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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
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CVS Corporation
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(NAME OF ISSUER)
Common Stock, par value $.01 per share
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(TITLE OF CLASS OF SECURITIES)
126650100
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(CUSIP NUMBER)
Alisa Singer, Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza, Suite 600, Chicago, IL 60606 (312) 466-3196
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
May 29, 1997
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled our for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 126650100 13D Page 2 of 27
1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Zell/Chilmark Fund, L.P.
36-3716608
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
11,585,043
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
11,585,043
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,585,043
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.8%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTION BEFORE FILLING OUT!
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Item 1 Security and Issuer
This Schedule 13D relates to the common stock, $.01 par value per share
("Common Stock"), of CVS Corporation (the "Issuer"). The Issuer's
principal executive office is One CVS Drive, Woodsocket, RI 02895.
Item 2 Identity and Background
(a - c) This Schedule 13D is being filed by Zell/Chilmark
Fund, L.P., a Delaware limited partnership ("Zell/Chilmark"). The
sole general partner of Zell/Chilmark is ZC Limited Partnership, an
Illinois limited partnership ("ZC Limited"). No limited partner of
Zell/Chilmark acts as a general partner or has control over
Zell/Chilmark. The sole general partner of ZC Limited is ZC
Partnership, an Illinois general partnership ("ZC"). ZC has delegated
its full power and authority to represent itself to an executive
committee of ZC comprised of Samuel Zell, David M. Schulte and two
delegates appointed by Mr. Zell. Mr. Zell has appointed Rod F.
Dammeyer and Sheli Z. Rosenberg as his delegates. ZC's partners
are ZC, Inc., an Illinois corporation ("ZCI") whose sole stockholder is
Samuel Zell as trustee of the Samuel Zell Revocable Trust under trust
agreement dated January 19, 1990 ("Zell Trust"), and CZ Inc., a
Delaware corporation ("CZI") whose sole stockholder is David M.
Schulte. Mr. Zell is also the beneficiary of the Zell Trust. The
principal executive office of Zell/Chilmark, ZC Limited, ZC, ZCI, the
Zell Trust, Messrs. Zell and Dammeyer and Mrs. Rosenberg is Two N.
Riverside Plaza, Suite 600, Chicago, IL 60606. The principal
executive office of CZI and Mr. Schulte is 875 N. Michigan, Suite 2100,
Chicago, IL 60611. The principal business of Zell/Chilmark and
through Zell/Chilmark, of ZC Limited, ZC, ZCI and CZI is investing in,
and providing capital and management support to companies that are
engaged in or are the appropriate subject of significant
recapitalizations or corporate restructurings. Certain information
concerning the members of the executive committee of ZC and the
executive officers, directors and stockholders of ZCI and CZI is set
forth in Appendix A hereto.
(d) and (e) Neither Zell/Chilmark, ZC Limited, ZC, ZCI, CZI, Mr. Zell,
Mr. Schulte, Mr. Dammeyer, Mrs. Rosenberg, nor, to the best knowledge of
Zell/Chilmark, any of the persons listed in Appendix A hereto, have
during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or (ii) been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was, or is,
subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The consideration for the acquisition of the 11,585,043 shares of Common
Stock was 13,102,288 shares of common stock of Revco D.S., Inc.
("Revco"). On February 6, 1997, the Issuer, its wholly owned
subsidiary, North Acquisition Corp. ("Acquisition Corp."), and Revco had
entered into an Agreement and Plan of Merger ("Merger Agreement")
wherein the parties agreed that, subject to certain conditions being
met, Revco would be merged with and into Acquisition Corp. with Revco as
the surviving corporation ("Merger"). The Merger proceeds would be the
Common Stock of the Issuer. On May 29, 1997, upon the satisfaction or
waiver of all conditions, the Merger was consummated and as a result,
Zell/Chilmark's 13,102,288 shares of Revco were converted into the right
to receive 11,585,043 shares of Common Stock.
Item 4. Purpose of the Transaction
Pursuant to Zell/Chilmark's Agreement of Limited Partnership
("Agreement"), Zell/Chilmark is obligated within 90 days of receiving
cash or marketable securities in the disposition of an investment to
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distribute to its partners the cash or marketable securities. The
executive committee of ZC has the sole discretion to determine the
amount available for distribution and whether the distribution will be
in cash or marketable securities. Within 90 days after the time that
Zell/Chilmark's 11,585,043 shares of Common Stock become marketable
securities, as that term is defined in the Agreement (which
Zell/Chilmark believes to be the time that the restrictions on
transferability lapse under the Affiliate's Letter Relating to Pooling,
as hereinafter defined), Zell/Chilmark will (i) sell the 11,585,043
shares of Common Stock and distribute the net proceeds to its partners;
(ii) distribute the 11,585,043 shares of Common Stock to its partners;
or (iii) sell a portion of the 11,085,043 shares of Common Stock and
distribute the net proceeds and the unsold shares of Common Stock to its
partners. Any distributions to Zell/Chilmark's partners will be in
accordance with the Agreement.
Zell/Chilmark has no plans or proposals of the type referred to in
clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuers
(a) and (b) As of the date hereof, Zell/Chilmark beneficially owns
11,585,043 shares of Common Stock or 6.8 % of the issued and outstanding
Common Stock. Zell/Chilmark shares the power to vote or to direct the
vote and shares the power to dispose or to direct the disposition of the
11,585,043 shares of Common Stock beneficially owned by it with the
members of ZC's executive committee: Messrs. Zell, Dammeyer and Schulte
and Mrs. Rosenberg.
Mrs. Rosenberg beneficially owns 3,713 shares of Common Stock and
options to purchase 22,844 shares of Common Stock which are currently
exercisable. Mrs. Rosenberg has the sole power to vote or to direct the
vote and the sole power to dispose or to direct the disposition of
26,557 shares of Common Stock (assuming the exercise of the options to
purchase 22,844 shares of Common Stock).
Mr. Dammeyer beneficially owns options to purchase 3005 shares of Common
Stock which are currently exercisable. Mr. Dammeyer has the sole power
to vote or to direct the vote and the sole power to dispose or to direct
the disposition of 3005 shares of Common Stock (assuming the exercise of
the options to purchase 3005 shares of Common Stock).
(c) On May 29, 1997, Zell/Chilmark acquired 11,585,043 shares of Common
Stock pursuant to the Merger in exchange for 13,102,288 shares of Common
Stock of Revco.
On May 29, 1997, Mrs. Rosenberg acquired the 3,713 shares of Common
Stock pursuant to the Merger in exchange for 4,200 shares of Common
Stock of Revco.
On May 29, 1997, Mrs. Rosenberg and Mr. Dammeyer acquired options to
purchase 22,844 and 3005 shares of Common Stock, respectively, pursuant
to the Merger in exchange for options to purchase 25,841 and 3405 shares
of Revco Common Stock, respectively.
(d) and (e) Not applicable.
Item 6 Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Concurrent with the closing of the Merger, the Issuer entered into a
Registration Rights Agreement ("Registration Agreement") with
Zell/Chilmark in a form substantially similar to the Registration
Agreement attached hereto as Exhibit 1. Pursuant to the Registration
Agreement, the Issuer has agreed to file with the Securities and
Exchange Commission ("Commission") a Shelf Registration Statement
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and to use its best efforts to cause the Registration Statement to
become effective. The summary of the Registration Agreement contained
in this Schedule 13D of certain provisions of the Registration Agreement
is qualified in its entirety by reference to the Registration Agreement
attached hereto as Exhibit 1 and incorporated hereby by reference.
