<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 1997
Registration No. 333-31449
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
CVS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 05-0494040
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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ONE CVS DRIVE
WOONSOCKET, RHODE ISLAND 02895
(401) 765-1500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CHARLES C. CONAWAY
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
CVS CORPORATION
ONE CVS DRIVE
WOONSOCKET, RHODE ISLAND 02895
(401) 765-1500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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DEANNA L. KIRKPATRICK, ESQ. ALISA M. SINGER, ESQ. MORTON A. PIERCE, ESQ.
DAVIS POLK & WARDWELL ROSENBERG & LIEBENTRITT, P.C. DEWEY BALLANTINE
450 LEXINGTON AVENUE 2 NORTH RIVERSIDE PLAZA 1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10017 SUITE 1600 NEW YORK, NEW YORK 10019
(212) 450-4000 CHICAGO, ILLINOIS 60606 (212) 259-8000
(312) 466-3196
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------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
- ---------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the fees and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the Offering. All of such expenses except the Securities and Exchange
Commission registration fee and the NASD filing fee are estimated:
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Securities and Exchange Commission registration fee................... $255,965
Blue sky fees and expenses............................................ 5,000
NASD filing fee....................................................... 30,500
Printing expense...................................................... 100,000
Accounting fees and expenses.......................................... 80,000
Legal fees and expenses............................................... 200,000(1)
Miscellaneous......................................................... 28,535
--------
Total............................................................ $700,000
========
</TABLE>
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(1) $50,000 of which will be paid by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Exculpation. Section 102(b)(7) of the Delaware Law permits a corporation
to include in its certificate of incorporation a provision eliminating or
limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such provision may not eliminate or limit the liability of a
director for any breach of the director's duty of loyalty to the corporation or
its stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for the payment of
unlawful dividends, or for any transaction from which the director derived an
improper personal benefit.
The CVS Charter limits the personal liability of a director to CVS and its
stockholders for monetary damages for a breach of fiduciary duty as a director
to the fullest extent permitted by law.
Indemnification. Section 145 of the Delaware Law permits a corporation to
indemnify any of its directors or officers who was or is a party, or is
threatened to be made a party to any third party proceeding by reason of the
fact that such person is or was a director or officer of the corporation,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reason to believe that such person's conduct was unlawful. In
a derivative action, i.e., one by or in the right of a corporation, the
corporation is permitted to indemnify directors and officers against expenses
(including attorneys' fees) actually and reasonably incurred by them in
connection with the defense or settlement of an action or suit if they acted in
good faith and in a manner that they reasonably believed to be in or not opposed
to the best interests of the corporation, except that no indemnification shall
be made if such person shall have been adjudged liable to the corporation,
unless and only to the extent that the court in which the action or suit was
brought shall determine upon application that the defendant directors or
officers are fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
The CVS Charter provides for indemnification of directors and officers of
CVS against liability they may incur in their capacities as such to the fullest
extent permitted under the Delaware Law.
Insurance. CVS has in effect Directors and Officers Liability Insurance
with a limit of $100,000,000 and pension trust liability insurance with a limit
of $50,000,000. This insurance was purchased in layers from National Union Fire
Insurance Company of Pittsburgh, Pennsylvania; Federal Insurance Company of
Warren,
II-1
<PAGE> 3
New Jersey; Royal Indemnity Company of Charlotte, North Carolina; Columbia
Casualty Insurance Company of Chicago, Illinois; St. Paul Surplus Lines Company
of St. Paul, Minnesota; and Reliance Insurance Company of Philadelphia,
Pennsylvania. The pension trust liability insurance covers actions of directors
and officers as well as other employees with fiduciary responsibilities under
ERISA.
Revco Directors and Officers. The Merger Agreement provides that CVS will
cause Revco and its Subsidiaries to indemnify (including the payment of
reasonable fees and expenses of legal counsel) the current or former directors
or officers of Revco to the fullest extent permitted by law for damages and
liabilities arising out of facts and circumstances occurring at or prior to the
Merger. The Merger Agreement also provides that for a period of six years after
the Merger CVS will cause to be maintained in effect Revco's existing policies
of directors' and officers' liability insurance as in effect on February 6, 1997
(provided that CVS may substitute policies with reputable and financially sound
carriers having at least the same coverage and amounts and containing terms and
conditions that are no less advantageous) with respect to facts or circumstances
occurring at or prior to the Merger; provided that if the annual premium for
such insurance during such six-year period exceeds 200% of the annual premiums
paid by Revco as of February 6, 1997 for such insurance (such 200% amount, the
"Maximum Premium") then CVS will cause Revco to provide the most advantageous
directors' and officers' insurance coverage then available for an annual premium
equal to the Maximum Premium.
ITEM 16. EXHIBITS
See index to exhibits at E-1.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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Pursuant to the requirements of the Securities Act of 1933, CVS Corporation
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Woonsocket, state of Rhode Island, on
July 23, 1997.
CVS CORPORATION
/s/ CHARLES C. CONAWAY
By:.................................
CHARLES C. CONAWAY
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
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SIGNATURE TITLE DATE
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STANLEY P. GOLDSTEIN* Chairman of the Board, Chief July 23, 1997
........................................ Executive Officer and
STANLEY P. GOLDSTEIN Director (Principal
Executive Officer)
/s/ CHARLES C. CONAWAY Executive Vice President and July 23, 1997
........................................ Chief Financial Officer
CHARLES C. CONAWAY (Principal Financial and
Accounting Officer)
ALLAN J. BLOOSTEIN* Director July 23, 1997
........................................
ALLAN J. BLOOSTEIN
W. DON CORNWELL* Director July 23, 1997
........................................
W. DON CORNWELL
THOMAS P. GERRITY* Director July 23, 1997
........................................
THOMAS P. GERRITY
WILLIAM H. JOYCE* Director July 23, 1997
........................................
WILLIAM H. JOYCE
TERRY R. LAUTENBACH* Director July 23, 1997
........................................
TERRY R. LAUTENBACH
TERRENCE MURRAY* Director July 23, 1997
........................................
TERRENCE MURRAY
SHELI Z. ROSENBERG* Director July 23, 1997
........................................
SHELI Z. ROSENBERG
THOMAS M. RYAN* Vice Chairman of the Board, July 23, 1997
........................................ Chief Operating Officer and
THOMAS M. RYAN Director
IVAN G. SEIDENBERG* Director July 23, 1997
........................................
IVAN G. SEIDENBERG
PATRICIA CARRY STEWART* Director July 23, 1997
........................................
PATRICIA CARRY STEWART
</TABLE>
II-3
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SIGNATURE TITLE DATE
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THOMAS O. THORSEN* Director July 23, 1997
........................................
THOMAS O. THORSEN
M. CABELL WOODWARD, JR.* Director July 23, 1997
........................................
M. CABELL WOODWARD, JR.
*By: /s/ CHARLES C. CONAWAY
.............................. ......
CHARLES C. CONAWAY
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 6
INDEX TO EXHIBITS
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EXHIBIT NO. DESCRIPTION
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1.1 Agreement and Plan of Merger dated as of February 6, 1997, as
amended on March 19, 1997, among the Registrant, Revco D.S., Inc.,
and North Acquisition Corp. (incorporated by reference to Annex A
of the Joint Proxy Statement/Prospectus contained in Amendment No.
1 to the Registration Statement No. 333-24163 dated April 17,
1997)
1.2 Form of Underwriting Agreement
3.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K (the "CVS 1996 Form 10-K")
for the year ended December 31, 1996).
3.2 By-Laws of CVS Corporation (incorporated by reference to Exhibit
3.2 to the CVS 1996 Form 10-K)
4.1 Specimen Common Stock certificate (incorporated by reference to
Exhibit 4-1 to the Registrant's Registration Statement on Form 8-B
dated November 4, 1996)
4.2++ Registration Rights Agreement dated as of May 29, 1997
4.3++ Letter Agreement under the Registration Rights Agreement dated
June 24, 1997
5.1 Opinion of Davis Polk & Wardwell regarding the validity of the
securities being registered
23.1++ Consent of KPMG Peat Marwick LLP
23.2++ Consent of Arthur Andersen LLP
23.3 Consent of Davis Polk & Wardwell (contained in the Opinion of
Counsel filed as Exhibit 5.1 hereto)
24.1++ Power of Attorney
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++ Previously filed.
