-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U2uXFhzcKCxY6xMmhhkMIIwY5YLNH/AEJP+vqmIG/f/hDcMTBurDNYcWkPcrEYgk 5uYHd99dIsMW75geIX/tkg== 0000950137-97-002210.txt : 19970620 0000950137-97-002210.hdr.sgml : 19970620 ACCESSION NUMBER: 0000950137-97-002210 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970619 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CVS CORP CENTRAL INDEX KEY: 0000064803 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 050494040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-07706 FILM NUMBER: 97626437 BUSINESS ADDRESS: STREET 1: ONE CVS DR CITY: WOONSOCKET STATE: RI ZIP: 02895 BUSINESS PHONE: 9149254000 MAIL ADDRESS: STREET 1: ONE THEALL ROAD CITY: RYE STATE: NY ZIP: 10580 FORMER COMPANY: FORMER CONFORMED NAME: MELVILLE CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MELVILLE SHOE CORP DATE OF NAME CHANGE: 19760630 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ZELL CHILMARK FUND L P CENTRAL INDEX KEY: 0000905301 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 363716608 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: TWO NORTH RIVERSIDE PLAZA STREET 2: 15TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129849711 MAIL ADDRESS: STREET 1: TWO NORTH RIVERSIDE PLAZA STREET 2: 15TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 SC 13D 1 SCHEDULE 13D 1 OMB APPROVAL OMB Number 3235-0145 Expires: August 31, 1991 Estimated average burden hours per response . . . . 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )* ------------- CVS Corporation --------------------------------------------- (NAME OF ISSUER) Common Stock, par value $.01 per share --------------------------------------------- (TITLE OF CLASS OF SECURITIES) 126650100 --------------------------------------------- (CUSIP NUMBER) Alisa Singer, Rosenberg & Liebentritt, P.C. Two N. Riverside Plaza, Suite 600, Chicago, IL 60606 (312) 466-3196 - ------------------------------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) May 29, 1997 --------------------------------------------- (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7). NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled our for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 27 2 CUSIP No. 126650100 13D Page 2 of 27 1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Zell/Chilmark Fund, L.P. 36-3716608 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING 8 SHARED VOTING POWER PERSON WITH 11,585,043 9 SOLE DISPOSITIVE POWER 10 SHARED DISPOSITIVE POWER 11,585,043 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11,585,043 12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.8% 14 TYPE OF REPORTING PERSON* PN *SEE INSTRUCTION BEFORE FILLING OUT! 3 Item 1 Security and Issuer This Schedule 13D relates to the common stock, $.01 par value per share ("Common Stock"), of CVS Corporation (the "Issuer"). The Issuer's principal executive office is One CVS Drive, Woodsocket, RI 02895. Item 2 Identity and Background (a - c) This Schedule 13D is being filed by Zell/Chilmark Fund, L.P., a Delaware limited partnership ("Zell/Chilmark"). The sole general partner of Zell/Chilmark is ZC Limited Partnership, an Illinois limited partnership ("ZC Limited"). No limited partner of Zell/Chilmark acts as a general partner or has control over Zell/Chilmark. The sole general partner of ZC Limited is ZC Partnership, an Illinois general partnership ("ZC"). ZC has delegated its full power and authority to represent itself to an executive committee of ZC comprised of Samuel Zell, David M. Schulte and two delegates appointed by Mr. Zell. Mr. Zell has appointed Rod F. Dammeyer and Sheli Z. Rosenberg as his delegates. ZC's partners are ZC, Inc., an Illinois corporation ("ZCI") whose sole stockholder is Samuel Zell as trustee of the Samuel Zell Revocable Trust under trust agreement dated January 19, 1990 ("Zell Trust"), and CZ Inc., a Delaware corporation ("CZI") whose sole stockholder is David M. Schulte. Mr. Zell is also the beneficiary of the Zell Trust. The principal executive office of Zell/Chilmark, ZC Limited, ZC, ZCI, the Zell Trust, Messrs. Zell and Dammeyer and Mrs. Rosenberg is Two N. Riverside Plaza, Suite 600, Chicago, IL 60606. The principal executive office of CZI and Mr. Schulte is 875 N. Michigan, Suite 2100, Chicago, IL 60611. The principal business of Zell/Chilmark and through Zell/Chilmark, of ZC Limited, ZC, ZCI and CZI is investing in, and providing capital and management support to companies that are engaged in or are the appropriate subject of significant recapitalizations or corporate restructurings. Certain information concerning the members of the executive committee of ZC and the executive officers, directors and stockholders of ZCI and CZI is set forth in Appendix A hereto. (d) and (e) Neither Zell/Chilmark, ZC Limited, ZC, ZCI, CZI, Mr. Zell, Mr. Schulte, Mr. Dammeyer, Mrs. Rosenberg, nor, to the best knowledge of Zell/Chilmark, any of the persons listed in Appendix A hereto, have during the last five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was, or is, subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration The consideration for the acquisition of the 11,585,043 shares of Common Stock was 13,102,288 shares of common stock of Revco D.S., Inc. ("Revco"). On February 6, 1997, the Issuer, its wholly owned subsidiary, North Acquisition Corp. ("Acquisition Corp."), and Revco had entered into an Agreement and Plan of Merger ("Merger Agreement") wherein the parties agreed that, subject to certain conditions being met, Revco would be merged with and into Acquisition Corp. with Revco as the surviving corporation ("Merger"). The Merger proceeds would be the Common Stock of the Issuer. On May 29, 1997, upon the satisfaction or waiver of all conditions, the Merger was consummated and as a result, Zell/Chilmark's 13,102,288 shares of Revco were converted into the right to receive 11,585,043 shares of Common Stock. Item 4. Purpose of the Transaction Pursuant to Zell/Chilmark's Agreement of Limited Partnership ("Agreement"), Zell/Chilmark is obligated within 90 days of receiving cash or marketable securities in the disposition of an investment to Page 3 of 27 4 distribute to its partners the cash or marketable securities. The executive committee of ZC has the sole discretion to determine the amount available for distribution and whether the distribution will be in cash or marketable securities. Within 90 days after the time that Zell/Chilmark's 11,585,043 shares of Common Stock become marketable securities, as that term is defined in the Agreement (which Zell/Chilmark believes to be the time that the restrictions on transferability lapse under the Affiliate's Letter Relating to Pooling, as hereinafter defined), Zell/Chilmark will (i) sell the 11,585,043 shares of Common Stock and distribute the net proceeds to its partners; (ii) distribute the 11,585,043 shares of Common Stock to its partners; or (iii) sell a portion of the 11,085,043 shares of Common Stock and distribute the net proceeds and the unsold shares of Common Stock to its partners. Any distributions to Zell/Chilmark's partners will be in accordance with the Agreement. Zell/Chilmark has no plans or proposals of the type referred to in clauses (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuers (a) and (b) As of the date hereof, Zell/Chilmark beneficially owns 11,585,043 shares of Common Stock or 6.8 % of the issued and outstanding Common Stock. Zell/Chilmark shares the power to vote or to direct the vote and shares the power to dispose or to direct the disposition of the 11,585,043 shares of Common Stock beneficially owned by it with the members of ZC's executive committee: Messrs. Zell, Dammeyer and Schulte and Mrs. Rosenberg. Mrs. Rosenberg beneficially owns 3,713 shares of Common Stock and options to purchase 22,844 shares of Common Stock which are currently exercisable. Mrs. Rosenberg has the sole power to vote or to direct the vote and the sole power to dispose or to direct the disposition of 26,557 shares of Common Stock (assuming the exercise of the options to purchase 22,844 shares of Common Stock). Mr. Dammeyer beneficially owns options to purchase 3005 shares of Common Stock which are currently exercisable. Mr. Dammeyer has the sole power to vote or to direct the vote and the sole power to dispose or to direct the disposition of 3005 shares of Common Stock (assuming the exercise of the options to purchase 3005 shares of Common Stock). (c) On May 29, 1997, Zell/Chilmark acquired 11,585,043 shares of Common Stock pursuant to the Merger in exchange for 13,102,288 shares of Common Stock of