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Exhibit 4.2
$250,000,000
EXPRESS SCRIPTS, INC.
9 5/8% Senior Notes due 2009
REGISTRATION RIGHTS AGREEMENT
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June 11, 1999
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Express Scripts, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to Credit Suisse First Boston Corporation and
Deutsche Bank Securities Inc. (collectively, the "Initial Purchasers"), upon the
terms set forth in a purchase agreement of even date herewith (the "Purchase
Agreement"), $250,000,000 aggregate principal amount of its 9 5/8% Senior Notes
due 2009 (the "Initial Securities") to be guaranteed (the "Guarantees") by the
persons listed on the signature pages hereto (collectively, the "Guarantors"
and, together with the Company, the "Issuers"). The Initial Securities will be
issued pursuant to an Indenture, dated as of June 16, 1999, (the "Indenture"),
among the Issuers and Bankers Trust Company, as trustee (the "Trustee"). As an
inducement to the Initial Purchasers to enter into the Purchase Agreement, the
Issuers agree with the Initial Purchasers, for the benefit of the Initial
Purchasers and the holders of the Securities (as defined below) (collectively
the "Holders"), as follows:
1. Registered Exchange Offer. Unless not permitted by
applicable law, the Issuers shall prepare and, not later than 60 days (such 60th
day being a "Filing Deadline") after the date on which the Initial Purchasers
purchase the Initial Securities pursuant to the Purchase Agreement (the "Closing
Date"), file with the Securities and Exchange Commission (the "Commission") a
registration statement (the "Exchange Offer Registration Statement") on an
appropriate form under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to a proposed offer (the "Registered Exchange Offer") to the
Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who
are not prohibited by any law or policy of the Commission from participating in
the Registered Exchange Offer, to issue and deliver to such Holders, in exchange
for the Initial Securities, a like aggregate principal amount of debt securities
of the Company issued under the Indenture and guaranteed by the Guarantors,
identical in all material respects to the Initial Securities and registered
under the Securities Act (the "Exchange Securities"). The Issuers shall (i) use
their reasonable best efforts to cause such Exchange Offer Registration
Statement to become effective under the Securities Act within 180 days after the
Closing Date (such 180th day being an "Effectiveness Deadline"), (ii) as soon as
practicable after the effectiveness of the Exchange Offer Registration
Statement, commence the Registered Exchange Offer and (iii) keep the Registered
Exchange Offer open for not less than 30 days (or longer, if required by
applicable law) after the date notice of the Registered Exchange Offer is mailed
to the Holders (such period being called the "Exchange Offer Period").
If the Issuers commence the Registered Exchange Offer, the
Issuers (i) will be entitled to consummate the Registered Exchange Offer 30 days
after such commencement
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(provided that the Issuers have accepted all the Initial Securities theretofore
validly tendered in accordance with the terms of the Registered Exchange Offer)
and (ii) will consummate the Registered Exchange Offer no later than 220 days
after the Closing Date (such 220th day being the "Consummation Deadline").
Following the declaration of the effectiveness of the Exchange
Offer Registration Statement, the Issuers shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities electing to exchange the
Initial Securities for Exchange Securities (assuming that such Holder is not an
affiliate of the Company within the meaning of the Securities Act, acquires the
Exchange Securities in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the Exchange
Securities and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and without material restrictions under the securities
laws of the several states of the United States.
The Issuers acknowledge that, pursuant to current
interpretations by the Commission's staff of Section 5 of the Securities Act, in
the absence of an applicable exemption therefrom, (i) each Holder which is a
broker-dealer electing to exchange Initial Securities, acquired for its own
account as a result of market making activities or other trading activities, for
Exchange Securities (an "Exchanging Dealer"), is required to deliver a
prospectus containing the information set forth in (a) Annex A hereto on the
cover of such prospectus, (b) Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section of such prospectus, and
(c) Annex C hereto in the "Plan of Distribution" section of such prospectus in
connection with a sale of any such Exchange Securities received by such
Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial
Purchaser that elects to sell Securities (as defined below) acquired in exchange
for Initial Securities constituting any portion of an unsold allotment, is
required to deliver a prospectus containing the information required by Items
507 or 508 of Regulation S-K under the Securities Act, as applicable, in
connection with such sale.
