EXHIBIT 10.3

CONFORMED COPY
$5,750,000,000
BRIDGE CREDIT AGREEMENT
 
by and among
 
CVS CORPORATION,
 
THE LENDERS PARTY HERETO,
 
LEHMAN COMMERCIAL PAPER INC.,
as Administrative Agent,
 
MORGAN STANLEY SENIOR FUNDING, INC.,
as Syndication Agent,
 
and
 
THE BANK OF NEW YORK,
BANK OF AMERICA, N.A., and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agents
 
 

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Dated as of March 15, 2007

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LEHMAN BROTHERS INC.,
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as Joint Lead Arrangers and Joint Bookrunners,
 

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TABLE OF CONTENTS
 
Page
 
Article 1
 
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION

          Section 1.1   Definitions   1 Section 1.2   Principles of Construction
  16

 
Article 2
 
AMOUNT AND TERMS OF LOANS
 

Section 2.1   Loans   17 Section 2.2   Notice of Borrowing Loans   18 Section
2.3   [Intentionally Omitted]   18 Section 2.4   Use of Proceeds   18 Section
2.5   Termination or Reduction of Commitments   19 Section 2.6   Prepayments of
Loans   19 Section 2.7   Notes   20

 
Article 3
 
PROCEEDS, PAYMENTS, CONVERSIONS,
INTEREST, YIELD PROTECTION AND FEES
 

Section 3.1   Disbursement of the Proceeds of the Loans   20 Section 3.2  
Payments   21 Section 3.3   Conversions; Other Matters   22 Section 3.4  
Interest Rates and Payment Dates   23 Section 3.5   Indemnification for Loss  
24 Section 3.6   Reimbursement for Costs, Etc.   25

 
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Section 3.7   Illegality of Funding   25 Section 3.8   Option to Fund;
Substituted Interest Rate   26 Section 3.9   Certificates of Payment and
Reimbursement   27 Section 3.10   Taxes; Net Payments   27 Section 3.11  
Facility Fee   28 Section 3.12   [Intentionally Omitted]   28 Section 3.13  
Replacement of Lender   28

Article 4
 
REPRESENTATIONS AND WARRANTIES
 

Section 4.1   Existence and Power   29 Section 4.2   Authority   29 Section 4.3
  Binding Agreement   30 Section 4.4   Litigation   30 Section 4.5   No
Conflicting Agreements   30 Section 4.6   Taxes   31 Section 4.7   Compliance
with Applicable Laws; Filings   31 Section 4.8   Governmental Regulations   31
Section 4.9   Federal Reserve Regulations; Use of Proceeds   31 Section 4.10  
No Misrepresentation   32 Section 4.11   Plans   32 Section 4.12   Environmental
Matters   32 Section 4.13   Financial Statements   33

 
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Article 5
 
     CONDITIONS OF LENDING —
LOANS ON THE FIRST BORROWING DATE
 

Section 5.1   Evidence of Corporate Action   34 Section 5.2   Notes   34 Section
5.3   Opinion of Counsel to the Borrower   34 Section 5.4   Caremark Acquisition
  34

Article 6
 
     CONDITIONS TO LENDING —
LOANS ON EACH BORROWING DATE
 

Section 6.1   Compliance   35 Section 6.2   Requests   35 Section 6.3   Loan
Closings   35

 
Article 7
 
AFFIRMATIVE COVENANTS
 

Section 7.1   Legal Existence   35 Section 7.2   Taxes   36 Section 7.3  
Insurance   36 Section 7.4   Performance of Obligations   36 Section 7.5  
Condition of Property   36 Section 7.6   Observance of Legal Requirements   36
Section 7.7   Financial Statements and Other Information   37 Section 7.8  
Records   38 Section 7.9   Authorizations   38

 
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Article 8
 
NEGATIVE COVENANTS
 

Section 8.1   Subsidiary Indebtedness   38 Section 8.2   Liens   39 Section 8.3
  Dispositions   39 Section 8.4   Merger or Consolidation, Etc.   40 Section 8.5
  Acquisitions   40 Section 8.6   Restricted Payments   40 Section 8.7  
Limitation on Upstream Dividends by Subsidiaries   40 Section 8.8   Limitation
on Negative Pledges   41 Section 8.9   Ratio of Consolidated Indebtedness to
Total Capitalization   41 Section 8.10   Caremark Acquisition   41

Article 9
 
DEFAULT
 

Section 9.1   Events of Default   42 Section 9.2   Remedies   44

Article 10
 
AGENT
 

Section 10.1   Appointment   45 Section 10.2   Delegation of Duties   45 Section
10.3   Exculpatory Provisions   45 Section 10.4   Reliance by Administrative
Agent   46 Section 10.5   Notice of Default   46 Section 10.6   Non-Reliance  
47

 
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Section 10.7   The Administrative Agent in Its Individual Capacity   47 Section
10.8   Successor Administrative Agent   47 Section 10.9   Arrangers,
Co-Documentation Agents and Syndication Agent   48

Article 11
 
OTHER PROVISIONS
 

Section 11.1   Amendments, Waivers, Etc.   48 Section 11.2   Notices   49
Section 11.3   No Waiver; Cumulative Remedies   51 Section 11.4   Survival of
Representations and Warranties   51 Section 11.5   Payment of Expenses and
Taxes; Indemnified Liabilities   51 Section 11.6   Lending Offices   52 Section
11.7   Successors and Assigns   52 Section 11.8   Counterparts   55 Section 11.9
  Set-off and Sharing of Payments   56 Section 11.10   Indemnity   56 Section
11.11   Governing Law   57 Section 11.12   Severability   58 Section 11.13  
Integration   58 Section 11.14   Treatment of Certain Information   58 Section
11.15   Acknowledgments   59 Section 11.16   Consent to Jurisdiction   59
Section 11.17   Service of Process   59 Section 11.18   No Limitation on Service
or Suit   60 Section 11.19   WAIVER OF TRIAL BY JURY   60

 
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Section 11.20   Effective Date   60 Section 11.21   PATRIOT Act Notice   60

EXHIBITS                   Exhibit   A   List of Commitments           Exhibit  
B   Form of Note           Exhibit   C   Form of Borrowing Request          
Exhibit   D-1   Form of Opinion of Counsel to the Borrower           Exhibit  
D-2   Form of Opinion of Special Counsel to the Borrower           Exhibit   E  
Form of Assignment and Acceptance Agreement

 
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BRIDGE CREDIT AGREEMENT, dated as of March 15, 2007, by and among CVS
CORPORATION, a Delaware corporation (the “Borrower”), the banks and other
financial institutions party hereto from time to time (each a “Lender” and,
collectively, the “Lenders”), LEHMAN BROTHERS INC. and MORGAN STANLEY SENIOR
FUNDING, INC., as joint lead arrangers and joint bookrunners (in such capacity,
the “Arrangers”), LEHMAN COMMERCIAL PAPER INC., as administrative agent for the
Lenders (in such capacity, the “Administrative Agent”), MORGAN STANLEY SENIOR
FUNDING, INC., as syndication agent (in such capacity, the “Syndication Agent”),
and THE BANK OF NEW YORK, BANK OF AMERICA, N.A., and WACHOVIA BANK, NATIONAL
ASSOCIATION, as co-documentation agents (in such capacity, the “Co-Documentation
Agents”).
 
ARTICLE 1
 
DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
 
SECTION 1.1 Definitions
 
When used in any Loan Document (as defined below), each of the following terms
shall have the meaning ascribed thereto unless the context otherwise
specifically requires:
 
“ABR Advances”: the Loans (or any portions thereof) at such time as they (or
such portions) are made or are being maintained at a rate of interest based upon
the Alternate Base Rate.
 
“Accumulated Funding Deficiency”: as defined in Section 302 of ERISA.
 
“Acquisition”: with respect to any Person, the purchase or other acquisition by
such Person, by any means whatsoever (including by devise, bequest, gift,
through a dividend or otherwise), of (a) stock of, or other equity securities
of, any other Person if, immediately thereafter, such other Person would be
either a consolidated subsidiary of such Person or otherwise under the control
of such Person, (b) any business, going concern or division or segment thereof,
or (c) the Property of any other Person other than in the ordinary course of
business, provided that (i) no acquisition of substantially all of the assets,
or any division or segment, of such other Person shall be deemed to be in the
ordinary course of business and (ii) no redemption, retirement, purchase or
acquisition by any Person of the stock or other equity securities of such Person
shall be deemed to constitute an Acquisition.
 
“Administrative Agent”: as defined in the preamble.
 
“Administrative Questionnaire”: an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
“Affected Advance”: as defined in Section 3.8(b).
 
“Affiliate”: with respect to any Person at any time and from time to time, any
other Person (other than a wholly-owned subsidiary of such Person) which, at
such time

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(a) controls such Person, (b) is controlled by such Person or (c) is under
common control with such Person. The term “control”, as used in this definition
with respect to any Person, means the power, whether direct or indirect through
one or more intermediaries, to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or other interests, by contract or otherwise.
 
“Agents”: the collective reference to the Co-Documentation Agents, the
Syndication Agent and the Administrative Agent.
 
“Aggregate Commitment Amount”: at any time, the sum of the Commitment Amounts of
the Lenders at such time under this Agreement.
 
“Aggregate Available Commitments”: at any time, the sum of the Available
Commitments of the Lenders at such time under this Agreement.
 
“Aggregate Credit Exposure”: at any time, the sum at such time of the aggregate
Credit Exposure of the Lenders at such time under this Agreement.
 
“Agreement”: this Bridge Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
 
“Alternate Base Rate”: for any day, a rate per annum (rounded, if necessary, to
the nearest l/100th of 1% or, if there is no nearest 1/100 of 1%, then to the
next higher 1/100 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day, and (b) ½ of 1% plus the Federal Funds Effective Rate in effect on
such day. Any change in the Prime Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
 
“Applicable Margin”: (i) with respect to the unpaid principal balance of ABR
Advances, the applicable percentage set forth below in the column entitled “ABR
Advances”, (ii) with respect to the unpaid principal balance of Eurodollar
Advances, the applicable percentage set forth below in the column entitled
“Eurodollar Advances” and (iii) with respect to the Facility Fee, the applicable
percentage set forth below in the column entitled “Facility Fee Rate”:
 
Pricing Level
ABR
Advances
Eurodollar
Advances
Facility Fee
Rate
Pricing Level I
0%
0.170%
0.030%
Pricing Level II
0%
0.210%
0.040%
Pricing Level III
0%
0.250%
0.050%
Pricing Level IV
0%
0.290%
0.060%

 
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Pricing Level
ABR
Advances
Eurodollar
Advances
Facility Fee
Rate
Pricing Level V
0%
0.320%
0.080%
Pricing Level VI
0%
0.445%
0.105%
Pricing Level VII
0%
0.725%
0.150%

 
Decreases in the Applicable Margin resulting from a change in Pricing Level
shall become effective upon the delivery by the Borrower to the Administrative
Agent of a notice pursuant to Section 7.7(d). Increases in the Applicable Margin
resulting from a change in Pricing Level shall become effective on the effective
date of any downgrade or withdrawal in the rating by Moody’s or S&P of the
senior unsecured long term debt rating of the Borrower.
 
“Approved Fund”: with respect to any Lender that is a fund that invests in
commercial loans, any other fund that invests in commercial loans and is managed
or advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
 
“Arrangers”: as defined in the preamble.
 
“Assignment and Acceptance Agreement”: an assignment and acceptance agreement
executed by an assignor and an assignee pursuant to which, subject to the terms
and conditions hereof and thereof, the assignor assigns to the assignee all or
any portion of such assignor’s Loans, Notes and Commitment, substantially in the
form of Exhibit E.
 
“Available Commitment”: with respect to any Lender at any time, an amount equal
to the excess, if any, of (a) such Lender’s Commitment then in effect over (b)
such Lender’s Credit Exposure at such time.
 
“Benefited Lender”: as defined in Section 11.9(b).
 
“Borrower”: as defined in the preamble.
 
“Borrowing Date”: each Domestic Business Day or Eurodollar Business Day, as the
case may be, during the Commitment Period on which the Lenders shall make Loans
pursuant to Section 2.1(a) and a Borrowing Request; provided, however, that for
avoidance of doubt, there shall be no more than three Borrowing Dates.
 
“Borrowing Request”: a request for Loans in the form of Exhibit C.
 
“Caremark”: Caremark RX Inc., a Delaware corporation.
 
“Caremark Acquisition”: the acquisition by the Borrower of all outstanding
capital stock of Caremark pursuant to the Caremark Merger Agreement.
 
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“Caremark Merger Agreement”: the Agreement and Plan of Merger, dated as of
November 1, 2006 among the Borrower, Caremark and Twain MergerSub Corp. (as
amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of
January 16, 2007 and as further amended, supplemented or otherwise modified from
time to time in accordance with Section 8.10).
 
“Caremark Special Dividend”: a special dividend made by the Borrower to the
holders of Caremark’s outstanding common stock in connection with the Caremark
Acquisition.
 
“Change of Control”: any of the following:
 
(i) any Person or group (as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended), (a) shall have or acquire
beneficial ownership of securities having 30% or more of the ordinary voting
power of the Borrower or (b) shall possess, directly or indirectly, the power to
direct or cause the direction of the management and policies of the Borrower,
whether through the ownership of voting securities, by contract or otherwise; or
 
(ii) the Continuing Directors shall cease for any reason to constitute a
majority of the board of directors of the Borrower then in office.
 
“Co-Documentation Agents”: as defined in the preamble.
 
“Commitment”: in respect of any Lender, such Lender’s obligation, if any, to
make a Loan to the Borrower on each Borrowing Date, subject to the terms and
conditions hereof, in an aggregate outstanding principal amount not to exceed
the Commitment Amount of such Lender.
 
“Commitment Amount”: at any time and with respect to any Lender, the amount set
forth adjacent to such Lender’s name under the heading “Commitment Amount” in
Exhibit A at such time or, in the event that such Lender is not listed on
Exhibit A, the “Commitment Amount” which such Lender shall have assumed from
another Lender in accordance with Section 11.7 on or prior to such time, as the
same may be adjusted from time to time pursuant to Section 2.5 and
Section 11.7(c). The aggregate amount of the Lenders’ Commitment Amounts on the
Effective Date is $5,750,000,000.
 
“Commitment Percentage”: at any time and with respect to any Lender, a fraction
the numerator of which is such Lender’s Commitment Amount at such time, and the
denominator of which is the Aggregate Commitment Amount at such time.
 
“Commitment Period”: the period from and including the Effective Date to the
date that is 60 Domestic Business Days after the first Borrowing Date, or on
such earlier date as all of the Commitments shall have been terminated in
accordance with the terms hereof.
 
“Compensatory Interest Payment”: as defined in Section 3.4(c).
 
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“Consolidated”: the Borrower and the Subsidiaries on a consolidated basis in
accordance with GAAP.
 
“Contingent Obligation”: as to any Person (the “secondary obligor”), any
obligation of such secondary obligor (a) guaranteeing or in effect guaranteeing
any return on any investment made by another Person, or (b) guaranteeing or in
effect guaranteeing any Indebtedness, lease, dividend or other obligation
(“primary obligation”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including any obligation of such
secondary obligor, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security therefor,
(ii) to advance or supply funds (A) for the purchase or payment of any such
primary obligation or (B) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the beneficiary of any such primary obligation of
the ability of the primary obligor to make payment of such primary obligation,
(iv) otherwise to assure or hold harmless the beneficiary of such primary
obligation against loss in respect thereof, and (v) in respect of the
Indebtedness of any partnership in which such secondary obligor is a general
partner, except to the extent that such Indebtedness of such partnership is
nonrecourse to such secondary obligor and its separate Property, provided that
the term “Contingent Obligation” shall not include the indorsement of
instruments for deposit or collection in the ordinary course of business.
 
“Continuing Director”: any member of the board of directors of the Borrower who
(i) is a member of that board of directors on the Effective Date or (ii) was
nominated for election by the board of directors a majority of whom were
directors on the Effective Date or whose election or nomination for election was
previously approved by one or more of such directors.
 
“Control Person”: as defined in Section 3.6.
 
“Convert”, “Conversion” and “Converted”: each, a reference to a conversion
pursuant to Section 3.3 of one Type of Loan into another Type of Loan.
 
“Costs”: as defined in Section 3.6.
 
“Credit Exposure”: with respect to any Lender at any time, the outstanding
principal balance of all Loans of such Lender at such time under this Agreement.
 
“Credit Parties”: a collective reference to the Agents, the Arrangers and the
Lenders.
 
“CVS Share Repurchase”: as defined in Section 2.4.
 
“Default”: any of the events specified in Section 9.1, whether any requirement
for the giving of notice, the lapse of time, or both, or any other condition,
has been satisfied.
 
“Disposition”: with respect to any Person, any sale, assignment, transfer or
other disposition by such Person by any means, of:
 
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(a) the Stock of, or other equity interests of, any other Person,
 
(b) any business, operating entity, division or segment thereof, or
 
(c) any other Property of such Person, other than (i) the sale of inventory
(other than in connection with bulk transfers), (ii) the disposition of
equipment and (iii) the sale of cash investments.
 
“Dividend Restrictions”: as defined in Section 8.7.
 
“Dollar” or “$”: lawful currency of the United States of America.
 
“Domestic Business Day”: any day (other than a Saturday, Sunday or legal holiday
in the State of New York) on which banks are open for business in New York City.
 
“Effective Date”: as defined in Section 11.20.
 
“Eligible Assignee”: (i) any commercial bank, investment bank, trust company,
banking association, financial institution, mutual fund, pension fund or any
Approved Fund or (ii) any Lender or any Affiliate or any Approved Fund of such
Lender.
 
“Eligible SPC”: a special purpose corporation that (i) is organized under the
laws of the United States or any state thereof, (ii) is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and (iii) issues (or the parent of which issues) commercial paper
rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the
equivalent thereof by Moody’s.
 
“Employee Benefit Plan”: an employee benefit plan, within the meaning of
Section 3(3) of ERISA, maintained, sponsored or contributed to by the Borrower,
any Subsidiary or any ERISA Affiliate.
 
“Environmental Laws”: all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
 
“Environmental Liability”: as to any Person, any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of such Person directly or
indirectly resulting from or based upon (i) violation of any Environmental Law,
(ii) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (iii) exposure to any Hazardous Materials,
(iv) the release or threatened release of any Hazardous Materials into the
environment or (v) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
 
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“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time, or any successor thereto, and the rules and regulations issued
thereunder, as from time to time in effect.
 
“ERISA Affiliate”: when used with respect to an Employee Benefit Plan, ERISA,
the PBGC or a provision of the Internal Revenue Code pertaining to employee
benefit plans, any Person that is a member of any group of organizations within
the meaning of Sections 414(b) or (c) of the Internal Revenue Code or, solely
with respect to the applicable provisions of the Internal Revenue Code,
Sections 414(m) or (o) of the Internal Revenue Code, of which the Borrower or
any Subsidiary is a member.
 
“ESOP Guaranty”: the guaranty of the 8.52% ESOP Note maturing 2008 in the
aggregate unpaid principal amount, as of December 30, 2006, of $82,100,000.
 
“Eurodollar Advance”: a portion of the Loans selected by the Borrower to bear
interest during a Eurodollar Interest Period selected by the Borrower at a rate
per annum based upon a Eurodollar Rate determined with reference to such
Eurodollar Interest Period, all pursuant to and in accordance with Section 2.2
or Section 3.3.
 
“Eurodollar Base Rate”: with respect to each day during each Eurodollar Interest
Period in effect for each Eurodollar Advance and as determined by the
Administrative Agent, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Eurodollar Interest Period
commencing on the first day of such Eurodollar Interest Period appearing the
Reuters Screen LIBORO1 Page as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Eurodollar Interest Period. In the event that
such rate does not appear on the Reuters Screen LIBORO1 Page (or otherwise on
such screen), the “Eurodollar Base Rate” for purposes of this definition shall
be determined by reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the Administrative Agent.
 
“Eurodollar Business Day”: any Domestic Business Day, other than a Domestic
Business Day on which banks are not open for dealings in Dollar deposits in the
interbank eurodollar market.
 
