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CVS Caremark Corporation (CVS)
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CVS » Topics » . Conditions to Defeasance.

This excerpt taken from the CVS 8-K filed Aug 15, 2006.
. Conditions to Defeasance. The Company may exercise its legal defeasance option or its covenant defeasance option only if:

     (i) with reference to this Section 8.02, the Company has irrevocably deposited in trust with the Trustee as trust funds solely for the benefit of the Holders of the Debt Securities of such series, for payment of the principal of and interest on the Debt Securities of such series, money or U. S. Government Obligations or a combination thereof sufficient (unless such funds consist solely of money, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee) without consideration of any reinvestment and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, to pay and discharge the principal of and accrued interest on the outstanding Debt Securities of such series to maturity or earlier redemption (irrevocably provided for under arrangements satisfactory to the Trustee), as the case may be;

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     (ii) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound;

     (iii) no Default with respect to the Debt Securities of such series shall have occurred and be continuing on the date of such deposit;

     (iv) the Company shall have delivered to the Trustee an Opinion of Counsel that (1) the Holders of the Debt Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of the Company’s exercise of its option under this Section and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred and (2) the Holders of the Debt Securities of such series have a valid security interest in the trust funds; and

     (v) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent herein provided relating to the defeasance contemplated by this Section have been complied with.

     In the case of legal defeasance under this Section 8.02 the Opinion of Counsel referred to in clause (iv)(1) above may be replaced by a ruling directed to the Trustee received from the Internal Revenue Service to the same effect. Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of the Debt Securities of such series at a future date in accordance with Article 3.

     Section 8.03

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