exv10w1



 




Exhibit 10.1


EXECUTION COPY


 

 


Published CUSIP Number: 58155CAA2


AMENDED AND RESTATED CREDIT AGREEMENT


Dated as of June 8, 2007


among


McKESSON CORPORATION
and
McKESSON CANADA CORPORATION,
collectively, the Borrowers,


BANK OF AMERICA, N.A.,
as Administrative Agent,


BANK OF AMERICA, N.A. (acting through
its Canada branch), as Canadian Administrative Agent,


JPMORGAN CHASE BANK
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents,


WACHOVIA BANK, NATIONAL ASSOCIATION,
as L/C Issuer,


THE BANK OF NOVA SCOTIA
and
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., SEATTLE BRANCH,
as Co-Documentation Agents,


and


The Other Lenders Party Hereto


BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager


 

 


 









 





TABLE OF CONTENTS



	 	 	 	 	 	 	 	 	 	 	 
	Section	 	Page
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS	 	 	1	 
	 
	 	 	1.01	 	 	Defined Terms	 	 	1	 
	 
	 	 	1.02	 	 	Other Interpretive Provisions	 	 	22	 
	 
	 	 	1.03	 	 	Accounting Terms	 	 	22	 
	 
	 	 	1.04	 	 	Rounding	 	 	23	 
	 
	 	 	1.05	 	 	References to Agreements and Laws	 	 	23	 
	 
	 	 	1.06	 	 	Times of Day	 	 	23	 
	 
	 	 	1.07	 	 	Letter of Credit Amounts	 	 	23	 
	ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS	 	 	23	 
	 
	 	 	2.01	 	 	Committed Loans	 	 	23	 
	 
	 	 	2.02	 	 	Borrowings, Conversions and Continuations of Committed Loans	 	 	25	 
	 
	 	 	2.03	 	 	Letters of Credit	 	 	28	 
	 
	 	 	2.04	 	 	Bankers’ Acceptances for McKesson Canada	 	 	36	 
	 
	 	 	2.05	 	 	Prepayments	 	 	42	 
	 
	 	 	2.06	 	 	Termination or Reduction of Commitments	 	 	43	 
	 
	 	 	2.07	 	 	Repayment of Loans	 	 	43	 
	 
	 	 	2.08	 	 	Interest	 	 	43	 
	 
	 	 	2.09	 	 	Fees	 	 	44	 
	 
	 	 	2.10	 	 	Computation of Interest and Fees	 	 	45	 
	 
	 	 	2.11	 	 	Evidence of Debt	 	 	45	 
	 
	 	 	2.12	 	 	Payments Generally	 	 	45	 
	 
	 	 	2.13	 	 	Sharing of Payments	 	 	47	 
	 
	 	 	2.14	 	 	Currency Exchange Fluctuations	 	 	48	 
	 
	 	 	2.15	 	 	Increase in Commitments	 	 	48	 
	 
	 	 	2.16	 	 	Utilization of Commitments in Canadian Dollars	 	 	49	 
	 
	 	 	2.17	 	 	Extension of Maturity Date	 	 	50	 
	ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	51	 
	 
	 	 	3.01	 	 	Taxes	 	 	51	 
	 
	 	 	3.02	 	 	Illegality	 	 	53	 
	 
	 	 	3.03	 	 	Inability to Determine Rates	 	 	53	 





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	Section	 	Page
	 
	 	 	3.04	 	 	Increased Cost and Reduced Return; Capital Adequacy	 	 	54	 
	 
	 	 	3.05	 	 	Funding Losses	 	 	54	 
	 
	 	 	3.06	 	 	Matters Applicable to all Requests for Compensation	 	 	55	 
	 
	 	 	3.07	 	 	Survival	 	 	55	 
	ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	 	 	55	 
	 
	 	 	4.01	 	 	Conditions to Effectiveness of Restatement	 	 	55	 
	 

	 	 	4.02	 	 	Conditions to all Credit Extensions	 	 	57	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES	 	 	58	 
	 
	 	 	5.01	 	 	Corporate Existence and Power	 	 	58	 
	 
	 	 	5.02	 	 	Corporate Authorization; No Contravention	 	 	59	 
	 
	 	 	5.03	 	 	Governmental Authorization	 	 	59	 
	 
	 	 	5.04	 	 	Binding Effect	 	 	59	 
	 
	 	 	5.05	 	 	Litigation	 	 	59	 
	 
	 	 	5.06	 	 	No Default	 	 	60	 
	 
	 	 	5.07	 	 	Use of Proceeds; Margin Regulations	 	 	60	 
	 
	 	 	5.08	 	 	Financial Condition	 	 	60	 
	 
	 	 	5.09	 	 	Regulated Entities	 	 	60	 
	 
	 	 	5.10	 	 	No Burdensome Restrictions	 	 	60	 
	 
	 	 	5.11	 	 	Subsidiaries and Certain Liens As of the Restatement Date	 	 	61	 
	 
	 	 	5.12	 	 	Disclosed Matters	 	 	61	 
	ARTICLE VI. AFFIRMATIVE COVENANTS	 	 	61	 
	 
	 	 	6.01	 	 	Financial Statements	 	 	61	 
	 
	 	 	6.02	 	 	Certificates; Other Information	 	 	62	 
	 
	 	 	6.03	 	 	Notices	 	 	63	 
	 
	 	 	6.04	 	 	Preservation of Existence, Etc	 	 	64	 
	 
	 	 	6.05	 	 	Maintenance of Insurance	 	 	64	 
	 
	 	 	6.06	 	 	Payment of Taxes	 	 	64	 
	 
	 	 	6.07	 	 	Compliance with Laws	 	 	64	 
	 
	 	 	6.08	 	 	Books and Records	 	 	64	 
	 
	 	 	6.09	 	 	Inspection Rights	 	 	64	 
	 
	 	 	6.10	 	 	Use of Proceeds	 	 	65	 
	ARTICLE VII. NEGATIVE COVENANTS	 	 	65	 
	 
	 	 	7.01	 	 	Liens	 	 	65	 






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	Section	 	Page
	 
	 	 	7.02	 	 	Consolidations and Mergers	 	 	66	 
	 
	 	 	7.03	 	 	Use of Proceeds	 	 	67	 
	 
	 	 	7.04	 	 	Maximum Debt to Capitalization Ratio	 	 	67	 
	 
	 	 	7.05	 	 	Swap Contracts	 	 	67	 
	ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES	 	 	67	 
	 
	 	 	8.01	 	 	Events of Default	 	 	67	 
	 
	 	 	8.02	 	 	Remedies Upon Event of Default	 	 	69	 
	 
	 	 	8.03	 	 	Application of Funds	 	 	69	 
	ARTICLE IX. ADMINISTRATIVE AGENT	 	 	70	 
	 
	 	 	9.01	 	 	Appointment and Authorization of Agents	 	 	70	 
	 
	 	 	9.02	 	 	Rights as a Lender	 	 	71	 
	 
	 	 	9.03	 	 	Exculpatory Provisions	 	 	71	 
	 
	 	 	9.04	 	 	Delegation of Duties	 	 	72	 
	 
	 	 	9.05	 	 	Reliance by Agents	 	 	72	 
	 
	 	 	9.06	 	 	Successor Agents	 	 	73	 
	 
	 	 	9.07	 	 	Non-Reliance on Agents and Other Lenders	 	 	73	 
	 
	 	 	9.08	 	 	No Other Duties, Etc	 	 	74	 
	 
	 	 	9.09	 	 	Administrative Agent May File Proofs of Claim	 	 	74	 
	ARTICLE X. THE COMPANY’S GUARANTY OF MCKESSON CANADA’S OBLIGATIONS	 	 	75	 
	 
	 	 	10.01	 	 	Guaranty of the Guarantied Obligations	 	 	75	 
	 
	 	 	10.02	 	 	Liability of the Company Absolute	 	 	75	 
	 
	 	 	10.03	 	 	Waivers by the Company	 	 	77	 
	 
	 	 	10.04	 	 	Payment by the Company; Application of Payments	 	 	78	 
	 
	 	 	10.05	 	 	Guarantor’s Rights of Subrogation, Contribution, Etc	 	 	78	 
	 
	 	 	10.06	 	 	Subordination of Other Obligations	 	 	79	 
	 
	 	 	10.07	 	 	Real Property Security	 	 	79	 
	 
	 	 	10.08	 	 	Expenses	 	 	80	 
	 
	 	 	10.09	 	 	Continuing Guaranty; Termination of Guaranty	 	 	80	 
	 
	 	 	10.10	 	 	Authority of the Company or McKesson Canada	 	 	80	 
	 
	 	 	10.11	 	 	Financial Condition of McKesson Canada	 	 	80	 
	 
	 	 	10.12	 	 	Rights Cumulative	 	 	80	 
	 
	 	 	10.13	 	 	Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty	 	 	81	 






iii









 






	 	 	 	 	 	 	 	 	 	 	 
	Section	 	Page
	ARTICLE XI. MISCELLANEOUS	 	 	81	 
	 
	 	 	11.01	 	 	Amendments, Etc	 	 	81	 
	 
	 	 	11.02	 	 	Notices and Other Communications; Facsimile Copies	 	 	83	 
	 
	 	 	11.03	 	 	No Waiver; Cumulative Remedies	 	 	85	 
	 
	 	 	11.04	 	 	Expenses; Indemnity; Damage Waiver	 	 	85	 
	 
	 	 	11.05	 	 	Payments Set Aside	 	 	87	 
	 
	 	 	11.06	 	 	Successors and Assigns	 	 	87	 
	 
	 	 	11.07	 	 	Treatment of Certain Information; Confidentiality	 	 	91	 
	 
	 	 	11.08	 	 	Set-off	 	 	92	 
	 
	 	 	11.09	 	 	Interest Rate Limitation	 	 	92	 
	 
	 	 	11.10	 	 	Counterparts	 	 	93	 
	 
	 	 	11.11	 	 	Integration	 	 	93	 
	 
	 	 	11.12	 	 	Survival of Representations and Warranties	 	 	93	 
	 
	 	 	11.13	 	 	Severability	 	 	93	 
	 
	 	 	11.14	 	 	Tax Forms	 	 	93	 
	 
	 	 	11.15	 	 	Replacement of Lenders	 	 	95	 
	 
	 	 	11.16	 	 	Governing Law	 	 	96	 
	 
	 	 	11.17	 	 	Waiver of Right to Trial by Jury	 	 	97	 
	 
	 	 	11.18	 	 	California Judicial Reference	 	 	97	 
	 
	 	 	11.19	 	 	No Advisory or Fiduciary Responsibility	 	 	97	 
	 
	 	 	11.20	 	 	USA Patriot Act Notice	 	 	98	 
	 
	 	 	11.21	 	 	Judgment	 	 	98	 





iv









 






	 	 	 	 	 	 	 	 	 	 	 
	SCHEDULES	 	 	 	 
	 
	 	 	1.01	 	 	Existing Letters of Credit	 	 	 	 
	 
	 	 	2.01	 	 	Commitments, Pro Rata Shares and Affiliate Banks	 	 	 	 
	 
	 	 	5.11	 	 	Subsidiaries and Indebtedness Secured by Liens	 	 	 	 
	 
	 	 	11.02	 	 	Administrative Agent’s Office, Certain Addresses for Notices	 	 	 	 
	 
	EXHIBITS	 	 	 	 
	 
	 	 	 	 	 	Form of	 	 	 	 
	 
	 	 	A	 	 	Committed Loan Notice	 	 	 	 
	 
	 	 	B-1	 	 	Note (McKesson Corporation)	 	 	 	 
	 
	 	 	B-2	 	 	Note (McKesson Canada Corporation)	 	 	 	 
	 
	 	 	C	 	 	Opinion Matters	 	 	 	 
	 
	 	 	D	 	 	Compliance Certificate	 	 	 	 
	 
	 	 	E	 	 	Assignment and Assumption	 	 	 	 
	 
	 	 	F	 	 	Drawing Notice	 	 	 	 





v









 





AMENDED AND RESTATED CREDIT AGREEMENT




     This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of June 8,
2007, among McKESSON CORPORATION, a Delaware corporation (the “Company”), McKESSON CANADA
CORPORATION, a Nova Scotia unlimited company and indirect wholly owned subsidiary of the Company
(“McKesson Canada” and, together with the Company, the “Borrowers” and each a
“Borrower”), each lender from time to time party hereto (collectively, the
“Lenders” and each individually, a “Lender”), BANK OF AMERICA, N.A. acting through
its Canada branch, as Canadian Administrative Agent with respect to the Canadian Loans and the
Bankers’ Acceptance Facility (as hereinafter defined), BANK OF AMERICA, N.A., as Administrative
Agent, and Wachovia Bank, National Association, as L/C Issuer.



     The Borrowers have requested that the Lenders amend and restate the Existing Revolving Credit
Facility, and the Lenders are willing to do so on the terms and conditions set forth herein.



     Immediately prior to the effectiveness hereof, certain Lenders shall have assigned certain of
their interests under the Existing Revolving Credit Agreement to Bank of America, and Bank of
America shall have assigned such interests to certain other Lenders, in each case pursuant to
certain Master Assignment and Assumption Agreements each dated as of the date hereof.



     In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:



ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS




     1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings
set forth below:



     “Acceptance Usage” means, as at any date of determination, the aggregate Face Amount
of all completed Bankers’ Acceptances which have not been repaid by McKesson Canada whether or not
due and whether or not held by a Lender. For purposes of this definition, any Bankers’ Acceptance
that has been prepaid in full shall not be deemed to be outstanding and all Bankers’ Acceptances
shall be valued in Dollar Equivalents as of the applicable Computation Date.



     “Additional Commitment Lender” has the meaning specified in Section 2.17.



     “Administrative Agent” means Bank of America, N.A. in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.



     “Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.02, or such other address or account as
the Administrative Agent may from time to time notify the Borrowers and the Lenders.



     “Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.



1









 





     “Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified. “Control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.



     “Agent Parties” has the meaning specified in Section 11.02(c).



     “Agents” means the Administrative Agent and the Canadian Administrative Agent.



     “Aggregate Canadian Commitments” means the aggregate Canadian Commitments of all the
Lenders, which is an amount equal to $200,000,000 on the Restatement Date. The Aggregate Canadian
Commitments are a part of, and not an addition to, the Aggregate Commitments.



     “Aggregate Commitments” means the aggregate Commitments of all the Lenders.



     “Agreement” means this Amended and Restated Credit Agreement.



     “Anniversary Date” has the meaning specified in Section 2.17.



     “Applicable Agent” means (a) the Administrative Agent in the case of Domestic Loans
and Letters of Credit and (b) the Canadian Administrative Agent in the case of Canadian Loans and
in connection with the Bankers’ Acceptance Facility.



     “Applicable Borrower” means (a) the Company in the case of Domestic Loans and Letters
of Credit and (b) McKesson Canada in the case of Canadian Loans and Bankers’ Acceptances.



     “Applicable Currency” means, as to any particular payment or Loan, Dollars in the case
of Domestic Loans and Letters of Credit and Canadian Dollars in the case of Canadian Loans and the
Bankers’ Acceptance Facility.



     “Applicable Rate” means, from time to time, the rate, expressed in basis points per
annum, corresponding to the applicable Debt Rating as set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Eurodollar Rate	 	 
	 	 	 	 	 	 	 	 	Loans, Letters of	 	Base Rate Loans and
	 	 	Debt Ratings	 	 	 	 	 	Credit and Bankers’	 	Canadian Prime Rate
	Pricing Level	 	S&P/Moody’s/Fitch	 	Facility Fee	 	Acceptances	 	Loans
	1
	 	Greater than or equal 
to A/A2/A	 	 	6.0	 	 	 	14.0	 	 	 	-6.0	 






2









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Eurodollar Rate	 	 
	 	 	 	 	 	 	 	 	Loans, Letters of	 	Base Rate Loans and
	 	 	Debt Ratings	 	 	 	 	 	Credit and Bankers’	 	Canadian Prime Rate
	Pricing Level	 	S&P/Moody’s/Fitch	 	Facility Fee	 	Acceptances	 	Loans
	2
	 	A-/A3/A-	 	 	7.0	 	 	 	18.0	 	 	 	-7.0	 
	3
	 	BBB+/Baa1/BBB+	 	 	8.0	 	 	 	27.0	 	 	 	-8.0	 
	4
	 	BBB/Baa2/BBB	 	 	9.0	 	 	 	31.0	 	 	 	-9.0	 
	5
	 	BBB-/Baa3/BBB-	 	 	10.0	 	 	 	40.0	 	 	 	-10.0	 
	6
	 	Less than 
 BBB-/Baa3/BBB-	 	 	12.0	 	 	 	63.0	 	 	 	-12.0	 






     “Debt Rating” means, as of any date of determination, the available ratings as
determined by S&P, Moody’s and/or Fitch (collectively, the “Debt Ratings”) of the
Company’s non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the
Company shall maintain a rating of its non-credit-enhanced, senior unsecured long-term debt from
only two of S&P, Moody’s and Fitch then the higher of such Debt Ratings shall apply (with the Debt
Rating for Pricing Level 1 being the highest and the Debt Rating for Pricing Level 6 being the
lowest), unless there is a split in Debt Ratings of more than one Pricing Level, in which case the
Applicable Rate shall be determined by reference to a Debt Rating that is one Pricing Level lower
than the higher of the Company’s two Debt Ratings, (b) if the Company shall maintain a Debt Rating
of its non-credit-enhanced, senior unsecured long-term debt from only one of S&P, Moody’s and
Fitch, then that single Debt Rating shall apply, (c) if the Company shall maintain a Debt Rating of
its non-credit-enhanced, senior unsecured long-term debt from all three of S&P, Moody’s and Fitch
and there is a difference in such Debt Ratings, (i) if there is a difference of only one Pricing
Level between the highest and lowest of such Debt Ratings, the Applicable Rate shall be determined
by reference to the higher Debt Rating, and (ii) if there is a difference of more than one Pricing
Level between any of the Debt Ratings, and if two Debt Ratings are equivalent and the third Debt
Rating is lower, the Applicable Rate shall be determined by reference to the higher Debt Rating;
otherwise the Applicable Rate shall be determined by reference to a Debt Rating that is one Pricing
Level below the highest of the Company’s three Debt Ratings and (d) if the Company shall fail to
maintain any Debt Rating of its non-credit-enhanced, senior unsecured long-term debt from any of
S&P, Moody’s and Fitch, then the Applicable Rate shall be the same as the Applicable Rate that
would apply if the Company had the lowest Debt Ratings set forth in the Applicable Rate grid above.



     Initially, the Applicable Rate shall be determined based upon the Debt Rating specified in the
certificate delivered pursuant to Section 4.01(a)(vi). Thereafter, each change in the
Applicable Rate resulting from a publicly announced change in the Debt Rating shall be effective,
in the case of an upgrade, during the period commencing on the date of delivery by the Company to
the Administrative Agent of notice thereof pursuant to Section 6.03(e) and ending on the
date immediately preceding the effective date of the next such change and, in the case of a
downgrade, during the period commencing on the date of the public announcement thereof and ending
on the date immediately preceding the effective date of the next such change.



3









 





     “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.



     “Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger
and sole book manager.



     “Assignment and Assumption” means an Assignment and Assumption substantially in the
form of Exhibit E.



     “Attorney Costs” means and includes all fees, expenses and disbursements of any law
firm or other external counsel and, without duplication, the allocated cost of internal legal
services and all expenses and disbursements of internal counsel; provided that no fees,
expenses or disbursements shall qualify as Attorney Costs unless written evidence substantiating
such fees, expenses and disbursements is available to the Company upon request.



     “Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.



     “Audited Financial Statements” means the audited consolidated balance sheet of the
Company and its Subsidiaries for the fiscal year ended March 31, 2007, and the related consolidated
statements of operations, shareholders’ equity and cash flows for such fiscal year of the Company
and its Subsidiaries, including the notes thereto.



     “Availability Period” means the period from and including the Restatement Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments
pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender
to make Loans and of the obligation of the of the L/C Issuer to make L/C Credit Extensions pursuant
to Section 8.02.



     “BA Canada” means Bank of America, N.A. (acting through its Canada branch), and its
successors.



     “Bank of America” means Bank of America, N.A. and its successors.



     “Bankers’ Acceptance” has the meaning set forth in Section 2.04(a).



     “Bankers’ Acceptance Credit Extension” means, with respect to any Bankers’ Acceptance,
the acceptance thereof or the renewal or increase of the amount thereof.



     “Bankers’ Acceptance Facility” means the facility established by Section
2.04(a).



     “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as
publicly



4









 







announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a
rate set by Bank of America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate. Any change in
such rate announced by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.



     “Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.



     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.



     “Beneficiary” means, in relation to a Letter of Credit, from time to time, the initial
beneficiary, a transferee beneficiary, a successor beneficiary, a nominated bank, a negotiating
bank or a confirming bank with respect to such Letter of Credit, as applicable.



     “Borrower” has the meaning specified in the introductory paragraph hereto.



     “Borrower Materials” has the meaning specified in Section 6.02.



     “Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same
Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the
Lenders pursuant to Section 2.01.



     “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, Charlotte,
North Carolina or San Francisco, California, or, in the case of Canadian Loans or in connection
with the Bankers’ Acceptance Facility, Toronto, are authorized or required by law to close and, if
such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar
deposits are conducted by and between banks in the London interbank eurodollar market.



     “Canadian Administrative Agent” means BA Canada, in its capacity as the Canadian
administrative agent for the Canadian Lenders, and any successor Canadian administrative agent.



     “Canadian Administrative Agent’s Office” means the Canadian Administrative Agent’s
address and, as appropriate, account as set forth on Schedule 11.02, or such other address
or account as the Canadian Administrative Agent may from time to time notify the Borrowers and
Canadian Lenders.



     “Canadian Commitment” means, as to each Canadian Lender, an aggregate amount equal to
the amount set forth opposite its name in the column under the heading “Canadian Commitments” on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in accordance with
this Agreement.



     “Canadian Dollars” and “Cdn.$” each means the lawful money of Canada.



     “Canadian Exposure” means, as to any Canadian Lender (a) prior to the termination of
the Canadian Commitment, such Canadian Lender’s Canadian Commitment and (b) after the



5









 







termination of the Canadian Commitment, the Total Canadian Outstandings for such Canadian
Lender.



     “Canadian Lender” means each Canadian bank listed on Schedule 2.01 as a
Canadian Lender, and their successors and assigns.



     “Canadian Loan” means any Loan made to McKesson Canada pursuant to Section
2.01(b) denominated in Canadian Dollars, which may be a Eurodollar Rate Loan or a Canadian
Prime Rate Loan.



     “Canadian Participant” has the meaning set forth in Section 2.01(b)(ii).



     “Canadian Participation” has the meaning set forth in Section 2.01(b)(ii).



     “Canadian Prime Rate” means, for any day, with respect to any Canadian Loan, a
fluctuating rate per annum equal to the higher of (a) the rate announced by the Canadian
Administrative Agent from time to time as its prime lending rate, as in effect from time to time,
and (b) a rate equal to the CDOR that would apply to a one-month Bankers’ Acceptance accepted by BA
Canada if made on such day plus 0.75% per annum. As to any loan, the Canadian Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate actually charged to any
customer. The Canadian Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Canadian Prime Rate. Any change in the reference rate announced by
the Canadian Administrative Agent shall take effect at the opening of business on the day specified
in the announcement of such change.



     “Canadian Prime Rate Loans” means Canadian Loans bearing interest at rates determined
by reference to the Canadian Prime Rate.



     “Canadian Pro Rata Share” means, as to any Canadian Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such
Canadian Lender’s Canadian Exposure divided by the combined Canadian Exposure of all Canadian
Lenders (including, in each case, Canadian Exposure of Affiliates of Canadian Lenders). The
initial Canadian Pro Rata Share of each Canadian Lender is set forth opposite the name of such
Canadian Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such
Canadian Lender becomes a party hereto, as applicable.



     “Canadian Resident” shall mean a Person that is either (a) a resident of Canada for
purposes of the Income Tax Act (Canada) or (b) the Canada branch of an authorized foreign bank that
will receive all amounts contemplated under this agreement as part of its Canadian banking business
for purposes of the Income Tax Act (Canada).



     “Canadian Spot Rate” means the rate quoted by Bank of America as the spot rate for the
purchase by Bank of America of such currency with another currency through its FX Trading Office at
approximately 8:00 a.m. on the Computation Date.



     “Cash Collateralize” has the meaning specified in Section 2.03(g).



6









 





     “CDOR” means, for any day and relative to Bankers’ Acceptances having any specified
Face Amount and maturity, the average of the annual rates for Bankers’ Acceptances having such
specified Face Amount and maturity (or a Face Amount and maturity as closely as possible comparable
to such specified Face Amount and maturity) of the banks named in Schedule I to the Bank Act
(Canada) that appears on the Reuters Screen CDOR page as of at 10:00 a.m. (Eastern time) on such
day (or, if such day is not a Business Day, as of 10:00 a.m. (Eastern time) on the next preceding
Business Day), provided that if such rate does not appear on the Reuters Screen CDOR page at such
time on such date, CDOR for such date will be the annual rate of interest (rounded upward to the
nearest whole multiple of 1/100 of 1% calculated) as of 10:00 a.m. (Eastern time) on such date on
the basis of the discount amount at which the Canadian Administrative Agent is then offering to
purchase Bankers’ Acceptances accepted by it having a comparable aggregate Face Amount and
identical maturity date to the aggregate Face Amount and maturity date of such Bankers’
Acceptances.



     “Clearing House” means The Canadian Depository for Securities Limited, or such
alternative clearing house within the meaning of The Depository Bills and Notes Act (Canada).



     “Code” means the Internal Revenue Code of 1986.



     “Commitment” means, as to each Lender, its obligation to (a) make Committed Loans
(including any Canadian Commitment of any Canadian Lender to make Canadian Loans or purchase
Bankers’ Acceptances) to the Borrowers pursuant to Article II and (b) purchase
participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not
to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as
such amount may be adjusted from time to time in accordance with this Agreement. The Commitment
for any Lender that has an Affiliate is a single value for such Lender and its Affiliate taken
together.



     “Committed Loan” means a Domestic Loan or a Canadian Loan.



     “Committed Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of
Committed Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans,
pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A.



     “Company” has the meaning specified in the introductory clause hereto.



     “Company Guaranty” means the Company’s guaranty of the Obligations of McKesson Canada
under this agreement, the terms of which guaranty are located in Article X of this
Agreement.



     “Compliance Certificate” means a certificate substantially in the form of Exhibit
D.



     “Computation Date” has the meaning specified in Section 2.16(a).



     “Contractual Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.



7









 





     “Control” has the meaning specified in the definition of “Affiliate.”



     “Credit Extension” means each of the following: (a) a Borrowing, (b) a Bankers’
Acceptance Credit Extension and (c) an L/C Credit Extension.



     “Debt Rating” has the meaning specified in the definition of “Applicable Rate.”



     “Debtor Relief Laws” means the Bankruptcy Code of the United States, the Bankruptcy
and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.



     “Default” means any event or condition that constitutes an Event of Default or that,
with the giving of any notice, the passage of time, or both, would be an Event of Default.



     “Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate, if any, applicable to Base Rate Loans plus (c) 1% per annum;
provided, however, that, with respect to a Eurodollar Rate Loan or Canadian Prime
Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 1% per annum, in each case to the fullest
extent permitted by applicable Laws.



     “Defaulting Lender” means (a) any Lender that (i) has failed to fund any portion of
the Committed Loans or participations in L/C Obligations required to be funded by it hereunder
within one Business Day of the date required to be funded by it hereunder, (ii) has otherwise
failed to pay over to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the subject of a good
faith dispute, or (iii) has been deemed insolvent or become the subject of an Insolvency Proceeding
and (b) any Canadian Lender that has failed to purchase any Draft or Bankers’ Acceptance.



     “Disclosed Matters” means (a) those matters described in the Company’s press release
dated April 28, 1999 (the “Press Release”), (b) litigation which (i) is related to the matters
disclosed in the Press Release and (ii) has been disclosed to the Administrative Agent and the
Lenders prior to the Restatement Date, (c) other matters related to the matters disclosed in the
Press Release which have been publicly disclosed by the Company in its filings with the SEC prior
to the Restatement Date, and (d) other litigation to the extent disclosed in the Company’s Annual
Report on Form 10-K for the fiscal year ended March 31, 2007, as filed with the SEC.