“Eurodollar Interest Period”: the period commencing on any Eurodollar Business
Day selected by the Borrower in accordance with Section 2.2 or Section 3.3 and
ending (A) one, two, three or six months or (B) a certain number of days (such
number of days referred to in this clause (B) referred to herein as the “Shorter
Period”) in each case thereafter, as selected by the Borrower in accordance with
either such Sections, subject to the following:
 
(i) if any Eurodollar Interest Period would otherwise end on a day which is not
a Eurodollar Business Day, such Eurodollar Interest Period shall be extended to
the immediately succeeding Eurodollar Business Day unless the result of such
extension would be to carry the end of such Eurodollar Interest Period into
another calendar month, in which event such Eurodollar Interest Period shall end
on the Eurodollar Business Day immediately preceding such day;
 
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(ii) if any Eurodollar Interest Period shall begin on the last Eurodollar
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Eurodollar Interest
Period), such Eurodollar Interest Period shall end on the last Eurodollar
Business Day of such latter calendar month, except as otherwise provided in
clause (iii) below; and
 
(iii) notwithstanding anything contained in the foregoing to the contrary, in
the case of clause (B) above in this definition only, the number of days
selected may only be (x) seven days, in the case of a Borrowing Request
delivered on the Effective Date for Loans, the proceeds of which will be used to
finance a portion of the Special Dividend, or (y) that number of days to (and
including) the Maturity Date; provided that the number of days selected shall
not exceed 30 days, and to the extent that the Borrower has selected a
Eurodollar Interest Period under such clause (B) in accordance with the
provisions of this definition, then such Eurodollar Interest Period shall end on
the Maturity Date.
 
“Eurodollar Rate”: with respect to each day during each Eurodollar Interest
Period in effect for each Eurodollar Advance and as determined by the
Administrative Agent, a rate per annum determined for such day in accordance
with the following formula (rounded, if necessary, to the nearest l/100 of 1%
or, if there is no nearest 1/100 of 1%, then to the next higher 1/100 of 1%):
 
Eurodollar Base Rate
1.00 minus Eurocurrency Reserve Requirements

 
“Eurocurrency Reserve Requirements”: for any day, the aggregate (without
duplication) of the maximum rates (expressed as a decimal or a fraction) of
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board of Governors of the Federal Reserve System, or other Governmental
Authority having jurisdiction with respect thereto dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board of Governors of the
Federal Reserve System, as amended) maintained by a member bank of the Federal
Reserve System with deposits exceeding $1,000,000,000 with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term equal to such Eurodollar Interest Period.
 
“Event of Default”: any of the events specified in Section 9.1, provided that
any requirement for the giving of notice, the lapse of time, or both, or any
other condition has been satisfied.
 
“Excluded Debt”: any Indebtedness of the Borrower under (x) the Existing Credit
Agreements and (y) any indebtedness under any bank credit facility of the
Borrower to the extent the proceeds thereof are used to repay Indebtedness under
(i) any bank credit facility of the Borrower existing on the Effective Date or
(ii) the Existing Credit Agreements.
 
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“Existing 2004 Five Year Credit Agreement”: the Five Year Credit Agreement,
dated as of June 11, 2004, by and among the Borrower, the lenders party thereto,
Bank of America, N.A., Credit Suisse First Boston, and Wachovia Securities,
Inc., as co-syndication agents, ABN AMRO Bank N.V., as documentation agent, and
The Bank of New York, as administrative agent, as the same may be amended,
supplemented, replaced or otherwise modified from time to time.
 
“Existing 2005 Five Year Credit Agreement”: the Five Year Credit Agreement,
dated as of June 3, 2005, by and among the Borrower, the lenders party thereto,
Bank of America, N.A., Credit Suisse First Boston, and Wachovia Bank, National
Association, as co-syndication agents, SunTrust Bank, as documentation agent,
and The Bank of New York, as administrative agent, as the same may be amended,
supplemented, replaced or otherwise modified from time to time.
 
“Existing 2006 Five Year Credit Agreement”: the Five Year Credit Agreement,
dated as of May 12, 2006, by and among the Borrower, the lenders party thereto,
Bank of America, N.A., Lehman Brothers Inc. and Wachovia Bank, National
Association, as co-syndication agents, KeyBank National Association, as
documentation agent, and The Bank of New York, as administrative agent, as the
same may be amended, supplemented, replaced or otherwise modified from time to
time.
 
“Existing 2007 Five Year Credit Agreement”: the Five Year Credit Agreement,
dated as of March 12, 2007, by and among the Borrower, the lenders party
thereto, Lehman Commercial Paper Inc. and Wachovia Bank, National Association,
as co-syndication agents, Morgan Stanley Senior Funding, Inc., as documentation
agent, and The Bank of New York, as administrative agent, as the same may be
amended, supplemented, replaced or otherwise modified from time to time.
 
“Existing 2007 364-Day Credit Agreement”: the 364-Day Credit Agreement, dated as
of March 12, 2007, by and among the Borrower, the lenders party thereto, Lehman
Commercial Paper Inc. and Wachovia Bank, National Association, as co-syndication
agents, and The Bank of New York, as administrative agent, as the same may be
amended, supplemented, replaced or otherwise modified from time to time.
 
“Existing Credit Agreements”: collectively, the Existing 2004 Five Year Credit
Agreement, the Existing 2005 Five Year Credit Agreement, the Existing 2006 Five
Year Credit Agreement, the Existing 2007 Five Year Credit Agreement and the
Existing 2007 364-Day Credit Agreement.
 
“Expiration Date”: the earlier of (a) the Maturity Date and (b) the date on
which the Loans shall become due and payable, whether by acceleration, notice of
intention to prepay or otherwise.
 
“Facility Fee”: as defined in Section 3.11.
 
“Facility Fee Termination Date”: the first date, occurring on or after the date
the Commitments have been terminated, upon which there shall be no Loans
outstanding.
 
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“Federal Funds Effective Rate”: for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Domestic Business Day, for the next preceding Domestic Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Domestic Business Day, the average (rounded, if
necessary, to the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
then to the next higher 1/100 of 1%) of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.
 
“Fees”: as defined in Section 3.2(a).
 
“Financial Statements”: as defined in Section 4.13.
 
“Foreign Lender”: any Lender that is organized under the laws of a jurisdiction
other than the United States of America, any State thereof or the District of
Columbia.
 
“GAAP”: generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession, which are applicable to the
circumstances as of the date of determination, consistently applied.
 
“Governmental Authority”: any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
 
“Granting Lender”: as defined in Section 11.7(h).
 
“Hazardous Materials”: all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 
“Highest Lawful Rate”: as to any Lender, the maximum rate of interest, if any,
which at any time or from time to time may be contracted for, taken, charged or
received on the Loans or the Notes or which may be owing to such Lender pursuant
to this Agreement under the laws applicable to such Lender and this Agreement.
 
“Indebtedness”: as to any Person at a particular time, all items of such Person
which constitute, without duplication, (a) indebtedness for borrowed money or
the deferred purchase price of Property (other than trade payables and accrued
expenses incurred in the ordinary course of business), (b) indebtedness
evidenced by notes, bonds, debentures or similar instruments, (c) indebtedness
with respect to any conditional sale or other title retention
 
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agreement, (d) indebtedness arising under acceptance facilities and the amount
available to be drawn under all letters of credit (excluding for purposes of
Section 8.1 and Section 8.9 letters of credit obtained in the ordinary course of
business by the Borrower or any Subsidiary) issued for the account of such
Person and, without duplication, all drafts drawn thereunder to the extent such
Person shall not have reimbursed the issuer in respect of the issuer’s payment
of such drafts, (e) that portion of any obligation of such Person, as lessee,
which in accordance with GAAP is required to be capitalized on a balance sheet
of such Person, (f) all indebtedness described in clauses (a) through and
including (e) above secured by any Lien on any Property owned by such Person
even though such Person shall not have assumed or otherwise become liable for
the payment thereof (other than carriers’, warehousemen’s, mechanics’,
repairmen’s or other like non-consensual Liens arising in the ordinary course of
business), and (g) Contingent Obligations in respect of any indebtedness
described in clauses (a) through and including (f) above; provided that, for
purposes of this definition, Indebtedness shall not include Intercompany Debt
and obligations in respect of interest rate caps, collars, exchanges, swaps or
other, similar agreements.
 
“Indemnified Liabilities”: as defined in Section 11.5.
 
“Indemnified Person”: as defined in Section 11.10.
 
“Intercompany Debt”: (i) Indebtedness of the Borrower to one or more of the
Subsidiaries of the Borrower and (ii) Indebtedness of one or more of the
Subsidiaries of the Borrower to the Borrower or any one or more of the other
Subsidiaries of the Borrower.
 
“Intercompany Disposition”: a Disposition by the Borrower or any of the
Subsidiaries of the Borrower to the Borrower or to any of the other Subsidiaries
of the Borrower.
 
“Interest Payment Date”: (i) as to any ABR Advance, the last day of each March,
June, September and December, commencing on the first of such days to occur
after such ABR Advance is made or any Eurodollar Advance is converted to an ABR
Advance, (ii) as to any Eurodollar Advance in respect of which the Borrower has
selected a Eurodollar Interest Period of the Shorter Period, the last day of
such Eurodollar Interest Period, (iii) as to any Eurodollar Advance in respect
of which the Borrower has selected a Eurodollar Interest Period of one, two or
three months, the last day of such Eurodollar Interest Period, and (iv) as to
any Eurodollar Advance in respect of which the Borrower has selected a
Eurodollar Interest Period greater than three months, the last day of the third
month of such Eurodollar Interest Period and the last day of such Eurodollar
Interest Period.
 
“Internal Revenue Code”: the Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto, and the rules and regulations issued
thereunder, as from time to time in effect.
 
“LCPI”: Lehman Commercial Paper Inc.
 
“Lender”: as defined in the preamble.
 
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“Lien”: any mortgage, pledge, hypothecation, assignment, lien, deposit
arrangement, charge, encumbrance or other security arrangement or security
interest of any kind, or the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement.
 
“Loan” or “Loans”: as defined in Section 2.1(a).
 
“Loan Documents”: this Agreement and, upon the execution and delivery thereof,
the Notes, if any.
 
“Margin Stock”: any “margin stock”, as said term is defined in Regulation U of
the Board of Governors of the Federal Reserve System, as the same may be amended
or supplemented from time to time.
 
“Material Adverse”: with respect to any change or effect, a material adverse
change in, or effect on, as the case may be, (i) the financial condition,
operations, business, or Property of the Borrower and the Subsidiaries taken as
a whole, (ii) the ability of the Borrower to perform its obligations under the
Loan Documents, or (iii) the ability of the Administrative Agent or any Lender
to enforce the Loan Documents.
 
“Maturity Date”: the date that is the earlier of (x) 364 days after the
Effective Date, and (y) June 30, 2008.
 
“Moody’s”: Moody’s Investors Service, Inc.
 
“Multiemployer Plan”: a Pension Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
 
“Net Proceeds”: with respect to (a) the issuance of any equity securities or
hybrid securities by the Borrower or any of its Subsidiaries in a registered
public offering or private placement or (b) the issuance of long term
Indebtedness by the Borrower or any of its Subsidiaries in a registered public
offering or a private placement or under any new bank credit facility (excluding
any Excluded Debt).
 
“Net Worth”: at any date of determination, the sum of all amounts which would be
included under shareholders’ equity on a Consolidated balance sheet of the
Borrower and the Subsidiaries determined in accordance with GAAP as at such
date.
 
“Note”: with respect to each Lender that has requested one, a promissory note
evidencing such Lender’s Loans payable to the order of such Lender (or, if
required by such Lender, to such Lender and its registered assigns),
substantially in the form of Exhibit B.
 
“Participant”: as defined in Section 11.7(e).
 
“PATRIOT Act”: as defined in Section 11.21.
 
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“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
functions thereof.
 
“Pension Plan”: at any time, any Employee Benefit Plan (including a
Multiemployer Plan) subject to Section 302 of ERISA or Section 412 of the
Internal Revenue Code, the funding requirements of which are, or at any time
within the six years immediately preceding the time in question, were in whole
or in part, the responsibility of the Borrower, any Subsidiary or an ERISA
Affiliate.
 
“Person”: any individual, firm, partnership, limited liability company, joint
venture, corporation, association, business trust, joint stock company,
unincorporated association, trust, Governmental Authority or any other entity,
whether acting in an individual, fiduciary, or other capacity, and for the
purpose of the definition of “ERISA Affiliate”, a trade or business.
 
“Pricing Level”: Pricing Level I, Pricing Level II, Pricing Level III, Pricing
Level IV, Pricing Level V, Pricing Level VI or Pricing Level VII, as the case
may be.
 
“Pricing Level I”: any time when the senior unsecured long term debt rating of
the Borrower by (x) S&P is A+ or higher or (y) Moody’s is A1 or higher.
 
“Pricing Level II”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is A or higher or (y) Moody’s is A2 or higher and
(ii) Pricing Level I does not apply.
 
“Pricing Level III”: any time when (i) the senior unsecured long term debt
rating of the Borrower by (x) S&P is A- or higher or (y) Moody’s is A3 or higher
and (ii) neither Pricing Level I nor II applies.
 
“Pricing Level IV”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is BBB+ or higher or (y) Moody’s is Baa1 or higher
and (ii) none of Pricing Level I, II or III applies.
 
“Pricing Level V”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is BBB or higher or (y) Moody’s is Baa2 or higher and
(ii) none of Pricing Level I, II, III or IV applies.
 
“Pricing Level VI”: any time when (i) the senior unsecured long term debt rating
of the Borrower by (x) S&P is BBB- or higher or (y) Moody’s is Baa3 or higher
and (ii) none of Pricing Level I, II, III, IV or V applies.
 
“Pricing Level VII”: any time when none of Pricing Level I, II, III, IV, V or VI
applies.
 
Notwithstanding each definition of Pricing Level set forth above, if at any time
the senior unsecured long term debt ratings of the Borrower by S&P and Moody’s
differ by more
 
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than one equivalent rating level, then the applicable Pricing Level shall be
determined based upon the lower such rating adjusted upwards to the next higher
rating level.
 
“Prime Rate”: the prime lending rate as set forth on the British Banking
Association Telerate Page 5 (or such other comparable page as may, in the
opinion of the Administrative Agent, replace such page for the purpose of
displaying such rate), as in effect from time to time.
 
“Pro Rata Percentage”: with respect to any Lender, at any time of determination
(a) at any time prior to the earlier of (x) the third Borrowing Date or (y) the
last day of the Commitment Period, such Lender’s Commitment Percentage, and
(b) at any time thereafter, a fraction (expressed as a percentage), the
numerator of which shall be the amount of such Lender’s Credit Exposure at such
time and the denominator of which shall be the Aggregate Credit Exposure of all
Lenders.
 
“Prohibited Transaction”: a transaction that is prohibited under Section 4975 of
the Internal Revenue Code or Section 406 of ERISA and not exempt under
Section 4975 of the Internal Revenue Code or Section 408 of ERISA.
 
“Property”: in respect of any Person, all types of real, personal or mixed
property and all types of tangible or intangible property owned or leased by
such Person.
 
“Regulatory Change”: (a) the introduction or phasing in of any law, rule or
regulation after the date hereof, (b) the issuance or promulgation after the
date hereof of any directive, guideline or request from any central bank or
United States or foreign Governmental Authority (whether or not having the force
of law), or (c) any change after the date hereof in the interpretation of any
existing law, rule, regulation, directive, guideline or request by any central
bank or United States or foreign Governmental Authority charged with the
administration thereof, in each case applicable to the transactions contemplated
by this Agreement.
 
“Related Parties”: with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
 
“Replaced Lender”: as defined in Section 3.13.
 
“Replacement Lender”: as defined in Section 3.13.
 
“Reportable Event”: with respect to any Pension Plan, (a) any event set forth in
Sections 4043(c) (other than a Reportable Event as to which the 30 day notice
requirement is waived by the PBGC under applicable regulations), 4062(e) or
4063(a) of ERISA, or the regulations thereunder, (b) an event requiring the
Borrower, any Subsidiary or any ERISA Affiliate to provide security to a Pension
Plan under Section 401(a)(29) of the Internal Revenue Code, or (c) the failure
to make any payment required by Section 412(m) of the Internal Revenue Code.
 
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“Required Lenders”: (a) at any time during the Commitment Period, Lenders having
Commitments and Credit Exposure equal to or more than 51% of the Aggregate
Available Commitments plus the Aggregate Credit Exposure, and (b) at all other
times, Lenders having Credit Exposure equal to or more than 51% of the Aggregate
Credit Exposure.
 
“Restricted Payment”: with respect to any Person, any of the following, whether
direct or indirect: (a) the declaration or payment by such Person of any
dividend or distribution on any class of Stock of such Person, other than a
dividend payable solely in shares of that class of Stock to the holders of such
class, (b) the declaration or payment by such Person of any distribution on any
other type or class of equity interest or equity investment in such Person, and
(c) any redemption, retirement, purchase or acquisition of, or sinking fund or
other similar payment in respect of, any class of Stock of, or other type or
class of equity interest or equity investment in, such Person.
 
“Restrictive Agreement”: as defined in Section 8.7.
 
“S&P”: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.
 
“Shorter Period”: as defined in the definition of Eurodollar Interest Period.
 
“Solvent”: with respect to any Person on a particular date, the condition that
on such date, (i) the fair value of the Property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature, and (iv) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person’s Property would constitute an unreasonably small amount of
capital. For purposes of this definition, the amount of any contingent liability
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability after taking into account
probable payments by co-obligors.
 
“Special Counsel”: such counsel as the Administrative Agent may engage from time
to time.
 
“Stock”: any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation) and any and all
warrants, rights or options to purchase any of the foregoing.
 
“Subsidiary”: at any time and from time to time, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which the Borrower and/or any Subsidiary of the Borrower, directly or
indirectly at such time, either (a) in respect of a corporation, owns or
controls more than 50% of the outstanding stock having ordinary voting power to
elect a majority of the board of directors or similar managing body,
 
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irrespective of whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of an association,
partnership, limited liability company, joint venture or other business entity,
is entitled to share in more than 50% of the profits and losses, however
determined.
 
“Tangible Net Worth”: at any date of determination, Net Worth less all assets of
the Borrower and its Subsidiaries included in such Net Worth, determined on a
Consolidated basis at such date, that would be classified as intangible assets
in accordance with GAAP.
 
“Termination Event”: with respect to any Pension Plan, (a) a Reportable Event,
(b) the termination of a Pension Plan under Section 4041(c) of ERISA, or the
filing of a notice of intent to terminate a Pension Plan under Section 4041(c)
of ERISA, or the treatment of a Pension Plan amendment as a termination under
Section 4041(e) of ERISA (except an amendment made after such Pension Plan
satisfies the requirement for a standard termination under Section 4041(b) of
ERISA), (c) the institution of proceedings by the PBGC to terminate a Pension
Plan under Section 4042 of ERISA, or (d) the appointment of a trustee to
administer any Pension Plan under Section 4042 of ERISA.
 
“Total Capitalization”: at any date, the sum of the Borrower’s Consolidated
Indebtedness and shareholders’ equity on such date, determined in accordance
with GAAP.
 
“Type”: with respect to any Loan, the characteristic of such Loan as an ABR
Advance or a Eurodollar Advance, each of which constitutes a Type of Loan.
 
“Unqualified Amount”: as defined in Section 3.4(c).
 
“Upstream Dividends”: as defined in Section 8.7.
 
“Waiver Agreement”: the Waiver Agreement, dated as of January 16, 2007 between
the Borrower and Caremark with respect to the Caremark Merger Agreement (as
amended by that certain amendment to Waiver Agreement, dated as of February 12,
2007, and that certain amendment to Waiver Agreement, dated as of March 8,
2007).
 
SECTION 1.2 Principles of Construction
 
(a) All capitalized terms defined in this Agreement shall have the meanings
given such capitalized terms herein when used in the other Loan Documents or in
any certificate, opinion or other document made or delivered pursuant hereto or
thereto, unless otherwise expressly provided therein.
 
(b) Unless otherwise expressly provided herein, the word “fiscal” when used
herein shall refer to the relevant fiscal period of the Borrower. As used in the
Loan Documents and in any certificate, opinion or other document made or
delivered pursuant thereto, accounting terms not defined in Section 1.1, and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
 
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(c) The words “hereof”, “herein”, “hereto” and “hereunder” and similar words
when used in each Loan Document shall refer to such Loan Document as a whole and
not to any particular provision of such Loan Document, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
 
(d) All references herein to a time of day shall mean the then applicable time
in New York, New York, unless otherwise expressly provided herein.
 
