As filed with the Securities and Exchange Commission on May 11, 1999
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CVS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 5912 05-0494040
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Identification No.)
organization) Classification Code Number)
One CVS Drive
Woonsocket, RI 02895
(401) 765-1500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Charles C. Conaway
President and Chief Operating Officer
One CVS Drive
Woonsocket, RI 02895
(401) 765-1500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Deanna L. Kirkpatrick
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: []
CALCULATION OF REGISTRATION FEE
<TABLE>
Proposed Maximum
Title of Each Class Amount to be Proposed Maximum Aggregate Offering Amount of
of Securities to be Registered Registered Offering Price(1) Price(1) Registration Fee(2)
------------------------------ ---------- ----------------- ------------------- -------------------
<S> <C> <C> <C> <C>
5 1/2% Exchange Notes due February $300,000,000 100% $300,000,000 $83,400
15, 2004.............................
</TABLE>
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee.
(2) Calculated pursuant to Rule 457(f).
-----------------------
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.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED May 11, 1999
PROSPECTUS
CVS Corporation
Offer to Exchange
5 1/2% Notes Due February 15, 2004
for
5 1/2% Exchange Notes Due February 15, 2004
which have been registered
under the Securities Act of 1933, as amended
$300,000,000 aggregate principal amount outstanding
We are offering to exchange up to $300,000,000 of our 5 1/2% Exchange Notes
due February 15, 2004 (the "new notes"), which have been registered under the
Securities Act of 1933 for our existing 5 1/2% Notes due February 15, 2004 (the
"old notes"). We are offering to issue the new notes to satisfy our obligations
contained in the registration rights agreement entered into when the old notes
were sold in transactions pursuant to Rule 144A under the Securities Act and
therefore not registered with the SEC.
The terms of the new notes are identical in all material respects to the
terms of the old notes, except that the new notes have been registered under the
Securities Act, and certain transfer restrictions and registration rights
relating to the old notes do not apply to the new notes.
To exchange your old notes for new notes:
o you must complete and send the letter of transmittal that accompanies
this prospectus to the exchange agent, The Bank of New York, by 5:00
p.m., New York time, on , 1999.
o If your old notes are held in book-entry form at The Depository Trust
Company ("DTC"), you must instruct DTC through your signed letter of
transmittal that you wish to exchange your old notes for new notes.
When the exchange offer closes, your DTC account will be changed to
reflect your exchange of old notes for new notes.
o You should read the section called "The Exchange Offer" for additional
information on how to exchange your old notes for new notes.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the notes to be issued in the exchange
offer or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is , 1999.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the U.S. Securities and Exchange Commission. Our SEC filings
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. In addition, because our common stock is listed on the
New York Stock Exchange, reports and other information concerning CVS can also
be inspected at the office of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
This prospectus is a part of a registration statement filed by us with the
SEC under the Securities Act. As allowed by SEC rules, this prospectus does not
contain all of the information that you can find in the registration statement
or the exhibits to the registration statement.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference
includes important business and financial information that is not included in
this document and is an important part of this prospectus, and information that
we file later with the SEC will automatically update and supersede the
information in this prospectus. We incorporate by reference the documents listed
below (SEC File No. 1-1011) and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until the termination of
the offering under this prospectus.
(1) CVS' Annual Report on Form 10-K........... Year ended December 31, 1998;
(2) CVS' Quarterly Report on Form 10-Q........ Filed on May 11, 1999; and
(3) CVS' Current Reports on Form 8-K.......... Filed on February 11, 1999,
February 9, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Nancy R. Christal
Vice President, Investor Relations
CVS Corporation
670 White Plains Road, Suite 210
Scarsdale, New York, 10583
(800) 201-0938
To obtain timely delivery of copies of any such filings, you must make your
request no later than .
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THE COMPANY
CVS Corporation is a leader in the chain drugstore industry in the United
States with approximately $15.3 billion in revenue in 1998. As of March 27,
1999, we operated 4,096 stores in 24 states in the Northeast, Mid-Atlantic,
Midwest and Southeast regions and in the District of Columbia, making us one of
the largest drugstore chains in the nation in terms of store count. Our stores
are well positioned, operating in 66 of the top 100 drugstore markets in the
country. We have the number one market share position in six of the top ten
drugstore markets. We are also among the industry leaders in terms of store
productivity and operating profit margin.
The pharmacy business, which represented approximately 58% of our total
sales in 1998, is a primary focus of our operations. In 1998, we dispensed over
251 million prescriptions, making us the largest drugstore chain in the United
States in terms of prescriptions filled and pharmacy sales. We believe that our
pharmacy operations will continue to represent a critical part of our business
and strategy due to favorable trends, including:
o an aging American population,
o greater responsibility being borne by Americans for their healthcare,
o an increasing demand for retail formats that provide easy access and
convenience,
o discovery of new and better drug therapies, and
o the need for cost effective healthcare solutions.
In addition to prescription drugs and services, we offer a broad selection
of general merchandise, presented in a well-organized fashion, in stores that
are designed to be customer-friendly, inviting and easy to shop. Merchandise
categories include, among other things, over-the-counter drugs, greeting cards,
film and photo-finishing services, beauty and cosmetics, seasonal merchandise
and convenience foods. We also offer over 1,400 products under the CVS private
label brand. Total front store sales, which are generally higher margin than
pharmacy sales, represented approximately 42% of total sales in 1998.
On May 29, 1997, CVS merged with Revco D.S., Inc. in an exchange of stock
that was accounted for as a pooling of interests. The merger resulted in CVS
becoming one of the largest chain drugstore companies in the United States based
on store count.
On March 31, 1998, CVS merged with Arbor Drugs, Inc. in an exchange of
stock that was also accounted for as a pooling of interests. Arbor is the
leading drugstore chain in southeastern Michigan in terms of store count and
sales volume. The Arbor merger strengthened CVS' position as one of the nation's
leading chain drugstore companies by bringing CVS into a high-growth, contiguous
geographic market where CVS previously had no presence.
Our principal executive offices are located at One CVS Drive, Woonsocket,
Rhode Island 02895, telephone (401) 765-1500.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
In the documents we have incorporated by reference into this prospectus, we
make forward-looking statements. These statements are subject to risks and
uncertainties. Forward-looking statements include the information concerning:
o our future operating performance, including sales and earnings per
common share growth and cost savings and synergies following the Revco
and Arbor mergers;
o our ability to elevate the performance level of Revco stores following
the Revco merger;
o our belief that we have sufficient cash flows to support working
capital needs, capital expenditures and debt service requirements;
o our belief that we can continue to improve operating performance by
relocating existing stores to freestanding locations;
o our belief that we can continue to reduce selling, general and
administrative expenses as a percentage of net sales;
o our belief that we can continue to reduce inventory levels; and
o our belief that we will incur only minimal business disruption as a
result of the Year 2000 issue.
In addition, statements that include the words "believes," "expects,"
"anticipates," "intends," "estimates" or other similar expressions are
forward-looking statements. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
You should understand that the following important factors, in addition to
those discussed elsewhere in the documents which are incorporated by reference
could affect the future results of the Company and could cause those results to
differ materially from those expressed in our forward-looking statements.
What Factors Could Affect the Outcome of Our Forward-Looking Statements?
Industry and Market Factors
o changes in economic conditions generally in the markets served by CVS;
o future federal and/or state regulatory and legislative actions
(including accounting standards and taxation requirements) affecting
CVS and/or the chain-drug industry;
o consumer preferences and spending patterns;
o competition from other drugstore chains; from alternative distribution
channels such as supermarkets, membership clubs, mail order companies
and internet companies (e-commerce) and from third party plans; and
o the continued efforts of health maintenance organizations, managed
care organizations, pharmacy benefit management companies and other
third party payors to reduce prescription drug costs.
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Operating Factors
o our ability to combine the businesses of CVS, Revco and Arbor while
maintaining current operating performance levels during the
integration period(s) and the challenges inherent in diverting the
Company's management focus and resources from other strategic
opportunities and from operational matters for an extended period of
time;
o our ability to implement new computer systems and technologies;
o our ability to continue to secure suitable new store locations on
favorable lease terms as we seek to open new stores and relocate a
portion of our existing store base to freestanding locations;
o the creditworthiness of the purchasers of former businesses whose
store leases are guaranteed by CVS;
o fluctuations in the cost and availability of inventory and our ability
to maintain favorable supplier arrangements and relationships;
o our ability to attract, hire and retain suitable pharmacists and
management personnel;
o our ability and the ability of our key business partners to replace,
modify or upgrade computer systems in ways that adequately address the
Year 2000 issue. Given the numerous and significant uncertainties
involved, there can be no assurances that Year 2000 related estimates
and anticipated results will be achieved as actual results could
differ materially;
o our ability to establish effective advertising, marketing and
promotional programs (including pricing strategies) in the different
geographic markets in which we operate; and
o our relationships with suppliers.
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new notes.
The new notes will be exchanged for old notes as described in this prospectus
upon our receipt of old notes in like principal amount. We will cancel all of
the old notes surrendered in exchange for the new notes.
Our net proceeds from the sale of the old notes were approximately $297
million, after deduction of the initial purchasers' discounts and commissions
and other expenses of the offering. We used such net proceeds to repay
outstanding commercial paper.
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SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
Our selected consolidated financial and operating data as of and for the
years ended December 31, 1996, 1997 and 1998 has been derived from our
consolidated financial statements, which have been audited by KPMG LLP,
independent accountants. Historical results should not be taken as necessarily
indicative of the results that may be expected for any future period. You should
read this selected consolidated financial and operating data in conjunction with
our Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and
our Quarterly Report on Form 10-Q for the quarterly period ended March 27, 1999.
The selected consolidated financial and operating data as of and for the
three months ended March 27, 1998 and March 28, 1999 and for the years ended
December 31, 1994 and 1995 has been derived from our unaudited consolidated
financial statements. In the opinion of management, the consolidated financial
statements include all adjustments necessary for a fair presentation of the
results of operations, financial position, and cash flows for those periods. The
results for the three months ended March 27, 1999 are not necessarily indicative
of results that may be expected for the entire fiscal year.
<TABLE>
Years Ended December 31, Three Months Ended
------------------------------------------------------------ ---------------------
March 28, March 27,
1994 1995 1996 1997 1998 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations:(5)
Net sales.............................. $ 9,469.1 $ 10,513.1 $ 11,831.6 $ 13,749.6 $ 15,273.6 $ 3,601.5 $ 4,240.5
Gross margin(1)........................ 2,707.3 2,960.0 3,300.9 3,718.3 4,129.2 1,006.9 1,169.4
Selling, general & administrative...... 2,290.5 2,522.8 2,696.2 3,014.2 3,198.7 768.0 876.2
Merger, restructuring and other
nonrecurring charges................ -- 165.5 12.8 442.7 158.3 -- --
Operating profit(2).................... 416.8 271.7 591.9 261.4 772.2 238.9 293.2
Interest expenses, net................. 86.6 114.0 69.9 44.1 60.9 11.2 14.3
Income tax provision................... 144.3 74.3 271.0 140.8 314.9 95.7 114.3
Earnings from continuing operations
before extraordinary item(3)........ $ 185.9 $ 83.4 $ 372.4 $ 76.5 $ 396.4 $ 132.0 $ 164.6
Per Common Share Data:
Earnings from continuing operations
before extraordinary item:(3)
Basic............................... $ 0.47 $ 0.18 $ 0.98 $ 0.17 $ 0.99 $ 0.34 $ 0.41
Diluted............................. 0.47 0.18 0.95 0.16 0.98 0.33 0.40
Cash dividends per common share........ 0.7600 0.7600 0.2200 0.2200 0.2250 0.0550 0.0575
Other Operating Data:
Ratio of earnings to fixed charges(4).. 2.68x 1.67x 3.96x 2.02x 3.98x 5.13x 5.39x
Pharmacy sales as a percentage of
total sales(6)...................... -- -- 51.6% 54.7% 57.6% 56.4% 58.7%
Total same store sales(6).............. -- -- 8.9% 9.7% 10.8% 7.4% 13.4%
Pharmacy same store sales(6)........... -- -- 13.5% 16.5% 16.5% 14.5% 20.4%
Third party sales as percentage of
pharmacy sales(6)................... -- -- 79.8% 80.8% 83.7% 82.8% 85.3%
Number of stores (at end of period).... 3,617 3,715 4,204 4,094 4,122 4,064 4,096
Balance Sheet Data: (At End of Period)
Working capital........................ $ 1,552.7 $ 1,429.6 $ 1,540.3 $ 981.5 $ 1,165.9 $ 1,086.5 $ 1,508.6
Total assets........................... 7,202.9 6,614.4 6,014.9 5,978.9 6,736.2 6,176.2 6,907.0
Total long-term debt................... 1,012.3 1,056.3 1,204.8 290.4 275.7 290.1 575.5
Total shareholders equity.............. 3,341.4 2,567.4 2,413.8 2,614.6 3,110.6 2,743.0 3,264.2
</TABLE>
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(1) Gross margin includes the pre-tax effect of the following non-recurring
charges: (i) in 1998, $10.0 million ($5.9 million after-tax) related to the
markdown of non-compatible Arbor merchandise and (ii) in 1997, $75.0
million ($49.9 million after-tax) related to the markdown of non-compatible
Revco merchandise.
(2) Operating profit includes the pre-tax effect of the charges discussed in
Note (1) above and the following merger, restructuring and other
non-recurring charges: (i) in 1998, $158.3 million ($107.8 million
after-tax) related to the merger of CVS and Arbor, (ii) in 1997, $411.7
million ($273.7 million after-tax) related to the merger of CVS and Revco
and $31.0 million ($19.1 million after-tax) related to the restructuring of
Big B, Inc., (iii) in 1996, $12.8 million ($6.5 million after-tax) related
to the write-off of costs incurred in connection with the failed merger of
Rite Aid Corporation and Revco and (iv) in 1995, $165.5 million ($97.7
million after-tax) related to the Company's strategic restructuring program
and the early adoption of SFAS No. 121, and $49.5 million ($29.1 million
after-tax) related to the Company changing its policy from capitalizing
internally developed software costs to expensing the costs as incurred,
outsourcing certain technology functions and retaining certain employees
until their respective job functions were transitioned.
(3) Earnings from continuing operations before extraordinary item and earnings
per common share from continuing operations before extraordinary item
includes the after-tax effect of the charges discussed in Notes (1) and (2)
above and a $121.4 million ($72.1 million after-tax) gain realized during
1996 upon the sale of certain equity securities received from the sale of
Marshalls.
(4) For purposes of computing our ratio of earnings to fixed charges, earnings
consist of earnings from continuing operations before income taxes and
extraordinary item and fixed charges (excluding capitalized interest).
Fixed charges consist of interest, capitalized interest and one-third of
rental expense, which is deemed representative of the interest factor.
(5) Prior to the mergers, Arbor's fiscal year ended on July 31 and Revco's
fiscal year ended on the Saturday closest to May 31. In recording the
business combinations, Arbor's and Revco's historical stand-alone
consolidated financial statements have been restated to a December 31
year-end, to conform to CVS' fiscal year-end. As permitted by the rules and
regulations of the Securities and Exchange Commission, Arbor's fiscal year
ended July 31, 1995 and Revco's fiscal year ended June 3, 1995 have been
combined with CVS' fiscal year ended December 31, 1994.
(6) Comparable data is unavailable for certain periods prior to 1996 due to the
Company's mergers and acquisitions subsequent to such periods.
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DESCRIPTION OF NOTES
The notes were issued under an indenture dated as of February 11, 1999
between CVS and The Bank of New York as trustee. The following summary
highlights certain material terms of the indenture. Because this is a summary,
it does not contain all of the information that is included in the indenture.
You should read the entire indenture, including the definitions of certain terms
used below. The indenture is subject to and governed by the Trust Indenture Act
of 1939, as amended. We have filed a copy of the indenture as an exhibit to the
registration statement of which this prospectus forms a part. See "Where You Can
Find More Information."
The terms of the new notes are identical in all material respects to the
terms of the old notes, except for certain transfer restrictions and
registration rights relating to the old notes. If we do not complete the
exchange offer by September 19, 1999, holders of old notes that have complied
with their obligations under the registration rights agreement will be entitled,
subject to certain exceptions, to liquidated damages in an amount equal to a
rate of 0.5% per year on the notes until the consummation of the exchange offer.
General
The notes:
o are our unsecured senior obligations
o mature on February 15, 2004
o bear interest at the rate of 5 1/2% per year from February 11, 1999,
or from the most recent interest payment date to which interest has
been paid or provided for.
We will pay interest on February 15 and August 15 every year, beginning
August 15, 1999, to the person in whose name such note, or any predecessor note
is registered at the close of business on the February 1 or August 1,
respectively, preceding such interest payment date.
Interest on the notes will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
We will pay principal, any premium, and interest on the notes at the office
we maintain in New York City for such purposes, which is currently the corporate
trust office of the trustee. You may exchange your notes or register any
transfer of notes at that office as well.
We do not intend to list the notes on a national securities exchange.
The indenture does not contain any provisions that would limit our ability
to incur indebtedness or require the maintenance of financial ratios or
specified levels of net worth or liquidity, nor does it contain covenants or
other provisions designed to afford holders of the notes protection in the event
of a highly leveraged transaction, change in credit rating or other similar
occurrence. However, the provisions of the indenture do:
(i) provide that, subject to certain exceptions, neither CVS nor any
Restricted Subsidiary (as defined below) will subject its property or
assets to any mortgage or other encumbrance unless the notes are
secured equally and ratably with such other indebtedness thereby
secured, and
(ii) contain certain limitations on the entry into certain sale and
leaseback arrangements by CVS and its Restricted Subsidiaries.
In addition, the indenture does not contain any provisions which would require
us to repurchase or redeem or otherwise modify the terms of any of the notes
upon a change in control or other events involving us which may adversely affect
the creditworthiness of the notes.
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We may, without the consent of the holders of the notes, issue additional
notes under the indenture having the same terms in all respects as the notes or
in all respects except for the payment of interest on the notes:
(1) scheduled and paid prior to date of issuance of such notes or
(2) payable on the first interest payment date following such date of
issuance.
The notes offered hereby and any additional notes would be treated as a single
class for all purposes under the indenture and will vote together as one class
on all matters with respect to the notes.
Optional Redemption
We may at any time, at our option, redeem all or any portion of the notes,
at a redemption price equal to the greater of:
(1) 100% of their principal amount or
(2) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the date of redemption on a
semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at
the applicable Treasury Yield plus 0.125%, plus any accrued interest.
We define the "Treasury Yield" as, in connection with any redemption date,
the annual rate equal to the semiannual equivalent yield to maturity of the
comparable Treasury issue, assuming a price for the comparable Treasury issue
(expressed as a percentage of its principal amount) equal to the applicable
comparable Treasury price for such redemption date.
The "comparable Treasury issue" is the United States Treasury security
selected by an independent investment banker as having a maturity comparable to
the remaining term of the notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
notes.
The "independent investment banker" will be Credit Suisse First Boston
Corporation or, if such firm is unwilling or unable to select the applicable
comparable Treasury issue, an independent investment banking institution of
national standing appointed by the trustee.
The "comparable Treasury price" means, in connection with any redemption
date applicable to the notes,
(1) the average of the applicable Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such
applicable Reference Treasury Dealer Quotations, or
(2) if the trustee obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Quotations.
The "reference Treasury dealer" will be Credit Suisse First Boston
Corporation; provided however, that if the foregoing shall cease to be a primary
United States Government securities dealer in New York City (a "primary Treasury
dealer"), the Company shall substitute another primary Treasury dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
reference Treasury dealer and any redemption date for the notes, the average, as
determined by the trustee, of the bid and asked prices for the Comparable
Treasury Issue for the notes, expressed in each case as a percentage of its
principal amount, quoted in writing to the trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day preceding
such redemption date.
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Holders of the notes to be redeemed will receive notice thereof by
first-class mail at least 30 and not more than 60 days prior to the date fixed
for redemption.
Certain Covenants
Restrictions on Secured Funded Debt. The indenture provides that CVS will
not, nor will it permit any Restricted Subsidiary to, incur, issue, assume,
guarantee or create any Secured Debt, without effectively providing concurrently
with the incurrence, issuance, assumption, guaranty or creation of any such
Secured Debt that the notes (together with, if CVS shall so determine, any other
Indebtedness of CVS or such Restricted Subsidiary then existing or thereafter
created which is not subordinated to the notes) will be secured equally and
ratably with (or prior to) such Secured Debt, unless, after giving effect
thereto, the sum of the aggregate amount of all outstanding Secured Debt of CVS
and its Restricted Subsidiaries together with all Attributable Debt in respect
of sale and leaseback transactions relating to a Principal Property (with the
exception of Attributable Debt which is excluded pursuant to clauses (1) to (8)
described under "Limitations on Sale/Leaseback Transactions" below), would not
exceed 15% of Consolidated Net Tangible Assets.
This restriction will not apply to, and there will be excluded from Secured
Debt in any computation under this restriction and under "Limitation on
Sale/Leaseback Transactions" below, Indebtedness, secured by:
(1) Liens on property, shares of capital stock or Indebtedness of
any corporation existing at the time such corporation becomes a
Subsidiary;
(2) Liens on property, shares of capital stock or Indebtedness
existing at the time of acquisition thereof or incurred within 360
days of the time of acquisition thereof (including, without
limitation, acquisition through merger or consolidation) by CVS or any
Restricted Subsidiary;
(3) Liens on property, shares of capital stock or Indebtedness
thereafter acquired (or constructed) by CVS or any Restricted
Subsidiary and created prior to, at the time of, or within 360 days
(or thereafter if such Lien is created pursuant to a binding
commitment entered into prior to, at the time of or within 360 days)
after such acquisition (including, without limitation, acquisition
through merger or consolidation) (or the completion of such
construction or commencement of commercial operation of such property,
whichever is later) to secure or provide for the payment of all or any
part of the purchase price (or the construction price) thereof;
(4) Liens in favor of CVS or any Restricted Subsidiary;
(5) Liens in favor of the United States of America, any State
thereof or the District of Columbia or any foreign government, or any
agency, department or other instrumentality thereof, to secure
partial, progress, advance or other payments pursuant to any contract
or provisions of any statute;
(6) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from Federal income
taxation pursuant to Section 103(b) of the Internal Revenue Code;
(7) Liens securing the performance of any contract or undertaking
not directly or indirectly in connection with the borrowing of money,
the obtaining of advances or credit or the securing of Indebtedness,
if made and continuing in the ordinary course of business;
(8) Liens incurred (no matter when created) in connection with
CVS's or a Restricted Subsidiary's engaging in leveraged or
single-investor lease transactions; provided, however, that the
instrument creating or evidencing any borrowings secured by such Lien
will provide that such borrowings are payable solely out of the income
and proceeds of the property subject to such Lien and are not a
general obligation of CVS or such Restricted Subsidiary;
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(9) Liens in favor of a governmental agency to qualify CVS or any
Restricted Subsidiary to do business, maintain self insurance or
obtain other benefits, or Liens under workers' compensation laws,
unemployment insurance laws or similar legislation,
(10) good faith deposits in connection with bids, tenders,
contracts or deposits to secure public or statutory obligations of CVS
or any Restricted Subsidiary, or deposits of cash or obligations of
the United States of America to secure surety and appeal bonds to
which CVS or any Restricted Subsidiary is a party or in lieu of such
bonds, or pledges or deposits for similar purposes in the ordinary
course of business,
(11) Liens imposed by law, such as laborers' or other employees',
carriers', warehousemen's, mechanics', materialmen's and vendors'
Liens,
(12) Liens arising out of judgments or awards against CVS or any
Restricted Subsidiary with respect to which CVS or such Restricted
Subsidiary at the time shall be prosecuting an appeal or proceedings
for review or Liens arising out of individual final judgments or
awards in amounts of less than $100,000; provided that the aggregate
amount of all such individual final judgments or awards shall not at
any one time exceed $1,000,000,
(13) Liens for taxes, assessments, governmental charges or levies
not yet subject to penalties for nonpayment or the amount or validity
of which is being in good faith contested by appropriate proceedings
by CVS or any Restricted Subsidiary, as the case may be,
(14) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions or Liens as to the use of
real properties, which Liens, exceptions, encumbrances, easements,
reservations, rights and restrictions do not, in the opinion of CVS,
in the aggregate materially detract from the value of said properties
or materially impair their use in the operation of the business of CVS
and its Restricted Subsidiaries;
(15) Liens incurred to finance all or any portion of the cost of
construction, alteration or repair of any Principal Property or
improvements thereto created prior to or within 360 days (or
thereafter if such Lien is created pursuant to a binding commitment to
lend entered into prior to, at the time of, or within 360 days) after
completion of such construction, alteration or repair;
(16) Liens existing on the date of the indenture;
(17) Liens created in connection with a project financed with,
and created to secure, a Nonrecourse Obligation; or
(18) any extension, renewal, refunding or replacement of the
foregoing, provided that (i) such extension, renewal, refunding or
replacement Lien shall be limited to all or a part of the same
property that secured the Lien extended, renewed, refunded or replaced
(plus improvements on such property) and (ii) the Funded Debt secured
by such Lien at such time is not increased.