<PAGE> 1
DRAFT
14,500,000 SHARES
CVS CORPORATION
COMMON STOCK ($.01 PAR VALUE)
UNDERWRITING AGREEMENT
July 23, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, NY 10010-3629
Dear Sirs:
1. Introductory. The stockholders listed in Schedule A hereto
(collectively, the "Selling Stockholders") propose severally to sell an
aggregate of 12,300,000 outstanding shares ("U.S. Firm Securities") of the
common stock, $.01 par value ("Securities") of CVS Corporation, a Delaware
corporation ("Company"), to the several underwriters named in Schedule B hereto
(the "Underwriters").
It is understood that the Company and the Selling Stockholders
are concurrently entering into a Subscription Agreement, dated the date hereof
("Subscription Agreement"), with Credit Suisse First Boston (Europe) Limited
("CSFBL"), Donaldson, Lufkin & Jenrette Securities Corporation, Merrill Lynch
International, Morgan Stanley & Co. International Limited and Salomon Brothers
International Limited ("Managers") relating to the concurrent offering and sale
of 2,200,000 outstanding shares of Securities ("International Firm Securities")
of CVS Corporation outside the United States and Canada ("International
Offering").
In addition, as set forth below, the Selling Stockholders
propose to sell (i) to the Underwriters, at the option of the Underwriters, an
aggregate of not more than 1,138,211 additional shares of Securities ("U.S.
Optional Securities) and (ii) to the Managers, at the option of the Managers, an
aggregate of not more than 203,544 additional shares of Securities
("International Optional Securities"). The U.S. Firm Securities and the U.S.
Optional Securities are hereinafter called the "U.S. Securities"; the
International Firm Securities and the International Optional Securities are
hereinafter called the "International Securities"; the U.S. Firm Securities and
the International Firm Securities are hereinafter called the "Firm Securities";
and the U.S. Optional Securities and the International Optional Securities are
hereinafter called the "Optional Securities." The U.S. Securities and the
International Securities are collectively referred to as the "Offered
Securities." To provide for the coordination of their activities, the
Underwriters and the Managers have entered into an Agreement Between
<PAGE> 2
Underwriters and Managers which permits them, among other things, to sell the
Offered Securities to each other for purposes of resale.
The Company and the Selling Stockholders hereby agree with the
several Underwriters as follows:
2. Representations and Warranties of the Company and the
Selling Stockholders. (a) The Company represents and warrants to, and agrees
with, the several Underwriters that:
(i) A registration statement (No. 333-31449) relating
to the Offered Securities, including a form of prospectus relating to
the U.S. Securities and a form of prospectus relating to the
International Securities, has been filed with the Securities and
Exchange Commission ("Commission") and either (A) has been declared
effective under the Securities Act of 1933 ("Act") and is not proposed
to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the "initial
registration statement") has been declared effective, either (A) an
additional registration statement (the "additional registration
statement") relating to the Offered Securities may have been filed with
the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act
and, if so filed, has become effective upon filing pursuant to such
Rule and the Offered Securities all have been duly registered under the
Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (B) such an additional
registration statement may be proposed to be filed with the Commission
pursuant to Rule 462(b), and if so filed, and assuming compliance by
the Underwriters with such Rule, will become effective upon filing
pursuant to such Rule and upon such filing the Offered Securities will
all have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, such additional registration
statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has
been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the
Act or, in the case of the additional registration statement, Rule
462(b). For purposes of this Agreement, "Effective Time" with respect
to the initial registration statement or, if filed prior to the
execution and delivery of this Agreement, the additional registration
statement means (A) if the Company has advised Credit Suisse First
Boston Corporation ("CSFBC") that it does not propose to amend such
registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any)
filed prior to the execution and delivery of this Agreement, was
declared effective by the Commission or has become effective upon
filing pursuant to Rule 462(b) or 462(c), or (B) if the Company has
advised CSFBC that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Company has advised CSFBC that it proposes to file one, "Effective
Time" with respect to such additional registration statement means the
date and time as of which such registration statement is filed and
become effective pursuant to Rule 462(b). "Effective Date" with respect
to the initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The
initial registration statement, as amended at its Effective Time,
including all material incorporated by reference therein, including all
information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration
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statement pursuant to the General Instructions of the Form on which it
is filed and including all information (if any) deemed to be a part of
the initial registration statement as of its Effective Time pursuant to
Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to
as the "Initial Registration Statement". The additional registration
statement, as amended at its Effective Time, including the contents of
the initial registration statement incorporated by reference therein
and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to
Rule 430A(b), is hereinafter referred to as the "Additional
Registration Statement." The Initial Registration Statement and the
Additional Registration Statement are hereinafter referred to
collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the U.S.
Securities and the form of prospectus relating to the International
Securities, each as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement,
including all material incorporated by reference in each such
prospectus, are hereinafter referred to as the "U.S. Prospectus" and
the "International Prospectus", respectively, and collectively as the
"Prospectuses". No document has been or will be prepared or distributed
in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement conformed in all material
respects to the requirements of the Act and the rules and regulations
of the Commission ("Rules and Regulations") and did not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed,
or will conform, in all material respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (C) on
the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior to
the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of each
of the Prospectuses pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Date of the Initial Registration Statement
or the Additional Registration Statement, as the case may be, in which
the Prospectuses are included, and on each Closing Date (as hereinafter
defined) each of the Prospectuses will conform, in all material
respects to the requirements of the Act and the Rules and Regulations,
and neither of the Prospectuses includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were
made not misleading. If the Effective Time of the Initial Registration
Statement is subsequent to the execution and delivery of this
Agreement: on the Effective Date of the Initial Registration Statement,
the Initial Registration Statement and on each Closing Date each of the
Prospectuses will conform in all material respects to the requirements
of the Act and the Rules and Regulations, the Initial Registration
Statement will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and neither of
the Prospectuses will include any untrue statement of a material fact
or will omit to state any material fact required to be stated therein
or necessary to make the statements therein in light of the
circumstances under which they were made not misleading, and no
Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or either of the Prospectuses based upon written
information furnished to the Company by any Selling Stockholder, or by
any Underwriter through CSFBC or by any Manager through CSFBL
3
<PAGE> 4
specifically for use therein, it being understood and agreed that the
only such information is that described as such in Sections 7(b) and
7(c) hereof.
(iii) The Company has been duly incorporated and is
an existing corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct it business as described in the Prospectuses; and the Company
is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified or be in good standing
would not have a material adverse effect on the financial condition,
business, properties, results of operations or affairs of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect").
(iv) Each subsidiary of the Company that is
material to the Company and its subsidiaries taken as a whole
(collectively, the "Significant Subsidiaries") is listed on Schedule C
hereto, together with its jurisdiction of incorporation and the
beneficial ownership of the Company therein. Each Significant
Subsidiary has been duly incorporated and is an existing corporation in
good standing under the laws of the jurisdiction of its incorporation,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectuses; and each Significant
Subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect; all of the
issued and outstanding capital stock of each Significant Subsidiary of
the Company has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each Significant
Subsidiary owned by the Company, directly or through subsidiaries, is
owned free and clear of any mortgage, pledge, lien, security interest,
claim, encumbrance or defect of any kind.
(v) The Offered Securities and all other outstanding
shares of capital stock of the Company have been duly authorized and
validly issued, fully paid and nonassessable and conform in all
material respects to the description thereof contained in the
Prospectuses. Except as set forth or incorporated by reference in the
Prospectuses, there are no outstanding (A) securities or obligations of
the Company convertible into or exchangeable for any capital stock of
the Company, (B) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or any such
convertible or exchangeable securities or obligations or (C)
obligations of the Company to issue such shares, any such convertible
or exchangeable securities or obligations, or any such warrants, rights
or obligations.
(vi) Except as disclosed in the Prospectuses, there
are no contracts, agreements or understandings between the Company and
any third party that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with the transactions contemplated by
this Agreement or the Subscription Agreement.
(vii) Except for the Registration Rights Agreement
(as defined in the Prospectuses) and as otherwise described in the
Prospectuses, there are no contracts, agreements or understandings
between the Company and any third party granting such third party the
right to require the Company to file a registration statement under the
Act with respect to any securities of the Company owned or to be owned
by such third party or to require the Company to include such
securities with the securities registered pursuant to a Registration
Statement or with any securities being registered pursuant to any other
registration statement filed by the Company under the Act; and there
are no legal or governmental proceedings, statutes,
4
<PAGE> 5
regulations, contracts or other documents that are required to be
described in the Registration Statements or the Prospectuses or
required to be filed as exhibits to the Registration Statements that
are not described or filed as required; and the descriptions in the
Registration Statements and the Prospectuses of statutes, contracts and
other documents and legal proceedings are accurate in all material
respects and fairly present and summarize such matters in all material
respects.