(e) Section headings have been inserted in the Loan Documents for convenience
only and shall not be construed to be a part thereof. Unless the context
otherwise requires, words in the singular number include the plural, and words
in the plural include the singular.
 
(f) Whenever in any Loan Document or in any certificate or other document made
or delivered pursuant thereto, the terms thereof require that a Person sign or
execute the same or refer to the same as having been so signed or executed, such
terms shall mean that the same shall be, or was, duly signed or executed by
(i) in respect of any Person that is a corporation, any duly authorized officer
thereof, and (ii) in respect of any other Person (other than an individual), any
analogous counterpart thereof.
 
(g) The words “include” and “including”, when used in each Loan Document, shall
mean that the same shall be included “without limitation”, unless otherwise
specifically provided.
 
ARTICLE 2
 
AMOUNT AND TERMS OF LOANS
 
SECTION 2.1 Loans
 
(a) Subject to the terms and conditions hereof (including the satisfaction of
the conditions set forth in Article 5), each Lender severally (and not jointly)
agrees to make loans under this Agreement (each a “Loan” and, collectively with
each other Loan of such Lender and/or with each Loan of each other Lender, the
“Loans”) at any time and from time to time during the Commitment Period to the
Borrower in an aggregate amount which does not exceed the amount of such
Lender’s Commitment, provided that, (i) the aggregate amount of Loans made to
finance the CVS Share Repurchase shall not exceed $5,250,000,000 and there shall
not be more than two Borrowing Dates with respect thereto, (ii) the aggregate
amount of Loans made to finance the Caremark Special Dividend shall not exceed
$500,000,000 and there shall not be more than one Borrowing Date with respect
thereto and (iii) any remaining Commitment that is not borrowed shall
automatically expire on the date that is the earlier of (x) the third Borrowing
Date and (y) the last day of the Commitment Period. Once repaid, no Loan may be
reborrowed. At the option of the Borrower, indicated in a Borrowing Request,
Loans may be made as ABR Advances or Eurodollar Advances.
 
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(b) The aggregate outstanding principal balance of all Loans shall be due and
payable on the Expiration Date.
 
(c) The Borrower hereby unconditionally promises to pay to the Administrative
Agent for the account of each Lender holding a Loan or Loans the then unpaid
principal amount of such Loan or Loans on the Expiration Date, together with all
accrued and unpaid interest, if any, and any and all amounts payable pursuant to
Section 3.5.
 
SECTION 2.2 Notice of Borrowing Loans
 
The Borrower agrees to notify the Administrative Agent in writing, which
notification shall be irrevocable, no later than (a) 9:00 A.M. on the proposed
Borrowing Date if the Loans made on such Borrowing Date will consist of ABR
Advances and (b) 10:00 A.M. at least two Eurodollar Business Days prior to the
proposed Borrowing Date if the Loans made on such Borrowing Date will consist of
Eurodollar Advances. Each such notice shall specify (i) the aggregate amount
requested to be borrowed under the Commitments, (ii) the proposed Borrowing
Date, (iii) whether the borrowing of Loans is to be of ABR Advances or
Eurodollar Advances, and the amount of each thereof and (iv) if applicable, the
Eurodollar Interest Period for such Eurodollar Advances. Each such notice shall
be made by delivery to the Administrative Agent of a Borrowing Request. Any
Eurodollar Advance made on a Borrowing Date shall equal no less than
$10,000,000, or an integral multiple of $1,000,000 in excess thereof. Any ABR
Advance made on a Borrowing Date shall equal no less than $1,000,000 or an
integral multiple of $500,000 in excess thereof. The Administrative Agent shall
promptly notify each Lender (by fax or other writing) of such Borrowing Request.
Subject to its receipt of each such notice from the Administrative Agent and
subject to the terms and conditions hereof, each Lender shall make immediately
available funds available to the Administrative Agent at the address therefor
set forth in Section 11.2 not later than 1:00 P.M. on each Borrowing Date in an
amount equal to such Lender’s Commitment Percentage of Loans requested by the
Borrower on such Borrowing Date.
 
SECTION 2.3 [Intentionally Omitted]
 
SECTION 2.4 Use of Proceeds
 
The Borrower agrees that the proceeds of the Loans shall be used solely to
finance (i) the repurchase (the “CVS Share Repurchase”) of up to $5,250,000,000
of the Borrower’s outstanding common stock after the consummation of the
Caremark Acquisition through a tender offer, an accelerated share repurchase
program and/or open market repurchases and (ii) up to $500,000,000 of the
Caremark Special Dividend in connection with the Caremark Acquisition.
Notwithstanding anything to the contrary contained in any Loan Document, the
Borrower further agrees that no part of the proceeds of any Loan will be used,
directly or indirectly, and whether immediately, incidentally or ultimately
(i) for a purpose which violates any law, rule or regulation of any Governmental
Authority, including the provisions of Regulations U or X of the Board of
Governors of the Federal Reserve System, as amended, or any provision of this
Agreement, including, without limitation, the provisions of Section 4.9 or
(ii) to make a loan to any director or executive officer of the Borrower or any
Subsidiary.
 
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SECTION 2.5 Termination or Reduction of Commitments
 
(a) Voluntary Termination or Reductions. At the Borrower’s option and upon at
least three Domestic Business Days’ prior irrevocable notice to the
Administrative Agent, the Borrower may (i) terminate the Commitments at any
time, or (ii) permanently reduce the Aggregate Commitment Amount in part at any
time and from time to time, provided that each such partial reduction shall be
in an amount equal to at least $10,000,000 or an integral multiple of $1,000,000
in excess thereof, and provided further that a notice of termination of the
Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities or the consummation of the
issuance of long term Indebtedness, equity securities or hybrid securities (such
notice to specify the proposed effective date), in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
such specified effective date) if such condition is not satisfied, and the
Borrower shall indemnify the Lenders in accordance with Section 3.5.
 
(b) Mandatory Reductions. The Aggregate Commitment Amount shall be automatically
and permanently reduced by an amount equal to the Net Proceeds (if any) received
by or on behalf of the Borrower or any Subsidiary; and such reduction shall be
effective upon receipt by the Borrower or any Subsidiary of such Net Proceeds.
 
(c) In General. Each reduction of the Aggregate Commitment Amount shall be made
by reducing each Lender’s Commitment Amount by a sum equal to such Lender’s
Commitment Percentage of the amount of such reduction.
 
(d) Termination.  In addition to any termination or reduction of the Commitments
as otherwise provided herein, the Commitments shall terminate immediately on the
date that is the earlier of (x) the third Borrowing Date and (y) the last day of
the Commitment Period; provided, however, that if no Loans shall have been made
pursuant to Section 2.1(a) on or before 1:00 P.M. on November 1, 2007, then the
Commitments shall be automatically terminated and the Aggregate Commitment
Amount shall be reduced to zero at such time on such date.
 
SECTION 2.6 Prepayments of Loans
 
(a) Voluntary Prepayments. The Borrower may prepay Loans, in whole or in part,
without premium or penalty, but subject to Section 3.5 at any time and from time
to time, by notifying the Administrative Agent, which notification shall be
irrevocable, at least two Eurodollar Business Days, in the case of a prepayment
of Eurodollar Advances, or one Domestic Business Day, in the case of a
prepayment of ABR Advances, prior to the proposed prepayment date specifying
(i) the Loans to be prepaid, (ii) the amount to be prepaid, and (iii) the date
of prepayment. Upon receipt of each such notice, the Administrative Agent shall
promptly notify each Lender thereof. Each such notice given by the Borrower
pursuant to this Section shall be irrevocable; provided that, a notice of
prepayment delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities or the consummation of the
issuance of long term Indebtedness, equity securities or hybrid securities (such
notice to specify the proposed effective date), in which case such notice of
prepayment may be revoked by the Borrower (by notice to the Administrative Agent
on or prior to such specified effective date) if
 
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such condition is not satisfied, and the Borrower shall indemnify the Lenders in
accordance with Section 3.5. Each partial prepayment under this Section shall be
in a minimum amount of $1,000,000 ($500,000 in the case of ABR Advances) or an
integral multiple of $1,000,000 ($100,000 in the case of ABR Advances) in excess
thereof.
 
(b) Mandatory Prepayments. In the event and on each occasion that any Net
Proceeds are received by or on behalf of the Borrower or any Subsidiary, then,
after such Net Proceeds are received (but no later than one Business Day
thereafter), the Borrower shall prepay the Loans in an aggregate amount equal to
such Net Proceeds.
 
(c) Caremark Acquisition Prepayment. In the event that the Borrower borrows
Loans hereunder in anticipation of consummation of the Caremark Acquisition and
the payment of the Caremark Special Dividend, and the closing of the Caremark
Acquisition does not occur within four Domestic Business Days after such
borrowing, then the Borrower shall prepay such Loans in full no later than the
fifth Domestic Business Day following such borrowing.
 
(d) In General. Simultaneously with each prepayment hereunder, the Borrower
shall prepay all accrued interest on the amount prepaid through the date of
prepayment and indemnify the Lenders in accordance with Section 3.5.
 
SECTION 2.7 Notes
 
Any Lender may request that the Loans made by it be evidenced by a Note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a Note
payable to the order of such Person or, if requested by such Person, such Person
and its registered assigns. Thereafter, all Loans evidenced by such Note and
interest thereon shall at all times (including after assignment pursuant to
Section 11.7) be represented by a Note in like form payable to the order of the
payee named therein and its registered assigns.
 
ARTICLE 3
 
PROCEEDS, PAYMENTS, CONVERSIONS,
INTEREST, YIELD PROTECTION AND FEES
 
SECTION 3.1 Disbursement of the Proceeds of Loans
 
The Administrative Agent shall disburse the proceeds of Loans by wire transfer
of the funds received from each Lender to the account of the Borrower designated
by the Borrower in writing to the Administrative Agent. Unless the
Administrative Agent shall have received prior notice from a Lender (by fax or
other writing) that such Lender will not make available to the Administrative
Agent such Lender’s Commitment Percentage of the Loan to be made by it on a
Borrowing Date, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such Borrowing Date in
accordance with this Section, provided that such Lender received notice thereof
from the Administrative Agent in accordance with the terms hereof, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such Borrowing Date a corresponding amount.
 
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If and to the extent such Lender shall not have so made such amount available to
the Administrative Agent, such Lender and the Borrower severally agree to pay to
the Administrative Agent, forthwith on demand, such corresponding amount (to the
extent not previously paid by the other), together with interest thereon for
each day from the date such amount is made available to the Borrower until the
date such amount is paid to the Administrative Agent, at a rate per annum equal
to, in the case of the Borrower, the applicable interest rate set forth in
Section 3.4(a) and, in the case of such Lender, the Federal Funds Effective Rate
from the date such payment is due until the third day after such date and,
thereafter, at the Federal Funds Effective Rate plus 2%. Any such payment by the
Borrower shall be without prejudice to its rights against such Lender. If such
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender’s Loan as part of such Loans for
purposes of this Agreement, which Loan shall be deemed to have been made by such
Lender on the Borrowing Date applicable to such Loans.
 
SECTION 3.2 Payments
 
(a) Each payment, including each prepayment, of principal and interest on the
Loans and of the Facility Fee (collectively, together with all of the other fees
to be paid to the Administrative Agent and the Lenders in connection with the
Loan Documents, the “Fees”), and of all of the other amounts to be paid to the
Administrative Agent and the Lenders in connection with the Loan Documents shall
be made by the Borrower to the Administrative Agent at its office specified in
Section 11.2 without setoff, deduction or counterclaim in funds immediately
available in New York by 3:00 P.M. on the due date for such payment. The failure
of the Borrower to make any such payment by such time shall not constitute a
default hereunder, provided that such payment is made on such due date, but any
such payment made after 3:00 P.M. on such due date shall be deemed to have been
made on the next Domestic Business Day or Eurodollar Business Day, as the case
may be, for the purpose of calculating interest on amounts outstanding on the
Loans. If the Borrower has not made any such payment prior to 3:00 P.M., the
Borrower hereby authorizes the Administrative Agent to deduct the amount of any
such payment from such account(s) as the Borrower may from time to time
designate in writing to the Administrative Agent, upon which the Administrative
Agent shall apply the amount of such deduction to such payment. Promptly upon
receipt thereof by the Administrative Agent, each payment of principal and
interest on the Loans shall be remitted by the Administrative Agent in like
funds as received to each Lender (a) first, pro rata according to the amount of
interest which is then due and payable to the Lenders, and (b) second, pro rata
according to the amount of principal which is then due and payable to the
Lenders. Each payment of the Facility Fee payable to the Lenders shall be
promptly transmitted by the Administrative Agent in like funds as received to
each Lender pro rata according to such Lender’s Commitment Amount or, if the
Commitments shall have terminated or been terminated, according to the
outstanding principal amount of such Lender’s Loans.
 
(b) If any payment hereunder or under the Loans shall be due and payable on a
day which is not a Domestic Business Day or Eurodollar Business Day, as the case
may be, the due date thereof (except as otherwise provided in the definition of
Eurodollar Interest Period) shall be extended to the next Domestic Business Day
or Eurodollar Business Day, as the case  
 
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may be, and (except with respect to payments of the Facility Fee) interest shall
be payable at the applicable rate specified herein during such extension.
 
SECTION 3.3 Conversions; Other Matters
 
(a) The Borrower may elect at any time and from time to time to Convert one or
more Eurodollar Advances to an ABR Advance by giving the Administrative Agent at
least one Domestic Business Day’s prior irrevocable notice of such election,
specifying the amount to be so Converted. In addition, the Borrower may elect at
any time and from time to time to Convert an ABR Advance to any one or more new
Eurodollar Advances or to Convert any one or more existing Eurodollar Advances
to any one or more new Eurodollar Advances by giving the Administrative Agent no
later than 10:00 A.M. at least two Eurodollar Business Days’ prior irrevocable
notice, in the case of a Conversion to Eurodollar Advances, of such election,
specifying the amount to be so Converted and the initial Eurodollar Interest
Period relating thereto, provided that any Conversion of an ABR Advance to
Eurodollar Advances shall only be made on a Eurodollar Business Day. The
Administrative Agent shall promptly provide the Lenders with notice of each such
election. Each Conversion of Loans from one Type to another shall be made pro
rata according to the outstanding principal amount of the Loans of each Lender.
ABR Advances and Eurodollar Advances may be Converted pursuant to this Section
in whole or in part, provided that the amount to be Converted to each Eurodollar
Advance, when aggregated with any Eurodollar Advance to be made on such date in
accordance with Section 2.1 and having the same Eurodollar Interest Period as
such first Eurodollar Advance, shall equal no less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
 
(b) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence and during the continuance of a Default or an Event of Default, the
Borrower shall have no right to elect to Convert any existing ABR Advance to a
new Eurodollar Advance or to Convert any existing Eurodollar Advance to a new
Eurodollar Advance. In such event, such ABR Advance shall be automatically
continued as an ABR Advance or such Eurodollar Advance shall be automatically
Converted to an ABR Advance on the last day of the Eurodollar Interest Period
applicable to such Eurodollar Advance. The foregoing shall not affect any other
rights or remedies that the Administrative Agent or any Lender may have under
this Agreement or any other Loan Document.
 
(c) Each Conversion shall be effected by each Lender by applying the proceeds of
each new ABR Advance or Eurodollar Advance, as the case may be, to the existing
Advance (or portion thereof) being Converted (it being understood that such
Conversion shall not constitute a borrowing for purposes of Article 4, Article 5
or Article 6).
 
(d) Notwithstanding any other provision of any Loan Document:
 
(i) if the Borrower shall have failed to elect a Eurodollar Advance under
Section 2.2 or this Section 3.3, as the case may be, in connection with any
borrowing of new Loans or expiration of an Eurodollar Interest Period with
respect to any existing Eurodollar Advance, the amount of the Loans subject to
such borrowing or such existing Eurodollar Advance shall thereafter be an ABR
Advance until such time, if any, as the Borrower shall elect a new Eurodollar
Advance pursuant to this Section 3.3,
 
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(ii) the Borrower shall not be permitted to select a Eurodollar Advance the
Eurodollar Interest Period in respect of which ends later than the Maturity
Date, and
 
(iii) the Borrower shall not be permitted to have more than ten Eurodollar
Advances outstanding at any one time, it being understood and agreed that each
borrowing of Eurodollar Advances pursuant to a single Borrowing Request shall
constitute the making of one Eurodollar Advance for the purpose of calculating
such limitation.
 
SECTION 3.4 Interest Rates and Payment Dates
 
(a) Prior to Maturity. Except as otherwise provided in Section 3.4(b) and
Section 3.4(c), the Loans shall bear interest on the unpaid principal balance
thereof at the applicable interest rate or rates per annum set forth below:

LOANS
RATE
Loans constituting ABR Advances
Alternate Base Rate applicable thereto plus the Applicable Margin.
Loans constituting Eurodollar Advances
Eurodollar Rate applicable thereto plus the Applicable Margin.

 
(b) After Maturity, Late Payment Rate. After maturity, whether by acceleration,
notice of intention to prepay or otherwise, the outstanding principal balance of
the Loans shall bear interest at the Alternate Base Rate plus 2% per annum until
paid (whether before or after the entry of any judgment thereon). Any payment of
principal, interest or any Fees not paid on the date when due and payable shall
bear interest at the Alternate Base Rate plus 2% per annum from the due date
thereof until the date such payment is made (whether before or after the entry
of any judgment thereon).
 
(c) Highest Lawful Rate. Notwithstanding anything to the contrary contained in
this Agreement, at no time shall the interest rate payable to any Lender on any
of its Loans, together with any Fees and all other amounts payable hereunder to
such Lender to the extent the same constitute or are deemed to constitute
interest, exceed the Highest Lawful Rate. If in respect of any period during the
term of this Agreement, any amount paid to any Lender hereunder, to the extent
the same shall (but for the provisions of this Section 3.4) constitute or be
deemed to constitute interest, would exceed the maximum amount of interest
permitted by the Highest Lawful Rate during such period (such amount being
hereinafter referred to as an “Unqualified Amount”), then (i) such Unqualified
Amount shall be applied or shall be deemed to have been applied as a prepayment
of the Loans of such Lender, and (ii) if, in any subsequent period during the
term of this Agreement, all amounts payable hereunder to such Lender in respect
of such period which constitute or shall be deemed to constitute interest shall
be less than the maximum amount of interest permitted by the Highest Lawful Rate
during such period, then
 
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the Borrower shall pay to such Lender in respect of such period an amount (each
a “Compensatory Interest Payment”) equal to the lesser of (x) a sum which, when
added to all such amounts, would equal the maximum amount of interest permitted
by the Highest Lawful Rate during such period, and (y) an amount equal to the
aggregate sum of all Unqualified Amounts less all other Compensatory Interest
Payments.
 
(d) General. Interest shall be payable in arrears on each Interest Payment Date,
on the Expiration Date and, to the extent provided in Section 2.6(d), upon each
prepayment of the Loans. Any change in the interest rate on the Loans resulting
from an increase or a decrease in the Alternate Base Rate or any reserve
requirement shall become effective as of the opening of business on the day on
which such change shall become effective. The Administrative Agent shall (i) in
accordance with its customary practice, provide notice to the Borrower when
interest payments are due, and (ii) as soon as practicable, notify the Borrower
and the Lenders of the effective date and the amount of each change in the Prime
Rate, but any failure to so notify shall not in any manner affect the obligation
of the Borrower to pay interest on the Loans in the amounts and on the dates set
forth herein. Each determination by the Administrative Agent of the Alternate
Base Rate and the Eurodollar Rate pursuant to this Agreement shall be conclusive
and binding on the Borrower absent manifest error. The Borrower acknowledges
that to the extent interest payable on the Loans is based on the Alternate Base
Rate, such rate is only one of the bases for computing interest on loans made by
the Lenders, and by basing interest payable on ABR Advances on the Alternate
Base Rate, the Lenders have not committed to charge, and the Borrower has not in
any way bargained for, interest based on a lower or the lowest rate at which the
Lenders may now or in the future make extensions of credit to other Persons. All
interest (other than interest calculated with reference to the Prime Rate) shall
be calculated on the basis of a 360-day year for the actual number of days
elapsed, and all interest determined with reference to the Prime Rate shall be
calculated on the basis of a 365/366-day year for the actual number of days
elapsed.
 
