Exhibit 1.1
Medco Health Solutions, Inc.
___ % Senior Notes due 2013
Form of
Underwriting Agreement
_______,2003
Xxxxxxx, Xxxxx & Co.,
X.X. Xxxxxx Securities Inc.,
Citigroup Global Markets Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/x Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Medco Health Solutions, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of $500,000,000 principal amount of ____% Senior Notes due 2013 (the
"Securities").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-86404) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto, to you, for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement, any
post effective amendment thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto but excluding Form T-1
and including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial Registration
Statement at the time it was declared effective, each as amended at the
time such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became
effective or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; such form of final prospectus, in
the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(d) The consolidated financial statements, together with the related
schedule and notes, included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly in
all material respects the combined financial position, results of
operations and cash flows of the Company and its consolidated
subsidiaries at the respective dates or for the respective periods to
which they apply; such statements and related schedule and notes have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data of
the Company set forth in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) present fairly, in all material
respects, the information stated therein and have been derived from the
books and records of the Company, and such other financial information
and data have been prepared on a basis consistent with such financial
statements;
(e) The unaudited pro forma condensed consolidated balance sheet and
condensed consolidated statements of income and the related notes thereto
set forth in the Registration Statement and the Prospectus have been
prepared in all material respects in accordance with the applicable
requirements of Rule 11-02 of Regulation S-X promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
have been compiled on the pro forma basis described therein and, in the
opinion of the Company, the assumptions used in
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the preparation thereof were reasonable at the time made and the
adjustments used therein are based upon good faith estimates and
assumptions believed by the Company to be reasonable at the time made;
(f) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of
its subsidiaries on the other hand, which is required by the Securities
Act to be described in the Registration Statement and the Prospectus
which is not so described;
(g) Neither the Company nor any of its significant subsidiaries
within the meaning of Rule 1-02(w) of Regulation S-X of the Commission
(each, a "Significant Subsidiary") has sustained since the date of the
latest audited financial statements included in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
(h) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and
each subsidiary of the Company has been duly organized and is validly
existing as a corporation or limited liability company in good standing
under the laws of its jurisdiction of organization;
(j) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except for directors'
qualifying shares and except as otherwise
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set forth in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
(k) This Agreement has been duly authorized, executed and delivered
by the Company, and the Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the Indenture to be dated as of ________, 2003 (the
"Indenture") between the Company and U.S. Bank Trust National
Association, as Trustee (the "Trustee"), under which they are to be
issued, which will be substantially in the form filed as an exhibit to
the Registration Statement; the Indenture has been duly authorized and
duly qualified under the Trust Indenture Act (assuming due execution and
delivery by the Trustee) and, when executed and delivered by the Company
and the Trustee, will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Securities and the Indenture will conform to
the descriptions thereof in the Prospectus in all material respects;
(l) The Master Separation and Distribution Agreement between Merck &
Co., Inc. ("Merck") and the Company, dated ______, 2003 (the "Master
Separation and Distribution Agreement"), has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by Merck, constitutes a valid and legally binding
agreement of the Company; and each of the other agreements described in
the Prospectus under the heading "Relationships Between Our Company and
Merck & Co., Inc." that has been filed as an exhibit to the Registration
Statement, in each case between Merck and the Company (collectively,
including the Master Separation and Distribution Agreement, the
"Separation and Transition Agreements"), has been duly authorized and,
when executed and delivered by the Company prior to the Time of Delivery,
will be duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by Merck, will constitute a valid
and legally binding agreement of the Company;
(m) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, the
Separation and Transition Agreements and this Agreement and the
consummation of the transactions herein and therein contemplated will not
(i) conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, except for
any such conflict, breach or violation that would not, individually or in
the aggregate, adversely affect the validity of the Securities or have a
material adverse effect on the business or assets, or the current or
future consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect"); (ii) result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the Company