     “Dollar” and “$” mean lawful money of the United States.



     “Dollar Equivalent” means, at any time, (a) as to any amount denominated in Dollars,
the amount thereof at such time, and (b) as to any amount denominated in Canadian Dollars, the
equivalent amount in Dollars as determined by the Applicable Agent at such time on the basis of the
Canadian Spot Rate for the purchase of Dollars with Canadian Dollars on the most recent Computation
Date provided for in Section 2.16(a).



8









 





     “Domestic Lender” means each Lender acting in the capacity of a domestic lender listed
on Schedule 2.01 as a Domestic Lender, and their successors and assigns.



     “Domestic Loan” means any Loan made to the Company pursuant to Section 2.01(a)
denominated in Dollars which may be a Eurodollar Rate Loan or a Base Rate Loan.



     “Draft” means, at any time, a bill of exchange, within the meaning of the Bills of
Exchange Act (Canada) drawn by McKesson Canada to be accepted by a Canadian Lender (which upon such
acceptance will be a Bankers’ Acceptance) and bearing such distinguishing letters and numbers as
such Canadian Lender may determine, but which at such time, except as otherwise provided herein,
has not been accepted by a Canadian Lender.



     “Drawing” means an acceptance of completed Drafts by a Canadian Lender or by any other
Person pursuant to Section 2.04.



     “Drawing Date” means any Business Day fixed pursuant to Section 2.04(b) for a
Drawing.



     “Drawing Fee” means, with respect to the Drafts issued by McKesson Canada hereunder
and accepted as provided herein on any Drawing Date, an amount equal to the Drawing Fee Rate
multiplied by the aggregate Face Amount of such Drafts, calculated, in each case, on the basis of
the term to maturity of such Draft and a year of 365 or 366 days, as the case may be (rounded to
the nearest whole cent, with one-half of one cent being rounded up).



     “Drawing Fee Rate” means, in calculating the Drawing Fee for any Draft, the Applicable
Rate for Bankers’ Acceptances.



     “Drawing Notice” has the meaning set forth in Section 2.04(b)(i).



     “Drawing Purchase Price” means, in respect of Drafts to be accepted by a Canadian
Lender or any other Person, the difference between (a) the result (rounded to the nearest whole
cent, with one-half of one cent being rounded up) obtained by dividing the aggregate Face Amount of
such Drafts by the sum of one plus the product of (i) the Effective Discount Rate multiplied by
(ii) a fraction the numerator of which is the term of maturity of such Drafts and the denominator
of which is 365; and (b) the applicable Drawing Fee.



     “Effective Discount Rate” means (a) with respect to any Bankers’ Acceptance accepted
by a Canadian Lender named on Schedule I to the Bank Act (Canada), the rate determined by the
Canadian Administrative Agent as being CDOR on the applicable Drawing Date, and (b) with respect to
any Bankers’ Acceptance accepted by any other Canadian Lender, the lesser of (i) the rate advised
by such Canadian Lender to the Canadian Administrative Agent as being the discount rate of such
Canadian Lender, calculated on the basis of a year of 365 or 366 days, as applicable, and
determined in accordance with normal market practice, for bankers’ acceptances of such Lender
having comparable Face Amount and identical maturity date to the Face Amount and maturity date of
such Bankers’ Acceptance and (ii) the rate determined by the Canadian Administrative Agent in
accordance with clause (a) above plus 0.07% per annum.



     “Eligible Assignee” has the meaning specified in Section 11.06(g).



9









 





     “Environmental Laws” means any and all federal, state, provincial, municipal, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.



     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Company or any of its Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.



     “ERISA” means the Employee Retirement Income Security Act of 1974.



     “ERISA Affiliate” means any trade or business (whether or not incorporated) under
common control with the Company within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the
Code).



     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company
or any ERISA Affiliate.



     “Eurodollar Base Rate” has the meaning specified in the definition of Eurodollar Rate.



     “Eurodollar Rate” means for any Interest Period with respect to any Eurodollar Rate
Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:



Eurodollar Rate =                     Eurodollar Base Rate                    

                              1.00 — Eurodollar Reserve Percentage




     Where,



10









 





     “Eurodollar Base Rate” means, for such Interest Period, the rate per annum equal to
the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by the Administrative
Agent from time to time) at approximately 11:00 a.m. London time two Business Days prior to the
commencement of such Interest Period for deposits in the Applicable Currency (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is
not available at such time for any reason, then the “Eurodollar Base Rate” for such Interest Period
shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits
in the Applicable Currency for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of
America and with a term equivalent to such Interest Period would be offered by Bank of America’s
London Branch (or other Bank of America branch or Affiliate) to major banks in the London or other
offshore interbank eurodollar market for such currency at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest Period.



     “Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate based on
the Eurodollar Rate.



     “Eurodollar Reserve Percentage” means, for any day during any Interest Period (A) in
the case of Domestic Loans, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Domestic Lender, under
regulations issued from time to time by the FRB for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) and (B) in the case of
Canadian Loans, the reserve percentage (expressed as a decimal, carried out to five decimal places)
in effect on such day, whether or not applicable to any Canadian Lender, under any applicable
regulations of the central bank or other relevant Governmental Authority in Canada. The Eurodollar
Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.



     “Event of Default” has the meaning specified in Section 8.01.



     “Existing Letters of Credit” means those letters of credit issued prior to the date
hereof for the account of the Company or one of its Subsidiaries and identified on Schedule
1.01.



     “Existing Maturity Date” has the meaning specified in Section 2.17.



     “Existing Revolving Credit Agreement” means that certain Credit Agreement dated as of
September 24, 2004 among the Company, McKesson Canada, Bank of America, as administrative agent, BA
Canada, as Canadian administrative agent, JPMorgan Chase Bank and Wachovia Bank, National
Association as syndication agents, Wachovia Bank, National Association as L/C issuer, The Bank of
Nova Scotia and Bank of Tokyo Mitsubishi, Ltd., Seattle Branch, as co-documentation agents and the
lenders from time to time party thereto, as amended to date.



11









 





     “Exposure” means, with respect to any Lender, (a) prior to the termination of the
Commitment, such Lender’s Commitment and (b) after the termination of the Commitment, the Total
Outstandings for such Lender.



     “Extending Lender” has the meaning specified in Section 2.17.



     “Face Amount” means, in respect of a Draft or a Bankers’ Acceptance, as the case may
be, the amount payable to the holder thereof on its maturity.



     “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the weighted average rate (rounded upward, if necessary, to a whole multiple of 1/100 of
1%) charged to Bank of America on such day on such transactions as determined by the Administrative
Agent.



     “Fee Letter” means the letter agreement, dated May 9, 2007, among the Company, the
Administrative Agent and the Arranger.



     “Fitch” means Fitch, Inc., a majority-owned subsidiary of Fimalac, S.A., and any
successor thereto.



     “Foreign Lender” has the meaning specified in Section 11.14(a)(i).



     “FRB” means the Board of Governors of the Federal Reserve System of the United States.



     “Fund” means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its activities.



     “FX Trading Office” means the Foreign Exchange Trading Unit of Bank of America located
in London, England, or such other of Bank of America’s offices as Bank of America may designate
from time to time or, if Bank of America is no longer the Administrative Agent, the offices of
Administrative Agent as Administrative Agent may designate from time to time.



     “GAAP” means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.



12









 





     “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative
tribunal, central bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.



     “Granting Lender” has the meaning specified in Section 11.06(h).



     “Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any
assets of such Person securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.



     “Guarantied Obligations” has the meaning set forth in Section 10.01.



     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



     “Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following:



          (a) all obligations of such Person for borrowed money;




          (b) all obligations of such Person to pay the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business);




          (c) all non-contingent reimbursement or payment obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments;




13









 








          (d) all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or
other similar instruments;




          (e) capital leases and Synthetic Lease Obligations;




          (f) net obligations of such Person under any Swap Contract;




          (g) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); and




          (h) all indebtedness referred to in clauses (a) through (g) above (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person, whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse.




     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such date.



     “Indemnified Liabilities” has the meaning set forth in Section 11.04.



     “Indemnitees” has the meaning set forth in Section 11.04.



     “Insolvency Proceeding” means (a) any case, action or proceeding before any court or
other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or other similar
arrangement in respect of its creditors generally or any substantial portion of its creditors;
undertaken under any Debtor Relief Law.



     “Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan or a
Canadian Prime Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate
Loan exceeds three months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan or
Canadian Prime Rate Loan, (i) the fifth Business Day following the end of each calendar quarter and
(ii) the Maturity Date.



     “Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the
date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by the Applicable
Borrower in its Committed Loan Notice; provided that:



14









 






     (a) any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next preceding
Business Day;




     (b) any Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar month at the end
of such Interest Period; and




     (c) no Interest Period shall extend beyond the Maturity Date.



     “IRS” means the United States Internal Revenue Service.



     “ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such
later version thereof as may be in effect at the time of issuance).



     “Issuer Documents” means with respect to any Letter of Credit, the Letter Credit
Application, and any other document, agreement and instrument entered into by the L/C Issuer and
the Company (or any Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of
Credit.



     “Laws” means, collectively, all international, foreign, Canadian, federal, state,
provincial, municipal and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the enforcement, interpretation
or administration thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each
case whether or not having the force of law.



     “L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.



     “L/C Borrowing” means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.



     “L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.



     “L/C Issuer” means Wachovia Bank, National Association in its capacity as issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.



     “L/C Obligations” means, as at any date of determination, the aggregate undrawn amount
of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts,
including all L/C Borrowings. For purposes of computing the amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with
Section 1.07. For all purposes of this Agreement, if on any date of determination a Letter
of



15









 







Credit has expired by its terms but any amount may still be drawn thereunder by reason of the
operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.



     “Lender” has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the L/C Issuer.



     “Lending Office” means, as to any Lender, the office or offices of such Lender
described as its “Lending Office” or “Domestic Lending Office” or “Eurodollar Lending Office,” as
the case may be, in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Company and the Administrative Agent.



     “Letter of Credit” means (a) any letter of credit issued hereunder and (b) each of the
Existing Letters of Credit. A Letter of Credit may be a commercial letter of credit or a standby
letter of credit.



     “Letter of Credit Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.



     “Letter of Credit Expiration Date” means the day that is five Business Days prior to
the Maturity Date then in effect.



     “Letter of Credit Sublimit” means an amount equal to $500,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.



     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
of any kind or nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect as any of the
foregoing, but not including the interest of a lessor under an operating lease or the sale of
accounts receivable).



     “Loan” means an extension of credit by a Lender to a Borrower under Article II
in the form of a Committed Loan.



     “Loan Documents” means this Agreement, any Notes, any Drafts, any Bankers’
Acceptances, the Fee Letter and all other documents delivered to the Administrative Agent, Canadian
Administrative Agent or any Lender in connection herewith.



     “Loan Parties” means, collectively, the Borrowers.



     “Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of
the FRB.



     “Master Agreement” has the meaning set forth in the definition of “Swap Contract.”




     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties or condition (financial or otherwise) of
the



16









 







Company and its Subsidiaries taken as a whole or any Material Subsidiary; (b) a material
impairment of the ability of any Borrower to perform its obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect
or enforceability against any Borrower of any Loan Document to which it is a party.



     “Material Subsidiary” means, at any time, (a) McKesson Canada and (b) any other
Subsidiary having at such time 10% or more of the Company’s consolidated total (gross) revenues for
the preceding four fiscal quarter period, as of the last day of the preceding fiscal quarter based
upon the Company’s most recent annual or quarterly financial statements delivered to the
Administrative Agent under Section 6.01.



     “Maturity Date” means the later of (a) June 8, 2012 or (b) if the term of this
Agreement is extended pursuant to Section 2.17, such extended termination date as
determined pursuant to such Section; provided, however, that, in each case, if such date is not a
Business Day, the next preceding Business Day; provided further that with respect to any
Non-Extending Lender, the Maturity Date of such Non-Extending Lender’s Commitment shall be the
Existing Maturity Date notwithstanding the extension of Commitments by any other Lender pursuant to
Section 2.17.



     “McKesson Canada” has the meaning specified in the introductory paragraph hereto.



     “Member” means a Canadian Lender that has entered into a contract of membership with
the Clearing House.



     “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.



     “Multiemployer Plan” means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.



     “Net Worth” means the sum of the capital stock and additional paid in capital plus
retained earnings (or minus accumulated deficits) of the Company and its Subsidiaries determined on
a consolidated basis in conformity with GAAP on such date.



     “Non-Extending Lender” has the meaning specified in Section 2.17.



     “Note” means a promissory note executed by a Borrower in favor of a Lender pursuant to
Section 2.11, substantially in the form of Exhibit B-1 in the case of the Company
with respect to Domestic Loans or substantially in the form of Exhibit B-2 in the case of
McKesson Canada with respect to Canadian Loans.



     “Notice Date” has the meaning specified in Section 2.17.



     “Obligations” means all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any
Loan, Draft, Bankers’ Acceptance or Letter of Credit, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter
arising and including interest and fees that accrue after the commencement by or against any



17









 







Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding.



     “Organization Documents” means, with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with
respect to any non-U.S. jurisdiction).



     “Other Taxes” has the meaning specified in Section 3.01(b).



     “Outstanding Amount” means (a) with respect to Committed Loans and on any date, the
aggregate outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Committed Loans occurring on such date; (b) with respect to any
Bankers’ Acceptances on any date, the amount of the Acceptance Usage on such date after giving
effect to any Bankers’ Acceptance Credit Extension occurring on such date and any other changes in
the aggregate amount of the Acceptance Usage as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Bankers’ Acceptance or any reductions in
the maximum amount available for drawing under Bankers’ Acceptance taking effect on such date; and
(c) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any L/C Credit Extension occurring on such date and any other changes
in the aggregate amount of the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on such date.



     “Overnight Canadian Rate” means, for any day, the rate of interest per annum at which
overnight deposits in Canadian Dollars, in an amount approximately equal to the amount with respect
to which such rate is being determined, would be offered for such day by the Administrative Agent’s
London Branch to major banks in the London or other applicable offshore interbank market.



     “Participant” has the meaning specified in Section 11.06(d).



     “Participation Funding Date” has the meaning specified in Section
2.01(b)(ii)(A).



     “PBGC” means the Pension Benefit Guaranty Corporation.



     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by the Company or any ERISA Affiliate or to which the Company or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.



     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.



18









 





     “Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by any Borrower or, with respect to any such plan that is subject to Section 412
of the Code or Title IV of ERISA, any ERISA Affiliate.



     “Pro Rata Share” means, with respect to each Lender at any time, a fraction (expressed
as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of
the Commitment of such Lender at such time and the denominator of which is the amount of the
Aggregate Commitments at such time; provided that if the Commitment of each Lender to make Loans,
the obligation of the Canadian Lenders to make Bankers’ Acceptance Credit Extensions and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section
8.02 or if the Aggregate Commitments have expired, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such termination and
after giving effect to any subsequent assignments made pursuant to the terms hereof. The initial
Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.



     “Proceedings” has the meaning set forth in Section 6.03(c).



     “Register” has the meaning set forth in Section 11.06(c).



     “Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.



     “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the 30 day notice period has been waived.



     “Request for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Committed Loans, a Committed Loan Notice, (b) with respect to a Bankers’
Acceptance, a Drawing Notice and (c) with respect to an L/C Credit Extension, a Letter of Credit
Application.



     “Request Period” has the meaning specified in Section 2.17.



     “Required Lenders” means, as of any date of determination, Lenders having more than
50% of the Aggregate Commitments or, if the Commitment of each Lender to make Loans, the obligation
of each Canadian Lender to make Bankers’ Acceptance Credit Extensions and the obligation of the L/C
Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, Lenders
holding in the aggregate more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in Bankers’ Acceptances and L/C Obligations
being deemed “held” by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required Lenders.



     “Requirement of Law” means, as to any Person, any law (statutory or common), treaty,
rule or regulation or determination, decree or order of an arbitrator or of a Governmental



19









 







Authority, in each case applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject, including but not limited to any Environmental
Law.



     “Response Deadline” has the meaning specified in Section 2.17.



     “Responsible Officer” means the chief executive officer, president, chief financial
officer, corporate vice president or the treasurer of a Loan Party. Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to
have been authorized by all necessary corporate, partnership and/or other action on the part of
such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.



     “Restatement Date” means the first date on which all conditions set forth in
Section 4.01 are satisfied or waived in accordance with Section 11.01 (or, in the
case of Section 4.01(b), waived by the Person entitled to receive the applicable payment).



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.



     “SEC” means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.



     “SPC” has the meaning specified in Section 11.06(h).



     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company, unlimited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the election of directors
or other governing body (other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries”
shall refer to a Subsidiary or Subsidiaries of the Company.



     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement relating to any
of the foregoing (any such



20









 







master agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.



     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).



     “Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance sheet of such Person
but which, upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).



     “Taxes” has the meaning specified in Section 3.01(a).



     “Total Canadian Outstandings” means (a) as to all Lenders at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding Canadian Loans plus
(ii) the Acceptance Usage, in each case valued in Dollar Equivalents, and (b) as to any Canadian
Lender at any date of determination, the sum of (x) the aggregate principal amount of all
outstanding Canadian Loans made by such Canadian Lender or its Affiliate plus (y) the Acceptance
Usage of such Canadian Lender or its Affiliate, in each case valued in Dollar Equivalents.



     “Total Capitalization” means, on any date, the sum of (a) Total Debt and (b) the Net
Worth on such date.



     “Total Debt” means, on any date, all Indebtedness of the Company and its Subsidiaries
determined on a consolidated basis on such date.



     “Total Outstandings” means (a) as to all Lenders at any date of determination, the sum
of (i) the Outstanding Amount of all Loans and L/C Obligations plus (ii) the Acceptance Usage, in
each case valued in Dollar Equivalents, and (b) as to any Lender at any date of determination, the
sum of (x) the Outstanding Amount of all Loans and L/C Obligations of such Lender or its Affiliate
plus (y) the Acceptance Usage of such Lender or its Affiliate, in each case valued in Dollar
Equivalents.



     “Type” means (a) with respect to a Domestic Loan, its character as a Base Rate Loan or
a Eurodollar Rate Loan and (b) with respect to a Canadian Loan, its character as a Canadian Prime
Rate Loan or a Eurodollar Rate Loan.



     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section
412 of the Code for the applicable plan year.



21









 





     “United States” and “U.S.” mean the United States of America.



     “Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).



     “Wholly-Owned Subsidiary” means any Subsidiary in which (other than directors’
qualifying shares required by law) 100% of the capital stock of each class or other interests
having ordinary voting power, and 100% of the capital stock of every other class or other
interests, in each case, at the time as of which any determination is being made, is owned,
beneficially and of record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.



     1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan
Document, unless otherwise specified herein or in such other Loan Document:



     (a) The meanings of defined terms are equally applicable to the singular and plural forms of
the defined terms.



     (b) (i) The words “herein,” “hereto,” “hereof” and “hereunder”
and words of similar import when used in any Loan Document shall refer to such Loan Document as a
whole and not to any particular provision thereof.




     (ii) Article, Section, Exhibit and Schedule references are to the Loan Document in which
such reference appears.




     (iii) The term “including” is by way of example and not limitation.




     (iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.



     (c) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including;” the words “to” and “until”
each mean “to but excluding;” and the word “through” means “to and
including.”



     (d) Section headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any other Loan
Document.



     1.03 Accounting Terms. (a) All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time,
applied in a manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.



     (b) If at any time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Company or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Company shall negotiate



22









 







in good faith to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders); provided
that, until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Company shall provide to the
Administrative Agent and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations
of such ratio or requirement made before and after giving effect to such change in GAAP.



     1.04 Rounding. Any financial ratios required to be maintained by the Company pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).



     1.05 References to Agreements and Laws. Unless otherwise expressly provided herein, (a)
references to Organization Documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are not prohibited by any
Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.



     1.06 Times of Day. Unless otherwise specified, all references herein to times of day shall be
references to Pacific time (daylight or standard, as applicable).



     1.07 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of
Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided, however, that with respect to any Letter of Credit that, by
its terms or the terms of any Issuer Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all such increases,
whether or not such maximum stated amount is in effect at such time.



ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS




     2.01 Committed Loans.



     (a) Subject to the terms and conditions set forth herein, each Lender severally agrees to make
Domestic Loans to the Company from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s
Commitment; provided, however, that after giving effect to any Borrowing, (i) the
Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender’s Pro Rata Share of the
Outstanding Amount of all L/C Obligations and all Bankers’ Acceptances (taking into account any
Canadian Participations when determining the Total Canadian Outstandings of a



23









 







Canadian Lender) shall not exceed such Lender’s Commitment. Within the limits of each
Lender’s Commitment, and subject to the other terms and conditions hereof, the Company may borrow
under this Section 2.01(a), prepay under Section 2.05, and reborrow under this
Section 2.01(a). Domestic Loans may be Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.



     (b) (i) Subject to the terms and conditions set forth herein, each Canadian Lender severally
agrees to make Canadian Loans to McKesson Canada from time to time, on any Business Day during the
Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of
such Lender’s Canadian Commitment; provided, however, that, after giving effect to
any Borrowing under the Canadian Commitments, (A) the Total Outstandings shall not exceed the
Aggregate Commitments, (B) the Total Canadian Outstandings shall not exceed the Aggregate Canadian
Commitments, (C) McKesson Canada shall be a Wholly-Owned Subsidiary, (D) the aggregate Outstanding
Amount of the Canadian Loans of any Canadian Lender, plus such Lender’s Pro Rata Share of the
Acceptance Usage (taking into account any Canadian Participations when determining the Total
Canadian Outstandings of a Canadian Lender) shall not exceed its Canadian Commitment, and (E) all
Canadian Loans to McKesson Canada shall be made by the Canadian Lenders, shall be denominated and
payable in Canadian Dollars and no other currency and shall not be Base Rate Loans. Within the
limits of each Lender’s Canadian Commitment, and subject to the other terms and conditions hereof,
McKesson Canada may borrow under this Section 2.01(b)(i), prepay under Section 2.05
and reborrow under this Section 2.01(b)(i). Canadian Loans may be Canadian Prime Rate
Loans or Eurodollar Rate Loans, as provided herein.




     (ii) (A) Subject to Section 2.01(b)(ii)(B) below, on the Participation Funding
Date (as defined below) each Lender that is not a Canadian Lender shall be deemed to have
purchased, and hereby agrees to purchase, a participation in each outstanding Canadian Loan
and Bankers’ Acceptance Credit Extension in an amount equal to its Pro Rata Share of the
unpaid amount of such Canadian Loan or Bankers’ Acceptance Credit Extension together with
accrued interest thereon (each, a “Canadian Participation”), such Canadian
Participation to be governed by this Section 2.01(b)(ii)(A) and not by Section
11.06(d) hereof. Only upon demand from any Canadian Lender on or after the date of (X)
any Event of Default under Sections 8.01(a), 8.01(f) or 8.01(g) or (Y) an
acceleration of the maturity pursuant to Section 8.02(b) of any amounts owing to the
Canadian Lenders under this Agreement (the date of such demand, the “Participation
Funding Date”), each such Lender that has purchased a Canadian Participation (each a
“Canadian Participant”) shall deliver to the Canadian Administrative Agent an amount
equal to its Canadian Participation in same day funds and in Canadian Dollars at the
Canadian Administrative Agent’s Office for distribution to Canadian Lenders in accordance
with their Canadian Pro Rata Share. If any amount required to be paid by any Canadian
Participant pursuant to this Section 2.01(b)(ii)(A) is not paid to the Canadian
Administrative Agent when due but is paid within three Business Days after the date such
payment is due, such Canadian Participant shall pay to the Canadian Administrative Agent for
distribution to Canadian Lenders on demand an amount equal to the product of (i) such
amount, times (ii) the Overnight Canadian Rate, times (iii) a fraction the numerator of
which is the number of days that elapse during such period and the denominator of which is
365 or 366, as the case may be. If such amount required to be



24









 







paid by any Canadian Participant pursuant to this Section 2.01(b)(ii)(A) is not
in fact made available to the Canadian Administrative Agent within three Business Days after
the date such payment is due, the Canadian Administrative Agent shall be entitled to recover
from such Canadian Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum equal to the rate applicable thereto in accordance with
the preceding sentence plus the Applicable Rate. A certificate of the Canadian
Administrative Agent submitted to any Canadian Participant with respect to any amounts owing
under this Section 2.01(b)(ii)(A) shall be conclusive in the absence of manifest
error. In the event the Canadian Administrative Agent receives a payment with respect to
any Canadian Loan in which Canadian Participations have been purchased and as to which the
purchase price has been requested by the Canadian Administrative Agent and delivered by a
Canadian Participant as in this Section 2.01(b)(ii)(A) provided, the Canadian
Administrative Agent shall promptly distribute to such Canadian Participant its share of
such payment based on its Canadian Participation. If the Canadian Administrative Agent pays
any amount to a Canadian Participant pursuant to this Section 2.01(b)(ii)(A) in the
belief or expectation that a related payment has been or will be received or collected and
such related payment is not received or collected by the Canadian Administrative Agent, then
such Canadian Participant will promptly on demand by the Canadian Administrative Agent
return such amount to the Canadian Administrative Agent, together with interest thereon at
such rate as the Canadian Administrative Agent shall determine to be customary between banks
for correction of errors. If the Canadian Administrative Agent determines at any time that
any amount received or collected by the Canadian Administrative Agent pursuant to this
Agreement is to be returned to McKesson Canada under this Agreement or paid to any other
Person or entity pursuant to any Debtor Relief Laws, any sharing clause in this Agreement,
or otherwise, then, notwithstanding any other provision of this Agreement, the Canadian
Administrative Agent shall not be required to distribute any portion thereof to any Canadian
Participant, and each such Canadian Participant will promptly on demand by the Canadian
Administrative Agent repay any portion that the Canadian Administrative Agent shall have
distributed to such Canadian Participant, together with interest thereon at such rate, if
any, as the Canadian Administrative Agent shall pay to McKesson Canada or such other Person
or entity with respect thereto. If any amounts returned to McKesson Canada or reimbursed by
a Canadian Participant pursuant to this Section 2.01(b)(ii)(A) are later recovered
by the Canadian Administrative Agent, the Canadian Administrative Agent shall promptly pay
to each Canadian Participant a proportionate share based on such Canadian Participant’s
Canadian Participation.




     (B) Notwithstanding any other provision of this Agreement, each Lender agrees
that, prior to the Participation Funding Date, all amounts paid or credited by
McKesson Canada under this Agreement to a Canadian Lender shall be received by such
Canadian Lender (a) for its own benefit and account or (b) as agent for or for the
account of an Eligible Assignee that is a Canadian Resident in respect of the
Canadian Loans, and not otherwise as agent for or on behalf of any other Person.



25









 





     2.02 Borrowings, Conversions and Continuations of Committed Loans.



     (a) With respect to Domestic Loans, each Borrowing, each conversion of Committed Loans from
one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the
Company’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each
such notice must be received by the Administrative Agent not later than 9:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Committed Loans,
and (ii) on the requested date of any Borrowing of Base Rate Committed Loans. With respect to
Canadian Loans, each Borrowing, each conversion of Canadian Loans from one Type to the other and
each continuation of Eurodollar Rate Loans shall be made upon McKesson Canada’s irrevocable notice
to the Canadian Administrative Agent, which may be given by telephone. Each such notice must be
received by the Canadian Administrative Agent not later than 11:00 a.m. (Eastern time) (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Canadian Prime Rate Loans,
and (ii) one Business Day prior to the requested date of any Borrowing of Canadian Prime Rate
Loans. Each telephonic notice by a Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Applicable Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of the Applicable Borrower. Each
Borrowing, conversion or continuation of Domestic Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof and, in the case of Canadian Loans,
in an aggregate minimum amount of Cdn.$5,000,000 or any whole multiple of Cdn.$1,000,000 in excess
thereof. Except as provided in Section 2.03(c) and 2.04(g), each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Applicable Borrower is requesting a
Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the identity of the Borrower and the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal
amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans
to be borrowed or to which existing Committed Loans are to be converted, (v) if applicable, the
duration of the Interest Period with respect thereto and (vi) the Applicable Currency. If the
Applicable Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the
Applicable Borrower fails to give a timely notice requesting a conversion or continuation, then the
applicable Committed Loans shall be made as, or converted to, Base Rate Loans or Canadian Prime
Rate Loans, as appropriate. Any such automatic conversion to Base Rate Loans or Canadian Prime
Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurodollar Rate Loans. If the Applicable Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but
fails to specify an Interest Period, they will be deemed to have specified an Interest Period of
one month.