"Attributable Debt" means, in connection with any sale and leaseback
transaction under which either the Company or any Restricted Subsidiary is at
the time liable as lessee for a term of more than 12 months and at any date as
of which the amount thereof is to be determined, the lesser of (A) total net
obligations of the lessee for rental payments during the remaining term of the
lease discounted from the respective due dates thereof to such determination
date at a rate per annum equivalent to the greater of (1) the weighted average
Yield to Maturity (as defined in the indenture) of the notes, such average being
weighted by the principal amount of the notes and (2) the interest rate inherent
in such lease (as determined in good faith by the Company), both to be
compounded semi-annually or (B) the sale price for the assets so sold and leased
multiplied by a fraction the numerator of which is the
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remaining portion of the base term of the lease included in such transaction and
the denominator of which is the base term of the lease.
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recent consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of the fiscal quarter of the Company
ending not more than 135 days prior to such date, prepared in accordance with
U.S. generally accepted accounting principles, less (i) all current liabilities
(due within one year) as shown on such balance sheet, (ii) investments in and
advances to Unrestricted Subsidiaries and (iii) Intangible Assets and
liabilities relating thereto.
"Funded Debt" means (i) any Indebtedness of the Company or a Restricted
Subsidiary maturing more than 12 months after the time of computation thereof,
(ii) guarantees of Funded Debt or of dividends of others (except guarantees in
connection with the sale or discount of accounts receivable, trade acceptances
and other paper arising in the ordinary course of business), (iii) in the case
of any Restricted Subsidiary, all preferred stock having mandatory redemption
provisions of such Restricted Subsidiary as reflected on such Restricted
Subsidiary's balance sheet prepared in accordance with U.S. generally accepted
accounting principles, and (iv) all Capital Lease Obligations (as defined in the
indenture).
"Indebtedness" means, at any date, without duplication, all obligations for
borrowed money of the Company or a Restricted Subsidiary.
"Intangible Assets" means, at any date, the value, as shown on or reflected
in the most recent consolidated balance sheet of the Company and its Restricted
Subsidiaries as at the end of the fiscal quarter of the Company ending not more
than 135 days prior to such date, prepared in accordance with generally accepted
accounting principles, of: (i) all trade names, trademarks, licenses, patents,
copyrights, service marks, goodwill and other like intangibles; (ii)
organizational and development costs; (iii) deferred charges (other than prepaid
items, such as insurance, taxes, interest, commissions, rents, pensions,
compensation and similar items and tangible assets being amortized); and (iv)
unamortized debt discount and expense, less unamortized premium.
"Liens" means such pledges, mortgages, security interests and other liens
on any Principal Property of the Company or a Restricted Subsidiary which secure
Secured Debt.
"Nonrecourse Obligation" means indebtedness or lease payment obligations
substantially related to (i) the acquisition of assets not previously owned by
the Company or any Restricted Subsidiary or (ii) the financing of a project
involving the development or expansion of properties of the Company or any
Restricted Subsidiary, as to which the obligee with respect to such indebtedness
or obligation has no recourse to the Company or any Restricted Subsidiary or any
assets of the Company or any Subsidiary other than the assets which were
acquired with the proceeds of such transaction or the project financed with the
proceeds of such transaction (and the proceeds thereof).
"Principal Property" means real and tangible property owned and operated
now or hereafter by the Company or any Restricted Subsidiary constituting a part
of any store, warehouse or, distribution center located within the United States
of America or its territories or possessions (excluding current assets, motor
vehicles, mobile materials-handling equipment and other rolling stock, cash
registers and other point-of-sale recording devices and related equipment and
data processing and other office equipment), the net book value of which
(including leasehold improvements and store fixtures constituting a part of such
store, warehouse or distribution center) as of the date on which the
determination is being made is more than 1.0% of Consolidated Net Tangible
Assets. As of the date of this offering circular, none of the Company's stores
constitutes a Principal Property.
"Restricted Subsidiary" means each Subsidiary other than Unrestricted
Subsidiaries.
"Secured Debt" means Funded Debt which is secured by any pledge of, or
mortgage, security interest or other lien on any (i) Principal Property (whether
owned on the date of the indenture or thereafter acquired or created), (ii)
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shares of stock owned by the Company or a Subsidiary in a Restricted Subsidiary
or (iii) Indebtedness of a Restricted Subsidiary.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock, which under ordinary circumstances (not dependent upon the
happening of a contingency) has voting power to elect a majority of the board of
directors of such corporation (or similar management body), is owned directly or
indirectly by the Company or by one or more Subsidiaries of the Company, or by
the Company and one or more Subsidiaries.
"Unrestricted Subsidiary" means Subsidiaries designated as Unrestricted
Subsidiaries from time to time by the Board of Directors of the Company;
provided, however, that the Board of Directors of the Company (i) will not
designate as an Unrestricted Subsidiary any Subsidiary of the Company that owns
any Principal Property or any stock of a Restricted Subsidiary, (ii) will not
continue the designation of any Subsidiary of the Company as an Unrestricted
Subsidiary at any time that such Subsidiary owns any Principal Property, and
(iii) will not, nor will it cause or permit any Restricted Subsidiary to,
transfer or otherwise dispose of any Principal Property to any Unrestricted
Subsidiary (unless such Unrestricted Subsidiary will in connection therewith be
redesignated as a Restricted Subsidiary and any pledge, mortgage, security
interest or other lien arising in connection with any Indebtedness of such
Unrestricted Subsidiary so redesignated does not extend to such Principal
Property (unless the existence of such pledge, mortgage, security interest or
other lien would otherwise be permitted under the indenture)).
Limitation on Sale/Leaseback Transactions. The indenture provides that the
Company will not, nor will it permit any Restricted Subsidiary to, enter into
any arrangement with any person providing for the leasing by the Company or any
Restricted Subsidiary of any Principal Property of the Company or any Restricted
Subsidiary (which lease is required by GAAP to be capitalized on the balance
sheet of such lessee), which Principal Property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such person (a "sale
and leaseback transaction") unless, after giving effect thereto, the aggregate
amount of all Attributable Debt with respect to all such sale and leaseback
transactions plus all Secured Debt (with the exception of Indebtedness secured
by Liens which is excluded pursuant to clauses (1) to (18) described under
"Restrictions on Secured Debt" above) would not exceed 15% of Consolidated Net
Tangible Assets.
This covenant will not apply to, and there will be excluded from
Attributable Debt in any computation under this restriction or under
"Restrictions on Secured Debt" above, Attributable Debt with respect to any sale
and leaseback transaction if:
(1) the Company or a Restricted Subsidiary is permitted to create
Funded Debt secured by a Lien pursuant to clauses (1) to (18)
inclusive described under "Restrictions on Secured Funded Debt" above
on the Principal Property to be leased, in an amount equal to the
Attributable Debt with respect to such sale and leaseback transaction,
without equally and ratably securing the notes;
(2) the property leased pursuant to such arrangement is sold for
a price at least equal to such property's fair market value (as
determined by the Chief Executive Officer, the President, the Chief
Financial Officer, the Treasurer or the Controller of the Company) and
the Company or a Restricted Subsidiary, within 360 days after the sale
or transfer shall have been made by the Company or a Restricted
Subsidiary, shall apply the proceeds thereof to the retirement of
Indebtedness or Funded Debt of the Company or any Restricted
Subsidiary (other than Indebtedness or Funded Debt owned by the
Company or any Restricted Subsidiary); provided, however, that no
retirement referred to in this clause (2) may be effected by payment
at maturity or pursuant to any mandatory sinking fund payment
provision of Indebtedness or Funded Debt;
(3) the Company or a Restricted Subsidiary applies the net
proceeds of the sale or transfer of the Principal Property leased
pursuant to such transaction to the purchase of assets (and the cost
of construction thereof) within 360 days prior or subsequent to such
sale or transfer;
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(4) the effective date of any such arrangement or the purchaser's
commitment therefor is within 36 months prior or subsequent to the
acquisition of the Principal Property (including, without limitation,
acquisition by merger or consolidation) or the completion of
construction and commencement of operation thereof (which, in the case
of a retail store, is the date of opening to the public), whichever is
later;
(5) the lease in such sale and leaseback transaction is for a
term, including renewals, of not more than three years;
(6) the sale and leaseback transaction is entered into between
the Company and a Restricted Subsidiary or between Restricted
Subsidiaries;
(7) the lease secures or relates to industrial revenue or
pollution control bonds or
(8) the lease payment is created in connection with a project
financed with, and such obligation constitutes, a Nonrecourse
Obligation.
Merger, Consolidation and Disposition of Assets
The indenture provides that the Company shall not consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially as
an entirety in one transaction or a series of related transactions) to, any
Person (other than a consolidation with or merger with or into a Restricted
Subsidiary or a sale, conveyance, transfer, lease or other disposition to a
Subsidiary) or permit any Person to merge with or into the Company unless:
(a) either
(i) the Company shall be the continuing Person or
(ii) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or that acquired or
leased such property and assets of the Company shall be a corporation
organized and validly existing under the laws of the United States of
America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the trustee, all of
the obligations of the Company under the notes and the indenture, and
the Company shall have delivered to the trustee an opinion of counsel
stating that such consolidation, merger or transfer and such
supplemental indenture complies with this provision and that all
conditions precedent provided for in the indenture relating to such
transaction have been complied with and that such supplemental
indenture constitutes the legal valid and binding obligation of the
Company or such successor enforceable against such entity in
accordance with its terms, subject to customary exceptions; and
(b) the Company shall have delivered to the trustee an officers'
certificate to the effect that immediately after giving effect to such
transaction, no Default (as defined in the indenture) shall have occurred
and be continuing and an opinion of counsel as to the matters set forth in
paragraph (a) above.
The indenture does not restrict, or require us to redeem or permit holders
to cause a redemption of notes in the event of,
(i) a consolidation, merger, sale of assets or other similar transaction
that may adversely affect the creditworthiness of CVS or its successor or
combined entity,
(ii) a change in control of CVS or
(iii) a highly leveraged transaction involving CVS, whether or not
involving a change in control.
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Accordingly, the holders of the notes would not have protection in the event of
a highly leveraged transaction, reorganization, restructuring, merger or similar
transaction involving CVS that may adversely affect the holders of notes. The
existing protective covenants applicable to the notes would continue to apply to
CVS, or its successor, in the event of such a transaction initiated or supported
by CVS, the management of CVS, or any affiliate of CVS or its management, but
may not prevent such a transaction from taking place.
Events of Default, Waiver and Notice
"Event of Default" is defined in the indenture to be if:
(a) the Company defaults in the payment of all or any part of the
principal of the notes when the same becomes due and payable at maturity,
upon acceleration, redemption or mandatory repurchase, including as a
sinking fund installment, or otherwise;
(b) the Company defaults in the payment of any interest on the notes
when the same becomes due and payable, and such default continues for a
period of 30 days;
(c) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in the indenture and such default or
breach continues for a period of 60 consecutive days after written notice
thereof has been given to the Company by the trustee or to the Company and
the trustee by the holders of 25% or more in aggregate principal amount of
the notes;
(d) certain events of bankruptcy or insolvency with respect to the
Company;
(e) an event of default as defined in any one or more indentures or
instruments evidencing or under which the Company has at the date of the
indenture or shall thereafter have outstanding an aggregate of at least
$25,000,000 aggregate principal amount of indebtedness for borrowed money,
shall happen and be continuing and such indebtedness shall have been
accelerated so that the same shall be or become due and payable prior to
the date on which the same would otherwise have become due and payable, and
such acceleration shall not be rescinded or annulled within ten days after
notice thereof shall have been given to the Company by the trustee (if such
event be known to it), or to the Company and the trustee by the holders of
at least 25% in aggregate principal amount of the notes at the time
outstanding; provided that if such event of default under such indentures
or instruments shall be remedied or cured by the Company or waived by the
holders of such indebtedness, then the Event of Default under the indenture
by reason thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of either the trustee
or any of the holders; or
(f) failure by the Company to make any payment at maturity, including
any applicable grace period, in respect of at least $25,000,000 aggregate
principal amount of indebtedness for borrowed money and such failure shall
have continued for a period of ten days after notice thereof shall have
been given to the Company by the trustee (if such event be known to it), or
to the Company and the trustee by the holders of at least 25% in aggregate
principal amount of the notes at the time outstanding; provided that if
such failure shall be remedied or cured by the Company or waived by the
holders of such indebtedness, then the Event of Default under the indenture
by reason thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of either the trustee
or any of the holders.
o If an Event of Default occurs and is continuing, then, and in each and
every such case, either the trustee or the holders of not less than
25% in aggregate principal amount of the notes then outstanding by
notice in writing to the Company (and to the trustee if given by
holders), may declare the entire principal amount of all notes, and
the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become
immediately due and payable.
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o If an Event of Default described in clause (d) occurs and is
continuing, then the principal amount of all the notes then
outstanding and interest accrued thereon, if any, shall be and become
immediately due and payable, without any notice or other action by any
holder or the trustee to the full extent permitted by applicable law.
Subject to provisions in the indenture for the indemnification of the
trustee and certain other limitations, the holders of at least a majority in
aggregate principal amount of the outstanding notes may direct the time, method
and place of conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred on the trustee by the indenture;
provided that the trustee may refuse to follow any direction that conflicts with
law or the indenture, that may involve the trustee in personal liability, or
that the trustee determines in good faith may be unduly prejudicial to the
rights of holders not joining in the giving of such direction; and provided
further that the trustee may take any other action it deems proper that is not
inconsistent with any directions received from holders of notes pursuant to this
paragraph.
Subject to various provisions in the indenture, the holders of at least a
majority in principal amount of the outstanding notes, by notice to the trustee,
may waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any note as specified in
clauses (a) or (b) of the first paragraph of this section or in respect of a
covenant or provision of the indenture which cannot be modified or amended
without the consent of the holder of each outstanding note affected. Upon any
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of the
indenture; but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereto.
The indenture provides that no holder of any notes may institute any
proceeding, judicial or otherwise, with respect to the indenture or the notes,
or for the appointment of a receiver or trustee, or for any other remedy under
the indenture, unless:
(1) such holder has previously given to the trustee written notice of
a continuing Event of Default;
(2) the holders of at least 25% in aggregate principal amount of
outstanding notes shall have made written request to the trustee to
institute proceedings in respect of such Event of Default in its own
name as trustee under the indenture;
(3) such holder or holders have offered to the trustee indemnity
reasonably satisfactory to the trustee against any costs, liabilities
or expenses to be incurred in compliance with such request;
(4) the trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding;
and
(5) during such 60-day period, the holders of a majority in aggregate
principal amount of the outstanding notes have not given the trustee a
direction that is inconsistent with such written request. A holder may
not use the indenture to prejudice the rights of another holder or to
obtain a preference or priority over such other holder.
Information
Whether or not required by the rules and regulations of the SEC, we have
agreed that, so long as any notes are outstanding, we will furnish to the
trustee, within 15 days after we are or would have been required to file with
the SEC, and to furnish to the holders of the notes thereafter:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and
10-K if we were required to file such Forms, including a "Management's
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Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report
thereon by our certified independent accountants, and
(ii) all current reports that would be required to be filed with the
SEC on Form 8-K if we were required to file such reports.
In addition, whether or not required by the rules and regulations of the
SEC, at any time after we file an registration statement with respect to an
exchange offer or a registration statement permitting resales of the notes, we
will file a copy of all such information and reports with the SEC for public
availability and make such information available to securities analysts and
prospective investors upon request.
In addition, we have agreed that, for so long as any notes remain
outstanding, we will furnish to the holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act. Any such request
should be directed to the address referred to under "Where You Can Find More
Information."
We will be required to file with the trustee annually, within four months
of the end of each fiscal year, a certificate as to the compliance with all
conditions and covenants of the indenture.
Discharge and Defeasance of Notes and Covenants
The indenture provides that the Company may terminate its obligations under
the notes and the indenture if:
(i) all notes previously authenticated and delivered, with certain
exceptions, have been delivered to the trustee for cancellation and the Company
has paid all sums payable by it under the indenture; or
(ii) (a) the notes mature within one year or all of them are to be called
for redemption within one year under arrangements satisfactory to the
trustee for giving the notice of redemption,
(b) the Company irrevocably deposits in trust with the trustee, as
trust funds solely for the benefit of the holders of the notes for
that purpose, money or U.S. Government Obligations or a combination
thereof sufficient (unless such funds consist solely of money, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the trustee), without consideration of any reinvestment, to pay the
principal of and interest on the notes to maturity or redemption, as
the case may be, and to pay all other sums payable by it under the
indenture, and
(c) the Company delivers to the trustee an officers' certificate and
an opinion of counsel, in each case stating that all conditions
precedent provided for in the indenture relating to the satisfaction
and discharge of the indenture have been complied with.
With respect to the foregoing clause (i), only the Company's obligations to
compensate and indemnify the trustee under the indenture shall survive. With
respect to the foregoing clause (ii), only the Company's obligations to execute
and deliver the notes for authentication, to set the terms of the notes, to
maintain an office or agency in respect of the notes, to have moneys held for
payment in trust, to register the transfer or exchange of the notes, to deliver
the notes for replacement or to be canceled, to compensate and indemnify the
trustee and to appoint a successor trustee, and its right to recover excess
money held by the trustee shall survive until the notes are no longer
outstanding. Thereafter, only the Company's obligations to compensate and
indemnify the trustee, and its right to recover excess money held by the trustee
shall survive.
The indenture provides that the Company:
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(i) will be deemed to have paid and will be discharged from any and
all obligations in respect of the notes, and the provisions of the
indenture will, except as noted below, no longer be in effect with
respect to the notes ("legal defeasance") and
(ii) may omit to comply with any other specific covenant relating to
the notes provided for in a Board Resolution or supplemental indenture
which may by its terms be defeased pursuant to the indenture, and such
omission shall be deemed not to be an Event of Default under clause
(c) of the first paragraph of "--Events of Default" ("covenant
defeasance");
provided that the following conditions shall have been satisfied:
(a) the Company has irrevocably deposited in trust with the trustee
as trust funds solely for the benefit of the holders of the notes, for
payment of the principal of and interest on the notes, money or U.S.
Government Obligations or a combination thereof sufficient (unless
such funds consist solely of money, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the trustee) without
consideration of any reinvestment and after payment of all federal,
state and local taxes or other charges and assessments in respect
thereof payable by the trustee, to pay and discharge the principal of
and accrued interest on the outstanding notes to maturity or earlier
redemption (irrevocably provided for under arrangements satisfactory
to the trustee), as the case may be;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, the indenture or any other material
agreement or instrument to which the Company is a party or by which it
is bound;
(c) no Default with respect to the notes shall have occurred and be
continuing on the date of such deposit;
(d) the Company shall have delivered to the trustee an opinion of
counsel that (1) the holders of the notes will not recognize income,
gain or loss for Federal income tax purposes as a result of the
Company's exercise of its option under this provision of the indenture
and will be subject to Federal income tax on the same amount and in
the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred and (2) the holders of
the notes have a valid security interest in the trust funds, and
(e) the Company has delivered to the trustee an officers' certificate
and an opinion of counsel, in each case stating that all conditions
precedent provided for in the indenture relating to the defeasance
contemplated have been complied with.
In the case of legal defeasance under clause (i) above, the opinion of counsel
referred to in clause (d)(1) above may be replaced by a ruling directed to the
trustee received from the Internal Revenue Service to the same effect.
Subsequent to legal defeasance under clause (i) above, the Company's obligations
to execute and deliver the notes for authentication, to maintain an office or
agency in respect of the notes, to have moneys held for payment in trust, to
register the transfer or exchange of the notes, to deliver the notes for
replacement or to be canceled, to compensate and indemnify the trustee and to
appoint a successor trustee, and its right to recover excess money held by the
trustee shall survive until the notes are no longer outstanding. After the notes
are no longer outstanding, in the case of legal defeasance under clause (i)
above, only the Company's obligations to compensate and indemnify the trustee
and its right to recover excess money held by the trustee shall survive.
Modification and Waiver
The indenture provides that the Company and the trustee may amend or
supplement the indenture or the notes without notice to or the consent of any
holder:
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(1) to cure any ambiguity, defect or inconsistency in the indenture;
provided that such amendments or supplements shall not materially and
adversely affect the interests of the holders;
(2) to comply with the provisions of the indenture in connection with
a consolidation or merger of the Company or the sale, conveyance, transfer,
lease or other disposal of all or substantially all of the property and
assets of the Company;
(3) to comply with any requirements of the Commission in connection
with the qualification of the indenture under the Trust indenture Act;
(4) to evidence and provide for the acceptance of appointment under
the indenture by a successor trustee; or
(5) to make any change that does not materially and adversely affect
the rights of any holder.
The indenture also contains provisions whereby the Company and the trustee,
subject to certain conditions, without prior notice to any holders, may amend
the indenture and the outstanding notes with the written consent of the holders
of a majority in principal amount of the notes then outstanding, and the holders
of a majority in principal amount of the outstanding notes by written notice to
the trustee may waive future compliance by the Company with any provision of the
indenture or the notes.
Notwithstanding the foregoing provisions, without the consent of each
holder affected thereby, an amendment or waiver may not:
(i) extend the stated maturity of the principal of, or any installment
of interest on, such holder's notes, or reduce the principal thereof or the
rate of interest thereon, or any premium payable with respect thereto, or
change any place or currency of payment where any note or any premium or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the due date therefor;
(ii) reduce the percentage in principal amount of outstanding notes
the consent of whose holders is required for any such supplemental
indenture, for any waiver of compliance with certain provisions of the
indenture or certain Defaults and their consequences provided for in the
indenture;
(iii) waive a Default in the payment of principal of or interest on
any note of such holder; or
(iv) modify any of the provisions of this provision of the indenture,
except to increase any such percentage or to provide that certain other
provisions of the indenture cannot be modified or waived without the
consent of the holder of each outstanding note thereunder affected thereby.
It shall not be necessary for the consent of any holder under this
provision of the indenture to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof. After an amendment, supplement or waiver under
this section of the indenture becomes effective, the Company shall give to the
holders affected thereby a notice briefly describing the amendment, supplement
or waiver. The Company will mail supplemental indentures to holders upon
request. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture or waiver.
Governing Law
The indenture and the notes will be governed by the laws of the State of
New York.
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The Trustee
The Company and its subsidiaries maintain ordinary banking and trust
relationships with The Bank of New York and its affiliates. The trustee also
acts as the registrar and transfer agent for our common stock, and an affiliate
of the trustee acted as an initial purchaser of the old notes.
Book-Entry; Delivery and Form
The certificates representing the new notes will be issued in fully
registered form, without coupons. Except as described below, the new notes will
be deposited with, or on behalf of, The Depository Trust Company, New York, New
York, and registered in the name of Cede & Co. as DTC's nominee, in the form of
a global note (the "Global Registered Note").
The Global Registered Note. CVS expects that pursuant to procedures
established by DTC (a) upon deposit of the Global Registered Note, DTC or its
custodian will credit on its internal system interests in the Global Registered
notes to the accounts of persons who have accounts with DTC ("Participants") and
(b) ownership of the Global Registered Note will be shown on, and the transfer
of ownership thereof will be effected only through, records maintained by DTC or
its nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons other than Participants).
Ownership of beneficial interests in the Global Registered Note will be limited
to Participants or persons who hold interests through Participants.
So long as DTC or its nominee is the registered owner or holder of the new
notes, DTC or such nominee will be considered the sole owner or holder of the
new notes represented by the Global Registered Note for all purposes under the
indenture. No beneficial owner of an interest in the Global Registered Note will
be able to transfer such interest except in accordance with DTC's procedures, in
addition to those provided for under the indenture with respect to the new
notes.
Payments of the principal of or premium and interest on the Global
Registered Note will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. None of CVS, the trustee or any paying agent under the
indenture will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Registered Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
We expect that DTC or its nominee, upon receipt of any payment of the
principal of or premium and interest on the Global Registered Note, will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global
Registered Note as shown on the records of DTC or its nominee. We also expect
that payments by Participants to owners of beneficial interests in the Global
Registered Note held through such Participants will be governed by standing
instructions and customary practice as is now the case with securities held for
the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such Participants.
Transfers between Participants in DTC will be effected in accordance with
DTC rules and will be settled in immediately available funds. If a holder
requires physical delivery of a Certificated exchange note for any reason,
including to sell new notes to persons in states which require physical delivery
of the new notes or to pledge such securities, such holder must transfer its
interest in the Global Registered Note in accordance with the normal procedures
of DTC and with the procedures set forth in the indenture.
DTC has advised us that DTC will take any action permitted to be taken by a
holder of new notes (including the presentation of new notes for exchange as
described below) only at the direction of one or more Participants to whose
account at DTC interests in the Global Registered Note are credited and only in
respect of such portion of the aggregate principal amount of new notes as to
which such Participant or Participants has or have given such direction.
