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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
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TABLE OF CONTENTS
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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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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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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
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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
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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
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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, ▇▇▇▇▇▇▇ & 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
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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
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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. ▇▇.▇▇.
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)).
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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;
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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 ▇▇▇▇▇▇ 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
10
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
12
(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
13
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
14
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
15
(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
17
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
18
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
19
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
20
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
21
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
22
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;
23
(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.
24
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
32
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
34
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
35
(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
40
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,
41
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
43
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
44
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;
45
(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
46
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
47
(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
48
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
50
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
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ -▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
51
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
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
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
SIGNATURES
Dated as of February 11, 1999 CVS CORPORATION
By:
------------------------------------
Name:
Title:
Attest:
-----------------------------
Name:
Title:
Dated as of February 11, ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
as Trustee
By:
------------------------------------
Name:
Title:
55
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
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
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
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
[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
(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. ▇▇.▇▇. 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
"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
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
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
(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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
A-10
--------------------------------------------------------------------------------
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
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
[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:
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
A-13
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
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
[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. ▇▇.▇▇. 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
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
"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
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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
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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
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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
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▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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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.
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Date: Your Signature:
---------------------- --------------------------
Sign exactly as your name appears on the face of this Note.
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