Exhibit 4.2
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FORM OF
REGISTRATION RIGHTS AGREEMENT
BETWEEN
MERCK & CO., INC.
AND
MEDCOHEALTH SOLUTIONS, INC.
Table of Contents
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Page
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ARTICLE 1 DEFINITIONS......................................................1
Section 1.1. Holders...................................................1
Section 1.2. Indemnification Agreement.................................1
Section 1.3. SEC.......................................................1
Section 1.4. Selling Holders...........................................1
Section 1.5. Shares....................................................2
ARTICLE 2 DEMAND REGISTRATION..............................................2
Section 2.1. Notice....................................................2
Section 2.2. Registration Expenses.....................................2
Section 2.3. Selection of Professionals................................2
Section 2.4. Other Shares..............................................3
Section 2.5. Permitted Transferees.....................................3
Section 2.6. Shelf Registration; Convertible Registration;
Exchange Registration.....................................3
Section 2.7. SEC Form..................................................3
Section 2.8. Other Registration Rights.................................3
ARTICLE 3 PIGGYBACK REGISTRATIONS..........................................4
Section 3.1. Notice and Registration...................................4
Section 3.2. Selection of Professionals................................5
Section 3.3. Registration Expenses.....................................5
ARTICLE 4 REGISTRATION PROCEDURES..........................................5
Section 4.1. Registration and Qualification............................5
Section 4.2. Underwriting..............................................7
Section 4.3. Listing...................................................8
Section 4.4. Holdback Agreements.......................................8
ARTICLE 5 PREPARATION......................................................9
Section 5.1. Reasonable Investigation..................................9
ARTICLE 6 INDEMNIFICATION..................................................9
ARTICLE 7 BENEFITS AND TERMINATION OF REGISTRATION RIGHTS.................10
Section 7.1. Benefits and Termination of Registration Rights...........10
ARTICLE 8 REGISTRATION EXPENSES...........................................11
Section 8.1. Registration Expenses....................................11
ARTICLE 9 DISPUTE RESOLUTION..............................................11
ARTICLE 10 MISCELLANEOUS..................................................12
Section 10.1. No Inconsistent Agreements..............................12
Section 10.2. Entire Agreement........................................12
Section 10.3. Governing Law; Forum....................................12
Section 10.4. Termination.............................................12
Section 10.5. Notices.................................................12
Section 10.6. Counterparts............................................13
Section 10.7. Binding Effect; Assignment; Third-Party Beneficiaries...13
Section 10.8. Offset..................................................13
Section 10.9. Severability............................................14
Section 10.10. Failure or Indulgence Not Waiver........................14
Section 10.11. Amendment...............................................14
Section 10.12. Authority...............................................14
Section 10.13. Interpretation..........................................14
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made and entered
into as of [ ] __, 2002, between Merck & Co., Inc., a New Jersey corporation
("Merck"), and MedcoHealth Solutions, Inc., a Delaware corporation (the
"Company" or "Medco"). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms set forth in the Master
Separation Agreement, dated as of the date hereof, between Merck and Medco (the
"Master Separation Agreement").
WHEREAS, the Board of Directors of Merck has determined that it is
appropriate and desirable for Merck to separate the Medco Group from the Merck
Group (the "Separation"); and
WHEREAS, in connection with the foregoing, Merck and Medco are entering
into a Master Separation Agreement, which provides, among other things, for the
Separation, the IPO of Medco Common Stock, the declaration of the Merck Dividend
immediately prior to the IPO Closing Date, the subsequent Distribution of all
the Medco Common Stock then owned by Merck to the holders of Merck common stock,
and the execution and delivery of certain other agreements in order to
facilitate and provide for the foregoing; and
WHEREAS, upon consummation of the IPO, Merck will own no less than 80.1% of
the outstanding shares of Medco Common Stock; and
WHEREAS, in connection with the Separation, the parties desire to enter
into this Agreement to provide Merck with certain registration rights with
respect to the Medco Common Stock following the IPO.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and intending to be legally bound
hereby, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Holders. "Holders" means, collectively Merck and any
Permitted Transferees (as defined in Section 2.5).
Section 1.2. Indemnification Agreement. "Indemnification
Agreement" means the Indemnification and Insurance Matters Agreement
between the parties.
Section 1.3. SEC. "SEC" means the Securities and Exchange
Commission.