(viii) The Securities are listed on the New York
Stock Exchange.
(ix) Except as disclosed in the Prospectuses, no
consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required to be obtained or
made by the Company for the consummation of the transactions
contemplated by this Agreement or the Subscription Agreement in
connection with the sale of the Offered Securities, except such as have
been obtained and made under the Act and such as may be required under
state securities or blue sky laws.
(x) The execution, delivery and performance of this
Agreement and the Subscription Agreement, and the consummation of the
transactions herein and therein contemplated, have been duly authorized
by all necessary corporate action on the part of the Company and do not
and will not conflict with or result in a breach or violation of any of
the terms and provisions of, and do not and will not constitute a
default (or an event which with the giving of notice or the lapse of
time or both would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
material assets or properties of the Company or any of its subsidiaries
under (A) the charter, by-laws or other organizational documents of the
Company or any Significant Subsidiary, (B) any statute, any rule,
regulation, order or decree of any governmental or regulatory agency or
body or any court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their properties, assets or
operations, or (C) any indenture, mortgage, loan or credit agreement,
note, lease, permit, license or other agreement or instrument to which
the Company or any subsidiary is a party or by which the Company or any
subsidiary is bound or to which any of the properties, assets or
operations of the Company or any subsidiary is subject, except, in the
case of clauses (B) and (C), for such breaches or violations which
would not have a Material Adverse Effect.
(xi) This Agreement and the Subscription Agreement
have been duly authorized, executed and delivered by the Company.
(xii) The Company and its subsidiaries have good and
marketable title to all real properties owned by them, in each case
free and clear of any mortgage, pledge, lien, security interest, claim
or other encumbrance or defect, and the Company and its subsidiaries
hold any leased real property under valid, subsisting and enforceable
leases or subleases with no exceptions that would materially interfere
with the use made or to be made thereof by them; neither the Company
nor any of its subsidiaries is in default under any such lease or
sublease; and no material claim of any sort has been asserted by anyone
adverse to the rights of the Company or any subsidiary under any such
lease or sublease or affecting or questioning the right of such entity
to the continued possession of the leased or subleased properties under
any such lease or sublease, except in each case as would not,
individually or in the aggregate, have a Material Adverse Effect.
(xiii) Except as described in the Prospectuses, the
Company and its subsidiaries possess adequate certificates,
authorizations, licenses or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them except as would not have a Material Adverse Effect and have not
received any notice of
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<PAGE> 6
proceedings relating to the revocation or modification of any such
certificate, authorization, license or permit that individually or in
the aggregate could have a Material Adverse Effect.
(xiv) The Company and its subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks, trade names
and other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that,
individually or in the aggregate, would have a Material Adverse Effect.
(xv) Except as described in the Prospectuses and
except as would not have a Material Adverse Effect, the properties,
assets and operations of each of the Company and its subsidiaries are
in compliance with all applicable federal, state, local and foreign
laws (including, without limitation, common law), rules and
regulations, orders, decrees, judgments, permits and licenses relating
to worker health and safety, and to the protection and clean-up of the
natural environment and to the protection or preservation of natural
resources, including, without limitation, those relating to the
processing, manufacturing, generation, handling, disposal,
transportation or release of hazardous materials (collectively,
"Environmental Laws"). Except as described in the Prospectuses and
except as would not have a Material Adverse Effect, (A) to the
Company's knowledge, none of the Company or any of its subsidiaries is
the subject of any federal, state, local or foreign investigation
pursuant to Environmental Laws, (B) none of the Company or any of its
subsidiaries has received any written notice or claim pursuant to
Environmental Laws and (C) there are no pending, or, to the knowledge
of the Company, threatened actions, suits or proceedings against the
Company, any of its subsidiaries or its properties, assets or
operations, in connection with any Environmental Laws. The term
"hazardous materials" shall mean those substances that are regulated by
or pursuant to any applicable Environmental Laws.
(xvi) The Company and each of its subsidiaries have
filed all tax returns required to be filed, which returns are complete
and correct in all material respects, and neither the Company nor any
of its subsidiaries is in default in the payment of any taxes which
were payable pursuant to said returns or any assessments with respect
thereto, in each case except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(xvii) Each "employee benefit plan" within the
meaning of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), in which employees of the Company or any subsidiary
participate or as to which the Company or any subsidiary has any
liability (the "ERISA Plans") is in compliance with the applicable
provisions of ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"). Neither the Company nor any subsidiary has any liability
with respect to the ERISA Plans, nor does the Company expect that any
such liability will be incurred, that would have a Material Adverse
Effect. Except as described in the Prospectuses, (i) the value of the
aggregate vested and nonvested benefit liabilities under each of the
ERISA Plans that is subject to Section 412 of the Code, determined as
of the end of such ERISA Plan's most recent ended plan year on the
basis of the actuarial assumptions specified for funding purposes in
such Plan's most recent actuarial valuation report, did not exceed the
aggregate current value of the assets of such ERISA Plan allocable to
such benefit liabilities by an amount that would have a Material
Adverse Effect and (ii) neither the Company nor any subsidiary has any
liability, whether or not contingent, with respect to any ERISA Plan
that provides post-retirement welfare benefits that would have a
Material Adverse Effect.
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(xviii) Except as described in the Prospectuses (A)
neither the Company nor any of its Significant Subsidiaries is in
violation of its charter or by-laws, (B) neither the Company nor any of
its subsidiaries is in violation of any applicable law, ordinance,
administrative or governmental rule or regulation, or any order, decree
or judgment of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries and (C) no
event of default or event that, but for the giving of notice or the
lapse of time or both, would constitute an event of default exists, or
as a result of consummation of the sale of the Offered Securities will
exist, under any indenture, mortgage, loan agreement, note, lease,
permit, license or other agreement or instrument to which the Company
or any of its subsidiaries is a party or to which any of the
properties, assets or operations of the Company or any such subsidiary
is subject, except, in the case of clauses (B) and (C), for such
violations and defaults that would not have a Material Adverse Effect.
(xix) The Company and each of its Significant
Subsidiaries maintains reasonably adequate insurance covering their
properties, operations, personnel and businesses in accordance with
customary industry practice to protect the Company and each of its
Significant Subsidiaries and their businesses.
(xx) Except as described in the Prospectuses, there
are no pending actions, suits or proceedings against or, to the
knowledge of the Company, affecting the Company, any of its
subsidiaries or any of their respective properties, assets or
operations that would have a Material Adverse Effect, or could
materially and adversely affect the ability of the Company to perform
its obligations under this Agreement or the Subscription Agreement; and
no such actions, suits or proceedings are, to the knowledge of the
Company, threatened or contemplated.
(xxi) The financial statements, together with the
related schedules and notes, included or incorporated by reference in
each Registration Statement and the Prospectuses present fairly, in all
material respects, the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and have been prepared
in conformity with generally accepted accounting principles in the
United States applied on a consistent basis, except as disclosed
therein; the assumptions used in preparing the pro forma financial
information included or incorporated by reference in the Prospectuses
provide a reasonable basis for presenting the effects directly
attributable to the transactions or events described therein, the
related adjustments give appropriate effect to those assumptions, and
the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical amounts. The other
financial and statistical information set forth in the Prospectuses
present fairly, in all material respects, the information shown therein
and have been compiled on a basis consistent with that of the financial
statements included or incorporated by reference in the Registration
Statement.
(xxii) Since the date of the latest audited financial
statements of the Company included or incorporated by reference in the
Prospectuses, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the financial condition, business, properties or results of
operations of the Company and its subsidiaries taken as a whole.
(xxiii) The Company has not taken and will not take,
directly or indirectly, any action designed to or that could cause or
result in stabilization or manipulation of the price of the Offered
Securities to facilitate the sale or resale of the Offered Securities
and the Company has not distributed and will not distribute any
offering material in connection with the offering and sale of the
Offered Securities other than any preliminary prospectus filed with
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<PAGE> 8
the Commission or the Prospectuses or other materials, if any,
permitted by the Act or the Rules and Regulations.
(xxiv) The Company is not and, after giving effect to
the offering and sale of the Offered Securities, will not be an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(xxv) On the date each Registration Statement was
first filed with the Commission, and at the Effective Time, the Company
met the conditions for the use of Form S-3 under the Act and the Rules
and Regulations.