SECTION 3.5 Indemnification for Loss
 
Notwithstanding anything contained herein to the contrary, if: (i) the Borrower
shall fail to borrow a Eurodollar Advance or if the Borrower shall fail to
Convert a Eurodollar Advance after it shall have given notice to do so in which
it shall have requested a Eurodollar Advance pursuant to Section 2.2 or
Section 3.3, as the case may be, (ii) a Eurodollar Advance shall be terminated
for any reason prior to the last day of the Eurodollar Interest Period
applicable thereto, (iii) any repayment or prepayment of the principal amount of
a Eurodollar Advance is made for any reason on a date which is prior to the last
day of the Eurodollar Interest Period applicable thereto, or (iv) the Borrower
shall have revoked a notice of prepayment or notice of termination of the
Commitments that was conditioned upon the effectiveness of other credit
facilities or the consummation of the issuance of long term Indebtedness or
equity securities pursuant to Section 2.5 or Section 2.6, the Borrower agrees to
indemnify each Lender against, and to pay on demand directly to such Lender the
amount (calculated by such Lender using any method chosen by such Lender which
is customarily used by such Lender for such purpose) equal to any loss or
expense suffered by such Lender as a result of such failure to borrow or
Convert, or such termination, repayment, prepayment or revocation, including any
loss, cost or expense suffered by such Lender in liquidating or employing
deposits acquired to
 
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fund or maintain the funding of such Eurodollar Advance or redeploying funds
prepaid or repaid, in amounts which correspond to such Eurodollar Advance and
any reasonable internal processing charge customarily charged by such Lender in
connection therewith.
 
SECTION 3.6 Reimbursement for Costs, Etc.
 
If at any time or from time to time there shall occur a Regulatory Change and
any Lender shall have reasonably determined that such Regulatory Change
(i) shall have had or will thereafter have the effect of reducing (A) the rate
of return on such Lender’s capital or the capital of any Person directly or
indirectly owning or controlling such Lender (each a “Control Person”), or
(B) the asset value (for capital purposes) to such Lender or such Control
Person, as applicable, of the Loans, or any participation therein, in any case
to a level below that which such Lender or such Control Person could have
achieved or would thereafter be able to achieve but for such Regulatory Change
(after taking into account such Lender’s or such Control Person’s policies
regarding capital), (ii) will impose, modify or deem applicable any reserve,
asset, special deposit or special assessment requirements on deposits obtained
in the interbank eurodollar market in connection with the Loan Documents
(excluding, with respect to any Eurodollar Advance, any such requirement which
is included in the determination of the rate applicable thereto), (iii) will
subject such Lender or such Control Person, as applicable, to any tax
(documentary, stamp or otherwise) with respect to this Agreement or any Note, or
(iv) will change the basis of taxation of payments to such Lender or such
Control Person, as applicable, of principal, interest or fees payable under the
Loan Documents (except, in the case of clauses (iii) and (iv) above, for any tax
or changes in the rate of tax on such Lender’s or such Control Person’s net
income) then, in each such case, within ten days after demand by such Lender,
the Borrower shall pay to such Lender or such Control Person, as the case may
be, such additional amount or amounts as shall be sufficient to compensate such
Lender or such Control Person, as the case may be, for any such reduction,
reserve or other requirement, tax, loss, cost or expense (excluding general
administrative and overhead costs) (collectively, “Costs”) attributable to such
Lender’s or such Control Person’s compliance during the term hereof with such
Regulatory Change. Each Lender may make multiple requests for compensation under
this Section.
 
Notwithstanding the foregoing, the Borrower will not be required to compensate
any Lender for any Costs under this Section 3.6 arising prior to 45 days
preceding the date of demand, unless the applicable Regulatory Change giving
rise to such Costs is imposed retroactively. In the case of retroactivity, such
notice shall be provided to the Borrower not later than 45 days from the date
that such Lender learned of such Regulatory Change. The Borrower’s obligation to
compensate such Lender shall be contingent upon the provision of such timely
notice (but any failure by such Lender to provide such timely notice shall not
affect the Borrower’s obligations with respect to (i) Costs incurred from the
date as of which such Regulatory Change became effective to the date that is
45 days after the date such Lender reasonably should have learned of such
Regulatory Change and (ii) Costs incurred following the provision of such
notice).
 
SECTION 3.7 Illegality of Funding
 
Notwithstanding any other provision hereof, if any Lender shall reasonably
determine that any law, regulation, treaty or directive, or any change therein
or in the
 
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interpretation or application thereof, shall make it unlawful for such Lender to
make or maintain any Eurodollar Advance as contemplated by this Agreement, such
Lender shall promptly notify the Borrower and the Administrative Agent thereof,
and (a) the commitment of such Lender to make such Eurodollar Advances or
Convert ABR Advances to such Eurodollar Advances shall forthwith be suspended,
(b) such Lender shall fund its portion of each requested Eurodollar Advance as
an ABR Advance and (c) such Lender’s Loans then outstanding as such Eurodollar
Advances, if any, shall be Converted automatically to an ABR Advance on the last
day of the then current Eurodollar Interest Period applicable thereto or at such
earlier time as may be required. If the commitment of any Lender with respect to
Eurodollar Advances is suspended pursuant to this Section and such Lender shall
have obtained actual knowledge that it is once again legal for such Lender to
make or maintain Eurodollar Advances, such Lender shall promptly notify the
Administrative Agent and the Borrower thereof and, upon receipt of such notice
by each of the Administrative Agent and the Borrower, such Lender’s commitment
to make or maintain Eurodollar Advances shall be reinstated. If the commitment
of any Lender with respect to Eurodollar Advances is suspended pursuant to this
Section, such suspension shall not otherwise affect such Lender’s Commitment.
 
SECTION 3.8 Option to Fund; Substituted Interest Rate
 
(a) Each Lender has indicated that, if the Borrower requests a Eurodollar
Advance, such Lender may wish to purchase one or more deposits in order to fund
or maintain its funding of its Pro Rata Percentage of such Eurodollar Advance
during the Eurodollar Interest Period with respect thereto; it being understood
that the provisions of this Agreement relating to such funding are included only
for the purpose of determining the rate of interest to be paid in respect of
such Eurodollar Advance and any amounts owing under Section 3.5 and Section 3.6.
Each Lender shall be entitled to fund and maintain its funding of all or any
part of each Eurodollar Advance in any manner it sees fit, but all such
determinations hereunder shall be made as if such Lender had actually funded and
maintained its Pro Rata Percentage of each Eurodollar Advance during the
applicable Eurodollar Interest Period through the purchase of deposits in an
amount equal to the amount of its Pro Rata Percentage of such Eurodollar Advance
and having a maturity corresponding to such Eurodollar Interest Period. Each
Lender may fund its Loans from or for the account of any branch or office of
such Lender as such Lender may choose from time to time, subject to
Section 3.10.
 
(b) In the event that (i) the Administrative Agent shall have determined in good
faith (which determination shall be conclusive and binding upon the Borrower)
that by reason of circumstances affecting the interbank eurodollar market either
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
applicable pursuant to Section 2.2 or Section 3.3, or (ii) the Required Lenders
shall have notified the Administrative Agent that they have in good faith
determined (which determination shall be conclusive and binding on the Borrower)
that the applicable Eurodollar Rate will not adequately and fairly reflect the
cost to such Lenders of maintaining or funding loans bearing interest based on
such Eurodollar Rate with respect to any portion of the Loans that the Borrower
has requested be made as Eurodollar Advances or any Eurodollar Advance that will
result from the requested conversion of any portion of the Loans into Eurodollar
Advances (each, an “Affected Advance”), the Administrative Agent shall promptly
notify the Borrower and the Lenders (by fax or other writing) of such
 
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determination on or, to the extent practicable, prior to the requested Borrowing
Date or conversion date for such Affected Advances. If the Administrative Agent
shall give such notice, (A) any Affected Advances shall be made as ABR Advances,
(B) the Loans (or any portion thereof) that were to have been Converted to
Affected Advances shall be Converted to or continued as ABR Advances, and
(C) any outstanding Affected Advances shall be Converted, on the last day of the
then current Eurodollar Interest Period with respect thereto, to ABR Advances.
Until any notice under clauses (i) or (ii), as the case may be, of this
Section 3.8(b) has been withdrawn by the Administrative Agent (by notice to the
Borrower) promptly upon either (x) the Administrative Agent having determined
that such circumstances affecting the relevant market no longer exist and that
adequate and reasonable means do exist for determining the Eurodollar Rate
pursuant to Section 2.2 or Section 3.3, or (y) the Administrative Agent having
been notified by such Required Lenders that circumstances no longer render the
Loans (or any portion thereof) Affected Advances, no further Eurodollar Advances
shall be required to be made by the Lenders nor shall the Borrower have the
right to Convert all or any portion of the Loans to Eurodollar Advances.
 
SECTION 3.9 Certificates of Payment and Reimbursement
 
Each Lender agrees, in connection with any request by it for payment or
reimbursement pursuant to Section 3.5 or Section 3.6, to provide the Borrower
with a certificate, signed by an officer of such Lender, setting forth a
description in reasonable detail of any such payment or reimbursement. Each
determination by each Lender of such payment or reimbursement shall be
conclusive absent manifest error.
 
SECTION 3.10 Taxes; Net Payments
 
(a) All payments made by the Borrower under the Loan Documents shall be made
free and clear of, and without reduction for or on account of, any taxes
required by law to be withheld from any amounts payable under the Loan
Documents. In the event that the Borrower is prohibited by law from making such
payments free of deductions or withholdings, then the Borrower shall pay such
additional amounts to the Administrative Agent, for the benefit of the Lenders,
as may be necessary in order that the actual amounts received by the Lenders in
respect of interest and any other amounts payable under the Loan Documents after
deduction or withholding (and after payment of any additional taxes or other
charges due as a consequence of the payment of such additional amounts) shall
equal the amount that would have been received if such deduction or withholding
were not required. In the event that any such deduction or withholding can be
reduced or nullified as a result of the application of any relevant double
taxation convention, the Lenders and the Administrative Agent will, at the
expense of the Borrower, cooperate with the Borrower in making application to
the relevant taxing authorities seeking to obtain such reduction or
nullification, provided that the Lenders and the Administrative Agent shall have
no obligation to (i) engage in any litigation, hearing or proceeding with
respect thereto or (ii) disclose any tax return or other confidential
information. If the Borrower shall make any payment under this Section or shall
make any deduction or withholding from amounts paid under any Loan Document, the
Borrower shall forthwith forward to the Administrative Agent original or
certified copies of official receipts or other evidence acceptable to the
Administrative Agent establishing each such payment, deduction or
 
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withholding, as the case may be, and the Administrative Agent in turn shall
distribute copies thereof to each Lender. If any payment to any Lender under any
Loan Document is or becomes subject to any withholding, such Lender shall
(unless otherwise required by a Governmental Authority or as a result of any
law, rule, regulation, order or similar directive applicable to such Lender)
designate a different office or branch to which such payment is to be made from
that initially selected thereby, if such designation would avoid such
withholding and would not be otherwise disadvantageous to such Lender in any
respect. In the event that any Lender determines that it received a refund or
credit for taxes paid by the Borrower under this Section, such Lender shall
promptly notify the Administrative Agent and the Borrower of such fact and shall
remit to the Borrower the amount of such refund or credit applicable to the
payments made by the Borrower in respect of such Lender under this Section.
 
(b) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under the Loan Documents shall deliver to the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate. Notwithstanding any provision herein
to the contrary, the Borrower shall have no obligation to pay to any Lender any
amount which the Borrower is liable to withhold due to the failure of such
Lender to file any statement of exemption required by the Internal Revenue Code.
 
SECTION 3.11 Facility Fee
 
The Borrower agrees to pay to the Administrative Agent for the pro rata account
of each Lender a fee (the “Facility Fee”) during the period commencing on the
Effective Date and ending on the Facility Fee Termination Date, payable
quarterly in arrears on the last day of each March, June, September and December
of each year, commencing on the last day of the calendar quarter in which the
Effective Date shall have occurred, and on the Facility Fee Termination Date, at
a rate per annum equal to the Applicable Margin of (i) prior to the date that is
the earlier of (x) the third Borrowing Date and (y) the last day of the
Commitment Period, the Available Commitment of such Lender plus the sum of the
outstanding principal balance of all Loans of such Lender on such date and
(ii) on any day thereafter, the sum of the outstanding principal balance of all
Loans of such Lender on such date. The Facility Fee shall be computed on the
basis of a 360-day year for the actual number of days elapsed.
 
SECTION 3.12 [Intentionally Omitted]
 
SECTION 3.13 Replacement of Lender
 
If the Borrower is obligated to pay to any Lender any amount under Section 3.6
or Section 3.10, the Borrower shall have the right within 90 days thereafter, in
accordance with the requirements of Section 11.7(b), if no Default or Event of
Default shall exist, to replace such Lender (the “Replaced Lender”) with one or
more other assignees (each a “Replacement Lender”), provided that (i) at the
time of any replacement pursuant to this Section, the Replacement Lender shall
enter into one or more Assignment and Acceptance Agreements
 
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pursuant to Section 11.7(b) (with the processing and recordation fee referred to
in Section 11.7(b) payable pursuant to said Section 11.7(b) to be paid by the
Replacement Lender) pursuant to which the Replacement Lender shall acquire the
Commitment (if any) and the outstanding Loans of the Replaced Lender and, in
connection therewith, shall pay the following: (a) to the Replaced Lender, an
amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Lender and (B) an
amount equal to all accrued, but unpaid, fees owing to the Replaced Lender and
(b) to the Administrative Agent an amount equal to all amounts owed by such
Replaced Lender to the Administrative Agent under this Agreement, including,
without limitation, an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, a corresponding
amount of which was made available by the Administrative Agent to the Borrower
pursuant to Section 3.1 and which has not been repaid to the Administrative
Agent by such Replaced Lender or the Borrower, and (ii) all obligations of the
Borrower owing to the Replaced Lender (other than those specifically described
in clause (i) above in respect of which the assignment purchase price has been,
or is concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Acceptance Agreements and the payment of amounts referred to in
clauses (i) and (ii) of this Section 3.13, the Replacement Lender shall become a
Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions under this
Agreement that are intended to survive the termination of the Commitments and
the repayment of the Loans.
 
ARTICLE 4
 
REPRESENTATIONS AND WARRANTIES
 
In order to induce the Administrative Agent and the Lenders to enter into this
Agreement, and the Lenders to make Loans, the Borrower hereby makes the
following representations and warranties to the Administrative Agent and the
Lenders:
 
SECTION 4.1 Existence and Power
 
Each of the Borrower and the Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation (except, in the case of the Subsidiaries, where the failure to be in
such good standing could not reasonably be expected to have a Material Adverse
effect), has all requisite corporate power and authority to own its Property and
to carry on its business as now conducted, and is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which it
owns or leases real Property or in which the nature of its business requires it
to be so qualified (except those jurisdictions where the failure to be so
qualified or to be in good standing could not reasonably be expected to have a
Material Adverse effect).
 
SECTION 4.2 Authority
 
The Borrower has full corporate power and authority to enter into, execute,
deliver and perform the terms of the Loan Documents, all of which have been duly
authorized by
 
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all proper and necessary corporate action and are not in contravention of any
applicable law or the terms of its Certificate of Incorporation and By-Laws. No
consent or approval of, or other action by, shareholders of the Borrower, any
Governmental Authority, or any other Person (which has not already been
obtained) is required to authorize in respect of the Borrower, or is required in
connection with the execution, delivery, and performance by the Borrower of the
Loan Documents or is required as a condition to the enforceability of the Loan
Documents against the Borrower.
 
SECTION 4.3 Binding Agreement
 
The Loan Documents constitute the valid and legally binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by equitable principles relating to the
availability of specific performance as a remedy.
 
SECTION 4.4 Litigation
 
As at February 2, 2007, there were no actions, suits, arbitration proceedings or
claims (whether purportedly on behalf of the Borrower, any Subsidiary or
otherwise) pending or, to the knowledge of the Borrower, threatened against the
Borrower or any Subsidiary or any of their respective Properties, or maintained
by the Borrower or any Subsidiary, at law or in equity, before any Governmental
Authority which could reasonably be expected to have a Material Adverse effect.
There are no proceedings pending or, to the knowledge of the Borrower,
threatened against the Borrower or any Subsidiary (a) which call into question
the validity or enforceability of any Loan Document, or otherwise seek to
invalidate, any Loan Document, or (b) which might, individually or in the
aggregate, materially and adversely affect any of the transactions contemplated
by any Loan Document (it being understood that the Caremark Acquisition is not a
transaction contemplated by any Loan Document for the purposes of this
clause (b)).
 
SECTION 4.5 No Conflicting Agreements
 
(a) Neither the Borrower nor any Subsidiary is in default under any agreement to
which it is a party or by which it or any of its Property is bound the effect of
which could reasonably be expected to have a Material Adverse effect. No notice
to, or filing with, any Governmental Authority is required for the due
execution, delivery and performance by the Borrower of the Loan Documents.
 
(b) No provision of any existing material mortgage, material indenture, material
contract or material agreement or of any existing statute, rule, regulation,
judgment, decree or order binding on the Borrower or any Subsidiary or affecting
the Property of the Borrower or any Subsidiary conflicts with, or requires any
consent which has not already been obtained under, or would in any way prevent
the execution, delivery or performance by the Borrower of the terms of, any Loan
Document. The execution, delivery or performance by the Borrower of the terms of
each Loan Document will not constitute a default under, or result in the
 
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creation or imposition of, or obligation to create, any Lien upon the Property
of the Borrower or any Subsidiary pursuant to the terms of any such mortgage,
indenture, contract or agreement.
 
SECTION 4.6 Taxes
 
The Borrower and each Subsidiary has filed or caused to be filed all tax
returns, and has paid, or has made adequate provision for the payment of, all
taxes shown to be due and payable on said returns or in any assessments made
against them, the failure of which to file or pay could reasonably be expected
to have a Material Adverse effect, and no tax Liens (other than Liens permitted
under Section 8.2) have been filed against the Borrower or any Subsidiary and no
claims are being asserted with respect to such taxes which are required by GAAP
to be reflected in the Financial Statements and are not so reflected, except for
taxes which have been assessed but which are not yet due and payable. The
charges, accruals and reserves on the books of the Borrower and each Subsidiary
with respect to all federal, state, local and other taxes are considered by the
management of the Borrower to be adequate, and the Borrower knows of no unpaid
assessment which (a) could reasonably be expected to have a Material Adverse
effect, or (b) is or might be due and payable against it or any Subsidiary or
any Property of the Borrower or any Subsidiary, except such thereof as are being
contested in good faith and by appropriate proceedings diligently conducted, and
for which adequate reserves have been set aside in accordance with GAAP or which
have been assessed but are not yet due and payable.
 
SECTION 4.7 Compliance with Applicable Laws; Filings
 
Neither the Borrower nor any Subsidiary is in default with respect to any
judgment, order, writ, injunction, decree or decision of any Governmental
Authority which default could reasonably be expected to have a Material Adverse
effect. The Borrower and each Subsidiary is complying with all applicable
statutes, rules and regulations of all Governmental Authorities, a violation of
which could reasonably be expected to have a Material Adverse effect. The
Borrower and each Subsidiary has filed or caused to be filed with all
Governmental Authorities all reports, applications, documents, instruments and
information required to be filed pursuant to all applicable laws, rules,
regulations and requests which, if not so filed, could reasonably be expected to
have a Material Adverse effect.
 
SECTION 4.8 Governmental Regulations
 
Neither the Borrower nor any Subsidiary nor any corporation controlling the
Borrower or any Subsidiary or under common control with the Borrower or any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, or is subject to any statute or regulation which regulates the
incurrence of Indebtedness.
 