Revco. On May 29, 1997, Mrs. Rosenberg acquired the 3,713 shares of Common Stock pursuant to the Merger in exchange for 4,200 shares of Common Stock of Revco. On May 29, 1997, Mrs. Rosenberg and Mr. Dammeyer acquired options to purchase 22,844 and 3005 shares of Common Stock, respectively, pursuant to the Merger in exchange for options to purchase 25,841 and 3405 shares of Revco Common Stock, respectively. (d) and (e) Not applicable. Item 6 Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Concurrent with the closing of the Merger, the Issuer entered into a Registration Rights Agreement ("Registration Agreement") with Zell/Chilmark in a form substantially similar to the Registration Agreement attached hereto as Exhibit 1. Pursuant to the Registration Agreement, the Issuer has agreed to file with the Securities and Exchange Commission ("Commission") a Shelf Registration Statement Page 4 of 27 5 and to use its best efforts to cause the Registration Statement to become effective. The summary of the Registration Agreement contained in this Schedule 13D of certain provisions of the Registration Agreement is qualified in its entirety by reference to the Registration Agreement attached hereto as Exhibit 1 and incorporated hereby by reference. Additionally, Zell/Chilmark stated in a letter to the Issuer and Revco dated February 6, 1997 ("Affiliate's Letter Relating to Pooling") that Zell/Chilmark will not sell, transfer, or otherwise dispose of its interest in or acquire or sell any options or other securities relating to securities of the Issuer that would be intended to reduce Zell/Chilmark's risk relative to any shares of Common Stock beneficially owned by it during the period commencing on the 30th day prior to the effectiveness of the Merger and ending at such time as the Issuer publicly releases a report covering at least 30 days of combined operations of the Issuer after the Merger. The summary contained in this Schedule 13D of certain provisions of the Affiliate's Letter Relating to Pooling is qualified in its entirety by reference to the Affiliate's Letter Relating to Pooling attached hereto as Exhibit 2 and is incorporated herein by reference. Additionally, Zell/Chilmark stated in a separate letter to the Issuer and Revco dated May 29, 1997 ("Affiliate's Letter for Zell/Chilmark") that it would not sell, transfer or otherwise dispose of the shares of Common Stock it received in the Merger in violation of the Securities Act of 1933, as amended (the "Act"); that it may not sell, transfer or otherwise dispose of the shares of Common Stock received in the Merger unless (i) such sale, transfer or other disposition has been registered under the Act; (ii) such sale, transfer or other disposition is made in conformity with Rule 145 promulgated by the Commission under the Act; or (iii) in the opinion of counsel reasonably acceptable to the Issuer or pursuant to a "no action" letter obtained by Zell/Chilmark from the staff of the Commission, such sale, transfer or other disposition is otherwise exempt from registration under the Act. The summary contained in this Schedule 13D of certain provisions of the Affiliate's Letter for Zell/Chilmark is qualified in its entirety by reference to the Affiliate's Letter to Zell/Chilmark attached hereto as Exhibit 3 and is incorporated herein by reference. On May 29, 1997, Sheli Z. Rosenberg was elected to the Issuer's Board of Directors. Item 7 Materials to be Filed as Exhibits Exhibit 1 Registration Rights Agreement between the Issuer and Zell/Chilmark Exhibit 2 Letter to the Issuer and Revco from Zell/Chilmark dated February 6, 1997 Exhibit 3 Letter to the Issuer and Revco from Zell/Chilmark dated May 29, 1997 Page 5 of 27 6 SIGNATURES After reasonable inquiry, and the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DATED: June 18, 1997. Zell/Chilmark Fund, L.P. By: ZC Limited Partnership, general partner By: ZC Partnership, general partner By: ZC Inc., a partner By: /s/ Sheli Z. Rosenberg ----------------------- Vice President Page 6 of 27 7 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION PAGE 1 Registration Rights Agreement 9 2 Letter to the Issuer and Revco from Zell/Chilmark dated 23 February 6, 1997 3 Letter to the Issuer and Revco from Zell/Chilmark dated 25 May 29, 1997 Page 7 of 27 8 APPENDIX A Information concerning the members of the executive committee of ZC and the officers and directors of ZCI and CZI. EXECUTIVE COMMITTEE OF ZC PARTNERSHIP Samuel Zell is the Chairman of the Board of Equity Group Investments, Inc. ("EGI"), an owner and manager of real estate and corporate investments. EGI's principal executive office is located at Two North Riverside Plaza, Suite 600, Chicago, Illinois 60606. Mr. Zell is a citizen of the United States of America. David M. Schulte is a general partner of Chilmark Partners ("Chilmark"), an investment banking firm. Chilmark's principal executive offices are located at 875 North Michigan Avenue, Suite 2100, Chicago, Illinois 60611. Mr. Schulte is a citizen of the United States of America. Rod F. Dammeyer is managing director of EGI Corporate Investments, a division of EGI. Mr. Dammeyer is also president and chief executive officer of Anixter International Inc. ("Anixter") a distributor of electrical products. Anixter's principal executive offices are located at Two North Riverside Plaza, Suite 1900, Chicago, Illinois 60606. Mr. Dammeyer is a citizen of the United States of America. Sheli Z. Rosenberg is president and chief executive officer of EGI and a principal in the law firm, Rosenberg & Liebentritt, P.C. ("R & L"). The principal executive offices of R & L is Two North Riverside Plaza, Suite 1600, Chicago, Illinois 60606. Mrs. Rosenberg is a citizen of the United States of America. EXECUTIVE OFFICERS AND DIRECTORS OF ZC, INC. The sole director of ZCI is Samuel Zell. The officers of ZCI are: Samuel Zell President Rod F. Dammeyer Vice President Donald J. Liebentritt Vice President Sheli Z. Rosenberg Vice President Information concerning Messrs. Zell and Dammeyer and Mrs. Rosenberg is above. Donald J. Liebentritt is an executive vice president and general counsel of EGI and a principal of R & L. Mr. Liebentritt is a citizen of the United States of America. The address for Mr. Liebentritt is Two North Riverside Plaza, Chicago, Illinois 60606. EXECUTIVE OFFICERS AND DIRECTORS OF CZ INC. David M. Schulte is the sole director of CZI. The officers of CZI are: David M. Schulte President Joel S. Friedland Vice President Matthew R. Rosenberg Vice President Information concerning Mr. Schulte is above. Messrs. Friedland and Rosenberg are both general partners of Chilmark and citizens of the United States of America. The address for Messrs. Friedland and Rosenberg is 875 North Michigan Avenue, Suite 2100, Chicago, IL 60606. Page 8 of 27 EX-1 2 REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 1 REGISTRATION RIGHTS AGREEMENT AGREEMENT dated as of ___________, 1997 among CVS Corporation, a Delaware corporation (the "ISSUER"), and the Holders as defined herein. W I T N E S S E T H: WHEREAS, this Agreement is being entered into in connection with the closing under the Merger Agreement referred to below; NOW, THEREFORE, in consideration of the foregoing and the mutual promises, representation, warranties, covenants and agreements contained herein, the parties hereto, intending to be legally bound hereby, agree as follows: Definitions . Definitions. Terms defined in the Agreement and Plan of Merger dated as of F ebruary 6, 1997 among the Issuer, Revco D.S., Inc., a Delaware corporation, and North Acquisition Corp., a Delaware corporation, are used herein as defined therein. In addition, the following terms, as used herein, shall have the following respective meanings: "COMMISSION" means the Securities and Exchange Commission or any successor governmental body or agency. "COMMON STOCK" means the common stock, par value $.01 per share, of the Issuer. "DEMAND REGISTRATION" has the meaning ascribed thereto in Section 2.02 (a)(i). "DEMAND REQUEST" has the meaning ascribed thereto in Section 2.02(a). "DISADVANTAGEOUS CONDITION" has the meaning ascribed thereto in Section 2.04. "HOLDER" means a person who owns Registrable Securities and is either (i) an Investor or (ii) a Person that (A) has agreed to be bound by the terms of this Agreement as if such Person were an Investor and (B) is (1) upon the death of any Investor, the executor of the estate of such Investor or such Investor's heirs, devisees, legatees or assigns, (2) upon the disability of any Investor, any guardian or conservator of such Investor or (3) a general or