(b) Each Selling Stockholder severally represents and
warrants to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on each
Closing Date hereinafter mentioned will have valid and unencumbered
title to the Offered Securities to be delivered by such Selling
Stockholder hereunder and under the Subscription Agreement on such
Closing Date, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind (other than
restrictions on resale pursuant to the Act); such Selling Stockholder
has full right, power and authority to enter into this Agreement, the
Subscription Agreement, the Custody Agreement (the "Custody Agreement")
and Irrevocable Power of Attorney (the "Power of Attorney") entered
into by such Selling Stockholder in connection with the transactions
contemplated hereby and to sell, assign, transfer and deliver the
Offered Securities to be delivered by such Selling Stockholder on such
Closing Date hereunder; and upon the delivery of and payment for the
Offered Securities on each Closing Date hereunder the several
Underwriters and the several Managers will acquire valid and
unencumbered title to the Offered Securities to be delivered by such
Selling Stockholder on such Closing Date.
(ii) All information relating to such
Selling Stockholder which is contained in the Prospectuses is, and on
each Closing Date will be, true, correct and complete, and does not and
on each Closing Date will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make such
information, in light of the circumstances under which they were made,
not misleading.
(iii) Except as disclosed in the
Prospectuses, there are no contracts, agreements or understandings
between such Selling Stockholder and any third party that would give
rise to a valid claim against the Company or any Underwriter or Manager
for a brokerage commission, finder's fee or other like payment in
connection with the transactions contemplated by this Agreement, the
Subscription Agreement, the Custody Agreement and Power of Attorney.
(iv) This Agreement, the Subscription
Agreement, the Custody Agreement and Power of Attorney have each been
duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and this Agreement, the Subscription Agreement, the Custody
Agreement and Power of Attorney each constitute the legal, valid and
binding obligations of such Selling Stockholder enforceable against
such Selling Stockholder in accordance with their respective terms
(except as rights to indemnification and contribution may be limited by
applicable federal or state law).
(v) No consent, approval, authorization,
order, registration or qualification of, or filing with, any third
party (whether acting in an individual, fiduciary or other capacity) or
any governmental or regulatory agency or body or court is required to
be obtained or made by such Selling Stockholder for the consummation of
the transactions
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<PAGE> 9
contemplated by this Agreement, the Subscription Agreement, the Custody
Agreement and Power of Attorney in connection with the sale of the
Offered Securities, except such as have been obtained and made under
the Act and such as may be required under state securities laws.
(vi) The execution, delivery and performance
of this Agreement, the Subscription Agreement, the Custody Agreement
and Power of Attorney by such Selling Stockholder and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under (A) any statute, any rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, have jurisdiction over such Selling Stockholder or
any of its properties or operations, or any agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the properties or operations of
such Selling Stockholder is subject, or (B) if applicable, the charter,
by-laws or other organizational documents of such Selling Stockholder,
except, in the case of clause (A), for such conflicts, breaches,
violations or defaults which could not reasonably be expected to,
individually or in the aggregate, have a material adverse effect on the
consummation of the transactions contemplated by this Agreement, the
Subscription Agreement, the Custody Agreement or the Power of Attorney.
(vii) Such Selling Stockholder has not taken
and will not take, directly or indirectly, any action designed to or
that could reasonably be expected to cause or result in stabilization
or manipulation of the price of the Offered Securities to facilitate
the sale or resale of the Offered Securities, and such Selling
Stockholder has not distributed and will not distribute any offering
material in connection with the offering and sale of the Offered
Securities other than any preliminary prospectus filed with the
Commission or the Prospectuses or other materials, if any, permitted by
the Act or the Rules and Regulations.
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, each Selling Stockholder
agrees, severally and not jointly, to sell to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from each Selling
Stockholder, at a purchase price of $ per share, that number of U.S. Firm
Securities (rounded up or down, as determined by CSFBC in its discretion, in
order to avoid fractions) obtained by multiplying the number of U.S. Firm
Securities set forth opposite the name of such Selling Stockholder in Schedule A
hereto by a fraction the numerator of which is the number of U.S. Firm
Securities set forth opposite the name of such Underwriter in Schedule B hereto
and the denominator of which is the total number of U.S. Firm Securities.
Certificates in negotiable form for the U.S. Securities have
been placed in custody, for delivery under this Agreement, under Custody
Agreements made with Chase Mellon Shareholder Services, LLC as custodian
("Custodian"). Each Selling Stockholder agrees that the shares represented by
the certificates held in custody for the Selling Stockholders under such Custody
Agreement are subject to the interests of the Underwriters hereunder, that the
arrangements made by the Selling Stockholders for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholders
hereunder shall not be terminated by operation of law, whether by the death of
any individual Selling Stockholder or the occurrence of any other event, or in
the case of a trust, by the death of any trustee or trustees or the termination
of such trust. If any individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the U.S. Securities hereunder,
certificates for the U.S. Securities shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such death or
other event or termination had not occurred, regardless of whether or not the
Custodian shall have received notice of such death or other event or
termination.
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The Custodian will deliver the U.S. Firm Securities to CSFBC
for the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to CSFBC drawn to the order of the Custodian at the
office of Dewey Ballantine, 1301 Avenue of the Americas, New York, New York
10019 at 10:00 A.M., New York time, on [ ], or at such other time not later than
seven full business days thereafter as CSFBC and the Custodian determine, such
time being herein referred to as the "First Closing Date". For purposes of Rule
15c6-1 under the Securities Exchange Act of 1934, the First Closing Date (if
later than the otherwise applicable settlement date) shall be the settlement
date for payment of funds and delivery of securities for all of the Offered
Securities sold pursuant to the U.S. Offering and the International Offering.
The certificates for the U.S. Firm Securities so to be delivered will be in
definitive form, in such denominations and registered in such names as CSFBC
requests and will be made available for checking and packaging at the office of
Credit Suisse First Boston Corporation, Eleven Madison Avenue, New York, New
York 1001-3629 at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the
Company and the Selling Stockholders from time to time not more than 30 days
subsequent to the date of the Prospectuses, the Underwriters may purchase all or
less than all of the U.S Optional Securities at the purchase price per Security
to be paid for the U.S. Firm Securities. The U.S. Optional Securities to be
purchased by the Underwriters on any Optional Closing Date (as defined herein)
shall be in the same proportion to all the Optional Securities to be purchased
by the Underwriters and the Managers on such Optional Closing Date as the U.S.
Firm Securities bear to all the Firm Securities. The Selling Stockholders agree
to sell to the Underwriters the aggregate number of U.S. Optional Securities
specified in such notice. The maximum number of U.S. Optional Securities which
each of the Selling Stockholders agrees to sell upon exercise by the
Underwriters of the over-allotment option is set forth opposite their respective
names on Schedule A hereto. The number of U.S. Optional Securities which the
Underwriters elect to purchase upon any exercise of the over-allotment option
shall be provided by each Selling Stockholder in proportion to the respective
maximum numbers of U.S. Optional Securities which each such Selling Stockholder
has agreed to sell. Such U.S. Optional Securities shall be purchased for the
account of each Underwriter in the same proportion as the number of U.S Firm
Securities set forth opposite such Underwriter's name bears to the total number
of Firm Securities (subject to adjustment by CSFBC to eliminate fractions) and
may be purchased by the Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the U.S. Firm Securities. No
Optional Securities shall be sold or delivered unless the U.S. Firm Securities
and the International Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the U.S. Optional Securities or
any portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice
by CSFBC on behalf of the Underwriters and the Managers to the Selling
Stockholders. It is understood that CSFBC is authorized to make payment for and
accept delivery of such Optional Securities on behalf of the Underwriters and
Managers pursuant to the terms of CSFBC's instructions to the Selling
Stockholders.
Each time for the delivery of and payment for the U.S.
Optional Securities, being herein referred to as an "Optional Closing Date",
which may be the First Closing Date (the First Closing Date and each Optional
Closing Date, if any, being sometimes referred to as a "Closing Date"), shall be
determined by CSFBC but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. The
Custodian will deliver the U.S. Optional Securities being purchased on each
Optional Closing Date to CSFBC for the accounts of the several Underwriters,
against payment of the purchase price in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to
CSFBC drawn to the order of the Custodian, at the office of Dewey Ballantine,
1301 Avenue of the Americas, New York, New York 10019. The certificates for the
Optional Securities being purchased on each Optional Closing Date will be in
definitive form, in such denominations and registered in such names as CSFBC
requests upon reasonable notice prior to such Optional Closing Date and will be
made available for checking and packaging at the
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<PAGE> 11
office of Credit Suisse First Boston Corporation, Eleven Madison Avenue, New
York, New York 10010-3629, at a reasonable time in advance of such Optional
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the U.S. Securities for sale to the public as set
forth in the U.S. Prospectus.