     (b) Following receipt of a Committed Loan Notice for Domestic Loans, the Administrative Agent
shall promptly notify each Lender of the amount of its Pro Rata Share of the applicable Domestic
Loans, and if no timely notice of a conversion or continuation is provided by the Company, the
Administrative Agent shall notify each Lender of the details of any automatic conversion to Base
Rate Loans described in Section 2.02(a). Following receipt of a Committed Loan Notice for
Canadian Loans, the Canadian Administrative Agent shall



26









 







promptly notify each Canadian Lender of the amount of its Canadian Pro Rata Share of the
applicable Canadian Loans, and if no timely notice of a conversion or continuation is provided by
the Borrowers, the Canadian Administrative Agent shall notify each Canadian Lender of the details
of any automatic conversion to Canadian Prime Rate Loans described in Section 2.02(a). In
the case of a Borrowing, each Lender shall make the amount of its Domestic Loan available to the
Administrative Agent in immediately available funds at the Administrative Agent’s Office not later
than 11:00 a.m., and each Canadian Lender will make the amount of its Canadian Loan available to
the Canadian Administrative Agent in Canadian Dollars at the Canadian Administrative Agent’s Office
by 11:00 a.m. (Eastern time) on the Business Day specified in the applicable Committed Loan Notice.
Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such
Borrowing is the initial Credit Extension, Section 4.01), the Applicable Agent shall make
all funds so received available to the Applicable Borrower in like funds as received by the
Applicable Agent either by (i) crediting the account of the Applicable Borrower on the books of
Bank of America or BA Canada with the amount of such funds or (ii) wire transfer of such funds, in
each case in accordance with instructions provided to (and reasonably acceptable to) the Applicable
Agent by the Applicable Borrower; provided, however, that if, on the date the
Committed Loan Notice with respect to such Borrowing is given by a Borrower, there are unpaid
amounts due in respect of Bankers’ Acceptances, in the case of McKesson Canada, or L/C Borrowings
outstanding, in the case of the Company, then the proceeds of such Borrowing shall be applied,
first, to the payment in full of any such unpaid amounts and L/C Borrowings, and
second, to the Applicable Borrower as provided above.



     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of
a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Lenders.



     (d) The Administrative Agent shall promptly notify the Applicable Borrower and the Lenders of
the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of
such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Company and the Lenders of any change in Bank of America’s
prime rate used in determining the Base Rate promptly following the public announcement of such
change. At any time that Canadian Prime Rate Loans are outstanding, the Canadian Administrative
Agent shall notify McKesson Canada and the Canadian Lenders of any change in BA Canada’s prime
lending rate used in determining the Canadian Prime Rate promptly following the public announcement
of such change.



     (e) After giving effect to all Borrowings, all conversions of Committed Loans from one Type to
the other, and all continuations of Committed Loans as the same Type, there shall not be more than
ten Interest Periods in effect at any time with respect to Committed Loans.



     (f) The Dollar Equivalent amount of any Borrowing in Canadian Dollars will be determined by
the Canadian Administrative Agent for such Borrowing on the Computation Date therefor in accordance
with Section 2.16(a) and shall be conclusive absent manifest error.



27









 





     2.03 Letters of Credit.



     (a) The Letter of Credit Commitment.




     (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the Lenders set forth in this Section 2.03, (1)
from time to time on any Business Day during the period from the Restatement Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Company
or certain Subsidiaries, and to amend or extend Letters of Credit previously issued by it,
in accordance with Section 2.03(b), and (2) to honor drafts under the Letters of
Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Company; provided that after giving effect to any L/C Credit
Extension with respect to any Letter of Credit (x) the Total Outstandings shall not exceed
the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C
Obligations, shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of
the L/C Obligations shall not exceed the Letter of Credit Sublimit. Within the foregoing
limits, and subject to the terms and conditions hereof, the Company’s ability to obtain
Letters of Credit shall be fully revolving, and accordingly the Company may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or
that have been drawn upon and reimbursed.




     (ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:




     (A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such
Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental Authority
with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Restatement Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Restatement Date and which the L/C Issuer in good faith deems
material to it;




     (B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer applicable to letters of credit and letter of credit applicants
generally;




     (C) subject to Section 2.03(b)(iii), the expiry date of such requested Letter
of Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Lenders have approved such expiry date;



28









 






     (D) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such expiry
date;




     (E) such Letter of Credit is in an initial amount less than $100,000, in the
case of a commercial Letter of Credit, or $500,000, in the case of a standby Letter
of Credit, or is to be denominated in a currency other than Dollars;
provided that the $500,000 minimum amount relating to a standby Letter of
Credit shall not be applicable if the Company pays to the L/C Issuer in respect of
such Letter of Credit an additional issuance fee in an amount to be agreed between
the Company and the L/C Issuer from time to time; or




     (F) a default of any Lender’s obligations to fund under Section 2.03(c)
exists or any Lender is at such time a Defaulting Lender hereunder, unless (i) the
Company shall have Cash Collateralized an amount equal to such Lender’s Pro Rata
Share of the full amount of such Letter of Credit, provided that the Cash Collateral
in respect of such Lender’s Pro Rata Share shall be released to the Company promptly
upon request after the effective date of the replacement of such Lender in
accordance with Section 11.15, or (ii) the L/C Issuer has otherwise entered into
satisfactory arrangements with the Company or such Lender to eliminate the L/C
Issuer’s risk with respect to such Lender.




     (iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A)
the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its
amended form under the terms hereof, or (B) the Beneficiary of such Letter of Credit does
not accept the proposed amendment to such Letter of Credit.




     (iv) On and after the Restatement Date, the Existing Letters of Credit shall be deemed
for all purposes, including for purposes of the fees and charges to be collected pursuant to
this Section 2.03 for periods on and after the Restatement Date, and reimbursement
of costs and expenses to the extent provided herein, to be Letters of Credit outstanding
under this Agreement and entitled to the benefits of this Agreement and the other Loan
Documents, and shall be governed by the applications and agreements pertaining thereto and
by this Agreement; provided, however, that, notwithstanding any other
provision of this Agreement, no fees with respect to the initial issuance of the Existing
Letters of Credit shall be due hereunder.



     (b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit.




     (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Company delivered to the L/C Issuer (with a copy to the Administrative Agent)
in the form of a Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Company. Such Letter of Credit Application must be received by
the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least three
Business Days (or such later date and time as the Administrative Agent and the L/C Issuer
may agree in a particular instance in their sole discretion) prior to the proposed



29









 







issuance date or date of amendment, as the case may be. In the case of a request for
an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify
in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the Beneficiary thereof; (E) the documents
to be presented by such Beneficiary in case of any drawing thereunder; (F) the full text of
any certificate to be presented by such Beneficiary in case of any drawing thereunder; (G)
the purpose and nature of the requested Letter of Credit; and (H) such other matters as the
L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter
of Credit, such Letter of Credit Application shall specify in form and detail satisfactory
to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D)
such other matters as the L/C Issuer may require. Additionally, the Company shall furnish
to the L/C Issuer and the Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.




     (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will
confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit Application from the Company and, if not,
the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C
Issuer has received written notice from any Lender, the Administrative Agent or any Loan
Party, at least one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in Article IV
shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C
Issuer shall, on the requested date, issue a Letter of Credit for the account of the Company
(or the applicable Subsidiary) or enter into the applicable amendment, as the case may be,
in each case in accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of such Lender’s
Pro Rata Share times the amount of such Letter of Credit.




     (iii) If the Company so requests in any applicable Letter of Credit Application, the
L/C Issuer shall issue a Letter of Credit that has automatic extension provisions (each, an
“Auto-Extension Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in
each twelve-month period (commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the Beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter
of Credit is issued; provided further that the L/C issuer shall not exercise
its right to prevent any such renewal unless the L/C Issuer determines that it would have no
obligation at such time to issue such Letter of Credit in its renewed form under the terms
of this Agreement. Unless otherwise directed by the L/C Issuer, the Company shall not be
required to make a specific request to the L/C Issuer for any such extension. Once an




30









 






Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the extension of such Letter
of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the L/C Issuer shall not permit any such extension
if (A) the L/C Issuer has determined that it would not be permitted, or would have no
obligation, at such time to issue such Letter of Credit in its revised form (as extended)
under the terms hereof (by reason of the provisions of clause (ii) of Section
2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is seven Business Days before the Non-Extension Notice
Date (1) from the Administrative Agent that the Required Lenders have elected not to permit
such extension or (2) from the Administrative Agent, any Lender or the Company that one or
more of the applicable conditions specified in Section 4.02 is not then satisfied,
and in each such case directing the L/C Issuer not to permit such extension.




     (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the Beneficiary thereof, the L/C
Issuer will also deliver to the Company and the Administrative Agent a true and complete
copy of such Letter of Credit or amendment.



     (c) Drawings and Reimbursements; Funding of Participations.




     (i) Upon receipt from the Beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Company and the
Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by the
L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Company
shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Company fails to so reimburse the L/C Issuer by such time,
the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of
the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Pro Rata Share thereof. In such event, the Company shall be deemed to have
requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Commitments and the conditions set forth in
Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given
by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i)
may be given by telephone if immediately confirmed in writing; provided that the
lack of such an immediate confirmation shall not affect the conclusiveness or binding effect
of such notice.




     (ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed
Amount not later than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section 
2.03(c)(iii), each Lender that so makes funds available shall be deemed to have
made a



31









 







Base Rate Committed Loan to the Company in such amount. The Administrative Agent
shall remit the funds so received to the L/C Issuer.




     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot
be satisfied or for any other reason, the Company shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate. In such event, each Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to Section
2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.




     (iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely
for the account of the L/C Issuer.




     (v) Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section
2.03(c), shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against the L/C Issuer, the Company or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Committed Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Company of a Committed Loan Notice). No
such making of an L/C Advance shall relieve or otherwise impair the obligation of the
Company to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.




     (vi) If any Lender fails to make available to the Administrative Agent for the account
of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.03(c) by the time specified in Section
2.03(c)(ii), the L/C Issuer shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment is
immediately available to the L/C Issuer at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking
industry rules on interbank compensation. A certificate of the L/C Issuer submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be conclusive absent manifest error.



32









 





     (d) Repayment of Participations.




     (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lender’s L/C Advance in respect of such payment in
accordance with Section 2.03(c), if the Administrative Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or
interest thereon (whether directly from the Company or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s L/C Advance was
outstanding) in the same funds as those received by the Administrative Agent.




     (ii) If any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 11.05 (including pursuant to any settlement
entered into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand
of the Administrative Agent, plus interest thereon from the date of such demand to the date
such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.



     (e) Obligations Absolute. The obligation of the Company to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:




     (i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;




     (ii) the existence of any claim, counterclaim, setoff, defense or other right that the
Company or any Subsidiary may have at any time against any Beneficiary or any transferee of
such Letter of Credit (or any Person for whom any such Beneficiary or any such transferee
may be acting), the L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement
or instrument relating thereto, or any unrelated transaction;




     (iii) any draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such
Letter of Credit;




     (iv) any payment by the L/C Issuer under such Letter of Credit against presentation of
a draft or certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to



33









 







any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for
the benefit of creditors, liquidator, receiver or other representative of or successor to
any Beneficiary or any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law; or




     (v) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company or any Subsidiary.



     The Company shall promptly examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it and, in the event of any claim of noncompliance with the Company’s
instructions or other irregularity, the Company will immediately notify the L/C Issuer. The
Company shall be conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.



     (f) Role of L/C Issuer. Each Lender and the Company agree that, in paying any drawing
under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by the Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable;
(ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii)
the due execution, effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. The Company hereby assumes all risks of the acts or
omissions of any Beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not, preclude
the Company’s pursuing such rights and remedies as it may have against the Beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent,
any of their respective Related Parties nor any correspondent, participant or assignee of the L/C
Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v)
of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Company may have a claim against the L/C Issuer, and the L/C Issuer
may be liable to the Company, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Company which the Company proves were caused by
the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay
under any Letter of Credit after the presentation to it by the Beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear
on their face to be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity
or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.



34









 





     (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C
Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, (ii) if, as of the Letter of Credit Expiration Date, any L/C
Obligation for any reason remains outstanding or (iii) if, prior to the maturity date thereof,
prepayment of a Bankers’ Acceptance is required by the provisions of Section 2.04(g)(ii) or
2.04(k), the Company shall, in each case, immediately Cash Collateralize the then Outstanding
Amount of all L/C Obligations or McKesson Canada shall immediately Cash Collateralize the then
Outstanding Amount of all Bankers’ Acceptances, as applicable. Sections 2.03(a)(ii)(E), 2.04, 2.05
and 8.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. For
purposes of this Section 2.03, Section 2.04, Section 2.05 and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, or to the
Canadian Administrative Agent, for the benefit of the applicable Canadian Lenders, as applicable,
cash or deposit account balances pursuant to documentation in form and substance satisfactory to
the Administrative Agent, the Canadian Administrative Agent and the L/C Issuer (which documents are
hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The
Company hereby grants to the Administrative Agent, and McKesson Canada hereby grants to the
Canadian Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security
interest in all such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts
at Bank of America. For purposes of this Section 2.03, “Cash Collateral” means the cash
and deposit account balances pledged and deposited with or delivered to the Applicable Agent,
pursuant to a requirement to Cash Collateralize the L/C Obligations or Bankers’ Acceptances.



     (h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C Issuer
and the Company when a Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), (i) the rules of the ISP, with the exception of Rule 5.09 thereof,
shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the International Chamber of
Commerce at the time of issuance shall apply to each commercial Letter of Credit.



     (i) Letter of Credit Fees. The Company shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share a letter of credit fee for each Letter
of Credit equal to the Applicable Rate times the daily maximum amount available to be drawn
under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter
of Credit). Such letter of credit fees shall be computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the fifth Business Day following the end of each
calendar quarter, commencing with the first such date to occur after the issuance of such Letter of
Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change
in the Applicable Rate during any quarter, the daily maximum amount of each Letter of Credit shall
be computed and multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.



     (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Company shall pay directly to the L/C Issuer for its own account a fronting fee with respect to
each Letter of Credit in an amount equal to 0.125% per annum times the daily maximum



35









 







amount available to be drawn under such Letter of Credit. Such fronting fees shall be
computed on a quarterly basis in arrears. Such fronting fees shall be due and payable on the first
Business Day after the end of each calendar quarter, commencing with the first such date to occur
after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter
on demand. For purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance with Section
1.07. In addition, the Company shall pay directly to the L/C Issuer for its own account the
customary issuance, presentation, amendment and other processing fees, and other standard costs and
charges (including reasonable out-of-pocket expenses relating to issuances, amendments, renewals,
extensions and any demands for payment), of the L/C Issuer relating to letters of credit as from
time to time in effect. Such customary fees and standard costs and charges are due and payable on
demand and are nonrefundable.



     (k) Conflict with Issuer Document. In the event of any conflict between the terms
hereof and the terms of any Issuer Document, the terms hereof shall control.



     (l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or is for the account
of, a Subsidiary, the Company shall be obligated to reimburse the L/C Issuer hereunder for any and
all drawings under such Letter of Credit and to make any Cash Collateral deposits required
hereunder. The Company hereby acknowledges that the issuance of Letters of Credit for the account
of Subsidiaries inures to the benefit of the Company, and that the Company’s business derives
substantial benefits from the businesses of such Subsidiaries.



     (m) Reports to Administrative Agent. The L/C Issuer shall deliver to the
Administrative Agent, upon each calendar month end, a report setting forth for such period the
daily aggregate amount available to be drawn under the Letters of Credit that were outstanding
during such month.



     2.04 Bankers’ Acceptances for McKesson Canada.



     (a) Acceptance Commitment.




     (i) Each Canadian Lender severally agrees, on and subject to the terms and conditions
set forth herein: (A) in the case of a Canadian Lender that is able to accept Drafts from
McKesson Canada, to create acceptances (each, a “Bankers’ Acceptance”) by accepting
Drafts from McKesson Canada and to purchase such Bankers’ Acceptances in accordance with
Section 2.04(d); and (B) in the case of a Canadian Lender that has participated all
or any part of its interest in the Bankers’ Acceptance Facilities to a participant that is
able to accept Drafts from McKesson Canada, to arrange for the creation of Bankers’
Acceptances by such participant and for the purchase of such Bankers’ Acceptances by such
participant, to the extent of such participation or assignment, in accordance with
Section 2.04(d).




     (ii) Each Drawing shall be in an aggregate Face Amount of not less than Cdn.$5,000,000
and in integral multiples of Cdn.$1,000,000 and shall consist of the creation and purchase
of Bankers’ Acceptances on the same day, effected or arranged by



36









 







the Canadian Lenders in accordance with Section 2.04(d), ratably according to
their respective Canadian Pro Rata Shares.




     (iii) Anything contained in this Agreement to the contrary notwithstanding, the
Bankers’ Acceptance Facility and the Canadian Commitments shall be subject to the following
limitations:




     (A) the amount otherwise available for Drawing under the Aggregate Canadian
Commitment as of any time of determination shall be reduced by an amount equal to
the Total Canadian Outstandings as of such time of determination;




     (B) after any Drawing the Total Outstandings shall not exceed the Aggregate
Commitments then in effect;




     (C) the issuance of any Bankers’ Acceptance shall not violate any policies of
any Canadian Lender applicable to bankers’ acceptances and drawers generally; and




     (D) after any Drawing the Total Canadian Outstandings shall not exceed the
Aggregate Canadian Commitments then in effect.



     (b) Drawing Notice.




     (i) Each Drawing shall be made on three Business Days’ prior written notice specified
in relation to Bankers’ Acceptances, given not later than 11:00 a.m. (Eastern time), by
McKesson Canada to the Canadian Administrative Agent. Each such notice of a Drawing (a
“Drawing Notice”) shall be given in substantially the form of Exhibit F
annexed hereto or by telephone confirmed promptly in writing, containing the same
information as would be contained in a Drawing Notice, and shall specify therein (A) the
Drawing Date; (B) the aggregate Face Amount of Drafts to be accepted; and (C) the maturity
date for such Drafts. The Canadian Administrative Agent shall give each Canadian Lender
prompt notice of such Drawing Notice and of such Canadian Lender’s ratable portion of Drafts
to be accepted under the Drawing.




     (ii) McKesson Canada shall not request in a Drawing Notice a maturity date for Drafts
that would be subsequent to the Maturity Date.




     (iii) Each Drawing Notice shall be irrevocable and binding on McKesson Canada.
McKesson Canada shall indemnify each Canadian Lender against any loss or expense incurred by
such Canadian Lender as a result of any failure by McKesson Canada to fulfill or honor
before the date specified for any Drawing, the applicable conditions set forth in this
Section 2.04 or Section 4.02, if the Drawing, as a result of such failure,
is not made on such date.




     (iv) McKesson Canada shall repay, and there shall become due and payable, on the
Drawing Date the principal amount of any Canadian Loans which McKesson



37









 







Canada seeks to convert, if any, in whole or in part, to Bankers’ Acceptances on such
Drawing Date.




     (v) None of the Canadian Administrative Agent, the Administrative Agent or the Canadian
Lenders shall incur any liability to McKesson Canada or the Company in acting on the
telephonic notice referred to above which the Canadian Administrative Agent, the
Administrative Agent or any Canadian Lenders believes in good faith to have been given by a
duly authorized officer or other person authorized to borrow on behalf of McKesson Canada or
for otherwise acting in good faith under this Section 2.04 and upon the acceptance
of Drafts pursuant to any such telephonic notice, McKesson Canada shall be liable with
respect thereto as provided herein. In the event of a conflict between the Canadian
Administrative Agent’s record of the applicable terms of any Drawing and such Drawing
Notice, the Canadian Administrative Agent’s record shall prevail, absent manifest or
demonstrable error.



     (c) Form of Bankers’ Acceptances.




     (i) Each Draft presented by McKesson Canada shall (A) be dated the date of the Drawing;
(B) mature and be payable by McKesson Canada (in common with all other Drafts presented in
connection with such Drawing) on a Business Day which occurs no less than 30 days nor more
than 180 days after the date thereof, which term shall be specified on the Drawing Notice
presented by McKesson Canada in accordance with Section 2.04(b)(1); (C) be in a form
reasonably acceptable to the Canadian Administrative Agent; and (D) if such Draft is drawn
on a Canadian Lender that is a Member, be payable to the Clearing House.




     (ii) McKesson Canada hereby renounces, and shall not claim, any days of grace for the
payment of any Bankers’ Acceptances.



     (d) Acceptance and Purchase of Drafts.




     (i) Not later than 11:00 a.m. (Eastern time) on an applicable Drawing Date, each
Canadian Lender shall, as the case may be, (A) complete one or more Drafts dated the date of
such Drawing, with the maturity date specified by McKesson Canada in the Drawing Notice,
accept such Drafts, and purchase the Bankers’ Acceptances thereby created for the Drawing
Purchase Price; and (B) arrange for its participant to complete one or more Drafts dated the
date of such Drawing, with the maturity date specified by McKesson Canada in the Drawing
Notice, to accept such Drafts and to purchase the Bankers’ Acceptances thereby created for
the Drawing Purchase Price.




     (ii) The failure of any Canadian Lender to accept Drafts or purchase Bankers’
Acceptances as part of any Drawing shall not relieve such Canadian Lender of its obligation,
if any, to accept Drafts and purchase Bankers’ Acceptances hereunder, but a Canadian Lender
shall not be responsible for the failure of any other Canadian Lender to accept Drafts or
purchase Bankers’ Acceptance on the Drawing Date for any Drawing.




     (iii) The parties hereto agree that in the administering of Bankers’ Acceptances, each
Canadian Lender may avail itself of the debt clearing services offered



38









 







by the Clearing House and that the procedures set forth in Section 2.04 be
deemed amended to the extent necessary to comply with the requirements of such debt clearing
services. The foregoing sentence applies only to the administration of Bankers’ Acceptances
by the Canadian Lenders and shall not affect the rights and obligations of McKesson Canada
with respect to any Bankers’ Acceptance.



     (e) Payment of Drawing Purchase Price.




     (i) Subject to Section 2.04(b)(iv), each Canadian Lender shall, before 12:00
noon (Eastern time) on the applicable Drawing Date, pay or cause to be paid, the Drawing
Purchase Price in respect of any Bankers’ Acceptances which such Canadian Lender has
purchased or arranged to have purchased pursuant to Section 2.04(d)(i) by depositing
or causing to be deposited such amount to such account maintained by the Canadian
Administrative Agent at BA Canada as shall have been notified to such Canadian Lender by the
Canadian Administrative Agent, in Canadian Dollars in same day funds. Promptly upon receipt
of such funds, the Canadian Administrative Agent shall make such funds available to McKesson
Canada in accordance with reasonable instructions provided to the Canadian Administrative
Agent by McKesson Canada.




     (ii) Bankers’ Acceptances purchased by a Canadian Lender or its participant hereunder
may be held by such Canadian Lender or such participant, as the case may be, for its own
account until maturity or sold by it at any time prior thereto in any relevant market
therefor in Canada, in such Lender’s or its participant’s sole discretion.



     (f) Effective Discount Rate Determination. Promptly upon request of McKesson Canada,
the Canadian Administrative Agent shall provide McKesson Canada an indicative Effective Discount
Rate, which rate shall not be binding on the Canadian Administrative Agent, the Administrative
Agent or the Lenders for purposes of any Drawing or acceptance of Drafts.



     (g) Payment at Maturity; Cash Collateral.




     (i) McKesson Canada shall pay to the Canadian Administrative Agent, and there shall
become due and payable, at 12:00 noon (Eastern time) on the maturity date for each Bankers’
Acceptance an amount in Canadian Dollars in same day funds equal to the Face Amount of such
Bankers’ Acceptance. McKesson Canada shall make each payment hereunder in respect of
Bankers’ Acceptances by deposit of the required funds to the Canadian Administrative Agent
at the Canada Administrative Agent’s Office. Upon receipt of such payment, the Canadian
Administrative Agent will promptly thereafter cause such payment to be distributed in like
funds in payment of Bankers’ Acceptances ratably (based on the proportion that the aggregate
Face Amount of Bankers’ Acceptances held by any Canadian Lender or any participant thereof
maturing on the relevant date bears to the aggregate Face Amount of Bankers’ Acceptances
accepted or held by all Canadian Lenders or any participants or assignees thereof maturing
on such date) to Canadian Lenders for their account and for the account of any participant,
to the extent of and in accordance with their participation. Such payment to the Canadian
Administrative Agent shall satisfy McKesson Canada’s obligations under any Bankers’
Acceptances to which it relates and each Canadian Lender that has accepted such



39









 







Bankers’ Acceptances shall thereafter be solely responsible for the payment of such
Bankers’ Acceptances and shall indemnify and hold McKesson Canada harmless against any
liabilities, costs or expenses incurred by McKesson Canada as a result of any failure by
such Canadian Lender or such participant to pay such Bankers’ Acceptance in accordance with
its terms.




     (ii) If McKesson Canada fails to pay any Bankers’ Acceptance when due, or to convert or
renew the Face Amount of such Bankers’ Acceptance pursuant to Section 2.04(i), the
unpaid amount due and payable in respect thereof shall be converted as of such date, and
without any necessity for McKesson Canada to give a Committed Loan Notice in accordance with
Section 2.02, to, and thereafter be outstanding as, a Canadian Prime Rate Loan made
by, the Canadian Lenders and shall bear interest calculated and payable as provided in
Section 2.08. Each Borrower acknowledges, agrees and confirms with the Canadian
Lenders that the records of each Canadian Lender in respect of payment of any Bankers’
Acceptance by such Canadian Lender shall be binding on McKesson Canada and shall be
conclusive evidence (in the absence of manifest error) of a Canadian Prime Rate Loan to an
amount owing by McKesson Canada to such Canadian Lender. McKesson Canada further agrees
that if an Event of Default or the Maturity Date shall occur prior to the date upon which
any one or more Bankers’ Acceptances are payable by a Canadian Lender, thereupon, McKesson
Canada shall Cash Collateralize the full Face Amounts of all such Bankers’ Acceptances as
provided in Section 2.03(g), notwithstanding the fact that any such Bankers’ Acceptance may
be held by such Canadian Lender in its own right at maturity; provided,
however, that if for any reason McKesson Canada fails to so Cash Collateralize any
Bankers’ Acceptance, thereupon McKesson Canada shall be deemed for all purposes to have
received a Canadian Prime Rate Loan in an amount equal to the Face Amount of such Bankers’
Acceptance and McKesson Canada shall pay interest thereon at the Canadian Prime Rate until
repayment thereof in full.



     (h) Presigned Draft Forms.




     (i) To enable the Canadian Lenders to create Bankers’ Acceptances or complete Drafts in
the manner specified in this Section 2.04, McKesson Canada shall supply each
Canadian Lender with such number of Drafts as such Canadian Lender may reasonably request,
duly endorsed and executed on behalf of McKesson Canada by any one or more of its authorized
officers. Each Canadian Lender shall exercise such care in the custody and safekeeping of
Drafts as it would exercise in the custody and safekeeping of similar property owned by it.
Each Canadian Lender will, upon request by McKesson Canada, promptly advise McKesson Canada
of the number and designations, if any, of the uncompleted Drafts then held by it. The
signatures of such officers may be mechanically reproduced in facsimile and Drafts and
Bankers’ Acceptances bearing such facsimile signatures shall be binding upon McKesson Canada
as if they had been manually signed by such officers. Notwithstanding that any of the
individuals whose manual or facsimile signature appears on any Draft or Bankers’ Acceptance
as one of such officers may no longer hold office at the date thereof or at the date of its
acceptance by a Canadian Lender or a participant hereunder or at any time thereafter, any
Draft or Bankers’ Acceptance so signed shall be valid and binding upon McKesson Canada.



40









 






     (ii) To facilitate the acceptance of Drafts hereunder, McKesson Canada hereby appoints
each Canadian Lender as its attorney to sign and endorse on its behalf, as and when
considered necessary by such Canadian Lender in connection with a Drawing, an appropriate
number of Drafts in the form prescribed by that Canadian Lender. Any Draft signed by a
Canadian Lender as attorney for McKesson Canada, whether signed in handwriting or by the
facsimile or mechanical signature of an authorized officer of a Canadian Lender, may be
dealt with by the Canadian Administrative Agent or any Canadian Lender to all intents and
purposes and shall bind McKesson Canada as if duly signed and issued by McKesson Canada.