limited partner of Zell/Chilmark that has received Registrable Securities pursuant to the distribution to such partners of Registrable Securities in accordance with the agreement of limited partnership governing the rights of such partners. "HOLDERS' AGENT" means each of Magten, the Zell Holders' Agent and each Revco Individual Holder, as the case may be. "INVESTOR" means each Person listed on Schedule I hereto. Page 9 of 27 2 "MAGTEN" means Magten Asset Management Corporation. "PERMITTED HOLDER" means each of (i) the Zell Holders' Agent (or one representative of the Zell Holders that (x) is designated by Zell Holders that hold a majority of the Registrable Securities proposed to be sold by Zell Holders in the applicable offering and (y) is reasonably acceptable to the Issuer), (ii) Magten and (iii) one representative of the Revco Individual Holders that is reasonably acceptable to the Issuer, as the case may be. "1933 ACT" means the Securities Act of 1933, as amended. "REGISTRABLE SECURITIES" means Common Stock acquired by the Holders pursuant to the Merger (and any shares of stock or other securities into which or for which such Common Stock may hereafter be changed, converted or exchanged and any other shares or securities issued to Holders of such Common Stock (or such shares of stock or other securities into which or for which such shares are so changed, converted or exchanged) upon any reclassification, share combination, share subdivision, share dividend, share exchange, merger, consolidation or similar transaction or event). As to any particular Registrable Securities, such Registrable Securities shall cease to be Registrable Securities as soon as (i) such Registrable Securities have been sold or otherwise disposed of pursuant to a registration statement that was filed with the Commission in accordance with this Agreement and declared effective under the 1933 Act, (ii) based on an opinion of counsel or a no-action letter of the Commission, in either case reasonably acceptable to the Issuer (and, in the case of Registrable Securities held by a Zell Holder, reasonably acceptable to the Zell Holders' Agent), such Registrable Securities are eligible for immediate sale pursuant to Rule 144 or Rule 145 (whether or not subject to applicable volume limitations thereunder), provided that, notwithstanding such opinion or no-action letter, prior to the Shelf Termination Date (determined disregarding clause (c) of the definition of Shelf Termination Date in Section 2.01) (x) no Registrable Securities held by a Zell Holder shall cease to be Registrable Securities unless all Registrable Securities held by all Zell Holders could then be sold in a single transaction (assuming for these purposes the aggregation of all such Registrable Securities of all Zell Holders) without violation of applicable Rule 144 volume limitations and (y) no Registrable Securities held by Magten shall cease to be Registrable Securities unless all Registrable Securities held by Magten could then be sold in a single transaction without violation of applicable Rule 144 volume limitations, (iii) they shall have been otherwise sold, transferred or disposed of by a Holder to any Person that is not a Holder, or (iv) they shall have ceased to be outstanding. "REGISTRATION EXPENSES" means any and all expenses incident to performance of or compliance with any registration of securities pursuant to Article II, including, without limitation, (i) the fees, disbursements and expenses of the Issuer's counsel and accountants (including in connection with the delivery of opinions and/or comfort letters) in connection with this Agreement and the performance of the Issuer's obligations hereunder; (ii) all expenses, including filing fees, in connection with the preparation, printing and filing of one or more registration statements hereunder; (iii) the cost of printing or producing any agreements among underwriters, underwriting agreements, and blue sky or legal investment memoranda; (iv) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the securities to be disposed of; (v) transfer agents' and registrars' fees and expenses in connection with such offering; (vi) all security engraving and security printing Page 10 of 27 3 expenses; (vii) all fees and expenses payable in connection with the listing of the Registrable Securities on any securities exchange or automated interdealer quotation system on which the Common Stock is then listed; and (viii) all reasonable fees and expenses of one legal counsel for the Holders in connection with each of the Required Shelf Registration and the Demand Registration, which legal counsel shall be selected by Holders owning a majority of the Registrable Securities then being registered; provided that Registration Expenses shall exclude (x) all underwriting discounts and commissions, selling or placement agent or broker fees and commissions, and transfer taxes, if any, in connection with the sale of any securities, (y) the fees and expenses of counsel for any Holder (other than pursuant to clause (viii)) and (z) all costs and expenses of the Issuer incurred as contemplated in Section 2.06(g). "REQUIRED SHELF REGISTRATION" has the meaning ascribed thereto in Section 2.01. "REVCO INDIVIDUAL HOLDER" means each Holder that immediately prior to the Effective Time was an officer or director of Revco and each transferee thereof (contemplated in the definition of "Holder") that is a Holder. "RULE 144" means Rule 144 (or any successor rule to similar effect) promulgated under the 1933 Act. "RULE 145" means Rule 145 (or any successor rule to similar effect) promulgated under the 1933 Act. "RULE 415 OFFERING" means an offering on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated under the 1933 Act. "SELLING HOLDER" means any Holder who sells Registrable Securities pursuant to a public offering registered hereunder. "SHELF REGISTRATION" means the registration under the 1933 Act of a Rule 415 Offering. "SHELF REGISTRATION STATEMENT" means a registration statement intended to effect a Shelf Registration. "ZELL HOLDER" means Zell/Chilmark, any Affiliate of Zell/Chilmark that is a Holder, and each partner of Zell/Chilmark referred to in clause (C) of the definition of "Holder." "ZELL HOLDERS' AGENT" has the meaning ascribed thereto in Section 3.11. . Internal References. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Appendix A, and references to the parties shall mean the parties to this Agreement. Page 11 of 27 4 REGISTRATION RIGHTS . Shelf Registration. If requested by any Holder, as soon as practicable (but in any event not more than 10 days) after the date of this Agreement, the Issuer shall prepare and file with the Commission a Shelf Registration Statement on an appropriate form that shall include all Registrable Securities, and may include securities of the Company for sale for the Company's own account (the "REQUIRED SHELF REGISTRATION"). The Issuer shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective within 15 days after the public release by the Issuer of the financial results of the Issuer and Revco referred to in Section 5.20 of the Merger Agreement. Notwithstanding anything else contained in this Agreement, the Issuer shall only be obligated to keep such Shelf Registration Statement effective until the earliest of (a) 12 months after the date such Shelf Registration Statement has been declared effective, provided that such 12-month period shall be extended by (i) the length of any period during which the Issuer delays in maintaining the Shelf Registration Statement current pursuant to Section 2.04, (ii) the length of any period (in which such Shelf Registration Statement is required to be effective hereunder) during which such Shelf Registration Statement is not maintained effective, and (iii) such number of days that equals the number of days elapsing from (x) the date the written notice contemplated by Section 2.06 (e) below is given by the Issuer to (y) the date on which the Issuer delivers to the Holders of Registrable Securities the supplement or amendment contemplated by Section 2.06 (e) below, (b) such time as all Registrable Securities have been sold or disposed of thereunder or sold, transferred or otherwise disposed of to a person that is not a Holder and (c) such time as all securities that were Registrable Securities on the date hereof have ceased to be Registrable Securities (the earliest of (a), (b) and (c) being the "Shelf Termination Date"). The Required Shelf Registration shall not be counted as a Demand Registration for purposes of Section 2.02 of this Agreement. . Demand