Additionally, Zell/Chilmark stated in a letter to the Issuer and Revco
dated February 6, 1997 ("Affiliate's Letter Relating to Pooling") that
Zell/Chilmark will not sell, transfer, or otherwise dispose of its
interest in or acquire or sell any options or other securities relating
to securities of the Issuer that would be intended to reduce
Zell/Chilmark's risk relative to any shares of Common Stock beneficially
owned by it during the period commencing on the 30th day prior to the
effectiveness of the Merger and ending at such time as the Issuer
publicly releases a report covering at least 30 days of combined
operations of the Issuer after the Merger. The summary contained in
this Schedule 13D of certain provisions of the Affiliate's Letter
Relating to Pooling is qualified in its entirety by reference to the
Affiliate's Letter Relating to Pooling attached hereto as Exhibit 2 and
is incorporated herein by reference.
Additionally, Zell/Chilmark stated in a separate letter to the Issuer
and Revco dated May 29, 1997 ("Affiliate's Letter for Zell/Chilmark")
that it would not sell, transfer or otherwise dispose of the shares of
Common Stock it received in the Merger in violation of the Securities
Act of 1933, as amended (the "Act"); that it may not sell, transfer or
otherwise dispose of the shares of Common Stock received in the Merger
unless (i) such sale, transfer or other disposition has been registered
under the Act; (ii) such sale, transfer or other disposition is made in
conformity with Rule 145 promulgated by the Commission under the Act; or
(iii) in the opinion of counsel reasonably acceptable to the Issuer or
pursuant to a "no action" letter obtained by Zell/Chilmark from the
staff of the Commission, such sale, transfer or other disposition is
otherwise exempt from registration under the Act. The summary contained
in this Schedule 13D of certain provisions of the Affiliate's Letter for
Zell/Chilmark is qualified in its entirety by reference to the
Affiliate's Letter to Zell/Chilmark attached hereto as Exhibit 3 and is
incorporated herein by reference.
On May 29, 1997, Sheli Z. Rosenberg was elected to the Issuer's Board of
Directors.
Item 7 Materials to be Filed as Exhibits
Exhibit 1 Registration Rights Agreement between the Issuer and
Zell/Chilmark
Exhibit 2 Letter to the Issuer and Revco from Zell/Chilmark
dated February 6, 1997
Exhibit 3 Letter to the Issuer and Revco from Zell/Chilmark
dated May 29, 1997
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SIGNATURES
After reasonable inquiry, and the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DATED: June 18, 1997.
Zell/Chilmark Fund, L.P.
By: ZC Limited Partnership, general partner
By: ZC Partnership, general partner
By: ZC Inc., a partner
By: /s/ Sheli Z. Rosenberg
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Vice President
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION PAGE
1 Registration Rights Agreement 9
2 Letter to the Issuer and Revco from Zell/Chilmark dated 23
February 6, 1997
3 Letter to the Issuer and Revco from Zell/Chilmark dated 25
May 29, 1997
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APPENDIX A
Information concerning the members of the executive committee of ZC and the
officers and directors of ZCI and CZI.
EXECUTIVE COMMITTEE OF ZC PARTNERSHIP
Samuel Zell is the Chairman of the Board of Equity Group Investments, Inc.
("EGI"), an owner and manager of real estate and corporate investments. EGI's
principal executive office is located at Two North Riverside Plaza, Suite 600,
Chicago, Illinois 60606. Mr. Zell is a citizen of the United States of
America.
David M. Schulte is a general partner of Chilmark Partners ("Chilmark"),
an investment banking firm. Chilmark's principal executive offices are located
at 875 North Michigan Avenue, Suite 2100, Chicago, Illinois 60611. Mr. Schulte
is a citizen of the United States of America.
Rod F. Dammeyer is managing director of EGI Corporate Investments, a
division of EGI. Mr. Dammeyer is also president and chief executive officer of
Anixter International Inc. ("Anixter") a distributor of electrical products.
Anixter's principal executive offices are located at Two North Riverside Plaza,
Suite 1900, Chicago, Illinois 60606. Mr. Dammeyer is a citizen of the United
States of America.
Sheli Z. Rosenberg is president and chief executive officer of EGI and a
principal in the law firm, Rosenberg & Liebentritt, P.C. ("R & L"). The
principal executive offices of R & L is Two North Riverside Plaza, Suite 1600,
Chicago, Illinois 60606. Mrs. Rosenberg is a citizen of the United States of
America.
EXECUTIVE OFFICERS AND DIRECTORS OF ZC, INC.
The sole director of ZCI is Samuel Zell. The officers of ZCI are:
Samuel Zell President
Rod F. Dammeyer Vice President
Donald J. Liebentritt Vice President
Sheli Z. Rosenberg Vice President
Information concerning Messrs. Zell and Dammeyer and Mrs. Rosenberg is
above. Donald J. Liebentritt is an executive vice president and general
counsel of EGI and a principal of R & L. Mr. Liebentritt is a citizen of the
United States of America. The address for Mr. Liebentritt is Two North
Riverside Plaza, Chicago, Illinois 60606.
EXECUTIVE OFFICERS AND DIRECTORS OF CZ INC.
David M. Schulte is the sole director of CZI. The officers of CZI are:
David M. Schulte President
Joel S. Friedland Vice President
Matthew R. Rosenberg Vice President
Information concerning Mr. Schulte is above. Messrs. Friedland and
Rosenberg are both general partners of Chilmark and citizens of the United
States of America. The address for Messrs. Friedland and Rosenberg is 875
North Michigan Avenue, Suite 2100, Chicago, IL 60606.
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EXHIBIT 1
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of ___________, 1997 among CVS Corporation,
a Delaware corporation (the "ISSUER"), and the Holders as defined
herein.
W I T N E S S E T H:
WHEREAS, this Agreement is being entered into in connection
with the closing under the Merger Agreement referred to below;
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises, representation, warranties, covenants and agreements
contained herein, the parties hereto, intending to be legally bound
hereby, agree as follows:
Definitions
. Definitions. Terms defined in the Agreement and Plan of Merger dated
as of F ebruary 6, 1997 among the Issuer, Revco D.S., Inc., a Delaware
corporation, and North Acquisition Corp., a Delaware corporation, are used
herein as defined therein. In addition, the following terms, as used herein,
shall have the following respective meanings:
"COMMISSION" means the Securities and Exchange Commission or any
successor governmental body or agency.
"COMMON STOCK" means the common stock, par value $.01 per share, of the
Issuer.
"DEMAND REGISTRATION" has the meaning ascribed thereto in Section 2.02
(a)(i).
"DEMAND REQUEST" has the meaning ascribed thereto in Section 2.02(a).
"DISADVANTAGEOUS CONDITION" has the meaning ascribed thereto in Section
2.04.