SECTION 4.9 Federal Reserve Regulations; Use of Proceeds
 
The Borrower is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any margin stock within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System, as amended. No part of the proceeds of the Loans has
been or will be used, directly or indirectly, and whether immediately,
incidentally or ultimately, for a purpose which violates any law, rule
 
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or regulation of any Governmental Authority, including, without limitation, the
provisions of Regulations T, U or X of the Board of Governors of the Federal
Reserve System, as amended. Anything in this Agreement to the contrary
notwithstanding, no Lender shall be obligated to extend credit to or on behalf
of the Borrower in violation of any limitation or prohibition provided by any
applicable law, regulation or statute, including said Regulation U. Following
application of the proceeds of each Loan, not more than 25% (or such greater or
lesser percentage as is provided in the exclusions from the definition of
“Indirectly Secured” contained in said Regulation U as in effect at the time of
the making of such Loan) of the value of the assets of the Borrower and the
Subsidiaries on a Consolidated basis that are subject to Section 8.2 will be
Margin Stock. In addition, no part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to make a loan to any director or executive officer of the Borrower
or any Subsidiary.
 
SECTION 4.10 No Misrepresentation
 
No representation or warranty contained in any Loan Document and no certificate
or written report furnished by the Borrower to the Administrative Agent or any
Lender pursuant to any Loan Document contains or will contain, as of its date, a
misstatement of material fact, or omits or will omit to state, as of its date, a
material fact required to be stated in order to make the statements therein
contained not misleading in the light of the circumstances under which made (it
being understood that the Borrower makes no representation or warranty hereunder
with respect to any projections or other forward looking information).
 
SECTION 4.11 Plans
 
Each Employee Benefit Plan of the Borrower, each Subsidiary and each ERISA
Affiliate is in compliance with ERISA and the Internal Revenue Code, where
applicable, except where the failure to so comply would not be material. The
Borrower, each Subsidiary and each ERISA Affiliate have complied with the
material requirements of Section 515 of ERISA with respect to each Pension Plan
which is a Multiemployer Plan, except where the failure to so comply would not
be material. The Borrower, each Subsidiary and each ERISA Affiliate has, as of
the date hereof, made all contributions or payments to or under each Pension
Plan required by law or the terms of such Pension Plan or any contract or
agreement. No liability to the PBGC has been, or is reasonably expected by the
Borrower, any Subsidiary or any ERISA Affiliate to be, incurred by the Borrower,
any Subsidiary or any ERISA Affiliate. Liability, as referred to in this
Section 4.11, includes any joint and several liability, but excludes any current
or, to the extent it represents future liability in the ordinary course, any
future liability for premiums under Section 4007 of ERISA. Each Employee Benefit
Plan which is a group health plan within the meaning of Section 5000(b)(1) of
the Internal Revenue Code is in material compliance with the continuation of
health care coverage requirements of Section 4980B of the Internal Revenue Code
and with the portability, nondiscrimination and other requirements of
Sections 9801, 9802, 9803, 9811 and 9812 of the Internal Revenue Code.
 
SECTION 4.12 Environmental Matters
 
Neither the Borrower nor any Subsidiary (a) has received written notice or
otherwise learned of any claim, demand, action, event, condition, report or
investigation
 
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 indicating or concerning any potential or actual liability which individually
or in the aggregate could reasonably be expected to have a Material Adverse
effect, arising in connection with (i) any non-compliance with or violation of
the requirements of any applicable federal, state or local environmental health
or safety statute or regulation, or (ii) the release or threatened release of
any toxic or hazardous waste, substance or constituent, or other substance into
the environment, (b) to the best knowledge of the Borrower, has any threatened
or actual liability in connection with the release or threatened release of any
toxic or hazardous waste, substance or constituent, or other substance into the
environment which individually or in the aggregate could reasonably be expected
to have a Material Adverse effect, (c) has received notice of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release or threatened release of any toxic or hazardous waste, substance or
constituent or other substance into the environment for which the Borrower or
any Subsidiary is or would be liable, which liability would reasonably be
expected to have a Material Adverse effect, or (d) has received notice that the
Borrower or any Subsidiary is or may be liable to any Person under the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601 et seq., or any analogous state law, which
liability would reasonably be expected to have a Material Adverse effect. The
Borrower and each Subsidiary is in compliance with the financial responsibility
requirements of federal and state environmental laws to the extent applicable,
including those contained in 40 C.F.R., parts 264 and 265, subpart H, and any
analogous state law, except in those cases in which the failure so to comply
would not reasonably be expected to have a Material Adverse effect.
 
SECTION 4.13 Financial Statements
 
The Borrower has heretofore delivered to the Lenders through the Administrative
Agent copies of the audited Consolidated Balance Sheet of the Borrower and its
Subsidiaries as of December 31, 2006, and the related Consolidated Statements of
Operations, Shareholders’ Equity and Cash Flows for the fiscal year then ended.
The financial statements referred to immediately above, including all related
notes and schedules, are herein referred to collectively as the “Financial
Statements.” The Financial Statements fairly present the Consolidated financial
condition and results of the operations of the Borrower and the Subsidiaries as
of the date and for the period indicated therein and, except as noted therein,
have been prepared in conformity with GAAP as then in effect. Neither the
Borrower nor any of the Subsidiaries has any obligation or liability of any kind
(whether fixed, accrued, contingent, unmatured or otherwise) which, in
accordance with GAAP as then in effect, should have been disclosed in the
Financial Statements and was not. During the period from December 31, 2005 to
and including February 2, 2007 there was no Material Adverse change, including
as a result of any change in law or any change in the consolidated financial
condition, operations, business or Property of the Borrower and its Subsidiaries
taken as a whole.
 
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ARTICLE 5
 
CONDITIONS OF LENDING —
LOANS ON THE FIRST BORROWING DATE
 
In addition to the requirements set forth in Article 6, the obligation of each
Lender on the first Borrowing Date to make a Loan is subject to the fulfillment
of the following conditions precedent prior to or simultaneously with the
Effective Date:
 
SECTION 5.1 Evidence of Corporate Action
 
The Administrative Agent shall have received a certificate, dated the Effective
Date, of the Secretary or an Assistant Secretary of the Borrower (i) attaching a
true and complete copy of the resolutions of its Board of Directors and of all
documents evidencing all other necessary corporate action (in form and substance
reasonably satisfactory to the Administrative Agent) taken by the Borrower to
authorize the Loan Documents and the transactions contemplated thereby,
(ii) attaching a true and complete copy of its Certificate of Incorporation and
By-Laws, (iii) setting forth the incumbency of the officer or officers of the
Borrower who may sign the Loan Documents and any other certificates, requests,
notices or other documents now or in the future required thereunder, and
(iv) attaching a long-form certificate of good standing of the Secretary of
State of the State of Delaware.
 
SECTION 5.2 Notes
 
The Administrative Agent shall have received a Note for each Lender that shall
have requested one, executed by the Borrower.
 
SECTION 5.3 Opinion of Counsel to the Borrower
 
The Administrative Agent shall have received:
 
(a) an opinion of Zenon Lankowsky, counsel to the Borrower, dated the Effective
Date, and in the form of Exhibit D-1; and
 
(b) an opinion of Davis Polk & Wardwell, special counsel to the Borrower, dated
the Effective Date, and in the form of Exhibit D-2.
 
SECTION 5.4 Caremark Acquisition
 
The Administrative Agent shall have received a certificate of the Chief
Financial Officer of the Borrower, dated as of the first Borrowing Date,
certifying that the closing of the Caremark Acquisition has been or will be
consummated substantially in accordance with all material terms and conditions
of the Caremark Merger Agreement.
 
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ARTICLE 6
 
CONDITIONS TO LENDING —
LOANS ON EACH BORROWING DATE
 
The obligation of each Lender on any Borrowing Date to make each Loan is subject
to the fulfillment of the following conditions precedent:
 
SECTION 6.1 Compliance
 
On each Borrowing Date, and after giving effect to the Loans to be made on such
Borrowing Date, (a) there shall exist no Default or Event of Default, and
(b) the representations and warranties contained in this Agreement shall be true
and correct with the same effect as though such representations and warranties
had been made on such Borrowing Date, except those which are expressly specified
to be made as of an earlier date.
 
SECTION 6.2 Requests
 
The Administrative Agent shall have received a Borrowing Request (which shall
comply with the provisions of Section 2.2) from the Borrower.
 
SECTION 6.3 Loan Closings
 
All documents required by the provisions of this Agreement to have been executed
or delivered by the Borrower to the Administrative Agent or any Lender on or
before the applicable Borrowing Date shall have been so executed or delivered on
or before such Borrowing Date.
 
ARTICLE 7
 
AFFIRMATIVE COVENANTS
 
The Borrower covenants and agrees that on and after the Effective Date and until
the payment in full of the Loans and all other sums and amounts payable under
the Loan Documents, the Borrower will:
 
SECTION 7.1 Legal Existence
 
Except as may otherwise be permitted by Section 8.3 and Section 8.4, maintain,
and cause each Subsidiary to maintain, its corporate existence in good standing
in the jurisdiction of its incorporation or formation and in each other
jurisdiction in which the failure so to do could reasonably be expected to have
a Material Adverse effect, except that the corporate existence of Subsidiaries
operating closing or discontinued operations may be terminated.
 
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SECTION 7.2 Taxes
 
Pay and discharge when due, and cause each Subsidiary so to do, all taxes,
assessments, governmental charges, license fees and levies upon or with respect
to the Borrower and such Subsidiary, and upon the income, profits and Property
thereof unless, and only to the extent, that either (i)(a) such taxes,
assessments, governmental charges, license fees and levies shall be contested in
good faith and by appropriate proceedings diligently conducted by the Borrower
or such Subsidiary, and (b) such reserve or other appropriate provision as shall
be required by GAAP shall have been made therefor, or (ii) the failure to pay or
discharge such taxes, assessments, governmental charges, license fees and levies
could not reasonably be expected to have a Material Adverse effect.
 
SECTION 7.3 Insurance
 
Keep, and cause each Subsidiary to keep, insurance with responsible insurance
companies in such amounts and against such risks as is usually carried by the
Borrower or such Subsidiary.
 
SECTION 7.4 Performance of Obligations
 
Pay and discharge promptly when due, and cause each Subsidiary so to do, all
lawful Indebtedness, obligations and claims for labor, materials and supplies or
otherwise which, if unpaid, could reasonably be expected to (a) have a Material
Adverse effect, or (b) become a Lien on the Property of the Borrower or any
Subsidiary, except those Liens permitted under Section 8.2, provided that
neither the Borrower nor such Subsidiary shall be required to pay or discharge
or cause to be paid or discharged any such Indebtedness, obligation or claim so
long as (i) the validity thereof shall be contested in good faith and by
appropriate proceedings diligently conducted by the Borrower or such Subsidiary,
and (ii) such reserve or other appropriate provision as shall be required by
GAAP shall have been made therefor.
 
SECTION 7.5 Condition of Property
 
Except for ordinary wear and tear, at all times, maintain, protect and keep in
good repair, working order and condition, all material Property necessary for
the operation of its business (other than Property which is replaced with
similar Property) as then being operated, and cause each Subsidiary so to do.
 
SECTION 7.6 Observance of Legal Requirements
 
Observe and comply in all material respects, and cause each Subsidiary so to do,
with all laws, ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and requirements of
all Governmental Authorities, which now or at any time hereafter may be
applicable to it or to such Subsidiary, a violation of which could reasonably be
expected to have a Material Adverse effect.
 
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SECTION 7.7 Financial Statements and Other Information
 
Maintain, and cause each Subsidiary to maintain, a standard system of accounting
in accordance with GAAP, and furnish to each Lender:
 
(a) As soon as available and, in any event, within 120 days after the close of
each fiscal year, a copy of (x) the Borrower’s 10-K in respect of such fiscal
year, and (y)(i) the Borrower’s Consolidated Balance Sheet as of the end of such
fiscal year, and (ii) the related Consolidated Statements of Operations,
Shareholders’ Equity and Cash Flows, as of and through the end of such fiscal
year, setting forth in each case in comparative form the corresponding figures
in respect of the previous fiscal year, all in reasonable detail, and
accompanied by a report of the Borrower’s auditors, which report shall state
that (A) such auditors audited such financial statements, (B) such audit was
made in accordance with generally accepted auditing standards in effect at the
time and provides a reasonable basis for such opinion, and (C) said financial
statements have been prepared in accordance with GAAP;
 
(b) As soon as available, and in any event within 60 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of (x) the
Borrower’s 10-Q in respect of such fiscal quarter, and (y)(i) the Borrower’s
Consolidated Balance Sheet as of the end of such quarter and (ii) the related
Consolidated Statements of Operations, Shareholders’ Equity and Cash Flows for
(A) such quarter and (B) the period from the beginning of the then current
fiscal year to the end of such quarter, in each case in comparable form with the
prior fiscal year, all in reasonable detail and prepared in accordance with GAAP
(without footnotes and subject to year-end adjustments);
 
(c) Simultaneously with the delivery of the financial statements required by
clauses (a) and (b) above, a certificate of the chief financial officer or
treasurer of the Borrower certifying that no Default or Event of Default shall
have occurred or be continuing or, if so, specifying in such certificate all
such Defaults and Events of Default, and setting forth computations in
reasonable detail demonstrating compliance with Section 8.1 and Section 8.9;
 
(d) Prompt notice upon the Borrower becoming aware of any change in a Pricing
Level;
 
(e) Promptly upon becoming available, copies of all regular or periodic reports
(including current reports on Form 8-K) which the Borrower or any Subsidiary may
now or hereafter be required to file with or deliver to the Securities and
Exchange Commission, or any other Governmental Authority succeeding to the
functions thereof, and copies of all material news releases sent to all
stockholders;
 
(f) Prompt written notice of: (i) any citation, summons, subpoena, order to show
cause or other order naming the Borrower or any Subsidiary a party to any
proceeding before any Governmental Authority which could reasonably be expected
to have a Material Adverse effect, and include with such notice a copy of such
citation, summons, subpoena, order to show cause or other order, (ii) any lapse
or other termination of any license, permit, franchise or other authorization
issued to the Borrower or any Subsidiary by any Governmental Authority,
(iii) any refusal by any Governmental Authority to renew or extend any license,
permit, franchise
 
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or other authorization, and (iv) any dispute between the Borrower or any
Subsidiary and any Governmental Authority, which lapse, termination, refusal or
dispute, referred to in clause (ii), (iii) or (iv) above, could reasonably be
expected to have a Material Adverse effect;
 
(g) Prompt written notice of the occurrence of (i) each Default, (ii) each Event
of Default and (iii) each Material Adverse change;
 
(h) Promptly upon receipt thereof, copies of any audit reports delivered in
connection with the statements referred to in Section 7.7(a);
 
(i) From time to time, such other information regarding the financial position
or business of the Borrower and the Subsidiaries as the Administrative Agent, at
the request of any Lender, may reasonably request; and
 
(j) Prompt written notice of such other information with documentation required
by bank regulatory authorities under applicable “know your customer” and
Anti-Money Laundering rules and regulations (including, without limitation, the
PATRIOT Act), as from time to time may be reasonably requested by the
Administrative Agent or any Lender.
 
SECTION 7.8 Records
 
Upon reasonable notice and during normal business hours, permit representatives
of the Administrative Agent and each Lender to visit the offices of the Borrower
and each Subsidiary, to examine the books and records (other than tax returns
and work papers related to tax returns) thereof and auditors’ reports relating
thereto, to discuss the affairs of the Borrower and each Subsidiary with the
respective officers thereof, and to meet and discuss the affairs of the Borrower
and each Subsidiary with the Borrower’s auditors.
 
SECTION 7.9 Authorizations
 
Maintain and cause each Subsidiary to maintain, in full force and effect, all
copyrights, patents, trademarks, trade names, franchises, licenses, permits,
applications, reports, and other authorizations and rights, which, if not so
maintained, would individually or in the aggregate have a Material Adverse
effect.
 
ARTICLE 8
 
NEGATIVE COVENANTS
 
The Borrower covenants and agrees that on and after the Effective Date and until
the payment in full of the Loans and all other sums and amounts which are
payable under the Loan Documents, the Borrower will not:
 
SECTION 8.1 Subsidiary Indebtedness
 
Permit the Indebtedness of all Subsidiaries (excluding the ESOP Guaranty) to
exceed (on a combined basis) 10% of Tangible Net Worth.
 
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SECTION 8.2 Liens
 
Create, incur, assume or suffer to exist any Lien against or on any Property now
owned or hereafter acquired by the Borrower or any of the Subsidiaries, or
permit any of the Subsidiaries so to do, except any one or more of the following
types of Liens: (a) Liens in connection with workers’ compensation, unemployment
insurance or other social security obligations (which phrase shall not be
construed to refer to ERISA or the minimum funding obligations under Section 412
of the Code), (b) Liens to secure the performance of bids, tenders, letters of
credit, contracts (other than contracts for the payment of Indebtedness),
leases, statutory obligations, surety, customs, appeal, performance and payment
bonds and other obligations of like nature, in each such case arising in the
ordinary course of business, (c) mechanics’, workmen’s, carriers’,
warehousemen’s, materialmen’s, landlords’ or other like Liens arising in the
ordinary course of business with respect to obligations which are not due or
which are being contested in good faith and by appropriate proceedings
diligently conducted, (d) Liens for taxes, assessments, fees or governmental
charges the payment of which is not required by Section 7.2, (e) easements,
rights of way, restrictions, leases of Property to others, easements for
installations of public utilities, title imperfections and restrictions, zoning
ordinances and other similar encumbrances affecting Property which in the
aggregate do not materially impair its use for the operation of the business of
the Borrower or such Subsidiary, (f) Liens on Property of the Subsidiaries under
capital leases and Liens on Property of the Subsidiaries acquired (whether as a
result of purchase, capital lease, merger or other acquisition) and either
existing on such Property when acquired, or created contemporaneously with or
within 12 months of such acquisition to secure the payment or financing of the
purchase price of such Property (including the construction, development,
substantial repair, alteration or improvement thereof), and any renewals
thereof, provided that such Liens attach only to the Property so purchased or
acquired (including any such construction, development, substantial repair,
alteration or improvement thereof) and provided further that the Indebtedness
secured by such Liens is permitted by Section 8.1, (g) statutory Liens in favor
of lessors arising in connection with Property leased to the Borrower or any of
the Subsidiaries, (h) Liens of attachments, judgments or awards against the
Borrower or any of the Subsidiaries with respect to which an appeal or
proceeding for review shall be pending or a stay of execution or bond shall have
been obtained, or which are otherwise being contested in good faith and by
appropriate proceedings diligently conducted, and in respect of which adequate
reserves shall have been established in accordance with GAAP on the books of the
Borrower or such Subsidiary, (i) Liens securing Indebtedness of a Subsidiary to
the Borrower or another Subsidiary, (j) Liens (other than Liens permitted by any
of the foregoing clauses) arising in the ordinary course of its business which
do not secure Indebtedness and do not, in the aggregate, materially detract from
the value of the business of the Borrower and its Subsidiaries, taken as a
whole, and (k) additional Liens securing Indebtedness of the Borrower and the
Subsidiaries in an aggregate outstanding Consolidated principal amount not
exceeding 10% of Tangible Net Worth.
 
SECTION 8.3 Dispositions
 
Make any Disposition, or permit any of its Subsidiaries so to do, of all or
substantially all of the assets of the Borrower and the Subsidiaries on a
Consolidated basis.
 
 
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SECTION 8.4 Merger or Consolidation, Etc.
 
The Borrower will not consolidate with, be acquired by, or merge into or with
any Person unless (x) immediately after giving effect thereto no Default or
Event of Default shall or would exist and (y) either (i) the Borrower or (ii) a
corporation organized and existing under the laws of one of the States of the
United States of America shall be the survivor of such consolidation or merger,
provided that if the Borrower is not the survivor, the corporation which is the
survivor shall expressly assume, pursuant to an instrument executed and
delivered to the Administrative Agent, and in form and substance satisfactory to
the Administrative Agent, all obligations of the Borrower under the Loan
Documents and the Administrative Agent shall have received such documents,
opinions and certificates as it shall have reasonable requested in connection
therewith.
 
SECTION 8.5 Acquisitions
 
Make any Acquisition, or permit any of the Subsidiaries so to do, except any one
or more of the following: (a) Intercompany Dispositions permitted by Section 8.3
and (b) Acquisitions by the Borrower or any of the Subsidiaries (including the
Caremark Acquisition), provided that immediately before and after giving effect
to each such Acquisition no Default or Event of Default shall or would exist.
 