     (i) Conversion or Renewal of Bankers’ Acceptances. Upon the maturity of a Bankers’
Acceptance, McKesson Canada may elect to (A) renew such Bankers’ Acceptance, by giving a Drawing
Notice in accordance with Section 2.04(b)(i); or (B) have all or a portion of the Face
Amount of such Bankers’ Acceptance converted to a Eurodollar Rate Loan or Canadian Prime Rate Loan,
by giving a Committed Loan Notice in accordance with Section 2.02. If the Bankers’
Acceptances to be converted cannot be converted into a Eurodollar Rate Loan or Canadian Prime Rate
Loan in an aggregate amount which may be made as a Eurodollar Rate Loan or Canadian Prime Rate
Loan, as the case may be, under this Agreement, then the amount which cannot be so converted shall
be repaid to the Canadian Administrative Agent for distribution to the Canadian Lenders in
accordance with Section 2.04(g) on the date of such conversion.



     (j) Circumstances Making Bankers’ Acceptances Unavailable.




     (i) If the Canadian Administrative Agent determines in good faith, which determination
shall be final, conclusive and binding upon McKesson Canada, and notifies McKesson Canada
that, by reason of circumstances affecting the money market (A) there is no market for
Bankers’ Acceptances; or (B) the demand for Bankers’ Acceptances is insufficient to allow
the sale or trading of the Bankers’ Acceptances created and purchased hereunder; then,




     (1) the right of McKesson Canada to request a Drawing shall be suspended until
the Canadian Administrative Agent determines that the circumstances causing such
suspension no longer exist and the Canadian Administrative Agent so notifies
McKesson Canada; and




     (2) any Drawing Notice which is outstanding shall be cancelled and the Drawing
requested therein shall not be made.




     (ii) The Canadian Administrative Agent shall promptly notify McKesson Canada and the
Administrative Agent of the suspension of McKesson Canada’s right to request a Drawing and
of the termination of any such suspension.



     (k) Prepayments. Except as required by Article VIII, Section 2.05 or
Section 2.07, no repayment of a Bankers’ Acceptance shall be made by McKesson Canada to a
Canadian Lender prior to the maturity date thereof. Any such repayment, made as required by
Article VIII, Section 2.05 or Section 2.07, shall be made (unless such
repayment has been rescinded or



41









 







otherwise is required to be returned by such Canadian Lender to McKesson Canada for any
reason) in accordance with the provisions of Section 2.03(g) and Section 2.04(g).
Any such payment by McKesson Canada to the Canadian Administrative Agent shall satisfy McKesson
Canada’s obligations under the Bankers’ Acceptance to which it relates and, in the case of a
Bankers’ Acceptance which has been accepted by a Canadian Lender or its participant, such Canadian
Lender or such participant shall thereafter be solely responsible for the payment of such Bankers’
Acceptance and shall indemnify and hold McKesson Canada harmless against any liabilities, costs or
expenses incurred by McKesson Canada as a result of any failure by such Canadian Lender or such
participant to pay such Bankers’ Acceptance in accordance with its terms.



     2.05 Prepayments.



     (a) The Applicable Borrower may, upon notice to the Applicable Agent, at any time or from time
to time voluntarily prepay Domestic Loans or Canadian Loans, as the case may be, in whole or in
part without premium or penalty; provided that (i) such notice must be received by the
Applicable Agent not later than 9:00 a.m., in the case of a prepayment of Domestic Loans, and 11:00
a.m. (Eastern time) in the case of prepayment of Canadian Loans, (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate
Committed Loans and Canadian Prime Rate Loans; (ii) any prepayment of Domestic Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any
prepayment of Canadian Loans shall be in a principal amount of Cdn.$5,000,000 or a whole multiple
of Cdn.$1,000,000 in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such prepayment and the
Type(s) of Committed Loans to be prepaid. The Applicable Agent will promptly notify each Lender or
Canadian Lender, as appropriate, of its receipt of each such notice, and of the amount of such
Lender’s Pro Rata Share or Canadian Pro Rata Share, as appropriate, of such prepayment. If such
notice is given by a Borrower, the Applicable Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified therein. Any
prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together
with any additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Committed Loans of the Lenders in accordance with their respective Pro Rata
Shares or Canadian Pro Rata Shares, as appropriate.



     (b) Subject to Section 2.14, if for any reason the Total Outstandings at any time
exceed the Aggregate Commitments then in effect, the Company shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations and/or McKesson Canada shall immediately prepay Canadian
Loans and/or Cash Collateralize Bankers’ Acceptances in an aggregate amount equal to such excess;
provided, however, that the Borrowers shall not be required to Cash Collateralize
the L/C Obligations or prepay the Face Amounts of Bankers’ Acceptances pursuant to this Section
2.05(b) unless after the prepayment in full of the Committed Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.



     (c) Subject to Section 2.14, if for any reason the Total Canadian Outstandings at any
time exceed the Aggregate Canadian Commitments then in effect, McKesson Canada shall immediately
prepay Canadian Loans and Cash Collateralize Bankers’ Acceptances in an



42









 







aggregate amount equal to such excess, provided that McKesson Canada shall not be
required to prepay the Bankers’ Acceptances pursuant to this Section 2.05(c) unless, after
prepayment in full of the Canadian Loans, the Total Canadian Outstandings exceed the Aggregate
Canadian Commitments then in effect.



     2.06 Termination or Reduction of Commitments. The Company may, upon notice to the Applicable
Agent, terminate the Aggregate Commitments or the Aggregate Canadian Commitments, or from time to
time permanently reduce the Aggregate Commitments or the Aggregate Canadian Commitments;
provided that (i) any such notice shall be received by the Applicable Agent not later than
9:00 a.m. or, in the case of a reduction of the Canadian Commitments, 11:00 a.m. (Eastern time)
five Business Days prior to the date of termination or reduction, (ii) any such partial reduction
shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Company shall not terminate or reduce the Aggregate Commitments if, after giving
effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, (iv) the Company shall not terminate or reduce the Aggregate Canadian
Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total
Canadian Outstandings would exceed the Aggregate Canadian Commitments, (v) if, after giving effect
to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit exceeds the amount of
the Aggregate Commitments, such Sublimit shall be automatically reduced by the amount of such
excess, and (vi) if, after giving effect to any reduction of the Aggregate Commitments, the
Aggregate Canadian Commitments exceed the amount of the Aggregate Commitments, the Aggregate
Canadian Commitments shall be automatically reduced by the amount of such excess. The
Administrative Agent will promptly notify the Lenders of any such notice of termination or
reduction of the Aggregate Commitments and the Canadian Administrative Agent will promptly notify
the Canadian Lenders of any such notice of termination or reduction of the Aggregate Canadian
Commitments. Any reduction of the Aggregate Commitments or Aggregate Canadian Commitments shall be
applied to the Commitment of each Lender or the Canadian Commitment of each Canadian Lender, as the
case may be, according to its Pro Rata Share or its Canadian Pro Rata Share, as the case may be.
All facility fees accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.



     2.07 Repayment of Loans.



     The Applicable Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of its Committed Loans outstanding on such date. McKesson Canada shall repay to
the Lenders on the date that it ceases to be a Wholly-Owned Subsidiary the aggregate principal
amount of its Canadian Loans outstanding on such date.



     2.08 Interest.



     (a) Subject to the provisions of Section 2.08(b), (i) each Eurodollar Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest Period at a rate per
annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii)
each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from
the applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable



43









 







Rate; and (iii) each Canadian Prime Rate Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to the Canadian Prime
Rate plus the Applicable Rate.



     (b) If any amount payable by a Borrower under any Loan Document is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise,
such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws. Furthermore, upon
the request of the Required Lenders, while any Event of Default exists, the Borrowers shall pay
interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable
Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand.



     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein. Interest hereunder shall be
due and payable in accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.



     2.09 Fees. In addition to certain fees described in Sections 2.03(i) and (j)
and Section 2.04:



     (a) Facility Fee. The Company shall pay to the Administrative Agent for the account
of each Lender in accordance with its Pro Rata Share, a facility fee on the later of the fifth
Business Day following the end of each calendar quarter or the fifth Business Day after the Company
has received from the Administrative Agent a notice setting forth the amount of such fee, which
shall be equal to the Applicable Rate times the actual daily amount of the Aggregate
Commitments (or, if the Aggregate Commitments have terminated, on the Outstanding Amount of all
Committed Loans, Bankers’ Acceptances and L/C Obligations), regardless of usage. The facility fee
shall accrue at all times during the Availability Period (and thereafter so long as any Committed
Loans, Bankers’ Acceptances or L/C Obligations remain outstanding), including at any time during
which one or more of the conditions in Article IV are not met, and shall be due and payable
quarterly in arrears on each date specified above following the end of each calendar quarter,
commencing with the first such date to occur after the Restatement Date, and on the last day of the
Availability Period (and, if applicable, thereafter on demand). The facility fee shall be
calculated on a calendar quarter basis in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable
Rate separately for each period during such quarter that such Applicable Rate was in effect.



     (b) Other Fees. (i) The Company shall pay to the Arranger and the Administrative
Agent for their own respective accounts fees in the amounts and at the times specified in the Fee
Letter. Such fees shall be fully earned when paid and, except to the extent expressly otherwise
agreed, shall not be refundable for any reason whatsoever.




     (ii) The Borrowers shall pay to the Lenders such fees as shall have been separately
agreed upon in writing in the amounts and at the times so specified. Such fees



44









 







shall be fully earned when paid and, except to the extent expressly otherwise agreed,
shall not be refundable for any reason whatsoever.



     2.10 Computation of Interest and Fees. All computations of interest for Bankers’ Acceptances
and Drawing Fees, for Canadian Prime Rate Loans and for Base Rate Loans when the Base Rate is
determined by Bank of America’s “prime rate” shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed. All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid, provided that
any Loan that is repaid on the same day on which it is made shall, subject to Section
2.12(a), bear interest for one day. Each determination by the Administrative Agent and the
Canadian Administrative Agent, as the case may be, of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.



     2.11 Evidence of Debt.



     (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by the Applicable Agent in the ordinary course of business.
The accounts or records maintained by the Administrative Agent, the Canadian Administrative Agent
and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions
made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect the obligation of the
Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the accounts and records of
either Agent in respect of such matters, the accounts and records of such Agent shall control in
the absence of manifest error. Upon the request of any Lender made through the Applicable Agent,
the applicable Borrower shall execute and deliver to such Lender (through the Applicable Agent) a
Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.



     (b) In addition to the accounts and records referred to in Section 2.11(a), each
Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts
or records evidencing the purchases and sales by such Lender of participations in Letters of
Credit. In the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of manifest error.



     2.12 Payments Generally.



     (a) All payments to be made by the Borrowers shall be made without condition or deduction for
any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein,
all payments by the Company hereunder shall be made to the Administrative Agent, for the account of
the Lenders, at the Administrative Agent’s Office in Dollars not later



45









 







than 12:00 noon on the date specified herein, and all payments by McKesson Canada hereunder
shall be made to the Canadian Administrative Agent for the account of the Canadian Lenders at the
Canadian Administrative Agent’s Office in Canadian Dollars not later than 12:00 noon (Eastern time)
on the date specified herein, in each case, in immediately available funds. The Applicable Agent
will promptly distribute to each Lender its Pro Rata Share and to each Canadian Lender its Canadian
Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office. All payments received by an Agent after
the applicable time specified in this Section 2.12(a) shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to accrue. If any
payment to be made by a Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.




     (b) (i) Unless the Applicable Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to such Agent such
Lender’s share of such Borrowing, such Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.02 and may, in reliance upon
such assumption, make available to the Applicable Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing available to
the Applicable Agent, then such Lender and the Applicable Borrower severally agree to pay to
the Applicable Agent forthwith on demand such corresponding amount in immediately available
funds with interest thereon, for each day from and including the date such amount is made
available to the Applicable Borrower to but excluding the date of payment to such Agent, at
(A) in the case of a payment to be made by such Lender, the greater of (1)(x), in respect of
Domestic Loans, the Federal Funds Rate and (y) in respect of Canadian Loans, the Overnight
Canadian Rate from time to time in effect and (2) a rate determined by the Applicable Agent
in accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the Applicable Agent in
connection with the foregoing, and (B) in the case of a payment to be made by the Applicable
Borrower, the interest rate applicable to the applicable Borrowing. If the Applicable
Borrower and such Lender shall pay such interest to the Applicable Agent for the same or an
overlapping period, the Applicable Agent shall promptly remit to the Applicable Borrower the
amount of such interest paid by the Applicable Borrower for such period. If such Lender
pays its share of the applicable Borrowing to the Applicable Agent, then the amount so paid
shall constitute such Lender’s Committed Loan included in such Borrowing. Any payment by
the Applicable Borrower shall be without prejudice to any claim the Applicable Borrower may
have against a Lender that shall have failed to make such payment to the Applicable Agent.




(ii) Unless the Applicable Agent shall have received notice from the Applicable Borrower
prior to the date on which any payment is due to such Agent for the account of the Lenders
or the L/C Issuer hereunder that the Applicable Borrower will not make such payment, the
Applicable Agent may assume that the Applicable Borrower has made such payment on such date
in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders
or the L/C Issuer, as the case may be, the amount due. In such event, if the Applicable
Borrower has not in fact made such payment, then each of the



46









 







Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Applicable
Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in
immediately available funds with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to such Agent, at the
greater of (1)(x), in respect of Domestic Loans, the Federal Funds Rate and (y) in respect
of Canadian Loans, the Overnight Canadian Rate from time to time in effect and (2) a rate
determined by the Applicable Agent in accordance with banking industry rules on interbank
compensation.



     A notice of the Applicable Agent to any Lender or the Applicable Borrower with respect to any
amount owing under this subsection (b) shall be conclusive, absent manifest error.



     (c) If any Lender makes available to either Agent funds for any Loan to be made by such Lender
as provided in the foregoing provisions of this Article II, and such funds are not made
available to the Applicable Borrower by the Applicable Agent because the conditions to the
applicable Credit Extension set forth in Article IV are not satisfied or waived in
accordance with the terms hereof, such Agent shall return such funds (in like funds as received
from such Lender) to such Lender, without interest.



     (d) The obligations of the Lenders hereunder to make Committed Loans, to fund participations
in Letters of Credit and to purchase Bankers’ Acceptances and to make payments pursuant to
Section 11.04(c) are several and not joint. The failure of any Lender to make any
Committed Loan, to fund any such participation, to make any such purchase or to make any payment
under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of
its corresponding obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Committed Loan, fund its participation or purchase its
Bankers’ Acceptance.



     (e) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in
any particular place or manner or to constitute a representation by any Lender that it has obtained
or will obtain the funds for any Loan in any particular place or manner.



     2.13 Sharing of Payments. If, other than as expressly provided elsewhere herein, any Lender
shall obtain on account of the Committed Loans made by it, the Bankers’ Acceptance Facility or the
participations in L/C Obligations held by it, any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent
of such fact, and (b) purchase from the other Lenders such participations in the Committed Loans
made by them or Bankers’ Acceptances and/or such subparticipations in the participations in L/C
Obligations held by them, as the case may be, as shall be necessary to cause such purchasing Lender
to share the excess payment in respect of such Committed Loans, Bankers’ Acceptances or such
participations, as the case may be, pro rata with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from the purchasing
Lender under any of the circumstances described in Section 11.05 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such purchase shall to that
extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price
paid therefor, together with an amount equal to such



47









 







paying Lender’s ratable share (according to the proportion of (i) the amount of such paying
Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered, without further interest thereon; provided further that, for
purposes of this Section 2.13, and subject to Section 2.01(b)(ii), no Lender other
than a Canadian Lender that is a Canadian Resident may purchase any portion of or any interest in a
Canadian Loan or Bankers’ Acceptance. Each Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off, but subject to Section 11.08) with
respect to such participation as fully as if such Lender were the direct creditor of such Borrower
in the amount of such participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations purchased under this
Section 2.13 and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section 2.13 shall
from and after such purchase have the right to give all notices, requests, demands, directions and
other communications under this Agreement with respect to the portion of the Obligations purchased
to the same extent as though the purchasing Lender were the original owner of the Obligations
purchased.



     2.14 Currency Exchange Fluctuations.



     Subject to Section 3.02, if on any Computation Date the Administrative Agent or the
Canadian Administrative Agent shall have determined that (a) the Total Outstandings exceed the
Aggregate Commitments by more than $3,000,000, or (b) the Total Canadian Outstandings exceed the
Aggregate Canadian Commitments by more than $3,000,000, in either event due to a change in
applicable rates of exchange between Dollars and Canadian Dollars, then the Administrative
Agent shall give notice to the Borrowers that a prepayment is required under this Section
2.14, and the Borrowers agree thereupon to make prepayments of Loans such that, after giving
effect to such prepayment, the Total Outstandings do not exceed the Aggregate Commitments and the
Total Canadian Outstandings do not exceed the Aggregate Canadian Commitments. No prepayment of
Loans is required pursuant to this Section 2.14 or Section 2.05 in the event that
the Total Outstandings exceed the Aggregate Commitments by $3,000,000 or less, or the Total
Canadian Outstandings exceed the Aggregate Canadian Commitments by $3,000,000 or less, in either
event solely due to a change in applicable rates of exchange between Dollars and Canadian Dollars.



     2.15 Increase in Commitments.



     (a) Provided there exists no Default, upon notice to the Administrative Agent (which shall
promptly notify the Lenders), the Company may from time to time, request an increase in the
Aggregate Commitments by an aggregate amount (for all such requests) not exceeding $700,000,000.
At the time of sending such notice, the Company (in consultation with the Administrative Agent)
shall specify the time period within which each Lender is requested to respond (which shall in no
event be less than ten Business Days from the date of delivery of such notice to the Lenders).
Each Lender shall notify the Administrative Agent within such time period whether or not it agrees
to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than
its Pro Rata Share of such requested increase. Any Lender not responding within such time period
shall be deemed to have declined to increase its



48









 







Commitment. The Administrative Agent shall notify the Company and each Lender of the Lenders’
responses to each request made hereunder. To achieve the full amount of a requested increase, the
Company may also invite additional Eligible Assignees to become Lenders pursuant to a joinder
agreement in form and substance satisfactory to the Administrative Agent and its counsel.
Notwithstanding the foregoing provisions of this Section 2.15(a), during the first 90 days
following the Restatement Date, the Company may invite Eligible Assignees to become Lenders under
this Agreement in connection with a requested increase without first providing any Lender with the
opportunity to increase its Commitment as provided above.



     (b) If the Aggregate Commitments are increased in accordance with this Section 2.15,
the Administrative Agent and the Company shall determine the effective date (the “Increase
Effective Date”) and the final allocation of such increase. The Administrative Agent shall
promptly notify the Company and the Lenders of the final allocation of such increase and the
Increase Effective Date. As a condition precedent to such increase, the Company shall deliver to
the Administrative Agent a certificate of each Loan Party dated as of the Increase Effective Date
signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions
adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the
Company, certifying that, before and after giving effect to such increase, (A) the representations
and warranties contained in Article V and the other Loan Documents are true and correct on
and as of the Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true and correct as of
such earlier date, and except that, for purposes of this Section 2.15, (1) the
representation and warranty contained in Section 5.08(a) shall be deemed to refer to the
most recent statements furnished pursuant to Sections 6.01(a) and (b),
respectively, and (2) the reference to the Restatement Date in Section 5.05(b) and
Section 5.08(b) shall be deemed to refer to the Increase Effective Date and (B) no Default
exists. The Company shall prepay any Committed Loans outstanding on the Increase Effective Date
(and pay any additional amounts required pursuant to Section 3.05) to the extent necessary
to keep the outstanding Committed Loans ratable with any revised Pro Rata Shares arising from any
nonratable increase in the Commitments under this Section 2.15.



     (c) In the event of an increase in Commitments pursuant to this Section 2.15, the
provisions of this Section 2.15 shall govern any conflicts with provisions in Sections
2.13 or 11.01.



     2.16 Utilization of Commitments in Canadian Dollars.



     (a) The Administrative Agent will determine the Dollar Equivalent amount with respect to any
(i) Bankers’ Acceptance or Borrowing comprised of Canadian Loans that are Eurodollar Rate Loans as
of the date which is three Business Days prior to the date of the requested Borrowing, (ii)
Borrowing comprised of Canadian Prime Rate Loans, one day prior to the requested date of Borrowing,
(iii) outstanding Canadian Loans or Bankers’ Acceptances as of the last Business Day of each month,
and (iv) conversions to or continuation of Canadian Loans as of the date the related Committed Loan
Notice is received by the Canadian Administrative Agent or, if such conversion or continuation is
performed in accordance with Section 2.16(b) or Section 3.02, as of, in the case of
Section 2.16(b), the date that the request by the Required Lenders is received by the
Administrative Agent or, in the case of Section 3.02, the date that the



49









 







notice by the Administrative Agent is received by the Borrowers and the Lenders (each such
date under clauses (i) through (iv) a “Computation Date”).



     (b) Notwithstanding anything herein to the contrary, during the existence of a Default or an
Event of Default, upon the request of the Required Lenders, all or any part of any outstanding
Canadian Loans consisting of Eurodollar Rate Loans shall be converted into Canadian Prime Rate
Loans with effect from the last day of the Interest Period with respect to any such Canadian Loans.
The Administrative Agent will promptly notify the Borrowers of any such conversion request.



     2.17 Extension of Maturity Date.



     (a) Requests for Extension. The Company may, by notice to the Administrative Agent,
given not earlier than 90 days and not later than 65 days prior to each of the first and second
anniversaries of the Restatement Date (each such anniversary being referred to herein as an
“Anniversary Date” and each such 25 day period prior to an Anniversary Date being referred
to herein as a “Request Period”), request that each Lender, effective as of the first or
second Anniversary Date, as the case may be, extend its Commitment beyond the Maturity Date then in
effect (the “Existing Maturity Date”) for an additional one-year period from the Existing
Maturity Date; provided that no more than one such request may be made during each Request Period.
The Administrative Agent shall promptly notify each Lender of the Company’s request for such
extension (the date such notice is given being referred to herein as the “Notice Date”).



     (b) Lender Elections to Extend. Each Lender, acting in its sole discretion, shall, by
notice to the Administrative Agent given not later than 10 days following the Notice Date (the
“Response Deadline”), advise the Administrative Agent whether or not such Lender agrees to
such extension (each such Lender that determines not to so extend its Commitment being referred to
as a “Non-Extending Lender”). Any Lender that does not so advise the Administrative Agent
on or before the Response Deadline shall be deemed to be a Non-Extending Lender. The election of
any Lender to agree to such extension of the Maturity Date shall not obligate any other Lender to
so agree.



     (c) Notification by Administrative Agent. The Administrative Agent shall notify the
Company of each Lender’s determination under this Section 2.17 within five Business Days
after the Response Deadline.



     (d) Additional Commitment Lenders. The Company shall have the right on or before the
related Anniversary Date to replace each Non-Extending Lender with, and add as “Lenders” under this
Agreement in place thereof, one or more Eligible Assignees (each, an “Additional Commitment
Lender”) as provided in Section 11.06, provided that each such Additional Commitment
Lender shall enter into an Assignment and Assumption Agreement pursuant to which such Additional
Commitment Lender shall undertake a Commitment (and, if any such Additional Commitment Lender is
already a Lender, its Commitment shall be in addition to such Lender’s Commitment hereunder on such
date).



     (e) Minimum Extension Requirement. If (and only if) the total of the Commitments of
the Lenders that have agreed to so extend the Maturity Date (each, an “Extending Lender”)




50










 




and the Commitments of the Additional Commitment Lenders shall be more than 51% of the
aggregate amount of the Commitments in effect immediately prior to the related Anniversary Date,
then, effective as of the related Anniversary Date (but subject to the prior satisfaction of the
conditions set forth in clause (f) below), the Maturity Date of this Agreement and the Maturity
Date with respect to the Commitments of each Extending Lender and of each Additional Commitment
Lender shall be extended to the date falling one year after the Existing Maturity Date (except
that, if such date is not a Business Day, such Maturity Date as so extended shall be the next
preceding Business Day) and each Additional Commitment Lender shall thereupon become a “Lender” for
all purposes of this Agreement. Notwithstanding anything herein to the contrary, the Commitment of
each Non-Extending Lender shall remain in full force and effect until and shall terminate on the
Existing Maturity Date for such Non-Extending Lender, unless such Non-Extending Lender is replaced
prior to the related Anniversary Date by an Additional Commitment Lender as provided in clause (d)
above.




     (f) Conditions to Effectiveness of Extensions. Notwithstanding the foregoing, the
extension of the Maturity Date pursuant to this Section shall not be effective with respect to any
Lender unless:




     (i) no Default shall exist, or would result from such extension;




     (ii) the representations and warranties of the Borrowers contained in this Agreement or
any other Loan Document, or which are contained in any document furnished at any time under
or in connection herewith or therewith, shall be true and correct on and as of the date of
such extension, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they shall be true and correct as of such earlier
date;




     (iii) as of the Anniversary Date, with respect to such extension no Material Adverse
Effect has occurred since March 31, 2007; and




     (iv) the chief financial officer of the Company shall have delivered to the
Administrative Agent a certificate, dated the Anniversary Date with respect to such
extension, as to the matters referred to in clauses (i) through (iii) above.



     (g) Payment of Non-Extending Lenders. On the Maturity Date of any Non-Extending
Lender, the Company shall repay any Committed Loans of such Non-Extending Lender outstanding on
such date (and pay any additional amounts required pursuant to Sections 2.09 and
3.05).



     (h) Conflicting Provisions. This Section shall supersede any provisions in
Section 11.01 to the contrary.



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ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01 Taxes.



     (a) Any and all payments by the Borrowers to or for the account of any Agent or any Lender
under any Loan Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges, and all liabilities with respect thereto, excluding, in the case of each
Agent and each Lender, taxes imposed on or measured by its net income, taxable income, taxable
capital or similar measure and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which such Agent or such
Lender, as the case may be, is organized or maintains a lending office or carries on business
through a permanent establishment (all such non-excluded taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter
referred to as “Taxes”). If the Borrowers shall be required by any Laws to deduct any
Taxes from or in respect of any sum payable under any Loan Document to any Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 3.01), each
of such Agent and such Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Applicable Borrower shall make such deductions, (iii) the
Applicable Borrower shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Applicable Borrower shall furnish to the Applicable Agent (which shall forward the
same to such Lender) the original or a certified copy of a receipt evidencing payment thereof.



     (b) In addition, each Borrower agrees to pay any and all present or future stamp, court or
documentary taxes and any other excise or property taxes or charges or similar levies which arise
from any payment made under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as “Other Taxes”).



     (c) If a Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in
respect of any sum payable under any Loan Document to either Agent or any Lender, that Borrower
shall also pay to such Agent or to such Lender, as the case may be, at the time interest is paid,
such additional amount that such Agent or such Lender specifies is necessary to preserve the
after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net
income) that such Agent or such Lender would have received if such Taxes or Other Taxes had not
been imposed.



     (d) Each Borrower agrees to indemnify each Agent and each Lender for (i) the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction
on amounts payable under this Section 3.01) paid by such Agent and such Lender, (ii)
amounts payable under Section 3.01(c) and (iii) any liability (including additions to tax,
penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether
or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the



52









 







relevant Governmental Authority. Payment under this Section 3.01(d) shall be made
within 30 days after the date the Lender or the Applicable Agent makes a demand therefor.



     (e) If any Lender or Agent, as applicable, receives a refund (whether by way of a direct
payment or by offset) of any Taxes or Other Taxes paid by a Borrower under this Section
3.01 which, in the reasonable good faith judgment of such Lender or Agent, as the case may be,
is allocable to such payment, the amount of such refund (net of all reasonable out-of-pocket
expenses of such Lender or Agent) shall be paid to such Borrower if (i) payment of the Taxes or
Other Taxes being refunded has been made in full as and when required pursuant to this Section
3.01 and (ii) such Borrower agrees in writing to repay the amount of such refund, together with
interest thereon, to the applicable Lender or Agent in the event such Lender or Agent is required
to repay such refund to the Governmental Authority that imposed the Tax or Other Tax being
refunded.



