EXHIBIT 4.2
[FORM OF FACE OF NOTE DUE FEBRUARY 1, 2012]
THIS NOTE IS A REGISTERED GLOBAL 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. UNLESS THIS NOTE 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 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. 1 CUSIP NO. 58155QAA1
MCKESSON CORPORATION
7-3/4% NOTE DUE FEBRUARY 1, 2012
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, Cede & Co., or registered
assigns, the principal sum of Four Hundred Million Dollars ($400,000,000) on
February 1, 2012 and to pay interest on said principal sum from January 29,
2002, or from the most recent interest payment date to which interest has been
paid or duly provided for, semi-annually in arrears on February 1 and August 1
(each such date, an "Interest Payment Date") of each year commencing on August
1, 2002, at the rate of 7-3/4% 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. In
the event that any date on which the principal or interest payable on this Note
is not a Business Day, then payment of principal or interest payable on such
date will be
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made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of such delay). The interest installment so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture (referred to on the reverse hereof) be paid to the
person in whose name this Note 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 January 15 and July 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 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
de faulted interest), notice whereof shall be given by mail by or on behalf of
the Issuer to the registered holders of Notes 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 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 is represented by a Registered Global
Security, payment of principal, premium, if any, or interest on this Note 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 shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
Capitalized terms used in this Note which are defined in the Indenture
shall have the respective meanings assigned to them in the Indenture.
The provisions of this Note 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.
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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:
------------------------------------
Name:
Title:
Attest:
By:
------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK
as Trustee
By:
------------------------------------
Authorized Signatory
Dated:
---------------------------------
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[FORM OF REVERSE SIDE OF NOTE]
This Note is one of a duly authorized series of securities (the
"Securities") of the Issuer designated as its 7-3/4% Notes due February 1, 2012
(the "Notes"). The Securities are all issued or to be issued under and pursuant
to an Indenture, dated as of January 29, 2002 (the "Indenture"), duly executed
and delivered be tween the Issuer and The Bank of New York, a New York banking
corporation (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 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.
The Notes are issuable only as Registered Securities in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Notes are exchangeable for a like aggregate principal amount of Notes as
requested by the holder surrendering the same.
Except as set forth below, this Note is not redeemable and is not entitled
to the benefit of a sinking fund or any analogous provision.
This Note is redeemable, in 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 and (ii) as determined by the Quotation Agent, 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 plus 30 basis points, plus, in each case, accrued
interest thereon to the date of redemption. The Holder of this Note will receive
notice thereof by first-class mail at least 30 and not more than 60 days prior
to the date fixed for redemption. Unless the Issuer defaults in payment of the
redemption price, on and after the redemption date, interest will cease to
accrue on the Notes or portions thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any date of redemption, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury
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Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
that date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Note 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.
"Comparable Treasury Price" means, with respect to any date of redemption,
(i) the average of the Reference Treasury Dealer Quotations for the date of
redemption, after excluding the highest and lowest Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than three Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.
"Quotation Agent" means J.P. Morgan Securities Inc. or another Reference
Treasury Dealer appointed by the Issuer.
"Reference Treasury Dealer" means (i) each of J.P. Morgan Securities Inc.
and Banc of America Securities LLC and their respective successors; provided,
however, that if either 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 another Primary Treasury Dealer; and (ii) any other
Primary Treasury Dealer selected by the Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that date of redemption.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of all the Notes 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 Senior Securities or Subordinated Securities, as the
case may be, of all series issued under such Indenture then outstanding and
affected (each
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voting as one class), to add any provisions to, or change in any manner,
eliminate or waive 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 Security affected thereby, (i) extend the
final maturity of the principal of any Security or reduce the principal amount
thereof or premium thereon, if any, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof
or change the currency in which the principal thereof (other than as otherwise
may be provided with respect to such series), premium, if any, or interest
thereon is payable or reduce the amount of the principal of any Original Issue
Discount Security that is payable upon acceleration or provable in bankruptcy,
or in the case of Subordinated Securities of any series, modify any of the
subordination provisions or the definition of "Senior Indebtedness" relating to
such series in a manner adverse to the holders of such Subordinated Securities,
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 the
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 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 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 may be registered on the registry books of the
Issuer, upon surrender of this Note for registration of transfer at the office
or agency
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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 of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
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 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 is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
THIS NOTE 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.