The Issuers shall use their reasonable best efforts to keep
the Exchange Offer Registration Statement effective and to amend and supplement
the prospectus contained therein, in order to permit such prospectus to be
lawfully delivered by all persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such persons must
comply with such requirements in order to resell the Exchange Securities;
provided, however, that (i) in the case where such prospectus and any amendment
or supplement thereto must be delivered by an Exchanging Dealer or an Initial
Purchaser, such period shall be the lesser of 180 days and the date on which all
Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities
held by them (unless such period is extended pursuant to Section 3(j) below) and
(ii) the Issuers shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 180 days after the
consummation of the Registered Exchange Offer.
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If, upon consummation of the Registered Exchange Offer, any
Initial Purchaser holds Initial Securities acquired by it as part of its initial
distribution, the Issuers, simultaneously with the delivery of the Exchange
Securities pursuant to the Registered Exchange Offer, shall issue and deliver to
such Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "Private Exchange") for the Initial Securities held by such
Initial Purchaser, a like principal amount of debt securities of the Company
issued under the Indenture and guaranteed by the Guarantors, identical in all
material respects to the Initial Securities (the "Private Exchange Securities").
The Initial Securities, the Exchange Securities and the Private Exchange
Securities are herein collectively called the "Securities".
In connection with the Registered Exchange Offer, the Issuers
shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date
notice thereof is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York, which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Initial Securities at
any time prior to the close of business, New York City time, on the
last business day on which the Registered Exchange Offer shall remain
open; and
(e) otherwise comply with all applicable laws.
As soon as practicable after the close of the Registered
Exchange Offer or the Private Exchange, as the case may be, the Issuers shall:
(x) accept for exchange all the Initial Securities validly
tendered and not withdrawn pursuant to the Registered Exchange Offer
and the Private Exchange;
(y) deliver to the Trustee for cancellation all the Initial
Securities so accepted for exchange; and
(z) cause the Trustee to authenticate and deliver promptly to
each Holder of the Initial Securities, Exchange Securities or Private
Exchange Securities, as the case may be, equal in principal amount to
the Initial Securities of such Holder so accepted for exchange.
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The Indenture will provide that the Exchange Securities will
not be subject to the transfer restrictions set forth in the Indenture and that
all the Securities will vote and consent together on all matters as one class
and that none of the Securities will have the right to vote or consent as a
class separate from one another on any matter.
Interest on each Exchange Security and Private Exchange
Security issued pursuant to the Registered Exchange Offer and in the Private
Exchange will accrue from the last interest payment date on which interest was
paid on the Initial Securities surrendered in exchange therefor or, if no
interest has been paid on the Initial Securities, from the date of original
issue of the Initial Securities.
Each Holder participating in the Registered Exchange Offer
shall be required to represent to the Issuers that at the time of the
consummation of the Registered Exchange Offer (i) any Exchange Securities
received by such Holder will be acquired in the ordinary course of business,
(ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Securities or the Exchange Securities
within the meaning of the Securities Act, (iii) such Holder is not an
"affiliate," as defined in Rule 405 of the Securities Act, of the Company or if
it is an affiliate, such Holder will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable, (iv) if
such Holder is not a broker-dealer, that it is not engaged in, and does not
intend to engage in, the distribution of the Exchange Securities and (v) if such
Holder is a broker-dealer, that it will receive Exchange Securities for its own
account in exchange for Initial Securities that were acquired as a result of
marketmaking activities or other trading activities and that it will be required
to acknowledge that it will deliver a prospectus in connection with any resale
of such Exchange Securities.