"HOLDER" means a person who owns Registrable Securities and is either
(i) an Investor or (ii) a Person that (A) has agreed to be bound by the terms of
this Agreement as if such Person were an Investor and (B) is (1) upon the death
of any Investor, the executor of the estate of such Investor or such Investor's
heirs, devisees, legatees or assigns, (2) upon the disability of any Investor,
any guardian or conservator of such Investor or (3) a general or limited partner
of Zell/Chilmark that has received Registrable Securities pursuant to the
distribution to such partners of Registrable Securities in accordance with the
agreement of limited partnership governing the rights of such partners.
"HOLDERS' AGENT" means each of Magten, the Zell Holders' Agent and each
Revco Individual Holder, as the case may be.
"INVESTOR" means each Person listed on Schedule I hereto.
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"MAGTEN" means Magten Asset Management Corporation.
"PERMITTED HOLDER" means each of (i) the Zell Holders' Agent (or one
representative of the Zell Holders that (x) is designated by Zell Holders that
hold a majority of the Registrable Securities proposed to be sold by Zell
Holders in the applicable offering and (y) is reasonably acceptable to the
Issuer), (ii) Magten and (iii) one representative of the Revco Individual
Holders that is reasonably acceptable to the Issuer, as the case may be.
"1933 ACT" means the Securities Act of 1933, as amended.
"REGISTRABLE SECURITIES" means Common Stock acquired by the Holders
pursuant to the Merger (and any shares of stock or other securities into which
or for which such Common Stock may hereafter be changed, converted or exchanged
and any other shares or securities issued to Holders of such Common Stock (or
such shares of stock or other securities into which or for which such shares are
so changed, converted or exchanged) upon any reclassification, share
combination, share subdivision, share dividend, share exchange, merger,
consolidation or similar transaction or event). As to any particular
Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities as soon as (i) such Registrable Securities have been sold
or otherwise disposed of pursuant to a registration statement that was filed
with the Commission in accordance with this Agreement and declared effective
under the 1933 Act, (ii) based on an opinion of counsel or a no-action letter of
the Commission, in either case reasonably acceptable to the Issuer (and, in the
case of Registrable Securities held by a Zell Holder, reasonably acceptable to
the Zell Holders' Agent), such Registrable Securities are eligible for immediate
sale pursuant to Rule 144 or Rule 145 (whether or not subject to applicable
volume limitations thereunder), provided that, notwithstanding such opinion or
no-action letter, prior to the Shelf Termination Date (determined disregarding
clause (c) of the definition of Shelf Termination Date in Section 2.01) (x) no
Registrable Securities held by a Zell Holder shall cease to be Registrable
Securities unless all Registrable Securities held by all Zell Holders could then
be sold in a single transaction (assuming for these purposes the aggregation of
all such Registrable Securities of all Zell Holders) without violation of
applicable Rule 144 volume limitations and (y) no Registrable Securities held by
Magten shall cease to be Registrable Securities unless all Registrable
Securities held by Magten could then be sold in a single transaction without
violation of applicable Rule 144 volume limitations, (iii) they shall have been
otherwise sold, transferred or disposed of by a Holder to any Person that is not
a Holder, or (iv) they shall have ceased to be outstanding.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article II, including, without limitation, (i) the fees, disbursements and
expenses of the Issuer's counsel and accountants (including in connection with
the delivery of opinions and/or comfort letters) in connection with this
Agreement and the performance of the Issuer's obligations hereunder; (ii) all
expenses, including filing fees, in connection with the preparation, printing
and filing of one or more registration statements hereunder; (iii) the cost of
printing or producing any agreements among underwriters, underwriting
agreements, and blue sky or legal investment memoranda; (iv) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the securities to be
disposed of; (v) transfer agents' and registrars' fees and expenses in
connection with such offering; (vi) all security engraving and security printing
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expenses; (vii) all fees and expenses payable in connection with the listing of
the Registrable Securities on any securities exchange or automated interdealer
quotation system on which the Common Stock is then listed; and (viii) all
reasonable fees and expenses of one legal counsel for the Holders in connection
with each of the Required Shelf Registration and the Demand Registration, which
legal counsel shall be selected by Holders owning a majority of the Registrable
Securities then being registered; provided that Registration Expenses shall
exclude (x) all underwriting discounts and commissions, selling or placement
agent or broker fees and commissions, and transfer taxes, if any, in connection
with the sale of any securities, (y) the fees and expenses of counsel for any
Holder (other than pursuant to clause (viii)) and (z) all costs and expenses of
the Issuer incurred as contemplated in Section 2.06(g).
"REQUIRED SHELF REGISTRATION" has the meaning ascribed thereto in
Section 2.01.
"REVCO INDIVIDUAL HOLDER" means each Holder that immediately prior to
the Effective Time was an officer or director of Revco and each transferee
thereof (contemplated in the definition of "Holder") that is a Holder.
"RULE 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the 1933 Act.
"RULE 145" means Rule 145 (or any successor rule to similar effect)
promulgated under the 1933 Act.
"RULE 415 OFFERING" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated
under the 1933 Act.
"SELLING HOLDER" means any Holder who sells Registrable Securities
pursuant to a public offering registered hereunder.
"SHELF REGISTRATION" means the registration under the 1933 Act of a
Rule 415 Offering.
"SHELF REGISTRATION STATEMENT" means a registration statement intended
to effect a Shelf Registration.
"ZELL HOLDER" means Zell/Chilmark, any Affiliate of Zell/Chilmark that
is a Holder, and each partner of Zell/Chilmark referred to in clause (C) of the
definition of "Holder."
"ZELL HOLDERS' AGENT" has the meaning ascribed thereto in Section 3.11.
. Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Appendix A, and
references to the parties shall mean the parties to this Agreement.
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REGISTRATION RIGHTS
. Shelf Registration. If requested by any Holder, as soon as
practicable (but in any event not more than 10 days) after the date of this
Agreement, the Issuer shall prepare and file with the Commission a Shelf
Registration Statement on an appropriate form that shall include all
Registrable Securities, and may include securities of the Company for sale for
the Company's own account (the "REQUIRED SHELF REGISTRATION"). The Issuer
shall use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective within 15 days after the public release by
the Issuer of the financial results of the Issuer and Revco referred to in
Section 5.20 of the Merger Agreement. Notwithstanding anything else contained
in this Agreement, the Issuer shall only be obligated to keep such Shelf
Registration Statement effective until the earliest of (a) 12 months after the
date such Shelf Registration Statement has been declared effective, provided
that such 12-month period shall be extended by (i) the length of any period
during which the Issuer delays in maintaining the Shelf Registration Statement
current pursuant to Section 2.04, (ii) the length of any period (in which such
Shelf Registration Statement is required to be effective hereunder) during
which such Shelf Registration Statement is not maintained effective, and (iii)
such number of days that equals the number of days elapsing from (x) the date
the written notice contemplated by Section 2.06 (e) below is given by the
Issuer to (y) the date on which the Issuer delivers to the Holders of
Registrable Securities the supplement or amendment contemplated by Section 2.06
(e) below, (b) such time as all Registrable Securities have been sold or
disposed of thereunder or sold, transferred or otherwise disposed of to a
person that is not a Holder and (c) such time as all securities that were
Registrable Securities on the date hereof have ceased to be Registrable
Securities (the earliest of (a), (b) and (c) being the "Shelf Termination
Date"). The Required Shelf Registration shall not be counted as a Demand
Registration for purposes of Section 2.02 of this Agreement.