5. Certain Agreements of the Company and the Selling
Stockholders. (a) The Company agrees with the several Underwriters that:
(i) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file each of the Prospectuses with the Commission pursuant
to and in accordance with subparagraph (1) (or, if applicable and if
consented to by CSFBC, which consent will not be unreasonably withheld,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this
Agreement or (B) the fifteenth business day after the Effective Date of
the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and
an additional registration statement is necessary to register a portion
of the Offered Securities under the Act but the Effective Time thereof
has not occurred as of such execution and delivery, the Company will
file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time
either Prospectus is printed and distributed to any Underwriter or
Manager, or will make such filing at such later date as shall have been
consented to by CSFBC, which consent will not be unreasonably withheld.
(ii) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration
statement as filed or either of the related prospectuses or the Initial
Registration Statement, the Additional Registration Statement (if any)
or either of the Prospectuses and will not effect such amendment or
supplementation without CSFBC's consent, which consent will not be
unreasonably withheld; and the Company will also advise CSFBC promptly
of the effectiveness of each Registration Statement (if its Effective
Time is subsequent to the execution and delivery of this Agreement) and
of any amendment or supplementation of a Registration Statement or
either of the Prospectuses and of the institution by the Commission of
any stop order proceedings in respect of a Registration Statement and
will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(iii) If, at any time when a prospectus relating to the
Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter, Manager or dealer, any event
occurs as a result of which either or both of the Prospectuses as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
either or both of the Prospectuses to comply with the Act, the Company
will promptly notify CSFBC of such event and will promptly prepare and
file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFBC's consent
to, nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6.
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(iv) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(v) The Company will furnish to CSFBC copies of each
Registration Statement (one of which will be signed and will include
all exhibits), each preliminary prospectus relating to the U.S.
Securities, and, so long as a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, the U.S. Prospectus and all
amendments and supplements to such documents, in each case in such
quantities as CSFBC reasonably requests. The U.S. Prospectus shall be
so furnished on or prior to 3:00 P.M., New York time, on the business
day following the later of the execution and delivery of this Agreement
or the Effective Time of the Initial Registration Statement. All other
such documents shall be so furnished as soon as available.
(vi) The Company will use its reasonable best efforts to
arrange for the qualification of the Offered Securities for sale under
the laws of such jurisdictions as CSFBC reasonably designates and will
continue such qualifications in effect so long as required for the
distribution.
(vii) During the period of five years hereafter, the Company
will furnish to CSFBC and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year,
a copy of its annual report to stockholders for such year; and the
Company will furnish to CSFBC as soon as available, a copy of each
report and any definitive proxy statement of the Company filed with the
Commission under the Securities Exchange Act of 1934 or mailed to
stockholders.
(viii) For a period of 90 days after the date of the initial
public offering of the Offered Securities, the Company will not offer,
sell, contract to sell, grant any option to purchase, establish a put
equivalent position (as defined in Rule 1a-1(h) under the Exchange
Act), pledge or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Act relating to,
any shares of Securities or securities convertible into or exchangeable
or exercisable for, or any rights to purchase or acquire, any shares of
Securities, or publicly disclose the intention to make any such offer,
sale, pledge, grant, establishment, disposal or filing, without the
prior written consent of CSFBC, except (i) for private sales so long as
the purchaser thereof enters into a corresponding lockup agreement with
CSFBC and CSFBL for the then unexpired portion of the 90-day period and
(ii) for grants of employee stock options, restricted stock or other
stock-based awards pursuant to the terms of a plan in effect on the
date hereof or the issuance of shares of Common Stock pursuant to the
exercise of such options.
(ix) The Company agrees with the Underwriters that the Company
will pay all expenses incident to the performance of the obligations of
the Selling Stockholders except as set forth below and the obligations
of the Company under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale under
the laws of such jurisdictions as CSFBC reasonably designates and the
printing of memoranda relating thereto, for the filing fee incident to,
and the reasonable fees and disbursements of counsel to the
Underwriters in connection
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<PAGE> 13
with, the review by the National Association of Securities Dealers,
Inc. of the Offered Securities, and for expenses incurred in
distributing preliminary prospectuses and the Prospectuses (including
any amendments and supplements thereto) to the Underwriters; provided,
however, that each Selling Stockholder shall be responsible for any
transfer taxes on the sale of its Offered Securities to the
Underwriters and all expenses payable by such Selling Stockholder
pursuant to the Registration Rights Agreement.
(b) Each Selling Stockholder agrees with the several
Underwriters that:
(i) Each Selling Stockholder will deliver to CSFBC, attention:
Transactions Advisory Group on or prior to the First Closing Date a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(ii) Each Selling Stockholder agrees, for a period of 90 days
after the date of the initial public offering of the Offered
Securities, not to offer, sell, contract to sell, grant any option to
purchase, establish a put equivalent position (as defined in Rule
1a-1(h) under the Exchange Act), pledge or otherwise dispose of,
directly or indirectly, or cause the filing with the Commission of a
registration statement under the Act relating to, any shares of
Securities or securities convertible into or exchangeable or
exercisable for, or any rights to purchase or acquire, any shares of
Securities, or publicly disclose the intention to make any such offer,
sale, pledge, grant, establishment, disposal or filing, without the
prior written consent of CSFBC, except for (i) private sales or other
transfers so long as the purchaser or transferee thereof enters into a
corresponding lockup agreement with CSFBC and CSFBL for the then
unexpired portion of the 90-day period and (ii) in the case of
Zell/Chilmark Fund, L.P., disclosure to partners of such Selling
Stockholder if such parties agree to keep such information
confidential.
(iii) Each Selling Stockholder agrees with the Underwriters
that such Selling Stockholder shall be responsible for any transfer
taxes on the sale of its Offered Securities to the Underwriters and for
all other expenses payable by such Selling Stockholder pursuant to the
Registration Rights Agreement.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the U.S. Firm
Securities on the First Closing Date and the U.S. Optional Securities to be
purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their obligations hereunder and to the following
additional conditions precedent:
(a) The Underwriters shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement, shall be prior to the
filing of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to such Effective Time), of KPMG
Peat Marwick LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included in the Registration
Statements comply as to form in all
13
<PAGE> 14
material respects with the applicable accounting
requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures
specified by the American Institute of Certified
Public Accountants for a review of interim financial
information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on
the unaudited financial statements included in the
Registration Statements;
(iii) on the basis of the review referred to
in clause (ii) above, a reading of the latest
available interim financial statements of the
Company, inquiries of officials of the Company who
have responsibility for financial and accounting
matters and other specified procedures, nothing came
to their attention that caused them to believe that:
(A) the unaudited financial
statements included in the Registration
Statements do not comply as to form in all
material respects with the applicable
accounting requirements of the Act and the
related published Rules and Regulations or
any material modifications should be made to
such unaudited financial statements for them
to be in conformity with generally accepted
accounting principles;
(B) the information set forth in
the Prospectuses under the captions
"Selected Historical Consolidated Financial
Data" and "Selected Restated Consolidated
Financial Data" does not agree with the
amounts set forth in the unaudited
consolidated financial statements or the
audited consolidated financial statements,
as the case may be, from which it was
derived or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the unaudited
statements or the audited statements
included in the Registration Statements and
the Prospectuses;
(C) at the date of the latest
available balance sheet read by such
accountants, or at a subsequent specified
date not more than three business days prior
to the date of this Agreement, there was any
change in the capital stock or any increase
in short-term indebtedness or long-term debt
of the Company and its consolidated
subsidiaries or, at the date of the latest
available balance sheet read by such
accountants, there was any decrease in
consolidated net current assets or net
assets, as compared with amounts shown on
the latest balance sheet included in the
Prospectuses; or
(D) for the period from the closing
date of the latest income statement included
in the Registration Statement and the
Prospectuses to the closing date of the
latest available income statement read by
such accountants there were any decreases,
as compared with the corresponding period of
the previous year and with the period of
corresponding length ended the date of the
latest income statement included in the
Registration Statement and the Prospectuses,
in consolidated net sales or net operating
income, or in the total or per share amounts
of consolidated income before extraordinary
items or net income;
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<PAGE> 15
except in all cases set forth in clauses (C) and (D)
above for changes, increases or decreases which the
Prospectuses disclose have occurred or may occur or
which are described in such letter;
(iv) (A) they have read the pro
forma financial statements and other pro
forma financial information included in the
Registration Statements (collectively, the
"Pro Forma Information");
(B) they have made inquiries of certain
officials of the Company who have
responsibility for financial and
accounting matters about the basis
for the pro forma adjustments;
(C) they have proved the arithmetic
accuracy of the application of the
pro forma adjustments to the
historical amounts in the Pro Forma
Information and whether the Pro
Forma Information complies as to
form in all material respects with
the accounting requirements of the
Securities Act and the related
published Rules and Regulations;
and
(D) on the basis of such procedures,
and such other inquiries and
procedures as may be specified in
such letter, nothing came to their
attention that caused them to
believe that the Pro Forma
Information included in the
Registration Statements does not
comply as to form in all material
respects with the accounting
requirements of the Securities Act
and the related published Rules and
Regulations or has not been
properly compiled and that the pro
forma adjustments have not been
properly applied to the historical
amounts in the compilation of those
statements; and
(v) they have compared specified
dollar amounts (or percentages derived from
such dollars amounts) and other financial
information contained in the Registration
Statements (in each case to the extent that
such dollar amounts, percentages and other
financial information are derived from the
general accounting records of the Company
and its subsidiaries subject to the internal
controls of the Company's accounting system
or are derived directly from such records by
analysis or computation) with the results
obtained from inquiries, a reading of such
general accounting records and other
procedures specified in such letter and have
found such dollar amounts, percentages and
other financial information to be in
agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "Registration Statements" shall mean the
initial registration statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "Registration Statements"
shall mean the Initial Registration Statement and the additional
registration
15
<PAGE> 16
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Prospectuses" shall mean the prospectuses included in
the Registration Statements. All financial statements and schedules
included in material incorporated by reference into the Prospectuses
shall be deemed included in the Registration Statements for purposes of
this subsection.