Notwithstanding any other provisions hereof, the Issuers will
ensure that (i) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, 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 and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
2. Shelf Registration. If, (i) because of any change in law or
in applicable interpretations thereof by the staff of the Commission, the
Issuers are not permitted to effect a Registered Exchange Offer, as contemplated
by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated by
the 220th day after the Closing Date, (iii) any Initial Purchaser so requests
with respect to the Initial Securities (or the Private Exchange Securities) not
eligible to be exchanged for Exchange Securities in the Registered Exchange
Offer and held by it following consummation of the Registered Exchange Offer
within 10 business days following
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consummation of the Registered Exchange Offer or (iv) any Holder is not eligible
to participate in the Registered Exchange Offer or, in the case of any Holder
that participates in the Registered Exchange Offer, such Holder may not resell
to the public the Exchange Securities without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement is not
appropriate for such resales by such Holder, or any Holder that is a
broker-dealer holds Initial Securities that are part of an unsold allotment from
the original sale of the Initial Securities, and any such Holder so requests,
the Issuers shall take the following actions (the date on which any of the
conditions described in the foregoing clauses (i) through (iv) occur, including
in the case of clauses (iii) or (iv) the receipt of the required notice, being a
"Trigger Date"):
(a) The Issuers shall as promptly as practicable (but in no
event more than 60 days after the Trigger Date (such 60th day being a
"Filing Deadline")) file with the Commission and thereafter use their
reasonable best efforts to cause to be declared effective no later than
180 days after the Trigger Date (such 180th day being an "Effectiveness
Deadline") a registration statement (the "Shelf Registration Statement"
and, together with the Exchange Offer Registration Statement, a
"Registration Statement") on an appropriate form under the Securities
Act relating to the offer and sale of the Transfer Restricted
Securities by the Holders thereof from time to time in accordance with
the methods of distribution set forth in the Shelf Registration
Statement and Rule 415 under the Securities Act (hereinafter, the
"Shelf Registration"); provided, however, that no Holder (other than an
Initial Purchaser) shall be entitled to have the Securities held by it
covered by such Shelf Registration Statement unless such Holder agrees
in writing to be bound by all the provisions of this Agreement
applicable to such Holder.
(b) The Issuers shall use their reasonable best efforts to
keep the Shelf Registration Statement continuously effective in order
to permit the prospectus included therein to be lawfully delivered by
the Holders of the relevant Securities, for a period of two years (or
for such longer period if extended pursuant to Section 3(j) below) from
the date of its effectiveness or such shorter period that will
terminate when all the Securities covered by the Shelf Registration
Statement (i) have been sold pursuant thereto or (ii) can be sold
pursuant to Rule 144(k) under the Securities Act (the "Shelf
Registration Period"). The Issuers shall be deemed not to have used
their reasonable best efforts to keep the Shelf Registration Statement
effective during the requisite period if they voluntarily take any
action that would result in Holders of Securities covered thereby not
being able to offer and sell such Securities during that period, unless
such action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to
the contrary, the Issuers shall cause the Shelf Registration Statement
and the related prospectus and any amendment or supplement thereto, as
of the effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material
fact or omit to state
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a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
3. Registration Procedures. In connection with any Shelf
Registration contemplated by Section 2 hereof and, to the extent applicable, any
Registered Exchange Offer contemplated by Section 1 hereof, the following
provisions shall apply:
(a) The Issuers shall (i) furnish to each Initial Purchaser,
prior to the filing thereof with the Commission, a copy of the
Registration Statement and each amendment thereof and each supplement,
if any, to the prospectus included therein and, in the event that an
Initial Purchaser (with respect to any portion of an unsold allotment
from the original offering) is participating in the Registered Exchange
Offer or the Shelf Registration Statement, the Issuers shall use their
reasonable best efforts to reflect in each such document, when so filed
with the Commission, such comments as such Initial Purchaser reasonably
may propose; (ii) include the information set forth in Annex A hereto
on the cover of the prospectus forming a part of the Exchange Offer
Registration Statement, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section of
the prospectus forming a part of the Exchange Offer Registration
Statement and in Annex C hereto in the "Plan of Distribution" section
of the prospectus forming a part of the Exchange Offer Registration
Statement and include the information set forth in Annex D hereto in
the Letter of Transmittal delivered pursuant to the Registered Exchange
Offer; (iii) if requested by an Initial Purchaser, include the
information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in the prospectus forming a part of the
Exchange Offer Registration Statement; (iv) include within the
prospectus contained in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," reasonably acceptable to the
Initial Purchasers, which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with
respect to the potential "underwriter" status of any broker-dealer that
is the beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange
Securities received by such broker-dealer in the Registered Exchange
Offer (a "Participating Broker-Dealer"), whether such positions or
policies have been publicly disseminated by the staff of the Commission
or such positions or policies, in the reasonable judgment of the
Initial Purchasers based upon advice of counsel (which may be in-house
counsel), represent the prevailing views of the staff of the
Commission; and (v) in the case of a Shelf Registration Statement,
include the names of the Holders who propose to sell Securities
pursuant to the Shelf Registration Statement as selling
securityholders.