. Demand Registration. Upon written notice to the Issuer from one or
more Holders at any time after the Shelf Termination Date (but not later than
the date that is 180 days after the Shelf Termination Date) (the "DEMAND
REQUEST") requesting that the Issuer effect the registration under the 1933 Act
of any or all of the Registrable Securities held by such requesting Holders,
which notice shall specify the intended method or methods of disposition of
such Registrable Securities, the Issuer shall prepare and, within 60 days after
such request, file with the Commission a registration statement with respect to
such Registrable Securities and thereafter use its reasonable best efforts to
cause such registration statement to be declared effective under the 1933 Act
for purposes of dispositions in accordance with the intended method or methods
of disposition stated in such request. Notwithstanding any other provision of
this Agreement to the contrary:
(i) the Holders may collectively exercise their rights to request
registration under this Section 2.02(a) on not more than one occasion (such
registration being referred to herein as the "DEMAND REGISTRATION");
(ii) the Issuer shall not be required to effect the Demand Registration
hereunder unless the aggregate number of Registrable Securities to be
registered pursuant to the Demand Registration is equal to or more than
3,000,000 shares;
(iii) the method of disposition requested by Holders in connection with
any Demand Registration may not, without the Issuer's written consent, be a
Rule 415 Offering; and
(iv) the Issuer shall not be required to effect the Demand Registration
hereunder if all securities that were Registrable Securities on the date hereof
have ceased to be Registrable Securities.
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(b) Notwithstanding any other provision of this Agreement
to the contrary, a Demand Registration requested by Holders pursuant to this
Section 2.02 shall not be deemed to have been effected, and, therefore, not
requested and the rights of each Holder shall be deemed not to have been
exercised for purposes of paragraph (a) above, if such Demand Registration has
not become effective under the 1933 Act or if such Demand Registration, after
it became effective under the 1933 Act, was not maintained effective under the
1933 Act (other than as a result of any stop order, injunction or other order or
requirement of the Commission or other government agency or court solely on the
account of a material misrepresentation or omission of a Holder) for at least 30
days (or such shorter period ending when all the Registrable Securities covered
thereby have been disposed of pursuant thereto) and, as a result thereof, the
Registrable Securities requested to be registered cannot be distributed in
accordance with the plan of distribution set forth in the related registration
statement. So long as a Demand Request is made by the Holders within the
180-day period referred to in Section 2.02(a), the Holders shall not lose their
right to their Demand Registration under Section 2.02 if the Demand Registration
related to such Demand Request is delayed or not effected in the circumstances
set forth in this clause (b).
(c) The Issuer shall have the right to cause the
registration of additional equity securities for sale for the account of the
Issuer in the registration of Registrable Securities requested by the Holders
pursuant to Section 2.02(a) above; provided that if such Holders are advised in
writing (with a copy to the Issuer) by the lead or managing underwriter referred
to in Section 2.03(b) that, in such underwriter's good faith view, all or a part
of such Registrable Securities and additional equity securities cannot be sold
and the inclusion of such Registrable Securities and additional equity
securities in such registration would be likely to have an adverse effect on the
price, timing or distribution of the offering and sale of the Registrable
Securities and additional equity securities then contemplated, then the number
of securities that can, in the good faith view of such underwriter, be sold in
such offering without so adversely affecting such offering shall be allocated
pro rata among the requesting Holders and the Issuer on the basis of the
relative number requested to be included therein by the Issuer and each such
Holder (in which case Section 2.02(a)(ii) shall be disregarded for purposes of
such Demand Registration); provided that in the event such a pro rata allocation
shall be made in connection with the Demand Request, the remaining Holders shall
be entitled to request one additional Demand Registration (without needing to
make a Demand Request therefor within the 180-day period referred to in Section
2.02(a) and disregarding Section 2.02(a)(ii) for purposes of such additional
Demand Registration); provided further that in conection with such additional
Demand Registration, if any, the Issuer may not include additional securities
therein for its own account if such inclusion would result in any reduction in
the Registrable Securities proposed to be sold therein by the Holders. The
Holders of the Registrable Securities to be offered pursuant to paragraph (a)
above may require that any such additional equity securities be included by the
Issuer in the offering proposed by such Holders on the same conditions as the
Registrable Securities that are included therein.
(d) Within 7 days after delivery of a Demand Request by a
Holder, the Issuer shall provide a written notice to each Holder (or, if so
requested by the Issuer after appropriate notice to the Zell Holders' Agent by
the Issuer, the Zell Holders' Agent shall provide written notice to each Zell
Holder), advising such Holder of its right to include any or all of the
Registrable Securities held by such Holder for sale pursuant to the Demand
Registration and advising such Holder of procedures to enable such Holder to
elect to so include Registrable Securities for sale in the Demand Registration.
Any Holder may, within 7 days of delivery to such Holder of a notice pursuant to
this Section 2.02(d), elect to so include Registrable Securities in the Demand
Registration by written notice to such effect to the Issuer specifying the
number of Registrable Securities desired to be so included by such Holder. (e)
1Section .2 . Other Matters In Connection With Registrations.
Each Zell Holder shall keep the Zell Holders' Agent informed promptly (x) of the
name, address and other contact information of such Zell Holder, (y) of the
number of Registrable Securities held from time-to-time by such Zell Holder, and
(z) of each sale, transfer or other disposition of Registrable Securities
(including the number of shares sold) by each such Zell Holder. Each Holders'
Agent shall keep the Issuer informed promptly (x) of the name, address and other
contact information of each Holder for whom such Holders' Agent is acting as
agent hereunder (or, of itself, in the case of each Revco Individual Holder),
(y) of the number of Registrable Securities held from time-to-time by each such
Holder, and (z) of each sale, transfer or other disposition of Registrable
Securities (including the number of shares sold) by each such Holder.
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<PAGE> 6
(a) In the event that any public offering pursuant to this
Agreement shall involve, in whole or in part, an underwritten offering, the
Issuer shall have the right to designate an underwriter or underwriters as the
lead or managing underwriters of such underwritten offering who shall be
reasonably acceptable to Holders owning a majority of the Registrable Securities
proposed to be sold therein. (b) 1 Section .3 . Certain Delay Rights.