or (iii) except for any such violation that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect,
result in any violation of any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is
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required for the issue and sale of the Securities or the consummation by
the Company of the transactions contemplated by this Agreement or the
Indenture, except the registration under the Act of the Securities, such
as have been obtained under the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriters;
(n) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws; and neither the Company
nor any of its subsidiaries is in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound except for any such default that would not,
individually or in the aggregate, have a Material Adverse Effect;
(o) The statements set forth in the Prospectus under the caption
"Description of Notes", insofar as they purport to constitute a summary
of the terms of the Securities, and under the captions "U.S. Federal Tax
Considerations" and "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, fairly
present in all material respects the matters referred to therein;
(p) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate reasonably be expected to have a Material Adverse Effect; and,
to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(q) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", as such term
is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(r) PricewaterhouseCoopers LLP who have certified certain financial
statements of the Company and its subsidiaries, and Xxxxxx Xxxxxxxx LLP
whose reports appear in the Prospectus are or were at all relevant times
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(s) The Company or one of its subsidiaries currently own or possess
adequate licenses or other rights to use the patents and patent
applications, copyrights, trademarks, service marks, trade names,
technology and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary rights) necessary in any material respect
to conduct the business of the Company and its subsidiaries, taken as a
whole, as currently conducted in the manner described in the Prospectus
(collectively, the "Company Intellectual Property"); and, except as
disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any written notice of infringement of the
intellectual property rights of others with respect to the Company
Intellectual Property, which would reasonably be expected to have a
Material Adverse Effect;
(t) The Company and each of its subsidiaries has conducted its
business in compliance with all the laws, rules and regulations of the
jurisdictions in which each such
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entity is conducting business, except as disclosed in the Prospectus or
except for any such non-compliance that would not, individually or in the
aggregate, have a Material Adverse Effect; without limiting the
foregoing, except as disclosed in the Prospectus, the Company and each of
its subsidiaries, and each of the pharmacists and physicians employed by
the Company and each of its subsidiaries, owns or possesses and is in
compliance with the terms, provisions and conditions of all permits,
licenses, franchises, operating certificates, orders, authorizations,
registrations, qualifications, consents or approvals (including
certificates of need, licenses, pharmacy licenses, Medicare provider
numbers, accreditations and other similar documentation or approvals of
any local health departments or any Authority (as hereinafter defined))
(collectively, "Permits") of any court, arbitrator or arbitral body, or
any federal, state or local or foreign governmental agency or
self-regulatory authority, department or commission, or any other board,
bureau, review board, instrumentality or similar organization or any
applicable private accrediting organization (collectively, "Authorities")
necessary to own and use the properties and assets of the Company and
each of its subsidiaries, respectively, and to conduct their respective
businesses, except where the failure to so own, possess or comply,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect; as to the Company and each of its
subsidiaries, each such Permit of and from such Authorities is valid and
in full force and effect and there is no proceeding pending or, to the
best knowledge of the Company and its subsidiaries, threatened that may
cause any such Permit of or from any Authority to be revoked, withdrawn,
canceled, suspended or not renewed, except where the failure to own or
possess such Permit would not reasonably be expected to have a Material
Adverse Effect;
(u) None of the Company or any of its subsidiaries is in violation of
any statute, or any rule, regulation, decision or order of any
governmental agency or body or any court relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances ("Environmental Laws"); is to its knowledge liable for any
off-site disposal or contamination pursuant to any Environmental Laws; or
is the subject of any claim relating to any Environmental Laws, in any
such case the effect of which would reasonably be expected to have a
Material Adverse Effect; and
(v) Except as disclosed in the Prospectus, the Company has not
received written notice of any, and to the knowledge of any officer or
director of the Company there are no material, Medicare, Medicaid or any
other managed care recoupment or recoupments of any third-party payor
being sought, threatened, requested or claimed against the Company or any
of its subsidiaries.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of ___% of the principal amount thereof, plus accrued interest,
if any, from __________, 2003 to the Time of Delivery hereunder, the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with The Depository
Trust Company ("DTC") or its designated custodian. The
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Company will deliver the Securities to Xxxxxxx, Xxxxx & Co., for the account of
each Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to Xxxxxxx, Xxxxx & Co. at least forty-eight
hours in advance, by causing DTC to credit the Securities to the account of
Xxxxxxx, Xxxxx & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Xxxxx & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on ____________, 2003 or such other time and date as Xxxxxxx,
Xxxxx & Co. and the Company may agree upon in writing. Such time and date are
herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(j) hereof, will be delivered at the offices
of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at ___ p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York City are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when the Registration Statement, or any amendment thereto,
has been filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed and to furnish you with copies
thereof; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus or suspending any such qualification, to
promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Securities, provided that in connection
therewith the Company shall not be
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required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) Prior to 12:00 noon, New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with written and electronic copies of
the Prospectus in New York City in such quantities as you may reasonably
request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Securities and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus in order to comply with
the Act or the Trust Indenture Act, to notify you and upon your request
to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many written and electronic copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many written and electronic
copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the Time of Delivery or such earlier time as you may
notify the Company, not to offer, sell, contract to sell, pledge, grant
any option to purchase, make any short sale or otherwise dispose of,
except as provided hereunder, any securities of the Company that are
substantially similar to the Securities;
(f) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report (including
a balance sheet and statements of income, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with
the fiscal quarter ending after the effective date of the Registration
Statement), to make available to its stockholders consolidated summary
financial information of the Company and its subsidiaries for such
quarter in reasonable detail; and to furnish to the holders of the
Securities all other documents required to be delivered pursuant to
Section 4.03 of the Indenture;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to
deliver to you (i) as soon as they are available, (A) copies of any
reports
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and financial statements furnished to or filed with the Commission or any
national securities exchange on which the Securities or any class of
securities of the Company is listed and (B) the documents specified in
Section 4.03 of the Indenture, as in effect from time to time provided,
however, that the obligations of the Company shall be considered
satisfied for the purpose of this Section 5(g)(i) so long as the Company
shall file such reports, financial statements and other communications
(financial or other) electronically with the Commission pursuant to
Regulation S-T under the Act, and such reports, financial statements and
other communications (financial or other) shall be publicly available;
and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(i) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act;
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act; and
(k) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if
any, operated by such Underwriter for the purpose of facilitating the
on-line offering of the Securities (the "License"); provided, however,
that the License shall be used solely for the purpose described above,
shall be removed from the Underwriter's website as promptly as
practicable at the request of the Company following the Time of Delivery,
is granted without any fee, and may not be sublicensed, assigned or
transferred.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
and Legal Investment Memoranda, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the filing fees incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, any required review by the
National Association of Securities
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Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; if the Company has elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by
10:00 p.m., Washington, D.C. time, on the date of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
(b) Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, shall have
furnished to you such written opinion or opinions (a draft of each such
opinion is attached as Xxxxx XX(a) hereto), dated the Time of Delivery,
and such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon the matters referred
to therein;
(c) Xxxxx, Xxxxx, Xxxxxx, Xxxxxxx & Xxxxxxxx, counsel for the
Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as Xxxxx XX(b) hereto), dated the Time of
Delivery, in form and substance satisfactory to you;
(d) Xxxxx X. Xxxxxxxxxx, General Counsel for the Company, shall have
furnished to you his written opinion (a draft of such opinion is attached
as Xxxxx XX(c) hereto), dated the Time of Delivery, in form and substance
satisfactory to you;
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date
of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at the Time of
Delivery, PricewaterhouseCoopers LLP shall have furnished to you a letter
or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I hereto
(the executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered by PricewaterhouseCoopers LLP on the effective
date of any post-effective amendment to the Registration Statement and as
of the Time of Delivery is attached as Annex I(b) hereto);