(b) The Issuers shall give written notice to the Initial
Purchasers, the Holders of the Securities and any Participating
Broker-Dealer from whom the Company has received prior written notice
that they will be Participating Broker-Dealers in the Registered
Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall
be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):
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(i) when the Registration Statement or any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment thereto
has become effective;
(ii) of any request by the Commission for amendments
or supplements to the Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that
purpose;
(iv) of the receipt by the Issuers or their legal
counsel of any notification with respect to the suspension of
the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(v) of the happening of any event that requires the
Issuers to make changes in the Registration Statement or the
prospectus in order that the Registration Statement or the
prospectus do not contain an untrue statement of a material
fact nor omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the
case of the prospectus, in light of the circumstances under
which they were made) not misleading.
(c) The Issuers shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.
(d) The Issuers shall furnish to each Holder of Securities included
within the coverage of the Shelf Registration, without charge, at least one copy
of the Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) The Issuers shall deliver to each Exchanging Dealer and each
Initial Purchaser, and to any other Holder who so requests, without charge, at
least one copy of the Exchange Offer Registration Statement and any
posteffective amendment thereto, including financial statements and schedules,
and, if any Initial Purchaser or any such Holder requests, all exhibits thereto
(including those incorporated by reference).
(f) The Issuers shall, during the Shelf Registration Period, deliver to
each Holder of Securities included within the coverage of the Shelf
Registration, without charge, as many copies of the prospectus (including each
preliminary prospectus) included in the Shelf Registration Statement and any
amendment or supplement thereto as
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such person may reasonably request. The Issuers consent, subject to the
provisions of this Agreement, to the use of the prospectus or any amendment or
supplement thereto by each of the selling Holders of the Securities in
connection with the offering and sale of the Securities covered by the
prospectus, or any amendment or supplement thereto, included in the Shelf
Registration Statement.
(g) The Issuers shall deliver to each Initial Purchaser, any Exchanging
Dealer, any Participating Broker-Dealer and such other persons required to
deliver a prospectus following the Registered Exchange Offer, without charge, as
many copies of the final prospectus included in the Exchange Offer Registration
Statement and any amendment or supplement thereto as such persons may reasonably
request. The Issuers consent, subject to the provisions of this Agreement, to
the use of the prospectus or any amendment or supplement thereto by any Initial
Purchaser, if necessary, any Participating Broker-Dealer and such other persons
required to deliver a prospectus following the Registered Exchange Offer in
connection with the offering and sale of the Exchange Securities covered by the
prospectus, or any amendment or supplement thereto, included in such Exchange
Offer Registration Statement.
(h) Prior to any public offering of the Securities pursuant to any
Registration Statement the Issuers shall register or qualify or cooperate with
the Holders of the Securities included therein and their respective counsel in
connection with the registration or qualification of the Securities for offer
and sale under the securities or "blue sky" laws of such states of the United
States as any Holder of the Securities reasonably requests in writing and do any
and all other acts or things reasonably necessary or advisable to enable the
offer and sale in such jurisdictions of the Securities covered by such
Registration Statement; provided, however, that the Issuers shall not be
required to (i) qualify generally to do business in any jurisdiction where they
are not then so qualified or (ii) take any action which would subject them to
general service of process or to taxation in any jurisdiction where they are not
then so subject.
