(g) you shall have received on and as of the Closing Date an
opinion of Simpson Thacher & Bartlett, counsel to the Underwriters, with
respect to the validity of the Indenture and the Securities, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(h) the Underwriters shall have received, on each of the date
hereof and on the Closing Date, letters dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from the independent auditors for the Company,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" with respect to the financial statements
and certain financial information contained in or incorporated by
reference in the Prospectus; provided that the letters delivered on the
Closing Date shall use a "cut-off date" not earlier than the date
hereof; and
(i) on or prior to the Closing Date, the Company shall have
furnished to the Representatives such further certificates and documents
as the Representatives shall reasonably request.
7. (a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls an Underwriter within the
meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (in each case as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact necessary in order to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Underwriters furnished to the
Company in writing by the Underwriters expressly for use therein; provided,
however, that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of an Underwriter or any person
controlling an Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, at or prior to the written confirmation of the sale of the Securities to
such person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages or liabilities,
unless such failure is the result of noncompliance by the Company with Section
5(e) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (in each
case as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact necessary in
order to make the statements therein not misleading, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter expressly for use in the Registration Statement or the
Prospectus or any preliminary prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any government investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to paragraph (a) or (b) of this Section 7 such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (i)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Underwriters and all persons, if any, who control the
Underwriters within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and (ii) 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 Underwriters and such
control persons of the Underwriters, such firm shall be designated in writing by
the Underwriters. In the case of any such separate firm for the Company and
control persons of the Company, such firm shall be designated in writing by the
Company. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for the reasonable fees
and expenses of counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters bear to the
aggregate offering price of the Securities. The relative fault of the Company on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section 7. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) of this Section 7
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities purchased by it and resold pursuant to this
Agreement exceeds the amount of any damages which such Underwriter would have
otherwise been required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section
7 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of the Underwriters or any person controlling the Underwriters
or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
8. This Agreement shall be subject to termination by notice given by you
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (a) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the NASD, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement and the Prospectus.
9. If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities which it or they have agreed to purchase
under this Agreement, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I hereto bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as the Representatives may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-tenth of such principal amount of Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased,
and arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of Securities.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Underwriters, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Any action by the Underwriters hereunder may be taken by you jointly
or by the first of the named Representatives set forth in Schedule I hereto
alone on behalf of the Underwriters, and any such action taken by you jointly or
by the first of the named Representatives set forth in Schedule I hereto alone
shall be binding upon the Underwriters. All notices and other communications
hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given at the address set
forth in Schedule II hereto. Notices to the Company shall be given to it at
McKesson Corporation, One Post Street, San Francisco, California 94104,
(facsimile: (415) 983-8826); Attention: Treasurer.
13. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
14. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York including, without limitation, Section 5-1401
of the New York General Obligations Law.
Very truly yours,
MCKESSON CORPORATION
By: /s/ WILLIAM R. GRABER
------------------------------------
Name: William R. Graber
Title: Senior Vice President and
Chief Financial Officer
Accepted: January 24, 2002
J.P. MORGAN SECURITIES INC.
Acting severally on behalf of
itself and the several
Underwriters listed in Schedule II
hereto.
By: J.P. MORGAN SECURITIES INC.
By: /s/ ROBERT OSIESKI
------------------------------------
Name: Robert Osieski
Title: Vice President
SCHEDULE I
Representatives: J.P. Morgan Securities Inc.
Banc of America Securities LLC
Underwriting Agreement January 24, 2002
dated:
Registration Statement 333-50985, 333-50985-01, 333-50985-02 and
Nos.: 333-50985-03
Title of Securities: 7 3/4% Notes due 2012
Principal amount: $400,000,000
Price to Public: 99.485% of the principal amount of the Securities.
Purchase Price: 98.835% of the principal amount of the Securities.
Indenture: Indenture dated as of January 29, 2002 between the
Company and The Bank of New York, as Trustee.
Maturity: February 1, 2012
Interest Rate: 7 3/4% per annum
Interest Payment Dates: February 1 and August 1.
Optional Redemption The notes may be redeemed, at the Company's
Provisions: option, in whole or in part, at a redemption price
equal to the greater of (i) 100% of the
principal amount of the notes to be
redeemed or (ii) the sum of the present
values of the remaining scheduled payments
of principal and interest thereon (not
including any portion of those payments of
interest accrued as of the date of
redemption) discounted to the date of
redemption on a semi-annual basis (assuming
a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as
defined in the Prospectus) plus 30 basis
points and, in each case, accrued interest
thereon to the date of redemption.
Sinking Fund Provisions: None
Other Provisions: None
Closing Date and
Time of Delivery: January 29, 2002. 10:00 a.m.
Closing Location: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Address for Notices J.P. Morgan Securities Inc.
to Underwriters: Attn: Transaction Execution Group
270 Park Avenue, Ninth Floor
New York, New York 10017
Fax: (212) 834-6702
SCHEDULE II
Principal Amount of
Securities to be
Underwriter Purchased
- ----------- --------------------
J.P. Morgan Securities Inc. ........................ $ 140,000,000
Banc of America Securities LLC. .................... $ 120,000,000
Banc One Capital Markets, Inc. ..................... $ 28,000,000
Credit Suisse First Boston Corporation.............. $ 28,000,000
Lehman Brothers Inc. ................................ $ 28,000,000
TD Securities (USA) Inc. ........................... $ 28,000,000
First Union Securities, Inc. ....................... $ 28,000,000
-------------
Total $ 400,000,000