However, if there is an Event of Default under the indenture, DTC will exchange
the Global Registered Note for Certificated new notes, which it will distribute
to its Participants.
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DTC has advised us as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC was created to hold securities for its
Participants and facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entry changes in
accounts of its Participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and certain other organizations.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants").
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interest in the Global Registered Notes among Participants, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither CVS nor the trustee will have any
responsibility for the performance by DTC or its Participants or Indirect
Participants of their respective obligations under the rules and procedures
governing their operations.
Certificated Notes. Interests in the Global Registered Notes will be
exchangeable or transferable, as the case may be, for certificated notes if
(1) DTC notifies us that it is unwilling or unable to continue as
depositary for such Global Registered Notes, or DTC ceases to be a
"clearing agency" registered under the Exchange Act, and a successor
depositary is not appointed by CVS within 90 days, or
(2) CVS in its discretion at any time determines not to have all the
notes represented by the Global Securities, or
(3) an Event of Default has occurred and is continuing with respect to
such new notes.
Upon the occurrence of any of the events described in the preceding
sentence, CVS will cause the appropriate certificated notes to be delivered.
THE EXCHANGE OFFER
Pursuant to a registration rights agreement between CVS and the initial
purchasers of the old notes, we agreed
(1) to file a registration statement on or prior to 90 days after the
closing of the offering of the old notes with respect to an offer to
exchange the old notes for a new issue of notes, with terms substantially
the same as of the old notes but registered under the Securities Act,
(2) to use our best efforts to cause the registration statement to be
declared effective by the SEC on or prior to 180 days after the closing of
the old notes offering and
(3) use our best efforts to consummate the exchange offer and issue
the new notes within 30 business days after the registration statement is
declared effective.
The registration rights agreement provides that, in the event we fail to
file the registration statement within 90 days after the closing date or
consummate the exchange offer within 220 days, we will be required to pay
additional interest on the old notes over and above the regular interest on the
notes. Upon consummation of this exchange offer, the provision for additional
interest on the old notes shall cease.
The exchange offer is not being made to, nor will we accept tenders for
exchange from, holders of old notes in any jurisdiction in which the exchange
offer or acceptance of the exchange offer would violate the securities or blue
sky laws of such jurisdiction.
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Terms of the Exchange Offer; Period for Tendering Old Notes
This prospectus and the accompanying letter of transmittal contain the
terms and conditions of the exchange offer. Upon the terms and subject to the
conditions included in this prospectus and in the accompanying letter of
transmittal (which together constitute the exchange offer), we will accept for
exchange old notes which are properly tendered on or prior to the expiration
date, unless you have previously withdrawn them.
o When you tender to us old notes as provided below, our acceptance of
the old notes will constitute a binding agreement between you and us
upon the terms and subject to the conditions in this prospectus and in
the accompanying letter of transmittal.
o For each $1,000 principal amount of old notes surrendered to us
pursuant to the exchange offer, we will give the you $1,000 principal
amount of new notes.
o We will keep the exchange offer open for not less than 30 days (or
longer if required by applicable law) after the date that we first
mail notice of the exchange offer to the holders of the old notes. We
are sending this prospectus, together with the letter of transmittal,
on or about the date of this prospectus to all of the registered
holders of old notes at their addresses listed in the trustee's
security register with respect to old notes.
o The exchange offer expires at 5:00 p.m., New York City time, on
, 1999; provided, however, that we, in our sole discretion, may
extend the period of time for which the exchange offer is open. The
term "expiration date" means , 1999 or, if extended by us,
the latest time and date to which the exchange offer is extended.
o As of the date of this prospectus, $300,000,000 in aggregate principal
amount of the old notes were outstanding. The exchange offer is not
conditioned upon any minimum principal amount of old notes being
tendered.
o Our obligation to accept old notes for exchange pursuant to the
exchange offer is subject to certain conditions that we describe in
the section called "Certain Conditions to the Exchange Offer" below.
o We expressly reserve the right, at any time, to extend the period of
time during which the exchange offer is open, and thereby delay
acceptance of any old notes, by giving oral or written notice of such
extension to the exchange agent and notice of such extension to the
holders as described below. During any such extension, all old notes
previously tendered will remain subject to the exchange offer and may
be accepted for exchange by us. Any old notes not accepted for
exchange for any reason will be returned without expense to the
tendering holder thereof as promptly as practicable after the
expiration or termination of the exchange offer.
o We expressly reserve the right to amend or terminate the exchange
offer, and not to accept for exchange any old notes that we have not
yet accepted for exchange, upon the occurrence of any of the
conditions of the exchange offer specified below under "Certain
Conditions to the Exchange Offer."
o We will give oral or written notice of any extension, amendment,
termination or non-acceptance described above to holders of the old
notes as promptly as practicable. If we extend the expiration date, we
will give notice by means of a press release or other public
announcement no later than 9:00 a.m., New York City time, on the
business day after the previously scheduled expiration date. Without
limiting the manner in which we may choose to make any public
announcement and subject to applicable law, we will have no obligation
to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News
Service.
o Holders of old notes do not have any appraisal or dissenters' rights
in connection with the exchange offer.
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o Old notes which are not tendered for exchange or are tendered but not
accepted in connection with the exchange offer will remain outstanding
and be entitled to the benefits of the indenture, but will not be
entitled to any further registration rights under the registration
rights agreement.
o We intend to conduct the exchange offer in accordance with the
applicable requirements of the Exchange Act and the rules and
regulations of the SEC thereunder.
o By executing, or otherwise becoming bound by, the letter of
transmittal, you will be making certain representations to us.
See "--Resales of the New Notes."
Important rules concerning the exchange offer
You should note that:
o All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of old notes tendered for exchange will be
determined by CVS in its sole discretion, which determination shall be
final and binding.
o We reserve the absolute right to reject any and all tenders of any
particular old notes not properly tendered or to not accept any
particular old notes which acceptance might, in our judgment or the
judgment of our counsel, be unlawful.
o We also reserve the absolute right to waive any defects or
irregularities or conditions of the exchange offer as to any
particular old notes either before or after the expiration date
(including the right to waive the ineligibility of any holder who
seeks to tender old notes in the exchange offer). Unless we agree to
waive any defect or irregularity in connection with the tender of old
notes for exchange, such waiver must be cured within such reasonable
period of time as we shall determine.
o Our interpretation of the terms and conditions of the exchange offer
as to any particular old notes either before or after the expiration
date (including the letter of transmittal and the instructions
thereto) shall be final and binding on all parties.
o Neither CVS, the exchange agent nor any other person shall be under
any duty to give notification of any defect or irregularity with
respect to any tender of old notes for exchange, nor shall any of them
incur any liability for failure to give such notification.
Procedures for Tendering Old Notes
What to submit and how
If you, as the registered holder of an old note, wish to tender your old
notes for exchange pursuant to the exchange offer, you must transmit a properly
completed and duly executed letter of transmittal, including all other documents
required by such letter of transmittal, to The Bank of New York at the address
set forth below under "Exchange Agent" on or prior to the expiration date.
In addition,
(1) certificates for such old notes must be received by the exchange
agent along with the letter of transmittal, or
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(2) a timely confirmation of a book-entry transfer (what we call a
"book-entry confirmation") of such old notes, if such procedure is
available, into the exchange agent's account at DTC pursuant to the
procedure for book-entry transfer described below, must be received by the
exchange agent prior to the expiration date or
(3) you must comply with the guaranteed delivery procedures described
below.
The method of delivery of old notes, letters of transmittal and all other
required documents is at the your election and risk. If such delivery is by
mail, we recommend that registered mail, properly insured, with return receipt
requested, be used. In all cases, sufficient time should be allowed to assure
timely delivery. No letters of transmittal or old notes should be sent to CVS.
How to sign your letter of transmittal and other documents
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the old notes surrendered for exchange
pursuant thereto are tendered
(1) by a registered holder of the old notes who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery Instructions"
on the letter of transmittal or
(2) for the account of an Eligible Institution (as defined below).
If signatures on a letter of transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantees must be by certain
eligible institutions, including:
o a firm which is a member of a registered national securities exchange
or a member of the National Association of Securities Dealers, Inc.
o a commercial bank or trust company having an office or correspondent
in the United States
(collectively, "Eligible Institutions").
If old notes are registered in the name of a person other than the person
signing the letter of transmittal, the old notes surrendered for exchange must
be endorsed by, or be accompanied by a written instrument or instruments of
transfer or exchange, in satisfactory form as determined by us in our sole
discretion, duly executed by the registered holder with the signature thereon
guaranteed by an Eligible Institution.
If the letter of transmittal is signed by a person or persons other than
the registered holder or holders of old notes, such old notes must be endorsed
or accompanied by appropriate powers of attorney, in either case signed exactly
as the name or names of the registered holder or holders that appear on the old
notes.
If the letter of transmittal or any old notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers or corporations or others acting in a fiduciary or representative
capacity, such person should so indicate when signing and, unless waived by CVS,
proper evidence satisfactory to CVS of its authority to so act must be
submitted.
Acceptance of Old Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, promptly after the expiration date, all old notes properly
tendered and will issue the new notes promptly after acceptance of the old
notes. See "Certain Conditions to the Exchange Offer" below. For purposes of the
exchange offer, we shall be deemed to have accepted properly tendered old notes
for exchange when, as and if we have given oral or written notice thereof to the
Exchange Agent.
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In all cases, we will only issue new notes in exchange for old notes that
are accepted for exchange only after timely receipt by the exchange agent of:
o certificates for such old notes, or
o a timely book-entry confirmation of such old notes into the exchange
agent's account at DTC pursuant to the book-entry transfer procedures
described below, and
o a properly completed and duly executed letter of transmittal and all
other required documents.
If we do not accept any tendered old notes for any reason included in the
terms and conditions of the exchange offer or if you submit certificates
representing old notes in a greater principal amount than you wish to exchange,
we will return such unaccepted or non-exchanged old notes without expense to the
tendering holder or, in the case of old notes tendered by book-entry transfer
into the exchange agent's account at DTC pursuant to the book-entry transfer
procedures described below, such non-exchanged old notes will be credited to an
account maintained with DTC as promptly as practicable after the expiration or
termination of the exchange offer.
Book-Entry Transfer
The exchange agent will make a request to establish an account with respect
to the old notes at DTC for purposes of the exchange offer promptly after the
date of this prospectus. Any financial institution that is a participant in
DTC's systems may make book-entry delivery of old notes by causing DTC to
transfer such old notes into the exchange agent's account in accordance with
DTC's Automated Tender Offer Program ("ATOP") procedures for transfer. However,
the exchange for the old notes so tendered will only be made after timely
confirmation of such book-entry transfer of old notes into the exchange agent's
account, and timely receipt by the exchange agent of an Agent's Message (as such
term is defined in the next sentence) and any other documents required by the
Letter of Transmittal. The term "Agent's Message" means a message, transmitted
by DTC and received by the exchange agent and forming a part of a Book-entry
confirmation, which states that DTC has received an express acknowledgment from
a Participant tendering old notes that are the subject of such Book-entry
confirmation that such Participant has received and agrees to be bound by the
terms of the letter of transmittal, and that we may enforce such agreement
against such Participant.
Although delivery of old notes may be effected through book-entry transfer
into the exchange agent's account at DTC, the letter of transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees and any other required documents, must in any case be
delivered to and received by the exchange agent at its address listed under
"--Exchange Agent" on or prior to the expiration date, or you must comply
guaranteed delivery procedure described below.
Delivery of documents to DTC in accordance with its procedures does not
constitute delivery to the exchange agent.
Guaranteed Delivery Procedures
If you are a registered holder of old notes and you want to tender such old
notes but your old notes are not immediately available, or time will not permit
your old notes or other required documents to reach the exchange agent before
the expiration date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if
(1) the tender is made through an Eligible Institution,
(2) prior to the expiration date, the exchange agent receives from
such Eligible Institution a properly completed and duly executed letter of
transmittal (or a facsimile thereof) and notice of guaranteed delivery,
substantially in the form provided by us (by facsimile transmission, mail
or hand delivery), stating:
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o the name and address of the holder of old notes
o the amount of old notes tendered
o the tender is being made by delivering such notice and guaranteeing
that within five New York Stock Exchange trading days after the date
of execution of the notice of guaranteed delivery, the certificates of
all physically tendered old notes, in proper form for transfer, or a
book-entry confirmation, as the case may be, and any other documents
required by the letter of transmittal will be deposited by that
Eligible Institution with the exchange agent, and
(3) the certificates for all physically tendered old notes, in proper
form for transfer, or a book-entry confirmation, as the case may be, and
all other documents required by the letter of transmittal, are received by
the exchange agent within five New York Stock Exchange trading days after
the date of execution of the Notice of Guaranteed Delivery.
Withdrawal Rights
You can withdraw your tender of old notes may be withdrawn at any time
prior to the expiration date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the exchange agent at one of the addresses listed below under
"Exchange Agent." Any such notice of withdrawal must specify:
o the name of the person having tendered the old notes to be withdrawn,
o the old notes to be withdrawn (including the principal amount of such
old notes), and
o if certificates for old notes have been delivered to the exchange
agent, the name in which such old notes are registered, if different
from that of the withdrawing holder.
o if certificates for old notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of such
certificates, you must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of
withdrawal with signatures guaranteed by an Eligible Institution
unless you are an Eligible Institution.
o if old notes have been tendered pursuant to the procedure for
book-entry transfer described above, any note of withdrawal must
specify the name and number of the account at DTC to be credited with
the withdrawn old notes and otherwise comply with the procedures of
such facility.
Please note that all questions as to the validity, form and eligibility
(including time of receipt) of such notices of withdrawal will be determined by
us, and our determination shall be final and binding on all parties. Any old
notes so withdrawn will be deemed not to have been validly tendered for exchange
for purposes of the exchange offer.
If you have properly withdrawn old notes and wish to re-tender them, you
may do so by following one of the procedures described under "Procedures for
Tendering Old Notes" above at any time on or prior to the expiration date.
Certain Conditions to the Exchange Offer
Notwithstanding any other provisions of the exchange offer, we will not be
required to accept for exchange, or to issue new notes in exchange for, any old
notes and may terminate or amend the exchange offer, if at any time
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before the acceptance of such old notes for exchange or the exchange of the new
notes for such old notes, such acceptance or issuance would violate applicable
law or any interpretation of the staff of the SEC.
The foregoing condition is for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to such condition. Our failure at
any time to exercise the foregoing rights shall not be deemed a waiver by us of
any such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
In addition, we will not accept for exchange any old notes tendered, and no
new notes will be issued in exchange for any such old notes, if at such time any
stop order shall be threatened or in effect with respect to the exchange offer
of which this prospectus constitutes a part or the qualification of the
indenture under the Trust Indenture Act.
Exchange Agent
The Bank of New York has been appointed as the exchange agent for the
exchange offer. All executed letters of transmittal should be directed to the
exchange agent at one of the addresses set forth below. Questions and requests
for assistance, requests for additional copies of this prospectus or of the
letter of transmittal and requests for notices of guaranteed delivery should be
directed to the exchange agent, addressed as follows:
Deliver To:
The Bank of New York, Exchange Agent
101 Barclay Street
Floor 7 East
New York New York 10286
Attn: Jennifer Pedi
Facsimile Transmissions:
(212) 815-6339
To Confirm by Telephone
or for Information:
(212) 815-6331
Delivery to an address other than as listed above above or transmission of
instructions via facsimile other than as listed above above does not constitute
a valid delivery.
Fees and Expenses
The principal solicitation is being made by mail; however, additional
solicitation may be made by telegraph, telephone or in person by our officers,
regular employees and affiliates. We will not pay any additional compensation to
any such officers and employees who engage in soliciting tenders. We will not
make any payment to brokers, dealers, or others soliciting acceptances of the
exchange offer. However, we will pay the exchange agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection with the exchange offer.
The estimated cash expenses to be incurred in connection with the exchange
offer will be paid by us and are estimated in the aggregate to be $ .
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Transfer Taxes
Holders who tender their old notes for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that holders who instruct
us to register new notes in the name of, or request that old notes not tendered
or not accepted in the exchange offer to be returned to, a person other than the
registered tendering holder will be responsible for the payment of any
applicable transfer tax thereon.
Resale of the New Notes
Under existing interpretations of the staff of the SEC contained in several
no-action letters to third parties, the new notes would in general be freely
transferable after the exchange offer without further registration under the
Securities Act. However, any purchaser of old notes who is an "affiliate" of CVS
or who intends to participate in the exchange offer for the purpose of
distributing the new notes
(1) will not be able to rely on the interpretation of the staff of the
SEC,
(2) will not be able to tender its old notes in the exchange offer and
(3) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or transfer
of the notes unless such sale or transfer is made pursuant to an exemption
from such requirements.
By executing, or otherwise becoming bound by, the Letter of Transmittal
each holder of the old notes (other than certain specified holders) will
represent that:
(1) it is not our "affiliate";
(2) any new notes to be received by it were acquired in the ordinary
course of its business; and
(3) it has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the new notes.
In addition, in connection with any resales of new notes, any broker-dealer
participating in the exchange offer who acquired notes for its own account as a
result of market-making or other trading activities must deliver a prospectus
meeting the requirements of the Securities Act. The SEC has taken the position
that participating broker-dealers may fulfill their prospectus delivery
requirements with respect to the new notes (other than a resale of an unsold
allotment from the original sale of the old notes) with the prospectus contained
in the exchange offer exchange offer. Under the registration rights agreement,
we are required to allow participating broker-dealers and other persons, if any,
subject to similar prospectus delivery requirements to use this prospectus as it
may be amended or supplemented from time to time, in connection with the resale
of such new notes.
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CERTAIN UNITED STATES TAX CONSEQUENCES OF THE EXCHANGE OFFER
The exchange of old notes for new notes pursuant to the exchange offer will
not result in any United States federal income tax consequences to holders. When
a holder exchanges an old note for a new note pursuant to the exchange offer,
the holder will have the same adjusted basis and holding period in the new note
as in the old note immediately before the exchange.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for old notes where
such old notes were acquired as a result of market-making activities or other
trading activities. We have agreed that, for a period of 135 days after the
expiration date, we will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the new notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such new notes. Any broker-dealer that
resells new notes that were received by it for its own account pursuant to the
exchange offer and any broker or dealer that participates in a distribution of
such new notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of new notes and any commission
or concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of 135 days after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the notes) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the notes (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the notes offered hereby will be passed upon for CVS by
Davis Polk & Wardwell, New York, New York.
EXPERTS
The historical consolidated financial statements of CVS Corporation and its
subsidiaries as of December 31, 1997 and 1998 and for the three years ended
December 31, 1998 and the related consolidated financial statement schedule have
been incorporated by reference in this offering circular in reliance upon the
reports of KPMG LLP, independent certified public accountants, incorporated by
reference herein, and given upon the authority of said firm as experts in
accounting and auditing.
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================================================================================
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with
information that is different. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any CVS date other than the date on the front of those Corporation documents.
----------------------
TABLE OF CONTENTS
Page
-----
Where You Can Find More Information.................2
The Company.........................................3
Cautionary Statement Concerning Forward-
Looking Statements...............................3
Use of Proceeds.....................................5
Selected Consolidated Financial Data................6
Description of Notes................................8
The Exchange Offer.................................21
Certain United States Tax Consequences of the
Exchange Offer..................................29
Plan of Distribution...............................29
Legal Matters......................................29
Experts............................................29
================================================================================
$300,000,000
CVS
Corporation
[GRAPHIC OMITTED]
5 1/2% Exchange Notes due
February 15, 2004
-------------------
Prospectus
-------------------
, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Exculpation. Section 102(b)(7) of the Delaware General Corporations Law
("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 certificate of incorporation (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.
Expenses, including attorneys' fees, incurred by any such person in
defending any such action, suit or proceeding shall be paid or reimbursed by the
Company in advance of the final disposition of such action, suit or proceeding
upon receipt by it of an undertaking of such person to repay such expenses if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Company.
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. 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 Revco 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 Revco 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
II-1
<PAGE>
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.
Arbor Directors and Officers. The Arbor merger agreement provides that
after the Effective Time (as defined in the Arbor merger agreement), CVS will
cause Arbor to indemnify (including the payment of reasonable fees and expenses
of legal counsel) each person who was a director or officer of Arbor or its
subsidiaries at or prior to the date of the Arbor merger agreement to the
fullest extent permitted by law for damages and liabilities arising out of facts
and circumstances occurring at or prior to the Effective Time. The Arbor merger
agreement also provides that, for a period of six years after the Effective
Time, CVS will maintain in effect Arbor's existing policies of directors' and
officers' liability insurance as in effect on February 8, 1998 (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 to the covered persons) with respect to facts or
circumstances occurring at or prior to the Effective Time; provided that if the
aggregate annual premium for such insurance during such six-year period exceeds
200% of the aggregate annual premium paid by Arbor as of February 8, 1998 for
such insurance, then CVS will cause Arbor to provide the most advantageous
directors' and officers' insurance coverage then available for an annual premium
equal to such 200% of the February 8, 1998 premiums.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits (see index to exhibits at E-1).
Item 22. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in the volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
II-2
<PAGE>
(b) 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.
(c) 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 foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
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 being
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 Act and will be governed by the final adjudication of
such issue.
(d) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b) or 11 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(e) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and CVS being
acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
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-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Woonsocket, state of Rhode Island, on May 11, 1999.
CVS CORPORATION
By: /s/ Thomas M. Ryan
------------------------------------
Thomas M. Ryan
Chairman of the Board and Chief Executive
Officer
The registrant and each person whose signature appears below constitutes
and appoints Thomas M. Ryan, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign and file (i) any and all
amendments (including post-effective amendments) to this registration statement,
with all exhibits thereto, and other documents in connection therewith, and (ii)
a registration statement, and any and all amendments, thereto, relating to the
offering covered hereby filed pursuant to Rule 462(b) under the Securities Act
of 1933, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Thomas M. Ryan Chairman of the Board and Chief May 10, 1999
- ---------------------------------------- Executive Officer (Principal Executive
Thomas M. Ryan Officer)
Vice President and Controller May 10, 1999
/s/ Larry D. Solberg (Principal Financial and Accounting
- ---------------------------------------- Officer)
Larry D. Solberg
/s/ Eugene Applebaum Director May 5, 1999
- ----------------------------------------
Eugene Applebaum
/s/ Allan J. Bloostein Director May 6, 1999
- ----------------------------------------
Allan J. Bloostein
/s/ W. Don Cornwell Director May 10, 1999
- ----------------------------------------
W. Don Cornwel
II-4
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Thomas P. Gerrity Director May 10, 1999
- ----------------------------------------
Thomas P. Gerrity
/s/ Stanley P. Goldstein Director May 10, 1999
- ----------------------------------------
Stanley P. Goldstein
/s/ William H. Joyce Director May 5, 1999
- ----------------------------------------
William H. Joyce
/s/ Terry R. Lautenbach Director May 5, 1999
- ----------------------------------------
Terry R. Lautenbach
/s/ Terrence Murray Director May 10, 1999
- ----------------------------------------
Terrence Murray
/s/ Sheli Z. Rosenberg Director May 10, 1999
- ----------------------------------------
Sheli Z. Rosenberg
/s/ Ivan G. Seidenberg Director May 10, 1999
- ----------------------------------------
Ivan G. Seidenberg
Director May 10, 1999
- ----------------------------------------
Thomas O. Thorsen
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Document
----------- --------
1.1 Registration Rights Agreement dated as of February 8,1999
between CVS and Credit Suisse First Boston Corporation,
Bear, Stearns & Co. Inc. and BNY Capital Markets, Inc., as
Initial Purchasers
4.1 Indenture, dated as of February 11, 1999 between CVS and the
Trustee
5.1* Opinion of Davis Polk & Wardwell with respect to the
new notes
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Davis Polk & Wardwell (contained in their opinion
filed as Exhibit 5.1).
23.2 Consent of KPMG LLP.
24.1 Power of Attorney (Included on the signature page of this
registration statement)
25.1 Statement of Eligibility of The Bank of New York
on Form T-1.
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Clients
99.4* Form of Letter to Nominees
99.5* Form of Instructions to Registered Holder and/or Book-Entry
Transfer Participant from Owner
- -------------------
* To be filed by amendment.
E-1
EXHIBIT 1.1
EXECUTION COPY
$300,000,000
CVS Corporation
5.50% Notes due February 15, 2004
REGISTRATION RIGHTS AGREEMENT
February 8, 1999
Credit Suisse First Boston Corporation
Bear, Stearns & Co. Inc.