(i) The Issuers shall cooperate with the Holders of the Securities to
facilitate the timely preparation and delivery of certificates representing the
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and, if not represented by a global certificate pursuant to
the Indenture, in such denominations and registered in such names as the Holders
may request a reasonable period of time prior to sales of the Securities
pursuant to such Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 3(b) above during the period for which the Issuers are
required to maintain an effective Registration Statement, the Issuers shall
promptly prepare and file a post-effective amendment to the Registration
Statement or a supplement to the related prospectus and any other required
document so that, as thereafter delivered to Holders of the Securities or
purchasers of Securities, the prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which
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they were made, not misleading. If the Issuers notify the Initial Purchasers,
the Holders of the Securities and any known Participating Broker-Dealer in
accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the
use of the prospectus until the requisite changes to the prospectus have been
made, then the Initial Purchasers, the Holders of the Securities and any such
Participating Broker-Dealers shall suspend use of such prospectus, and the
period of effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement provided for in
Section 1 above shall each be extended by the number of days from and including
the date of the giving of such notice to and including the date when the Initial
Purchasers, the Holders of the Securities and any known Participating
Broker-Dealer shall have received such amended or supplemented prospectus
pursuant to this Section 3(j).
(k) Not later than the effective date of the applicable Registration
Statement, the Issuers will provide a CUSIP number for the Initial Securities,
the Exchange Securities or the Private Exchange Securities, as the case may be,
and provide the applicable trustee with global certificates (unless the
Indenture provides otherwise) for the Initial Securities, the Exchange
Securities or the Private Exchange Securities, as the case may be, in a form
eligible for deposit with The Depository Trust Company.
(l) The Issuers will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Registered
Exchange Offer or the Shelf Registration and will make generally available to
their security holders (or otherwise provide in accordance with Section 11(a) of
the Securities Act) an earnings statement satisfying the provisions of Section
11(a) of the Securities Act, no later than 45 days after the end of a 12-month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of the Issuers' first fiscal quarter commencing after the effective date
of the Registration Statement, which statement shall cover such 12-month period.
(m) The Issuers shall cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended, in a timely manner and containing such
changes, if any, as shall be necessary for such qualification. In the event that
such qualification would require the appointment of a new trustee under the
Indenture, the Issuers shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.
(n) The Issuers may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Issuers such
information regarding the Holder and the distribution of the Securities as the
Issuers may from time to time reasonably require for inclusion in the Shelf
Registration Statement, and the Issuers may exclude from such registration the
Securities of any Holder that unreasonably fails to furnish such information
within a reasonable time after receiving such request.
(o) The Issuers shall enter into such customary agreements (including,
if requested, an underwriting agreement in customary form) and take all such
other action, if
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any, as any Holder of the Securities shall reasonably request in order to
facilitate the disposition of the Securities pursuant to any Shelf Registration.
(p) In the case of any Shelf Registration, the Issuers shall (i) make
reasonably available for inspection by the Holders of the Securities, any
underwriter participating in any disposition pursuant to the Shelf Registration
Statement and any attorney, accountant or other agent retained by the Holders of
the Securities or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Issuers and (ii) use their
reasonable best efforts to cause the Issuers' officers, directors, employees,
accountants and auditors to supply all relevant information reasonably requested
by the Holders of the Securities or any such underwriter, attorney, accountant
or agent in connection with the Shelf Registration Statement, in each case, as
shall be reasonably necessary to enable such persons to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act; provided,
however, that the foregoing inspection and information gathering shall be
coordinated on behalf of the Initial Purchasers and on behalf of the other
parties, by one counsel designated by and on behalf of such other parties as
described in Section 4 hereof.
(q) In the case of any Shelf Registration, the Issuers, if requested by
any Holder of Securities covered thereby, shall cause (i) their counsel to
deliver an opinion and updates thereof relating to the Securities in customary
form addressed to such Holders and the managing underwriters, if any, thereof
and dated, in the case of the initial opinion, the effective date of such Shelf
Registration Statement covering such matters customarily covered in legal
opinions rendered in connection with underwritten offerings; (ii) its officers
to execute and deliver all customary documents and certificates and updates
thereof requested by any underwriters of the applicable Securities and (iii) its
independent public accountants and the independent public accountants with
respect to any other entity for which financial information is provided in the
Shelf Registration Statement to provide to the selling Holders of the applicable
Securities and any underwriter therefor a comfort letter in customary form and
covering matters of the type customarily covered in comfort letters in
connection with primary underwritten offerings, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72.