Notwithstanding any other provision of this Agreement to the contrary, if at any
time while the Required Shelf Registration is effective the Issuer provides
written notice to each Holder (whether by notice directly to such Holder or
through the Holders' Agent acting as agent for such Holder hereunder) that in
the Issuer's good faith and reasonable judgment it would be materially
disadvantageous to the Issuer (because the sale of Registrable Securities
covered by such registration statement or the disclosure of information therein
or in any related prospectus or prospectus supplement would materially interfere
with any acquisition, financing or other material event or transaction in
connection with which a registration of securities under the 1933 Act for the
account of the Issuer is then intended or the public disclosure of which at the
time would be materially prejudicial to the Issuer) (a "DISADVANTAGEOUS
CONDITION") for sales of Registrable Securities thereunder to then be permitted,
and setting forth the general reasons for such judgment, the Issuer may refrain
from maintaining current the prospectus contained in the Shelf Registration
Statement until such Disadvantageous Condition no longer exists (notice of which
the Issuer shall promptly deliver to each Holder (directly or through the
applicable Holders' Agent)). Furthermore, notwithstanding anything else
contained in this Agreement, with respect to any registration statement filed,
or to be filed, pursuant to Section 2.02, if the Issuer provides written notice
to each Holder (whether by notice directly to such Holder or through the
Holders' Agent acting as agent for such Holder hereunder) that in the Issuer's
good faith and reasonable judgment it would be materially disadvantageous to the
Issuer (because of a Disadvantageous Condition) for such a registration
statement to be maintained effective, or to be filed and become effective, and
setting forth the general reasons for such judgment, the Issuer shall be
entitled to cause such registration statement to be withdrawn or the
effectiveness of such registration statement terminated, or, in the event no
registration statement has yet been filed, shall be entitled not to file any
such registration statement, until such Disadvantageous Condition no longer
exists Holder (notice of which the Issuer shall promptly deliver to each Holder
(directly or through the applicable Holders' Agent)). With respect to each
Holder, upon the receipt by such Holder of any such notice of a Disadvantageous
Condition (directly from the Issuer or through the applicable Holders' Agent)
(i) in connection with the Required Shelf Registration , such Holder shall
forthwith discontinue use of the prospectus and any prospectus supplement under
such registration statement and shall suspend sales of Registrable Securities
until such Disadvantageous Condition no longer exists and (ii) in connection
with the Required Shelf Registration or the Demand Registration, as applicable,
if so directed by the Issuer by notice as aforesaid, such Holder will deliver to
the Issuer all copies, other than permanent file copies then in such Holder's
possession, of the prospectus and prospectus supplements then covering such
Registrable Securities at the time of receipt of such notice as aforesaid.
Notwithstanding anything else contained in this Agreement, (x) neither the
filing nor the effectiveness of any registration statement under Section 2.02
may be delayed for more than a total of 60 days pursuant to this Section 2.04
and (y) the maintaining current of a prospectus (and the suspension of sales of
Registrable Securities) in connection with the Required Shelf Registration may
not be delayed under this Section 2.04 for more than a total of 60 days in any
six-month period.
ARTICLE 1Section .4 . Except as provided herein, the Issuer shall
pay all Registration Expenses with respect to each registration hereunder.
Notwithstanding the foregoing, each Holder and the Issuer shall be responsible
for its own internal administrative and similar costs, which shall not
constitute Registration Expenses, each Holder shall be responsible for the
legal fees and expenses of its own counsel (except as provided in clause (viii)
of the definition of Registration Expenses), (iii) each Holder shall be
responsible for all underwriting discount and commissions, selling or placement
agent or broker fees and commissions, and transfer taxes, if any, in connection
with the sale of securities by such Holder, and (iv) the Holders shall be
jointly and severally responsible for all out-of-pocket costs and expenses of
the Issuer and its officers and employees incurred in connection with providing
the assistance and/or attending analyst or investor presentations or any "road
show" undertaken in connection with the registration and/or marketing of any
Registrable Securities as contemplated in Section 2.06(g).
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<PAGE> 7
ARTICLE 1Section .5 . Registration and Qualification. If and
whenever the Issuer is required to effect the registration of any Registrable
Securities under the 1933 Act as provided in Sections 2.01 or 2.02, the Issuer
shall as promptly as practicable (but subject to the provisions of Sections 2.01
and 2.02):
(a) prepare, file and cause to become effective a
registration statement under the 1933 Act relating to the Registrable Securities
to be offered in accordance with the intended method of disposition thereof;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities (i) in the case of the Required Shelf
Registration, until the Shelf Termination Date and (ii) in the case of the
Demand Registration, until the earlier of such time as all Registrable
Securities proposed to be sold therein have been disposed of in accordance with
the intended methods of disposition set forth in such registration statement and
the expiration of 30 days after such registration statement becomes effective;
provided, that such 30-day period shall be extended for such number of days that
equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph (e) below is given by the Issuer to (y) the date on
which the Issuer delivers to the Holders of Registrable Securities the
supplement or amendment contemplated by paragraph (e) below;
(c) furnish to the Holders of Registrable Securities and
to any underwriter of such Registrable Securities such number of conformed
copies of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each preliminary
prospectus), in conformity with the requirements of the 1933 Act, and such
documents incorporated by reference in such registration statement or
prospectus, as the Holders of Registrable Securities or such underwriter may
reasonably request;
(d) furnish to any underwriter of such Registrable
Securities an opinion of counsel for the Issuer and a "cold comfort" letter
signed by the independent public accountants who have audited the financial
statements of the Issuer included in the applicable registration statement, in
each such case covering substantially such matters with respect to such
registration statement (and the prospectus included therein) and the related
offering as are customarily covered in opinions of issuer's counsel with respect
thereto and in accountants' letters delivered to underwriters in underwritten
public offerings of securities and such other matters as such underwriters may
reasonably request;
(e) promptly notify the Selling Holders in writing at any
time when a prospectus relating to a registration pursuant to Section 2.01 or
2.02 is required to be delivered under the 1933 Act of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits 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 of any request by the Commission or any other
regulatory body or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document relating to such
offering, and in either such case, at the request of the Selling Holders prepare
and furnish to the Selling Holders a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading;
(f) use its reasonable best efforts to list all such
Registrable Securities covered by such registration on each securities exchange
and automated inter-dealer quotation system on which the Common Stock is then
listed;
(g) use reasonable efforts to assist the Holders in the
marketing of Common Stock in connection with up to two underwritten offerings
hereunder (including, to the extent reasonably consistent with work commitments,
using reasonable efforts to have officers of the Issuer attend "road shows" and
analyst or investor presentations scheduled in connection with such
registration), with all out-of-pocket costs and expenses incurred by the Issuer
or such officers in connection with such attendance or assistance to be paid by
the Holders as provided in Section 2.05; and
(h) furnish for delivery in connection with the closing of
any offering of Registrable Securities pursuant to a registration effected
pursuant to Sections 2.01 or 2.02 unlegended
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<PAGE> 8
certificates representing ownership of the Registrable Securities being sold in
such denominations as shall be requested by the Selling Holders or the
underwriters.
ARTICLE 1Section .6 . Underwriting; Due Diligence. If requested
by the underwriters for any underwritten offering of Registrable Securities
pursuant to a registration requested under this Article II, the Issuer shall
enter into an underwriting agreement with such underwriters for such offering,
which agreement will contain such representations and warranties by the Issuer
and such other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnification and contribution provisions substantially to the
effect and to the extent provided in Section 2.08, and agreements as to the
provision of opinions of counsel and accountants' letters to the effect and to
the extent provided in Section 2.06(d). Such underwriting agreement shall also
contain such representations and warranties by such Selling Holders and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnification and contribution provisions substantially to the
effect and to the extent provided in Section 2.08.