(b) The Underwriters shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Arthur Andersen LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect
that:
(i) in their opinion the financial statements and
schedules examined by them and included in the Registration
Statements comply as to form in all material respects with
the applicable accounting requirements of the Act and the
related published Rules and Regulations; and
(ii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration
Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the Company
and its subsidiaries subject to the internal controls of
the Company's accounting system or are derived directly
from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of
the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, "Registration
Statements" shall mean the initial registration statement as
proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time,
(ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement but the Effective Time of the Additional
Registration Statement is subsequent to such execution and
delivery, "Registration Statements" shall mean the Initial
Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended
by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "Prospectuses" shall mean the
prospectuses included in the Registration Statements. All
financial statements and schedules included in material
incorporated by reference into the Prospectuses shall be
deemed included in the Registration Statements for purposes of
this subsection.
(c) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by CSFBC. If the Effective Time of the
16
<PAGE> 17
Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time either Prospectus is printed
and distributed to any Underwriter or Manager, or shall have occurred
at such later date as shall have been consented to by CSFBC. If the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, each of the Prospectuses
shall have been filed with the Commission in accordance with the Rules
and Regulations and Section 5(a)(i) of this Agreement. Prior to such
Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of any
Selling Stockholder, the Company or CSFBC, shall be contemplated by the
Commission.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole which, in the
judgment of CSFBC is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities; (ii) any downgrading in
the rating of any debt securities or preferred stock of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by U.S. Federal or New York authorities; or
(v) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of CSFBC the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(e) The Underwriters shall have received an opinion, dated
such Closing Date, of Davis Polk & Wardwell, counsel for the Company,
to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectuses;
(ii) The Offered Securities delivered on such Closing
Date have been duly authorized and validly issued, are fully
paid and nonassessable;
(iii) Except for the Registration Rights Agreement
and as otherwise described in the Prospectuses, to the best of
such counsel's knowledge after due inquiry of responsible
officers of the Company, there are no contracts or agreements
between the Company and any third party entered into since
November 1995 granting such third party the right to require
the Company to
17
<PAGE> 18
include securities with the securities registered pursuant to
a Registration Statement;
(iv) The Company is not and, after giving effect to
the offering and sale of the Offered Securities, will not be
an "investment company" as defined in the Investment Company
Act of 1940;
(v) Except as disclosed in the Prospectuses, to the
best of such counsel's knowledge, no consent, approval,
authorization, order, registration or qualification of, or
filing with, any governmental or regulatory agency or body or
any court is required under New York or federal law or the
General Corporation Law of the State of Delaware for the
execution, delivery and performance by the Company of this
Agreement or the Subscription Agreement, except such as have
been obtained and made under the Act and such as may be
required under state securities or blue sky laws;
(vi) To the best of such counsel's knowledge after
due inquiry of responsible officers of the Company, the
Company is not in violation of its charter or by-laws;
(vii) The authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters in
all material respects to the description thereof contained in
the Prospectus;
(viii) The Initial Registration Statement was
declared effective under the Act as of the date and time
specified in such opinion, the Additional Registration
Statement (if any) was filed and, assuming compliance by the
Underwriters with Rule 462(b), became effective under the Act
as of the date and time (if determinable) specified in such
opinion, each of the Prospectuses either was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was
included in the Initial Registration Statement and, to the
knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act;
(ix) The descriptions in the Registration Statement
and the Prospectuses under the headings "Description of
Capital Stock" and "Certain U.S. Federal Tax Considerations
for Non-U.S. Holders of Common Stock" insofar as statements
therein constitute a summary of legal matters or documents
referred to therein, fairly present and summarize such matters
in all material respects; and
(x) This Agreement and the Subscription Agreement has
been duly authorized, executed and delivered by the Company.
Such counsel shall also state that they have not themselves
checked the accuracy or completeness of, or otherwise verified, the
information furnished with respect to other matters in the Registration
Statements and the Prospectuses but they have generally reviewed and
discussed with certain officers and other representatives of the
Company, its independent public accountants and your representatives
and counsel the information furnished, whether or not subject to their
check or verification. On the basis of such review and discussion, but
without independent check or
18
<PAGE> 19
verification, except as stated, (i) they are of the opinion that the
Registration Statements, as of their respective effective dates, and
the Prospectuses, as of their date, (except for the financial
statements, including the notes thereto, and supporting schedules and
other financial, statistical and other accounting data included therein
or omitted therefrom, as to which they express no opinion) complied as
to form in all material respects with the requirements of the Act and
the rules and regulations thereunder and (ii) nothing came to their
attention that causes them to believe that (except for the financial
statements, including the notes thereto, and supporting schedules and
other financial, statistical and other accounting data included therein
or omitted therefrom, as to which they express no opinion) any
Registration Statement, at its effective date, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that either of the Prospectuses, as of its
date or as of such Closing Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
(f) The Underwriters shall have received an opinion, dated
such Closing Date, of Zenon Lankowsky, Esq., Vice President and General
Counsel of the Company, to the effect that:
(i) The Company is duly qualified to do business as a
foreign corporation in good standing in all jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification, except to the extent
that the failure to be so qualified or in good standing would
not have a Material Adverse Effect; each of the Company's
Significant Subsidiaries has been duly incorporated and is a
validly existing corporation in good standing under the laws
of the jurisdiction of its incorporation, with corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses; and
each Significant Subsidiary is duly qualified to transact
business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the
failure to be so qualified or in good standing would not have
a Material Adverse Effect;
(ii) All of the outstanding shares of capital stock
of, or other ownership interests in, each of the Company's
Significant Subsidiaries have been duly and validly authorized
and issued and are fully paid and non-assessable, and the
shares of capital stock of each Significant Subsidiary owned
by the Company, directly or through subsidiaries, are owned,
free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature;
(iii) The execution, delivery and performance of this
Agreement and the Subscription Agreement have been duly
authorized by all necessary corporate action on the part of
the Company and do not and will not conflict with or result in
a breach or violation of any of the terms and provisions of,
and do not and will not constitute a default (or an event
which with the giving of notice or the lapse of time or both
would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
material assets or properties of the Company or any of its
subsidiaries under, and neither the Company nor any of its
subsidiaries is in violation of
19
<PAGE> 20
(A) the charter, by-laws or other organizational documents of
the Company or any Significant Subsidiary, (B) to the
knowledge of such counsel, any statute, rule, regulation,
order or decree of any governmental or regulatory agency or
body or any court having jurisdiction over the Company or any
subsidiary or any of their properties, assets or operations or
(C) to the knowledge of such counsel, any indenture, mortgage,
loan or credit agreement, note, lease, permit, license or
other agreement or instrument to which the Company or any
subsidiary is a party or by which the Company or any
subsidiary is bound or to which any of the properties, assets
or operations of the Company or any subsidiary is subject,
except, in the case of clauses (B) and (C), for such breaches
or violations which would not have a Material Adverse Effect.