(r) In the case of the Registered Exchange Offer, if requested by any
Initial Purchaser or any known Participating Broker-Dealer, the Issuers shall
cause (i) their counsel to deliver to such Initial Purchaser or such
Participating Broker-Dealer a signed opinion in the form set forth in Sections
6(d) and 6(e) of the Purchase Agreement with such changes as are customary in
connection with the preparation of a Registration Statement and (ii) their
independent public accountants and the independent public accountants with
respect to any other entity for which financial information is provided in the
Registration Statement to deliver to such Initial Purchaser or such
Participating Broker-Dealer a comfort letter, in customary form, meeting the
requirements as to the substance thereof as set forth in Section 6(a) of the
Purchase Agreement, with appropriate date changes.
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(s) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Initial Securities by Holders to the Issuers
(or to such other Person as directed by the Issuers) in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may be, the
Issuers shall xxxx, or caused to be marked, on the Initial Securities so
exchanged that such Initial Securities are being canceled in exchange for the
Exchange Securities or the Private Exchange Securities, as the case may be; in
no event shall the Initial Securities be marked as paid or otherwise satisfied.
(t) The Issuers will use their reasonable best efforts to (a) if the
Initial Securities have been rated prior to the initial sale of such Initial
Securities, confirm such ratings will apply to the Securities covered by a
Registration Statement, or (b) if the Initial Securities were not previously
rated, cause the Securities covered by a Registration Statement to be rated with
the appropriate rating agencies, if so requested by Holders of a majority in
aggregate principal amount of Securities covered by such Registration Statement,
or by the managing underwriters, if any.
(u) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution" (within
the meaning of the Conduct Rules (the "Rules") of the National Association of
Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such
Securities or as an underwriter, a placement or sales agent or a broker or
dealer in respect thereof, or otherwise, the Issuers will assist such
broker-dealer in complying with the requirements of such Rules, including,
without limitation, by (i) if such Rules, including Rule 2720, shall so require,
engaging a "qualified independent underwriter" (as defined in Rule 2720) to
participate in the preparation of the Registration Statement relating to such
Securities, to exercise usual standards of due diligence in respect thereto and,
if any portion of the offering contemplated by such Registration Statement is an
underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Securities, (ii) indemnifying any such qualified
independent underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof and (iii) providing such information to such
broker-dealer as may be required in order for such broker-dealer to comply with
the requirements of the Rules.
(v) The Issuers shall use their reasonable best efforts to take all
other steps necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.
4. Registration Expenses. (a) All expenses incident to the
Issuers' performance of and compliance with this Agreement will be borne by the
Issuers, jointly and severally, regardless of whether a Registration Statement
is ever filed or becomes effective, including without limitation;
(i) all registration and filing fees and expenses;
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(ii) all fees and expenses of compliance with federal
securities and state "blue sky" or securities laws;
(iii) all expenses of printing (including printing
certificates (if required by the Indenture) for the Securities to be
issued in the Registered Exchange Offer and the Private Exchange and
printing of prospectuses), messenger and delivery services and
telephone;
(iv) all fees and disbursements of counsel for the Issuers;
(v) all application and filing fees in connection with listing
the Exchange Securities on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent certified
public accountants of the Issuers (including the expenses of any
special audit and comfort letters required by or incident to such
performance).
The Issuers will bear their internal expenses (including, without limitation,
all salaries and expenses of their officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Issuers.
(b) In connection with any Registration Statement required by
this Agreement, the Issuers will reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities who are tendering Initial Securities
in the Registered Exchange Offer and/or selling or reselling Securities pursuant
to the "Plan of Distribution" contained in the Exchange Offer Registration
Statement or the Shelf Registration Statement, as applicable, for the reasonable
fees and disbursements of not more than one counsel, who shall be chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared.