(a) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the 1933 Act
pursuant to this Article II, the Issuer shall give the Permitted Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants (the identity and number of whom shall be reasonably
acceptable to the Issuer), such reasonable and customary access to its books,
records and properties and such opportunities to discuss the business and
affairs of the Issuer with its officers and the independent public accountants
who have certified the financial statements of the Issuer as shall be necessary,
in the opinion of such Holders and such underwriters or their respective
counsel, to conduct a reasonable investigation within the meaning of the 1933
Act; provided that the foregoing shall not require the Issuer to provide access
to (or copies of) any competitively sensitive information relating to the Issuer
or its Subsidiaries or their respective businesses; provided further that (i)
each Holder and the underwriters and their respective counsel and accountants
shall have entered into a confidentiality agreement reasonably acceptable to the
Issuer and (ii) the Permitted Holders and the underwriters and their respective
counsel and accountants shall use their reasonable best efforts to minimize the
disruption to the Issuer's business and coordinate any such investigation of the
books, records and properties of the Issuer and any such discussions with the
Issuer's officers and accountants so that all such investigations occur at the
same time and all such discussions occur at the same time.
ARTICLE 1Section .7 . Indemnification and Contribution. The Issuer
agrees to indemnify and hold harmless each Selling Holder and each person, if
any, who controls each Selling Holder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or alleged untrue statement of
a material fact contained in any registration statement or any amendment
thereof, any preliminary prospectus or prospectus (as amended or supplemented if
the Issuer shall have furnished any amendments or supplements thereto) relating
to the Registrable Securities, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished to the
Issuer in writing by a Selling Holder expressly for use therein. The Issuer
also agrees to indemnify any underwriter of the Registrable Securities so
offered and each person, if any, who controls such underwriter on substantially
the same basis as that of the indemnification by the Issuer of the Selling
Holder provided in this Section 2.08(a).
(a) Each Selling Holder agrees to indemnify and hold
harmless the Issuer, its directors, the officers who sign any registration
statement and each person, if any who controls the Issuer within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or any amendment thereof, any preliminary prospectus or prospectus (as
amended or supplemented if the Issuer shall have furnished any amendments or
supplements
Page 16 of 27
<PAGE> 9
thereto) relating to the Registrable Securities, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with reference to information furnished in writing by a Selling Holder (or
any representative thereof) expressly for use in a registration statement, any
preliminary prospectus, prospectus or any amendments or supplements thereto.
Each Selling Holder also agrees to indemnify any underwriter of the Registrable
Securities so offered and each person, if any, who controls such underwriter on
substantially the same basis as that of the indemnification by such Selling
Holder of the Issuer provided in this Section 2.08(b).
(b) Each party indemnified under paragraph (a) or (b)
above shall, promptly after receipt of notice of a claim or action against such
indemnified party in respect of which indemnity may be sought hereunder, notify
the indemnifying party in writing of the claim or action; provided that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b) above except to the extent that the
indemnifying party was actually prejudiced by such failure, and in no event
shall such failure relieve the indemnifying party from any other liability that
it may have to such indemnified party. If any such claim or action shall be
brought against an indemnified party, and it shall have notified the
indemnifying party thereof, unless based on the written advice of counsel to
such indemnified party a conflict of interest between such indemnified party and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume the
defense thereof. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 2.08 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof. Any indemnifying
party against whom indemnity may be sought under this Section 2.08 shall not be
liable to indemnify an indemnified party if such indemnified party settles such
claim or action without the consent of the indemnifying party. The indemnifying
party may not agree to any settlement of any such claim or action, other than
solely for monetary damages for which the indemnifying party shall be
responsible hereunder, the result of which any remedy or relief shall be applied
to or against the indemnified party, without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld. In any
action hereunder as to which the indemnifying party has assumed the defense
thereof, the indemnified party shall continue to be entitled to participate in
the defense thereof, with counsel of its own choice, but the indemnifying party
shall not be obligated hereunder to reimburse the indemnified party for the
costs thereof.
(c) If the indemnification provided for in this Section
2.08 shall for any reason be unavailable (other than in accordance with its
terms) to an indemnified party in respect of any loss, liability, cost, claim or
damage referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, cost, claim or
damage (i) in such proportion as is appropriate to reflect the relative benefits
received by the Issuer on the one hand and the Selling Holders on the other hand
from the offering of the Registrable Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Issuer on the one hand
and the Selling Holders on the other hand in connection with the offering of the
Registrable Securities shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Registrable Securities (before
deducting expenses) received by the Issuer and the Selling Holders,
respectively, bear to the aggregate public offering price of the Registrable
Securities. The relative fault of the Issuer on the one hand and the Selling
Holders on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuer or a Selling Holder and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an indemnified party as a
result of the loss, cost, claim, damage or liability, or action in respect
thereof, referred to above in this paragraph (d) shall be deemed to include, for
purposes of this paragraph (d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. The Issuer and the Selling Holders agree that it would not be
just and equitable if contribution pursuant to this Section 2.08 were determined
by pro rata allocation or by any other method of allocation which does not take
Page 17 of 27
<PAGE> 10
account of the equitable considerations referred to in this paragraph.
Notwithstanding any other provision of this Section 2.08, no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such Selling Holder were
offered to the public exceeds the amount of any damages which such Selling
Holder 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 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(d) The obligations of the parties under this Section 2.08
shall be in addition to any liability which any party may otherwise have to any
other party.
ARTICLE 1Section .8 . Holdback Agreement. If the Demand Registration
pursuant to this Article II shall be in connection with an underwritten public
offering of Registrable Securities, each Selling Holder agrees not to effect any
sale or distribution, including any sale under Rule 144, of any equity security
of the Issuer (otherwise than through the registered public offering then being
made), within 7 days prior to or 60 days (or such lesser period as the lead or
managing underwriters may permit) after the effective date of the applicable
registration statement.
ARTICLE 2 MISCELLANEOUS
ARTICLE 2Section .1 . Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
ARTICLE 2Section .2 . Assignment. No party may assign any of its rights
or obligations hereunder by operation of law or otherwise without the prior
written consent of the other parties.
ARTICLE 2Section .3 . Amendments, Waivers, Etc. This Agreement may not
be amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
Issuer and Holders representing a majority of the Registrable Securities then
held by all Holders.
ARTICLE 2Section .4 . Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if given) by hand delivery or telecopy, or
by any courier service, such as Federal Express, providing proof of delivery.
All communications hereunder shall be delivered to the respective parties at the
address or telecopy number set forth on the signature pages hereto (unless such
contact information in the case of the Holders is updated pursuant to Section
2.03(a)).
ARTICLE 2Section .5 . Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
ARTICLE 2Section .6 . No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
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<PAGE> 11
ARTICLE 2Section .7 . No Third Party Beneficiaries. This Agreement is
not intended to be for the benefit of, and shall not be enforceable by, any
Person who or which is not a party hereto.
ARTICLE 2Section .8 . Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law thereof.
ARTICLE 2Section .9 . Jurisdiction. Each party hereby irrevocably
submits to the exclusive jurisdiction of the United States District Court for
the Southern District of New York or any state court sitting in the City of New
York, Borough of Manhattan in any action, suit or proceeding arising in
connection with this Agreement, and agrees that any such action, suit or
proceeding shall be brought only in such courts (and waives any objection based
on forum non conveniens or any other objection to venue therein); provided,
however, that such consent to jurisdiction is solely for the purpose referred to
in this Section 3.09 and shall not be deemed to be a general submission to the
jurisdiction of said Courts or in the State of New York other than for such
purposes. Each party hereto hereby waives any right to a trial by jury in
connection with any such action, suit or proceeding.