BNY Capital Markets, Inc.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
CVS Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to Credit Suisse First Boston Corporation, Bear,
Stearns & Co. Inc. and BNY Capital Markets, Inc. (collectively, the "Initial
Purchasers"), upon the terms set forth in a purchase agreement of even date
herewith (the "Purchase Agreement"), $300,000,000 aggregate principal amount
of its 5.50% Notes due February 15, 2004 (the "Initial Securities"). The
Initial Securities will be issued pursuant to an Indenture, dated as of
February 11, 1999 (the "Indenture"), among the Company and The Bank of New
York, as trustee (the "Trustee"). As an inducement to the Initial Purchasers
to enter into the Purchase Agreement, the Company agrees with the Initial
Purchasers, for the benefit of the holders of the Initial Securities
(including, without limitation, the Initial Purchasers), the Exchange
Securities (as defined below) and the Private Exchange Securities (as defined
below) (collectively the "Holders"), as follows:
I. Registered Exchange Offer. The Company shall, at its own
cost, prepare and, not later than 90 days after (or if the 90th day is not a
business day, the first business day thereafter) the date of original issue of
the Initial Securities (the "Issue Date"), file with the Securities and
Exchange Commission (the "Commission") a registration statement (the "Exchange
Offer Registration Statement") on an appropriate form under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to a proposed offer
(the "Registered Exchange Offer") to the Holders of Transfer Restricted
Securities (as defined in Section 6 hereof), who are not prohibited by any law
or policy of the Commission from participating in the Registered Exchange
Offer, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of debt securities (the
"Exchange Securities") of the Company issued under the Indenture and identical
in all material respects to the Initial Securities (except for the transfer
restrictions relating to the Initial Securities and the provisions relating
to the matters described in Section 6 hereof) that would be registered under
the Securities Act. The Company shall use its best efforts to cause such
Exchange Offer Registration Statement to become effective under the Securities
Act as promptly as possible, but in no event later than 180 days (or if the
180th day is not a business day, the first business day thereafter) after the
Issue Date of the Initial Securities and shall keep the Exchange Offer
Registration Statement effective for not less than 30 days (or longer, if
required by applicable law) after the date notice of the Registered Exchange
Offer is mailed to the Holders (such period being called the "Exchange Offer
Registration Period") and shall use its best efforts to issue on or prior to
30 business days after the Exchange Offer Registration Statement is declared
effective the Exchange Securities in exchange for all such Initial Securities.
If the Company effects the Registered Exchange Offer, the
Company will be entitled to close the Registered Exchange Offer 30 days after
the commencement thereof provided that the Company has accepted all the Initial
Securities theretofore validly tendered in accordance with the terms of the
Registered Exchange Offer.
Following the declaration of the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the
Registered Exchange Offer, it being the objective of such Registered Exchange
Offer to enable each Holder of Transfer Restricted Securities (as defined in
Section 6 hereof) electing to exchange the Initial Securities for Exchange
Securities (assuming that such Holder is not an affiliate of the Company
within the meaning of the Securities Act, acquires the Exchange Securities in
the ordinary course of such Holder's business and has no arrangements with any
person to participate in the distribution of the Exchange Securities and is
not prohibited by any law or policy of the Commission from participating in
the Registered Exchange Offer) to trade such Exchange Securities from and
after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States.
The Company acknowledges that, pursuant to current
interpretations by the Commission's staff of Section 5 of the Securities Act,
in the absence of an applicable exemption therefrom, (i) each Holder which is
a broker-dealer electing to exchange Initial Securities, acquired for its own
account as a result of market making activities or other trading activities,
for Exchange Securities (an "Exchanging Dealer"), is required to deliver a
prospectus containing information substantially to the effect set forth in (a)
Annex A hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, and (b) Annex B hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell
Securities (as defined below) acquired in exchange for Initial Securities
constituting any portion of an unsold allotment is required to deliver a
prospectus containing the information required by Items 507 or 508 of
Regulation S-K under the Securities Act, as applicable, in connection with such
sale.
The Company shall, subject to Section 6(b) hereof, use its best
efforts to keep the Exchange Offer Registration Statement effective and to
amend and supplement the prospectus contained therein, in order to permit such
prospectus to be lawfully delivered by all persons subject to the prospectus
delivery requirements of the Securities Act for such period of time as such
persons must comply with such requirements in order to resell the Exchange
Securities; provided, however, that (i) in the case where such prospectus and
any amendment or supplement thereto must be delivered by an Exchanging Dealer
or an Initial Purchaser, such period shall be the lesser of 135 days and the
date on which all Exchanging Dealers and the Initial Purchasers have sold all
Exchange Securities held by them (unless such period is extended pursuant to
Section 3(j) below) and (ii) the Company shall make such prospectus and any
amendment or supplement thereto available to any broker-dealer for use in
connection with any resale of any Exchange Securities for a period of not less
than 135 days after the consummation of the Registered Exchange Offer.
If, upon consummation of the Registered Exchange Offer, any
Initial Purchaser holds Initial Securities acquired by it as part of its
initial distribution, the Company, simultaneously with the delivery of the
Exchange Securities pursuant to the Registered Exchange Offer, shall issue and
deliver to such Initial Purchaser upon the written request of such Initial
Purchaser, in exchange (the "Private Exchange") for the Initial Securities
held by such Initial Purchaser, a like principal amount of debt securities of
the Company issued under the Indenture and identical in all material respects
(including the existence of restrictions on transfer under the Securities Act
and the securities laws of the several states of the United States, but
excluding provisions relating to the matters described in Section 6 hereof) to
the Initial Securities (the "Private Exchange Securities"). The Initial
Securities, the Exchange Securities and the Private Exchange Securities are
herein collectively called the "Securities".
In connection with the Registered Exchange Offer, the Company
shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date notice
thereof is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of New
York, which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply with all applicable laws.
As soon as practicable after the close of the Registered
Exchange Offer or the Private Exchange, as the case may be, the Company shall:
(x) accept for exchange all the Securities validly tendered and
not withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(y) deliver to the Trustee for cancellation all the Initial
Securities so accepted for exchange; and
(z) cause the Trustee to authenticate and deliver promptly to
each Holder of the Initial Securities, Exchange Securities or Private Exchange
Securities, as the case may be, equal in principal amount to the Initial
Securities of such Holder so accepted for exchange.
The Indenture will provide that the Exchange Securities will
not be subject to the transfer restrictions set forth in the Indenture and
that all the Securities will vote and consent together on all matters as one
class and that none of the Securities will have the right to vote or consent
as a class separate from one another on any matter.
Interest on each Exchange Security and Private Exchange
Security issued pursuant to the Registered Exchange Offer and in the Private
Exchange will accrue from the last interest payment date on which interest was
paid on the Initial Securities surrendered in exchange therefor or, if no
interest has been paid on the Initial Securities, from the date of original
issue of the Initial Securities.
Each Holder participating in the Registered Exchange Offer
shall be required to represent to the Company that at the time of the
consummation of the Registered Exchange Offer (i) any Exchange Securities
received by such Holder will be acquired in the ordinary course of business,
(ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Securities or the Exchange Securities
within the meaning of the Securities Act, (iii) such Holder is not an
"affiliate," as defined in Rule 405 of the Securities Act, of the Company or
if it is an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent
applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged
in, and does not intend to engage in, the distribution of the Exchange
Securities and (v) if such Holder is a broker-dealer, that it will receive
Exchange Securities for its own account in exchange for Initial Securities
that were acquired as a result of market-making activities or other trading
activities and that it will be required to acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities.
Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration
Statement, and any supplement to such prospectus, does not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
2. Shelf Registration. If, (i) because of any change in law or
in applicable interpretations thereof by the staff of the Commission, the
Company is not permitted to effect a Registered Exchange Offer, as
contemplated by Section 1 hereof, (ii) any Initial Purchaser so requests with
respect to the Initial Securities (or the Private Exchange Securities) not
eligible to be exchanged for Exchange Securities in the Registered Exchange
Offer and held by it following consummation of the Registered Exchange Offer,
(iii) any Holder (other than an Exchanging Dealer) of Transfer Restricted
Securities (as defined in Section 6 hereof) notifies the Company in writing
prior to consummation of the Exchange Offer that, based upon an opinion of
counsel, it is not eligible to participate in the Registered Exchange Offer
or, in the case of any Holder (other than an Exchanging Dealer) that
participates in the Registered Exchange Offer, such Holder does not receive
freely tradeable Exchange Securities on the date of the exchange, or (iv) the
Registered Exchange Offer is not consummated within 220 days of the Issue
Date, the Company shall take the following actions:
(a) The Company shall, at its cost, as promptly as practicable
(but in no event more than 90 days after so required or requested pursuant to
this Section 2) file with the Commission and thereafter shall use its best
efforts to cause to be declared effective a registration statement (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, a "Registration Statement") on an appropriate form under the
Securities Act relating to the offer and sale of the Transfer Restricted
Securities by the Holders thereof from time to time in accordance with the
methods of distribution set forth in the Shelf Registration Statement and Rule
415 under the Securities Act (hereinafter, the "Shelf Registration");
provided, however, that no Holder (other than an Initial Purchaser) shall be
entitled to have the Securities held by it covered by such Shelf Registration
Statement unless such Holder agrees in writing to be bound by all the
provisions of this Agreement applicable to such Holder.
(b) The Company shall use its reasonable best efforts to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered by the Holders of the
relevant Securities, for a period of two years (or for such longer period if
extended pursuant to Section 3(j) below) from the date of its effectiveness or
such shorter period that will terminate when all the Securities covered by the
Shelf Registration Statement (i) have been sold pursuant thereto or (ii) are
no longer restricted securities (as defined in Rule 144 under the Securities
Act, or any successor rule thereof). The Company shall be deemed not to have
used its best efforts to keep the Shelf Registration Statement effective
during the requisite period if it voluntarily takes any action (other than an
action permitted by Section 6(b)) that would result in Holders of Securities
covered thereby not being able to offer and sell such Securities during that
period, unless such action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to
the contrary, the Company shall cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement, amendment or supplement, (i) to
comply in all material respects with the applicable requirements of the
Securities Act and the rules and regulations of the Commission and (ii) not to
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
3. Registration Procedures. In connection with any Shelf
Registration contemplated by Section 2 hereof and, to the extent applicable,
any Registered Exchange Offer contemplated by Section 1 hereof, the following
provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser,
prior to the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and, in the event that an Initial Purchaser (with
respect to any portion of an unsold allotment from the original offering) is
participating in the Registered Exchange Offer or the Shelf Registration
Statement, the Company shall use its best efforts to reflect in each such
document, when so filed with the Commission, such comments as such Initial
Purchaser reasonably may propose; (ii) include information substantially to
the effect set forth in Annex A hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section and in Annex B hereto
in the "Plan of Distribution" section of the prospectus forming a part of the
Exchange Offer Registration Statement and include the information set forth in
Annex C hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; (iii) if requested by an Initial Purchaser in
connection with any Shelf Registration, include the information required by
Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in
the prospectus forming a part of the Exchange Offer Registration Statement;
and (iv) in the case of a Shelf Registration Statement, include the names of
the Holders who propose to sell Securities pursuant to the Shelf Registration
Statement as selling securityholders.
(b) The Company shall give written notice to the Initial
Purchasers, the Holders of the Securities (if pursuant to clause (i) hereof,
only in the event of a Shelf Registration Statement) and any Participating
Broker-Dealer from whom the Company has received prior written notice that it
will be a Participating Broker-Dealer in the Registered Exchange Offer
(which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by
an instruction to suspend the use of the prospectus until the requisite
changes have been made):
(i) when the Registration Statement or any amendment thereto
has been filed with the Commission and when the Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of
any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose; and
(v) of the happening of any event that requires the Company
to make changes in the Registration Statement or the
prospectus in order that the Registration Statement or the
prospectus do not contain an untrue statement of a material
fact nor omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the
case of the prospectus, in light of the circumstances under
which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.
(d) The Company shall, upon request, furnish to each Holder of
Securities included within the coverage of the Shelf Registration, without
charge, at least one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference).
(e) The Company shall deliver to each Exchanging Dealer and CSFB
and, upon request, each other Initial Purchaser, and to any other Holder who so
requests, without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if any Initial Purchaser or any such Holder
requests, all exhibits thereto (including those incorporated by reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Securities included within the coverage of the Shelf
Registration, without charge, as many copies of the prospectus (including each
preliminary prospectus) included in the Shelf Registration Statement and any
amendment or supplement thereto as such person may reasonably request. The
Company consents, subject to the provisions of this Agreement, to the use of
the prospectus or any amendment or supplement thereto by each of the selling
Holders of the Securities in connection with the offering and sale of the
Securities covered by the prospectus, or any amendment or supplement thereto,
included in the Shelf Registration Statement.
(g) The Company shall deliver to each Initial Purchaser, any
Exchanging Dealer, any Participating Broker-Dealer and such other persons
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the
Exchange Offer Registration Statement and any amendment or supplement thereto
as such persons may reasonably request. The Company consents, subject to the
provisions of this Agreement, to the use of the prospectus or any amendment or
supplement thereto by any Initial Purchaser, if necessary, any Participating
Broker-Dealer and such other persons required to deliver a prospectus
following the Registered Exchange Offer in connection with the offering and
sale of the Exchange Securities covered by the prospectus, or any amendment or
supplement thereto, included in such Exchange Offer Registration Statement.
(h) Prior to any public offering of the Securities pursuant to
any Registration Statement the Company shall register or qualify or cooperate
with the Holders of the Securities included therein and their respective
counsel in connection with the registration or qualification of the Securities
for offer and sale under the securities or "blue sky" laws of such states of
the United States as any Holder of the Securities reasonably requests in
writing and do any and all other acts or things necessary or advisable to
enable the offer and sale in such jurisdictions of the Securities covered by
such Registration Statement; provided, however, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it
is not then so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it is not
then so subject.
(i) The Company shall cooperate with the Holders of the
Securities to facilitate the timely preparation and delivery of certificates
representing the Securities to be sold pursuant to any Registration Statement
free of any restrictive legends and in such denominations and registered in
such names as the Holders may request a reasonable period of time prior to
sales of the Securities pursuant to such Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraphs
(ii) through (v) of Section 3(b) above during the period for which the Company
is required to maintain an effective Registration Statement, the Company shall,
subject to Section 6(b), promptly prepare and file a post-effective amendment
to the Registration Statement or a supplement to the related prospectus and
any other required document so that, as thereafter delivered to Holders of the
Securities or purchasers of Securities, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the
Company notifies the Initial Purchasers, the Holders of the Securities and any
known Participating Broker-Dealer in accordance with paragraphs (ii)
through (v) of Section 3(b) above to suspend the use of the prospectus
until the requisite changes to the prospectus have been made, then the
Initial Purchasers, the Holders of the Securities and any such
Participating Broker-Dealers shall suspend use of such prospectus, and the
period of effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement provided
for in Section 1 above shall each be extended by the number of days from
and including the date of the giving of such notice to and including the
date when the Initial Purchasers, the Holders of the Securities and any
known Participating Broker-Dealer shall have received such amended or
supplemented prospectus pursuant to this Section 3(j).
(k) Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for the
Exchange Securities or the Private Exchange Securities, as the case may be,
and provide the applicable trustee with printed certificates for the Exchange
Securities or the Private Exchange Securities, as the case may be, in a form
eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make generally
available to its security holders (or otherwise provide in accordance with
Section 11(a) of the Securities Act) an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days after
the end of a 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of the Registration Statement, which
statement shall cover such 12-month period.
(m) The Company shall cause the Indenture to be qualified under
the Trust Indenture Act of 1939, as amended, in a timely manner and containing
such changes, if any, as shall be necessary for such qualification. In the
event that such qualification would require the appointment of a new trustee
under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.
(n) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Securities as the
Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement, and the Company may exclude from such registration the
Securities of any Holder that unreasonably fails to furnish such information
within a reasonable time after receiving such request.
(o) The Company shall enter into such customary agreements
(including, if requested, an underwriting agreement in customary form) and take
all such other action, if any, as any Holder of the Securities shall reasonably
request in order to facilitate the disposition of the Securities pursuant to
any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall
(i) make reasonably available for inspection by the Holders of the Securities,
any underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent retained by
the Holders of the Securities or any such underwriter all relevant financial
and other records, pertinent corporate documents and properties of the Company
and (ii) cause the Company's officers, directors, employees, accountants and
auditors to supply all relevant information reasonably requested by the
Holders of the Securities or any such underwriter, attorney, accountant or
agent in connection with the Shelf Registration Statement, in each case, as
shall be reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that the foregoing inspection and information gathering
shall be coordinated on behalf of the Initial Purchasers by you and on behalf
of the other parties, by one counsel designated by and on behalf of such other
parties as described in Section 4 hereof.
(q) In the case of any Shelf Registration, the Company, if
requested by any Holder of Securities covered thereby, shall cause (i) its
counsel to deliver an opinion and updates thereof relating to the Securities
in customary form addressed to such Holders and the managing underwriters, if
any, thereof and dated, in the case of the initial opinion, the effective date
of such Shelf Registration Statement (it being agreed that the matters to be
covered by such opinion shall include, without limitation, the due
incorporation and good standing of the Company and its subsidiaries; the
qualification of the Company and its subsidiaries to transact business as
foreign corporations; the due authorization, execution and delivery of the
relevant agreement of the type referred to in Section 3(o) hereof; the due
authorization and the validity and enforceability, of the applicable
Securities; the absence of governmental approvals required to be obtained in
connection with the Shelf Registration Statement, the offering and sale of the
applicable Securities, or any agreement of the type referred to in Section
3(o) hereof; the compliance as to form of such Shelf Registration Statement
and any documents incorporated by reference therein and of the Indenture with
the requirements of the Securities Act and the Trust Indenture Act,
respectively; and, as of the date of the opinion and as of the effective date
of the Shelf Registration Statement or most recent post-effective amendment
thereto, as the case may be, the absence from such Shelf Registration
Statement and the prospectus included therein (including any documents
incorporated by reference therein), as then amended or supplemented, of an
untrue statement of a material fact or the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) its officers to execute and
deliver all customary documents and certificates and updates thereof
requested by any underwriters of the applicable Securities and (iii) its
independent public accountants to provide to the selling Holders of the
applicable Securities and any underwriter therefor a comfort letter in
customary form and covering matters of the type customarily covered in
comfort letters in connection with primary underwritten offerings, subject
to receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.
(r) In the case of the Registered Exchange Offer, if requested
by any Initial Purchaser or any known Participating Broker-Dealer, the Company
shall cause (i) its counsel to deliver to such Initial Purchaser or such
Participating Broker-Dealer a signed opinion in the form set forth in Section
6(c)-(d) of the Purchase Agreement with such changes as are customary in
connection with the preparation of a Registration Statement and (ii) its
independent public accountants to deliver to such Initial Purchaser or such
Participating Broker-Dealer a comfort letter, in customary form, meeting the
requirements as to the substance thereof as set forth in Section 6(a) of the
Purchase Agreement, with appropriate date changes.
(s) If a Registered Exchange Offer or a Private Exchange is to
be consummated, upon delivery of the Initial Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange for
the Exchange Securities or the Private Exchange Securities, as the case may
be, the Company shall mark, or caused to be marked, on the Initial Securities
so exchanged that such Initial Securities are being canceled in exchange for
the Exchange Securities or the Private Exchange Securities, as the case may
be; in no event shall the Initial Securities be marked as paid or otherwise
satisfied.
(t) The Company will use its best efforts to, if the Initial
Securities were not previously rated, cause the Securities covered by a Shelf
Registration Statement to be rated with the appropriate rating agencies, if so
requested by Holders of a majority in aggregate principal amount of Securities
covered by such Shelf Registration Statement, or by the managing underwriters,
if any.
(u) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Conduct Rules (the "Rules") of the National
Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder
of such Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company will assist
such broker-dealer in complying with the requirements of such Rules,
including, without limitation, by (i) if such Rules, including Rule 2720,
shall so require, engaging a "qualified independent underwriter" (as defined
in Rule 2720) to participate in the preparation of the Registration Statement
relating to such Securities, to exercise usual standards of due diligence in
respect thereto and, if any portion of the offering contemplated by such
Registration Statement is an underwritten offering or is made through a
placement or sales agent, to recommend the yield of such Securities, (ii)
indemnifying any such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 5 hereof and (iii)
providing such information to such broker-dealer as may be required in order
for such broker-dealer to comply with the requirements of the Rules.
(v) The Company shall use its best efforts to take all other
steps necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.
4. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 1 through 3 hereof (including the reasonable fees and expenses, if
any, of one firm of counsel designated by the Holders of a majority in
principal amount of the Securities, incurred in connection with the Registered
Exchange Offer or a Shelf Registration, whether or not the Registered Exchange
Offer or a Shelf Registration is filed or becomes effective, but not for
underwriting fees or commissions.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Holder of the Securities, any Participating Broker-Dealer and each person, if
any, who controls such Holder or such Participating Broker-Dealer within the
meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses,
claims, damages or liabilities, joint or several, or any actions in respect
thereof (including, but not limited to, any losses, claims, damages,
liabilities or actions relating to purchases and sales of the Securities)
to which each Indemnified Party may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a Shelf Registration,
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 shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action in respect thereof;
provided, however, that (i) the Company shall not be liable in any such
case to the extent that such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in a Registration Statement or prospectus
or in any amendment or supplement thereto or in any preliminary prospectus
relating to a Shelf Registration in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Company
by or on behalf of such Holder specifically for inclusion therein and (ii)
with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus relating to a
Shelf Registration Statement, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Holder or
Participating Broker-Dealer from whom the person asserting any such losses,
claims, damages or liabilities purchased the Securities concerned, to the
extent that a prospectus relating to such Securities was required to be
delivered by such Holder or Participating Broker-Dealer under the
Securities Act in connection with such purchase and any such loss, claim,
damage or liability of such Holder or Participating Broker-Dealer 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 Securities to such person,
a copy of the final prospectus if the Company had previously furnished
copies thereof to such Holder or Participating Broker-Dealer; provided
further, however, that this indemnity agreement will be in addition to any
liability which the Company may otherwise have to such Indemnified Party.
The Company shall also indemnify underwriters, their officers and directors
and each person who controls such underwriters within the meaning of the
Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if
requested by such Holders.
(b) Each Holder of the Securities, severally and not jointly,
will indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act from and against any losses, claims, damages or liabilities or any actions
in respect thereof, to which the Company or any such controlling person may
become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus relating to a
Shelf Registration, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder
specifically for inclusion therein; and, subject to the limitation set forth
immediately preceding this clause, shall reimburse, as incurred, the Company
for any legal or other expenses reasonably incurred by the Company or any such
controlling person in connection with investigating or defending any loss,
claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability which such Holder may otherwise
have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action or proceeding (including
a governmental investigation), such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b) above.
In case any such action is brought against any indemnified party, and it
notifies the 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 (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying 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 5 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof. 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.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) 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 (or actions in respect thereof)
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the exchange of the Securities, pursuant to the Registered Exchange Offer or,
if applicable, the Shelf Registration, or (ii) if the allocation provided by
the foregoing clause (i) 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 the indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations. The relative fault of the
parties 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 on the one hand or such Holder or such other indemnified party, as
the case may be, on the other, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such 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 (d) 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 (d).
Notwithstanding any other provision of this Section 5(d), the Holders of the
Securities shall not be required to contribute any amount in excess of the
amount by which the net proceeds received by such Holders from the sale of the
Securities pursuant to a Registration Statement exceeds the amount of damages
which such Holders have 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 Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls such indemnified party within
the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 5 shall survive
the sale of the Securities pursuant to a Registration Statement and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified
party.
6. Additional Interest Under Certain Circumstances.
(a) Additional interest (the "Additional Interest") with
respect to the Initial Securities shall be assessed as follows if any of the
following events occur (each such event in clauses (i) through (iii) below a
"Registration Default":
(i) If by May 12, 1999, neither the Exchange Offer
Registration Statement nor a Shelf Registration Statement
has been filed with the Commission;
(ii) If by September 19, 1999, neither the Registered
Exchange Offer is consummated nor, if required in lieu
thereof, the Shelf Registration Statement is declared
effective by the Commission; or
(iii) If after either the Exchange Offer Registration
Statement or the Shelf Registration Statement is declared
effective (A) such Registration Statement thereafter ceases
to be effective or (B) such Registration Statement or the
related prospectus ceases to be usable in connection with
resales of Transfer Restricted Securities during the periods
specified herein because either (1) any event occurs as a
result of which the related prospectus forming part of such
Registration Statement would include any 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
(2) it shall be necessary to amend such Registration
Statement or supplement the related prospectus, to comply
with the Securities Act or the Exchange Act or the
respective rules thereunder.
Additional Interest shall accrue on the Initial Securities over and above the
interest set forth in the title of the Securities from and including the date
on which any such Registration Default shall occur to but excluding the date
on which all such Registration Defaults have been cured, at a rate of 0.50%
per annum (regardless of the number of Registration Defaults).