Registration. Upon written notice to the Issuer from one or more Holders at any time after the Shelf Termination Date (but not later than the date that is 180 days after the Shelf Termination Date) (the "DEMAND REQUEST") requesting that the Issuer effect the registration under the 1933 Act of any or all of the Registrable Securities held by such requesting Holders, which notice shall specify the intended method or methods of disposition of such Registrable Securities, the Issuer shall prepare and, within 60 days after such request, file with the Commission a registration statement with respect to such Registrable Securities and thereafter use its reasonable best efforts to cause such registration statement to be declared effective under the 1933 Act for purposes of dispositions in accordance with the intended method or methods of disposition stated in such request. Notwithstanding any other provision of this Agreement to the contrary: (i) the Holders may collectively exercise their rights to request registration under this Section 2.02(a) on not more than one occasion (such registration being referred to herein as the "DEMAND REGISTRATION"); (ii) the Issuer shall not be required to effect the Demand Registration hereunder unless the aggregate number of Registrable Securities to be registered pursuant to the Demand Registration is equal to or more than 3,000,000 shares; (iii) the method of disposition requested by Holders in connection with any Demand Registration may not, without the Issuer's written consent, be a Rule 415 Offering; and (iv) the Issuer shall not be required to effect the Demand Registration hereunder if all securities that were Registrable Securities on the date hereof have ceased to be Registrable Securities. Page 12 of 27 5 (b) Notwithstanding any other provision of this Agreement to the contrary, a Demand Registration requested by Holders pursuant to this Section 2.02 shall not be deemed to have been effected, and, therefore, not requested and the rights of each Holder shall be deemed not to have been exercised for purposes of paragraph (a) above, if such Demand Registration has not become effective under the 1933 Act or if such Demand Registration, after it became effective under the 1933 Act, was not maintained effective under the 1933 Act (other than as a result of any stop order, injunction or other order or requirement of the Commission or other government agency or court solely on the account of a material misrepresentation or omission of a Holder) for at least 30 days (or such shorter period ending when all the Registrable Securities covered thereby have been disposed of pursuant thereto) and, as a result thereof, the Registrable Securities requested to be registered cannot be distributed in accordance with the plan of distribution set forth in the related registration statement. So long as a Demand Request is made by the Holders within the 180-day period referred to in Section 2.02(a), the Holders shall not lose their right to their Demand Registration under Section 2.02 if the Demand Registration related to such Demand Request is delayed or not effected in the circumstances set forth in this clause (b). (c) The Issuer shall have the right to cause the registration of additional equity securities for sale for the account of the Issuer in the registration of Registrable Securities requested by the Holders pursuant to Section 2.02(a) above; provided that if such Holders are advised in writing (with a copy to the Issuer) by the lead or managing underwriter referred to in Section 2.03(b) that, in such underwriter's good faith view, all or a part of such Registrable Securities and additional equity securities cannot be sold and the inclusion of such Registrable Securities and additional equity securities in such registration would be likely to have an adverse effect on the price, timing or distribution of the offering and sale of the Registrable Securities and additional equity securities then contemplated, then the number of securities that can, in the good faith view of such underwriter, be sold in such offering without so adversely affecting such offering shall be allocated pro rata among the requesting Holders and the Issuer on the basis of the relative number requested to be included therein by the Issuer and each such Holder (in which case Section 2.02(a)(ii) shall be disregarded for purposes of such Demand Registration); provided that in the event such a pro rata allocation shall be made in connection with the Demand Request, the remaining Holders shall be entitled to request one additional Demand Registration (without needing to make a Demand Request therefor within the 180-day period referred to in Section 2.02(a) and disregarding Section 2.02(a)(ii) for purposes of such additional Demand Registration); provided further that in conection with such additional Demand Registration, if any, the Issuer may not include additional securities therein for its own account if such inclusion would result in any reduction in the Registrable Securities proposed to be sold therein by the Holders. The Holders of the Registrable Securities to be offered pursuant to paragraph (a) above may require that any such additional equity securities be included by the Issuer in the offering proposed by such Holders on the same conditions as the Registrable Securities that are included therein. (d) Within 7 days after delivery of a Demand Request by a Holder, the Issuer shall provide a written notice to each Holder (or, if so requested by the Issuer after appropriate notice to the Zell Holders' Agent by the Issuer, the Zell Holders' Agent shall provide written notice to each Zell Holder), advising such Holder of its right to include any or all of the Registrable Securities held by such Holder for sale pursuant to the Demand Registration and advising such Holder of procedures to enable such Holder to elect to so include Registrable Securities for sale in the Demand Registration. Any Holder may, within 7 days of delivery to such Holder of a notice pursuant to this Section 2.02(d), elect to so include Registrable Securities in the Demand Registration by written notice to such effect to the Issuer specifying the number of Registrable Securities desired to be so included by such Holder. (e) 1Section .2 . Other Matters In Connection With Registrations. Each Zell Holder shall keep the Zell Holders' Agent informed promptly (x) of the name, address and other contact information of such Zell Holder, (y) of the number of Registrable Securities held from time-to-time by such Zell Holder, and (z) of each sale, transfer or other disposition of Registrable Securities (including the number of shares sold) by each such Zell Holder. Each Holders' Agent shall keep the Issuer informed promptly (x) of the name, address and other contact information of each Holder for whom such Holders' Agent is acting as agent hereunder (or, of itself, in the case of each Revco Individual Holder), (y) of the number of Registrable Securities held from time-to-time by each such Holder, and (z) of each sale, transfer or other disposition of Registrable Securities (including the number of shares sold) by each such Holder. Page 13 of 27 6 (a) In the event that any public offering pursuant to this Agreement shall involve, in whole or in part, an underwritten offering, the Issuer shall have the right to designate an underwriter or underwriters as the lead or managing underwriters of such underwritten offering who shall be reasonably acceptable to Holders owning a majority of the Registrable Securities proposed to be sold therein. (b) 1 Section .3 . Certain Delay Rights. Notwithstanding any other provision of this Agreement to the contrary, if at any time while the Required Shelf Registration is effective the Issuer provides written notice to each Holder (whether by notice directly to such Holder or through the Holders' Agent acting as agent for such Holder hereunder) that in the Issuer's good faith and reasonable judgment it would be materially disadvantageous to the Issuer (because the sale of Registrable Securities covered by such registration statement or the disclosure of information therein or in any related prospectus or prospectus supplement would materially interfere with any acquisition, financing or other material event or transaction in connection with which a registration of securities under the 1933 Act for the account of the Issuer is then intended or the public disclosure of which at the time would be materially prejudicial to the Issuer) (a "DISADVANTAGEOUS CONDITION") for sales of Registrable Securities thereunder to then