     3.02 Illegality.



     (a) If any Lender determines that any Law has made it unlawful, or that any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to
make, maintain or fund Eurodollar Rate Loans (whether payable in Dollars or Canadian Dollars), or
to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by
such Lender to the Borrowers through the Applicable Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Committed Loans or Canadian Prime Rate
Loans, as the case may be, to Eurodollar Rate Loans shall be suspended until such Lender notifies
the Applicable Agent and the Applicable Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Applicable Borrower shall, upon
demand from such Lender (with a copy to the Applicable Agent), prepay or, if applicable, convert
all Eurodollar Rate Loans of such Lender to Base Rate Loans or Canadian Prime Rate Loans, as the
case may be, either on the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion,
the Applicable Borrower shall also pay accrued interest on the amount so prepaid or converted.
Each Lender agrees to designate a different Lending Office if such designation will avoid the need
for such notice and will not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.



     (b) Upon any Lender’s giving notice and suspending its obligations relating to Eurodollar Rate
Loans in accordance with Section 3.02(a), the Company may replace such Lender in accordance
with Section 11.15.



     3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason
adequate and reasonable means do not exist for determining the Eurodollar Base Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or that the Eurodollar
Base Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrowers and each Lender. Thereafter, the obligation of the
Lenders (including Canadian Lenders) to make or maintain Eurodollar Rate



53









 







Loans shall be suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrowers may revoke any pending
request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing
that, will be deemed to have converted such request into a request for a Borrowing of Base Rate
Loans or Canadian Prime Rate Loans, as the case may be, in the amount specified therein.



     3.04 Increased Cost and Reduced Return; Capital Adequacy.



     (a) If any Lender, including any Canadian Lender, determines that as a result of the
introduction of or any change in or in the interpretation of any Law, or such Lender’s compliance
therewith, in either case after the Restatement Date, there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans, agreeing
to accept or accepting, funding or maintaining Drafts or Bankers’ Acceptances, or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount received or
receivable by such Lender in connection with any of the foregoing (excluding for purposes of this
Section 3.04(a) any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of taxation
of overall net income or overall gross income by the United States or any foreign jurisdiction or
any political subdivision of either thereof under the Laws of which such Lender is organized or has
its Lending Office, and (iii) reserve requirements utilized in the determination of the Eurodollar
Rate), then from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent and the Canadian Administrative Agent, if applicable), the Applicable Borrower
shall pay to such Lender such additional amounts as will compensate such Lender for such increased
cost or reduction; provided that no Lender shall be entitled to receive additional amounts
with respect to any period prior to six months prior to making such demand.



     (b) If any Lender determines that the introduction of any Law regarding capital adequacy or
any change therein or in the interpretation thereof, in either case after the Restatement Date, or
compliance by such Lender (or its Lending Office) therewith, has the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender as a consequence of
such Lender’s obligations hereunder (taking into consideration its policies with respect to capital
adequacy and such Lender’s desired return on capital), then from time to time upon demand of such
Lender (with a copy of such demand to the Administrative Agent), the Company shall pay to such
Lender such additional amounts as will compensate such Lender for such reduction; provided
that no Lender shall be entitled to receive additional amounts with respect to any period prior to
six months prior to making such demand.



     3.05 Funding Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, the Company shall promptly compensate such Lender for and hold such Lender harmless
from any loss, cost or expense incurred by it as a result of:



     (a) any continuation, conversion, payment or prepayment of any Eurodollar Rate Loan on a day
other than the last day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);



54









 





     (b) any failure by a Borrower (for a reason other than the failure of such Lender to make a
Loan) to prepay, borrow, continue or convert any Eurodollar Rate Loan on the date or in the amount
notified by such Borrower; or



     (c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest
Period therefor as a result of a request by the Company pursuant to Section 11.15;



including any loss of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained.



For purposes of calculating amounts payable by the Company to the Lenders under this Section
3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the
Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or
other borrowing in the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.



     3.06 Matters Applicable to all Requests for Compensation.



     (a) A certificate of the Administrative Agent, the Canadian Administrative Agent or any Lender
claiming compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Administrative Agent, the Canadian Administrative Agent or such Lender
may use any reasonable averaging and attribution methods.



     (b) Upon any Lender’s making a claim for compensation under Section 3.04 or if any
Borrower is required to pay amounts to any Lender under Section 3.01 as a result of any
Taxes or Other Taxes, in each case the Company may replace such Lender in accordance with
Section 11.15.



     3.07 Survival. All of the Borrowers’ obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations hereunder.



ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS




     4.01 Conditions to Effectiveness of Restatement. Effectiveness of this Agreement is subject
to satisfaction of the following conditions precedent:



     (a) The Administrative Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Restatement Date (or, in the case of
certificates of governmental officials, a recent date before the Restatement Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:



55









 






     (i) executed counterparts of this Agreement, sufficient in number for distribution to
the Administrative Agent, the Canadian Administrative Agent, each Lender and each Loan
Party;




     (ii) if requested by any Lender at least two Business Days before the Restatement Date,
a Note executed by the Applicable Borrower in favor of each Lender so requesting a Note;




     (iii) such certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers or the corporate secretary or assistant secretary
of the Company and McKesson Canada as the Administrative Agent may require evidencing the
identity, authority and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party;




     (iv) each of the following documents:




     (1) the articles or certificate of incorporation and the bylaws of each
Borrower as in effect on the Restatement Date, certified by the Secretary or
Assistant Secretary of such Borrower as of the Restatement Date;




     (2) a good standing and tax good standing certificate for the Company from the
applicable Secretary of State (or similar, applicable Governmental Authority) of the
States of Delaware and California dated as of a recent date; and




     (3) a certificate of status for McKesson Canada from the Registrar of Joint
Stock Companies of Nova Scotia, dated as of a recent date;




     (v) favorable opinions, addressed to the Agents and the Lenders, of Laureen E. Seeger,
Executive Vice President, General Counsel and Secretary of the Company, as to the matters
set forth in Exhibit C and such other matters as the Administrative Agent may
reasonably request, and Stewart, McKelvey, Stirling, Scales, special Canadian counsel to the
Company and McKesson Canada, as to certain matters of Canadian law;




     (vi) a certificate signed by a Responsible Officer of the Company:




     (1) certifying that:




     (a) the representations and warranties contained in Article V
and the other Loan Documents are true and correct on and as of such date, as
though made on and as of such date;




     (b) no Default or Event of Default exists or would result from the
initial Borrowing;




     (c) there has occurred since March 31, 2007, no event or circumstance
that has resulted or could reasonably be expected to result in a Material
Adverse Effect;



56









 






     (d) each of the conditions in Sections 4.01(b) and (c) has been satisfied on the part of the
Company as of the Restatement Date;




     (2) designating the Restatement Date; and




     (3) indicating the Debt Ratings;




     (vii) a certificate signed by a Responsible Officer of McKesson Canada certifying that:




     (1) the representations and warranties of McKesson Canada contained in
Article V are true and correct on and as of the Restatement Date, as though
made on and as of such date;




     (2) no Default or Event of Default with respect to McKesson Canada or any of
its Subsidiaries exists or would result from the initial Borrowing;




     (3) there has occurred since March 31, 2007 no event or circumstance with
respect to McKesson Canada or any of its Subsidiaries that has resulted or could
reasonably be expected to result in a Material Adverse Effect; and




     (4) each of the conditions in Sections 4.01(b) and (c) has been satisfied on the part of
McKesson Canada as of the Restatement Date;




     (viii) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the Canadian Administrative Agent, the L/C Issuer or the Required
Lenders reasonably may require.



     (b) Any fees required by the Loan Documents to be paid, and all reimburseable expenses for
which invoices have been presented, to either Agent, the L/C Issuer, the Arranger or any Lender on
or before the Restatement Date shall have been paid, to the extent that such invoices have been
presented to the Company on or before the Restatement Date.



     (c) Unless waived by the Administrative Agent, the Company shall have paid all Attorney Costs
of the Administrative Agent to the extent invoiced to the Company prior to or on the Restatement
Date, plus such additional amounts of Attorney Costs as shall constitute its reasonable estimate of
Attorney Costs incurred or to be incurred by it through the restatement proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between the Company and
the Administrative Agent).



     (d) Since March 31, 2007, no Material Adverse Effect shall have occurred or become known to
the Administrative Agent.



     (e) The Restatement Date shall have occurred on or before June 30, 2007.



     Without limiting the generality of the provisions of Section 9.05, for purposes of
determining compliance with the conditions specified in this Section 4.01, each Lender that
has signed this Agreement shall be deemed to have consented to, approved or accepted or to be



57









 







satisfied with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have
received notice from such Lender prior to the proposed Restatement Date specifying its objection
thereto.



     4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor any Request
for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed
Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following
conditions precedent:



     (a) The representations and warranties of each Borrower contained in Article V or any
other Loan Document, or which are contained in any document furnished at any time under or in
connection herewith or therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier date, and except that
for purposes of this Section 4.02, the representations and warranties contained in
Section 5.08(a) shall be deemed to refer to the most recent statements furnished pursuant
Sections 6.01(a) and (b), respectively.



     (b) No Default shall exist, or would result from such proposed Credit Extension.



     (c) The Administrative Agent, the Canadian Administrative Agent, if applicable, and the L/C
Issuer, if applicable, shall have received a Request for Credit Extension in accordance with the
requirements hereof.



     (d) In the case of a Drawing Notice or any Loan to be made to McKesson Canada, McKesson Canada
shall be a Wholly-Owned Subsidiary.



     (e) In the case of a Drawing Notice, each of the conditions to the acceptance of the Draft
identified in such Drawing Notice that is set forth in Section 2.04 shall have been
satisfied.



     Each Request for Credit Extension (other than a Committed Loan Notice requesting only a
conversion of Committed Loans to the other Type or a continuation of Eurodollar Rate Loans)
submitted by the Company or, in the case of a Canadian Loan or Bankers’ Acceptance, McKesson
Canada, shall be deemed to be a representation and warranty that the conditions specified in
Sections 4.02(a), (b) and (d) have been satisfied on and as of the date of
the applicable Credit Extension.



ARTICLE V.

REPRESENTATIONS AND WARRANTIES




     Each Borrower represents and warrants (which representations and warranties in the case of
McKesson Canada shall be limited to McKesson Canada and its Subsidiaries and other facts and
circumstances known to McKesson Canada and its Subsidiaries) to the Administrative Agent, the
Canadian Administrative Agent and each Lender that:



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     5.01 Corporate Existence and Power. The Company and each of its Subsidiaries:



     (a) is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization;



     (b) has the power and authority and all required governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and to execute, deliver, and
perform its obligations under the Loan Documents to which it is a party;



     (c) is duly qualified and is licensed and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its business requires such
qualification or license; and



     (d) is in compliance with all Requirements of Law;



     except, (i) with respect to Subsidiaries other than Material Subsidiaries, to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse Effect, and (ii) with
respect to the Company and its Material Subsidiaries (A) in each case referred to in clause (c) or
clause (d), to the extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect and (B) in each case referred to in clause (d), the Disclosed Matters.



     5.02 Corporate Authorization; No Contravention. The execution, delivery and performance by
each Borrower of this Agreement and each other Loan Document to which such Borrower is party, and
any Borrowing as of the date of such Borrowing have been duly authorized by all necessary corporate
action, and do not and will not:



     (a) contravene the terms of any Borrower’s Organization Documents;



     (b) conflict with or result in any breach or contravention of, or the creation of any Lien
under, any document evidencing any Contractual Obligation to which any Borrower is a party or any
order, injunction, writ or decree of any Governmental Authority to which any Borrower or its
property is subject; or



     (c) violate any Requirement of Law.



     5.03 Governmental Authorization. No approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority is necessary or required in
connection with the execution, delivery or performance by, or enforcement against, any Borrower of
the Agreement or any other Loan Document.



     5.04 Binding Effect. This Agreement and each other Loan Document to which each Borrower is a
party constitute the legal, valid and binding obligations of such Borrower, enforceable against
such Borrower in accordance with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability.



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     5.05 Litigation.




     Except for the Disclosed Matters, there are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of each Borrower, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against any Borrower, or its Subsidiaries or
any of their respective properties which:



     (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby or thereby; or



     (b) if determined adversely to the Company or its Subsidiaries, would reasonably be expected
to have a Material Adverse Effect as of the Restatement Date. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement
or any other Loan Document, or directing that the transactions provided for herein or therein not
be consummated as herein or therein provided.



     5.06 No Default. No Default or Event of Default exists or would result from the incurring of
any Obligations by any Borrower. As of the Restatement Date, neither the Company nor any
Subsidiary is in default under or with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably be expected to have a Material
Adverse Effect as of the Restatement Date, or that would, if such default had occurred after the
Restatement Date, create an Event of Default under Section 8.01(e).



     5.07 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to be used solely for
the purposes set forth in Section 6.10. Neither the Company nor any Subsidiary is
generally engaged in the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.



     5.08 Financial Condition. (a) The Audited Financial Statements:




     (A) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, subject in the
case of the unaudited statements to ordinary, good faith year end audit adjustments;




     (B) fairly present the financial condition of the Company and its Subsidiaries
as of the date thereof and results of operations for the period covered thereby; and




     (C) show all material indebtedness and other liabilities, direct or contingent,
of the Company and its consolidated Subsidiaries as of the date thereof required to
be shown in accordance with GAAP.



     (b) As of the Restatement Date, since March 31, 2007, there has been no Material Adverse
Effect.



60









 





     5.09 Regulated Entities. None of the Company, any Person controlling the Company, or any
Subsidiary, is or is required to be registered as an “investment company” within the meaning of the
Investment Company Act of 1940. Neither Borrower is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal, state or other statute or regulation limiting its ability to
incur Indebtedness.



     5.10 No Burdensome Restrictions. Neither the Company nor any Subsidiary is a party to or
bound by any Contractual Obligation, or subject to any restriction in any Organization Document, or
any Requirement of Law, which could reasonably be expected to have a Material Adverse Effect.



     5.11 Subsidiaries and Certain Liens As of the Restatement Date. As of the Restatement Date,
the Company has no Subsidiaries other than those listed in part (a) of Schedule 5.11
hereto. As of the Restatement Date, part (b) of Schedule 5.11 describes all outstanding
Indebtedness of the Company and its Subsidiaries for borrowed money in excess of $25,000,000 that
is secured by a Lien existing on property of the Company or any of its Subsidiaries.



     5.12 Disclosed Matters. As of the Restatement Date, based on information available to the
Company on the Restatement Date, it is unlikely that, prior to the Maturity Date, any actions,
suits, proceedings or governmental investigations, pending or threatened, comprising or resulting
from the Disclosed Matters would materially and adversely affect the ability of the Company to
perform its obligations under any Loan Document.



ARTICLE VI.

AFFIRMATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation (other
than Obligations under Section 11.04(b) that remain contingent after termination of the Commitments
and payment of all other Obligations) hereunder shall remain unpaid or unsatisfied, or any Letter
of Credit or Bankers’ Acceptance shall remain outstanding, unless the Required Lenders waive
compliance in writing:



     6.01 Financial Statements. The Company shall deliver to the Administrative Agent, in form and
detail satisfactory to the Administrative Agent and the Required Lenders:



     (a) as soon as available, but in any event within 70 days after the end of each fiscal year of
the Company, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such
fiscal year, and the related consolidated statements of operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of Deloitte & Touche LLP or another nationally recognized
independent certified public accountant, which report and opinion shall be prepared in accordance
with GAAP and shall not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit; and



61









 





     (b) as soon as available, but in any event within 55 days after the end of each of the first
three fiscal quarters of each fiscal year of the Company, beginning with the fiscal quarter ending
June 30, 2007, a consolidated balance sheet of the Company and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of operations, shareholders’ equity
and cash flows for such fiscal quarter and for the portion of the Company’s fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding fiscal quarter of
the previous fiscal year and the corresponding portion of the previous fiscal year, all in
reasonable detail and certified by a Responsible Officer of the Company as fairly presenting the
financial condition, results of operations, shareholders’ equity and cash flows of the Company and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.


As to any information contained in materials furnished pursuant to Section 6.02(b), the
Company shall not be separately required to furnish such information under clause (a) or (b) above,
but the foregoing shall not be in derogation of the obligation of the Company to furnish the
information and materials described in Sections 6.01(a) and (b) at the times
specified therein.




     6.02 Certificates; Other Information. The Company shall deliver to the Administrative Agent:



     (a) concurrently with the delivery of the financial statements referred to in Sections
6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible
Officer of the Company;



     (b) promptly after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the Company, and copies of
all annual, regular, periodic and special reports and registration statements which the Company may
file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act
of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;
and



     (c) promptly, such additional information regarding the business, financial or corporate
affairs of the Company or any Subsidiary, including McKesson Canada, or compliance with the terms
of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably
request.



     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(b) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Company posts such documents, or provides a link thereto on
the Company’s website on the Internet at the website address listed on Schedule 11.02; or
(ii) on which such documents are posted on the Company’s behalf on IntraLinks or another similar
electronic system (a “Platform”), if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by the Administrative
Agent). Notwithstanding anything contained herein, in every instance the Company shall be required
to provide paper copies of the Compliance Certificates required by Section 6.02(a) to the
Administrative Agent. Except for such Compliance Certificates, the



62









 







Administrative Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, and in any event shall have no responsibility to monitor
compliance by the Company with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such documents.



     The Borrower hereby acknowledges that (a) the Administrative Agent may make available to the
Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrower
under Sections 6.01(a), 6.01(b), 6.02(a) and 6.02(b) (and any other such materials and/or
information to the extent the Borrower has previously consented in writing) (collectively,
“Borrower Materials”) by posting the Borrower Materials on a Platform and (b) certain of
the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its affiliates, or the respective securities
of any of the foregoing, and who may be engaged in investment and other market-related activities
with respect to such Persons’ securities. The Borrower hereby agrees that (a) all Borrower
Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the
first page thereof; (b) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to
have authorized the Administrative Agent, the L/C Issuer and the Lenders to treat such Borrower
Materials as publicly available information with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws; (c) all Borrower Materials marked
“PUBLIC” are permitted to be made available through a portion of a Platform designated “Public
Investor”; and (d) the Administrative Agent shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of a Platform not
designated “Public Investor”.



     6.03 Notices. The Company and McKesson Canada shall promptly notify the Administrative Agent
and each Lender:



     (a) of the occurrence of any Default;



     (b) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect;



     (c) promptly upon any Responsible Officer of the Company obtaining knowledge thereof of (i)
the institution of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or arbitration against or
affecting the Company or any of its Subsidiaries or any property of the Company or any of its
Subsidiaries (collectively “Proceedings”) not previously disclosed in writing by the
Company to the Lenders or (ii) any material development in any Proceeding that, in the case of
clause (i) or (ii) above, (A) has a reasonable possibility of giving rise to a Material Adverse
Effect; or (B) seeks to enjoin or otherwise prevent the consummation of, or to recover any damages
or obtain relief as a result of, the transactions contemplated hereby, together with such other
information as may be reasonably available to Company that the Administrative Agent requests to
enable the Administrative Agent and the Lenders to evaluate such matters.



     (d) of any material change in accounting policies or financial reporting practices by the
Company or any Subsidiary;



63









 





     (e) of any announcement by S&P, Moody’s or Fitch of any change or possible change in a Debt
Rating; and



     (f) of (i) the occurrence of any ERISA Event with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of the Company or
any of its Subsidiaries in an aggregate amount in excess of $15,000,000 during the term of this
Agreement, or (ii) the existence of an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding
for purposes of such computation any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds 3% of Net Worth.



     Notification delivered to the Administrative Agent and each Lender by either Borrower under
this Section 6.03 shall satisfy the notice obligation of both Borrowers hereunder. Each
notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible
Officer of the Company setting forth details of the occurrence referred to therein and stating what
action the Company has taken and proposes to take with respect thereto. Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions of this Agreement
and any other Loan Document that have been breached.



     6.04 Preservation of Existence, Etc. The Company and McKesson Canada each shall, and shall
cause each of their respective Material Subsidiaries to, (a) preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.02 and (b) take all reasonable
action to maintain all governmental rights, privileges, permits, licenses and franchises necessary
in the normal conduct of its business, except in connection with transactions permitted by
Section 7.02 and except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.



     6.05 Maintenance of Insurance. The Company and McKesson Canada each shall, and shall cause
each of their respective Material Subsidiaries to, maintain with financially sound and reputable
insurance companies, insurance (including self-insurance) with respect to its properties and
business against loss or damage of the kinds customarily insured against by Persons engaged in the
same or similar business, of such types and in such amounts as the Company reasonably deems prudent
from time to time.



     6.06 Payment of Taxes. The Company and McKesson Canada each shall, and shall cause each of
their respective Material Subsidiaries to, pay and discharge as the same shall become due and
payable, all tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets (other than obligations that a Responsible Officer is not aware of or are of a
nominal amount), unless the same are being contested in good faith by appropriate proceedings
diligently conducted and adequate reserves in accordance with GAAP are being maintained by the
Company or such Subsidiary.



     6.07 Compliance with Laws. The Company and McKesson Canada each shall, and shall cause each
of their respective Material Subsidiaries to, comply in all material respects with the Requirements
of Law applicable to it or to its business, except in such instances in which (a) a Requirement of
Law is being contested in good faith by appropriate proceedings diligently



64









 







conducted; or (b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.



     6.08 Books and Records. The Company and McKesson Canada each shall, and shall cause each of
their respective Material Subsidiaries to, maintain in all material respects proper books of record
and account, in which full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and business of the
Company and such Subsidiary, as the case may be.



     6.09 Inspection Rights. The Company and McKesson Canada each shall, and shall cause each of
their respective Material Subsidiaries to, permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and independent public
accountants, all at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Company; provided,
however, that when an Event of Default exists the Administrative Agent or any Lender (or
any of their respective representatives or independent contractors) may do any of the foregoing at
the reasonable expense of the Borrowers at any time during normal business hours and without
advance notice.



     6.10 Use of Proceeds. The Borrowers shall use the proceeds of the Credit Extensions for
general corporate purposes (including the refinancing of existing indebtedness, acquisitions and
commercial paper back-up) not in contravention of any Law or of any Loan Document.



ARTICLE VII.

NEGATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation (other
than Obligations under Subsection 11.04(b) that remain contingent after termination of the
Commitments and payment of all other Obligations) hereunder shall remain unpaid or unsatisfied, or
any Letter of Credit or Bankers’ Acceptance shall remain outstanding, unless the Required Lenders
waive compliance in writing:



     7.01 Liens. The Company and McKesson Canada each shall not, and shall not suffer or permit
any of their respective Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien upon any of its property, whether now owned or hereafter acquired, other than the
following (“Permitted Liens”):



     (a) any Lien existing on property of the Company or any Subsidiary on the Restatement Date
securing Indebtedness outstanding on such date;



     (b) any Lien created under any Loan Document;



     (c) Liens for taxes, fees, assessments or other governmental charges not yet due or which are
being contested in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable Person in accordance
with GAAP;



65









 





     (d) carriers’, warehousemen’s, mechanics’, materialmen’s, landlords’, repairmen’s or other
like Liens arising in the ordinary course of business which are not delinquent or remain payable
without penalty;



     (e) pledges or deposits required in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security legislation, other than any
Lien imposed by ERISA;



     (f) Liens on the property of the Company or any Subsidiary securing (i) the non-delinquent
performance of bids, trade contracts (other than for borrowed money), leases, statutory
obligations, (ii) contingent obligations on surety and appeal bonds, and (iii) other non-delinquent
obligations of a like nature; in each case, incurred in the ordinary course of business, provided
all such Liens in the aggregate would not (even if enforced) cause a Material Adverse Effect;



     (g) easements, rights-of-way, restrictions and other similar encumbrances which, in the
aggregate, are not substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;



     (h) Liens arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution; provided that (i) such deposit
account is not a dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by the FRB, and (ii)
such deposit account is not intended by the Company or any Subsidiary to provide collateral to the
depository institution;



     (i) Any other Liens (other than any Lien imposed by ERISA or any Lien for taxes, fees,
assessments or other governmental charges that is not expressly permitted under Section
7.01(c));


provided that the aggregate amount of all Permitted Liens shall not exceed at any time 25%
of Net Worth.




     7.02 Consolidations and Mergers. The Company shall not, and shall not suffer or permit any of
its Material Subsidiaries to, directly or indirectly, liquidate, dissolve, merge, amalgamate,
consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:



     (a) any Subsidiary may merge with the Company, provided that the Company shall be the
continuing or surviving corporation, or with any one or more Subsidiaries, provided that if any
transaction shall be between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving corporation;




66










 





     (b) McKesson Canada or any Subsidiary of McKesson Canada may amalgamate with McKesson
Canada or with any one or more of the Company’s Subsidiaries and any of the Company’s Subsidiaries
may amalgamate with any one or more of the Company’s Subsidiaries;



     (c) any Subsidiary may sell, transfer or exchange all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Company or a Wholly-Owned Subsidiary; and



     (d) the Company may merge with another Person provided that the Company shall be the
continuing or surviving corporation and no Default or Event of Default is in effect immediately
prior to or on the date of or would result from such merger.



     7.03 Use of Proceeds. The Company and McKesson Canada each shall not, and shall not suffer or
permit any of their respective Subsidiaries to, use any Credit Extension, directly or indirectly,
(a) to purchase or carry Margin Stock, (b) to repay or otherwise refinance indebtedness of the
Company or others incurred to purchase or carry Margin Stock, (c) to extend credit for the purpose
of purchasing or carrying any Margin Stock, or (d) to acquire any security in any transaction that
is subject to Section 13 or 14 of the Securities Exchange Act of 1934.



     7.04 Maximum Debt to Capitalization Ratio. The Company shall not permit the ratio of Total
Debt to Total Capitalization as at the last day of any calendar month to exceed 0.565 to 1.00.



     7.05 Swap Contracts. The Company and McKesson Canada shall, and shall cause each of their
respective Subsidiaries to, enter into Swap Contracts only in the ordinary course of business and
not for any purpose other than for hedging an existing or anticipated underlying agreement.



ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES




     8.01 Events of Default. Any of the following shall constitute an Event of Default:



     (a) Non-Payment. Either Borrower fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan, L/C Obligation or Bankers’ Acceptance, or (ii) within
five days after the same becomes due, any interest on any Loan, L/C Obligation or Bankers’
Acceptance, or any facility fee or other fee due hereunder, or any other amount payable hereunder
or under any other Loan Document; or



     (b) Specific Covenants. The Company fails to perform or observe any term, covenant or
agreement contained in any of Section 6.04(a) or Article VII; or



     (c) Other Defaults. Either Borrower fails to perform or observe any other covenant or
agreement (not specified in Section 8.01(a) or (b)) contained in any Loan Document
on its part to be performed or observed and such failure continues for 20 days after the earlier of
(i) in the case of any provision in Article VI, the date upon which a Responsible Officer
knew of such failure or (ii) the date upon which written notice thereof is given to the Company by
the Administrative Agent or any Lenders; or



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     (d) Representations and Warranties. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of either Borrower herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or



     (e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise)
in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness
under Swap Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $25,000,000 and such failure continues after the applicable grace
or notice period, if any, specified in the relevant document on the date of such failure, or (B)
fails to observe or perform any other agreement or condition relating to any Indebtedness or
Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) of more than
$25,000,000 or contained in any instrument or agreement evidencing, securing or relating thereto,
and such failure continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which the Company or any Subsidiary is the Defaulting Party (as defined in
such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to
which the Company or any Subsidiary is an Affected Party (as so defined) and, in either event, the
Swap Termination Value owed by the Company or such Subsidiary as a result thereof is greater than
$25,000,000; or



     (f) Insolvency; Voluntary Proceedings. The Company or any Material Subsidiary (i)
ceases or fails to be solvent, or generally fails to pay, or admits in writing its inability to
pay, its debts as they become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in the ordinary course;
(iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or



     (g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is commenced
or filed against the Company or any Material Subsidiary, or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a substantial part of the
Company’s or any Material Subsidiary’s properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within sixty (60) days after commencement, filing or levy; (ii)
the Company or any Material Subsidiary admits the material



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allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company or
any Material Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its property or business; or




     (h) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability of the Company or
any of its Subsidiaries in an aggregate amount in excess of $25,000,000 during the term of this
Agreement, or (ii) there shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding
for purposes of such computation any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds 5% of Net Worth; or



     (i) Invalidity of Loan Documents. Any Loan Document, at any time after its execution
and delivery and for any reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan
Party contests in any manner the validity or enforceability of any provision of any Loan Document;
or any Loan Party denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any provision of any Loan Document.