(b) A Registration Default referred to in Section 6(a)(iii)
hereof shall be deemed not to have occurred and be continuing in relation to a
Shelf Registration Statement or the related prospectus if (i) such
Registration Default has occurred solely as a result of (x) the filing of a
post-effective amendment to such Shelf Registration Statement to incorporate
annual audited financial information with respect to the Company where such
post-effective amendment is not yet effective and needs to be declared
effective to permit Holders to use the related prospectus or (y) other
material events, with respect to the Company that would need to be described
in such Shelf Registration Statement or the related prospectus and (ii) in the
case of clause (y), the Company is proceeding promptly and in good faith to
amend or supplement such Shelf Registration Statement and related prospectus
to describe such events; provided, however, that in any case if such
Registration Default occurs for a continuous period in excess of 30 days,
Additional Interest shall be payable in accordance with the above paragraph
from the day such Registration Default occurs until such Registration Default
is cured.
(c) Any amounts of Additional Interest due pursuant to clause
(i), (ii) or (iii) of Section 6(a) above will be payable in cash on the
regular interest payment dates with respect to the Securities. The amount of
Additional Interest will be determined by multiplying the applicable
Additional Interest rate by the principal amount of the Initial Securities, as
the case may be, multiplied by a fraction, the numerator of which is the
number of days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
(d) "Transfer Restricted Securities" means each Security until
(i) the date on which such Security has been exchanged by a person other than
a broker-dealer for a freely transferable Exchange Security in the
Registered Exchange Offer, (ii) following the exchange by a broker-dealer
in the Registered Exchange Offer of an Initial Security for an Exchange
Note, the date on which such Exchange Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a
copy of the prospectus contained in the Exchange Offer Registration
Statement, (iii) the date on which such Security has been effectively
registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement or (iv) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act or
is saleable pursuant to Rule 144(k) under the Securities Act.
7. Underwritten Registrations. If any of the Transfer
Restricted Securities covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering ("Managing Underwriters") will
be selected by the Holders of a majority in aggregate principal amount of such
Transfer Restricted Securities to be included in such offering.
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
8. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, except by the Company
and the written consent of the Holders of a majority in principal amount of
the Securities affected by such amendment, modification, supplement, waiver or
consents.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, first-class
mail, facsimile transmission, or air courier which guarantees overnight
delivery:
(1) if to a Holder of the Securities, at the most current
address given by such Holder to the Company.
(2) if to the Initial Purchasers:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8278
Attention: Transactions Advisory Group
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Fax No.: (212) 259-6333
Attention: Morton A. Pierce, Esq.
(3) if to the Company, at its address as follows:
CVS Corporation
One CVS Drive
Woonsocket, Rhode Island 02895
Attention: General Counsel
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Deanna Kirkpatrick, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
three business days after being deposited in the mail, postage prepaid, if
mailed; when receipt is acknowledged by recipient's facsimile machine
operator, if sent by facsimile transmission; and on the day delivered, if sent
by overnight air courier guaranteeing next day delivery.
(c) No Inconsistent Agreements. The Company has not, as of the
date hereof, entered into, nor shall it, on or after the date hereof, enter
into, any agreement with respect to its securities that is inconsistent with
the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof.
(d) Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns.
(e) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing 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.
(h) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability
of any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Securities Held by the Company. Whenever the consent or
approval of Holders of a specified percentage of principal amount of
Securities is required hereunder, Securities held by the Company or its
affiliates (other than subsequent Holders of Securities if such subsequent
Holders are deemed to be affiliates solely by reason of their holdings of such
Securities) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the several Initial Purchasers and the Company in accordance
with its terms.
Very truly yours,
CVS CORPORATION
By:
----------------------------
Name:
Title:
THE FOREGOING REGISTRATION
RIGHTS AGREEMENT IS HEREBY CONFIRMED
AND ACCEPTED AS OF THE DATE FIRST
ABOVE WRITTEN.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, STEARNS & CO. INC.
BNY CAPITAL MARKETS, INC.
by: CREDIT SUISSE FIRST BOSTON CORPORATION
By:
----------------------------
Name:
Title:
ANNEX A
Each broker-dealer that receives Exchange Securities for its
own account in exchange for Initial Securities, where such Initial Securities
were acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Securities. See "Plan of
Distribution."
ANNEX B
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its
own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange
Securities. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-
dealer in connection with resales of Exchange Securities received in exchange
for Initial Securities where such Initial Securities were acquired as a result
of market-making activities or other trading activities. The Company has
agreed that, for a period of 135 days after the Expiration Date, it will
make this prospectus, as amended or supplemented, available to any broker-
dealer for use in connection with any such resale. In addition, until ,
199 , all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.(*)
- ------------
(*) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer Prospectus.
The Company will not receive any proceeds from any sale of
Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be
sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the
Exchange Securities or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 135 days after the Expiration Date the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that
requests such documents in the Letter of Transmittal. The Company has
agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the Holders of the Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
Holders of the Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
ANNEX C
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
------------------------------------------------------
Address:
----------------------------------------------------
----------------------------------------------------
If the undersigned is not a broker-dealer, t he undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Initial Securities that were
acquired as a result of market-making activities or other trading activities,
it acknowledges that it will deliver a prospectus in connection with any
resale of such Exchange Securities; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
- --------------------------------------------------------------------------------
EXHIBIT 4.1
CVS CORPORATION
as Issuer,
and
THE BANK OF NEW YORK
as Trustee
---------------------------
INDENTURE
Dated as of February 11, 1999
---------------------------
5 1/2 NOTES DUE FEBRUARY 15, 2004
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION WITNE
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Other Definitions...............................................8
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...............8
SECTION 1.04. Rules of Construction...........................................9
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating................................................10
SECTION 2.02. Execution and Authentication...................................12
SECTION 2.03. Registrar and Paying Agent.....................................12
SECTION 2.04. Paying Agent to Hold Money in Trust............................13
SECTION 2.05. Lists of Holders of Notes......................................13
SECTION 2.06. Transfer and Exchange..........................................14
SECTION 2.07. Replacement Notes..............................................20
SECTION 2.08. Outstanding Notes..............................................20
SECTION 2.09. Temporary Notes and Certificated Notes.........................20
SECTION 2.10. Cancellation...................................................21
SECTION 2.11. Defaulted Interest.............................................22
SECTION 2.12. CUSIP Number...................................................22
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.............................................22
SECTION 3.02. Selection of Notes to Be Redeemed..............................23
SECTION 3.03. Notice of Redemption...........................................23
SECTION 3.04. Effect of Notice of Redemption.................................24
SECTION 3.05. Deposit of Redemption Price....................................24
SECTION 3.06. Notes Redeemed in Part.........................................25
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PAGE
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Principal, Premium and Interest.....................25
SECTION 4.02. Maintenance of Office or Agency................................25
SECTION 4.03. SEC Reports....................................................25
SECTION 4.04. Restrictions on Secured Funded Debt............................26
SECTION 4.05. Limitation on Sale/leaseback Transactions......................29
SECTION 4.06. Compliance Certificates........................................30
SECTION 4.07. Further Instruments and Acts...................................31
ARTICLE 5
SUCCESSORS
SECTION 5.01. When CVS May Merge, Consolidate or Dispose of Assets...........31
SECTION 5.02. Successor Company Substituted..................................32
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default..............................................32
SECTION 6.02. Acceleration...................................................34
SECTION 6.03. Other Remedies.................................................34
SECTION 6.04. Waiver of past Defaults........................................34
SECTION 6.05. Control by Majority............................................35
SECTION 6.06. Limitation on Suits............................................35
SECTION 6.07. Unconditional Right of Holders of Notes to Receive Payment.....36
SECTION 6.08. Collection Suit by Trustee.....................................36
SECTION 6.09. Trustee May File Proofs of Claim...............................36
SECTION 6.10. Priorities.....................................................37
SECTION 6.11. Undertaking for Costs..........................................37
SECTION 6.12. Waiver of Stay, Extension and Usury Laws.......................37
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee..............................................38
SECTION 7.02. Rights of Trustee..............................................39
SECTION 7.03. Individual Rights of Trustee...................................40
SECTION 7.04. Trustee's Disclaimer...........................................40
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PAGE
SECTION 7.05. Notice of Default..............................................40
SECTION 7.06. Reports by Trustee to Holders of Notes.........................40
SECTION 7.07. Compensation and Indemnity.....................................41
SECTION 7.08. Replacement of Trustee.........................................42
SECTION 7.09. Successor Trustee by Merger, Etc...............................43
SECTION 7.10. Eligibility; Disqualification..................................43
SECTION 7.11. Preferential Collection of Claims Against CVS..................44
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance....................44
SECTION 8.02. Conditions to Defeasance.......................................45
SECTION 8.03. Application of Trust Money.....................................46
SECTION 8.04. Repayment to CVS...............................................46
SECTION 8.05. Indemnity for Government Obligations...........................46
SECTION 8.06. Reinstatement
....................................................................47
ARTICLE 9
AMENDMENT, SUPPLEMENT AND
SECTION 9.01. Without Consent of Holders of Notes............................47
SECTION 9.02. With Consent of Holders of Notes...............................48
SECTION 9.03. Compliance with Trust Indenture Act............................50
SECTION 9.04. Revocation and Effect of Consents and Waivers..................50
SECTION 9.05. Notation on or Exchange of Notes...............................50
SECTION 9.06. Trustee to Sign Amendments, Etc................................50
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls..................................51
SECTION 10.02. Notices.......................................................51
SECTION 10.03. Communication by Holders of Notes with Other Holder of Notes..52
SECTION 10.04. Certificate and Opinion as to Conditions Precedent............52
SECTION 10.05. Statements Required in Certificate or Opinion.................53
SECTION 10.06. Rules by Trustee and Agents...................................53
SECTION 10.07. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders..............................53
iii
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PAGE
SECTION 10.08. Governing Law.................................................54
SECTION 10.09. No Adverse Interpretation of Other Agreements.................54
SECTION 10.10. Successors....................................................54
SECTION 10.11. Severability..................................................54
SECTION 10.12. Counterpart Originals.........................................54
SECTION 10.13. Table of Contents, Headings, Etc..............................54
iv
<PAGE>
INDENTURE, dated as of February 11, 1999, between CVS Corporation
("CVS"), a corporation duly organized and existing under the laws of the State
of Delaware, and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee").
RECITALS OF CVS
CVS has duly authorized the execution and delivery of this Indenture to
provide for the issuance of CVS' 5 1/2% Notes Due February 15, 2004 issuable as
provided in this Indenture. All things necessary to make this Indenture a valid
agreement of CVS, in accordance with its terms, have been done, and CVS has done
all things necessary to make the Notes, when executed by CVS and authenticated
and delivered by the Trustee hereunder and duly issued by CVS, the valid
obligations of CVS as hereinafter provided.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION WITNE
SECTION 1.01. Definitions.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Attributable Debt" means, in connection with any sale and leaseback
transaction under which either the Company or any Restricted Subsidiary is at
the time liable as lessee for a term of more than 12 months and at any date as
of which the amount thereof is to be determined, the lesser of (A) total net
obligations of the lessee for rental
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payments during the remaining term of the lease discounted from the respective
due dates thereof to such determination date at a rate per annum equivalent to
the greater of (i) the weighted average Yield to Maturity of the Notes, such
average being weighted by the principal amount of the Notes and (ii) the
interest rate inherent in such lease (as determined in good faith by the
Company), both to be compounded semi-annually or (B) the sale price for the
assets so sold and leased multiplied by a fraction the numerator of which is the
remaining portion of the base term of the lease included in such transaction and
the denominator or which is the base term of the lease.
"Bankruptcy Law" means title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of CVS or any
committee thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means with respect to any Person any
obligation which is required to be classified and accounted for as a capital
lease on the face of a balance sheet of such Person prepared in accordance with
GAAP; the amount of such obligation shall be the capitalized amount thereof,
determined in accordance with GAAP; and the Stated Maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" means with respect to any Person any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in such Person (however designated), including any
preferred stock, but excluding debt securities convertible into or exchangeable
for such equity.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recent consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of the fiscal quarter of the Company
ending not more than 135 days prior to such date, prepared in accordance with
U.S. generally accepted accounting principles, less (i) all current liabilities
(due within one year) as shown on such balance sheet, (ii) investments in and
advances to Unrestricted Subsidiaries and (iii) Intangible Assets and
liabilities relating thereto.
"Corporate Trust Office of the Trustee" shall be at the address of the
2
<PAGE>
Trustee specified in Section 10.02 or such other address as to which the Trustee
may give notice to CVS.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and their
respective successors.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the 5 1/2% Notes Due February 15, 2004 to be
issued pursuant to this Indenture in connection with a Registered Exchange Offer
pursuant to the Registration Rights Agreement.
"Funded Debt" means (i) any Indebtedness of the Company or a Restricted
Subsidiary maturing more than 12 months after the time of computation thereof,
(ii) guarantees of Funded Debt or of dividends of others (except guarantees in
connection with the sale or discount of accounts receivable, trade acceptances
and other paper arising in the ordinary course of business), (iii) in the case
of any Restricted Subsidiary, all preferred stock having mandatory redemption
provisions of such Restricted Subsidiary as reflected on such Restricted
Subsidiary's balance sheet prepared in accordance with U.S. generally accepted
accounting principles, and (iv) all Capital Lease Obligations.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
(i) in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants; (ii) statements and
pronouncements of the Financial Accounting Standards Board; (iii) in such other
statements by such other entity as approved by a significant segment of the
accounting profession; and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Holder" means the Person in whose name a Note is registered on the
Note Register.
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"Indebtedness" means, at any date, without duplication, all obligations
for borrowed money of the Company or a Restricted Subsidiary.
"Indenture" means this Indenture, as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Initial Notes" means the 5 1/2% Notes Due February 15, 2004 issued
under this Indenture on or about the date hereof.
"Initial Purchasers" means (i) Credit Suisse First Boston Corporation,
Bear, Stearns & Co. Inc., and BNY Capital Markets, Inc., in respect of the
Initial Notes, and (ii) the initial purchasers of additional notes.
"Intangible Assets" means, at any date, the value, as shown on or
reflected in the most recent consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of the fiscal quarter of the Company
ending not more than 135 days prior to such date, prepared in accordance with
generally accepted accounting principles of: (i) all trade names, trademarks,
licenses, patents, copyrights, service marks, goodwill and other like
intangibles; (ii) organizational and development costs; (iii) deferred charges
(other than prepaid items, such as insurance, taxes, interest, commissions,
rents, pensions, compensation and similar items and tangible assets being
amortized); and (iv) unamortized debt discount and expense, less unamortized
premium.
"Issue Date" means the date on which the Initial Notes are originally
issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York, in the city of the Corporate Trust Office
of the Trustee or at a place of payment are authorized by law, regulation or
executive order to remain closed. If a payment date is a Legal Holiday, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Liens" means such pledges, mortgages, security interests and other
liens on any Principal Property of the Company or a Restricted Subsidiary which
secure Secured Debt.
"Nonrecourse Obligation" means indebtedness or lease payment
obligations substantially related to (i) the acquisition of assets not
previously owned by the Company or any Restricted Subsidiary or (ii) the
financing of a project involving the development or expansion of properties of
the Company or any Restricted Subsidiary, as to which the obligee with respect
to such indebtedness or obligation has no recourse to the Company or any
Restricted Subsidiary or any assets of the Company or any Subsidiary other than
4
<PAGE>
the assets which were acquired with the proceeds of such transaction or the
project financed with the proceeds of such transaction (and the proceeds
thereof).
"Notes" means the Initial Notes, the Exchange Notes, the Private
Exchange Notes, and any other 5 1/2% Notes due February 15, 2004 issued after
the Issue Date in accordance with clause (3) of the fourth paragraph of Section
2.02 treated as a single class of securities for all purposes, including voting,
as amended or supplemented from time to time in accordance with the terms
hereof, that are issued pursuant to this Indenture.
"Notes Custodian" means the custodian with respect to a Global Note (as
appointed by the Depositary), or any successor person thereto and shall
initially be the Trustee.
"Officer" means with respect to any Person the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, Controller, Secretary or any
Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of CVS by
two Officers of CVS.
"Opinion of Counsel" means a written opinion from legal counsel, who
may be an employee of or counsel to CVS.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Principal Property" means real and tangible property owned and
operated now or hereafter by the Company or any Restricted Subsidiary
constituting a part of any store, warehouse or distribution center located
within the United States of America or its territories or possessions (excluding
current assets, motor vehicles, mobile materials-handling equipment and other
rolling stock, cash registers and other point-of-sale recording devices and
related equipment and data processing and other office equipment), the net book
value of which (including leasehold improvements and store fixtures constituting
a part of such store, warehouse or distribution center) as of the date on which
the determination is being made is more than 1.0% of Consolidated Net Tangible
Assets.
"Private Exchange" means the offer by CVS, pursuant to the Registration
Rights Agreement, to the Initial Purchasers to issue and deliver to the Initial
Purchasers, in exchange for the Initial Notes held by the Initial Purchasers as
part of their initial
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distribution, a like aggregate principal amount of Private Exchange Notes.
"Private Exchange Notes" means the 5 1/2% Notes Due February 15, 2004
to be issued pursuant to this Indenture in connection with a Private Exchange
effected pursuant to the Registration Rights Agreement.
"Registered Exchange Offer" means an offer by CVS, pursuant to the
Registration Rights Agreement, to certain Holders of Initial Notes, to issue and
deliver to such Holders, in exchange for the Initial Notes, a like aggregate
principal amount of Exchange Notes registered under the Securities Act.
"Registration Rights Agreement" means (i) the Registration Rights
Agreement dated February 8, 1999 among CVS and the Initial Purchasers or (ii)
any registration rights agreement entered into in connection with the issuance
of additional notes following the Issue Date.
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers.
"Restricted Subsidiary" means each Subsidiary of CVS other than
Unrestricted Subsidiaries.
"SEC" means the U.S. Securities and Exchange Commission.
"Secured Debt" means Funded Debt which is secured by any pledge of, or
mortgage, security interest or other lien on any (i) Principal Property (whether
owned on the date of the Indenture or thereafter acquired or created), (ii)
shares of stock owned by the Company or a Subsidiary in a Restricted Subsidiary
or (iii) Indebtedness of a Restricted Subsidiary.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Shelf Registration Statement" means the registration statement issued
by CVS in connection with the offer and sale of Notes (other than Exchange
Notes), pursuant to the Registration Rights Agreement.
"Stated Maturity" means with respect to any security the date specified
in such security as the fixed date on which the principal of such security is
due and payable, including pursuant to any mandatory redemption provision (but
excluding any provision
6
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providing for the repurchase of such security at the option of the holder
thereof upon the happening of any contingency unless such contingency has
occurred).
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock, which under ordinary circumstances (not dependent upon the
happening of a contingency) has voting power to elect a majority of the board of
directors of such corporation (or similar management body), is owned directly or
indirectly by the Company or by one or more Subsidiaries of the Company, or by
the Company and one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transfer Restricted Notes" means Definitive Notes and Notes that bear
or are required to bear the legend set forth in Section 2.06(d).
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter such term shall mean such successor serving hereunder.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Unrestricted Subsidiary" means Subsidiaries designated as Unrestricted
Subsidiaries from time to time by the Board or Directors of the Company;
provided, however, that the Board of Directors of the Company (i) will not
designate as an Unrestricted Subsidiary any Subsidiary of the Company that owns
any Principal Property or any stock of a Restricted Subsidiary, (ii) will not
continue the designation of any Subsidiary of the Company as an Unrestricted
Subsidiary at any time that such Subsidiary owns any Principal Property, and
(iii) will not, nor will it cause or permit any Restricted Subsidiary to,
transfer or otherwise dispose of any Principal Property to any Unrestricted
Subsidiary (unless such Unrestricted Subsidiary will in connection therewith be
redesignated as a Restricted Subsidiary and any pledge, mortgage, security
interest or other lien arising in connection with any Indebtedness or such
Unrestricted Subsidiary so redesignated does not extend to such Principal
Property (unless the existence of such pledge, mortgage, security interest or
other lien would otherwise be permitted under this Indenture)).
7
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"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which is owned by CVS or another Wholly Owned Subsidiary.
SECTION 1.02. Other Definitions.
Defined in
Term Article/Section
"Agent Members" Section 2.01
"covenant defeasance" Section 8.01
"Default Amount" Section 6.02
"Definitive Notes" Section 2.01
"Event of Default" Section 6.01
"Global Note" Section 2.01
"IAI" Section 2.01
"legal defeasance" Section 8.01
"Note Register" Section 2.03
"parent corporation" Article 4
"Paying Agent" Section 2.03
"Payment Default" Section 7.01
"Purchase Agreement" Section 2.01
"QIB" Section 2.01
"Registrar" Section 2.03
"Regulation S" Section 2.01
"Rule 144A" Section 2.01
"Sale and Leaseback Transaction" Section 4.05
"Successor Company" Section 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
(i) "indenture securities" means the Notes;
(ii) "indenture security holder" means a Noteholder;
8
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(iii) "indenture to be qualified" means this Indenture;
(iv) "indenture trustee" or "institutional trustee" means the Trustee;
(v) "obligor" upon the Notes means CVS and any successor obligor upon
the Notes.
All other terms used in this Indenture that are (i) defined by the TIA;
(ii) defined by TIA reference to another statute; or (iii) defined by SEC rule
under the TIA have the meanings so assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(iii) the word "or" shall not be deemed to be exclusive;
(iv) words in the singular include the plural, and words in the plural
include the singular; and
(v) provisions apply to successive events and transactions.
(vi) "herein," "hereof" and other words of similar import refer t this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
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ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes and any additional notes issued in transactions
exempt from registration under the Securities Act and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A hereto, the
terms of which are incorporated in and made a part of this Indenture. The
Exchange Notes, the Private Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B, which is hereby
incorporated by reference and expressly made a part of this Indenture. The Notes
may have such notations, legends or endorsements approved as to form by CVS and
required, as applicable, by law, stock exchange rule, agreements to which CVS is
subject and/or usage. Each Note shall be dated the date of its authentication.
The Notes shall be issuable only in denominations of $1,000 and integral
multiples thereof. The terms of the Notes set forth in Exhibit A and Exhibit B
are part of the terms of this Indenture.
The Initial Notes are being offered and sold by CVS pursuant to a
Purchase Agreement, dated February 8, 1999, among CVS and the Initial Purchasers
(the "Purchase Agreement").
(a) Global Notes. Notes offered and sold to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) (a "QIB") in reliance
on Rule 144A under the Securities Act ("Rule 144A") shall be issued initially in
the form of one permanent global security in definitive form without interest
coupons (the "Restricted Global Note") deposited with the Trustee as custodian
for the Depositary and registered in the name of Cede & Co., as nominee for the
Depositary. Notes offered and sold to certain persons in offshore transactions
in reliance on Regulation S under the Securities Act ("Regulation S") shall be
issued initially in the form of one or more permanent global securities in
registered form without interest coupons (the "Regulation S Global Note," and
together with the Restricted Global Note, the "Global Notes") which will be
deposited with the Trustee as custodian for the Depositary for the respective
accounts of the DTC participants for Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System ("Euroclear"), and Cedel
Bank societe anonyme ("Cedel") and registered in the name of Cede & Co., as
nominee for the Depositary. The Global Notes shall have the global Note legend
and the restricted Note legend set forth in Exhibit A hereto. The Restricted
Global Note shall be deposited on behalf of the purchasers of the Initial Notes
represented thereby with the Trustee, as custodian for the Depositary (or with
such other custodian as the Depositary may direct), and registered in the name
of the Depositary or a nominee of the Depositary, duly executed by CVS and
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authenticated by the Trustee as hereinafter provided. The Regulation S Global
Note will be deposited with the Trustee, as custodian for the Depositary, duly
executed by CVS and authenticated by the Trustee as hereinafter provided;
provided that upon such deposit all such Notes shall be credited to or through
accounts maintained by the Depositary by or on behalf of Euroclear or Cedel. The
aggregate principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to
the Global Notes deposited with or on behalf of the Depositary.
CVS shall execute and the Trustee shall, in accordance with this
Section 2.01(b), authenticate and deliver initially Global Notes that (i) shall
be registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to the Global Note held on
their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Note, and the Depositary may be treated by CVS,
the Trustee and any agent of CVS or the Trustee as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the CVS, the Trustee or any agent of CVS or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices of such Depositary governing the
exercise of the rights of a holder of a beneficial interest in the Global Note.
(c) Certificated Notes. Except as provided in this Section or Section
2.06 or 2.09, owners of beneficial interests in the Global Note will not be
entitled to receive physical delivery of certificated Notes. Purchasers of
Initial Notes who are institutional "accredited investors" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (each an "IAI") and who are
not QIBs and did not purchase Initial Notes sold in reliance on Regulation S
will receive certificated Initial Notes bearing the restricted securities legend
set forth in Exhibit A hereto (such securities as held by an IAI are herein
referred to as "Definitive Notes"); provided, however, that upon transfer of
such certificated Initial Notes to a QIB or in reliance on Regulation S such
certificated Initial Notes will, unless the Global Note has previously been
exchanged, be exchanged for an interest in the Global Note pursuant to the
provisions of Section 2.06. Definitive Notes will bear the restricted securities
legend set forth on Exhibit A unless removed in accordance with Section 2.06(d).