be permitted, and setting forth the general reasons for such judgment, the Issuer may refrain from maintaining current the prospectus contained in the Shelf Registration Statement until such Disadvantageous Condition no longer exists (notice of which the Issuer shall promptly deliver to each Holder (directly or through the applicable Holders' Agent)). Furthermore, notwithstanding anything else contained in this Agreement, with respect to any registration statement filed, or to be filed, pursuant to Section 2.02, if the Issuer provides written notice to each Holder (whether by notice directly to such Holder or through the Holders' Agent acting as agent for such Holder hereunder) that in the Issuer's good faith and reasonable judgment it would be materially disadvantageous to the Issuer (because of a Disadvantageous Condition) for such a registration statement to be maintained effective, or to be filed and become effective, and setting forth the general reasons for such judgment, the Issuer shall be entitled to cause such registration statement to be withdrawn or the effectiveness of such registration statement terminated, or, in the event no registration statement has yet been filed, shall be entitled not to file any such registration statement, until such Disadvantageous Condition no longer exists Holder (notice of which the Issuer shall promptly deliver to each Holder (directly or through the applicable Holders' Agent)). With respect to each Holder, upon the receipt by such Holder of any such notice of a Disadvantageous Condition (directly from the Issuer or through the applicable Holders' Agent) (i) in connection with the Required Shelf Registration , such Holder shall forthwith discontinue use of the prospectus and any prospectus supplement under such registration statement and shall suspend sales of Registrable Securities until such Disadvantageous Condition no longer exists and (ii) in connection with the Required Shelf Registration or the Demand Registration, as applicable, if so directed by the Issuer by notice as aforesaid, such Holder will deliver to the Issuer all copies, other than permanent file copies then in such Holder's possession, of the prospectus and prospectus supplements then covering such Registrable Securities at the time of receipt of such notice as aforesaid. Notwithstanding anything else contained in this Agreement, (x) neither the filing nor the effectiveness of any registration statement under Section 2.02 may be delayed for more than a total of 60 days pursuant to this Section 2.04 and (y) the maintaining current of a prospectus (and the suspension of sales of Registrable Securities) in connection with the Required Shelf Registration may not be delayed under this Section 2.04 for more than a total of 60 days in any six-month period. ARTICLE 1Section .4 . Except as provided herein, the Issuer shall pay all Registration Expenses with respect to each registration hereunder. Notwithstanding the foregoing, each Holder and the Issuer shall be responsible for its own internal administrative and similar costs, which shall not constitute Registration Expenses, each Holder shall be responsible for the legal fees and expenses of its own counsel (except as provided in clause (viii) of the definition of Registration Expenses), (iii) each Holder shall be responsible for all underwriting discount and commissions, selling or placement agent or broker fees and commissions, and transfer taxes, if any, in connection with the sale of securities by such Holder, and (iv) the Holders shall be jointly and severally responsible for all out-of-pocket costs and expenses of the Issuer and its officers and employees incurred in connection with providing the assistance and/or attending analyst or investor presentations or any "road show" undertaken in connection with the registration and/or marketing of any Registrable Securities as contemplated in Section 2.06(g). Page 14 of 27 7 ARTICLE 1Section .5 . Registration and Qualification. If and whenever the Issuer is required to effect the registration of any Registrable Securities under the 1933 Act as provided in Sections 2.01 or 2.02, the Issuer shall as promptly as practicable (but subject to the provisions of Sections 2.01 and 2.02): (a) prepare, file and cause to become effective a registration statement under the 1933 Act relating to the Registrable Securities to be offered in accordance with the intended method of disposition thereof; (b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities (i) in the case of the Required Shelf Registration, until the Shelf Termination Date and (ii) in the case of the Demand Registration, until the earlier of such time as all Registrable Securities proposed to be sold therein have been disposed of in accordance with the intended methods of disposition set forth in such registration statement and the expiration of 30 days after such registration statement becomes effective; provided, that such 30-day period shall be extended for such number of days that equals the number of days elapsing from (x) the date the written notice contemplated by paragraph (e) below is given by the Issuer to (y) the date on which the Issuer delivers to the Holders of Registrable Securities the supplement or amendment contemplated by paragraph (e) below; (c) furnish to the Holders of Registrable Securities and to any underwriter of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus), in conformity with the requirements of the 1933 Act, and such documents incorporated by reference in such registration statement or prospectus, as the Holders of Registrable Securities or such underwriter may reasonably request; (d) furnish to any underwriter of such Registrable Securities an opinion of counsel for the Issuer and a "cold comfort" letter signed by the independent public accountants who have audited the financial statements of the Issuer included in the applicable registration statement, in each such case covering substantially such matters with respect to such registration statement (and the prospectus included therein) and the related offering as are customarily covered in opinions of issuer's counsel with respect thereto and in accountants' letters delivered to underwriters in underwritten public offerings of securities and such other matters as such underwriters may reasonably request; (e) promptly notify the Selling Holders in writing at any time when a prospectus relating to a registration pursuant to Section 2.01 or 2.02 is required to be delivered under the 1933 Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and of any request by the Commission or any other regulatory body or other body having jurisdiction for any amendment of or supplement to any registration statement or other document relating to such offering, and in either such case, at the request of the Selling Holders prepare and furnish to the Selling Holders a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; (f) use its reasonable best efforts to list all such Registrable Securities covered by such registration on each securities exchange and automated inter-dealer quotation system on which the Common Stock is then listed; (g) use reasonable efforts to assist the Holders in the marketing of Common Stock in connection with up to two underwritten offerings hereunder (including, to the extent reasonably consistent with work commitments, using reasonable efforts to have officers of the Issuer attend "road shows" and analyst or investor presentations scheduled in connection with such registration), with all out-of-pocket costs and expenses incurred by the Issuer or such officers in connection with such attendance or assistance to be paid by the Holders as provided in Section 2.05; and (h) furnish for delivery in connection with the closing of any offering of Registrable Securities pursuant to a registration effected pursuant to Sections 2.01 or 2.02 unlegended Page 15 of 27 8 certificates representing ownership of the Registrable Securities being sold in such denominations as shall be requested by the Selling Holders or the underwriters. ARTICLE 1Section .6 . Underwriting; Due Diligence. If requested by the underwriters for any underwritten offering of Registrable Securities pursuant to a registration requested under this Article II, the Issuer shall enter into an underwriting agreement with such underwriters for such offering, which agreement will contain such representations and warranties by the Issuer and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 2.08, and agreements as to the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 2.06(d). Such