(f)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference
-10-
with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of
which information is given in the Prospectus there shall not have been
any change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in your judgment as representatives of the
Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the NASDAQ
National Market System; (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock Exchange; (iii)
a general moratorium on commercial banking activities declared by either
Federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the
United States; (iv) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, or (v) the occurrence of any other calamity or crisis
or any change in financial, political or economic conditions in the
United States or elsewhere, if the effect of any such event specified in
clause (iv) or (v), in your judgment as representatives of the
Underwriters, makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus;
(i) The Company shall have complied with the provisions of Section 5
(c) hereof with respect to the furnishing of prospectuses;
(j) The Credit Agreement, dated as of _________, 2003, among the
Company, the Lenders and Issuing Bank Party thereto and JPMorgan Chase
Bank, as Administrative Agent, X.X. Xxxxxx Securities Inc., Xxxxxxx Xxxxx
Credit Partners L.P. and Citigroup Global Markets Inc., as Joint Lead
Arrangers and Joint Bookrunners, Xxxxxxx Xxxxx Credit Partners L.P. and
Citicorp North America, Inc., as Co-Syndication Agents and Bank One, NA
and Wachovia Bank, NA, as Co-Documentation Agents (the "Credit
Agreement"); the Accounts Receivable Financing Facility, dated as of
__________, 2003, among Medco Health Receivables, LLC, as Seller, the
Company, as Servicer, the Persons Parties thereto as Conduit Purchasers
and Committed Purchasers and Citicorp North America, Inc., Bank One, NA
(Main Office Chicago) and The Bank of Nova Scotia, as Managing Agents and
Citicorp North America, Inc., as Administrative Agent (the "Accounts
Receivable Financing Facility); and each of the Separation and Transition
Agreements shall be in full force and effect; each condition required to
be satisfied pursuant to Section 2.4 of the Master Separation and
-11-
Distribution Agreement (other than Sections 2.4(g) and (h)), prior to the
distribution by Merck to its stockholders of the Company's common stock,
$.01 par value, shall have been satisfied; and the Company shall have
declared the Merck Dividend (as defined in the Master Separation and
Distribution Agreement); and
(k) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of the Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to the Time of Delivery, as to the matters set
forth in subsections (a), (f) and (j) of this Section and as to such
other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company, in the case of each Underwriter, by such
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to
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participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the
-13-
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act and each broker dealer affiliate of
any Underwriter; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of
the Company) and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you shall have the right to
postpone the Time of Delivery for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability
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on the part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in Section
6 hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on your behalf as
representatives of the Underwriters.
All statements, requests, notices, and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you, as the representatives, in care of Xxxxxxx, Xxxxx
& Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
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16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
17. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax consequences expected to be realized with respect to
such transaction, without the Underwriters imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination, upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
MEDCO HEALTH SOLUTIONS, INC.
By:_____________________________
Name:
Title:
Accepted as of the date hereof at New York, New York:
XXXXXXX, XXXXX & CO.
X.X. XXXXXX SECURITIES INC.
CITIGROUP GLOBAL MARKETS INC.
By:_________________________________
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
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SCHEDULE I
Principal
Amount of
Securities
to be
Underwriter Purchased
----------- ---------
Xxxxxxx, Xxxxx & Co............................................. $
X.X. Xxxxxx Securities Inc......................................
Citigroup Global Markets Inc....................................
Banc One Capital Markets, Inc...................................
Wachovia Securities LLC.........................................
Fleet Securities, Inc...........................................
Scotia Capital (USA) Inc........................................
McDonald Investments Inc........................................
PNC Capital Markets, Inc........................................
------------
Total .................................................... $500,000,000
============
S-1
List of Annexes to the Underwriting Agreement
Xxxxx X(a): Executed copies of the letter of PricewaterhouseCoopers LLP
delivered prior to the execution of this Agreement.
Xxxxx X(b): Draft form of letter to be delivered by PricewaterhouseCoopers LLP
on the effective date of any post-effective amendment and as of the
Time of Delivery.
Xxxxx XX(a): Draft opinion of Xxxxxxxx & Xxxxxxxx LLP and form of registration
statement letter of Xxxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters.
Xxxxx XX(b): Draft opinion of Xxxxx, Xxxxx, Xxxxxx, Xxxxxxx & Xxxxxxxx, counsel
for the Company.
Xxxxx XX(c): Draft opinion of Xxxxx X. Xxxxxxxxxx, General Counsel for the
Company.
A-1