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[FORM OF SCHEDULE FOR ENDORSEMENTS ON REGISTERED
GLOBAL SECURITIES TO REFLECT CHANGES IN PRINCIPAL
AMOUNT]
Schedule A
Changes to Principal Amount of Registered Global Securities
Principal Amount
of Notes
by which this Registered Remaining
Global Security is to be Principal
Reduced or Increased, Amount of this
and Reason for Registered
Date Reduction or Increase Global Security Notation Made By
---- ------------------------ --------------- ----------------
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Pursuant to Section 2.3 of the Indenture, dated as of January 29, 2002
(the "Indenture"), between McKesson Corporation (the "Issuer") and The Bank of
New York, a New York banking corporation, as trustee (the "Trustee"), the terms
of a series of securities to be issued pursuant to the Indenture are as follows:
1. Designation. The designation of the securities is "7 3/4% Notes due
February 1, 2012" (the "Notes").
2. Initial Aggregate Principal Amount. The Notes shall be limited in
initial aggregate principal amount to $400,000,000 (except for Notes
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Section 2.8, 2.9,
2.11, 8.5 or 12.3 of the Indenture).
3. Currency Denomination. The Notes shall be denominated in Dollars.
4. Maturity. The date on which the principal of the Notes is payable is
February 1, 2012.
5. Rate of Interest; Interest Payment Date; Regular Record Dates. Each
Note shall bear interest from January 29, 2002 at 7 3/4% per annum
until the principal thereof is paid. Such interest shall be payable
semi-annually in arrears on February 1 and August 1 of each year,
commencing on August 1, 2002, to the persons in whose names the Notes
are registered at the close of business on the immediately preceding
January 15 and July 15, respectively. Interest on the Notes shall
accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from January 29, 2002. Interest on the
Notes shall be computed on the basis of a 360-day year comprised of
twelve 30-day months. In the event that any date on which principal,
premium, if any, or interest is payable on the Notes is not a Business
Day, then payment of the principal, premium, if any, or interest
payable on such date will be made on the next succeeding day that is a
9
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 shall be payable, and the transfer of the Notes 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 register; provided, however, that while any Notes
are represented by a Registered Global Security, payment of principal
of, premium, if any, or interest on the Notes may be made by wire
transfer to the account of the Depositary or its nominee.
7. Optional Redemption. The Notes may be redeemed, in 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 and (ii) as
determined by the Quotation Agent, 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 plus 30 basis points,
plus, in each case, accrued interest thereon to the date of
redemption. Holders of the Notes to be redeemed will receive notice
thereof by first-class mail at least 30 and not more than 60 days
prior to the date fixed for redemption. Unless the Issuer defaults in
payment of the redemption price, on and after the redemption date,
interest will cease to accrue on the Notes or portions thereof called
for redemption.
"Adjusted Treasury Rate" means, with respect to any date of
redemption, 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 that date
of redemption.
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"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term of the Notes 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.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of the Reference Treasury Dealer
Quotations for the date of redemption, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (ii) if the Trustee
obtains fewer than three Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations.
"Quotation Agent" means J.P. Morgan Securities Inc. or another
Reference Treasury Dealer appointed by the Issuer.
"Reference Treasury Dealer" means (i) each of J.P. Morgan Securities
Inc. and Banc of America Securities LLC and their respective
successors; provided, however, that if either 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
another Primary Treasury Dealer; and (ii) any other Primary Treasury
Dealer selected by the Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as
determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Trustee by that
Reference Treasury Dealer at 5:00 p.m., New York City time, on the
third business day preceding that date of redemption.