SECTION 8.6 Restricted Payments
 
Make any Restricted Payment or permit any of the Subsidiaries so to do, except
any one or more of the following Restricted Payments: (a) any direct or indirect
Subsidiary may make dividends or other distributions to the Borrower or to any
other direct or indirect Subsidiary, and (b) the Borrower may make Restricted
Payments, provided that, in the case of this clause (b), immediately before and
after giving effect thereto, no Event of Default shall or would exist. Nothing
in this Section 8.6 shall prohibit or restrict the declaration or payment of
dividends in respect of the Series One ESOP Convertible Preferred Stock of the
Borrower. 
 
SECTION 8.7 Limitation on Upstream Dividends by Subsidiaries
 
Permit or cause any of the Subsidiaries to enter into or agree, or otherwise be
or become subject, to any agreement, contract or other arrangement (other than
this Agreement) with any Person (each a “Restrictive Agreement”) pursuant to the
terms of which (a) such Subsidiary is or would be prohibited from declaring or
paying any cash dividends on any class of its stock owned directly or indirectly
by the Borrower or any of the other Subsidiaries or from making any other
distribution on account of any class of any such stock (herein referred to as
“Upstream Dividends”), or (b) the declaration or payment of Upstream Dividends
by a Subsidiary to the Borrower or another Subsidiary, on an annual or
cumulative basis, is or would be otherwise limited or restricted (“Dividend
Restrictions”). Notwithstanding the foregoing, nothing in this Section 8.7 shall
prohibit:
 
(i) Dividend Restrictions set forth in any Restrictive Agreement in effect on
the date hereof and any extensions, refinancings, renewals or replacements
thereof, provided that the Dividend Restrictions in any such extensions,
refinancings,
 
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renewals or replacements are no less favorable in any material respect to the
Lenders than those Dividend Restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;
 
(ii) Dividend Restrictions existing with respect to any Person acquired by the
Borrower or any Subsidiary and existing at the time of such acquisition, which
Dividend Restrictions are not applicable to any Person or the property or assets
of any Person other than such Person or its property or assets acquired, and any
extensions, refinancings, renewals or replacements of any of the foregoing,
provided that the Dividend Restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Lenders than those Dividend Restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;
 
(iii) Dividend Restrictions consisting of customary net worth, leverage and
other financial covenants, customary covenants regarding the merger of or sale
of assets of a Subsidiary, customary restrictions on transactions with
affiliates, and customary subordination provisions governing Indebtedness owed
to the Borrower or any Subsidiary, in each case contained in, or required by,
any agreement governing Indebtedness incurred by a Subsidiary in accordance with
Section 8.1; or
 
(iv) Dividend Restrictions contained in any other credit agreement so long as
such Dividend Restrictions are no more restrictive than those contained in this
Agreement (including Dividend Restrictions contained in the Existing Credit
Agreements).
 
SECTION 8.8 Limitation on Negative Pledges
 
Enter into any agreement, other than (i) this Agreement, (ii) the Existing
Credit Agreements, (iii) any other credit agreement that is substantially
similar to this Agreement, and (iv) purchase money mortgages or capital leases
permitted by this Agreement (in which cases, any prohibition or limitation shall
only be effective against the assets financed thereby), or permit any Subsidiary
so to do, which prohibits or limits the ability of the Borrower or such
Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its
Property or revenues, whether now owned or hereafter acquired to secure the
obligations of the Borrower hereunder.
 
SECTION 8.9 Ratio of Consolidated Indebtedness to Total Capitalization
 
Permit its ratio of Consolidated Indebtedness to Total Capitalization at the end
of any fiscal quarter to exceed 0.6:1.0.
 
SECTION 8.10 Caremark Acquisition
 
(a) Amend the Caremark Merger Agreement if such amendment has the effect of
(i) increasing the purchase price to be paid by the Borrower thereunder by a
material amount, (ii) increasing the liabilities of the Borrower thereunder by a
material amount, or (iii) decreasing
 
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the assets being acquired thereunder by the Borrower by a material amount, in
each case, without the consent of the Administrative Agent.
 
(b) Waive any material condition to the obligations of the Borrower under the
Caremark Merger Agreement to consummate the transactions contemplated by the
Caremark Merger Agreement (except as provided in the Waiver Agreement) without
the consent of the Administrative Agent.
 
ARTICLE 9
 
DEFAULT
 
SECTION 9.1 Events of Default
 
The following shall each constitute an “Event of Default” hereunder:
 
(a) The failure of the Borrower to make any payment of principal on any Loan
when due and payable; or
 
(b) The failure of the Borrower to make any payment of interest on any Loan or
of the Fees on any date when due and payable and such default shall continue
unremedied for a period of 5 Domestic Business Days after the same shall be due
and payable; or
 
(c) The failure of the Borrower to observe or perform any covenant or agreement
contained in Section 2.4, Section 2.6(b) or Section 7.1 or in Article 8; or
 
(d) The failure of the Borrower to observe or perform any other covenant or
agreement contained in this Agreement, and such failure shall have continued
unremedied for a period of 30 days after the Borrower shall have become aware of
such failure; or
 
(e) [Intentionally Omitted]
 
(f) Any representation or warranty of the Borrower (or of any of its officers on
its behalf) made in any Loan Document, or made in any certificate, report,
opinion (other than an opinion of counsel) or other document delivered on or
after the date hereof shall in any such case prove to have been incorrect or
misleading (whether because of misstatement or omission) in any material respect
when made; or
 
(g) (i) Obligations in an aggregate Consolidated amount in excess of $25,000,000
of the Borrower (other than its obligations hereunder and under the Notes) and
the Subsidiaries, whether as principal, guarantor, surety or other obligor, for
the payment of any Indebtedness or any net liability under interest rate swap,
collar, exchange or cap agreements, (A) shall become or shall be declared to be
due and payable prior to the expressed maturity thereof, or (B) shall not be
paid when due or within any grace period for the payment thereof, or (ii) any
holder of any such obligations shall have the right to declare the Indebtedness
evidenced thereby due and payable prior to its stated maturity; or
 
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(h) An involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or of a substantial part
of its assets, under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall
be entered; or
 
(i) The Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Section 9.1, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing; or
 
(j) The Borrower or any Subsidiary shall (i) suspend or discontinue its business
(except for store closings in the ordinary course of business and except in
connection with a permitted Disposition under Section 8.3 and as may otherwise
be expressly permitted herein), or (ii) generally not be paying its debts as
such debts become due, or (iii) admit in writing its inability to pay its debts
as they become due; or
 
(k) Judgments or decrees in an aggregate Consolidated amount in excess of
$25,000,000 against the Borrower and the Subsidiaries shall remain unpaid,
unstayed on appeal, undischarged, unbonded or undismissed for a period of
60 days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any assets
of the Borrower or any Subsidiary to enforce any such judgment; or
 
(l) After the Effective Date a Change of Control shall occur; or
 
(m) (i) Any Termination Event shall occur (x) with respect to any Pension Plan
(other than a Multiemployer Plan) or (y) with respect to any other retirement
plan subject to Section 302 of ERISA or Section 412 of the Internal Revenue
Code, which plan, during the five year period prior to such Termination Event,
was the responsibility in whole or in part of the Borrower, any Subsidiary or
any ERISA Affiliate, provided that this clause (y) shall only apply if, in
connection with such Termination Event, it is reasonably likely that liability
in an aggregate Consolidated amount in excess of $25,000,000 will be imposed
upon the Borrower, any Subsidiary or any ERISA Affiliate; (ii) any Accumulated
Funding Deficiency, whether or not waived, in an aggregate Consolidated amount
in excess of $25,000,000 shall exist with respect to any Pension Plan (other
than that portion of a Multiemployer Plan’s Accumulated Funding Deficiency to
the extent such Accumulated Funding Deficiency is attributable to employers
other than Borrower, any Subsidiary or any ERISA Affiliate); (iii) any Person
shall engage in any Prohibited Transaction involving any Employee Benefit Plan;
(iv) the Borrower, any Subsidiary
 
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or any ERISA Affiliate shall fail to pay when due an amount which is payable by
it to the PBGC or to a Pension Plan (including a Multiemployer Plan) under
Title IV of ERISA; (v) the imposition of any tax under Section 4980(B)(a) of the
Internal Revenue Code; or (vi) the assessment of a civil penalty with respect to
any Employee Benefit Plan under Section 502(c) of ERISA; in each case, to the
extent such event or condition would have a Material Adverse effect.
 
SECTION 9.2  Remedies
 
(a)  Upon the occurrence of an Event of Default or at any time thereafter during
the continuance of an Event of Default, the Administrative Agent, at the written
request of the Required Lenders, shall notify the Borrower that the Commitments
have been terminated and/or that all of the Loans and the Notes and all accrued
and unpaid interest on any thereof and all other amounts owing under the Loan
Documents have been declared immediately due and payable, provided that upon the
occurrence of an Event of Default under Section 9.1(h), (i) or (j) with respect
to the Borrower, the Commitments shall automatically terminate and all of the
Loans and the Notes and all accrued and unpaid interest on any thereof and all
other amounts owing under the Loan Documents shall become immediately due and
payable without declaration or notice to the Borrower. To the fullest extent not
prohibited by law, except for the notice provided for in the preceding sentence,
the Borrower expressly waives any presentment, demand, protest, notice of
protest or other notice of any kind in connection with the Loan Documents and
its obligations thereunder. To the fullest extent not prohibited by law, the
Borrower further expressly waives and covenants not to assert any appraisement,
valuation, stay, extension, redemption or similar law, now or at any time
hereafter in force which might delay, prevent or otherwise impede the
performance or enforcement of the Loan Documents.
 
(b)  In the event that the Commitments shall have been terminated pursuant to
the provisions of Section 9.2(a) or all of the Loans and the Notes shall have
been declared due and payable pursuant to the provisions of Section 9.2(a), the
Administrative Agent and the Lenders agree, among themselves, that any funds
received from or on behalf of the Borrower under any Loan Document by any Lender
(except funds received by any Lender as a result of a purchase from such Lender
pursuant to the provisions of Section 11.9(b)) shall be remitted to the
Administrative Agent, and shall be applied by the Administrative Agent in
payment of the Loans and the other obligations of the Borrower under the Loan
Documents in the following manner and order: (1) first, to reimburse the
Administrative Agent and the Lenders, in that order, for any expenses due from
the Borrower pursuant to the provisions of Section 11.5, (2) second, to the
payment of the Fees, (3) third, to the payment of any expenses or amounts (other
than the principal of and interest on the Loans and the Notes) payable by the
Borrower to the Administrative Agent or any of the Lenders under the Loan
Documents, (4) fourth, to the payment, pro rata according to the outstanding
principal balance of the Loans of each Lender, of interest due on the Loans,
(5) fifth, to the payment, pro rata according to the outstanding principal
balance of the Loans of each Lender, of the aggregate outstanding principal
balance of the Loans, and (6) sixth, any remaining funds shall be paid to
whosoever shall be entitled thereto or as a court of competent jurisdiction
shall direct.
 
(c)  In the event that the Loans and the Notes shall have been declared due and
payable pursuant to the provisions of this Section 9.2, the Administrative Agent
upon the written
 
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request of the Required Lenders, shall proceed to enforce the rights of the
holders of the Loans and the Notes by suit in equity, action at law and/or other
appropriate proceedings, whether for payment or the specific performance of any
covenant or agreement contained in the Loan Documents. In the event that the
Administrative Agent shall fail or refuse so to proceed, each Lender shall be
entitled to take such action as the Required Lenders shall deem appropriate to
enforce its rights under the Loan Documents.
 
ARTICLE 10
 
AGENT
 
SECTION 10.1 Appointment
 
Each Lender hereby irrevocably designates and appoints LCPI as the
Administrative Agent of such Lender under this Agreement and the other Loan
Documents and each Lender irrevocably authorizes the Administrative Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary contained in this Agreement and the other Loan Documents, the
Administrative Agent shall not have any duties or responsibilities except those
expressly set forth in this Agreement and the other Loan Documents, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the Loan
Documents or otherwise exist against the Administrative Agent.
 
SECTION 10.2 Delegation of Duties
 
The Administrative Agent may execute any of its duties under this Agreement and
the other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to rely upon the advice of counsel concerning all matters pertaining to
such duties, and shall not be liable for any action taken or omitted to be taken
in good faith upon the advice of such counsel. The Administrative Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
 
SECTION 10.3 Exculpatory Provisions
 
Neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by the Administrative Agent or such Person
under or in connection with the Loan Documents (except the Administrative Agent
for its own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any party contained in the Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, the Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Loan Documents
 
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or for any failure of the Borrower or any other Person to perform its
obligations thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire into the observance or
performance of any of the covenants or agreements contained in, or conditions
of, the Loan Documents, or to inspect the Property, books or records of the
Borrower or any Subsidiary. The Administrative Agent shall not be under any
liability or responsibility to the Borrower or any other Person as a consequence
of any failure or delay in performance, or any breach, by any Lender of any of
its obligations under any of the Loan Documents. The Lenders acknowledge that
the Administrative Agent shall not be under any duty to take any discretionary
action permitted under the Loan Documents unless the Administrative Agent shall
be requested in writing to do so by the Required Lenders.
 
SECTION 10.4 Reliance by Administrative Agent
 
The Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, request, consent, certificate,
affidavit, opinion, letter, cablegram, telegram, fax, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall not be under any duty
to examine or pass upon the validity, effectiveness or genuineness of the Loan
Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Administrative Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The
Administrative Agent shall be fully justified in failing or refusing to take any
action not expressly required under the Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate. The Administrative Agent Agent shall in all cases be fully
protected in acting, or in refraining from acting, under the Loan Documents in
accordance with a request of the Required Lenders or, if required by Section
11.1, all Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Borrower, all the Lenders and all
future holders of the Notes.
 
SECTION 10.5 Notice of Default
 
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Administrative Agent
shall have received written notice thereof from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating such notice is a “Notice of Default.” In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action or give such
directions, or refrain from taking such action or giving such directions, with
respect to such Default or Event of Default as it shall deem to be in the best
interests of the Lenders.
 
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SECTION 10.6 Non-Reliance
 
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to such Lender and that no act by the
Administrative Agent hereafter, including any review of the affairs of the
Borrower or the Subsidiaries, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that such Lender has, independently and without
reliance upon any the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
evaluation of and investigation into the business, operations, Property,
financial and other condition and creditworthiness of the Borrower and the
Subsidiaries and has made its own decision to enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, evaluations and decisions in taking or not taking action under
the Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, Property, financial and other
condition and creditworthiness of the Borrower and the Subsidiaries. Each Lender
acknowledges that a copy of this Agreement and all exhibits and schedules hereto
have been made available to it and its individual counsel for review, and each
Lender acknowledges that it is satisfied with the form and substance thereof.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower or
the Subsidiaries which may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
 
SECTION 10.7 The Administrative Agent in Its Individual Capacity
 
LCPI and each of the affiliates thereof, may make loans to, accept deposits
from, issue letters of credit for the account of and generally engage in any
kind of business with the Borrower and the Subsidiaries as though it were not
the Administrative Agent. With respect to the Commitment made by it and each
Note issued to it (if any), the Administrative Agent shall have the same rights
and powers under the Loan Documents as any Lender and may exercise the same as
though it were not the Administrative Agent, and the term “Lender” and “Lenders”
shall include LCPI in its individual capacity.
 
SECTION 10.8 Successor Administrative Agent
 
If at any time the Administrative Agent deems it advisable, in its sole
discretion, it may submit to each Lender a written notification of its
resignation as Administrative Agent under the Loan Documents, such resignation
to be effective on the earlier to occur of (a) the thirtieth day after the date
of such notice, and (b) the date upon which any successor to the Administrative
Agent, in accordance with the provisions of this Section, shall have accepted in
writing its appointment as successor Administrative Agent. Upon any such
resignation, the Required Lenders shall have the right to appoint from among the
Lenders a successor
 
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Administrative Agent, which successor Administrative Agent, provided that no
Default or Event of Default shall then exist, shall be reasonably satisfactory
to the Borrower. If no such successor Administrative Agent shall have been so
appointed by the Required Lenders and accepted such appointment within 30 days
after the retiring Administrative Agent’s giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which successor Administrative Agent shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000. Upon the written acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall automatically become a party to this
Agreement and shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent’s rights, powers, privileges and duties as
Administrative Agent under the Loan Documents shall be terminated. The Borrower
and the Lenders shall execute such documents as shall be necessary to effect
such appointment. After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Article 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent. If at any time there shall not be a duly appointed and
acting Administrative Agent, upon notice duly given, the Borrower agrees to make
each payment when due under the Loan Documents directly to the Lenders entitled
thereto during such time.
 
SECTION 10.9 Arrangers, Co-Documentation Agents and Syndication Agent
 
None of the Arrangers, the Co-Documentation Agents or the Syndication Agent, in
their respective capacities as such, shall have any duties or responsibilities,
nor shall any such Person incur any liability under this Agreement or the other
Loan Documents.
 
ARTICLE 11
 
OTHER PROVISIONS
 
SECTION 11.1 Amendments, Waivers, Etc.
 
With the written consent of the Required Lenders, the Administrative Agent and
the Borrower may, from time to time, enter into written amendments, supplements
or modifications of the Loan Documents and, with the written consent of the
Required Lenders, the Administrative Agent on behalf of the Lenders may execute
and deliver to any such parties a written instrument waiving or consenting to
the departure from, on such terms and conditions as the Administrative Agent may
specify in such instrument, any of the requirements of the Loan Documents or any
Default or Event of Default and its consequences, provided that no such
amendment, supplement, modification, waiver or consent shall (i) increase the
Commitment Amount of any Lender without the consent of such Lender (provided
that no waiver of a Default or Event of Default shall be deemed to constitute
such an increase), (ii) extend the Commitment Period without the consent of each
Lender directly affected thereby, (iii) reduce the amount, or extend the time of
payment, of the Fees without the consent of each Lender directly affected
thereby, (iv) reduce the rate, or extend the time of payment of, interest on any
Loan or any Note
 
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(other than the applicability of any post-default increase in such rate of
interest) without the consent of each Lender directly affected thereby,
(v) reduce the amount, or extend the time of payment of any payment of principal
on any Loan or any Note without the consent of each Lender directly affected
thereby, (vi) decrease or forgive the principal amount of any Loan or any Note
without the consent of each Lender directly affected thereby, (vii) consent to
any assignment or delegation by the Borrower of any of its rights or obligations
under any Loan Document without the consent of each Lender, (viii) change the
provisions of this Section 11.1 without the consent of each Lender, (ix) change
the definition of Required Lenders without the consent of each Lender,
(x) change the several nature of the obligations of the Lenders without the
consent of each Lender, or (xi) change the sharing provisions among Lenders
without the consent of each Lender. Notwithstanding the foregoing, no such
amendment, supplement, modification, waiver or consent shall amend, modify or
waive any provision of Article 10 or otherwise change any of the rights or
obligations of the Administrative Agent under any Loan Document without the
written consent of the Administrative Agent. Any such amendment, supplement,
modification, waiver or consent shall apply equally to each of the Lenders and
shall be binding upon the parties to the applicable Loan Document, the Lenders,
the Administrative Agent and all future holders of the Loans and the Notes. In
the case of any waiver, the Borrower, the Lenders and the Administrative Agent
shall be restored to their former position and rights under the Loan Documents,
but any Default or Event of Default waived shall not extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
 
SECTION 11.2 Notices
 
Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:
 
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If to the Borrower:
 

 
CVS Corporation
  One CVS Drive  
Woonsocket, Rhode Island 02895
 
Attention:
Carol A. DeNale
    Vice President and Treasurer  
Facsimile:
(401) 770-5768
 
Telephone:
(401) 770-4407        
with a copy, in the case of a notice of Default or Event of Default, to:

 

  CVS Corporation   One CVS Drive   Woonsocket, Rhode Island 02895  
Attention:
Legal Department
 
Facsimile:
(401) 765-7887
 
Telephone:
(401) 765-1500

If to the Administrative Agent:
 

 
in the case of each Borrowing Request and each notice of prepayment under
Section 2.6:
     
Lehman Commercial Paper Inc.
c/o Lehman Brothers Inc.
745 Seventh Avenue, 16th Floor
New York, New York 10019
Attention: Maritza Ospina
Facsimile: (646) 758-4648
Telephone: (212) 526-6590
      and in all other cases:      
Lehman Commercial Paper Inc.
c/o Lehman Brothers Inc.
745 Seventh Avenue, 5th Floor
New York, New York 10019
Attention: Ahuva Schwager
Facsimile: (917) 522-0593
Telephone: (212) 526-7417

 
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If to the Syndication Agent:
 

 
Morgan Stanley Senior Funding, Inc.
1585 Broadway
New York, New York 10036
Attention: Nomi Clarke
Facsimile: (718) 233-2132
Telephone: (718) 754-7283

 
If to any Lender: to it at its address (or facsimile number) set forth in its
Administrative Questionnaire.
 
Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto (or, in the
case of any Lender, by notice to the Administrative Agent and the Borrower). All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt. Any party to a Loan Document may rely on signatures of the parties
thereto which are transmitted by fax or other electronic means as fully as if
originally signed.
 
SECTION 11.3 No Waiver; Cumulative Remedies
 
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege under
any Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
 
SECTION 11.4 Survival of Representations and Warranties
 
All representations and warranties made in the Loan Documents and in any
document, certificate or statement delivered pursuant thereto or in connection
therewith shall survive the execution and delivery of the Loan Documents.
 
SECTION 11.5 Payment of Expenses and Taxes; Indemnified Liabilities
 
The Borrower agrees, promptly upon presentation of a statement or invoice
therefor setting forth in reasonable detail the items thereof, and whether any
Loan is made, (a) to pay or reimburse the Administrative Agent and its
Affiliates for all its reasonable costs and expenses actually incurred in
connection with the development, syndication, preparation and execution of, and
any amendment, waiver, consent, supplement or modification to, the Loan
Documents, any documents prepared in connection therewith and the consummation
of the transactions contemplated thereby, whether such Loan Documents or any
such amendment, waiver, consent, supplement or modification to the Loan
Documents or any documents prepared in connection therewith are executed and
whether the transactions contemplated thereby are
 
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consummated, including the reasonable fees and disbursements of Special Counsel,
(b) to pay, indemnify, and hold any Credit Party harmless from any and all
recording and filing fees and any and all liabilities and penalties with respect
to, or resulting from any delay (other than penalties to the extent attributable
to the negligence of the applicable Credit Party in failing to pay such fees or
other liabilities when due) in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Loan Documents and any such other
documents, and (c) to pay, reimburse, indemnify and hold each Indemnified Person
harmless from and against any and all other liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever (including reasonable counsel
fees and disbursements of counsel (including the allocated costs of internal
counsel) and such local counsel as may be required) actually incurred with
respect to the enforcement, performance of, and preservation of rights under,
the Loan Documents (all the foregoing, collectively, the “Indemnified
Liabilities”) and, if and to the extent that the foregoing indemnity may be
unenforceable for any reason, the Borrower agrees to make the maximum payment
permitted under applicable law, provided that the Borrower shall have no
obligation hereunder to pay Indemnified Liabilities to an Indemnified Person to
the extent arising from its gross negligence or willful misconduct. The
agreements in this Section shall survive the termination of the Commitments and
the payment of the Loans and the Notes and all other amounts payable under the
Loan Documents.
 
SECTION 11.6 Lending Offices
 
Each Lender shall have the right at any time and from time to time to transfer
any Loan to a different office of such Lender, subject to Section 3.10.
 
SECTION 11.7 Successors and Assigns
 
(a) The provisions of the Loan Documents shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in the Loan Documents, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each Credit Party)
any legal or equitable right, remedy or claim under or by reason of any Loan
Document.
 
(b) Any Lender may assign all or a portion of its rights and obligations under
the Loan Documents (including all or a portion of its Commitment and the
applicable Loans at the time owing to it), to an Eligible Assignee, provided
that (i) except in the case of an assignment to a Lender or an Affiliate or an
Approved Fund of a Lender, each of the Borrower and the Administrative Agent
must give its prior written consent to such assignment (which consent shall not
be unreasonably withheld or delayed), (ii) except in the case of an assignment
to a Lender or an Affiliate or an Approved Fund of a Lender or an assignment of
the entire remaining amount of the assigning Lender’s Commitment or Loans, as
the case may be, the
 
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amount of the Commitment or Loans, as the case may be, of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance Agreement with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000, unless the Borrower and
the Administrative Agent otherwise consent (which consent shall not be
unreasonably withheld or delayed) and shall be for a pro rata portion of such
Lender’s then remaining Commitment, if any, and such Lender’s then outstanding
Loans, (iii) no assignments to the Borrower or any of its Affiliates shall be
permitted (and any attempted assignment or transfer to the Borrower or any of
its Affiliates shall be null and void), (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance Agreement together with, unless otherwise agreed by the
Administrative Agent, a processing and recordation fee of $3,500, and (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire, and provided further that any consent of the
Borrower otherwise required under this subsection shall not be required if an
Event of Default has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to subsection (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance Agreement, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance Agreement, have the rights and
obligations of a Lender under the Loan Documents, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance Agreement, be released from its obligations under the Loan Documents
(and, in the case of an Assignment and Acceptance Agreement covering all of the
assigning Lender’s rights and obligations under the Loan Documents, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 3.5, Section 3.6, Section 3.7, Section 3.10 and
Section 11.10). Except as otherwise provided under clause (iii) of this
subsection, any assignment or transfer by a Lender of rights or obligations
under the Loan Documents that does not comply with this subsection shall be
treated for purposes of the Loan Documents as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection 0 of
this Section.
 
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain a copy of each Assignment and Acceptance Agreement
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amount of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive absent clearly demonstrable error,
and the Borrower and each Credit Party may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Credit Party,
at any reasonable time and from time to time upon reasonable prior notice.
 
(d) Upon its receipt of a duly completed Assignment and Acceptance Agreement
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in subsection (b) of
this Section and any written consent to such assignment required by
subsection (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance Agreement and record the information contained
 
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therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
subsection.
 
(e)  Any Lender may, without the consent of the Borrower or any Credit Party,
sell participations to Eligible Assignees (each a “Participant”) in all or a
portion of such Lender’s rights and obligations under the Loan Documents
(including all or a portion of its Commitments and outstanding Loans owing to
it), provided that (i) such Lender’s obligations under the Loan Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Borrower and
the Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under the Loan Documents
and (iv) no participations to the Borrower or any of its Affiliates shall be
permitted (and any attempted participation to the Borrower or any of its
Affiliates shall be null and void). Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of any Loan Documents,
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the proviso to Section 11.1 that affects
such Participant. Subject to subsection (f) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Section 3.5,
Section 3.6, Section 3.7 and Section 3.10 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.9(a) as though it were a Lender, provided
that such Participant agrees to be subject to Section 11.9(b) as though it were
a Lender.
 
(f)  A Participant shall not be entitled to receive any greater payment under
Section 3.6, Section 3.7 or Section 3.10 than the Lender that sold the
participation to such Participant would have been entitled to receive with
respect to the interest in the Loan Documents subject to the participation sold
to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 3.10 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 3.10(b) as though it were a Lender.
 
(g) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under the Loan Documents to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest, provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations under the Loan
Documents or substitute any such pledgee or assignee for such Lender as a party
hereto.
 
(h) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to an Eligible SPC the option to fund all or any
part of any Loan that such Granting Lender would otherwise be obligated to fund
pursuant to this Agreement,
 
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provided that (i) such designation shall not be effective unless the Borrower
consents thereto (which consent shall not be unreasonably withheld),
(ii) nothing herein shall constitute a commitment by any Eligible SPC to fund
any Loan, and (iii) if an Eligible SPC elects not to exercise such option or
otherwise fails to fund all or any part of such Loan, the Granting Lender shall
be obligated to fund such Loan pursuant to the terms hereof. The funding of a
Loan by an Eligible SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Loan were funded by such Granting
Lender. As to any Loans or portion thereof made by it, each Eligible SPC shall
have all the rights that a Lender making such Loans or portion thereof would
have had under this Agreement and otherwise, provided that (x) its voting rights
under this Agreement shall be exercised solely by its Granting Lender and
(y) its Granting Lender shall remain solely responsible to the other parties
hereto for the performance of such Granting Lender’s obligations under this
Agreement, including its obligations in respect of the Loans or portion thereof
made by it. Each Granting Lender shall act as administrative agent for its
Eligible SPC and give and receive notices and other communications on its
behalf. Any payments for the account of any Eligible SPC shall be paid to its
Granting Lender as administrative agent for such Eligible SPC and neither the
Borrower nor the Administrative Agent shall be responsible for any Granting
Lender’s application of such payments. Each party hereto hereby agrees that no
Eligible SPC shall be liable for any indemnity or payment under this Agreement
for which a Lender would otherwise be liable for so long as, and to the extent,
the Granting Lender provides such indemnity or makes such payment.
Notwithstanding anything to the contrary contained in this Agreement, any
Eligible SPC may (i) at any time, subject to payment of the processing and
recordation fee referred to in Section 11.7(b), assign all or a portion of its
interests in any Loans to its Granting Lender (but nothing contained herein
shall be construed in derogation of the obligation of the Granting Lender to
make Loans hereunder) or to any financial institutions providing liquidity
and/or credit support to or for the account of such Eligible SPC to support the
funding or maintenance of Loans, and (ii) disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or guarantee or credit or
liquidity enhancements to such Eligible SPC. This Section may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Loans is being funded by an Eligible SPC at the time of such amendment.
 
SECTION 11.8 Counterparts
 
Each of the Loan Documents (other than the Notes) may be executed on any number
of separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same agreement. It shall not be necessary in
making proof of any Loan Document to produce or account for more than one
counterpart signed by the party to be charged. A set of the copies of this
Agreement signed by all of the parties hereto shall be lodged with each of the
Borrower and the Administrative Agent. Any party to a Loan Document may rely
upon the signatures of any other party thereto which are transmitted by fax or
other electronic means to the same extent as if originally signed.
 
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SECTION 11.9  Set-off and Sharing of Payments
 
(a)  In addition to any rights and remedies of the Lenders provided by law, upon
the occurrence of an Event of Default under Section 9.1(a) or (b) or upon the
acceleration of the Loans, each Lender shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower,
to set-off and apply against any indebtedness or other liability, whether
matured or unmatured, of the Borrower to such Lender arising under the Loan
Documents, any amount owing from such Lender to the Borrower. To the extent
permitted by applicable law, the aforesaid right of set-off may be exercised by
such Lender against the Borrower or against any trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor of the Borrower, or
against anyone else claiming through or against the Borrower or such trustee in
bankruptcy, custodian, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance of, service
upon such Lender of, or notice to such Lender of, any petition, assignment for
the benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after each
such set-off and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
 
(b)  If any Lender (each a “Benefited Lender”) shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of its Loans or its Notes in excess of its pro rata share
(in accordance with the outstanding principal balance of all Loans) of payments
then due and payable on account of the Loans and Notes received by all the
Lenders, such Lender shall forthwith purchase, without recourse, for cash, from
the other Lenders such participations in their Loans and Notes as shall be
necessary to cause such purchasing Lender to share the excess payment with each
of them according to their pro rata share (in accordance with the outstanding
principal balance of all Loans), provided that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and each such Lender shall repay to
the purchasing Lender the purchase price to the extent of such recovery,
together with an amount equal to such Lender’s pro rata share (according to the
proportion of (i) the amount of such Lender’s required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees, to the fullest extent permitted by law, that
any Lender so purchasing a participation from another Lender pursuant to this
Section may exercise such rights to payment (including the right of set-off)
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
 
SECTION 11.10  Indemnity
 
(a)  The Borrower shall indemnify each Credit Party and each Related Party
thereof (each such Person being called an “Indemnified Person”) against, and
hold each Indemnified Person harmless from, any and all losses, claims, damages,
liabilities and related
 
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expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnified Person, incurred by or asserted against any
Indemnified Person arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the transactions
contemplated hereby or any other transactions contemplated thereby (including
the Caremark Acquisition), (ii) any Loan or the use of the proceeds thereof,
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the Borrower or any of the Subsidiaries,
or any Environmental Liability related in any way to the Borrower or any of the
Subsidiaries or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnified Person is a party
thereto, provided that such indemnity shall not, as to any Indemnified Person,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted primarily from the gross negligence
or willful misconduct of such Indemnified Person. Notwithstanding the above, the
Borrower shall have no liability under clause (i) of this Section to indemnify
or hold harmless any Indemnified Person for any losses, claims, damages,
liabilities and related expenses relating to income or withholding taxes or any
tax in lieu of such taxes.
 
(b)  To the extent that the Borrower fails to promptly pay any amount required
to be paid by it to the Administrative Agent under subsection (a) of this
Section, each Lender severally agrees to pay to the Administrative Agent an
amount equal to the product of such unpaid amount multiplied by (i) at any time
prior to the making of Loans pursuant to Section 2.1(a) or at any time when
Loans are outstanding, its Pro Rata Percentage and (ii) if the Loans have been
repaid in full, its Pro Rata Percentage on the last day on which such Loans were
outstanding (in each case with respect to clause (ii) immediately above,
determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought), provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as applicable, was incurred by or
asserted against the Administrative Agent in its capacity as such.
 
(c)  The obligations of the Borrower and the Lenders under this Section 11.10
shall survive the termination of the Commitments and the payment or repayment of
the Loans and the Notes and all other amounts payable under the Loan Documents.
 
(d)  To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnified Person, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct and actual damages) arising out of, in connection with, or as a result
of, any Loan Document or any agreement, instrument or other document
contemplated thereby, the transactions contemplated hereby or any Loan or the
use of the proceeds thereof.
 
SECTION 11.11  Governing Law
 
The Loan Documents and the rights and obligations of the parties thereto shall
be governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
 
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SECTION 11.12  Severability
 
Every provision of the Loan Documents is intended to be severable, and if any
term or provision thereof shall be invalid, illegal or unenforceable for any
reason, the validity, legality and enforceability of the remaining provisions
thereof shall not be affected or impaired thereby, and any invalidity,
illegality or unenforceability in any jurisdiction shall not affect the
validity, legality or enforceability of any such term or provision in any other
jurisdiction.
 
SECTION 11.13  Integration
 
All exhibits to the Loan Documents shall be deemed to be a part thereof. Each
Loan Document embodies the entire agreement and understanding between or among
the parties thereto with respect to the subject matter thereof and supersedes
all prior agreements and understandings between or among the parties thereto
with respect to the subject matter thereof.
 
SECTION 11.14  Treatment of Certain Information
 
Each Credit Party agrees to maintain as confidential and not to disclose,
publish or disseminate to any third parties any financial or other information
relating to the business, operations and condition, financial or otherwise, of
the Borrower provided to it, except if and to the extent that:
 
(a)  such information is in the public domain at the time of disclosure;
 
(b)  such information is required to be disclosed by subpoena or similar process
or applicable law or regulations;
 
(c)  such information is required or requested to be disclosed to any regulatory
or administrative body or commission to whose jurisdiction it may be subject;
 
(d)  such information is disclosed to its counsel, auditors or other
professional advisors;
 
(e)  such information is disclosed to (and, unless and until it receives written
objection from the Borrower, the Borrower shall be deemed to have consented to
disclosure of such information to) its affiliates (and its affiliates’ officers,
directors and employees), provided that such information shall be used in
connection with this Agreement and the transactions contemplated hereby;
 
(f)  such information is disclosed to its officers, directors and employees;
 
(g)  such information is disclosed with the prior written consent of the party
furnishing the information;
 
(h)  such information is disclosed in connection with any litigation or dispute
involving the Borrower and/or it;
 
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(i)  such information is disclosed in connection with the sale of a
participation or other disposition by it of any of its interest in this
Agreement, provided that such information shall not be disclosed unless and
until the party to whom it shall be disclosed shall have agreed to keep such
information confidential as set forth herein;
 
(j)  such information was in its possession or in its affiliate’s possession as
shown by clear and convincing evidence prior to any of the Borrower and/or any
or the Borrower’s representatives or agents furnishing such information to it;
or
 
(k)  such information is received by it, without restriction as to its
disclosure or use, from a Person who, to its knowledge or reasonable belief, was
not prohibited from disclosing such information by any duty of confidentiality.
 
Except to the extent prohibited or restricted by law or Governmental Authority,
each Lender shall notify the Borrower promptly of any disclosures of information
made by it as permitted pursuant to (h) above.
 
SECTION 11.15  Acknowledgments
 
The Borrower acknowledges that (a) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents, (b) by virtue of the
Loan Documents, neither the Administrative Agent nor any Lender has any
fiduciary relationship to the Borrower, and the relationship between the
Administrative Agent and the Lenders, on the one hand, and the Borrower, on the
other hand, is solely that of debtor and creditor, and (c) by virtue of the Loan
Documents, no joint venture exists among the Lenders or among the Borrower and
the Lenders.
 
SECTION 11.16  Consent to Jurisdiction
 
The Borrower irrevocably submits to the non-exclusive jurisdiction of any New
York State or Federal Court sitting in the City of New York over any suit,
action or proceeding arising out of or relating to the Loan Documents. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such a court and any claim that any
such suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. The Borrower agrees that a final judgment in any such suit,
action or proceeding brought in such a court, after all appropriate appeals,
shall be conclusive and binding upon it.
 
SECTION 11.17  Service of Process
 
The Borrower agrees that process may be served against it in any suit, action or
proceeding referred to in Section 11.16 by sending the same by first class mail,
return receipt requested or by overnight courier service, with receipt
acknowledged, to the address of the Borrower set forth in Section 11.2. The
Borrower agrees that any such service (i) shall be deemed in every respect
effective service of process upon it in any such suit, action, or proceeding,
and (ii) shall to the fullest extent enforceable by law, be taken and held to be
valid personal service upon and personal delivery to it.
 
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SECTION 11.18  No Limitation on Service or Suit
 
Nothing in the Loan Documents or any modification, waiver, or amendment thereto
shall affect the right of the Administrative Agent or any Lender to serve
process in any manner permitted by law or limit the right of the Administrative
Agent or any Lender to bring proceedings against the Borrower in the courts of
any jurisdiction or jurisdictions.
 
SECTION 11.19  WAIVER OF TRIAL BY JURY
 
EACH CREDIT PARTY AND THE BORROWER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY. FURTHER, THE BORROWER HEREBY CERTIFIES THAT
NO REPRESENTATIVE OR AGENT OF ANY CREDIT PARTY, OR COUNSEL TO THE ANY CREDIT
PARTY, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY CREDIT PARTY WOULD NOT,
IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY
TRIAL PROVISION. THE BORROWER ACKNOWLEDGES THAT EACH CREDIT PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS
SECTION.
 
SECTION 11.20  Effective Date
 
This Agreement shall be effective at such time (the “Effective Date”) as the
Administrative Agent shall have received executed counterparts hereof by the
Borrower, the Administrative Agent and each Lender and the conditions set forth
in Section 5.1, Section 5.2 and Section 5.3 have been or simultaneously will be
satisfied, provided that this Agreement shall not become effective or be binding
on any party hereto unless all of such conditions are satisfied not later than
November 1, 2007.
 
SECTION 11.21  PATRIOT Act Notice
 
Each Lender and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “PATRIOT Act”), it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of
the Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower in accordance with
the PATRIOT Act.
 
[Signature Pages Follow]
 
60

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the parties hereto, by their respective officers thereunto
duly authorized, have executed this Agreement on the date first above written.
 