Section 1.4. Selling Holders. "Selling Holders" means,
collectively the Holders of Shares proposed to be included in any
registration under this Agreement.
Section 1.5. Shares. "Shares" shall mean, subject to Section 7.1,
those shares of Medco Common Stock that are held by Merck immediately following
the IPO. The "Shares" shall include any securities issued or issuable with
respect to the Shares by way of a stock or other dividend or a stock split, in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise.
ARTICLE 2
DEMAND REGISTRATION
Section 2.1. Notice. Upon the terms and subject to the conditions set
forth herein, upon written notice of any Holder requesting that the Company
effect the registration under the Securities Act, of any or all of the Shares
held by it, which notice shall specify the intended method or methods of
disposition of such Shares (which methods may include, without limitation, a
Shelf Registration, a Convertible Registration or an Exchange Registration (as
such terms are defined in Section 2.6)), the Company will promptly give written
notice of the proposed registration to all other Holders and will use its best
efforts to effect (at the earliest reasonable date) the registration under the
Securities Act of such Shares (and the Shares of any other Holders joining in
such request as are specified in a written notice received by the Company within
[5] days after receipt of the Company's written notice of the proposed
registration) for disposition in accordance with the intended method or methods
of disposition stated in such request (each registration request pursuant to
this Section 2.1 is sometimes referred to herein as a "Demand Registration");
provided, however, that:
(a) any Demand Registration requested hereunder shall request the
registration of Shares representing at least [5]% of the then-outstanding shares
of Medco Common Stock, based on the number of such shares outstanding as
reported by the Company in its most recent annual or quarterly report filed with
the SEC under the Exchange Act; and
(b) if a Demand Registration is an underwritten offering and the
managing underwriters advise the Company in writing that in their opinion the
number of Shares requested to be included in such offering exceeds the number of
Shares which can be sold in an orderly manner in such offering within a price
range acceptable to the Holders of a majority of the Shares initially requesting
such registration or without materially adversely affecting the market for the
Medco Common Stock, the Company shall include in such registration the number of
Shares requested to be included therein which in the opinion of such
underwriters can be sold in an orderly manner within the price range of such
offering and without materially adversely affecting the market for the Medco
Common Stock, pro rata among the respective Holders thereof on the basis of the
amount of Shares owned by each Holder requesting inclusion of Shares in such
registration or as otherwise agreed by the Holders requesting inclusion of
Shares in such registration.
Section 2.2. Registration Expenses. The Company shall pay all
Registration Expenses (as defined in Article 8) for any registration requested
pursuant to this Article 2 (including any registration that is delayed or
withdrawn).
Section 2.3. Selection of Professionals. The Holders of a majority of
the Shares included in any Demand Registration shall have the right to select
the investment banker(s) and manager(s) to administer the offering. The Holders
of a majority of the Shares included in any Demand Registration shall have the
right to select the financial printer, the solicitation and/or exchange agent
(if any) and one counsel for the Selling Holders. The Holders of a majority of
the Shares included in any Demand Registration also shall be entitled to
designate any broker or other agent through whom the Holders shall sell into the
public market any Shares pursuant to a Shelf Registration that is not an
underwritten offering. The Company shall select its own outside counsel and
independent auditors.
Section 2.4. Other Shares. Without the approval of the Holders of a
majority of the Shares included in any Demand Registration, the Company shall
not have the right to cause the registration in any Demand Registration of any
securities of any other Person.
Section 2.5. Permitted Transferees. As used in this Agreement,
"Permitted Transferees" shall mean any transferee, whether direct or indirect,
of Shares so designated by Merck (or a subsequent Holder) in a written notice to
the Company as provided for in Section 9.7. Any Permitted Transferees of the
Shares shall be subject to and bound by all of the terms and conditions herein
applicable to Holders. The notice required by this Section 2.5 shall be signed
by both the transferring Holder and the Permitted Transferees so designated and
shall include an undertaking by the Permitted Transferees to comply with the
terms and conditions of this Agreement applicable to Holders. In the event of a
transfer of any of the Shares to a transferee that is not a Permitted
Transferee, the Shares so transferred shall no longer be subject to this
Agreement.