ARTICLE 2Section .10 . Descriptive Headings. The descriptive headings
used herein are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
ARTICLE 2Section .11 . Zell Holders' Agent. Each Zell Holder hereby
appoints Zell/Chilmark Fund. L.P. as its agent and attorney-in-fact (the "ZELL
HOLDERS' AGENT") for purposes of the delivery and receipt of all notices and
requests pursuant to this Agreement. The Issuer may give notice to any Zell
Holder hereunder by giving such notice directly to such Zell Holder.
Alternatively, the Issuer may request that the Zell Holders' Agent deliver to
each Zell Holder any notice given by the Issuer hereunder, in which event the
Zell Holders' Agent will promptly so give such notice to each Zell Holder.
Prompt delivery by the Zell Holders' Agent to the Zell Holders will be deemed
satisfied if delivery is made to the Zell Holders, in accordance with Section
3.04, not later than the third business day after actual receipt of the
applicable notice or document by the Zell Holders' Agent from the Issuer.
Notwithstanding anything else contained herein, the Zell Holders' Agent will not
be liable or responsible to any Person should any Zell Holder fail to act in
accordance with any notice so given to such Zell Holder hereunder.
ARTICLE 2Section .12 . Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same Agreement.
Page 19 of 27
<PAGE> 12
IN WITNESS WHEREOF, the Issuer and the Holders have caused this Agreement
to be duly executed as of the day and year first above written.
CVS CORPORATION
By:_______________________________
Name:
Title:
Holders
ZELL/CHILMARK FUND, L.P.
By: ZC Limited Partnership, general partner
By: ZC Partnerships, general partner
By: ZC Inc., a partner
By:_________________________________
Name: Sheli Z. Rosenberg
Title: Vice President
Address: Equity Group Investments, Inc.
2 North Riverside Plaza
Suite 600
Chicago, IL 60606
MAGTEN ASSET MANAGEMENT
CORPORATION
By:_________________________________
Name: Talton R. Embry
Title: Chairman
Address: 35 East 21st Street
New York, NY 10010
Page 20 of 27
<PAGE> 13
Name: Sheli Z. Rosenberg
Address: Equity Group Investments, Inc.
2 North Riverside Plaza
Suite 600
Chicago, IL 60606
Name: Sam Zell
Address: Equity Group Investments, Inc.
2 North Riverside Plaza
Suite 600
Chicago, IL 60606
Name: Carl A. Bellini
Address: P.O. Box 153
Bath, Ohio 44210
Name: Livio M. Borghese
Address: Luma Corp.
Borghese Investments
745 Fifth Avenue, Suite 1400
New York, NY 10151
Name: William H. Campbell
Address: The University of North Carolina
at Chapel Hill
101 Beard Hall
South Columbia Street
Chapel Hill, NC 27599
Name: Rod Dammeyer
Address: Equity Group Investments, Inc.
Two North Riverside Plaza
Suite 600
Chicago, IL 60606
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<PAGE> 14
Name: Talton R. Embry
Address: Magten Asset Management
Corporation
35 East 21st Street
New York, NY 10010
Name: Ben Evans
Address: Ernst & Young
787 7th Avenue
7th Floor
New York, NY 10019
Name: John V. Guttag
Address: Massachusetts Institute of
Technology
545 Technology Square
Cambridge, MA 02139
Name: D. Dwayne Hoven
Address: 802 South Ride
Tallahassee, FL 32303
Name: Walter B. Rheinhold
Address: Varco International, Inc.
743 North Eckhoff Street
Orange, CA 92668
Name: Thomas O. Thorsen
Address: P.O. Box 764
Center Harbor, NH 03226
Name: James P. Mastrian
Address: 60 East Juniper Lane
Moreland Hills, OH 44022
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<PAGE> 1
EXHIBIT 2
AFFILIATE'S LETTER RELATING TO POOLING
FOR ZELL/CHILMARK FUND, L.P.
(Revco D.S., Inc.)
February 6, 1997
CVS Corporation
One CVS Drive
Woonsocket, RI 02895
Revco D.S., Inc.
1925 Enterprise Parkway
Twinsburg, OH 44087
Ladies and Gentlemen: Pursuant to the terms of the Agreement and Plan of
Merger dated as of February 6, 1997 (the "AGREEMENT") among CVS Corporation, a
Delaware corporation ("CVS"), Revco D.S., Inc., a Delaware corporation
("REVCO"), and North Acquisition Corp., a Delaware corporation ("MERGER
SUBSIDIARY"), Merger Subsidiary will be merged with and into Revco with Revco to
be the surviving corporation in the Merger (the "MERGER").
The undersigned represents, warrants and covenants with and to CVS and
Revco that:
(a) The undersigned understands that the Merger is intended to be
accounted for using the "pooling-of-interests" method and that such treatment
for financial accounting purposes is dependent upon the accuracy of certain of
the representations and warranties, and the undersigned's compliance with
certain of the covenants and agreements, set forth herein. Accordingly, the
undersigned will not sell, transfer or otherwise dispose of the undersigned's
interests in, or acquire or sell any options or other securities relating to
securities of CVS or Revco that would be intended to reduce the undersigned's
risk relative to, any shares of common stock of either CVS or Revco beneficially
owned by the undersigned, during the period commencing on the 30th day prior to
the effectiveness of the Merger and ending at such time as CVS publicly releases
a report (the "COMBINED FINANCIAL RESULTS REPORT") covering at least 30 days of
combined operations of CVS after the Merger; provided that the foregoing shall
not restrict the distribution after the Effective Time (as defined in the
Agreement) by the undersigned to its partners of the shares of common stock of
CVS held by the undersigned so long as (if such distribution occurs before the
date of publication of the Combined Financial Results Report) no later than the
time of such distribution each such partner shall have executed and delivered to
CVS a letter agreement in the form of this letter (but excluding this proviso).
B. The undersigned also understands that stop transfer instructions will
be given to the transfer agents of CVS and Revco in order to prevent any breach
of the covenants and agreements make by the undersigned in paragraph A,
although such stop transfer instructions will be promptly rescinded upon the
publication of the Combined Financial Results Report.
C. The undersigned understands and agrees that this letter agreement
shall apply to all shares of the capital stock of CVS and Revco that are deemed
to be beneficially owned by the undersigned pursuant to applicable federal
securities laws.
Very truly yours,
Zell/Chilmark Fund, L.P.
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<PAGE> 2
By: ZC Limited Partnership, general
partner
By: ZC Partnerships, general partner
By: ZC Inc., a partner
By: /s/ Sheli Rosenberg
-------------------
Name: Sheli Rosenberg
Title: Vice President
Accepted this 6th day of
February, 1997.
CVS CORPORATION
By: /s/ Charles Conaway
-------------------------------------
Name: Charles Conaway
Title: Chief Financial Officer
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<PAGE> 1
EXHIBIT 3
AFFILIATE'S LETTER FOR ZELL/CHILMARK FUND, L.P.
(Revco D.S., Inc.)
May 29, 1997
CVS Corporation
One CVS Drive
Woonsocket, RI 02895
Revco D.S., Inc.