CVS CORPORATION           By: /s/ Carol A. DeNale     Name: Carol A. DeNale     
Title: Vice President and Treasurer   

 

--------------------------------------------------------------------------------

 
LEHMAN BROTHERS INC.,
   as Arranger
          By: /s/ Claire O’Connor     Name: Claire O’Connor      Title: Managing
Director   

 

--------------------------------------------------------------------------------

 

LEHMAN COMMERCIAL PAPER INC.,
   as Administrative Agent and a Lender         By: /s/ Claire O’Connor    
Name: Claire O’Connor      Title: Managing Director   

 

--------------------------------------------------------------------------------

 

MORGAN STANLEY SENIOR FUNDING, INC.,
   as Arranger, Syndication Agent and a Lender         By: /s/ Elizabeth
Hendricks     Name: Elizabeth Hendricks      Title: Vice President    

 

--------------------------------------------------------------------------------

 

THE BANK OF NEW YORK, as Co-
   Documentation Agent and a Lender         By: /s/ Erin Morrissey     Name:
Erin Morrissey      Title: Assistant Vice President   

 

--------------------------------------------------------------------------------

 

BANK OF AMERICA, N.A., as Co-
   Documentation Agent and a Lender         By: /s/ John Pocalyko     Name: John
Pocalyko       Title: Senior Vice President   

 

--------------------------------------------------------------------------------

 

WACHOVIA BANK, NATIONAL ASSOCIATION,
   as Co-Documentation Agent and a Lender         By: /s/ Denis Waltrich    
Name: Denis Waltrich      Title: Vice President   

 

--------------------------------------------------------------------------------

 

ABN AMRO Bank N.V., as a Lender         By: /s/ Tracie Elliot     Name: Tracie
Elliot      Title: Senior Vice President            By: /s/ Thomas T. Rogers    
Name: Thomas T. Rogers     Title: Managing Director  

 

--------------------------------------------------------------------------------

 

Branch Banking and Trust Company, as a Lender         By: /s/ Eric Searls    
Name: Eric Searls      Title: Assistant Vice President   

 

--------------------------------------------------------------------------------

 

HSBC Bank USA, as a Lender         By: /s/ Michael Frawley     Name: Michael
Frawley      Title: Senior Vice President   

 

--------------------------------------------------------------------------------

 
KeyBank National Association, as a Lender
        By: /s/ Marianne T. Meil     Name: Marianne T. Meil      Title: Senior
Vice President   

 

--------------------------------------------------------------------------------

 

Mizuho Corporate Bank, Ltd., as a Lender         By: /s/ Bertram H. Tang    
Name: Bertram H. Tang       Title: Senior Vice President & Team Leader   

 

--------------------------------------------------------------------------------

 

SUMITOMO MITSUI BANKING
   CORPORATION, as a Lender         By: /s/ David A. Buck     Name: David A.
Buck      Title: Senior Vice President   

 

--------------------------------------------------------------------------------

 

SunTrust Bank, as a Lender           By: /s/ John N. Gregg, Jr.     Name: John
N. Gregg, Jr.      Title: Managing Director   

 

--------------------------------------------------------------------------------

 

US Bank, N.A., as a Lender           By: /s/ David J. Dannemiller     Name:
David J. Dannemiller      Title: Vice President   

 

--------------------------------------------------------------------------------

 

Wells Fargo Bank, N.A., as a Lender           By: /s/ Megan Donnelly     Name:
Megan Donnelly      Title: Vice President   

 

--------------------------------------------------------------------------------

 
BRIDGE CREDIT AGREEMENT
 
EXHIBIT A
 
COMMITMENTS
 
Lender
Commitment
Lehman Commercial Paper Inc.
$935,000,000
Morgan Stanley Senior Funding, Inc.
935,000,000
The Bank of New York
810,000,000
Bank of America, N.A.
810,000,000
Wachovia Bank, National Association.
810,000,000
ABN AMRO Bank
250,000,000
KeyBank
250,000,000
SunTrust Bank
250,000,000
HSBC
122,000,000
Mizuho
122,000,000
Sumitomo Mitsui Bank
122,000,000
US Bank
122,000,000
Wells Fargo Bank
122,000,000
BB&T
90,000,000
     Total:
$5,750,000,000

 

--------------------------------------------------------------------------------

 
BRIDGE CREDIT AGREEMENT
 
EXHIBIT B
 
FORM OF NOTE
 

 
[                      ], 2007
 
New York, New York

 
FOR VALUE RECEIVED, the undersigned, CVS CORPORATION, a Delaware corporation
(the “Borrower”), hereby promises to pay to the order of
_________________________ (the “Lender”) the outstanding principal balance of
the Lender’s Loan, together with interest thereon, at the rate or rates, in the
amounts and at the time or times set forth in the Bridge Credit Agreement (as
the same may be amended, supplemented or otherwise modified from time to time,
the “Bridge Credit Agreement”), dated as of March [___], 2007, by and among the
Borrower, the Lenders party thereto, Lehman Brothers Inc. and Morgan Stanley
Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan
Stanley Senior Funding, Inc., as syndication agent, The Bank of New York, Bank
of America, N.A. and Wachovia Bank, National Association, as co-documentation
agents, and Lehman Commercial Paper Inc., as administrative agent (in such
capacity, the “Administrative Agent”), in each case at the office of the
Administrative Agent located at 745 Seventh Avenue, New York, New York, or at
such other place as the Administrative Agent may specify from time to time, in
lawful money of the United States of America in immediately available funds.

Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Bridge Credit Agreement.

The Loan evidenced by this Note is prepayable in the amounts, and on the dates,
set forth in the Bridge Credit Agreement. This Note is one of the Notes under
the Bridge Credit Agreement, and is subject to, and shall be construed in
accordance with, the provisions thereof, and is entitled to the benefits set
forth in the Loan Documents.

The Lender is hereby authorized to record on the schedule annexed hereto, and
any continuation sheets which the Lender may attach thereto (a) the date and
amount of the Loan made by the Lender, (b) the Eurodollar Interest Period for
the Loan (Eurodollar Advance only) made by the Lender, (c) the Type of the Loan
made by the Lender as an ABR Advance, a Eurodollar Advance, or a combination
thereof, (d) the Eurodollar Rate applicable to the Loan (Eurodollar Advance
only) made by the Lender and (e) the date and amount of each Conversion of the
Loan made by the Lender, and each payment or prepayment of principal of, the
Loan made by the Lender. The failure to so record or any error in so recording
shall not affect the obligation of the Borrower to repay the Loan, together with
interest thereon, as provided in the Bridge Credit Agreement.

B-1

--------------------------------------------------------------------------------

 
Except as specifically otherwise provided in the Bridge Credit Agreement, the
Borrower hereby waives presentment, demand, notice of dishonor, protest, notice
of protest and all other demands, protests and notices in connection with the
execution, delivery, performance, collection and enforcement of this Note.

This Note is being delivered in, is intended to be performed in, shall be
construed and interpreted in accordance with, and be governed by the laws of,
the State of New York.

This Note may only be amended by an instrument in writing executed pursuant to
the provisions of Section 11.1 of the Bridge Credit Agreement.

        CVS CORPORATION  
   
   
    By:      

--------------------------------------------------------------------------------

Name:   Title 

 
B-2

--------------------------------------------------------------------------------

SCHEDULE TO NOTE
 
Date of
Loan
Type
and
Amount
of Loan
Eurodollar
Interest
Period
(Eurodollar
Advance only)
Type of
Loan
(ABR or Eurodollar)
Eurodollar
Rate
(Eurodollar
Advance only)
Date and
Amount of
Conversion of Loan
Date and
Amount of
Principal
Payment or Prepayment
Notation
Made by
                                                                               
                                                                               
                                                                               

--------------------------------------------------------------------------------

 
BRIDGE CREDIT AGREEMENT
 
EXHIBIT C
 
FORM OF BORROWING REQUEST
 
[Date]
 
Lehman Commercial Paper Inc., as Administrative Agent
745 Seventh Avenue, 5th Floor
New York, New York 10019
Attention: Maritza Ospina
 
Re:
Bridge Credit Agreement, dated as of March [___], 2007, by and among CVS
Corporation, the Lenders party thereto, Lehman Brothers Inc. and Morgan Stanley
Senior Funding, Inc., as Arrangers, Morgan Stanley Senior Funding, Inc., as
Syndication Agent, The Bank of New York, Bank of America, N.A. and Wachovia
Bank, National Association, as co-documentation agents, and Lehman Commercial
Paper Inc., as Administrative Agent (as amended, supplemented or otherwise
modified from time to time, “Bridge Credit Agreement”)

 
Capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Bridge Credit Agreement. 
 
Pursuant to Section 2.2 of the Credit Agreement, the Borrower hereby gives
notice of its intention to borrow Loans in the aggregate sum of $____________ on
____________, which borrowing shall consist of the following:
 
 
ABR Advance or
Eurodollar Advance
 
 
Amount
Eurodollar Interest Period
(applicable only for a
Eurodollar Advance)
                             

The Borrower hereby represents and warrants that on the Borrowing Date set forth
above, and after giving effect to the Loans requested hereby:
 
C-1

--------------------------------------------------------------------------------

 
(a) There shall exist no Default or Event of Default.
 
(b) The representations and warranties contained in the Bridge Credit Agreement
shall be true and correct, except those which are expressly specified to be made
as of an earlier date.
 
The Borrower hereby instructs the Administrative Agent to deposit the proceeds
of the Loans to the following account of the Borrower:
 

 
Account Name:
Account Number
Bank Name:
Bank Address:
ABA Number:
Contact Name:

 
[Remainder of page intentionally left blank]
 
 
 
C-2

--------------------------------------------------------------------------------

 
IN EVIDENCE of the foregoing, the undersigned has caused this Borrowing Request
to be duly executed on its behalf.
 

        CVS CORPORATION  
   
   
    By:      

--------------------------------------------------------------------------------

Name:   Title 

 
 
C-3

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BRIDGE CREDIT AGREEMENT
 
EXHIBIT D-1
 
FORM OF OPINION
 
[              ], 2007
 
The Lenders and
the Administrative Agent Referred to Below
c/o Lehman Commercial Paper Inc.,
as Administrative Agent
745 Seventh Avenue
New York, New York 10019
 
Ladies and Gentlemen:
 
I am general counsel of CVS Corporation, a Delaware corporation (the
“Borrower”), and have acted as such in connection with the Bridge Credit
Agreement, dated as of March [___], 2007, by and among the Borrower, the Lenders
party thereto, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as
Arrangers, Morgan Stanley Senior Funding, Inc., as Syndication Agent, Lehman
Commercial Paper Inc., as Administrative Agent, and The Bank of New York, Bank
of America, N.A. and Wachovia Bank, National Association, as Co-Documentation
Agents (as in effect on the date hereof, the “Bridge Credit Agreement”).
Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Bridge Credit Agreement.
 
I have examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion. In rendering my opinions set forth below, I have assumed (i) the due
authorization, execution and delivery by all parties thereto (other than the
Borrower) of the Bridge Credit Agreement, (ii) the authenticity of all documents
submitted to me as originals and (iii) the conformity to original documents of
all documents submitted to me as copies.
 
Based upon the foregoing, I am of the opinion that:
 
1.  The Borrower is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. The Borrower has all
requisite corporate power and authority to own its Property and to carry on its
business as now conducted.
 
D-1-1

--------------------------------------------------------------------------------

 
2.  The Borrower is qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which it owns or leases real Property or
in which the nature of its business requires it to be so qualified (except those
jurisdictions where the failure to be so qualified or to be in good standing
could not reasonably be expected to have a Material Adverse effect).
 
3.  The execution, delivery and performance by the Borrower of the Bridge Credit
Agreement and the Notes are within the Borrower’s corporate powers and have been
duly authorized by all necessary corporate action on the part of the Borrower.
 
4.  The execution, delivery and performance by the Borrower of the Bridge Credit
Agreement and Notes do not require any action or approval on the part of the
shareholders of the Borrower or any action by or in respect of, or filing with,
any governmental body, agency or official under United States federal law or the
Delaware General Corporation Law, and do not contravene, or constitute a default
under, any provision of (i) United States federal law or the Delaware General
Corporation Law, (ii) the Certificate of Incorporation or bylaws of the Borrower
or (iii) any existing material mortgage, material indenture, material contract
or material agreement, in each case binding on the Borrower or any Subsidiary or
affecting the Property of the Borrower or any Subsidiary.
 
5.  The Bridge Credit Agreement and the Notes delivered by the Borrower on or
prior to the date hereof have been duly executed and delivered by the Borrower
and each constitutes the valid and binding agreement of the Borrower, in each
case enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect affecting the enforcement of creditors’ rights
generally and to general principles of equity.
 
6.  The Borrower is not an “investment company” (as such term is defined in the
United States Investment Company Act of 1940, as amended).
 
7.  To the best of my knowledge, there are no actions, suits, arbitration
proceedings or claims (whether purportedly on behalf of the Borrower, any
Subsidiary or otherwise) pending or threatened against the Borrower or any
Subsidiary or any of their respective Properties, or maintained by the Borrower
or any Subsidiary, at law or in equity, before any Governmental Authority which
could reasonably be expected to have a Material Adverse effect. To the best of
my knowledge, there are no proceedings pending or threatened against the
Borrower or any Subsidiary (a) which call into question the validity or
enforceability of, or otherwise seek to invalidate, any Loan Document or (b)
which could reasonably be expected to, individually or in the aggregate,
materially and adversely affect any of the transactions contemplated by any Loan
Document.
 
8.  To the best of my knowledge, the Borrower is not in default under any
agreement to which it is a party or by which it or any of its Property is bound
the effect of which could reasonably be expected to have a Material Adverse
effect.
 
D-1-2

--------------------------------------------------------------------------------

 
9.  To the best of my knowledge, no provision of any judgment, decree or order,
in each case binding on the Borrower or any Subsidiary or affecting the Property
of the Borrower or any Subsidiary conflicts with, or requires any consent which
has not already been obtained under, or would in any way prevent the execution,
delivery or performance by the Borrower of the terms of, any Loan Document.
 
The foregoing opinion is subject to the following qualifications:
 
(a)  I express no opinion as to the effect (if any) of any law of any
jurisdiction (except the Commonwealth of Massachusetts) in which any Lender is
located which may limit the rate of interest that such Lender may charge or
collect.
 
(b)  I express no opinion as to provisions in the Bridge Credit Agreement which
purport to create rights of set-off in favor of participants or which provide
for set-off to be made otherwise than in accordance with applicable laws.
 
(c)  I note that public policy considerations or court decisions may limit the
rights of any party to obtain indemnification under the Bridge Credit Agreement.
 
I am a member of the bar of the Commonwealth of Massachusetts and the foregoing
opinion is limited to the laws of the Commonwealth of Massachusetts, the federal
law of the United States of America and the Delaware General Corporation Law.
For purposes of paragraph 5 of this opinion, I have assumed that, with your
permission and without any research or investigation, the laws of the State of
New York are identical to the law of the Commonwealth of Massachusetts.
 
This opinion is rendered solely to you in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or relied upon by
any other person without my prior written consent, except that any person that
becomes a Lender in accordance with the provisions of the Bridge Credit
Agreement may rely upon this opinion as if it were specifically addressed and
delivered to such person on the date hereof.
 
Very truly yours,
 
 
D-1-3

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BRIDGE CREDIT AGREEMENT
 
EXHIBIT D-2
 
FORM OF OPINION
 
[              ], 2007
 
The Lenders and
the Administrative Agent Referred to Below
c/o Lehman Commercial Paper Inc.,
as Administrative Agent
745 Seventh Avenue
New York, New York 10019
 
Re: CVS Corporation
 
Ladies and Gentlemen:
 
We have acted as special New York counsel to CVS Corporation, a Delaware
corporation (the “Company”), in connection with the Bridge Credit Agreement,
dated as of March [___], 2007, among the Company, the lenders listed on the
signature pages thereof (the “Lenders”), Lehman Brothers Inc. and Morgan Stanley
Senior Funding, Inc., as joint lead arrangers and joint bookrunners (in such
capacity, the “Arrangers”), Morgan Stanley Senior Funding, Inc., as syndication
agent (in such capacity, the “Syndication Agent”), Lehman Commercial Paper Inc.,
as administrative agent (in such capacity, the “Administrative Agent”), and The
Bank of New York, Bank of America, N.A. and Wachovia Bank, National Association,
as co-documentation agents (in such capacity, the “Co-Documentation Agents”) (as
in effect on the date hereof, the “Bridge Credit Agreement”). Capitalized terms
defined in the Bridge Credit Agreement and not otherwise defined herein are used
herein as therein defined.
 
We have reviewed an executed copy of the Bridge Credit Agreement. In addition,
we have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments, and have conducted such other investigations of
fact and law, as we have deemed necessary or advisable for purposes of this
opinion.
 
Based upon the foregoing, and subject to the qualifications and assumptions set
forth herein, we are of the opinion that (i) the Bridge Credit Agreement
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, and (ii) the execution, delivery and
performance by the Company of the Bridge Credit Agreement (x) require no consent
or other action by or in respect of, or filing with, any gov-
 
D-2-1

--------------------------------------------------------------------------------

 
ernmental body, agency or official under New York State law, and (y) do not
contravene, or constitute a default under, any provision of New York State law
or regulation that in our experience is normally applicable to general business
corporations in relation to transactions of the type contemplated by the Bridge
Credit Agreement.
 
The foregoing opinions are subject to the following qualifications and
assumptions:
 
(a) Our opinions are subject to the effects of applicable bankruptcy, insolvency
and similar laws affecting creditors’ rights generally and equitable principles
of general applicability, and the enforceability of indemnification provisions
may be limited by Federal or State laws or policies underlying such laws.
 
(b) We express no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any Lender is located that
may limit the rate of interest that such Lender may charge or collect.
 
(c) We express no opinion as to the effect of Section 548 of the United States
Bankruptcy Code or any similar provisions of State law.
 
(d) We have assumed, with your permission and without independent investigation,
that (i) the Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, (ii) the execution,
delivery and performance by the Company of the Bridge Credit Agreement are
within its corporate powers and have been duly authorized by all necessary
corporate and other action, and (iii) the execution, delivery and performance by
the Company of the Bridge Credit Agreement (x) require no consent or other
action by or in respect of, or filing with, any governmental body, agency or
official under United States federal law or the Delaware General Corporation Law
and (y) do not contravene, or constitute a default under, any provision of (a)
United States federal law or regulation or the Delaware General Corporation Law,
or (b) the certificate of incorporation or bylaws of the Company.
 
We are members of the bar of the State of New York and the foregoing opinion is
limited to the laws of the State of New York.
 
This opinion is rendered solely to you in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or relied upon by
any other person (other than an assignee permitted under Section 11.7 of the
Bridge Credit Agreement) without our prior written consent.
 
Very truly yours,
 
D-2-2

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BRIDGE CREDIT AGREEMENT
 
EXHIBIT E
 
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
 
Reference is made to the Bridge Credit Agreement, dated as of March [___],
2007 (as amended and in effect on the date hereof, the “Bridge Credit
Agreement”), by and among CVS Corporation, the Lenders party thereto, Lehman
Brothers Inc. and Morgan Stanley Senior Funding, Inc., as Arrangers, Morgan
Stanley Senior Funding, Inc., as Syndication Agent, Lehman Commercial Paper
Inc., as Administrative Agent, and The Bank of New York, Bank of America, N.A.
and Wachovia Bank, National Association, as Co-Documentation Agents. Capitalized
terms used herein that are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Bridge Credit Agreement.
 
The Assignor named below hereby sells and assigns, without recourse, to the
Assignee named below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date (defined
below), the interests set forth below (the “Assigned Interest”) in the
Assignor’s rights and obligations under the Bridge Credit Agreement, including,
without limitation, the interests set forth below in the Commitment and the
Loans owing to the Assignor that are outstanding on the Assignment Date, but
excluding accrued interest and fees to and excluding the Assignment Date. The
Assignee hereby acknowledges receipt of a copy of the Bridge Credit Agreement.
From and after the Assignment Date, (i) the Assignee shall be a party to and be
bound by the provisions of the Bridge Credit Agreement and, to the extent of the
Assigned Interest, have the rights and obligations of a Lender under the Loan
Documents and (ii) the Assignor shall, to the extent of the Assigned Interest,
relinquish its rights and be released from its obligations under the Loan
Documents.
 
This Assignment and Acceptance is being delivered to the Administrative Agent,
together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 3.10(b) of the
Bridge Credit Agreement, duly completed and executed by the Assignee, and (ii)
if the Assignee is not already a Lender under the Bridge Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor]1  shall pay the fee
payable to the Administrative Agent pursuant to Section 11.7(b) of the Bridge
Credit Agreement.
 
 

--------------------------------------------------------------------------------

1  Delete inapplicable term.
 
E-1

--------------------------------------------------------------------------------

 
THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
Date of Assignment:
 
Legal Name of Assignor:
 
Legal Name of Assignee:
 
Assignee’s Address for Notices:
 
Effective Date of
 
Assignment (the “Assignment Date”):
 
Commitment Assigned:
 
Principal Amount of Loans Assigned:
[SIGNATURE PAGE FOLLOWS]
 
E-2

--------------------------------------------------------------------------------

 
The terms set forth above are hereby agreed to:
 
 

 
[Name of Assignor], as Assignor
        By:                [Name of Assignee], as Assignee         By:        

 
The undersigned hereby consent to the within assignment:
 
 

  CVS CORPORATION         By:                 LEHMAN COMMERCIAL PAPER INC.,   as
Administrative Agent         By:      

 
 
 
E-3 

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