5. Indemnification. (a) The Issuers agree, jointly and
severally, to indemnify and hold harmless each Holder of the Securities, any
Participating Broker-Dealer and each person, if any, who controls such Holder or
such Participating Broker-Dealer within the meaning of the Securities Act or the
Exchange Act (each Holder, any Participating Broker-Dealer and such controlling
persons are referred to collectively as the "Indemnified Parties") from and
against any losses, claims, damages or liabilities, joint or several, or any
actions in respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the
Securities) to which each Indemnified Party may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of, or are based upon, the omission or alleged omission to state therein a
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material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse, as incurred, the Indemnified
Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that (i) the Issuers
shall not be liable in any such case to the extent that such loss, claim, damage
or liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in a Registration
Statement or prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to a Shelf Registration in reliance upon and in
conformity with written information pertaining to such Holder and furnished to
the Issuers by or on behalf of such Holder specifically for inclusion therein
and (ii) with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus relating to a Shelf
Registration Statement, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Holder or Participating Broker-Dealer from
whom the person asserting any such losses, claims, damages or liabilities
purchased the Securities concerned, to the extent that a prospectus relating to
such Securities was required to be delivered by such Holder or Participating
Broker-Dealer under the Securities Act in connection with such purchase and any
such loss, claim, damage or liability of such Holder or Participating
Broker-Dealer results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Securities
to such person, a copy of the final prospectus if the Issuers had previously
furnished copies thereof to such Holder or Participating Broker-Dealer and such
final prospectus corrected such untrue statement or omission; provided further,
however, that this indemnity agreement will be in addition to any liability
which the Issuers may otherwise have to such Indemnified Party. The Issuers
shall also, jointly and severally, indemnify any underwriters, their officers
and directors and each person who controls such underwriters within the meaning
of the Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if
requested by such Holders.
(b) Each Holder of the Securities, severally and not jointly,
will indemnify and hold harmless the Issuers and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act from and against any losses, claims, damages or liabilities or any actions
in respect thereof, to which the Issuers or any such controlling person may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of or are based upon the omission or alleged omission
to state therein a material fact necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
omission or alleged untrue statement or omission was made in reliance upon and
in conformity with written information pertaining to such Holder and furnished
to the Issuers by or on behalf of such Holder specifically for inclusion
therein; and, subject to the limitation set forth immediately preceding this
clause, shall reimburse, as incurred, the Issuers for any legal or other
expenses reasonably incurred by the Issuers or any such controlling person in
connection with investigating or defending any loss, claim, damage, liability or
action in respect
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thereof. This indemnity agreement will be in addition to any liability which
such Holder may otherwise have to the Issuers or any of their controlling
persons.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably 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 will not be liable to such indemnified party under this
Section 5 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the exchange of the Securities,
pursuant to the Registered Exchange Offer, or the sale of the Securities,
pursuant to a Shelf Registration, as applicable, or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties 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 Issuers on the one hand or
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any
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legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding any other provision of this
Section 5(d), the Holders of the Securities shall not be required to contribute
any amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to a Registration Statement
exceeds the amount of damages which such Holders have 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act shall have the same rights to contribution as the Issuers.
(e) The agreements contained in this Section 5 shall survive
the sale of the Securities pursuant to a Registration Statement and shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstances. (a)
Additional interest (the "Additional Interest") with respect to the Transfer
Restricted Securities shall be assessed as follows if any of the following
events occur (each such event in clauses (i) through (iii) below being herein
called a "Registration Default"):
(i) by August 15, 1999 (60 days after the Closing Date)
(or if such day is not a business day, the first
business day thereafter), neither the Exchange
Registration Statement nor a Shelf Registration
Statement has been filed with the Commission;
(ii) by January 22, 2000 (220 days after the Closing Date)
(or if such day is not a business day, the first
business day thereafter), neither the Registered
Exchange Offer is consummated nor is the Shelf
Registration Statement declared effective by the
Commission; or
(iii) any Registration Statement required by this Agreement
has been declared effective by the Commission but (A)
such Registration Statement thereafter ceases to be
effective or (B) such Registration Statement or the
related prospectus ceases to be usable in connection
with resales of Transfer Restricted Securities during
the periods specified herein because either (1) any
event occurs as a result of which the related
prospectus forming part of such Registration
Statement would include any untrue statement of a
material fact or omit to state any material fact
necessary to make the statements therein in the light
of the circumstances under which they were made not
misleading, or (2) it shall be necessary to amend
such
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Registration Statement or supplement the related
prospectus, to comply with the Securities Act or the
Exchange Act or the respective rules thereunder.
Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Issuers or pursuant to operation of law or as a result of any
action or inaction by the Issuers.