(iv) To the knowledge of such counsel, there are no
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statements or the
Prospectuses or to be filed as exhibits to the Registration
Statements that are not described or filed as required; the
descriptions set forth under the caption
"Business--Regulation," in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 (as amended
by Form 10-K/A filed April 17, 1997), insofar as such
statements constitute a summary of legal or regulatory
matters, fairly present and summarize such matters in all
material respects.
(v) Except as described or incorporated by reference
in the Prospectuses, there are no pending actions, suits or
proceedings against the Company, any of its subsidiaries or
any of their respective properties, assets or operations that
would have a Material Adverse Effect, or could materially and
adversely affect the ability of the Company to perform its
obligations under this Agreement or the Subscription
Agreement; and no such actions, suits or proceedings are, to
the knowledge of such counsel, threatened or contemplated.
(vi) Except for the Registration Rights Agreement and
as otherwise described in the Prospectuses, to the best of
such counsel's knowledge, there are not contracts or agreement
between the Company and any third party entered into after
November 1995 granting such third party the right to require
the Company to include securities with any securities being
registered pursuant to any registration statement (other than
the Registration Statement) under the Act;
(vii) Such counsel have no reason to believe that any
part of a Registration Statement or any amendment thereto, as
of its effective date, contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectuses or any
amendment or supplement thereto, as of its issue date or as of
such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, it
being understood that such counsel need express no opinion as
to the financial statements, including the notes thereto, and
supporting schedules and other financial, statistical or other
accounting data contained in or omitted from the Registration
Statements or the Prospectuses.
20
<PAGE> 21
(g) The Underwriters shall have received an opinion, dated
such Closing Date, of counsel for each of the Selling Stockholders, to
the effect that:
(i) To the knowledge of such counsel, such Selling
Stockholder had full right, power and authority to enter into
this Agreement, the Subscription Agreement, the Custody
Agreement and Power of Attorney and to sell, assign, transfer
and deliver the Offered Securities delivered by such Selling
Stockholder on such Closing Date hereunder; and the several
Underwriters have acquired valid and unencumbered title to the
Offered Securities purchased by them on such Closing Date,
free and clear of any adverse claim (within the meaning of the
Uniform Commercial Code) to the extent the Underwriters are
without notice of any such adverse claim;
(ii) This Agreement and the Subscription Agreement
have been duly authorized, executed and delivered on behalf of
such Selling Stockholder.
(iii) The Custody Agreement and Power of Attorney
with respect to such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder
and constitute valid and legally binding obligations of such
Selling Stockholder enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
(iv) To the knowledge of such counsel, no consent,
approval, authorization, order, registration or qualification
of, or filing with, any third party (whether acting in an
individual, fiduciary or other capacity) or any governmental
agency or body or any court is required to be obtained or made
by such Selling Stockholder for the consummation of the
transactions contemplated by this Agreement, the Subscription
Agreement, the Custody Agreement and the Power of Attorney in
connection with the sale of the Offered Securities, except
such as have been obtained and made under the Act and such as
may be required under state securities laws;
(v) The execution, delivery and performance of this
Agreement, the Subscription Agreement, the Custody Agreement
and Power of Attorney by such Selling Stockholder and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute
a default under (A) to the knowledge of such counsel, any
statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, have
jurisdiction over such Selling Stockholder or any of its
properties or operations, or any agreement or instrument to
which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the properties
or operations of such Selling Stockholder is subject, or (B)
if applicable, the charter, by-laws or other organizational
documents of such Selling Stockholder, except, in the case of
clause (A), for such conflicts, breaches, violations or
defaults which could not reasonably be expected to,
individually or in the aggregate, have a material adverse
effect on the consummation of the transactions contemplated by
this Agreement, the Subscription Agreement, the Custody
Agreement or the Power of Attorney.
21
<PAGE> 22
(h) The Underwriters shall have received from Dewey
Ballantine, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the validity of the Offered
Securities delivered on such Closing Date, the Registration Statements,
the Prospectuses and other related matters as CSFBC may require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(i) The Underwriters shall have received a certificate, dated
such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement and the Subscription Agreement are true
and correct; the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder or
under the Subscription Agreement on or prior to such Closing Date; no
stop order suspending the effectiveness of any Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) or Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Act, prior to the time either
Prospectus was printed and distributed to any Underwriter or Manager;
and, since the date of the latest audited financial statements of the
Company included or incorporated by reference in the Prospectuses,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the financial
condition, business, properties or results of operations of the Company
and its Subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectuses or as described in such certificate.
(j) The Underwriters shall have received a letter, dated such
Closing Date, of KPMG Peat Marwick LLP, which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three business days
prior to such Closing Date for the purposes of this subsection.
(k) On such Closing Date, the Managers shall have purchased
the International Firm Securities or the International Optional
Securities, as the case may be, pursuant to the Subscription Agreement.
The Selling Stockholders and the Company will furnish the Underwriters with such
conformed copies of such opinions, certificates, letters and documents as the
Underwriters reasonably request. CSFBC may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, either of the Prospectuses, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
22
<PAGE> 23
incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by the Selling
Stockholders or by any Underwriter through CSFBC specifically for use therein,
it being understood and agreed that the only such information furnished by the
Selling Stockholders consists of the information described as such in subsection
(b) below and that the only such information furnished by any Underwriter
consists of the information described as such in subsection (c) below; and
provided, further, that with respect to any untrue statement or alleged untrue
statement in or omission or alleged omission from any preliminary prospectus the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased the Offered Securities concerned, to
the extent that a prospectus relating to such Offered Securities was required to
be delivered by such Underwriter under the Act in connection with such purchase
and any such loss, claim, damage or liability of such Underwriter results from
the fact that there was not sent or given to such person, at or prior to the
written confirmation of the sale of such Offered Securities to such person, a
copy of the U.S. Prospectus correcting such untrue statement or alleged untrue
statement in or omission or alleged omission from such preliminary prospectus if
the Company had previously furnished such quantity of copies thereof to such
Underwriter as reasonably requested by or on behalf of such Underwriter. The
Company agrees to indemnify each Selling Stockholder to the extent set forth in
the Registration Rights Agreement with respect to the matters described in this
Section 7(a).
(b) Each Selling Stockholder will severally and not jointly indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, either of the Prospectuses, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, in each case only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents (i) in
reliance upon and in conformity with written information furnished by such
Selling Stockholder specifically for use therein which for purposes hereof shall
consist of the information with respect to such Selling Stockholder set forth in
the chart and the related footnotes under the caption "Selling Stockholders" in
the U.S. Prospectus or (ii) relating to or arising out of any breach of the
representations and warranties made by such Selling Stockholder in this
Agreement, the Custody Agreement or the Power of Attorney; and provided,
further, that with respect to any untrue statement or alleged untrue statement
in or omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (b) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the U.S. Prospectus correcting such untrue statement or alleged untrue statement
in or omission or alleged omission from such preliminary prospectus if the
Company had previously furnished such quantity of copies thereof to such
Underwriter as reasonably requested by or on behalf of such Underwriter. Each
Selling Stockholder agrees to indemnify the Company to the extent set forth in
the Registration Rights Agreement with respect to the information described in
this Section 7(b).
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<PAGE> 24
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and each Selling Stockholder against any losses, claims,
damages or liabilities to which the Company or such Selling Stockholder may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, either of the Prospectuses, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through CSFBC specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company and each Selling Stockholder in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in the U.S.
Prospectus furnished on behalf of each Underwriter: the last paragraph at the
bottom of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning over-allotments and stabilizing on the
inside front cover, the information appearing in the fifth paragraph under the
caption "Underwriting" with respect to concession and reallowance figures and
the information appearing in the sixth, seventh and tenth paragraphs under the
caption "Underwriting."
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the
24
<PAGE> 25
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (e). Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase U.S. Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of U.S.