1925 Enterprise Parkway
Twinsburg, OH 44087
Ladies and Gentlemen: The undersigned has been advised that as of the
date of this letter the undersigned may be deemed to be an "affiliate" of Revco
D.S., Inc., a Delaware corporation ("REVCO"), as the term "affiliate" is defined
for purposes of paragraphs (c) and (d) of Rule 145 of the rules and regulations
(the "RULES AND REGULATIONS") of the Securities and Exchange Commission (the
"COMMISSION") under the Securities Act of 1933, as amended (the "ACT"). Pursuant
to the terms of the Agreement and Plan of Merger dated as of February 6, 1997
(the "AGREEMENT") among Revco, CVS Corporation, a Delaware corporation ("CVS"),
and North Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of CVS ("MERGER SUBSIDIARY"), Merger Subsidiary will be merged with
and into Revco with Revco to be the surviving corporation in the merger (the
"MERGER").
As a result of the Merger, the undersigned will receive shares of
Common Stock, par value $0.01 per share, of CVS (the "CVS COMMON STOCK") in
exchange for shares owned by the undersigned of Common Stock, par value $0.01
per share, of Revco (the "REVCO COMMON STOCK").
The undersigned represents, warrants and covenants to CVS and Revco
that as of the date the undersigned receives any CVS Common Stock as a result
of the Merger:
A. The undersigned shall not make any sale,
transfer or other disposition of the CVS Common Stock in violation of the Act or
the Rules and Regulations.
B. The undersigned has carefully read this
letter and the Agreement and discussed the requirements of such documents and
other applicable limitations upon the undersigned's ability to sell, transfer or
otherwise dispose of the CVS Common Stock to the extent the undersigned felt
necessary with the undersigned's counsel or counsel for Revco.
C. The undersigned has been advised that the
issuance of CVS Common Stock to the undersigned pursuant to the Merger will be
registered with the Commission under the Act on a Registration Statement on Form
S-4. However, the undersigned has also been advised that, since at the time the
Merger is submitted for a vote of the stockholders of Revco, the undersigned may
be deemed to be an affiliate of Revco, the undersigned may not sell, transfer or
otherwise dispose of the CVS Common Stock issued to the undersigned in the
Merger unless (i) such sale, transfer or other disposition has been registered
under the Act, (ii) such sale, transfer or other disposition is made in
conformity with Rule 145 promulgated by the Commission under the Act, or (iii)
in the opinion of counsel reasonably acceptable to CVS, or pursuant to a "no
action" letter obtained by the undersigned from the staff of the Commission,
such sale, transfer or other disposition is otherwise exempt
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<PAGE> 2
from registration under the Act. Notwithstanding the foregoing, assuming the
undersigned's partners do not vote in connection with the Merger, the
distribution (in accordance with the terms of the undersigned's limited
partnership agreement) after the Effective Time (as defined in the Agreement)
by the undersigned to its partners of the shares of CVS Common Stock held by the
undersigned shall be understood to be exempt from registration under the Act.
D. The undersigned understands that CVS is
under no obligation to register the sale, transfer or other disposition of the
CVS Common Stock by the undersigned or on the undersigned's behalf under the Act
or to take any other action necessary in order to enable such sale, transfer or
other disposition by the undersigned in compliance with an exemption from such
registration, other than pursuant to and in accordance with the Registration
Rights Agreement dated as of ___________, 1997 between CVS and the holders
referred to therein.
E. The undersigned also understands that there
will be placed on the certificates for the CVS Common Stock issued to the
undersigned or any substitution thereof, a legend stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE WITH THE TERMS OF A
LETTER AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF AND CVS CORPORATION, A
COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF CVS
CORPORATION."
F. The undersigned also understands that if the
undersigned distributes shares of CVS Common Stock to its partners as provided
in the last sentence of paragraph C, CVS reserves the right to put the following
legend on the certificates issued to the undersigned's partners:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED
SUCH SECURITIES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS (I) SUCH SALE,
TRANSFER OR OTHER DISPOSITION HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, (II) SUCH SALE, TRANSFER OR OTHER DISPOSITION IS MADE IN CONFORMITY WITH
RULE 145 PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SUCH ACT,
OR (III) IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO CVS CORPORATION, OR
PURSUANT TO A "NO ACTION" LETTER OBTAINED BY THE HOLDER HEREOF FROM THE STAFF
OF THE SECURITIES AND EXCHANGE COMMISSION, SUCH SALE, TRANSFER OR OTHER
DISPOSITION IS OTHERWISE EXEMPT FROM REGISTRATION UNDER SUCH ACT."
It is understood and agreed that the legends set forth in paragraphs E and
F above [and any stop transfer legends pursuant to paragraph G](1) shall be
removed by delivery of substitute certificates without such legend if (i) the
securities represented thereby have been registered for sale by the undersigned
under the 1933 Act or (ii) CVS has received either an opinion of counsel, which
opinion and counsel shall be reasonably satisfactory to CVS, or a "no-action"
letter obtained by the undersigned from the staff of the Commission, to the
effect that the restrictions imposed by Rule 145 under the Act no longer apply
to the undersigned.
[G. The undersigned understands that the Merger is intended to be
accounted for using the "pooling-of-interests" method and that such treatment
for accounting purposes is dependent upon the accuracy of certain of the
representations and warranties, and the undersigned's compliance with certain
of the covenants and agreements,
(1) To be deleted if you have executed and delivered to CVS and Revco
an affiliate's letter in the form of Exhibit C-1 to the Agreement.
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<PAGE> 3
set forth herein. Accordingly, the undersigned will not sell, transfer or
otherwise dispose of the undersigned's interests in, or acquire or sell any
options or other securities relating to securities of CVS or Revco that would be
intended to reduce the undersigned's risk relative to, any shares of common
stock of either CVS or Revco beneficially owned by the undersigned, during the
period commencing on the 30th day prior to the effectiveness of the Merger and
ending at such time as CVS publicly releases a report (the "COMBINED FINANCIAL
RESULTS REPORT") covering at least 30 days of combined operations of CVS after
the Merger. The undersigned also understand that stop transfer instructions
will be given to the transfer agents of CVS and Revco in order to prevent any
breach of the covenants and agreements the undersigned makes in this Section G,
although such stop transfer instructions will be promptly rescinded upon the
publication of the Combined Financial Results Report.](2)
H. The undersigned further understands and agrees that the
representations, warranties, covenants and agreements of the undersigned set
forth herein are for the benefit of CVS, Revco and the Surviving Corporation
(as defined in the Merger Agreement) and will be relied upon by such entities
and their respective counsel and accountants.
I. The undersigned understands and agrees that this letter agreement
shall apply to all shares of the capital stock of CVS and Revco that are deemed
to be beneficially owned by the undersigned pursuant to applicable federal
securities laws.
Execution of this letter should not be considered an admission on the part
of the undersigned that the undersigned is an "affiliate" of Revco as described
in the first paragraph of this letter or as a waiver of any rights the
undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
Very truly yours,
Zell/Chilmark Fund, L.P.
By: ZC Limited Partnership, general partner
By: ZC Partnerships, general partner
By: ZC Inc., a partner
By: _______________________
Name:
Title:
Accepted this ____ day of
____________, 1997.
CVS CORPORATION
By:_________________________
Name:
Title:
(2) To be deleted if you have executed and delivered to CVS and Revco an
affiliate's letter in the form of Exhibit C-1 to the Agreement.
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