Additional Interest shall accrue on the Transfer Restricted
Securities over and above the interest set forth in the title of the Securities
from and including the date on which any such Registration Default shall occur
to but excluding the date on which all such Registration Defaults have been
cured, at a rate of 0.25% per annum (the "Additional Interest Rate") for the
first 90-day period immediately following the occurrence of such Registration
Default, regardless of the number of such Registration Defaults. The Additional
Interest Rate shall increase by an additional 0.25% per annum with respect to
each subsequent 90- day period until all Registration Defaults have been cured,
up to a maximum Additional Interest Rate of 0.50% per annum.
(b) A Registration Default referred to in Section 6(a)(iii)
hereof shall be deemed not to have occurred and be continuing in relation to a
Shelf Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to such Shelf Registration Statement to incorporate annual audited
financial information with respect to the Issuers where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events with respect
to the Issuers that would need to be described in such Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
Issuers are proceeding promptly and in good faith to amend or supplement such
Shelf Registration Statement and related prospectus to describe such events;
provided, however, that in any case if such Registration Default occurs for a
continuous period in excess of 30 days, Additional Interest shall be payable in
accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured.
(c) Any amounts of Additional Interest due pursuant to Section
6(a) will be payable in cash on the regular interest payment dates with respect
to the Securities. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest Rate by the principal amount of
the Securities and further multiplied by a fraction, the numerator of which is
the number of days such Additional Interest Rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
(d) "Transfer Restricted Securities" means each Security until
(i) the date on which such Security has been exchanged by a person other than a
broker-dealer for a freely transferable Exchange Security in the Registered
Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered
Exchange Offer of an Initial Security for an Exchange Security, the date on
which such Exchange Security is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange
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Offer Registration Statement, (iii) the date on which such Security has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iv) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.
7. Rules 144 and 144A. The Issuers shall use their reasonable
best efforts to file the reports required to be filed by them under the
Securities Act and the Exchange Act in a timely manner and, if at any time the
Issuers are not required to file such reports, they will, upon the request of
any Holder of Securities, make publicly available other information so long as
necessary to permit sales of their securities pursuant to Rules 144 and 144A.
The Issuers covenant that they will take such further action as any Holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and
144A (including the requirements of Rule 144A(d)(4)). The Issuers will provide a
copy of this Agreement to prospective purchasers of Initial Securities
identified to the Issuers by the Initial Purchasers upon request. Upon the
request of any Holder of Initial Securities, the Issuers shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Issuers to register any of its securities pursuant to the Exchange
Act.
8. Underwritten Registrations. If any of the Transfer
Restricted Securities covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering ("Managing Underwriters") will be
selected by the Holders of a majority in aggregate principal amount of such
Transfer Restricted Securities to be included in such offering.
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Miscellaneous.
(a) Remedies. The Issuers acknowledge and agree that any
failure by the Issuers to comply with their obligations under Section 1
and 2 hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Issuers' obligations under Sections 1 and 2
hereof. The Issuers further agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
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(b) No Inconsistent Agreements. The Issuers will not on or
after the date of this Agreement enter into any agreement with respect
to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the
holders of the Issuers' securities under any agreement in effect on the
date hereof.
(c) Amendments and Waivers. Except as set forth in Section
9(l) hereof, the provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Issuers and the
written consent of the Holders of a majority in principal amount of the
Securities affected by such amendment, modification, supplement, waiver
or consents; provided, however, that no amendment, modification, or
supplement or waiver or consent to the departure with respect to the
provisions of Section 6 hereof shall be effective as against any Holder
of Transfer Restricted Securities or any of the Issuers unless
consented to in writing by such Holder of Transfer Restricted
Securities or the Issuers, as the case may be.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, first
class mail, facsimile transmission, or air courier which guarantees
overnight delivery:
(1) if to a Holder of the Securities, at the most
current address given by such Holder to the Issuers.
(2) if to the Initial Purchasers;
Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Transactions Advisory Group
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(3) if to any Issuer, at the following address:
Express Scripts, Inc.
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00000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Xx., Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by recipient's facsimile machine operator, if sent
by facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(e) Third Party Beneficiaries. The Holders shall be third
party beneficiaries to the agreements made hereunder between the Issuers, on the
one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder.
(f) Successors and Assigns. This Agreement shall be binding
upon the Issuers and their successors and assigns.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity,