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SECTION 2.02. Execution and Authentication.
Two Officers of CVS shall sign the Notes for CVS by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office
at the time such Note is authenticated, such Note shall be valid nevertheless.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that a
Note has been authenticated in accordance with the terms of this Indenture.
The Trustee, upon a written order of CVS signed by two Officers of CVS,
shall authenticate and deliver (1) Initial Notes for original issue in an
aggregate principal amount not to exceed $300,000,000, (2) Exchange Notes or
Private Exchange Notes for issue only in a Registered Exchange Offer or a
Private Exchange, respectively, pursuant to the Registration Rights Agreement,
for a like principal amount of Initial Notes, and (3) additional Notes for
original issue after the Issue Date (such Notes to be substantially in the form
of Exhibits A or B, as the case may be) in the amounts specified by CVS in such
written order (and if in the form of Exhibit A or B, as the case may be, the
same principle amount of Exchange Notes or Private Exchange Notes in exchange
therefor upon consummation of registered exchange offer) in each case upon a
written order of CVS signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of CVS. Such order shall specify
the amount of the Notes to be authenticated, the date on which the original
issue of Notes is to be authenticated, whether the Notes are to be Initial
Notes, Exchange Notes, Private Exchange Notes or Notes issued pursuant to clause
(3) above, and the aggregate principal amount of Notes outstanding on the date
of authentication.
The Trustee may appoint an authenticating agent acceptable to CVS to
authenticate the Notes. Unless limited by the terms of such appointment, any
such authenticating agent may authenticate the Notes whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent of the Trustee. An authenticating
agent has the same rights as an Agent to deal with CVS or an Affiliate of CVS.
SECTION 2.03. Registrar and Paying Agent.
CVS shall maintain (i) an office or agency where the Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "Registrar"); and
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(ii) an office or agency where the Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Holders of Notes and of the
transfer and exchange of such Notes (the "Note Register"). CVS may appoint one
or more co-registrars and one or more additional paying agents. The term "Paying
Agent" shall include any such additional paying agent. CVS may change any Paying
Agent, Registrar or co-registrar without prior notice to any Holder of a Note.
CVS shall notify the Trustee and the Trustee shall notify the Holders of the
Notes of the name and address of any Agent not a party to this Indenture. CVS or
any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying
Agent, Registrar or co-registrar. CVS shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which shall incorporate
the provisions of the TIA. Any such agency agreement shall implement the
provisions of this Indenture that relate to such Agent. If CVS fails to maintain
a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such, as appropriate, and shall be entitled to appropriate
compensation in accordance with Section 7.07.
CVS initially appoints the Trustee as Registrar, Paying Agent and agent
for service of notices and demands in connection with the Notes.
SECTION 2.04. Paying Agent to Hold Money in Trust.
On or prior to each due date of the principal of, premium, if any, and
interest on any Note, CVS shall deposit with the Paying Agent a sum sufficient
to pay such principal, premium, if any, and interest when so becoming due. CVS
shall require each Paying Age0nt (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of the Holders of the
Notes or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, and interest on the Notes, and shall notify the
Trustee of any Default by CVS in making any such payment. While any such Default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. CVS at any time may require a Paying Agent to pay all money held by
it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than CVS) shall have no further liability for the money delivered to the
Trustee. If CVS acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders of the Notes all money held by it as
Paying Agent.
SECTION 2.05. Lists of Holders of Notes.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders of Notes. If the Trustee is not the Registrar, CVS shall furnish to
the Trustee at least three Business Days before each interest payment date and
at such other times as the Trustee may request in
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writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes, including the
aggregate principal amount of Notes held by each such Holder of Notes.
SECTION 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. Definitive Notes shall
be issued in registered form and shall be transferable only upon the surrender
of Definitive Notes for registration of transfer. When Definitive Notes are
presented to the Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Definitive Notes of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; provided, however, that any
Definitive Notes presented or surrendered for registration of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar and the Trustee duly
executed by the Holder thereof or by his attorney duly authorized in
writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section
2.06(b) or pursuant to clause (A), (B) or (C) below, and are
accompanied by the following additional information and documents, as
applicable:
(A) if such Definitive Notes are being delivered to the
Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect (in the form set forth on the reverse of the
Note); or
(B) if such Definitive Notes are being transferred to CVS
a certification to that effect (in the form set forth on the
reverse of the Note); or
(C) if such Definitive Notes are being transferred
pursuant to an exemption from registration in accordance with
Rule 144 or Regulation S under the Securities Act: (i) a
certificate to that effect (in the form set forth on the
reverse of the Note), and (ii) if CVS or the Registrar so
requests, evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the legend set
forth in Section 2.06(d)(i).
(b) Restrictions on Transfer of a Definitive Note for a Beneficial
Interest in a Global Note. A Definitive Note may not be exchanged for a
beneficial interest in a
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Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) certification, in the form set forth on the reverse of the Note,
that such Definitive Note is being transferred to a QIB in accordance
with Rule 144A under the Securities Act or to a non-U.S. person in
accordance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Notes Custodian to make, an adjustment on its books and records
with respect to such Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by the Global Note,
then the Trustee shall cancel such Definitive Note and cause, or direct the
Notes Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Notes Custodian, the
aggregate principal amount of Notes represented by the Global Note to be
increased accordingly. If no Global Note is then outstanding, CVS shall issue
and the Trustee shall authenticate, upon written order of CVS in the form of an
Officers' Certificate, a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes.
(i) The transfer and exchange of a Global Note or beneficial interests
therein shall be effected through the Depositary, in accordance with
this Indenture (including applicable restrictions on transfer set forth
herein, if any) and the procedures of the Depositary therefor, if
applicable.
(ii) Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in Section 2.09), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor
Depositary.
(iii) In the event that a Global Note is exchanged for Notes in
definitive form pursuant to Section 2.09, prior to the consummation of
a Registered Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.06
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(including the certification requirements set forth on the reverse of
the Initial Notes intended to ensure that such transfers comply with
Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by CVS.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii) and (iii)
each Note certificate evidencing a Global Note and Definitive Notes
(and all Notes issued in exchange therefor or substitution thereof)
shall bear a legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND UNDER APPLICABLE
STATE SECURITIES LAWS, AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(ii) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
(iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE."
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When set forth on a Definitive Note, the legend will include the
following additional words:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Note (including
any Transfer Restricted Note represented by the Global Note) pursuant
to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Note that is a
Definitive Note, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Note for a certificated
Note that does not bear the legend set forth above and rescind
any restriction on the transfer of such Transfer Restricted
Note;
(B) in the case of any Transfer Restricted Note that is
represented by a Global Note, the Registrar shall, subject to
approval by the Company, permit the Holder thereof to request
the issuance of a certificated Note that does not bear the
legend set forth above and rescind any restrictions on the
transfer of such Transfer Restricted Note, if the sale or
exchange was made in reliance on Rule 144 and the Holder
certifies to that effect in writing to the Registrar (such
certification to be in the form set forth on the reverse of
the Note).
(iii) After a transfer of any Initial Notes or Private Exchange Notes
pursuant to and during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Notes or Private
Exchange Notes, as the case may be, all requirements pertaining to
legends on such Initial Note or such Private Exchange Note will cease
to apply, the requirements requiring any such Initial Note or such
Private Exchange Note issued to certain Holders be issued in global
form will cease to apply, and a certificated Initial Note or Private
Exchange Note without legends will be available (subject to Section
2.09) to the transferee of the Holder of such Initial Notes or Private
Exchange Notes or upon receipt of directions to transfer such Holder's
interest in a Global Note, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Notes pursuant to which Holders of such Initial Notes
are
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offered Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued
to certain Holders be issued in global form will cease to apply and
certificated Initial Notes with the restricted securities legend set
forth in Exhibit A hereto will be available to Holders of such Initial
Notes that do not exchange their Initial Notes and Exchange Notes in
certificated form will be available (subject to Section 2.09) to
Holders that exchange such Initial Notes in such Registered Exchange
Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Notes pursuant to which Holders of such Initial Notes are
offered Private Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued
to certain holders be issued in global form will still apply, and
Private Exchange Notes in global form with the restricted securities
legend set forth in Exhibit A hereto will be available to Holders that
exchange such Initial Notes in such Private Exchange.
(e) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note has either been exchanged for certificated
Notes, redeemed, repurchased or canceled, such Global Note shall be returned to
the Depositary for cancellation or retained and canceled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for certificated Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced and
an adjustment shall be made by the Trustee or the Notes Custodian to reflect
such reduction on the books and records of the Notes Custodian for such Global
Note with respect to such Global Note.
(f) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registration of transfers and exchanges, CVS shall
execute and the Trustee shall authenticate certificated Notes,
Definitive Notes and the Global Note at the Registrar's or
co-registrar's request.
(ii) CVS may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section 2.06.
(iii) CVS shall not be required to make and the Registrar or
co-registrar need not register transfers or exchanges of certificated
or Definitive Notes selected for redemption (except, in the case of any
Definitive Note to be redeemed in part, the portion thereof not to be
redeemed), or any Notes for a period of 15 days before a selection of
Notes to be redeemed or 15 days before an interest
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payment date.
(iv) Prior to the due presentation for registration of transfer of any
Note, CVS, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all
other purposes whatsoever, whether or not such Note is overdue, and
none of CVS, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Notes
surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner in a Global Note, a member of, or a participant in the
Depositary or other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Notes or with
respect to the delivery to any participant, member, beneficial owner or
other Person (other than the Depositary) of any notice (including any
notice of redemption) or the payment of any amount, under or with
respect to such Notes. All notices and communications to be given to
the Holders and all payments to be made to Holders under the Notes
shall be given or made only to or upon the order of the registered
Holders (which shall be the Depositary or its nominee in the case of a
Global Note). The rights of beneficial owners in a Global Note shall be
exercised only through the Depositary subject to the applicable rules
and procedures of the Depositary. The Trustee may rely and shall be
fully protected in relying upon information furnished by the Depositary
with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between
or among Depositary participants, members or beneficial owners in a
Global Note) other than to make any required delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to
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form with the express requirements hereof.
SECTION 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or CVS and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Note, CVS shall issue and the Trustee shall authenticate a replacement
Note if CVS' and the Trustee's reasonable requirements for the replacements of
Notes are met. If required by the Trustee or CVS, an indemnity bond shall be
supplied by the Holder that is sufficient in the judgment of the Trustee and CVS
to protect CVS, the Trustee, any Agent or any authenticating agent from any loss
which any of them may suffer if a Note is replaced.
Every replacement Note shall be an obligation of CVS.
SECTION 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee, except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding. A Note
does not cease to be outstanding because CVS, a Subsidiary of CVS or an
Affiliate of CVS holds such Note.
If a Note is replaced pursuant to Section 2.07, it shall cease to be
outstanding unless the Trustee receives proof satisfactory to it that such
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Holders of Notes on that
date pursuant to the terms of this Indenture, then on and after that date such
Notes (or portions thereof) shall cease to be outstanding and interest thereon
shall cease to accrue.
SECTION 2.09. Temporary Notes and Certificated Notes.
(a) Until definitive Notes are ready for delivery, CVS may prepare and
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have such variations as
CVS and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, CVS shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary
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Notes. Until such exchange, temporary Notes shall be entitled to the same
rights, benefits and privileges as definitive Notes.
(b) The Global Notes deposited with the Depositary or with the Trustee
as custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note, only if such transfer complies with Section 2.06 and (i)
the Depositary notifies CVS that it is unwilling or unable to continue as
Depositary for such Global Note or if at any time such Depositary ceases to be a
"clearing agency" registered under the Exchange Act and a successor depository
is not appointed by CVS within 90 days of such notice, (ii) an Event of Default
has occurred and is continuing or (iii) CVS, in its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of certificated
Notes under this Indenture.
(c) Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depositary to the
Trustee to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Note, an equal aggregate principal amount of Initial
Notes of authorized denominations. Any portion of the Global Note transferred
pursuant to this Section shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and registered in such
names as the Depositary shall direct. Any Initial Note delivered in exchange for
an interest in the Global Note shall, except as otherwise provided by Section
2.06(d), bear the restricted securities legend set forth in Exhibit A hereto.
(d) Subject to the provisions of Section 2.09(c), the registered
Holder of the Global Note may grant proxies and otherwise authorize any person,
including agent members, participants and persons that may hold interests
through agent members, to take any action which a Holder is entitled to take
under this Indenture or the Notes.
(e) In the event of the occurrence of any of the events specified in
Section 2.09(b), CVS will promptly make available to the Trustee a reasonable
supply of certificated Notes in definitive, fully registered form without
interest coupons.
SECTION 2.10. Cancellation.
CVS at any time may deliver Notes to the Trustee for cancellation. The
Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or
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cancellation, and shall return such canceled Notes (subject to the record
retention requirement of the Exchange Act), to CVS, upon the written request of
CVS. CVS may not issue new Notes to replace Notes it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest.
If CVS defaults in a payment of interest on the Notes, CVS shall pay
such defaulted interest in any lawful manner. CVS may pay such defaulted
interest to the Persons who are Holders of the Notes on a subsequent special
record date, which date shall be at the earliest practicable date but in all
events at least five Business Days prior to the payment date, in each case at
the rate provided in the Notes. CVS shall fix or cause to be fixed any such
special record date and payment date, and, at least 15 days prior to the special
record date, CVS shall mail or cause to be mailed to each Holder of a Note a
notice that states such special record date, such related payment date and the
amount of any such defaulted interest to be paid to Holders of the Notes.
SECTION 2.12. CUSIP Number.
CVS in issuing the Notes may use "CUSIP," "CINS" and "ISIN" numbers,
and, if CVS shall do so, the Trustee shall use such CUSIP, CINS and ISIN numbers
in notices of redemption or exchange as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness or accuracy of such numbers printed in such notice or on the Notes
and that reliance may be placed only on the other identification numbers printed
on the Notes. CVS will notify the Trustee of any change in a CUSIP, CINS or ISIN
number. The Regulation S Global Note and the Restricted Global Note shall be
assigned separate CUSIP numbers.
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee.
If CVS elects to redeem Notes pursuant to paragraph 5 of the Notes, CVS
shall notify the Trustee in writing of the redemption date, the principal amount
of Notes to be redeemed and the paragraph of the Notes pursuant to which the
redemption will occur.
CVS shall give each notice to the Trustee provided for in this Section
3.01 at least 30 but not more than 60 days before the redemption date unless the
Trustee consents to a
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shorter period. Such notice shall be accompanied by an Officers' Certificate and
an Opinion of Counsel from CVS to the effect that such redemption will comply
with the conditions herein. If fewer than all of the Notes are to be redeemed,
the record date relating to such redemption shall be selected by CVS and given
to the Trustee, which record date shall not be less than 15 days after the date
of notice to the Trustee.
SECTION 3.02. Selection of Notes to Be Redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed pro rata, unless otherwise required by law or
regulation (including regulation of The Depository Trust Company). The Trustee
shall make the selection from outstanding Notes not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Notes that have denominations larger than $1,000. Notes and portions of Notes
the Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify CVS
promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.03. Notice of Redemption.
CVS shall at least 30 days but not more than 60 days before a
redemption date mail or cause to be mailed, by first class-mail, a notice of
redemption to each Holder of Notes of which are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price,
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed, and that after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
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(vi) that, unless CVS defaults in making such redemption payment or
the Paying Agent is prohibited from making such payment pursuant to the
terms of this Indenture, interest on Notes called for redemption ceases
to accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or the Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
and
(viii) that no representation is made as to the correctness or accuracy
of the CUSIP, CINS or ISIN number, if any, listed in such notice or
printed on the Notes.
At CVS' request, at least five Business Days prior to the date upon
which such notice is to be mailed unless the Trustee consents to a shorter
period, the Trustee shall give the notice of redemption in CVS' name and at CVS'
expense. In such event, CVS shall provide the Trustee with the information
required by this Section 3.03.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.01,
Notes called for redemption shall become due and payable on the redemption date
and at the redemption price stated in such notice of redemption. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
such notice of redemption, plus accrued interest to the redemption date. Failure
to give notice to a Holder of a Note or any defect in any notice shall not
affect the validity of any notice to any other Holder of a Note.
SECTION 3.05. Deposit of Redemption Price.
On or prior to any redemption date, CVS shall deposit with the Paying
Agent (or, if CVS or a Subsidiary is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the redemption price of and accrued interest
on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to CVS any money deposited with the Trustee or the Paying Agent
by CVS in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed on that date other than Notes or
portions of Notes called for redemption which have been delivered by CVS to the
Trustee for cancellation.
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SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, CVS shall issue and
the Trustee shall authenticate for the Holder of the Notes (at the expense of
CVS) a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Principal, Premium and Interest.
CVS shall duly and punctually pay the principal of (and premium, if
any) and interest on the Notes in accordance with the terms of this Indenture
and the Notes. Interest on the Notes will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 4.02. Maintenance of Office or Agency.
CVS shall maintain an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon CVS in respect of the Notes and this Indenture may be
served. CVS shall give prompt written notice to the Trustee of the location, and
any change in such location, of such office or agency. If at any time CVS shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
CVS also from time to time may designate one or more additional offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and from time to time may rescind any such designation; provided,
however, that no such designation or rescission shall in any manner relieve CVS
of its obligation to maintain an office or agency for such purposes. CVS shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
SECTION 4.03. SEC Reports.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, CVS will deliver to the Trustee, within 15
days after it is or would
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have been required to file with the SEC, and to furnish to the Holders of the
Notes thereafter (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
CVS were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by CVS' certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if CVS were required to file such reports. In addition,
whether or not required by the rules and regulations is of the SEC, at any time
after CVS files a registration statement in connection with the Registered
Exchange Offer or a Shelf Registration Statement, CVS will file a copy of all
such information and reports listed in clause (i) and clause (ii) above with the
SEC for public availability and make such information available to securities
analysts and prospective investors upon request. CVS will also comply with the
provisions of TIA ss. 314(a).
Delivery of such reports, information and documents to the Trustee for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including CVS' compliance with
any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 4.04. Restrictions on Secured Funded Debt.
The Company will not, nor will it permit any Restricted Subsidiary to,
incur, issue, assume, guarantee or create any Secured Debt, without effectively
providing concurrently with the incurrence, issuance, assumption, guaranty or
creation of any such Secured Debt that the Notes (together with, if the Company
shall so determine, any other Indebtedness of the Company or such Restricted
Subsidiary then existing or thereafter created which is not subordinated to the
Notes) will be secured equally and ratably with (or prior to) such Secured Debt,
unless, after giving effect thereto, the sum of the aggregate amount of all
outstanding Secured Debt of the Company and its Restricted Subsidiaries together
with all Attributable Debt in respect of sale and leaseback transactions
relating to a Principal Property (with the exception of Attributable Debt which
is excluded pursuant to clauses (1) to (8) of Section 4.05), would not exceed
15% of Consolidated Net Tangible Assets; provided, however, that this Section
4.04 shall not apply to, and there shall be excluded from Secured Debt in any
computation under this Section 4.04 and under Section 4.05, Indebtedness,
secured by:
(i) Liens on property, shares of Capital Stock or Indebtedness of any
corporation existing at the time such corporation becomes a Subsidiary;
(ii) Liens on property, shares of Capital Stock or Indebtedness
existing
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at the time of acquisition thereof or incurred within 360 days of the
time of acquisition thereof (including, without limitation, acquisition
through merger or consolidation) by the Company or any Restricted
Subsidiary;
(iii) Liens on property, shares of Capital Stock or Indebtedness
thereafter acquired (or constructed) by the Company or any Restricted
Subsidiary and created prior to, at the time of, or within 360 days (or
thereafter if such Lien is created pursuant to a binding commitment
entered into prior to, at the time of or within 360 days) after such
acquisition (including, without limitation, acquisition through merger or
consolidation) (or the completion of such construction or commencement or
commercial operation of such property, whichever is later) to secure or
provide for the payment of all or any part of the purchase price (or the
construction price) thereof;
(iv) Liens in favor of the Company or any Restricted Subsidiary;
(v) Liens in favor of the United States of America, any State thereof
or the District of Columbia or any foreign government, or any agency,
department or other instrumentality thereof, to secure partial, progress,
advance or other payments pursuant to any contract or provisions of any
statute;
(vi) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from Federal income taxation
pursuant to Section 103(b) of the Internal Revenue Code;
(vii) Liens securing the performance of any contract or undertaking
not directly or indirectly in connection with the borrowing of money, the
obtaining of advances or credit or the securing of Indebtedness, if made
and continuing in the ordinary course of business;
(viii) Liens incurred (no matter when created) in connection with the
Company's or a Restricted Subsidiary's engaging in leveraged or
single-investor lease transactions; provided, however, that the instrument
creating or evidencing any borrowings secured by such Lien will provide
that such borrowings are payable solely out of the income and proceeds of
the property subject to such Lien and are not a general obligation of the
Company or such Restricted Subsidiary;
(ix) Liens in favor of a governmental agency to qualify the Company or
any Restricted Subsidiary to do business, maintain self insurance or
obtain other benefits, or Liens under workers' compensation laws,
unemployment insurance laws or similar legislation;
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(x) good faith deposits in connection with bids, tenders, contracts or
deposits to secure public or statutory obligations of the Company or any
Restricted Subsidiary, or deposits of cash or obligations of the United
States of America to secure surety and appeal bonds to which the Company
or any Restricted Subsidiary is a party or in lieu of such bonds, or
pledges or deposits for similar purposes in the ordinary course of
business;
(xi) Liens imposed by law, such as laborers' or other employees',
carriers', warehousemen's, mechanics', materialmen's and vendors' Liens;
(xii) Liens arising out of judgments or awards against the Company or
any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary at the time shall be prosecuting an appeal or
proceedings for review or Liens arising out of individual final judgments
or awards in amounts of less than $1000,000; provided that the aggregate
amount of all such individual final judgments or awards shall not at any
one time exceed $1,000,000;
(xiii) Liens for taxes, assessments, governmental charges or levies
not yet subject to penalties for nonpayment or the amount or validity of
which is being in good faith contested by appropriate proceedings by the
Company or any Restricted Subsidiary, as the case may be;
(xiv) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning
or other restrictions or Liens as to the use of real properties, which
Liens, exceptions, encumbrances, easements, reservations, rights and
restrictions do not, in the opinion of the Company, in the aggregate
materially detract from the value of said properties or materially impair
their use in the operation of the business of the Company and its
Restricted Subsidiaries;
(xv) Liens incurred to finance all or any portion of the cost of
construction, alteration or repair of any Principal Property or
improvements thereto created prior to or within 360 days (or thereafter if
such Lien is created pursuant to a binding commitment to lend entered into
prior to, at the time of, or within 360 days) after completion of such
construction, alteration or repair;
(xvi) Liens existing on the date of the Indenture;
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(xvii) Liens created in connection with a project financed with, and
created to secure, a Nonrecourse Obligation; or
(xviii) any extension, renewal, refunding or replacement of the
foregoing; provided that (i) such extension, renewal, refunding or
replacement Lien shall be limited to all or a part of the same property
that secured the Lien extended, renewed, refunded or replaced (plus
improvements on such property) and (ii) the Funded Debt secured by such
Lien at such time is not increased.
SECTION 4.05. Limitation on Sale/leaseback Transactions.
The Company will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any Person providing for the leasing by the
Company or any Restricted Subsidiary of any Principal Property of the Company or
any Restricted Subsidiary (which lease is required by GAAP to be capitalized on
the balance sheet of such lessee), which Principal Property has been or is to be
sold or transferred by the Company or such Restricted Subsidiary to such person
(a "Sale and Leaseback Transaction") unless, after giving effect thereto, the
aggregate amount of all Attributable Debt with respect to all such Sale and
Leaseback Transactions plus all Secured Debt (with the exception of Funded Debt
secured by Liens which is excluded pursuant to clauses (i) to (xviii) of Section
4.04) would not exceed 15% of Consolidated Net Tangible Assets. This covenant
will not apply to, and there will be excluded from Attributable Debt in any
computation under Section 4.04 or this Section 4.05, Attributable Debt with
respect to any sale and leaseback transaction if:
(i) the Company or a Restricted Subsidiary is permitted to create
Funded Debt secured by a Lien pursuant to clauses (i) to (xviii) of
Section 4.05 on the Principal Property to be leased, in an amount equal to
the Attributable Debt with respect to such Sale and Leaseback Transaction,
without equally and ratably securing the Notes;
(ii) the property leased pursuant to such arrangement is sold for a
price at least equal to such property's fair market value (as determined
by the Chief Executive Officer, the President, the Chief' Financial
Officer, the Treasurer or the Controller of the Company) and the Company
or a Restricted Subsidiary, within 360 days after the sale or transfer
shall have been made by the Company or a Restricted Subsidiary, shall
apply the proceeds thereof to the retirement of Indebtedness or Funded
Debt of the Company or any Restricted Subsidiary (other than Indebtedness
or Funded Debt owed by the Company or any Restricted Subsidiary);
provided, however, that no retirement referred to in this clause (2) may
be effected by payment at maturity or pursuant to any mandatory sinking
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fund payment provision of Indebtedness or Funded Debt;
(iii) the Company or a Restricted Subsidiary applies the net proceeds
or the sale or transfer of the Principal Property leased pursuant to such
transaction to the purchase of assets (and the cost of construction
thereof) within 360 days prior or subsequent to such sale or transfer;
(iv) the effective date of any such arrangement or the purchaser's
commitment therefor is within 36 months prior or subsequent to the
acquisition of the Principal Property (including, without limitation,
acquisition by merger or consolidation) or the completion of construction
and commencement of operation thereof (which, in the case of a retail
store, is the date of opening to the public), whichever is later;
(v) the lease in such Sale and Leaseback Transaction is for a term,
including renewals, of not more than three years;
(vi) the Sale and Leaseback Transaction is cantered into between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries,
(vii) the lease secures or relates to industrial revenue or pollution
control bonds; or
(viii) the lease payment is created in connection with a project
financed with, and such obligation constitutes, a Nonrecourse Obligation.