     8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:



     (a) declare the commitment of each Lender to make Loans and accept Drafts and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and
obligation shall be terminated;



     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by each Borrower;



     (c) require that the Company Cash Collateralize the L/C Obligations and unmatured Bankers’
Acceptances (in an amount equal to the then Outstanding Amount thereof); and



     (d) exercise on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents or applicable law;


provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the United States,
except in the case of Section 8.01(g)(i), in which case upon the expiration of the 60-day
period mentioned therein if the curative action mentioned in such clause is not taken, the
obligation of each Lender to make Loans and accept or discount Drafts or Bankers’ Acceptances and
any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable,

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and the obligation of the Company to Cash Collateralize the L/C Obligations and Bankers’
Acceptances as aforesaid shall automatically become effective, in each case without further act of
the Administrative Agent or any Lender.




     8.03 Application of Funds. After the exercise of remedies provided for in Section
8.02 (or after the Loans and other Obligations have automatically become immediately due and
payable and the L/C Obligations and Bankers’ Acceptances have automatically been required to be
Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on
account of the Obligations shall be applied by the Administrative Agent in the following order:



     First, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including Attorney Costs and amounts payable under Article III)
payable to the Administrative Agent, the Canadian Administrative Agent and the L/C Issuer in their
respective capacities as such;



     Second, to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal and interest) payable to the Lenders (including Attorney
Costs and amounts payable under Article III), ratably among them in proportion to the
amounts described in this clause Second payable to them;



     Third, to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and L/C Borrowings, ratably among the Lenders in proportion to the respective
amounts described in this clause Third payable to them;



     Fourth, to payment of that portion of the Obligations constituting unpaid principal of
the Loans and L/C Borrowings, in each case ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them;



     Fifth, to the Administrative Agent for the account of the L/C Issuer, and to the
Canadian Administrative Agent for the account of the applicable Canadian Lenders, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters
of Credit and that portion of the Obligations constituting unpaid principal of the Bankers’
Acceptances; and



     Last, the balance, if any, after all of the Obligations have been indefeasibly paid in
full, to the Applicable Borrower or as otherwise required by Law.


Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount
of Letters of Credit or the unmatured Bankers’ Acceptances pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur and Bankers’
Acceptances as they mature. If any amount remains on deposit as Cash Collateral after all Letters
of Credit have either been fully drawn or expired and all Bankers’ Acceptances have been paid, such
remaining amount shall be applied to the other Obligations, if any, in the order set forth above.




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ARTICLE IX.

ADMINISTRATIVE AGENT




     9.01 Appointment and Authorization of Agents.



     (a) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act
on its behalf as the Administrative Agent hereunder and under the other Loan Documents, and each
Canadian Lender hereby irrevocably appoints BA Canada to act on its behalf as the Canadian
Administrative Agent hereunder and under the other Loan Documents, and authorizes each such Agent
to take such actions on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers as are delegated to such Agent by the terms hereof or thereof,
together with such actions and powers as are reasonably incidental thereto. The provisions of this
Article IX are solely for the benefit of the Administrative Agent, the Canadian Administrative
Agent, the Lenders and the L/C Issuer, and the Borrowers shall not have rights as a third party
beneficiary of any of such provisions other than the provisions of Section 9.06 relating to the
Company’s consultation and notice rights.



     (b) Notwithstanding any provision to the contrary contained elsewhere herein or in any other
Loan Document, no Agent shall have any duties or responsibilities, except those expressly set forth
herein, nor shall either Agent have or be deemed to have any fiduciary relationship with any Lender
or participant, and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against
either Agent. Without limiting the generality of the foregoing sentence, the use of the term
“agent” herein and in the other Loan Documents with reference to the Administrative Agent and the
Canadian Administrative Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable Law. Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.



     (c) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit
issued by it and the documents associated therewith, and the L/C Issuer shall have all of the
benefits and immunities (A) provided to the Administrative Agent in this Article IX with
respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and the Issuer Documents pertaining to such
Letters of Credit as fully as if the term “Administrative Agent” as used in this Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided
herein with respect to the L/C Issuer.



     9.02 Rights as a Lender. The Person serving as the Administrative Agent and the Person
serving as Canadian Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender (and, as applicable, in its capacity as a Canadian Lender
as any other Canadian Lender) and may exercise the same as though it were not such Agent and the
term “Lender” or “Lenders” (and, as applicable, the term “Canadian Lender” or “Canadian Lenders”)
shall, unless otherwise expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder and the Person serving as the Canadian
Administrative Agent hereunder in their respective individual capacities. Each such Person and its
Affiliates may accept deposits from, lend money to, act as



71









 




the financial advisor or in any other advisory capacity for and generally engage in any kind
of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Persons were
not Agents hereunder and without any duty to account therefor to the Lenders.




     9.03 Exculpatory Provisions. Neither Agent shall have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the generality of the
foregoing, neither Agent:



     (a) shall be subject to any fiduciary or other implied duties, regardless of whether a Default
has occurred and is continuing;



     (b) shall have any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents
that such Agent is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for herein or in the other
Loan Documents), provided that neither Agent shall be required to take any action that, in
its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary
to any Loan Document or applicable law; and



     (c) shall, except as expressly set forth herein and in the other Loan Documents, have any duty
to disclose, and shall be liable for the failure to disclose, any information relating to the
Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving as
such Agent or any of its Affiliates in any capacity.



     Neither Agent shall be liable for any action taken or not taken by it (i) with the consent or
at the request of the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary, or as such Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.01 and 8.02) or (ii) in the absence of its
own gross negligence or willful misconduct. Neither Agent shall be deemed to have knowledge of any
Default unless and until notice describing such Default is given to such Agent by a Borrower, a
Lender or the L/C Issuer.



     Neither Agent shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder
or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to such Agent.



     9.04 Delegation of Duties. Each Agent may perform any and all of its duties and exercise its
rights and powers hereunder or any other Loan Document by or through any one or more sub-agents
appointed by such Agent. Each Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers by or through their respective Related Parties. The exculpatory
provisions of this Article shall apply to any such sub-agent and to the



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Related Parties of the Agents and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided for herein as well
as activities as Administrative Agent and Canadian Administrative Agent.




     9.05 Reliance by Agents. Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person or Persons. Each Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or the L/C Issuer, each Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless such Agent shall have received
notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the
issuance of such Letter of Credit. Each Agent may consult with legal counsel (who may be counsel
for the Borrower), independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of any such counsel,
accountants or experts.



     9.06 Successor Agents. Either Agent may at any time give notice of its resignation to the
Lenders, the L/C Issuer and the Company. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Company, to appoint a successor,
which, in the case of the Administrative Agent, shall be a bank with an office in the United
States, or an Affiliate of any such bank with an office in the United States and, in the case of
the Canadian Administrative Agent, shall be a bank with an office in Canada, or an Affiliate of any
such bank with an office in Canada. If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may on behalf of the Lenders and the L/C
Issuer (if applicable) appoint a successor Agent meeting the qualifications set forth above;
provided that if the Applicable Agent shall notify the Company and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (a) the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents and (b) all payments,
communications and determinations provided to be made by, to or through such Agent shall instead be
made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders
appoint a successor Agent as provided for above in this Section. Upon the acceptance of a
successor’s appointment as Administrative Agent or Canadian Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers, privileges and duties
of the retiring (or retired) Administrative Agent or Canadian Administrative Agent, as applicable,
and the retiring Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Company to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such successor. After the
retiring Administrative Agent’s or Canadian Administrative Agent’s resignation hereunder and under
the other Loan Documents, the provisions of this Article and Section 11.04 shall continue
in effect for the benefit of such



73









 




retiring Agent, its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Agent was acting as such Agent.




     9.07 Non-Reliance on Agents and Other Lenders. Each Lender and the L/C Issuer acknowledges
that it has, independently and without reliance upon the Administrative Agent, the Canadian
Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon either Agent or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document furnished hereunder or
thereunder.



     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the
documentation agents, syndication agents, book managers or arrangers listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender
hereunder. Without limiting the foregoing, none of the Lenders or other Persons so listed shall
have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges
that it has not relied, and will not rely, on any of the Lenders or other Persons so listed in
deciding to enter into this Agreement or in taking or not taking action hereunder.



     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding
under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan, Bankers’ Acceptance or L/C
Obligation shall then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall
be entitled and empowered, by intervention in such proceeding or otherwise:



     (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid
and to file such other documents as may be necessary or advisable in order to have the claims of
the Lenders and the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 11.04) allowed in such
judicial proceeding; and



     (b) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same;


and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the

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reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 11.04.




     Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.



ARTICLE X.

THE COMPANY’S GUARANTY

OF MCKESSON CANADA’S OBLIGATIONS




     10.01 Guaranty of the Guarantied Obligations. The Company hereby irrevocably and
unconditionally guaranties, as primary obligor and not merely as surety, the due and punctual
payment in full of all Guarantied Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. § 362(a)). The term “Guarantied Obligations” is used herein in
its most comprehensive sense and includes:



     (a) any and all Obligations of McKesson Canada now or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or not due, and however
arising under or in connection with this Agreement, the Notes and Drafts issued by McKesson Canada
and the other Loan Documents, including those arising under successive borrowing transactions under
this Agreement which shall either continue the Obligations of McKesson Canada or from time to time
renew them after they have been satisfied; and



     (b) those expenses set forth in Section 10.08.



     10.02 Liability of the Company Absolute. The Company agrees that its obligations under this
Company Guaranty are irrevocable, absolute, independent and unconditional and shall not be affected
by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other
than indefeasible payment in full of the Guarantied Obligations. In furtherance of the foregoing
and without limiting the generality thereof, the Company agrees as follows:



     (a) This Company Guaranty is a guaranty of payment when due and not of collectibility.



     (b) The Administrative Agent may enforce this Company Guaranty upon the occurrence of an Event
of Default under this Agreement notwithstanding the existence of any dispute between Lenders and
any Borrower with respect to the existence of such Event of Default.



     (c) The obligations of the Company under this Company Guaranty are independent of the
obligations of McKesson Canada under the Loan Documents and the obligations of any other



75









 




guarantor of the obligations of McKesson Canada under the Loan Documents, and a separate
action or actions may be brought and prosecuted against the Company whether or not any action is
brought against McKesson Canada or any of such other guarantors and whether or not McKesson Canada
is joined in any such action or actions.




     (d) The Company’s payment of a portion, but not all, of the Guarantied Obligations shall in no
way limit, affect, modify or abridge the Company’s liability for any portion of the Guarantied
Obligations that has not been paid. Without limiting the generality of the foregoing, if the
Administrative Agent is awarded a judgment in any suit brought to enforce the Company’s covenant to
pay a portion of the Guarantied Obligations, such judgment shall not be deemed to release the
Company from its covenant to pay the portion of the Guarantied Obligations that is not the subject
of such suit.



     (e) Any Agent or any Lender, upon such terms as it deems appropriate, without notice or demand
and without affecting the validity or enforceability of this Company Guaranty or giving rise to any
reduction, limitation, impairment, discharge or termination of the Company’s liability under this
Company Guaranty, from time to time may (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of payment of the Guarantied
Obligations, (ii) settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guarantied Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Guarantied Obligations and take and
hold security for the payment of this Company Guaranty or the Guarantied Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guarantied Obligations, any other
guaranties of the Guarantied Obligations, or any other obligation of any Person with respect to the
Guarantied Obligations; (v) enforce and apply any security now or hereafter held by or for the
benefit of the Agents or any Lender in respect of this Company Guaranty or the Guarantied
Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy
that the Agents or the Lenders, or any of them, may have against any such security, as the
Administrative Agent in its discretion may determine consistent with this Agreement and any
applicable security agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable, and even though such action operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of the Company against McKesson Canada or any security for
the Guarantied Obligations; and (vi) exercise any other rights available to it under the Loan
Documents. This Section 10.02(e) shall not modify Section 11.01.



     (f) This Company Guaranty and the obligations of the Company hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment, discharge or
termination for any reason (other than indefeasible payment in full of the Guarantied Obligations),
including the occurrence of any of the following, whether or not the Company shall have had notice
or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law
or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents, at law, in equity or



76









 




otherwise) with respect to the Guarantied Obligations or any agreement relating thereto, or
with respect to any other guaranty of or security for the payment of the Guarantied Obligations;
(ii) any rescission, waiver, amendment or modification of, or any consent to departure from, any of
the terms or provisions (including provisions relating to events of default) of this Agreement, any
of the other Loan Documents or any agreement or instrument executed pursuant thereto, or of any
other guaranty or security for the Guarantied Obligations, in each case whether or not in
accordance with the terms of this Agreement or such Loan Document or any agreement relating to such
other guaranty or security; (iii) the Guarantied Obligations, or any agreement relating thereto, at
any time being found to be illegal, invalid or unenforceable in any respect; (iv) the application
of payments received from any source (other than payments received pursuant to the other Loan
Documents or from the proceeds of any security for the Guarantied Obligations, except to the extent
such security also serves as collateral for indebtedness other than the Guarantied Obligations) to
the payment of indebtedness other than the Guarantied Obligations, even though the Agents or the
Lenders, or any of them, might have elected to apply such payment to any part or all of the
Guarantied Obligations; (v) any Lender’s or Agent’s consent to the change, reorganization or
termination of the corporate structure or existence of the Company or any of its Subsidiaries and
to any corresponding restructuring of the Guarantied Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral which secures any of the Guarantied
Obligations; (vii) any defenses, set-offs or counterclaims which McKesson Canada may allege or
assert against any Agent or any Lender in respect of the Guarantied Obligations, including but not
limited to failure of consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any extent vary the risk
of the Company as an obligor in respect of the Guarantied Obligations.




     10.03 Waivers by the Company. The Company hereby waives with respect to the Guarantied
Obligations, for the benefit of the Lenders and the Agents:



     (a) any right to require any Agent or any Lender, as a condition of payment or performance by
the Company, to (i) proceed against McKesson Canada, any other guarantor of the Guarantied
Obligations or any other Person, (ii) proceed against or exhaust any security held from McKesson
Canada, any other guarantor of the Guarantied Obligations or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit on the books of any Agent or
any Lender in favor of McKesson Canada or any other Person, or (iv) pursue any other remedy in the
power of any Agent or any Lender whatsoever;



     (b) any defense arising by reason of the incapacity, lack of authority or any disability or
other defense of McKesson Canada including any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of McKesson Canada from any cause
other than indefeasible payment in full of the Guarantied Obligations;



     (c) any defense based upon any statute or rule of law which provides that the obligation of a
surety must be neither larger in amount nor in other respects more burdensome than that of the
principal;



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     (d) any defense based upon any Agent’s or any Lender’s errors or omissions in the
administration of the Guarantied Obligations, except behavior which amounts to bad faith;



     (e) (i) any principles or provisions of law, statutory or otherwise, which are or might be in
conflict with the terms of this Guaranty and any legal or equitable discharge of the Company’s
obligations hereunder, (ii) the benefit of any statute of limitations affecting the Company’s
liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that any Agent or any Lender
protect, secure, perfect or insure any security interest or lien or any property subject thereto;



     (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance of this Guaranty, notices of default under
this Agreement or any agreement or instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to McKesson Canada and notices of any of the matters referred to in Section
10.02 and any right to consent to any thereof; and



     (g) any defenses or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the terms of this
Company Guaranty, including in accordance with Section 2856 of the California Civil Code, the
provisions of California Civil Code Sections 2787-2855, inclusive, 2899 and 3433.



     10.04 Payment by the Company; Application of Payments. The Company hereby agrees, in
furtherance of the foregoing and not in limitation of any other right which the Administrative
Agent or any other Person may have at law or in equity against the Company by virtue hereof, that
upon the failure of McKesson Canada to pay any of the Guarantied Obligations when and as the same
shall become due, whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)), the Company will upon demand
pay, or cause to be paid, in cash, to the Agent for the ratable benefit of the Lenders holding the
Guarantied Obligations, an amount equal to the sum of the unpaid principal amount of all Guarantied
Obligations then due as aforesaid, accrued and unpaid interest on such Guarantied Obligations
(including interest which, but for the filing of a petition in bankruptcy with respect to McKesson
Canada, would have accrued on such Guarantied Obligations, whether or not a claim is allowed
against McKesson Canada for such interest in any such bankruptcy proceeding) and all other
Guarantied Obligations then owed to the Administrative Agent and/or the Lenders as aforesaid. All
such payments shall be applied promptly from time to time by the Administrative Agent:



     First, to the payment of the costs and expenses of any collection or other realization
under this Company Guaranty, including reasonable compensation to the Administrative Agent and its
agents and counsel, and all expenses, liabilities and advances made or incurred by the
Administrative Agent in connection therewith;



     Second, to the payment of all other Guarantied Obligations to each Lender holding
Guarantied Obligations its applicable share as provided in this Agreement; and



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     Third, after payment in full of all Guarantied Obligations, to the payment to the
Company, or its successors or assigns, or to whosoever may be lawfully entitled to receive the same
or as a court of competent jurisdiction may direct, of any surplus then remaining from such
payments.



     10.05 Guarantor’s Rights of Subrogation, Contribution, Etc. Until the Guarantied Obligations
shall have been indefeasibly paid in full and the Commitments shall have terminated, the Company
shall withhold exercise of (a) any claim, right or remedy, direct or indirect, the Company now has
or may hereafter have against McKesson Canada or any of its assets in connection with this Company
Guaranty or the performance by the Company of its obligations hereunder, in each case whether such
claim, right or remedy arises in equity, under contract, by statute (including under California
Civil Code Section 2847, 2848 or 2849), under common law or otherwise and including (i) any right
of subrogation, reimbursement or indemnification that the Company now has or may hereafter have
against McKesson Canada, (ii) any right to enforce, or to participate in, any claim, right or
remedy that any Agent or any Lender now has or may hereafter have against McKesson Canada, and
(iii) any benefit of, and any right to participate in, any collateral or security now or hereafter
held by any Agent or any Lender, and (b) any right of contribution the Company may have against any
other guarantor of the Guarantied Obligations (including any such right of contribution under
California Civil Code Section 2848). The Company further agrees that, to the extent the agreement
to withhold the exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or indemnification the Company
may have against McKesson Canada or against any collateral or security, and any rights of
contribution the Company may have against any such other guarantor, shall be junior and subordinate
to any rights any Agent or any Lender may have against McKesson Canada, to all right, title and
interest any Agent or any Lender may have in any such collateral or security, and to any right any
Agent or any Lender may have against such other guarantor. Each Agent, on behalf of Lenders, may
use, sell or dispose of any item of collateral or security as it sees fit without regard to any
subrogation rights the Company may have, and upon any such disposition or sale any rights of
subrogation against such collateral the Company may have shall terminate. If any amount shall be
paid to the Company on account of any such subrogation, reimbursement or indemnification rights at
any time when all Guarantied Obligations shall not have been paid in full, such amount shall be
held in trust for the Administrative Agent on behalf of the Lenders and shall forthwith be paid
over to the Administrative Agent for the benefit of the Lenders to be credited and applied against
the Guarantied Obligations, whether matured or unmatured, in accordance with the terms hereof.



     10.06 Subordination of Other Obligations. Any indebtedness of McKesson Canada now or
hereafter held by the Company is hereby subordinated in right of payment to the Guarantied
Obligations, and any such indebtedness of McKesson Canada to the Company collected or received by
the Company after an Event of Default has occurred and is continuing shall be held in trust for the
Administrative Agent on behalf of the Lenders and shall forthwith be paid over to the
Administrative Agent for the benefit of the Lenders to be credited and applied against the
Guarantied Obligations but without affecting, impairing or limiting in any manner the liability of
the Company under any other provision of this Guaranty.



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     10.07 Real Property Security. The Company agrees that, if all or a portion of the Guarantied
Obligations or any other guaranty of all or a portion of the Guarantied Obligations are at any time
secured by a deed of trust or mortgage covering interests in real property, the Administrative
Agent or its designee, in its sole discretion, without notice or demand and without affecting the
liability of the Company, may foreclose, pursuant to the terms of the Loan Documents or otherwise,
on any such deed of trust or mortgage and the property described therein by nonjudicial or other
sale. Without limiting any of the waivers contained elsewhere herein, the Company hereby waives
any defense to liability arising by reason of the exercise by the Lenders or the Administrative
Agent, or any of them, of any right or remedy contained in any such deed of trust or mortgage or
any of the other Loan Documents. The Company waives all rights and defenses arising out of an
election of remedies by the Lenders or the Administrative Agent, even though the election of
remedies, such as a nonjudicial foreclosure with respect to security for a Guarantied Obligation,
has destroyed the Company’s rights of subrogation and reimbursement against McKesson Canada by the
operation of Section 580d of the California Code of Civil Procedure or otherwise.



     10.08 Expenses. The Company agrees to pay, or cause to be paid, on demand, and to save the
Administrative Agent and the Lenders harmless against liability for, any and all reasonable costs
and expenses (including fees and disbursements of counsel and allocated costs of internal counsel)
incurred or expended by the Administrative Agent or any Lender in connection with the enforcement
of or preservation of any rights under this Company Guaranty.



     10.09 Continuing Guaranty; Termination of Guaranty. This Company Guaranty is a continuing
guaranty and shall remain in effect until all of the Guarantied Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated. The Company hereby
irrevocably waives any right (including any such right arising under California Civil Code Section
2815) to revoke this Company Guaranty as to future transactions giving rise to any Guarantied
Obligations.



     10.10 Authority of the Company or McKesson Canada. It is not necessary for any Lender or any
Agent to inquire into the capacity or powers of McKesson Canada or the officers, directors or any
agents acting or purporting to act on behalf of any of them.



     10.11 Financial Condition of McKesson Canada. Any extensions of credit may be granted to
McKesson Canada or continued from time to time without notice to or authorization from the Company
regardless of the financial or other condition of McKesson Canada at the time of any such grant or
continuation. No Lender or Agent shall have any obligation to disclose or discuss with the Company
their assessment, or the Company’s assessment, of the financial condition of McKesson Canada. The
Company has adequate means to obtain information from McKesson Canada on a continuing basis
concerning the financial condition of McKesson Canada and its ability to perform its obligations
under the Loan Documents, and the Company assumes the responsibility for being and keeping informed
of the financial condition of McKesson Canada and of all circumstances bearing upon the risk of
nonpayment of the Guarantied Obligations. The Company hereby waives and relinquishes any duty on
the part of any Agent or any Lender to disclose any matter, fact or thing relating to the business,
operations or conditions of McKesson Canada now known or hereafter known by any Agent or any
Lender.



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     10.12 Rights Cumulative. The rights, powers and remedies given to the Lenders and the Agents
by this Company Guaranty are cumulative and shall be in addition to and independent of all rights,
powers and remedies given to any Lender and any Agent by virtue of any statute or rule of law or in
any of the other Loan Documents or any agreement between the Company and any Lender and/or any
Agent or between McKesson Canada and any Lender and/or any Agent. Any forbearance or failure to
exercise, and any delay by any Lender or any Agent in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof,
nor shall it preclude the further exercise of any such right, power or remedy.



     10.13 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty. (a) So long as any
Guarantied Obligations remain outstanding, the Company shall not, without the prior written consent
of the Administrative Agent in accordance with the terms of this Agreement, commence or join with
any other Person in commencing any bankruptcy, reorganization or insolvency proceedings of or
against McKesson Canada. The obligations of the Company under this Company Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of McKesson Canada or by any defense which McKesson Canada may have by
reason of the order, decree or decision of any court or administrative body resulting from any such
proceeding.



     (b) The Company acknowledges and agrees that any interest on any portion of the Guarantied
Obligations which accrues after the commencement of any proceeding referred to in clause (a) above
(or, if interest on any portion of the Guarantied Obligations ceases to accrue by operation of law
by reason of the commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been commenced) shall be included
in the Guarantied Obligations because it is the intention of the Company and the Administrative
Agent that the Guarantied Obligations which are guarantied by the Company pursuant to this Guaranty
should be determined without regard to any rule of law or order which may relieve McKesson Canada
of any portion of such Guarantied Obligations. The Company will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar person to pay the
Administrative Agent, or allow the claim of the Administrative Agent in respect of, any such
interest accruing after the date on which such proceeding is commenced.



     (c) In the event that all or any portion of the Guarantied Obligations are paid by McKesson
Canada, the obligations of the Company hereunder shall continue and remain in full force and effect
or be reinstated, as the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from any Agent or any Lender as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Company Guaranty.



ARTICLE XI.

MISCELLANEOUS




     11.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent to any departure by the Company or any other



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Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and
the Company or the applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that no
such amendment, waiver or consent shall:




     (a) waive any condition set forth in Section 4.01(a) (other than any condition
pursuant to Section 4.01(a)(viii)) without the written consent of each Lender;



     (b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) or increase or extend the obligation of any Lender to accept
Drafts except as permitted by Section 2.15, in each case without the written consent of
such Lender;



     (c) postpone any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder (including
a decrease in any amount payable in respect of the Bankers’ Acceptance Facility) or under any other
Loan Document without the written consent of each Lender directly affected thereby;



     (d) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (v) of the second proviso to this Section 11.01) any fees
or other amounts payable hereunder or under any other Loan Document without the written consent of
each Lender directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Borrowers to pay interest at the Default Rate;



     (e) change Section 2.13 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each Lender;



     (f) change any provision of this Section 11.01 or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders required to amend,
waive or otherwise modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; or



     (g) release the Company from the Company Guaranty without the written consent of each Lender;



and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights
or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of
Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Canadian Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Canadian Administrative Agent under this Agreement; (iii) no amendment,
waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to
the Lenders required above, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; (iv) Section 11.06(h) may not be amended, waived or
otherwise modified without the consent of each Granting Lender all or any part of whose Loans are
being funded by an SPC at



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the time of such amendment, waiver or other modification; and (v) the Fee Letter may be amended, or
rights or privileges thereunder waived, only in a writing executed by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of
such Lender may not be increased or extended without the consent of such Lender.




     11.02 Notices and Other Communications; Facsimile Copies.




     (a) General. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subsection (b) below), all notices
and other communications provided for hereunder shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:




     (i) if to the Company, McKesson Canada, the Administrative Agent, the L/C Issuer or the
Canadian Administrative Agent, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 11.02; and




     (ii) if to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire.



     Notices sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received; notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the extent provided in
subsection (b) below, shall be effective as provided in such subsection (b).



     (b) Electronic Communications. All notices hereunder to any Borrower shall be in
writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier (or, to the extent permitted hereunder to be given by
telephone, immediately confirmed in a writing so delivered, mailed or sent). Notices and other
communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or
the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication. The Administrative Agent or the
Company may, in its discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.



     Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such



83









 




notice or other communication is not sent during the normal business hours of the recipient,
such notice or communication shall be deemed to have been sent at the opening of business on the
next business day for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.




     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its
Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any
Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative
Agent’s transmission of Borrower Materials through the internet, except to the extent that such
losses, claims, damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Agent Party; provided, however, that in no event shall
any Agent Party have any liability to the Borrower, any Lender or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or actual damages).



     (d) Change of Address, Etc. Each of the Company, McKesson Canada, the Administrative
Agent, the Canadian Administrative Agent and the L/C Issuer may change its address, facsimile
number, electronic mail address or telephone number for notices and other communications hereunder
by notice to the other parties hereto. Each other Lender may change its address, facsimile number,
electronic mail address or telephone number for notices and other communications hereunder by
notice to the Borrowers, the Administrative Agent, the Canadian Administrative Agent and the L/C
Issuer. Furthermore, each Public Lender (as defined in Section 6.02) agrees to cause at least one
individual at or on behalf of such Public Lender to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the Platform (as defined
in Section 6.02) in order to enable such Public Lender or its delegate, in accordance with such
Public Lender’s compliance procedures and applicable Law, including United States Federal and state
securities Laws, to make reference to Borrower Materials (as defined in Section 1.01) that are not
made available through the “Public Side Information” portion of the Platform and that may contain
material non-public information with respect to the Borrower or its securities for purposes of
United States Federal or state securities laws.