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of U.S. Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Selling Stockholders for the purchase of
such U.S. Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the U.S. Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
U.S. Securities with respect to which such default or defaults occur exceeds 10%
of the total number of shares of U.S. Securities that the Underwriters are
obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Selling Stockholders for the purchase of such U.S. Securities by
other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter,
the Company or the Selling Stockholders, except as provided in Section 9
(provided that if such default occurs with respect to U.S. Optional Securities
after the First Closing Date, this Agreement will not terminate as to the U.S.
Firm Securities or any U.S. Optional Securities purchased prior to such
termination). As used in this Agreement, the term "Underwriter" includes any
person substituted for a Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of
25
<PAGE> 26
and payment for the U.S. Securities. If this Agreement is terminated pursuant to
Section 8 or if for any reason the purchase of the U.S. Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 (except as to any defaulting Underwriter) and the respective
obligations of the Company, the Selling Stockholders, and the Underwriters
pursuant to Section 7 shall remain in effect, but shall not inure to the benefit
of any defaulting Underwriter, and if any U.S. Securities have been purchased
hereunder the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the U.S.
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(d),
the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the U.S.
Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to CSFBC at Eleven Madison Avenue, New York, NY 10010-3629, Attention:
Investment Banking Department--Transactions Advisory Group, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at One CVS
Drive, Woonsocket, Rhode Island 02895, Attention: General Counsel, or, if sent
to the Selling Stockholders or any of them, will be mailed, delivered or
telegraphed and confirmed to such Selling Stockholder at the address of the
Attorneys-in-Fact as set forth in the Powers of Attorney, or in each case to
such other address as the person to be notified may have requested in writing;
provided, however, that any notice to any Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 7, and no other person will have any right or obligation
hereunder.
12. Representation. CSFBC will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by CSFBC will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
26
<PAGE> 27
If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to the Company and the Selling
Stockholders one of the counterparts hereof, whereupon it will become a binding
agreement among the Selling Stockholders, the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
CVS CORPORATION
By: ____________________________________
Name:
Title:
ZELL/CHILMARK FUND, L.P.
By: ZC Limited Partnership, general partner
By: ZC Partnership, general partner
By: ZC, Inc., a partner
By: ____________________________________
Name: Sheli Z. Rosenberg
Title: Vice President
GENERAL MOTORS EMPLOYEES DOMESTIC
GROUP PENSION TRUST
By: Mellon Bank, N.A., solely in its capacity as Trustee for
General Motors Employees Domestic Group Pension Trust as
directed by Magten Asset Management Corp., and not in its
individual capacity
By: ____________________________________
Name:
Title:
MAGTEN ASSET MANAGEMENT CORP.
By: ____________________________________
Name:
Title:
CITY OF LOS ANGELES FIRE AND POLICE PENSION
SYSTEMS
HUGHES RETIREMENT PLANS TRUST
NAVY EXCHANGE SERVICE COMMAND RETIREMENT
TRUST
WESTERN UNION TELEGRAPH COMPANY PENSION PLAN
By: Magten Asset Management Corp., as Attorney-in-Fact
By: ____________________________________
Name:
Title:
27
<PAGE> 28
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
By CREDIT SUISSE FIRST BOSTON CORPORATION
By__________________________________
Name:
Title:
28
<PAGE> 29
SCHEDULE A
<TABLE>
<CAPTION>
MAXIMUM
NUMBER OF
NUMBER OF U.S. FIRM U.S. OPTIONAL
SELLING STOCKHOLDER SECURITIES TO BE SOLD SECURITIES TO BE SOLD
<S> <C> <C>
Zell/Chilmark Fund, L.P. ...................................
General Motors Employees Domestic Group
Pension Trust.............................................
City of Los Angeles Fire and Police Pension Systems.........
Hughes Retirement Plans Trust...............................
Navy Exchange Service Command Retirement Trust..............
Western Union Telegraph Company Pension Plan................
Magten Asset Management Corp. .............................. 1
---------- ---------
Total............................................... 12,300,000 1,138,211
========== =========
</TABLE>
- --------
(1)Includes shares of Common Stock held in accounts (i) managed by
Magten on behalf of various pension and/or profit sharing accounts of Magten or
(ii) beneficially owned or otherwise controlled by Mr. Talton R. Embry, the
President and a director of Magten, as an individual or as a trustee. Does not
include 79,616 shares of Common Stock held in accounts managed by Magten, which
accounts are not participating in the Offering.
29
<PAGE> 30
SCHEDULE B
<TABLE>
<CAPTION>
TOTAL
NUMBER OF U.S.
FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
----------- ---------------
<S> <C>
Credit Suisse First Boston Corporation....................
Donaldson, Lufkin & Jenrette Securities Corporation.......
Merrill Lynch, Pierce, Fenner & Smith Incorporated........
Morgan Stanley & Co. Incorporated.........................
Salomon Brothers Inc...................................... ------------------
Total............................................. 12,300,000
==================
</TABLE>
30
<PAGE> 31
SCHEDULE C
SIGNIFICANT SUBSIDIARIES
The Company is the parent corporation of CVS New York, Inc. ("CVS New
York"), a New York corporation, and CVS Revco D.S., Inc. ("CVS Revco"), a
Delaware corporation. CVS New York is the direct parent corporation of CVS
Center, Inc., a New Hampshire corporation, and the indirect parent of CVS
Pharmacy, Inc., a Rhode Island corporation, and CVS H.C., Inc. a Minnesota
corporation.
CVS Revco is the direct parent of Big B, Inc., an Alabama corporation,
Hook-SuperRx, Inc., a Delaware corporation and Revco Discount Drug Centers, Inc.
("Revco Discount"), a Michigan corporation.
Big B., Inc. is the direct parent of Big B Drugs, Inc., a Georgia
Corporation. Hook-SuperRx, Inc. is the direct parent of Brooks Drug, Inc., a
Delaware corporation. Revco Discount is the direct parent of Revco Discount Drug
Centers, Inc. ("Revco Discount-Ohio"), an Ohio corporation, and White Cross
Stores Inc. No. 14, a Pennsylvania corporation. Revco Discount - Ohio is the
direct parent of Revco Drug Stores, Inc., an Ohio corporation.
CVS Pharmacy, Inc. is the direct parent of CVS H.C., Inc. which is the
parent corporation of Nashua Hollis CVS, Inc. ("Nashua Hollis"), a New Hampshire
corporation. Nashua Hollis is the parent corporation of approximately 1,145
subsidiaries, most of which operate CVS stores located in the United States,
selling prescription drugs, health and beauty care products, and is a 90% owner
of Pharmacare Management Services, Inc., a Delaware corporation ("Pharmacare").
Nashua Hollis is also the parent corporation of Bob's Stores Center,
Inc., which is the parent corporation of Bob's H.C., Inc. Bob's H.C., Inc. is
the parent corporation of Amherst NY Bob's, Inc., which is the parent
corporation of 59 subsidiaries which were formed to operate specialty retail
stores located in the United States, selling casual clothing and footwear for
the entire family.
CVS Pharmacy, Inc. (formerly known as CVS, Inc.) is the parent
corporation of Melville Realty Company, Inc., a New York corporation, which is
the parent corporation of Melville Realty Management Corporation, MREFC, Inc.,
Danbury MRC, Inc., MRC Manchester Devco, Inc., Amherst MRC Devco, Inc., MRC
Woodlands Devco, Inc., MRC Henderson Devco, Inc., MRC Westbury Devco, Inc., MRC
Norwalk Devco, Inc., and MRC Staten Island Devco, Inc.
The Company is also an indirect parent corporation of Bob's Inc., a
Connecticut corporation and CVS of DC & VA, Inc., a Maryland corporation, which
are included in the Company's consolidated financial statements.
Except for Pharmacare, the Company owns, directly or indirectly, 100%
of the common stock of the subsidiaries described above.
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF DAVIS POLK & WARDWELL]
JULY 23, 1997
CVS Corporation
One CVS Drive
Woonsocket, RI 02895
Ladies and Gentlemen:
We have acted as counsel to CVS Corporation ("CVS") in connection with CVS'
Registration Statement on Form S-3 (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the registration of shares (the "Shares") of
common stock, par value $.01 per share, of CVS to be sold by certain
stockholders of CVS.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates and other
instruments, and have conducted such other investigations of fact and law, as we
have deemed necessary or advisable for the purposes of this opinion.
On the basis of the foregoing, we are of the opinion that the Shares have
been duly authorized and are validly issued, fully paid and non-assessable.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In addition, we consent to the reference to us under the
caption "Legal Matters" in the Prospectus constituting a part of the
Registration Statement.
Very truly yours,
/s/ DAVIS POLK & WARDWELL