SECTION 4.06. Compliance Certificates.
CVS shall deliver to the Trustee, within 120 days after the end of each
fiscal year, beginning December 31, 1999, an Officers' Certificate stating that
a review of the activities of CVS and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether CVS has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such Officers' Certificate, that to the best of his or her knowledge CVS
has kept, observed, performed and fulfilled each covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action each is taking or proposes
to take with respect thereto). CVS shall also comply with TIA ss. 314(a)(4).
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SECTION 4.07. Further Instruments and Acts.
Upon request of the Trustee, CVS will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
ARTICLE 5
SUCCESSORS
SECTION 5.01. When CVS May Merge, Consolidate or Dispose of Assets.
The Company shall not consolidate with, merge with or into, or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially as an entirety in one
transaction or a series of related transactions) to, any Person (other than a
consolidation with or merger with or into a Restricted Subsidiary or a sale,
conveyance, transfer, lease or other disposition to a Restricted Subsidiary) or
permit any Person to merge with or into the Company unless:
(i) either (a) the Company shall be the continuing Person (the
"Successor Company") or (b) the Successor Company (if other than the
Company) formed by such consolidation or into which the Company is merged
or that acquired or leased such property and assets of the Company shall
be a corporation organized and validly existing under the laws of the
United States of America or any jurisdiction thereof and shall expressly
assume, by a supplemental indenture, executed and delivered to the
Trustee, all of the obligations of the Company under the Notes and this
Indenture, and the Company shall have delivered to the Trustee an opinion
of counsel stating that such consolidation, merger or transfer and such
supplemental indenture complies with this provision and that all
conditions precedent provided for in this Indenture relating to such
transaction have been complied with and that such supplemental indenture
constitutes the legal, valid and binding obligation of the Company or such
successor enforceable against such entity in accordance with its terms,
subject to customary exceptions; and
(ii) the Company shall have delivered to the Trustee an officers'
certificate to the effect that immediately after giving effect to such
transaction, no Default shall have occurred and be continuing and an
opinion of counsel as to the matters set forth in paragraph (i) above,
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SECTION 5.02. Successor Company Substituted.
The Successor Company shall be the successor to CVS and shall succeed
to, and be substituted for, and may exercise every right and power of, CVS under
this Indenture, but the predecessor Person in the case of a conveyance, transfer
or lease shall not be released from the obligation to pay the principal of and
interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall constitute an "Event of Default":
(i) CVS defaults in the payment of all or any part of the principal of
the Notes when the same becomes due and payable at maturity, upon
acceleration, redemption or mandatory repurchase, including as a sinking
fund installment, or otherwise;
(ii) CVS defaults in the payment of any interest on the Notes when the
same becomes due and payable, and such default continues for a period of
30 days;
(iii) CVS defaults in the performance of or breaches any other
covenant or agreement of CVS in the Indenture and such default or breach
continues for a period of 60 consecutive days after written notice thereof
has been given to CVS by the Trustee or to CVS and the Trustee by the
Holders of 25% or more in aggregate principal amount of the Notes;
(iv) an involuntary case or other proceeding shall be commenced
against CVS with respect to CVS or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect seeking the
appointment or a trustee, receiver, liquidator, custodian or other similar
official of CVS or for any substantial part of the property and assets of
CVS, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against CVS under any bankruptcy, insolvency or other
similar law now or hereafter in effect;
(v) CVS (1) commences a voluntary case under any applicable
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bankruptcy, insolvency or other similar law now or hereafter in effect,
or consents to the entry of an order for relief in an involuntary case
under any such law, (2) consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of CVS or for all or substantially all
of the property and assets of CVS or (3) effects any general assignment
for the benefit of creditors;
(vi) an event of default as defined in any one or more indentures or
instruments evidencing or under which CVS has at the date of this
Indenture or shall thereafter have outstanding an aggregate of at least
$25,000,000 aggregate principal amount of indebtedness for borrowed money,
shall happen and be continuing and such indebtedness shall have been
accelerated so that the same shall be or become due and payable prior to
the date on which the same would otherwise have become due and payable and
such acceleration shall not be rescinded or annulled within ten days after
notice thereof shall have been given to CVS by the Trustee (if such event
be known to it), or to CVS and the Trustee by the Holders of at least 25%
in aggregate principal amount of the Notes at the time outstanding;
provided that if such event of default under such indentures or
instruments shall be remedied or cured by CVS or waived by the holders of
such indebtedness, then the Event of Default under this clause (vi) shall
be deemed likewise to have been thereupon remedied, cured or waived
without further action upon the part of either the Trustee or any of the
Holders; and
(vii) failure by CVS to make any payment at maturity, including any
applicable grace period, in respect of at least $25,000,000 aggregate
principal amount of indebtedness for borrowed money and such failure shall
have continue for a period of ten days after notice thereof shall have
been given to CVS by the Trustee (if such event be known to it), or to CVS
and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding; provided that if such failure
shall be remedied or cured by CVS or waived by the holders of such
indebtedness, then the Event of Default under this clause (vii) shall be
deemed likewise to have been thereupon remedied, cured or waived without
further action upon the part of either the Trustee or any of the Holders.
The foregoing will constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
CVS shall deliver to the Trustee, within 30 days after the occurrence
thereof, an Officers' Certificate of any Event of Default pursuant to clause
(iii), clause (iv), clause
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(v), clause (vi), or clause (vii) and any event which with the giving of notice
or the lapse of time would become an Event of Default, its status and what
action CVS is taking or proposes to take in respect thereof.
SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing, then, and in each and
every such case, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding by notice in writing to
the Company (and to the Trustee if given by Holders), may declare the entire
principal amount of all Notes, and the interest accrued thereon, if any, to be
immediately due and payable (collectively, the "Default Amount"). Upon such a
declaration, the Default Amount shall be due and payable immediately.
Notwithstanding the foregoing, in case of an Event of Default specified in
clause (iv) or clause (v) of Section 6.01, then the principal amount of all the
Notes then outstanding and interest accrued thereon, if any, shall be and become
immediately due and payable, without any notice or other action by any Holder or
the Trustee to the full extent permitted by applicable law. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes and this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any such Notes in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon any Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in such Event of Default. No remedy
shall be exclusive of any other remedy. All remedies shall be cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of past Defaults.
Holders of at least a majority in principal amount of the outstanding
Notes, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences, except (i) a Default in the payment of principal
of or interest on any Note
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as specified in clauses (i) or (ii) of Section 6.01 or (ii) a Default in respect
of a covenant or provision that under Section 9.02 cannot be modified or amended
without the consent of the Holder of each outstanding Note affected. Upon any
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Indenture, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereto.
SECTION 6.05. Control by Majority.
Holders of at least a majority in aggregate principal amount of the
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee by this Indenture; provided that the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that,
subject to Section 7.01 may involve the Trustee in personal liability, or that
the Trustee determines in good faith may be unduly prejudicial to the rights of
Holders not joining in the giving of such direction; and provided further that
the Trustee may take any other action it deems proper that is not inconsistent
with any directions received from Holders of Notes pursuant to this Section
6.05.
SECTION 6.06. Limitation on Suits.
No Holder of any Notes may institute any proceeding, judicial or
otherwise, with respect to this Indenture or the Notes, or for the appointment
of a receiver or trustee, or for any other remedy under this Indenture, unless:
(i) such Holder has previously given to the Trustee written notice of
a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee under the Indenture;
(iii) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against any costs, liabilities or
expenses to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(v) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Notes have not given the Trustee a
direction that is inconsistent with such written request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Unconditional Right of Holders of Notes to Receive
Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on such Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of any such Holder
of a Note.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a)(i) or Section
6.01(a)(ii) occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against CVS for the entire amount
then due and owing, plus the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders of the Notes allowed in any judicial proceedings relative to CVS,
CVS' creditors or CVS' property, and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders of Notes in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder of
a Note to make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders of Notes, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due to Trustee under Section 7.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder of a Note any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder of a
Note thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Note in any such proceeding.
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SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
(i) FIRST: to the Trustee for amounts due to it under Section 7.07;
(ii) SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
(iii) THIRD: to CVS.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 shall not apply to a suit by the Trustee, a suit by a Holder
of a Note pursuant to Section 6.07, or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.
SECTION 6.12. Waiver of Stay, Extension and Usury Laws.
CVS (to the extent that it may lawfully do so) shall not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension or usury law wherever enacted, now or at any
time hereafter in force, that may affect the covenants or the performance of
this Indenture; and CVS (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and shall not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default of which a Responsible Officer of the
Trustee is aware has occurred and is continuing, the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default of which a
Responsible Officer of the Trustee is aware:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of the
mathematical calculations or other facts stated therein).
(iii) The Trustee shall not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct or bad faith, except that:
(c) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(i) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(ii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with a direction
received by it pursuant to Section 7.01.
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(iii) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraph (a), paragraph (b) and paragraph (c) of this Section 7.01.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with CVS.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any document reasonably believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from taking any act, the
Trustee may require an Officers' Certificate or an Opinion of Counsel or both.
The Trustee shall not be liable for any action taken or omitted to be taken by
it in good faith in reliance on such Officers' Certificate or such Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent; provided, however, that any such
agent is appointed by the Trustee with due care.
(d) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith which it reasonably believes to be authorized or
within its rights or powers conferred upon it by this Indenture; provided,
however, that the Trustee's conduct does not constitute negligence, willful
misconduct or bad faith.
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(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters shall be full and
complete authorization and protection from liability in respect to any action
taken, omitted or suffered by the Trustee hereunder in good faith and in
accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with CVS or any Affiliate of
CVS with the same rights as it would have if the Trustee were not the Trustee
hereunder. However, in the event the Trustee acquires any conflicting interest
in accordance with the TIA it must eliminate such conflicting interest within 90
days, apply to the SEC for permission to continue as Trustee or resign. Any
Paying Agent, Registrar or co-registrar may do the same with like rights. The
Trustee shall at all times remain subject to Section 7.10 and Section 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for CVS' use of the proceeds of the Notes and it shall not be
responsible for any statement contained herein or any statement contained in the
Notes or any other document in connection with the sale of the Notes or pursuant
to this Indenture other than the Trustee's certificates of authentication.
SECTION 7.05. Notice of Default.
If a Default occurs and is continuing and if such Default is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each Holder of a
Note a notice of such Default within 90 days (or such shorter period as may be
required by applicable law) after such Default occurs. Except in the case of a
Default in payment of principal of, premium, if any, or interest on any Note,
the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
SECTION 7.06. Reports by Trustee to Holders of Notes.
Within 60 days after each May 15, beginning with May 15 following the
date of this Indenture, the Trustee shall mail to Holders of the Notes a brief
report dated as of
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such reporting date that complies with TIA ss. 313(a) to the extent such a
report is required by TIA ss. 313(a). The Trustee also shall comply with TIA ss.
313(b).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to CVS and filed with the SEC and each stock exchange on
which the Notes may be listed. CVS shall promptly notify the Trustee upon the
Notes being listed on any stock exchange and any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
CVS shall pay to the Trustee from time to time such compensation as CVS
and the Trustee shall agree to in writing from time to time for the Trustee's
acceptance of this Indenture and its services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. CVS shall reimburse the Trustee for all reasonable out-of-pocket
expenses incurred or made by it in the course of its services hereunder. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts.
CVS shall indemnify the Trustee and any predecessor Trustee against any
and all loss, liability or reasonable expense, including taxes (other than taxes
based upon, measured by or determined by the income of the Trustee), incurred by
it in connection with the administration of this trust and the performance of
its duties under this Indenture, except any such loss, liability or expense
attributable to the negligence, willful misconduct or bad faith of the Trustee.
The Trustee shall notify CVS promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify CVS shall not relieve CVS of
its obligations hereunder except to the extent that CVS may be materially
prejudiced by such failure. CVS shall defend the claim and the Trustee shall
cooperate in the defense of such claim. The Trustee may have separate counsel
and CVS shall pay the reasonable fees and expenses of such counsel. CVS need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own negligence, willful misconduct
or bad faith. CVS need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
CVS' payment obligations under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure CVS' payment obligations under this Section 7.07, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee,
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except such money or property that is held by it in trust for the benefit of
Holders of Notes to pay principal and interest on particular Notes.
If the Trustee shall incur expenses after the occurrence of a Default
specified in Section 6.01(a)(iv) or Section 6.01(a)(v), such expenses (including
the reasonable fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying CVS in writing. The Holders of Notes of not less
than a majority in principal amount of the Notes then outstanding may remove the
Trustee by so notifying the Trustee and CVS in writing. CVS shall remove the
Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a Custodian or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), CVS shall promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a
majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by CVS.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, CVS or the Holders
of Notes of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
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If the Trustee after written request by any Holder of a Note who has
been a Holder of a Note for at least six months fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
Any successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to CVS. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all of the rights, powers and duties of the Trustee under
this Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Note. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the Lien provided for
in Section 7.07. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, CVS' obligations under Section 7.07 shall continue for the benefit
of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc..
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
entity without any further act shall constitute the successor Trustee; provided,
however, that such entity shall be otherwise qualified and eligible under this
Article 7.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor Trustee, and deliver such Notes so authenticated, and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
This Indenture at all times shall have a Trustee which satisfies the
requirements of TIA 310(a). Trustee shall be a corporation organized and doing
business under the laws of the United States of America or of any State thereof
authorized under such laws to exercise corporate trustee power, shall be subject
to supervision or examination by federal or state authority and shall have a
combined capital and surplus of at least $50 million as set forth in its most
recently published annual report of condition. The Trustee shall be
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subject to TIA ss. 310(b).
SECTION 7.11. Preferential Collection of Claims Against CVS.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee which has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance.
When (i) all Notes previously authenticated and delivered (other than
Notes replaced pursuant to Section 2.07) have been delivered to the Trustee for
cancellation and CVS has paid all sums payable by it under the Indenture, or
(ii) (A) the Notes mature within one year or all of them are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
giving the notice of redemption, (B) the Company irrevocably deposits in trust
with the Trustee, as trust funds solely for the benefit of the Holders of the
Notes for that purpose, money or U.S. Government Obligations or a combination
thereof sufficient (unless such funds consist solely of money, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without consideration
of any reinvestment, to pay the principal of and interest on the Notes (other
than Notes replaced pursuant to Section 2.07) to maturity or redemption, as the
case may be, and to pay all other sums payable by it under this Indenture, and
(C) the Company delivers to the Trustee an Officers' Certificate and an Opinion
of Counsel, in each case stating that all conditions precedent provided for in
this Article 8 relating to the satisfaction and discharge of the Indenture have
been complied with, then this Indenture shall, subject to Section [8.01(c)],
cease to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of CVS accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of CVS.
(a) Subject to Section [8.01(c)] and Section 8.02, CVS at any time may
terminate (i) all of CVS' obligations under the Notes and this Indenture ("legal
defeasance"); or (ii) its obligations under Section 4.03, Section 4.03, Section
4.04, Section 4.05, Section 4.06, Section 4.07, Section 6.01(a)(vi) and Section
6.01(a)(vii) ("covenant defeasance"). CVS may exercise its legal defeasance
option notwithstanding
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its prior exercise of its covenant defeasance option.
If CVS exercises its legal defeasance option, payment of the Notes may
not be accelerated because of an Event of Default. If CVS exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in Section 6.01(a)(iii).
Upon satisfaction of the conditions set forth herein and at the request
of CVS, the Trustee shall acknowledge in writing the discharge of those
obligations of CVS terminated thereby.
(b) Notwithstanding clause (a) and clause (b) above, CVS' obligations
contained in Section 2.02, Section 2.03, Section 2.04, Section 2.05, Section
2.07, Section 2.07, Section 7.07, Section 7.08 and this Article 8 shall survive
until the Notes have been paid in full. Thereafter, CVS' obligations contained
in Section 7.07, Section 8.04 and Section 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance.
CVS may exercise its legal defeasance option or its covenant defeasance
option only if:
(i) with reference to this Section 8.02, CVS has irrevocably deposited
in trust with the Trustee as trust funds solely for the benefit of the
Holders of the Notes, for payment of the principal of and interest on the
Notes, money or U. S. Government Obligations or a combination thereof
sufficient (unless such funds consist solely of money, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee) without
consideration of any reinvestment and after payment of all federal, state
and local taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay and discharge the principal of and accrued
interest on the outstanding Notes to maturity or earlier redemption
(irrevocably provided for under arrangements satisfactory to the Trustee),
as the case may be;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other material agreement
or instrument to which CVS is a party or by which it is bound;
(iii) no Default with respect to the Notes shall have occurred and be
continuing on the date of such deposit;
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(iv) CVS shall have delivered to the Trustee an opinion of counsel
that (1) the Holders of the Notes will not recognize income, gain or loss
for Federal income tax purposes as a result of CVS' exercise of its option
under this Section and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred and (2) the Holders
of the Notes have a valid security interest in the trust funds, and
(v) CVS has delivered to the Trustee an officers' certificate and an
opinion of counsel, in each case stating that all conditions precedent
herein provided relating to the defeasance contemplated by this Section
have been complied with.
In the case of legal defeasance under clause (i) above, the opinion of
counsel referred to in clause (iv)(1) above may be replaced by a ruling directed
to the Trustee received from the Internal Revenue Service to the same effect.
Before or after a deposit, CVS may make arrangements satisfactory to the Trustee
for the redemption of the Notes at a future date in accordance with Article 3.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. The Trustee shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
of, and premium, if any, and interest on, the Notes.
SECTION 8.04. Repayment to CVS.
The Trustee and the Paying Agent shall promptly turn over to CVS upon
request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to CVS upon request any money held by them for the
payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders of Notes entitled to the money shall look to CVS for payment
as general creditors.
SECTION 8.05. Indemnity for Government Obligations.
CVS shall pay and indemnify the Trustee against any tax, fee or other
charge
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imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, CVS'
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to this Article 8 until such time as
the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article 8; provided, however,
that, if CVS has made any payment of interest on or principal of any of the
Notes because of the reinstatement of its obligations, CVS shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND
SECTION 9.01. Without Consent of Holders of Notes.
CVS and the Trustee may amend or supplement this Indenture or the Notes
without notice to or the consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency in this Indenture;
provided that such amendments or supplements shall not materially and
adversely affect the interests of the Holders;
(ii) to provide for the assumption of CVS' obligations to the Holders
of the Notes in connection with a consolidation or merger of the Company
or the sale, conveyance, transfer, lease or other disposal of all or
substantially all of the property and assets of the Company pursuant to
Article 5;
(iii) to comply with any requirements of the SEC in connection with
the qualification of this Indenture under the TIA;
(iv) to evidence and provide for the acceptance of appointment under
this Indenture by a successor Trustee, or
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(v) to make any change that does not materially and adversely affect
the rights of any Holder.
Upon the request of CVS accompanied by a resolution of the Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.06, the Trustee shall join with CVS in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations which may be
contained therein, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture which adversely affects its own rights, duties
or immunities under this Indenture or otherwise.
After an amendment, supplement or waiver under this Section 9.01
becomes effective, CVS shall mail to the Holders of Notes affected thereby a
notice briefly describing any such amendment, supplement or waiver. Any failure
of CVS to mail such notice, or any defect therein, shall not in any way impair
or affect the validity of any such amended or supplemental Indenture or waiver.
Subject to Section 6.07 and Section 6.04, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance by CVS in
any particular instance with any provision of this Indenture or the Notes.
SECTION 9.02. With Consent of Holders of Notes.
CVS and the Trustee may amend or supplement this Indenture, the Notes
or any amended or supplemental Indenture with the written consent of the Holders
of Notes of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default and its consequences or compliance with
any provision of this Indenture or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the Notes then outstanding.
However, without the consent of each Holder of a Note affected, any amendment,
supplement or waiver may not:
(i) extended the Stated Maturity of the principal of, or any
installment of interest on, such Holder's Notes, or reduce the principal
thereof or the rate of interest thereon, or any premium payable with
respect thereto, or change any place or currency of payment where any Note
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the due
date therefor;
(ii) reduce the percentage in principal amount of outstanding Notes
the consent of whose Holders is required for any such supplemental
indenture, for any
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waiver of compliance with certain provisions of this Indenture or
certain Defaults hereunder and their consequences provided for in this
Indenture;
(iii) waive a Default in the payment of principal of or interest on
any Note of such Holder; or
(iv) modify any of the provisions of this Section, except to increase
any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder
of each outstanding Note thereunder affected thereby.
Upon the request of CVS accompanied by a resolution of the Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory with
the Trustee of the consent of the Holders of Notes as aforesaid and upon receipt
by the Trustee of the documents described in Section 9.06, the Trustee shall
join with CVS in the execution of such amended or supplemental Indenture unless
such amended or supplemental Indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, CVS shall mail to the Holders of Notes affected thereby a
notice briefly describing any such amendment, supplement or waiver. Any failure
of CVS to mail such notice, or any defect therein, shall not in any way impair
or affect the validity of any such amended or supplemental Indenture or waiver.
CVS may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by an Holder be
cancelled and of no further effect.
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SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers.
Until an amendment, supplement or waiver becomes effective, a consent
to such amendment, supplement or waiver by a Holder of a Note is a continuing
and binding consent by the Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if a notation of the consent or waiver is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver shall become effective in
accordance with its terms and thereafter shall bind every Holder of a Note.
CVS may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Notes entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, such Persons which were Holders of Notes at
such record date (or their duly designated proxies), and only such Persons,
shall be entitled to give such consent or to revoke any consent previously given
or to take any such action, whether or not such Persons continue to be Holders
of Notes after such record date. No such consent shall be valid or effective for
more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Notes.
If an amendment or supplement changes the terms of a Note, the Trustee
may require the Holder of such Note to deliver such Note to the Trustee. The
Trustee may place an appropriate notation on the Note regarding the changed
terms and return it to the Holder of such Note. Alternatively, if CVS or the
Trustee so determines, CVS in exchange for such Note shall issue and the Trustee
shall authenticate a new Note that reflects such changed terms. Failure to make
the appropriate notation or to issue a new Note shall not affect the validity of
such amendment or supplement.
SECTION 9.06. Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the
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rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing such amendment or supplement the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that such amendment or supplement is authorized or permitted
pursuant to this Indenture. CVS shall not sign any amendment or supplemental
Indenture until the Board of Directors approves any such amendment or
supplemental Indenture.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss. 318(c), such imposed duties shall control.
SECTION 10.02. Notices.
Any notice or communication by CVS or the Trustee to the other is duly
given if in writing and delivered in person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the other's address:
If to CVS:
CVS Corporation
One CVS Drive
Woonsocket, Rhode Island 02895
Telecopier No.: (401) 765-7887
Attention: General Counsel
If to the Trustee:
The Bank of New York
101 Barclay Street -21W
New York, New York 10286
Telecopier No: (212) 815-5915
Attention: Corporate Trust Administration
51
<PAGE>
CVS or the Trustee, by notice each to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder of a Note shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
Note Register. Any notice or communication shall also be so mailed to any Person
described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail
a notice or communication to a Holder of a Note or any defect in such notice
shall not affect its sufficiency with respect to other Holders of Notes.
If a notice or communication is mailed in the manner set forth above
within the time prescribed, such notice or communication shall be deemed to be
duly given whether or not the addressee receives it.
If CVS mails a notice or communication to Holders of Notes, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 10.03. Communication by Holders of Notes with Other Holder of
Notes.
Holders of Notes pursuant to TIA ss. 312(b) may communicate with other
Holders of Notes with respect to their rights under this Indenture or the Notes.