     (e) Reliance by Agents and Lenders. Each Agent and Lender shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notices and Drawing Notices)
purportedly given by or on behalf of the Company or McKesson Canada which such Agent or



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Lender believes in good faith to have been given by a duly authorized officer or other person
authorized to borrow on behalf of the Applicable Borrower even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. Each Borrower shall indemnify each Agent, the L/C Issuer, each Lender and
the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of such Borrower. All
telephonic notices to and other communications with an Agent may be recorded by such Agent, and
each of the parties hereto hereby consents to such recording.




     11.03 No Waiver; Cumulative Remedies. No failure by any Lender or the Agents to exercise, and
no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.



     11.04 Expenses; Indemnity; Damage Waiver.



     (a) Costs and Expenses. The Borrowers agree, jointly and severally, (i) to pay or
reimburse the Agents for all costs and expenses incurred in connection with the syndication of the
credit facilities provided for herein, the development, preparation, negotiation and execution of
this Agreement and the other Loan Documents and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, (ii) to pay the L/C Issuer all fees,
costs and charges required under Section 2.03(j) and (iii) to pay or reimburse the Agents,
the L/C Issuer and each Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement
or the other Loan Documents (including all such costs and expenses incurred during any “workout” or
restructuring in respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and
expenses shall include all search, filing, recording, title insurance and appraisal charges and
fees and taxes related thereto, and other out-of-pocket expenses incurred by the Agents and the
cost of independent public accountants and other outside experts retained by the Agents or any
Lender. All amounts due under this Section 11.04 shall be payable within 20 Business Days
after demand therefor.



     (b) Indemnification by the Borrowers. Whether or not the transactions contemplated
hereby are consummated, the Borrowers shall jointly and severally indemnify and hold harmless each
Agent (and any sub-agent thereof), the L/C Issuer, the Arranger, each Lender and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”) from and
against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted against



85









 




any such Indemnitee in any way relating to or arising out of or in connection with (i) the
execution, delivery, enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions contemplated thereby
or the consummation of the transactions contemplated thereby, (ii) any Commitment, Loan or Letter
of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C
Issuer to honor a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter of Credit), or
related to any Canadian Dollar transactions, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party
thereto (all the foregoing, collectively, the “Indemnified Liabilities”); provided
that such indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits,
costs, expenses or disbursements (A) are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such
Indemnitee or (B) result from non-tort claims by a Borrower against such Indemnitee that are
successful on the merits as determined by a court of competent jurisdiction by final and
nonappealable judgment.




     (c) Reimbursement by Lenders. To the extent that the Borrowers for any reason fail to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it
to the Agents (or any sub-agent thereof), the L/C Issuer, the Arranger or any Related Party of any
of the foregoing, each Lender severally agrees to pay to the Agents (or any such sub-agent), the
L/C Issuer, the Arranger or such Related Party, as the case may be, such Lender’s Pro Rata Share
(determined as of the time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or asserted against the
Agents (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related
Party of any of the foregoing acting for an Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity. The obligations of the Lenders under this subsection (b) are
subject to the provisions of Section 2.12(d).



     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, neither Borrower shall assert, and each Borrower hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any
damages arising from the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby.



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     (e) Payments. All amounts due under this Section shall be payable not later than 20
Business Days after demand therefor.



     (f) The agreements in this Section 11.04 shall survive the resignation of the
Administrative Agent, the Canadian Administrative Agent, the L/C Issuer or the Arranger, the
replacement of any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.



     11.05 Payments Set Aside. To the extent that any payment by or on behalf of a Borrower is
made to either Agent or any Lender, or either Agent or any Lender exercises its right of set-off,
and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by an Agent or such Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment
had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Applicable Agent upon demand its applicable share of any amount so recovered from or repaid by
such Agent, plus interest thereon from the date of such demand to the date such payment is made at
a rate per annum equal to (A) in the case of Domestic Loans and L/C Credit Extensions, the Federal
Funds Rate from time to time in effect and (B) in the case of Canadian Loans and Bankers’
Acceptance Credit Extensions, the Overnight Canadian Rate from time to time in effect.



     11.06 Successors and Assigns.




     (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that the
Borrowers may not assign or otherwise transfer any of their rights or obligations hereunder without
the prior written consent of each Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of Section 11.06(b), (ii) by way of participation in
accordance with the provisions of Section 11.06(d), (iii) by way of pledge or assignment of
a security interest subject to the restrictions of Sections 11.06(f) and (i), or (iv) to an
SPC in accordance with the provisions of Section 11.06(h) (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the extent provided in
Section 11.06(d) and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.



     (b) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of its Commitment and
the Loans (including for purposes of this Section 11.06(b), participations in L/C
Obligations) at the time owing to it); provided that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the
time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an



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Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the
Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and, so long
as no Event of Default has occurred and is continuing, the Company otherwise consents (each such
consent not to be unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned, (iii) any assignment of a
Commitment must be approved by the Administrative Agent (such approval not to be unreasonably
withheld or delayed) unless the Person that is the proposed assignee is itself a Lender or an
Affiliate of a Lender or an Approved Fund (whether or not the proposed assignee would otherwise
qualify as an Eligible Assignee); (iv) any assignment of a Commitment that increases the obligation
of the assignee to participate in exposure under one or more Letters of Credit (whether or not then
outstanding) must be approved by the L/C Issuer (such approval not to be unreasonably withheld or
delayed); and (v) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption and (except in the case of an assignment by a Lender to its
Affiliate) a processing and recordation fee of $3,500, provided, however, that the Administrative
Agent may in its sole discretion elect to waive such processing and recordation fee in the case of
any assignment, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Subject to acceptance and recording thereof
by the Administrative Agent pursuant to Section 11.06(c), from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all
of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05 and 11.04 with respect to facts and circumstances occurring
prior to the effective date of such assignment). Upon request, each Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 11.06(b)
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 11.06(d).




     (c) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers,
shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Company, at any reasonable time and from time to time upon
reasonable prior notice. In addition, at any time that a request for a



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consent for a material or substantive change to the Loan Documents is pending, any Lender
wishing to consult with other Lenders in connection therewith may request and receive from the
Administrative Agent a copy of the Register.




     (d) In addition to sales of Canadian Participations by Canadian Lenders pursuant to
Section 2.01(b)(ii), any Lender may at any time, without the consent of, or notice to, the
Administrative Agent, sell participations to any Person (other than a natural person or either
Borrower or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or
a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C
Obligations) owing to it); provided that (i) unless a Default or Event of Default has
occurred and is continuing, the Company shall have approved the sale of participations to such
Person (such approval not to be unreasonably withheld or delayed); (ii) no participations in
Canadian Loans or Bankers’ Acceptances shall be sold to any Person that is not a Canadian Resident;
(iii) such Lender’s obligations under this Agreement shall remain unchanged; (iv) such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations; and
(v) the Borrowers, the Agents, the L/C Issuer and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement; provided further that clauses (i) through (v) of the foregoing proviso are not
applicable to Canadian Participations. Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole right to enforce
this Agreement and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 11.01 that directly affects such Participant.
Subject to Section 11.06(e), the Borrowers agree that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b). To
the extent permitted by law, each Participant also shall be entitled to the benefits of Section
11.08 as though it were a Lender, provided such Participant agrees to be subject to
Section 2.13 as though it were a Lender.



     (e) A Participant shall not be entitled to receive any greater payment under Section
3.01 or 3.04 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the participation to such
Participant is made with the Company’s prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01
unless the Company is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Company, to comply with Section 11.14 as though it were a
Lender.



     (f) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.



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     (g) As used herein, the following terms have the following meanings:




     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the
Administrative Agent, and (ii) unless a Default or an Event of Default has occurred and is
continuing, the Company (each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, (i) “Eligible Assignee” shall not
include either Borrower or any of the Borrowers’ Affiliates or Subsidiaries and (ii) in the
case of clauses (a), (b) and (c), no such Lender, Affiliate or Approved Fund shall be an
Eligible Assignee for purposes of Canadian Loans or Bankers’ Acceptances unless such Person
is a Canadian Resident.



     (h) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose funding vehicle identified as such in writing from time
to time by the Granting Lender to the Administrative Agent and the Company (an “SPC”) the
option to provide all or any part of any Committed Loan that such Granting Lender would otherwise
be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Committed Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to make all or any part of such Committed Loan, the
Granting Lender shall be obligated to make such Committed Loan pursuant to the terms hereof or, if
it fails to do so, to make such payment to the Applicable Agent as is required under Section
2.12(b)(ii); provided further that no such grant to an SPC shall impose Taxes
or Other Taxes on either Borrower. Each party hereto hereby agrees that (i) neither the grant to
any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Company under this Agreement (including its
obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver or other
modification of any provision of any Loan Document, remain the lender of record hereunder. The
making of a Committed Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if, such Committed Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United
States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC
may (i) with notice to, but without prior consent of the Company and the Administrative Agent and
without paying any processing fee therefor, assign all or any portion of its right to receive
payment with respect to any Committed Loan to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of Committed Loans to any
rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPC.



     (i) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may
create a security interest in all or any portion of the Loans owing to it and the Note, if any,
held by it to the trustee for holders of obligations owed, or securities issued, by such Fund



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as security for such obligations or securities, provided that unless and until such
trustee actually becomes a Lender in compliance with the other provisions of this Section
11.06, (a) no such pledge shall release the pledging Lender from any of its obligations under
the Loan Documents and (b) such trustee shall not be entitled to exercise any of the rights of a
Lender under the Loan Documents even though such trustee may have acquired ownership rights with
respect to the pledged interest through foreclosure or otherwise. For purposes of this Section
11.06(i), “Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.




     (j) Notwithstanding anything to the contrary contained herein, if at any time Wachovia Bank,
National Association assigns all of its Commitment and Loans pursuant to Section 11.06(b),
Wachovia Bank, National Association may, upon 30 days’ notice to the Company and the Lenders,
resign as L/C Issuer. In the event of any such resignation as L/C Issuer, the Company shall be
entitled to appoint from among the Lenders a successor L/C Issuer hereunder; provided,
however, that no failure by the Company to appoint any such successor shall affect the
resignation of Wachovia Bank, National Association as L/C Issuer. In the event that each Lender
selected by the Company as L/C Issuer declines the appointment, Bank of America shall become the
L/C Issuer, without further action by the Company or the Lenders. If Wachovia Bank, National
Association resigns as L/C Issuer, it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Committed Loans or fund risk participations in Unreimbursed
Amounts pursuant to Section 2.03(c)).



     (k) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.



     11.07 Treatment of Certain Information; Confidentiality.



     Each of the Agents, the L/C Issuer and Lenders agrees to maintain, and to cause its Affiliates
(including any Related Parties) to maintain, the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the National Association of
Insurance Commissioners); (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process; (d) to any other party hereto; (e) to the extent reasonably
required, in connection with the exercise of any remedies hereunder or under any other Loan



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Document or any action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee of or Participant
in, or any prospective assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to obligations of the Loan Parties under the Loan Documents; (g)
with the consent of the Company; or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes available to any
Agent, the L/C Issuer, any Lender or any of their respective Affiliates on a nonconfidential basis
from a source other than the Company; provided, however, that to the extent permitted by
applicable law or regulation, each of the Agents and Lenders agrees to notify the Company prior to
(if reasonably practicable) or concurrently with its disclosure of such information to any third
party pursuant to clauses (b), (c) and (f). In addition, the Administrative Agent and the Lenders
may disclose the existence of this Agreement and public information about this Agreement to market
data collectors, similar service providers to the lending industry, and service providers to the
Administrative Agent and the Lenders in connection with the administration and management of this
Agreement, the other Loan Documents, the Commitments, and the Credit Extensions.




     For the purposes of this Section, “Information” means all information received from
any Loan Party relating to any Loan Party or its business, other than any such information that is
available to any Agent, the L/C Issuer, or any Lender or any of their respective Affiliates on a
nonconfidential basis prior to disclosure by any Loan Party; provided that, in the case of
information received from a Loan Party after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.



     Each of the Agents and each of the Lenders acknowledges that (a) the Information may include
material non-public information concerning the Borrowers or a Subsidiary, as the case may be, (b)
it has developed compliance procedures regarding the use of material non-public information and (c)
it will handle such material non-public information in accordance with applicable Law, including
United States federal and state securities Laws.



     11.08 Set-off. In addition to any rights and remedies of the Lenders provided by law, upon
the occurrence and during the continuance of any Event of Default, each Lender is authorized at any
time and from time to time, without prior notice to the Borrowers, any such notice being waived by
the Borrowers to the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the account of the
respective Loan Parties against any and all Obligations owing to such Lender hereunder or under any
other Loan Document, now or hereafter existing, irrespective of whether or not the Administrative
Agent or such Lender shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a currency different
from that of the applicable deposit or indebtedness. Each Lender agrees promptly to notify the
Borrowers and the Administrative Agent after any such set-



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off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and application.




     11.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If
either Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Applicable Borrower. In determining whether the interest contracted
for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts
the total amount of interest throughout the contemplated term of the Obligations hereunder.



     11.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.



     11.11 Integration. This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter. In the event of any
conflict between the provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of supplemental
rights or remedies in favor of the Agents or the Lenders in any other Loan Document shall not be
deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation
of the respective parties thereto and shall be construed neither against nor in favor of any party,
but rather in accordance with the fair meaning thereof.



     11.12 Survival of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery hereof and thereof.
Such representations and warranties have been or will be relied upon by each Agent and each Lender,
regardless of any investigation made by either Agent or any Lender or on their behalf and
notwithstanding that either Agent or any Lender may have had notice or knowledge of any Default at
the time of any Credit Extension, and shall continue in full force and effect as long as any Loan
or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.



     11.13 Severability. If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The



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invalidity of a provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.




     11.14 Tax Forms. (a) (i) Each Lender that is not a “United States person” within the meaning
of Section 7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to the Administrative
Agent, prior to receipt of any payment subject to withholding under the Code (or upon accepting an
assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or
any successor thereto (relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Foreign Lender by the Company
pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by the Borrowers pursuant to this Agreement) or such other
evidence satisfactory to the Company and the Administrative Agent that such Foreign Lender is
entitled to an exemption from, or reduction of, U.S. withholding tax, including any exemption
pursuant to Section 881(c) of the Code. Thereafter and from time to time, each such Foreign Lender
shall (A) promptly submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the Company and the
Administrative Agent of any available exemption from or reduction of, United States withholding
taxes in respect of all payments to be made to such Foreign Lender by the Company pursuant to this
Agreement, (B) promptly notify the Administrative Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (C) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement
of applicable Laws that the Company make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.




     (ii) Each Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Lender under any of
the Loan Documents (for example, in the case of a typical participation by such Lender),
shall deliver to the Administrative Agent on the date when such Foreign Lender ceases to act
for its own account with respect to any portion of any such sums paid or payable, and at
such other times as may be necessary in the determination of the Administrative Agent (in
the reasonable exercise of its discretion), (A) two duly signed completed copies of the
forms or statements required to be provided by such Lender as set forth above, to establish
the portion of any such sums paid or payable with respect to which such Lender acts for its
own account that is not subject to U.S. withholding tax, and (B) two duly signed completed
copies of IRS Form W-8IMY (or any successor thereto), together with any information such
Lender chooses to transmit with such form, and any other certificate or statement of
exemption required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.




     (iii) The Company shall not be required to pay any additional amount to any Foreign
Lender under Section 3.01 (A) with respect to any Taxes required to be deducted or
withheld on the basis of the information, certificates or statements of exemption such



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Lender transmits with an IRS Form W-8IMY pursuant to this Section 11.14(a) or
(B) if such Lender shall have failed to satisfy the foregoing provisions of this Section
11.14(a); provided that if such Lender shall have satisfied the requirement of
this Section 11.14(a) on the date such Lender became a Lender or ceased to act for
its own account with respect to any payment under any of the Loan Documents, nothing in this
Section 11.14(a) shall relieve the Company of its obligation to pay any amounts
pursuant to Section 3.01 in the event that, as a result of any subsequent change in
any applicable law, treaty or governmental rule, regulation or order, or any subsequent
change in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a subsequent
date establishing the fact that such Lender or other Person for the account of which such
Lender receives any sums payable under any of the Loan Documents is not subject to
withholding or is subject to withholding at a reduced rate.




     (iv) The Administrative Agent may, without reduction, withhold any Taxes required to be
deducted and withheld from any payment under any of the Loan Documents with respect to which
the Company is not required to pay additional amounts under this Section 11.14(a).



     (b) Upon the request of the Administrative Agent, each Lender that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code shall deliver to the Administrative Agent two
duly signed completed copies of IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to
the applicable back-up withholding tax imposed by the Code, without reduction.



     (c) If any Governmental Authority asserts that the Administrative Agent did not properly
withhold or backup withhold, as the case may be, any tax or other amount from payments made to or
for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable
to the Administrative Agent under this Section 11.14, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section
11.14 shall survive the termination of the Aggregate Commitments, repayment of all other
Obligations hereunder and the resignation of the Administrative Agent.



     (d) Each Canadian Lender hereby represents and warrants that it is a Canadian Resident, and
each Canadian Lender agrees that if the foregoing representation is inaccurate with respect to such
Canadian Lender in any material respect, then the Applicable Borrower shall not be required to pay
to such Canadian Lender any amounts pursuant to Section 3.01 relating to any Taxes
resulting solely from such inaccuracy. If a Borrower is required to pay amounts to any Canadian
Lender pursuant to Section 3.01 (whether by reason of such Canadian Lender’s change of
status or otherwise), then such Canadian Lender shall use reasonable efforts (consistent with legal
and regulatory restrictions) to take such actions as are necessary to minimize such Borrower’s
obligations under Article III, if such actions, in the sole judgment of such Canadian
Lender, are not otherwise disadvantageous to such Canadian Lender.



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     11.15 Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if a
Borrower is required to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 3.01, or if any Lender is a Non-Extending Lender for
any extension of the Maturity Date, or if any other circumstance exists hereunder that gives either
Borrower the right to replace a Lender as a party hereto, then such Borrower may, at its sole
expense and effort, upon notice to such Lender and the Agents, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.06), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided that:



     (a) the Company shall have paid to the Administrative Agent the assignment fee specified in
Section 11.06(b);



     (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and under the other Loan Documents (including any amounts under Section 3.05)
from the assignee (to the extent of such outstanding principal and accrued interest and fees) or
the Company (in the case of all other amounts);



     (c) in the case of any such assignment resulting from a claim for compensation under
Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter; and



     (d) such assignment does not conflict with applicable Laws.



     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to
require such assignment and delegation cease to apply.



     11.16 Governing Law.



     (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE;
PROVIDED THAT THE AGENTS, THE L/C ISSUER AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.



     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWERS, THE AGENTS,
THE L/C ISSUER AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWERS, THE



96









 




AGENTS, THE L/C ISSUER AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWERS, THE AGENTS, THE L/C ISSUER AND
EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.




     (c) The Borrowers expressly require that this document and all documents accessory hereto be
drawn up in English and each Agent and each Lender, because of the customer’s requirement and by
making such documents available to the customer in the English language, expresses the same
requirement.



     Les Emprunteurs requièrent expressément que ce document et tous les documents qui s’y
rapportent soient rédigés en langue anglaise et chaque Mondataire et chaque Banque, à cause de
cette exigence du client, exprime la même volonté en faisant en sorte que les documents en langue
anglaise soient à la disposition du client.



     11.17 Waiver of Right to Trial by Jury. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.



     11.18 California Judicial Reference. If any action or proceeding is filed in a court of the
State of California by or against any party hereto in connection with any of the transactions
contemplated by this Agreement or any other Loan Document, (a) the court shall, and is hereby
directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to
a referee (who shall be a single active or retired judge) to hear and determine all of the issues
in such action or proceeding (whether of fact or of law) and to report a statement of decision,
provided that at the option of any party to such proceeding, any such issues pertaining to
a “provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be
heard and determined by the court, and (b) without limiting the generality of Section 11.04
(but subject to the proviso to Section 11.04(b)), as between any Indemnitee and a Borrower, such
Borrower shall be solely responsible to pay all fees and expenses of any referee appointed in such
action or proceeding.



97









 





     11.19 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby (including in connection with any amendment, waiver or other
modification hereof or of any other Loan Document), each Borrower and each other Loan Party
acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (A) the arranging
and other services regarding this Agreement provided by the Agents and the Arranger are
arm’s-length commercial transactions between the Borrowers, each other Loan Party and their
respective Affiliates, on the one hand, and the Agents and the Arranger, on the other hand, (B)
such Borrower and each other Loan Party has consulted its own legal, accounting, regulatory and
tax advisors to the extent it has deemed appropriate, and (C) such Borrower and each other Loan
Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Agents and
the Arranger is and has been acting solely as a principal and, except as expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent
or fiduciary for either Borrower, any other Loan Party or any of their respective Affiliates, or
any other Person and (B) none of the Agents nor the Arranger has any obligation to either Borrower,
any other Loan Party or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Agents and the Arranger and their respective Affiliates may be engaged in
a broad range of transactions that involve interests that differ from those of the Borrowers, the
other Loan Parties and their respective Affiliates, and none of the Agents nor the Arranger has any
obligation to disclose any of such interests to either Borrower, any other Loan Party or any of
their respective Affiliates. To the fullest extent permitted by law, each of the Borrowers and the
other Loan Parties hereby waives and releases any claims that it may have against any of the Agents
or the Arranger with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.



     11.20 USA Patriot Act Notice. Each Lender that is subject to the Act (as hereinafter defined)
and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the
Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies the Borrowers, which information includes the name and address
of the Borrowers and other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrowers in accordance with the Act.



     11.21 Judgment. If, for the purposes of obtaining judgment in any court, it is necessary to
convert a sum due hereunder or any other Loan Document in one currency into another currency, the
rate of exchange used shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of a Borrower in respect of any
such sum due from it to the Administrative Agent hereunder or under the other Loan Documents shall,
notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such
sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement
Currency”), be discharged only to the extent that on the Business Day following receipt by the
Administrative Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative
Agent may in accordance with normal banking procedures purchase the Agreement Currency with the
Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum
originally due to the



98









 




Administrative Agent in the Agreement Currency, the Borrowers agree, as a separate obligation
and notwithstanding any such judgment, jointly and severally, to indemnify the Administrative Agent
or the Person to whom such obligation was owing against such loss. If the amount of the Agreement
currency so purchased is greater than the sum originally due to the Administrative Agent in such
currency, the Administrative Agent agrees to return the amount of any excess to the Applicable
Borrower (or to any other Person who may be entitled thereto under applicable law).





99










 





IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.




	 	 	 	 	 
	 	MCKESSON CORPORATION 

 	 
	 	By:  	/s/ Jeffrey C. Campbell
 	 
	 	 	Name:  	Jeffrey C. Campbell 	 
	 	 	Title:  	Executive Vice President and Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Nicholas A. Loiacono
 	 
	 	 	Name:  	Nicholas A. Loiacono 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 



	 	 	 	 	 
	 	MCKESSON CANADA CORPORATION

 	 
	 	By:  	/s/ Paula Keays
 	 
	 	 	Name:  	Paula Keays 	 
	 	 	Title:  	Vice President and Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as

Administrative Agent

 	 
	 	By:  	/s/ Kevin L. Ahart
 	 
	 	 	Name:  	Kevin L. Ahart 	 
	 	 	Title:  	Assistant Vice President 	 
	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as a Lender

 	 
	 	By:  	/s/ Richard C. Hardison
 	 
	 	 	Name:  	Richard C. Hardison 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A. (acting through its

Canada branch), as

Canadian Administrative Agent

 	 
	 	By:  	/s/ Medina Sales de Andrade
 	 
	 	 	Name:  	Medina Sales de Andrade 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A. (acting through

its Canada branch) as a Lender

 	 
	 	By:  	/s/ Medina Sales de Andrade
 	 
	 	 	Name:  	Medina Sales de Andrade 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL

ASSOCIATION, as L/C Issuer

 	 
	 	By:  	/s/ Jeanette A. Griffin
 	 
	 	 	Name:  	Jeanette A. Griffin 	 
	 	 	Title:  	Director 	 



S-1









 






	 	 	 	 	 



	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL

ASSOCIATION, as Lender

 	 
	 	By:  	/s/ Jeanette A. Griffin
 	 
	 	 	Name:  	Jeanette A. Griffin 	 
	 	 	Title:  	Director 	 
	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK, as a Lender

 	 
	 	By:  	/s/ John M. Lokay, Jr.
 	 
	 	 	Name:  	John M. Lokay, Jr. 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as a

Lender

 	 
	 	By:  	/s/ Richard Hawthorne
 	 
	 	 	Name:  	Richard Hawthorne 	 
	 	 	Title:  	Director 	 
	 



	 	 	 	 	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ,

LTD., Seattle Branch, as a Lender

 	 
	 	By:  	/s/ Tatsuro Miyazaki
 	 
	 	 	Name:  	Tatsuro Miyazaki 	 
	 	 	Title:  	Deputy General Manager 	 
	 



	 	 	 	 	 
	 	FIFTH THIRD BANK, as a Lender

 	 
	 	By:  	/s/ Sean Devillers
 	 
	 	 	Name:  	Sean Devillers 	 
	 	 	Title:  	Officer 	 
	 



	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL

ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Jeffrey Wieser
 	 
	 	 	Name:  	Jeffrey Wieser 	 
	 	 	Title:  	Managing Director 	 
	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as a

Lender

 	 
	 	By:  	/s/ Stephanie Parker
 	 
	 	 	Name:  	Stephanie Parker 	 
	 	 	Title:  	Executive Director 	 
	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A.,

TORONTO BRANCH

 	 
	 	By:  	/s/ Drew McDonald
 	 
	 	 	Name:  	Drew McDonald 	 
	 	 	Title:  	Executive Director 	 



S-2









 






	 	 	 	 	 



	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION, as a

Lender

 	 
	 	By:  	/s/ J.T. Taylor
 	 
	 	 	Name:  	J.T. Taylor 	 
	 	 	Title:  	Senior Vice President 	 
	 



	 	 	 	 	 
	 	NATIONAL CITY BANK, as a Lender

 	 
	 	By:  	/s/ Joseph R. Netzel
 	 
	 	 	Name:  	Joseph R. Netzel 	 
	 	 	Title:  	Senior Vice President 	 
	 



	 	 	 	 	 
	 	PNC BANK, NATIONAL

ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Luke McElhinny
 	 
	 	 	Name:  	Luke McElhinny 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	COÕPERATIEVE CENTRALE

RAIFFEISEN-BOERENLEENBANK B.A.