8. Mandatory Redemption. The Notes are not mandatorily redeem able and
are not entitled to the benefit of a sinking fund
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or any analogous provisions.
9. Denominations. The Notes shall be issued initially in minimum
denominations of $1,000 and shall be issued in integral multiples of
$1,000 in excess thereof.
10. Amount Payable Upon Acceleration. The principal of the Notes shall be
payable upon declaration of acceleration pursuant to Section 5.1 of
the Indenture.
11. Payment Currency. Principal and interest on the Notes shall be payable
in Dollars.
12. Payment Currency - Election. The principal of and interest on the
Notes shall not be payable in a currency other than Dollars.
13. Payment Currency - Index. The principal of and interest on the Notes
shall not be determined with reference to an index based on a coin or
currency.
14. Registered Securities. The Notes shall be issued only as Registered
Securities. The Notes shall be issuable as Registered Global
Securities.
15. Additional Amounts. The Issuer shall not pay additional amounts on the
Notes 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 the Notes in definitive form.
17. Registrar; Paying Agent; Depositary. The Trustee shall initially serve
as the registrar and the paying agent for the Notes. The Depository
Trust Company shall initially serve as the Depositary for the
Registered Global Security representing the Notes.
18. Events of Default; Covenants. There shall be no deletions from,
modifications or additions to the Events of Default set
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forth in Section 5.1 of the Indenture with respect to the Notes. There
shall be the following additions to the covenants of the Issuer set
forth in Article III of the Indenture with respect to the Notes:
Limitation on Liens. The Issuer covenants that, so long as any of the
Notes remain outstanding, it shall not, nor shall it permit any
Consolidated Subsidiary to, create or assume any Indebted ness for
money borrowed which is secured by a mortgage, pledge, security
interest or lien ("liens") of or upon any assets, whether now owned or
hereafter acquired, of the Issuer or any such Consolidated Subsidiary
without equally and ratably securing the Notes 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
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such assets or improvements or construction thereon, which
indebtedness is incurred or guaranteed prior to, at the time of or
within 360 days after such acquisition (or in the case of real
property, completion of such improvement or construction or
commencement of full operation of such property, whichever is later);
(c) liens on any assets securing indebtedness owed by any Consolidated
Subsidiary to the Issuer or another wholly owned Subsidiary; (d) liens
on any assets of a corporation existing at the time such corporation
is merged into or consolidated with the Issuer or a Subsidiary or at
the time of a purchase, lease or other acquisition of the assets of a
corporation or firm as an entirety or substantially as an entirety by
the Issuer or a Subsidiary; (e) liens on any assets of the Issuer or a
Consolidated Subsidiary in favor of the United States of America or
any state thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any State
thereof, or in favor of any other country, or any political
subdivision thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any
indebtedness incurred or guaranteed for the purpose of financing all
or any part of the purchase price (or, in the case of real property,
the cost of construction) of the assets subject to such liens
(including, but not limited to, liens incurred in connection with
pollution control, industrial revenue or similar financing); (f) any
extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of 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
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Subsidiary, or deposits or pledges to obtain the release of any of the
foregoing liens; (h) pledges, liens or deposits under worker's
compensation laws or similar legislation and liens or judgments
thereunder which are not currently dischargeable, or in connection
with bids, tenders, contracts (other than for the payment of money) or
leases to which the Issuer or any Consolidated Subsidiary is a party,
or to secure public or statutory obligations of the Issuer or any
Consolidated Subsidiary, or in connection with obtaining or
maintaining self-insurance or to obtain the benefits of any law,
regulation or arrangement pertaining to unemployment insurance, old
age pensions, social security or similar matters, or to secure surety,
appeal or customs bonds to which the Issuer or any Consolidated
Subsidiary is a party, or in litigation or other proceedings such as,
but not limited to, interpleader proceedings, and other similar
pledges, liens or deposits made or incurred in the ordinary course of
business; (i) liens created by or resulting from any litigation or
other proceeding which is being contested in good faith by appropriate