CVS, the Trustee, the Registrar, the Paying Agent and any other Person shall
have the protection of TIA ss. 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by CVS to the Trustee to take any
action under this Indenture, CVS shall furnish to the Trustee any certificates
or opinions required by the TIA, and:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions and covenants, if any, provided for in this Indenture
relating to the proposed action
52
<PAGE>
have been satisfied; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all conditions and covenants have been satisfied.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant contained in this Indenture shall include:
(i) a statement that the Person making such certificate or opinion has
read such condition or covenant;
(ii) a statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether such condition or
covenant has been satisfied; and
(iv) a statement as to whether, in the opinion of such Person, such
condition or covenant has been satisfied.
SECTION 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders of Notes. The Registrar and Paying Agent may make reasonable rules and
set reasonable requirements for their functions.
SECTION 10.07. No Personal Liability of Directors, Officers,
Employees, Incorporators and Stockholders.
No director, officer, employee, incorporator or stockholder of CVS, as
such, shall have any liability for any obligations of CVS under the Notes or
this Indenture or for any claim based on, in respect of, or by reason of, such
obligations. Each Holder of a Note by accepting a Note waives and releases all
such liability. Such waiver and release form a part of the consideration for
issuance of the Notes.
53
<PAGE>
SECTION 10.08. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICT OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of CVS or its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 10.10. Successors.
All agreements of CVS contained in this Indenture and the Notes shall
bind CVS and its successors. All agreements of the Trustee in this Indenture
shall bind the Trustee and its successors.
SECTION 10.11. Severability.
In case any provision of this Indenture or the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each such
signed copy shall be deemed to be an original, and all of such signed copies
together shall represent one and the same agreement.
SECTION 10.13. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience only,
and shall not, for any reason, be deemed to be part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
54
<PAGE>
SIGNATURES
Dated as of February 11, 1999 CVS CORPORATION
By:
------------------------------------
Name:
Title:
Attest:
- -----------------------------
Name:
Title:
Dated as of February 11, 1999 THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Name:
Title:
55
<PAGE>
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
CVS CORPORATION
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.*
[Restricted Notes Legend]
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND UNDER APPLICABLE
STATE SECURITIES LAWS, AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
- --------
* This legend should only be added if the Security is issued in global form.
A-1
<PAGE>
ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(ii) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR
(iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE."
["IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.]**
- --------
** Include on a Definitive Security to be held by an institutional "accredited
investor" (as defined in Rule 501(a), (1), (2), (3) or (7) under the Securities
act).
A-2
<PAGE>
No. Principal Amount $
CUSIP No. _________
5 1/2% Notes due February 15, 2004
CVS CORPORATION, a Delaware corporation, promises to pay to , or
registered assigns, the principal sum of ________Dollars on February 15, 2004.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
Additional provisions of this Note are set forth on the reverse side of
this Note.
Dated:________________
[Seal]
CVS CORPORATION
By:
------------------------------------
Title:
By:
------------------------------------
Title:
A-3
<PAGE>
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of the
Notes referred to in the
Indenture.
By
----------------------------------------
Authorized Signatory
A-4
<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
5 1/2% Notes due February 15, 2004
(a) Interest
CVS CORPORATION, a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called "CVS"), promises to pay interest on the principal amount of this Note at
the rate per annum shown above provided, however, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, interest will accrue
on this security at a rate of 6.0% per annum from and including the date on
which any such Registration Default shall occur but excluding the date on which
all Registration Defaults have been cured.
CVS will pay interest semi-annually on February 15 and August 15 of
each year, commencing August 15, 1999. Interest on the Notes will accrue from
the most recent date to which interest has been paid, or, if no interest has
been paid, from February 11, 1999, [or such other date on which the Notes are
originally issued]. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. CVS shall pay interest on overdue principal at the rate
borne by the Notes.
(b) Method of Payment
CVS will pay interest on the Notes (except defaulted interest) to the
Persons who are registered Holders of Notes at the close of business on the
February 1 or August 1 next preceding the interest payment date even if Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
CVS will pay principal and interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts.
However, CVS may pay principal and interest by check payable in such money. It
may mail an interest check to a Holder's registered address.
(c) Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. CVS may appoint and change
any Paying Agent, Registrar or co-registrar without notice. CVS or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar
A-5
<PAGE>
(d) Indenture
CVS issued the Notes under an Indenture dated as of February 11, 1999
(the "Indenture"), between CVS and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect
on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The Notes
are subject to all such terms, and Holders of Notes are referred to the
Indenture and the TIA for a statement of those terms.
The Notes are general obligations of CVS initially limited to
$300,000,000 aggregate principal amount (subject to Section 2.07 of the
Indenture). CVS may at any time issue additional notes under the Indenture in
unlimited amounts having the same terms as and treated as a single class with
the Notes for all purposes under the Indenture and will vote together as one
class with respect to the Notes. The Indenture imposes certain limitations on
the incurrence of certain additional indebtedness by CVS and certain of its
subsidiaries and the entry into certain sale and leaseback arrangements by the
Company and certain of its subsidiaries. The Indenture also restricts the
ability of CVS to consolidate or merge with or into, or to transfer all or
substantially all its assets to, another person.
(e) Optional Redemption
The Company, at its option, may at any time redeem all or any portion
of the Notes, at a redemption price plus accrued interest to the date of
redemption, equal to the greater of (i) 100% of their principal amount or (ii)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon discounted to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Yield plus 12.5 basis points.
"Comparable Treasury Issue" means, with respect to the Notes, the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Notes that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Notes, (i) the average of the applicable Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and
lowest such applicable Reference Treasury Dealer Quotations, or (ii) if the
Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Quotations.
A-6
<PAGE>
"Independent Investment Banker" means, with respect to the Notes
offered hereby, Credit Suisse First Boston Corporation or, if such firm is
unwilling or unable to select the applicable Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Trustee.
"Reference Treasury Dealer" means, with respect to the Notes offered
hereby, Credit Suisse First Boston Corporation; provided, however, that if the
foregoing shall cease to be a primary United States Government securities dealer
in New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date for the Notes, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue for the Notes (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day preceding
such redemption date.
"Treasury Yield" means, with respect to any redemption date applicable
to the Notes, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
applicable Comparable Treasury Price for such redemption date.
(f) Notice of Redemption
Notice of redemption shall be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at its
registered address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Notes (or portions thereof) to
be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Notes (or such portions
thereof) called for redemption.
(g) Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. Holders of Notes may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder of a Note, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer
A-7
<PAGE>
of or exchange any Note selected for redemption (except, in the case of a Note
to be redeemed in part, the portion of the Note not to be redeemed) or any Notes
for a period of 15 days before a selection of Notes to be redeemed or 15 days
before an interest payment date.
(h) Persons Deemed Owners
The registered Holder of this Note may be treated as the sole owner of
such Note for all purposes.
(i) Unclaimed Money
Subject to applicable abandoned property law, if money for the payment
of principal or interest remains unclaimed for two years, the Trustee or Paying
Agent shall pay the money back to CVS at its request unless an abandoned
property law designates another Person. After any such payment, Holders entitled
to the money must look only to CVS and not to the Trustee or Paying Agent for
payment.
(j) Discharge and Defeasance
Subject to certain conditions, CVS at any time may terminate some or
all of its obligations under the Notes and the Indenture if CVS deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Notes to redemption or maturity, as the case may be.
(k) Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount outstanding of the Notes; and (ii) any
default or compliance with any provision may be waived with the written consent
of the Holders of a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder of a Note, CVS and the Trustee may amend the Indenture or the Notes
to cure any ambiguity, omission, defect or inconsistency, or to comply with
Article 10 of the Indenture or that does not materially and adversely affect the
rights of any Holder of a Note or to comply with requirements of the SEC in
connection with the qualification of the Indenture under the TIA.
(l) Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least
A-8
<PAGE>
25% in aggregate principal amount of the Notes may declare all the Notes to be
due and payable immediately. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Notes being due and payable
immediately upon the occurrence of such Events of Default.
Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
such notice is in the interest of the Holders of Notes.
(m) Trustee Dealings with CVS
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by CVS or its Affiliates and may otherwise deal with CVS or its Affiliates with
the same rights it would have if it were not Trustee.
(n) No Recourse Against Others
A director, officer, employee or stockholder, as such, of CVS or the
Trustee shall not have any liability for any obligations of CVS under the Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations. By accepting a Note, each Holder of a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Notes.
(o) Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the face of this Note.
(p) Abbreviations
Customary abbreviations may be used in the name of a Holder of a Note
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
A-9
<PAGE>
(q) Holders' Compliance with Registration Rights Agreement
Each Holder of a Note, by acceptance hereof, acknowledges and agrees to
the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of CVS to the extent provided therein.
(r) CUSIP Numbers
Pursuant to the recommendation promulgated by the Committee on Uniform
Security Identification Procedures, CVS has caused CUSIP numbers to be printed
on the Notes and has directed the Trustee to use such CUSIP numbers in notices
of redemption as a convenience to Holders of Notes. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
(s) Governing Law
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
--------------------------------------------
CVS will furnish to any Holder of a Note upon written request and
without charge to such Holder of a Note a copy of the Indenture which contains
the text of this Note in larger type. Requests may be made to:
CVS Corporation
670 White Plains Road, Suite 210
Scarsdale, New York 10583
Attention: Nancy R. Christal
A-10
<PAGE>
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Note, complete the form below:
I or we assign and transfer this Note to:
[Print or type assignee's name, address and zip code]
[Insert assignee's soc. sec. or tax I.D. No.]
and irremovably appoint ___________________ agent to transfer
this Note on the books of CVS. The agent may substitute another
to act for him.
- -------------------------------------------------------------------------------
Date: Your Signature:
---------------------------- ------------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the face of this Note.
A-11
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF RESTRICTED NOTES
This certificate relates to $_________ principal amount of Notes held in (check
applicable space) ____ book-entry or _____ definitive form by the undersigned.
The undersigned (check one box below):
? has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depositary a
Note or Notes in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Note (or the portion thereof indicated above)
and CVS has consented to the exchange; or
? has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
The undersigned confirms that such Notes are being:
CHECK ONE BOX BELOW:
(1) ? acquired for the undersigned's own account, without
Transfer (in satisfaction of Section 2.06(a)(ii)(A) of
the Indenture); or
(2) ? transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933, as amended; or
(3) ? transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933, as
amended; or
(4) ? transferred pursuant to and in compliance with Rule 144
under the Securities Act of 1933, as amended; or
(5) ? transferred pursuant to an effective registration
statement under the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (2), (3) or (4) is
checked, CVS or the Trustee may require evidence reasonably satisfactory to them
as to the compliance with the restrictions set forth in the legend on the face
of this Note.
-----------------------------------
Signature
Signature Guarantee:
-----------------------------------
Guaranteed:
A-12
<PAGE>
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
<TABLE>
<CAPTION>
Amount of decrease Amount of increase in Principal Amount of this Signature of authorized
Date of in Principal Amount Principal Amount of this Global Note following such signatory of Trustee or
Exchange of this Global Note Global Note decrease or increase Notes Custodian
<S> <C> <C> <C> <C>
</TABLE>
A-13
<PAGE>
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE AND
PRIVATE EXCHANGE NOTE]
*
**
CVS CORPORATION
No. $
CUSIP:
5 1/2% Notes due February 15, 2004
CVS CORPORATION, a Delaware corporation, promises to pay to
___________, or registered assigns, the principal sum of ________Dollars on
February 15, 2004.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
Additional provisions of this Note are set forth on the reverse side of
this Note.
CVS CORPORATION
by
Dated: _________________
[Seal]
-------------------------------------
Title:
-------------------------------------
Title:
- ----------------------
* If the Note is to be issued in global form add the Global Notes
Legend from Exhibit A and the attachment to Exhibit A captioned "[TO BE ATTACHED
TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE".
** If the Note is a Private Exchange Note issued in a Private Exchange
to the Initial Purchasers holding an unsold portion of its initial allotment,
add the restricted securities legend from Exhibit A and include the "Certificate
to be Delivered upon Exchange or Registration of Transfer of Restricted Notes"
from Exhibit A.
B-1
<PAGE>
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of the
Notes referred to
in the Indenture.
by
--------------------
Authorized Signatory
B-2
<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
5 1/2% Notes due February 15, 2004
(t) Interest
CVS CORPORATION, a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called "CVS"), promises to pay interest on the principal amount of this Note at
the rate per annum shown above.
CVS will pay interest semi-annually on February 15 and August 15 of
each year, commencing August 15, 1999. Interest on the Notes will accrue from
the most recent date to which interest has been paid, or, if no interest has
been paid, [from February 11, 1999]. Interest will be computed on the basis of a
360-day year of twelve 30-day months. CVS shall pay interest on overdue
principal at the rate borne by the Notes.
(u) Method of Payment
CVS will pay interest on the Notes (except defaulted interest) to the
Persons who are registered Holders of Notes at the close of business on the
February 1 or August 1 next preceding the interest payment date even if Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
CVS will pay principal and interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts.
However, CVS may pay principal and interest by check payable in such money. It
may mail an interest check to a Holder's registered address.
(v) Paying Agent and Registrar
Initially, The Bank of New York, a national banking association (the
"Trustee"), will act as Paying Agent and Registrar. CVS may appoint and change
any Paying Agent, Registrar or co-registrar without notice. CVS or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
(w) Indenture
CVS issued the Notes under an Indenture dated as of February 11, 1999
(the "Indenture"), between CVS and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect
on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The Notes
are subject to all such terms, and Holders of Notes are referred
B-3
<PAGE>
to the Indenture and the TIA for a statement of those terms.
The Notes are general obligations of CVS initially limited to
$300,000,000 aggregate principal amount (subject to Section 2.07 of the
Indenture). CVS may at any time issue additional notes under the Indenture in
unlimited amounts having the same terms as and treated as a single class with
the Notes for all purposes under the Indenture and will vote together as one
class with respect to the Notes. The Indenture imposes certain limitations on
the incurrence of certain additional indebtedness by CVS and certain of its
subsidiaries and the entry into certain sale and leaseback arrangements by the
CVS and certain of its subsidiaries. The Indenture also restricts the ability of
CVS to consolidate or merge with or into, or to transfer all or substantially
all its assets to, another person.
(x) Optional Redemption
The Company, at its option, may at any time redeem all or any portion
of the Notes, at a redemption price plus accrued interest to the date of
redemption, equal to the greater of (i) 100% of their principal amount or (ii)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon discounted to the date of redemption on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Yield plus 12.5 basis points.
"Comparable Treasury Issue" means, with respect to the Notes, the
United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term of the Notes that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date
applicable to the Notes, (i) the average of the applicable Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and
lowest such applicable Reference Treasury Dealer Quotations, or (ii) if the
Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Independent Investment Banker" means, with respect to the Notes
offered hereby, Credit Suisse First Boston Corporation or, if such firm is
unwilling or unable to select the applicable Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Trustee.
"Reference Treasury Dealer" means, with respect to the Notes offered
hereby, Credit Suisse First Boston Corporation; provided, however, that if the
foregoing shall cease to be a primary United States Government securities dealer
in New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer.
B-4
<PAGE>
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date for the Notes, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue for the Notes (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day preceding
such redemption date.
"Treasury Yield" means, with respect to any redemption date applicable
to the Notes, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
applicable Comparable Treasury Price for such redemption date.
(y) Notice of Redemption
Notice of redemption shall be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at its
registered address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Notes (or portions thereof) to
be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Notes (or such portions
thereof) called for redemption.
(z) Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. Holders of Notes may transfer or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder of a Note, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Note selected for redemption (except, in the case of a Note to be redeemed in
part, the portion of the Note not to be redeemed) or any Notes for a period of
15 days before a selection of Notes to be redeemed or 15 days before an interest
payment date.
(aa) Persons Deemed Owners
The registered Holder of this Note may be treated as the sole owner of
such Note for all purposes.
(bb) Unclaimed Money
B-5
<PAGE>
Subject to applicable abandoned property law, if money for the payment
of principal or interest remains unclaimed for two years, the Trustee or Paying
Agent shall pay the money back to CVS at its request unless an abandoned
property law designates another Person. After any such payment, Holders entitled
to the money must look only to CVS and not to the Trustee or Paying Agent for
payment.
(cc) Discharge and Defeasance
Subject to certain conditions, CVS at any time may terminate some or
all of its obligations under the Notes and the Indenture if CVS deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Notes to redemption or maturity, as the case may be.
(dd) Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount outstanding of the Notes; and (ii) any
default or compliance with any provision may be waived with the written consent
of the Holders of a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder of a Note, CVS and the Trustee may amend the Indenture or the Notes
to cure any ambiguity, omission, defect or inconsistency, or to comply with
Article 10 of the Indenture or that does not materially and adversely affect the
rights of any Holder of a Note or to comply with requirements of the SEC in
connection with the qualification of the Indenture under the TIA.
(ee) Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes may declare
all the Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes being due and
payable immediately upon the occurrence of such Events of Default.
Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
such notice is in the interest of the Holders of Notes.
(ff) Trustee Dealings with CVS
B-6
<PAGE>
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by CVS or its Affiliates and may otherwise deal with CVS or its Affiliates with
the same rights it would have if it were not Trustee.
(gg) No Recourse Against Others
A director, officer, employee or stockholder, as such, of CVS or the
Trustee shall not have any liability for any obligations of CVS under the Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations. By accepting a Note, each Holder of a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Notes.
(hh) Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the face of this Note.
(ii) Abbreviations
Customary abbreviations may be used in the name of a Holder of a Note
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
(jj) Holders' Compliance with Registration Rights Agreement
Each Holder of a Note, by acceptance hereof, acknowledges and agrees to
the provisions of the Registration Rights Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of CVS to the extent provided therein.
(kk) Governing Law
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
(ll) CUSIP Numbers
Pursuant to the recommendation promulgated by the Committee on Uniform
Security
B-7
<PAGE>
Identification Procedures, CVS has caused CUSIP numbers to be printed on the
Notes and has directed the Trustee to use such CUSIP numbers in notices of
redemption as a convenience to Holders of Notes. No representation is made as to
the accuracy of such numbers either as printed on the Notes or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
--------------------------------------------
CVS will furnish to any Holder of a Note upon written request and
without charge to such Holder of a Note a copy of the Indenture which contains
the text of this Note in larger type. Requests may be made to:
CVS Corporation
670 White Plains Road, Suite 210
Scarsdale, New York 10583
Attention: Nancy R. Christal
B-8
<PAGE>
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Note, complete the form below:
I or we assign and transfer this Note to:
[Print or type assignee's name, address and zip code]
[Insert assignee's soc. sec. or tax I.D. No.]
and irremovably appoint ___________________ agent to transfer
this Note on the books of CVS. The agent may substitute another
to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
---------------------- --------------------------
Sign exactly as your name appears on the face of this Note.
B-9
EXHIBIT 12.1
CVS Corporation
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
Years Ended December 31, Three Months Ended
-----------------------------------------------------------------------------
March 28, March 27,
Dollars in millions 1994 1995 1996 1997 1998 1998 1999
- ------------------- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings from continuing operations
before income taxes and
extraordinary item(1) $ 330.3 $ 157.8 $ 643.4 $ 217.3 $ 711.3 $ 227.7 $ 278.9
Interest portion of net rental 105.3 118.2 132.7 153.4 168.5 42.0 47.3
expense(2)
Interest expense, including
amortization of debt 91.3 116.9 84.7 59.1 69.7 13.0 16.1
------- ------- ------- ------- ------- ------- -------
Adjusted earnings $ 526.9 $ 392.9 $ 860.8 $ 429.8 $ 949.5 $ 282.7 $ 342.3
======== ======== ======== ======== ======= ======= =======
Fixed Charges:(3)
Interest portion of net rental $ 105.3 $ 118.2 $ 132.7 $ 153.4 $ 168.5 $ 42.0 $ 47.3
expense(2)
Interest expense, including
amortization of debt 91.3 116.9 84.7 59.1 69.7 13.0 16.1
Interest capitalized 0.2 0.2 0.1 0.2 0.3 0.1 0.1
------- ------- ------- ------- ------- ------- -------
Total fixed charges $ 196.8 $ 235.3 $ 217.5 $ 212.7 $ 238.5 $ 55.1 $ 63.5
======== ======== ======== ======== ======= ======= =======
Ratio of earnings to fixed charges 2.68 1.67 3.96 2.02 3.98 5.13 5.39
</TABLE>
- ----------
(1) Earnings from continuing operations before income taxes and extraordinary
item includes the pre-tax effect of the following non-recurring charges:
(i) in 1998, $158.3 million ($107.8 million after-tax) related to the
merger of CVS and Arbor and $10.0 million ($5.9 million after-tax) related
to the markdown of non-compatible Arbor merchandise, (ii) in 1997, $411.7
million ($273.7 million after-tax) related to the merger of CVS and Revco,
$75.0 million ($49.9 million after-tax) related to the markdown of
non-compatible Revco merchandise and $31.0 million ($19.1 million
after-tax) related to the restructuring of Big B, Inc., (iii) in 1996,
$12.8 million ($6.5 million after-tax) related to the write-off of costs
incurred in connection with the failed merger of Rite Aid Corporation and
Revco and a $121.4 million ($72.1 million after-tax) gain realized upon the
sale of certain equity securities received from the sale of Marshalls and
(iv) in 1995, $165.5 million ($97.7 million after-tax) related to the
Company's strategic restructuring program and the early adoption of SFAS
No. 121, and $49.5 million ($29.1 million after-tax) related to the Company
changing its policy from capitalizing internally developed software costs
to expensing the costs as incurred, outsourcing certain technology
functions and retaining certain employees until their respective job
functions were transitioned.
(2) The interest portion of the net rental expense is estimated to be equal to
one-third of the net rental expense.
(3) The Company formed an Employee Stock Ownership Plan effective January 1,
1989. On June 23, 1989, the ESOP Trust borrowed $357.5 million from
qualified lenders, the proceeds of which were used to purchase a new series
of preference stock issued by the Company. The Company has guaranteed the
loan to the ESOP Trust. Dividends on preference stock totaled: $5.0 for the
three months ended March 27, 1999 and $5.1 for three months ended March 28,
1998 and $20.5 in 1998, $20.8 million in 1997, $21.8 million in 1996, $24.3
million in 1995, $24.9 million in 1994 and $25.3 million in 1993. These
amounts are not reflected in the calculation above.
CONSENT OF INDEPENDENT ACCOUNTANTS
Board of Directors
CVS Corporation
We consent to the incorporation by reference in the registration statement on
Form S-4 of our reports dated January 27, 1999 incorporated by reference in the
Annual Report on Form 10-K of CVS Corporaiton for the year ended December 31,
1998. And to the reference to ur firm under the heading "Experts" in the
prospectus.
/s/ KPMG LLP
Providence, Rhode Island
May 7, 1999
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
CVS CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 05-0494040
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One CVS Drive 02895
Woonsocket, RI (Zip code)
(Address of principal executive offices)
---------------------------
5 1/2% Exchange Notes due February 15, 2004
(Title of the indenture securities)
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- ------------------------------------------------ ------------------------------
Name Address
- ------------------------------------------------ ------------------------------
Superintendent of Banks of 2 Rector Street, New York, N.Y.
the State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 2nd day of March, 1999.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
-----------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1998, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
in Thousands
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and currency and coin.. $3,951,273
Interest-bearing balances........................... 4,134,162
Securities:
Held-to-maturity securities......................... 932,468
Available-for-sale securities....................... 4,279,246
Federal funds sold and Securities purchased under
agreements to resell................................ 3,161,626
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............37,861,802
LESS: Allowance for loan and
lease losses............619,791
LESS: Allocated transfer risk
reserve........................3,572
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,238,439
Trading Assets......................................... 1,551,556
Premises and fixed assets (including capitalized
leases)............................................. 684,181
Other real estate owned................................ 10,404
Investments in unconsolidated subsidiaries and
associated companies................................ 196,032
Customers' liability to this bank on acceptances
outstanding......................................... 895,160
Intangible assets...................................... 1,127,375
Other assets........................................... 1,915,742
-----------
Total assets........................................... $60,077,664
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $27,020,578
Noninterest-bearing.......................11,271,304
Interest-bearing..........................15,749,274
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 17,197,743
Noninterest-bearing..........................103,007
Interest-bearing..........................17,094,736
Federal funds purchased and Securities sold under
agreements to repurchase............................ 1,761,170
Demand notes issued to the U.S.Treasury................ 125,423
Trading liabilities.................................... 1,625,632
Other borrowed money:
With remaining maturity of one year or less......... 1,903,700
With remaining maturity of more than one year
through three years............................... 0
With remaining maturity of more than three years.... 31,639
Bank's liability on acceptances executed and
outstanding......................................... 900,390
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 2,708,852
-----------
Total liabilities...................................... 54,583,127
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 764,443
Undivided profits and capital reserves................. 3,542,168
Net unrealized holding gains (losses) on
available-for-sale securities....................... 82,367
Cumulative foreign currency translation adjustments....
(29,725)
Total equity capital................................... 5,494,537
-----------
Total liabilities and equity capital................... $60,077,664
===========
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni ]
Gerald L. Hassell ] Directors
Alan R. Griffith ]
- --------------------------------------------------------------------------------