underwriting agreement shall also contain such representations and warranties by such Selling Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnification and contribution provisions substantially to the effect and to the extent provided in Section 2.08. (a) In connection with the preparation and filing of each registration statement registering Registrable Securities under the 1933 Act pursuant to this Article II, the Issuer shall give the Permitted Holders of such Registrable Securities and the underwriters, if any, and their respective counsel and accountants (the identity and number of whom shall be reasonably acceptable to the Issuer), such reasonable and customary access to its books, records and properties and such opportunities to discuss the business and affairs of the Issuer with its officers and the independent public accountants who have certified the financial statements of the Issuer as shall be necessary, in the opinion of such Holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the 1933 Act; provided that the foregoing shall not require the Issuer to provide access to (or copies of) any competitively sensitive information relating to the Issuer or its Subsidiaries or their respective businesses; provided further that (i) each Holder and the underwriters and their respective counsel and accountants shall have entered into a confidentiality agreement reasonably acceptable to the Issuer and (ii) the Permitted Holders and the underwriters and their respective counsel and accountants shall use their reasonable best efforts to minimize the disruption to the Issuer's business and coordinate any such investigation of the books, records and properties of the Issuer and any such discussions with the Issuer's officers and accountants so that all such investigations occur at the same time and all such discussions occur at the same time. ARTICLE 1Section .7 . Indemnification and Contribution. The Issuer agrees to indemnify and hold harmless each Selling Holder and each person, if any, who controls each Selling Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) insofar as such losses, claims, damages or liabilities are caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or any amendment thereof, any preliminary prospectus or prospectus (as amended or supplemented if the Issuer shall have furnished any amendments or supplements thereto) relating to the Registrable Securities, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished to the Issuer in writing by a Selling Holder expressly for use therein. The Issuer also agrees to indemnify any underwriter of the Registrable Securities so offered and each person, if any, who controls such underwriter on substantially the same basis as that of the indemnification by the Issuer of the Selling Holder provided in this Section 2.08(a). (a) Each Selling Holder agrees to indemnify and hold harmless the Issuer, its directors, the officers who sign any registration statement and each person, if any who controls the Issuer within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) insofar as such losses, claims, damages or liabilities are caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or any amendment thereof, any preliminary prospectus or prospectus (as amended or supplemented if the Issuer shall have furnished any amendments or supplements Page 16 of 27 9 thereto) relating to the Registrable Securities, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information furnished in writing by a Selling Holder (or any representative thereof) expressly for use in a registration statement, any preliminary prospectus, prospectus or any amendments or supplements thereto. Each Selling Holder also agrees to indemnify any underwriter of the Registrable Securities so offered and each person, if any, who controls such underwriter on substantially the same basis as that of the indemnification by such Selling Holder of the Issuer provided in this Section 2.08(b). (b) Each party indemnified under paragraph (a) or (b) above shall, promptly after receipt of notice of a claim or action against such indemnified party in respect of which indemnity may be sought hereunder, notify the indemnifying party in writing of the claim or action; provided that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party on account of the indemnity agreement contained in paragraph (a) or (b) above except to the extent that the indemnifying party was actually prejudiced by such failure, and in no event shall such failure relieve the indemnifying party from any other liability that it may have to such indemnified party. If any such claim or action shall be brought against an indemnified party, and it shall have notified the indemnifying party thereof, unless based on the written advice of counsel to such indemnified party a conflict of interest between such indemnified party and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 2.08 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof. Any indemnifying party against whom indemnity may be sought under this Section 2.08 shall not be liable to indemnify an indemnified party if such indemnified party settles such claim or action without the consent of the indemnifying party. The indemnifying party may not agree to any settlement of any such claim or action, other than solely for monetary damages for which the indemnifying party shall be responsible hereunder, the result of which any remedy or relief shall be applied to or against the indemnified party, without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld. In any action hereunder as to which the indemnifying party has assumed the defense thereof, the indemnified party shall continue to be entitled to participate in the defense thereof, with counsel of its own choice, but the indemnifying party shall not be obligated hereunder to reimburse the indemnified party for the costs thereof. (c) If the indemnification provided for in this Section 2.08 shall for any reason be unavailable (other than in accordance with its terms) to an indemnified party in respect of any loss, liability, cost, claim or damage referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, cost, claim or damage (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer on the one hand and the Selling Holders on the other hand from the offering of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Issuer on the one hand and the Selling Holders on the other hand in connection with the offering of the Registrable Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Registrable Securities (before deducting expenses) received by the Issuer and the Selling Holders, respectively, bear to the aggregate public offering price of the Registrable Securities. The relative fault of the Issuer on the one hand and the Selling Holders on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or a Selling Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by an indemnified party as a result of the loss, cost, claim, damage or liability, or action in respect thereof, referred to above in this paragraph (d) shall be deemed to include, for purposes of this paragraph (d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. The Issuer and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.08 were determined by pro rata allocation or by any other method of allocation which does not take Page 17 of 27 10 account of the equitable considerations referred to in this paragraph. Notwithstanding any other provision of this Section 2.08, no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (d) The obligations of the parties under this Section 2.08 shall be in addition to any liability which any party may otherwise have to any other party. ARTICLE 1Section .8 . Holdback Agreement. If the Demand Registration pursuant to this Article II shall be in connection with an underwritten public offering of Registrable Securities, each Selling Holder agrees not to effect any sale or distribution, including any sale under Rule 144, of any equity security of the Issuer (otherwise than through the registered public offering then being made), within 7 days prior to or 60 days (or such lesser period as the lead or managing underwriters may permit) after the effective date of the applicable registration statement. ARTICLE 2 MISCELLANEOUS ARTICLE 2Section .1 . Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. ARTICLE 2Section .2 . Assignment. No party may assign any of its rights or obligations hereunder by operation of law or otherwise without the prior written consent of the other parties. ARTICLE 2Section .3 . Amendments, Waivers, Etc. This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by the Issuer and Holders representing a majority of the Registrable Securities then held by all Holders. ARTICLE 2Section .4 . Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly received if given) by hand delivery or telecopy, or by any courier service, such as Federal Express, providing proof of delivery. All communications hereunder shall be delivered to the respective parties at the address or telecopy number set forth on the signature pages hereto (unless such contact information in the case of the Holders is updated pursuant to Section 2.03(a)). ARTICLE 2Section .5 . Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein. ARTICLE 2Section .6 . No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. Page 18 of 27 11 ARTICLE 2Section .7 . No Third Party Beneficiaries. This Agreement is not intended to be for the benefit of, and shall not be enforceable by, any Person who or which is not a party hereto. ARTICLE 2Section .8 . Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. ARTICLE 2Section .9 . Jurisdiction. Each party hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or any state court sitting in the City of New York, Borough of Manhattan in any action, suit or proceeding arising in connection with this Agreement, and agrees that any such action, suit or proceeding shall be brought only in such courts (and waives any objection based on forum non conveniens or any other objection to venue therein); provided, however, that such consent to jurisdiction is solely for the purpose referred to in this Section 3.09 and shall not be deemed to be a general submission to the jurisdiction of said Courts or in the State of New York other than for such purposes. Each party hereto hereby waives any right to a trial by jury in connection with any such action, suit or proceeding. ARTICLE 2Section .10 . Descriptive Headings. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. ARTICLE 2Section .11 . Zell Holders' Agent. Each Zell Holder hereby appoints Zell/Chilmark Fund. L.P. as its agent and attorney-in-fact (the "ZELL HOLDERS' AGENT") for purposes of the delivery and receipt of all notices and requests pursuant to this Agreement. The Issuer may give notice to any Zell Holder hereunder by giving such notice directly to such Zell Holder. Alternatively, the Issuer may request that the Zell Holders' Agent deliver to each Zell Holder any notice given by the Issuer hereunder, in which event the Zell Holders' Agent will promptly so give such notice to each Zell Holder. Prompt delivery by the Zell Holders' Agent to the Zell Holders will be deemed satisfied if delivery is made to the Zell Holders, in accordance with Section 3.04, not later than the third business day after actual receipt of the applicable notice or document by the Zell Holders' Agent from the Issuer. Notwithstanding anything else contained herein, the Zell Holders' Agent will not be liable or responsible to any Person should any Zell Holder fail to act in accordance with any notice so given to such Zell Holder hereunder. ARTICLE 2Section .12 . Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same Agreement. Page 19 of 27 12 IN WITNESS WHEREOF, the Issuer and the Holders have caused this Agreement to be duly executed as of the day and year first above written. CVS CORPORATION By:_______________________________ Name: Title: Holders ZELL/CHILMARK FUND, L.P. By: ZC Limited Partnership, general partner By: ZC Partnerships, general partner By: ZC Inc., a partner By:_________________________________ Name: Sheli Z. Rosenberg Title: Vice President Address: Equity Group Investments, Inc. 2 North Riverside Plaza Suite 600 Chicago, IL 60606 MAGTEN ASSET MANAGEMENT CORPORATION By:_________________________________ Name: Talton R. Embry Title: Chairman Address: 35 East 21st Street New York, NY 10010 Page 20 of 27 13 Name: Sheli Z. Rosenberg Address: Equity Group Investments, Inc. 2 North Riverside Plaza Suite 600 Chicago, IL 60606 Name: Sam Zell Address: Equity Group Investments, Inc. 2 North Riverside Plaza Suite 600 Chicago, IL 60606 Name: Carl A. Bellini Address: P.O. Box 153 Bath, Ohio 44210 Name: Livio M. Borghese Address: Luma Corp. Borghese Investments 745 Fifth Avenue, Suite 1400 New York, NY 10151 Name: William H. Campbell Address: The University of North Carolina at Chapel Hill 101 Beard Hall South Columbia Street Chapel Hill, NC 27599 Name: Rod Dammeyer Address: Equity Group Investments, Inc. Two North Riverside Plaza Suite 600 Chicago, IL 60606 Page 21 of 27 14 Name: Talton R. Embry Address: Magten Asset Management Corporation 35 East 21st Street New York, NY 10010 Name: Ben Evans Address: Ernst & Young 787 7th Avenue 7th Floor New York, NY 10019 Name: John V. Guttag Address: Massachusetts Institute of Technology 545 Technology Square Cambridge, MA 02139 Name: D. Dwayne Hoven Address: 802 South Ride Tallahassee, FL 32303 Name: Walter B. Rheinhold Address: Varco International, Inc. 743 North Eckhoff Street Orange, CA 92668 Name: Thomas O. Thorsen Address: P.O. Box 764 Center Harbor, NH 03226 Name: James P. Mastrian Address: 60 East Juniper Lane Moreland Hills, OH 44022 Page 22 of 27 EX-2 3 LETTER DATED FEBRUARY 6, 1997 1 EXHIBIT 2 AFFILIATE'S LETTER RELATING TO POOLING FOR ZELL/CHILMARK FUND, L.P. (Revco D.S., Inc.) February 6, 1997 CVS Corporation One CVS Drive Woonsocket, RI 02895 Revco D.S., Inc. 1925 Enterprise Parkway Twinsburg, OH 44087 Ladies and Gentlemen: Pursuant to the terms of the Agreement and Plan of Merger dated as of February 6, 1997 (the "AGREEMENT") among CVS Corporation, a Delaware corporation ("CVS"), Revco D.S., Inc., a Delaware corporation ("REVCO"), and North Acquisition Corp., a Delaware corporation ("MERGER SUBSIDIARY"), Merger Subsidiary will be merged with and into Revco with Revco to be the surviving corporation in the Merger (the "MERGER"). The undersigned represents, warrants and covenants with and to CVS and Revco that: (a) The undersigned understands that the Merger is intended to be accounted for using the "pooling-of-interests" method and that such treatment for financial accounting purposes is dependent upon the accuracy of certain of the representations and warranties, and the undersigned's compliance with certain of the covenants and agreements, set forth herein. Accordingly, the undersigned will not sell, transfer or otherwise dispose of the undersigned's interests in, or acquire or sell any options or other securities relating to securities of CVS or Revco that would be intended to reduce the undersigned's risk relative to, any shares of common stock of either CVS or Revco beneficially owned by the undersigned, during the period commencing on the 30th day prior to the effectiveness of the Merger and ending at such time as CVS publicly releases a report (the "COMBINED FINANCIAL RESULTS REPORT") covering at least 30 days of combined operations of CVS after the Merger; provided that the foregoing shall not restrict the distribution after the Effective Time (as defined in the Agreement) by the undersigned to its partners of the shares of common stock of CVS held by the undersigned so long as (if such distribution occurs before the date of publication of the Combined Financial Results Report) no later than the time of such distribution each such partner shall have executed and delivered to CVS a letter agreement in the form of this letter (but excluding this proviso). B. The undersigned also understands that stop transfer instructions will be given to the transfer agents of CVS and Revco in order to prevent any breach of the covenants and agreements make by the undersigned in paragraph A, although such stop transfer instructions will be promptly rescinded upon the publication of the Combined Financial Results Report. C. The undersigned understands and agrees that this letter agreement shall apply to all shares of the capital stock of CVS and Revco that are deemed to be beneficially owned by the undersigned pursuant to applicable federal securities laws. Very truly yours, Zell/Chilmark Fund, L.P. Page 23 of 27 2 By: ZC Limited Partnership, general partner By: ZC Partnerships, general partner By: ZC Inc., a partner By: /s/ Sheli Rosenberg ------------------- Name: Sheli Rosenberg Title: Vice President Accepted this 6th day of February, 1997. CVS CORPORATION By: /s/ Charles Conaway ------------------------------------- Name: Charles Conaway Title: Chief Financial Officer Page 24 of 27 EX-3 4 LETTER DATED MAY 29, 1997 1 EXHIBIT 3 AFFILIATE'S LETTER FOR ZELL/CHILMARK FUND, L.P. (Revco D.S., Inc.) May 29, 1997 CVS Corporation One CVS Drive Woonsocket, RI 