proceedings, including liens arising out of judgements or awards
against the Issuer or any Consolidated Subsidiary with respect to
which the Issuer or such Consolidated Subsidiary is in good faith
prosecuting an appeal or proceedings for review or for which the time
to make an appeal has not yet expired; or final unappealable judgment
liens which are satisfied within 15 days of the date of judgment; or
liens incurred by the Issuer or any Consolidated Subsidiary for the
purpose of obtaining a stay or discharge in the course of any
litigation or other proceeding to which the Issuer or such
Consolidated Subsidiary is a party; (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
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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 Issuer 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 Issuer or the applicable Subsidiary is deemed to give rise to a
lien in favor of the purchaser thereof in such accounts receivable or
the proceeds thereof). Notwithstanding the above, the Issuer or any
Consolidated Subsidiary may, without securing the Notes, 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 remain outstanding, the Issuer will
not, nor shall the Issuer permit any Consolidated Subsidiary to, enter
into any sale and lease-back transaction with respect to any assets,
other than any sale lease-back transaction (involving a lease for a
term of not more than three years), unless either (a) the Issuer or
such Consolidated Subsidiary would be entitled to incur Indebtedness
secured by a lien on the assets to be leased in an amount at least
equal to the Attributable Debt in respect of such transaction without
equally and ratably securing the Notes pursuant to clauses (a) through
(j) inclusive of the covenant with respect to "Limitation on Liens"
above, or (b) the proceeds of the sale of the assets to be leased are
at least equal to their fair market value (as determined by the Board
of Directors of the Issuer) and the proceeds are applied to the
purchase or acquisition (or, in the case of real property, the
construction) of assets or to the retirement (other than at maturity
or pursuant to a mandatory sinking fund or mandatory redemption
provision) of indebtedness. The foregoing limitation shall not apply,
if at the time the Issuer or any
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Consolidated Subsidiary enters into such sale and lease-back
transaction, and after giving effect thereto, Exempted Debt does not
exceed 10% of the total assets of the Issuer and its Subsidiaries on a
consolidated basis, determined in accordance with generally accepted
accounting principles.
The term "Attributable Debt" in connection with a sale and lease- back
transaction shall mean, as of the date of determination, the lesser of
(a) the fair value of the assets subject to such transaction or (b)
the present value (discounted at the rate of interest set forth in or
implicit in the terms of such lease or, if it is not practicable to
determine such rate, the weighted average interest rate per annum
borne by all series of Securities then Outstanding and subject to the
"Limitation on Sale and Lease-back Transactions" covenant above
compounded semi-annually, 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 "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.
17
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.
The term "net rental payments" under any lease of any period shall
mean the sum of the rental and other payments required to be paid in
such period by the lessee thereunder, not including, however, any
amounts required to be paid by such lessee (whether or not designated
as rental or additional rental) on account of maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or similar
charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the
amount of sales, maintenance and repairs, reconstruction, insurance,
taxes, assessments, water rates or similar charges.
The term "Subsidiary" shall mean any corporation of which at least a
majority of the outstanding stock having voting power under ordinary
circumstances for the election of the board of directors of such
corporation shall at the time be owned by the Issuer or by the Issuer
and one or more Subsidiaries or by one or more Subsidiaries.
19. Conversion and Exchange. The Notes shall not be convertible into or
exchangeable into any other security.
20. Further Issues. The Issuer may, without notice to or the consent of
the holders of the Notes, create and issue further notes ranking
equally and ratably with the Notes in all respects, or in all respects
except for the payment of interest accruing prior to the issue date of
such further notes shall be consolidated and form a single series with
the Notes and shall have the same terms as to status, redemption or
otherwise as the Notes.
21. Other Terms. The Notes shall have the other terms and shall be
substantially in the form set forth in the form of the Notes. In case
of any conflict between this Annex A and the Notes, the form of the
Notes shall control.
18
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Indenture.
19