“RABOBANK INTERNATIONAL” NEW YORK

BRANCH, as a Lender

 	 
	 	By:  	/s/ Eric Baymiller
 	 
	 	 	Name:  	Eric Baymiller 	 
	 	 	Title:  	Executive Director 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Rebecca O. Morrow
 	 
	 	 	Name:  	Rebecca O. Morrow 	 
	 	 	Title:  	Executive Director 	 
	 



	 	 	 	 	 
	 	SUNTRUST BANK, as a Lender

 	 
	 	By:  	/s/ John W. Teasley
 	 
	 	 	Name:  	John W. Teasley 	 
	 	 	Title:  	Director 	 
	 



	 	 	 	 	 
	 	TORONTO DOMINION (TEXAS) LLC

 	 
	 	By:  	/s/ Debbi L. Brito
 	 
	 	 	Name:  	Debbi L. Brito 	 
	 	 	Title:  	Authorized Signatory 	 
	 



	 	 	 	 	 
	 	THE TORONTO-DOMINION BANK

 	 
	 	By:  	/s/ Debbi L. Brito
 	 
	 	 	Name:  	Debbi L. Brito 	 
	 	 	Title:  	Authorized Signatory 	 



S-3









 






	 	 	 	 	 



	 	 	 	 	 
	 	U.S. BANK NATIONAL

ASSOCIATION, as a Lender

 	 
	 	By:  	/s/ Dan Stevens
 	 
	 	 	Name:  	Dan Stevens 	 
	 	 	Title:  	Vice President 	 
	 



	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as a Lender

 	 
	 	By:  	/s/ Paul K. Stimpfl
 	 
	 	 	Name:  	Paul K. Stimpfl 	 
	 	 	Title:  	Senior Vice President 	 
	 



	 	 	 	 	 
	 	WILLIAM STREET COMMITMENT CORPORATION

(RECOURSE ONLY TO THE ASSETS OF WILLIAM

STREET COMMITMENT CORPORATION), as a

Lender

 	 
	 	By:  	/s/ Mark Walton
 	 
	 	 	Name:  	Mark Walton 	 
	 	 	Title:  	Assistant Vice President 	 
	 




S-4










 






SCHEDULE 1.01




EXISTING LETTERS OF CREDIT




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Issuer	 	Beneficiary	 	L/C Number	 	US$ Amount	 	Expiration Date	 	Type
	Wachovia Bank

	 	Oklahoma Workers Compensation Court
	 	SM415356C
	 	 	10,000.00	 	 	1/1/2008
	 	Auto renewable Standby
	Wachovia Bank

	 	Traveler’s Indemnity Company
	 	SM416740C
	 	 	350,000.00	 	 	4/30/2008
	 	Auto renewable Standby
	Wachovia Bank

	 	Industrial Commission of Arizona
	 	SM207138
	 	 	537,823.46	 	 	3/1/2008
	 	Auto renewable Standby
	Wachovia Bank

	 	Home Insurance Company
	 	SM415360C
	 	 	915,300.00	 	 	1/1/2008
	 	Auto renewable Standby
	Wachovia Bank

	 	Old Republic Insurance Company
	 	SM415750C
	 	 	2,325,463.00	 	 	1/1/2008
	 	Auto renewable Standby
	Wachovia Bank

	 	Conroe Industrial Development Corporation
	 	SM217709W
	 	 	2,458,456.00	 	 	6/1/2007
	 	Auto renewable Standby
	Wachovia Bank

	 	State of Illinois Healthcare
	 	SM220712
	 	 	8,600,000.00	 	 	7/1/2007
	 	Auto renewable Standby
	Wachovia Bank

	 	Old Republic Insurance Company
	 	SM415355C
	 	 	21,722,348.00	 	 	1/1/2008
	 	Auto renewable Standby
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL

	 	 	 	 	 	 	36,919,390.46	 	 	 	 	 







Schedule 1.01 - 1









 








SCHEDULE 2.01




COMMITMENTS, PRO RATA SHARES

AND AFFILIATE BANKS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Canadian	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Commitments	 	 	 	 	 	 	 	 
	 	 	Canadian	 	(in U.S.	 	Canadian Pro	 	 	 	 	 	Total Pro Rata
	Domestic Lender	 	Lender	 	Dollars)*	 	Rata Share	 	Total Commitment	 	Share
	Bank of America, N.A.
	 	Bank of America, N.A.
(acting
through its
 Canadian Branch)	 	$	95,000,000	 	 	 	47.500000000	%	 	$	210,000,000	 	 	 	16.153846154	%
	JPMorgan Chase Bank, N.A.
	 	JPMorgan Chase  Bank, 
 N.A., Toronto Branch	 	$	50,000,000	 	 	 	25.000000000	%	 	$	190,000,000	 	 	 	14.615384615	%
	Wachovia Bank, National Association
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	190,000,000	 	 	 	14.615384615	%
	The Bank of Nova Scotia
	 	The Bank of Nova Scotia	 	$	30,000,000	 	 	 	15.000000000	%	 	$	100,000,000	 	 	 	7.692307692	%
	The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
Seattle Branch
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	100,000,000	 	 	 	7.692307692	%
	SunTrust Bank
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	75,000,000	 	 	 	5.769230769	%
	Rabobank International
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	75,000,000	 	 	 	5.769230769	%
	U.S. Bank National Association
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	75,000,000	 	 	 	5.769230769	%
	KeyBank National Association
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	50,000,000	 	 	 	3.846153846	%
	William Street Commitment Corporation
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	50,000,000	 	 	 	3.846153846	%
	Fifth Third Bank
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	35,000,000	 	 	 	2.692307692	%
	The Bank of New York
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	30,000,000	 	 	 	2.307692308	%
	Toronto Dominion (Texas) LLC
	 	The Toronto Dominion

Bank, Toronto	 	$	25,000,000	 	 	 	12.500000000	%	 	$	25,000,000	 	 	 	1.923076923	%
	Wells Fargo Bank, N.A.
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	25,000,000	 	 	 	1.923076923	%
	HSBC Bank USA, National Association
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	25,000,000	 	 	 	1.923076923	%
	PNC Bank, National Association
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	25,000,000	 	 	 	1.923076923	%
	National City Bank
	 	 	 	 	 	$	0	 	 	 	 	 	 	$	20,000,000	 	 	 	1.538461538	%
	Totals:
	 	 	 	 	 	$	200,000,000	 	 	 	100.000000000	%	 	$	1,300,000,000	 	 	 	100.000000000	%








 




			
	*	 	Please see Section 2.01(a)(ii)





Schedule 2.01 - 1









 








SCHEDULE 5.11




SUBSIDIARIES AND INDEBTEDNESS SECURED BY LIENS




Part (a). Domestic/Foreign Subsidiaries




	 	 	 
	3071406 Nova Scotia Company

	 	3087601 Nova Scotia Company
	A.L.I Technologies (Deutschland) Gmbh

	 	A.L.I Holdings LLC
	A.L.I Imaging Systems Corp.

	 	A.L.I Technologies (Europe) B.V.
	A.L.I Technologies (International) LLC

	 	Access Health UK Ltd.**
	Beldere Corporation **

	 	California Golden State Finance Company
	CGSF Funding Corporation

	 	City Properties, S.A.**
	Clinique Sante Corporation

	 	Convenience Office Prescriptions
	CPG Industries, Inc.

	 	Crocker Plaza Company
	Cypress Medical Products LLC

	 	D & K Healthcare Resources LLC
	D & K Pharmacy Solutions, Inc.

	 	DC Land Company
	DGM Trust Corporation

	 	Diversified Healthcare, LLC
	Foremost de Venezuela, S.A.**

	 	Foremost Homes Hawaii, Ltd.**
	Foremost Iran Corporation**

	 	Foremost Shir, Inc.**
	Golden State Insurance Company Ltd.**

	 	Goodman Manufacturing Company
	HBO & Company (VI), Inc.**

	 	HBOC Medical Limited**
	Health Mart Systems, Inc.

	 	HF Lanc Company
	Intercal, Inc.**

	 	Jaron, Inc.
	Jewett Drug LLC

	 	Knowledgeable Healthcare Solutions, Inc.
	KWS & P, Inc**

	 	KWS & P/SFA, Inc.**
	MCK Acquisition Corp.

	 	McKesson (International) (Gibraltar) Limited**
	McKesson Asia-Pacific Pty Limited

	 	McKesson Automation Canada Corporation
	McKesson Automation Inc.

	 	McKesson Automation Systems Inc.
	McKesson Canada Corporation

	 	McKesson Canada Support Services Corporation
	McKesson Capital Funding Corporation

	 	McKesson Capital LLC
	McKesson Development Corp.

	 	McKesson Finance Company of Canada
	McKesson Financial Holdings II Limited

	 	McKesson Financial Holdings Limited
	McKesson Funding Company of Canada

	 	McKesson Health Solutions Canada Company
	McKesson Health Solutions Holdings LLC

	 	McKesson Health Solutions LLC
	McKesson Health Solutions Puerto Rico Inc

	 	McKesson Health Solutions Texas Inc.
	McKesson Information Solutions Canada Company

	 	McKesson Information Solutions Capital S.a.r.l.
	McKesson Information Solutions Finance S.a.r.l.

	 	McKesson Information Solutions France SAS
	McKesson Information Solutions Holdings France
S.a.r.l.

	 	McKesson Information Solutions Holdings I SRL
	McKesson Information Solutions Holdings II S.a.r.l.

	 	McKesson Information Solutions Holdings III S.a.r.l.
	McKesson Information Solutions Holdings IV S.a.r.l.

	 	McKesson Information Solutions Holdings V S.a.r.l
	McKesson Information Solutions Holdings Limited

	 	McKesson Information Solutions Holdings S.a.r.l.
	McKesson Information Solutions I SRL

	 	McKesson Information Solutions Ireland Limited
	McKesson Information Solutions LLC

	 	McKesson Information Solutions Netherlands B.V.
	McKesson Information Solutions Sweden AB

	 	McKesson Information Solutions UK Limited
	McKesson International Capital S.a.r.l.

	 	McKesson International Finance S.a.r.l.
	McKesson International Holdings II S.a.r.l.

	 	McKesson International Holdings III S.a.r.l.
	McKesson International Holdings IV S.a.r.l.

	 	McKesson International Holdings V S.a.r.l.
	McKesson International Holdings VI S.a.r.l.

	 	McKesson International Holdings VII S.a.r.l.
	McKesson International Holdings Limited

	 	McKesson International Holdings LLC
	McKesson International Holdings S.a.r.l.

	 	McKesson International Holdings SRL
	McKesson International Ireland Limited

	 	McKesson International LLC
	McKesson International Netherlands B.V.

	 	McKesson International Netherlands II B.V.






Schedule 5.11 - 1









 






	 	 	 
	McKesson International Nova Scotia ULC

	 	McKesson International S.a.r.l.
	McKesson International SRL

	 	McKesson Logistics Solutions
	McKesson Logistics Solutions LLC

	 	McKesson Medical Imaging Company
	McKesson Medical-Surgical FDT Inc.

	 	McKesson Medical-Surgical Holdings Inc.
	McKesson Medical-Surgical Inc.

	 	McKesson Medical-Surgical International Limited
	McKesson Medical-Surgical Maine Inc.

	 	McKesson Medical-Surgical MediMart Inc.
	McKesson Medical-Surgical MediNet Inc.

	 	McKesson Medical-Surgical Minnesota Inc.
	McKesson Medical-Surgical Minnesota Supply Inc.

	 	McKesson Medication Management LLC
	McKesson Medication Management Puerto Rico Inc.

	 	McKesson Nederland B.V.
	McKesson New Zealand Limited

	 	McKesson Property Company, Inc.
	McKesson Purchasing Company LLC

	 	McKesson Services LLC
	McKesson Specialty Arizona Inc

	 	McKesson Specialty Corporation
	McKesson Specialty Distribution LLC

	 	McKesson Specialty Holdings LLC
	McKesson Specialty Pharmaceuticals LLC

	 	McKesson Specialty Prescription Services (B.C.)
Corporation
	McKesson Specialty Prescription Services Corporation

	 	McKesson Trading Company
	McKesson Transportation Systems, Inc.

	 	Medcon Ltd.
	Medcon UK Limited

	 	Medical & Vaccine Products, Inc.
	Medical Imaging SRL

	 	Moore Medical LLC
	MSA Products LLC

	 	myhca, inc.
	NADRO, S.A. de C.V.*

	 	Nadro Services S. de R.L. de C.V.*
	National Oncology Alliance, Inc.

	 	NDC Health Holdings UK**
	NDC of Canada, Inc.**

	 	NDCHealth Corporation
	NDCHealth Pharmacy Systems and Services ULC

	 	NDCHealth Pharmacy Systems and Services, Inc.
	Northstar Healthcare Holdings Limited

	 	Northstar Healthcare Limited
	Northstar Rx LLC

	 	Patient Account Management Services, Inc.
	Per-Se Technologies (UK) Limited

	 	Per-Se Technologies Canada, Inc.
	Per-Se Technologies, Inc.

	 	Per-Se Transaction Services, Inc.
	Physician Micro Systems, Inc.

	 	Podiatry Online, Inc.
	PST Products, LLC

	 	PST Services, Inc.
	Purchasing Alliance for Clinical Therapeutics, LLC

	 	S.K.U., Inc.**
	SI/Baker, Inc.

	 	Sterling Medical Services, LLC
	Strategic Health Alliance II, Inc.

	 	Strategic Health Alliance Management Corp.
	Titus Home Health Care LLC

	 	VC Services, Inc.
	Verispan L.L.C.*

	 	Walsh Distribution, L.L.C.
	Walsh Healthcare Solutions LLC

	 	Zee Medical Canada Corporation
	Zee Medical, Inc.
	 	 








 




			
	*	 	Ownership less than 100%

	 
	**	 	Inactive





Part (b). Indebtedness in Excess of $25,000,000 Secured by Liens.



As of June 8, 2007, the Company and its Subsidiaries had no Indebtedness in excess of $25,000,000
secured by Liens.





Schedule 5.11 - 2









 








SCHEDULE 11.02




ADMINISTRATIVE AGENT’S OFFICE,

CERTAIN ADDRESSES FOR NOTICES




COMPANY:




McKesson Corporation

One Post Street

San Francisco, CA 94104-5296

U.S.A.

Attention: Nicholas A. Loiacono, Vice President and Treasurer

Telephone: (415) 983-9339

Facsimile: (415) 983-8826

Electronic mail: nicholas.loiacono@mckesson.com

Website address: www.mckesson.com




McKESSON CANADA:




McKesson Canada Corporation

8625 Trans Canada Highway

St. Laurent, Quebec

Canada H4Z 1Z6

Attention: Paula Keays, Chief Financial Officer

Telephone: (514) 832-8245

Facsimile: (514) 832-8232

Electronic mail: paula.keays@mckesson.ca

Website address: www.mckesson.ca

with a copy of all notices to:

Nicholas A. Loiacono, Vice President and Treasurer, McKesson Corporation (see Company contact

information above)




ADMINISTRATIVE AGENT:




Administrative Agent’s Contact for Payments and Requests for Credit Extensions:

Bank of America, N.A.

101 North Tryon Street

Mail Code: NC1-001-04-39

Charlotte, NC 28255-0001

Attention: Monika Patel

Telephone: (704) 386-5094

Facsimile: (704) 409-0157

Electronic Mail: monika.patel@bankofamerica.com




Payment Instructions:

Bank of America, N.A.

New York, NY




Schedule 11.02 - 1









 





Attn: Corporate Credit Services

ABA #: 026009593

Account #: 1366212250600

Ref: McKesson Corporation




Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

1455 Market Street

Mail Code: CA5-701-05-19

San Francisco, CA 94103

Attention: Kevin Ahart

Telephone: (415) 436-2750

Facsimile: (415) 503-5000

Electronic Mail: kevin.ahart@bankofamerica.com




CANADIAN ADMINISTRATIVE AGENT:




Canadian Administrative Agent’s Office:

Bank of America, N.A., Canada Branch

200 Front Street West, Suite 2700

Toronto, Ontario M5V 3L2

Canada

Telephone: (416) 349-4100




Contact for Payments and Requests for Credit Extensions:

Attn: Sylwia Durkiewicz

Telephone: (416) 349-4307

Facsimile: (416) 349-4282

and

Attn: Clara McGibbon

Telephone: (416) 349-5484

Facsimile: (416) 349-4282




Other Notices as Canadian Administrative Agent:

Attn: Medina Sales de Andrade, VP

Telephone: (416) 349-5433

Facsimile: (416) 349-4283




Payment Instructions:

Canadian Dollar

LVTS — Large Value Transaction System

Bank of America, N.A., Canada Branch

200 Front Street West, Toronto

Attn: Agency Loans Admin.

Swift Code: BOFACATT

Transit #: 01312-241




Schedule 11.02 - 2









 





Account #: 90083255

Ref: McKesson Canada




L/C ISSUER:




Wachovia Bank, National Association

201 S. College Street

NC 1183

Charlotte, North Carolina 28244

Attention: LaShasta Jackson, Corporate Lending Ops Analyst

Telephone: (704) 715-1459

Facsimile: (704) 715-0095

Electronic Mail: lashasta.jackson@wachovia.com




with a copy of all notices to:

Wachovia Securities

One South Broad Street, PA4152

Philadelphia, Pennsylvania 19107

Attention: Jeanette Griffin, Director

Telephone: (267) 321-6615

Facsimile: (267) 321-6700

Electronic Mail: jeanette.griffin@wachovia.com




Schedule 11.02 - 3









 





EXHIBIT A




FORM OF COMMITTED LOAN NOTICE




Date:                                         ,                     





			
	To:	 	Bank of America, N.A., as Administrative Agent

[Bank of America, N.A. (acting through its Canada branch), Canadian Administrative
Agent]





Ladies and Gentlemen:




     Reference is made to that certain Amended and Restated Credit Agreement, dated as of June 8,
2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement;” the terms defined therein being used herein as therein defined),
among McKesson Corporation, a Delaware corporation, McKesson Canada Corporation, a Nova Scotia
unlimited company, the Lenders from time to time party thereto, Bank of America, N.A. (acting
through its Canada branch), as Canadian Administrative Agent, Bank of America, N.A., as
Administrative Agent, and Wachovia Bank, National Association, as L/C Issuer.



     The undersigned hereby requests (select one):



     o A Borrowing of Committed Loans     o A conversion of Loans




     o A continuation of Loans




	 	1.	 	The Borrower is                                                             .
	 
	 	2.	 	On                                                              (a Business Day).
	 
	 	3.	 	In the amount of $                                        .
	 
	 	4.	 	Comprised of [Eurodollar Rate Loans] [Base Rate Loans][Canadian Prime Rate
Loans]. [Type of Committed Loan requested]
	 
	 	5.	 	For Eurodollar Rate Loans: with an Interest Period of       months.
	 
	 	6.	 	The Applicable Currency is [Dollars] [Canadian Dollars]





     [The Borrowing requested herein complies with the proviso to the first sentence of Section
2.01(a) of the Agreement and, if made with respect to Canadian Loans, Section
2.01(b)(i) of the Agreement.]




	 	 	 	 	 	 	 	 	 
	 	 	[BORROWER]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






A-1









 






EXHIBIT B-1




FORM OF NOTE

[DOMESTIC LOANS]




                                        




     FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
                                         or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of each Loan from time
to time made by the Lender to the Borrower under that certain Amended and Restated Credit
Agreement, dated as of June 8, 2007 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement;” the terms defined therein being
used herein as therein defined), among the Borrower, McKesson Canada Corporation, the Lenders from
time to time party thereto, Bank of America, N.A. (acting through its Canada branch), as Canadian
Administrative Agent, Bank of America, N.A., as Administrative Agent, and Wachovia Bank, National
Association, as L/C Issuer.



     The Borrower promises to pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such principal amount is paid in full, at such interest rates and at such
times as provided in the Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately available funds at the
Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid
amount shall bear interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum rate set forth in
the Agreement.



     This Note is one of the Notes referred to in the Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall
be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Note and endorse thereon the date,
amount and maturity of its Loans and payments with respect thereto.



     The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.



     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.



	 	 	 	 	 	 	 	 	 
	 	 	MCKESSON CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






B-1-1









 






EXHIBIT B-2




FORM OF NOTE

[CANADIAN LOANS]




                                                            




     FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
                                         or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of each Loan from time
to time made by the Lender to the Borrower under that certain Amended and Restated Credit
Agreement, dated as of June 8, 2007 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement;” the terms defined therein being
used herein as therein defined), among the Borrower, McKesson Corporation, the Lenders from time to
time party thereto, Bank of America, N.A. (acting through its Canada branch), as Canadian
Administrative Agent, Bank of America, N.A., as Administrative Agent, and Wachovia Bank, National
Association, as L/C Issuer.



     The Borrower promises to pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such principal amount is paid in full, at such interest rates and at such
times as provided in the Agreement. All payments of principal and interest shall be made to the
Canadian Administrative Agent for the account of the Lender in Canadian Dollars in immediately
available funds at the Canadian Administrative Agent’s Office. If any amount is not paid in full
when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due
date thereof until the date of actual payment (and before as well as after judgment) computed at
the per annum rate set forth in the Agreement.



     This Note is one of the Notes referred to in the Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall
be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Note and endorse thereon the date,
amount and maturity of its Loans and payments with respect thereto.



     The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.



     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.



	 	 	 	 	 	 	 	 	 
	 	 	MCKESSON CANADA CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






B-2-1









 






LOANS AND PAYMENTS WITH RESPECT THERETO




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Amount of Principal	 	Outstanding	 	 
	 	 	 	 	 	 	End of Interest	 	or Interest Paid	 	Principal Balance	 	 
	Date	 	Type of Loan Made	 	Amount of Loan Made	 	Period	 	This Date	 	This Date	 	Notation Made By
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______
	______
	 	______
	 	______
	 	______
	 	______
	 	______
	 	______






B-2-2









 






EXHIBIT C




OPINION MATTERS




     Consistent with opinions under the Existing Revolving Credit Agreement, the matters contained
in the following Sections of the Agreement should be covered by the legal opinions:




	 	•	 	Section 5.01(a) and (b)
	 
	 	•	 	Section 5.02
	 
	 	•	 	Section 5.03
	 
	 	•	 	Section 5.04
	 
	 	•	 	Section 5.05
	 
	 	•	 	Section 5.07
	 
	 	•	 	Section 5.09




C-1









 











EXHIBIT D




FORM OF COMPLIANCE CERTIFICATE




Financial Statement Date:                     ,




To: Bank of America, N.A., as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Amended and Restated Credit Agreement dated as of June 8,
2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement;” the terms defined therein being used herein as therein defined),
among McKesson Corporation, a Delaware corporation (the “Company”), McKesson Canada
Corporation, a Nova Scotia unlimited company, the Lenders from time to time party thereto, Bank of
America, N.A. (acting through its Canada branch), as Canadian Administrative Agent, Bank of
America, N.A., as Administrative Agent, and Wachovia Bank, National Association, as L/C Issuer.



     The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the
                    
                    
                    
                    
 of the Company, and that, as such, he/she is authorized to execute and deliver this Certificate to
the Administrative Agent on the behalf of the Company, and that:



[Use following paragraph 1 for fiscal year-end financial statements]




     1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a) of the Agreement for the fiscal year of the Company ended as of
the above date, together with the report and opinion of an independent certified public accountant
required by such section.



[Use following paragraph 1 for fiscal quarter-end financial statements]




     1. Attached hereto as Schedule 1 are the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of the Company ended as of the
above date. Such financial statements fairly present the financial condition, results of
operations and cash flows of the Company and its Subsidiaries in accordance with GAAP as at such
date and for such period, subject only to normal year-end audit adjustments and the absence of
footnotes.



     2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of the Company during the accounting period covered by the
attached financial statements.



     3. A review of the activities of the Company during such fiscal period has been made under the
supervision of the undersigned with a view to determining whether during such fiscal period the
Company performed and observed all its Obligations under the Loan Documents, and



D-1









 





[select one:]




     [to the best knowledge of the undersigned during such fiscal period, the Company performed and
observed each covenant and condition of the Loan Documents applicable to it.]



—or—




     [the following covenants or conditions have not been performed or observed and the following
is a list of each such Default and its nature and status:]



     4. The representations and warranties of the Company contained in Article V of the
Agreement, or which are contained in any document furnished at any time under or in connection with
the Loan Documents, are true and correct on and as of the date hereof, except to the extent that
such representations and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and except for purposes of this Compliance Certificate,
the representations and warranties contained in Section 5.08(a) of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b) respectively, of
Section 6.01 of the Agreement, including the statements in connection with which the
Compliance Certificate is delivered.



     5. The financial covenant analyses and information set forth on Schedule 2 attached
hereto are true and accurate on and as of the date of this Certificate.



     IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of                                         ,                                         .



	 	 	 	 	 	 	 	 	 
	 	 	MCKESSON CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 






D-2









 






For the
Quarter/Year ended                                          (“Statement Date”)




SCHEDULE 2

to the Compliance Certificate

($ in 000’s)




Section 7.04:




Maximum Total Debt to

Capitalization Ratio




	 	 	 	 	 
	1.

	 	Total Capitalization	 	 
	 

	 	(a) Total Debt
	 	$______
	 

	 	(b) Capital stock and additional paid-in-capital
	 	$______
	 

	 	(c) Retained earnings (accumulated deficits)
	 	$______
	 

	 	(d) Sum of (a), (b) and (c):
	 	$______
	2.

	 	Ratio of Total Debt (Item 1(a)) to

Total Capitalization (Item 1(d)):   ______:______	 	 
	3.

	 	Maximum Ratio Permitted under Section 7.04:
	 	0.565:1.00






D-3









 






EXHIBIT E




FORM OF ASSIGNMENT AND ASSUMPTION




     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Amended and Restated Credit
Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.



     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the Assignor under the
respective facilities identified below (including Letters of Credit included in such facilities)
and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of
action and any other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in
any way based on or related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned by the Assignor to the Assignee pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii)
above being referred to herein collectively as, the “Assigned Interest”). Such
sale and assignment is without recourse to the Assignor and, except as expressly provided in this
Assignment and Assumption, without representation or warranty by the Assignor.





	 	 	 	 	 
	1.	 	Assignor:                                                             
	2.	 	Assignee:                                                              [and is an Affiliate/Approved Fund of
[identify Lender]]
	3.	 	Borrower(s): McKesson Corporation and McKesson Canada Corporation
	4.	 	Administrative Agent: Bank of America, N.A., as the administrative
agent under the Credit Agreement
	5.

	 	Credit Agreement:
	 	The Amended and Restated Credit
Agreement, dated as of June 8,
2007, among McKesson
Corporation, McKesson Canada
Corporation, the Lenders from
time to time party thereto, Bank
of






E-1









 







	 	 	 	 	 
	 

	 	 	 	America, N.A., as Administrative Agent, Bank of America, N.A. (acting
through its Canada branch), as Canadian Administrative Agent,
Wachovia Bank, National Association, as L/C Issuer and the other
agents parties thereto






	6.	 	Assigned Interest:





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate	 	 	 	 	 	 
	 	 	Amount of	 	Amount of	 	Percentage	 	 
	 	 	Commitment	 	Commitment	 	Assigned of	 	 
	Facility Assigned	 	for all Lenders*	 	Assigned*	 	Commitment1	 	CUSIP Number
	Domestic Loans
	 	$	______	 	 	$	______	 	 	 	______	%	 	 	 	 
	Canadian Loans
	 	$	______	 	 	$	______	 	 	 	______	%	 	 	 	 
	 
	 	$	______	 	 	$	______	 	 	 	______	%	 	 	 	 








	[7. 	 	 Trade Date:                                         ]2




Effective Date:                                         , 20       [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE
THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]




The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 	 	 	 	 	 	 
	 	 	ASSIGNOR

[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ASSIGNEE

[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 






[Consented to and] Accepted:




Bank of America, N.A., as
Administrative Agent




                                                            






			
	1	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment of all Lenders thereunder.
	 
	2	 	To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.




E-2









 










	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	[Consented to:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	McKesson Corporation
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Title:
	 	]	 	 	 	 






E-3









 






ANNEX 1 TO ASSIGNMENT AND ASSUMPTION




AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF JUNE 8, 2007

AMONG

MCKESSON CORPORATION, MCKESSON CANADA CORPORATION,

THE LENDERS PARTY THERETO, BANK OF AMERICA, N.A. (ACTING THROUGH ITS CANADA BRANCH, AS CANADIAN

ADMINISTRATIVE AGENT, BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, AND WACHOVIA BANK, NATIONAL

ASSOCIATION, AS L/C ISSUER




STANDARD TERMS AND CONDITIONS FOR




ASSIGNMENT AND ASSUMPTION




     1. Representations and Warranties.



     1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Company, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.



     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents
and information as it shall deem



E-4









 







appropriate at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.



     2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.



     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of California.



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EXHIBIT F




FORM OF DRAWING NOTICE




     Pursuant to that certain Agreement, dated as of June 8, 2007 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined
therein being used herein as therein defined), among McKesson Corporation, a Delaware corporation,
McKesson Canada Corporation, a Nova Scotia unlimited company, the Lenders from time to time party
thereto (the “Lenders”), Bank of America, N.A. (acting through its Canada branch), as Canadian
Administrative Agent, Bank of America, N.A., as Administrative Agent and Wachovia Bank, National
Association, as L/C Issuer, this represents McKesson Canada’s notice pursuant to Section 2.04(b) of
the Agreement that McKesson Canada hereby requests a Drawing under the Agreement, and, in
connection therewith, sets forth below the information relating to such Drawing as required by
Section 2.04(b) of the Agreement:



          1. The Drawing Date, which is a Business Day, is                                         ,             
        ;




          2. The aggregate Face Amount of Drafts to be accepted is Cdn.$                    ;




          3. The maturity date for such Drafts is                                         ,
                    , which represents a term to maturity
of approximately [Insert term of bill of exchange, which may be anywhere from 7 to 180] days.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated: ___________________	 	 	 	 	 	McKESSON CANADA CORPORATION	 	 
	 

	 	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 







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