02895 Revco D.S., Inc. 1925 Enterprise Parkway Twinsburg, OH 44087 Ladies and Gentlemen: The undersigned has been advised that as of the date of this letter the undersigned may be deemed to be an "affiliate" of Revco D.S., Inc., a Delaware corporation ("REVCO"), as the term "affiliate" is defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "RULES AND REGULATIONS") of the Securities and Exchange Commission (the "COMMISSION") under the Securities Act of 1933, as amended (the "ACT"). Pursuant to the terms of the Agreement and Plan of Merger dated as of February 6, 1997 (the "AGREEMENT") among Revco, CVS Corporation, a Delaware corporation ("CVS"), and North Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of CVS ("MERGER SUBSIDIARY"), Merger Subsidiary will be merged with and into Revco with Revco to be the surviving corporation in the merger (the "MERGER"). As a result of the Merger, the undersigned will receive shares of Common Stock, par value $0.01 per share, of CVS (the "CVS COMMON STOCK") in exchange for shares owned by the undersigned of Common Stock, par value $0.01 per share, of Revco (the "REVCO COMMON STOCK"). The undersigned represents, warrants and covenants to CVS and Revco that as of the date the undersigned receives any CVS Common Stock as a result of the Merger: A. The undersigned shall not make any sale, transfer or other disposition of the CVS Common Stock in violation of the Act or the Rules and Regulations. B. The undersigned has carefully read this letter and the Agreement and discussed the requirements of such documents and other applicable limitations upon the undersigned's ability to sell, transfer or otherwise dispose of the CVS Common Stock to the extent the undersigned felt necessary with the undersigned's counsel or counsel for Revco. C. The undersigned has been advised that the issuance of CVS Common Stock to the undersigned pursuant to the Merger will be registered with the Commission under the Act on a Registration Statement on Form S-4. However, the undersigned has also been advised that, since at the time the Merger is submitted for a vote of the stockholders of Revco, the undersigned may be deemed to be an affiliate of Revco, the undersigned may not sell, transfer or otherwise dispose of the CVS Common Stock issued to the undersigned in the Merger unless (i) such sale, transfer or other disposition has been registered under the Act, (ii) such sale, transfer or other disposition is made in conformity with Rule 145 promulgated by the Commission under the Act, or (iii) in the opinion of counsel reasonably acceptable to CVS, or pursuant to a "no action" letter obtained by the undersigned from the staff of the Commission, such sale, transfer or other disposition is otherwise exempt Page 25 of 27 2 from registration under the Act. Notwithstanding the foregoing, assuming the undersigned's partners do not vote in connection with the Merger, the distribution (in accordance with the terms of the undersigned's limited partnership agreement) after the Effective Time (as defined in the Agreement) by the undersigned to its partners of the shares of CVS Common Stock held by the undersigned shall be understood to be exempt from registration under the Act. D. The undersigned understands that CVS is under no obligation to register the sale, transfer or other disposition of the CVS Common Stock by the undersigned or on the undersigned's behalf under the Act or to take any other action necessary in order to enable such sale, transfer or other disposition by the undersigned in compliance with an exemption from such registration, other than pursuant to and in accordance with the Registration Rights Agreement dated as of ___________, 1997 between CVS and the holders referred to therein. E. The undersigned also understands that there will be placed on the certificates for the CVS Common Stock issued to the undersigned or any substitution thereof, a legend stating in substance: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE WITH THE TERMS OF A LETTER AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF AND CVS CORPORATION, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF CVS CORPORATION." F. The undersigned also understands that if the undersigned distributes shares of CVS Common Stock to its partners as provided in the last sentence of paragraph C, CVS reserves the right to put the following legend on the certificates issued to the undersigned's partners: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO RECEIVED SUCH SECURITIES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS (I) SUCH SALE, TRANSFER OR OTHER DISPOSITION HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, (II) SUCH SALE, TRANSFER OR OTHER DISPOSITION IS MADE IN CONFORMITY WITH RULE 145 PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SUCH ACT, OR (III) IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO CVS CORPORATION, OR PURSUANT TO A "NO ACTION" LETTER OBTAINED BY THE HOLDER HEREOF FROM THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION, SUCH SALE, TRANSFER OR OTHER DISPOSITION IS OTHERWISE EXEMPT FROM REGISTRATION UNDER SUCH ACT." It is understood and agreed that the legends set forth in paragraphs E and F above [and any stop transfer legends pursuant to paragraph G](1) shall be removed by delivery of substitute certificates without such legend if (i) the securities represented thereby have been registered for sale by the undersigned under the 1933 Act or (ii) CVS has received either an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to CVS, or a "no-action" letter obtained by the undersigned from the staff of the Commission, to the effect that the restrictions imposed by Rule 145 under the Act no longer apply to the undersigned. [G. The undersigned understands that the Merger is intended to be accounted for using the "pooling-of-interests" method and that such treatment for accounting purposes is dependent upon the accuracy of certain of the representations and warranties, and the undersigned's compliance with certain of the covenants and agreements, (1) To be deleted if you have executed and delivered to CVS and Revco an affiliate's letter in the form of Exhibit C-1 to the Agreement. Page 26 of 27 3 set forth herein. Accordingly, the undersigned will not sell, transfer or otherwise dispose of the undersigned's interests in, or acquire or sell any options or other securities relating to securities of CVS or Revco that would be intended to reduce the undersigned's risk relative to, any shares of common stock of either CVS or Revco beneficially owned by the undersigned, during the period commencing on the 30th day prior to the effectiveness of the Merger and ending at such time as CVS publicly releases a report (the "COMBINED FINANCIAL RESULTS REPORT") covering at least 30 days of combined operations of CVS after the Merger. The undersigned also understand that stop transfer instructions will be given to the transfer agents of CVS and Revco in order to prevent any breach of the covenants and agreements the undersigned makes in this Section G, although such stop transfer instructions will be promptly rescinded upon the publication of the Combined Financial Results Report.](2) H. The undersigned further understands and agrees that the representations, warranties, covenants and agreements of the undersigned set forth herein are for the benefit of CVS, Revco and the Surviving Corporation (as defined in the Merger Agreement) and will be relied upon by such entities and their respective counsel and accountants. I. The undersigned understands and agrees that this letter agreement shall apply to all shares of the capital stock of CVS and Revco that are deemed to be beneficially owned by the undersigned pursuant to applicable federal securities laws. Execution of this letter should not be considered an admission on the part of the undersigned that the undersigned is an "affiliate" of Revco as described in the first paragraph of this letter or as a waiver of any rights the undersigned may have to object to any claim that the undersigned is such an affiliate on or after the date of this letter. Very truly yours, Zell/Chilmark Fund, L.P. By: ZC Limited Partnership, general partner By: ZC Partnerships, general partner By: ZC Inc., a partner By: _______________________ Name: Title: Accepted this ____ day of ____________, 1997. CVS CORPORATION By:_________________________ Name: Title: (2) To be deleted if you have executed and delivered to CVS and Revco an affiliate's letter in the form of Exhibit C-1 to the Agreement. Page 27 of 27 -----END PRIVACY-ENHANCED MESSAGE-----