Section 2.6. Shelf Registration; Convertible Registration; Exchange
Registration. With respect to any Demand Registration, the requesting Holders
may request the Company to effect a registration of the Shares (a) under a
registration statement pursuant to Rule 415 under the Securities Act (or any
successor rule) (a "Shelf Registration"); (b) in connection with such Holders'
registration under the Securities Act of securities (the "Convertible
Securities") convertible into, exercisable for or otherwise related to the
Shares (a "Convertible Registration"); or (c) in connection with any offer by
any such Holder to exchange the Shares for any debt or equity securities of such
Holder, a subsidiary or affiliate thereof or any other Person, or any
distribution by such Holder of Shares
to holders of debt or equity securities of such Holder, a subsidiary or
affiliate thereof or any other Person (an "Exchange Registration").
Section 2.7. SEC Form. The Holders of a majority of the Shares
included in any Demand Registration shall have the right to select the form of
registration statement under the Securities Act (from among the forms the
Company is then entitled to use) on which such Demand Registration shall be
registered. The Company shall use its best efforts to become eligible under the
Securities Act to use Form S-3 (or any successor form) and, after becoming
eligible to use Form S-3 (or any successor form), shall use its best efforts to
remain so eligible.
Section 2.8. Other Registration Rights. The Company shall not grant to
any Persons the right to request the Company to register any equity securities
of the Company, or any securities convertible or exchangeable into or
exercisable for such securities unless such rights are consistent with the
rights granted under this Agreement.
ARTICLE 3
PIGGYBACK REGISTRATIONS
Section 3.1. Notice and Registration. If the Company proposes to
register any of its securities for public sale under the Securities Act (whether
proposed to be offered for sale by the Company or any other Person), on a form
and in a manner which would permit registration of the Shares for sale to the
public under the Securities Act (a "Piggyback Registration"), it will give
prompt written notice to the Holders of its intention to do so, and upon the
written request of any or all of the Holders delivered to the Company within [5]
days after the giving of any such notice (which request shall specify the Shares
intended to be disposed of by such Holders), the Company will use its best
efforts to effect, in connection with the registration of such other securities,
the registration under the Securities Act of all of the Shares which the Company
has been so requested to register by such Holders (which shall then become
Selling Holders), to the extent required to permit the disposition (in
accordance with the same method of disposition as the Company proposes to use to
dispose of the other securities) of the Shares to be so registered; provided,
however, that:
(a) if, at any time after giving such written notice of its
intention to register any of its other securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register such other
securities, the Company may, at its election, give written notice of such
determination to the Selling Holders (or, if prior to delivery of the Holders'
written request described above in this Section 3.1, the Holders) and thereupon
the Company shall be relieved of its obligation to register such Shares in
connection with the registration of such other securities (but not from its
obligation to pay Registration Expenses to the extent incurred in connection
therewith as provided in Section 3.3), without prejudice, however, to the rights
(if any) of any Selling Holders immediately to request (subject to the terms and
conditions of Article 2) that such registration be effected as a registration
under Article 2;
(b) the Company shall not be required to effect any registration
of the Shares under this Article 3 incidental to the registration of any of its
securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
employee benefit plans of the Company; and
(c) if a Piggyback Registration is an underwritten offering
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without materially
adversely affecting the marketability of the offering or the market for the
Medco Common Stock, the Company shall include in such registration (i) first,
the securities the Company proposes to sell, (ii) second, the Shares requested
to be included in such registration, pro rata among the Holders of such Shares
on the basis of the number of Shares owned by each such Holder or as otherwise
agreed by the Holders requesting inclusion of Shares in such registration, and
(iii) third, any other securities requested to be included in such registration.
Section 3.2. Selection of Professionals. If any Piggyback Registration
is an underwritten offering, the Company shall select the investment banker(s)
or manager(s) to administer the offering and the financial printer; provided,
that, no investment banker or manager shall administer such offering if the
Holders of a majority of the Shares included in such Piggyback Registration
reasonably object thereto. The Holders of a majority of the Shares included in
any Piggyback Registration shall have the right to select one counsel for the
Selling Holders. The Company shall select its own outside counsel and
independent auditors.
Section 3.3. Registration Expenses. The Company will pay all of
the Registration Expenses in connection with any registration pursuant to
this Article 3.
ARTICLE 4
REGISTRATION PROCEDURES
Section 4.1. Registration and Qualification. If and whenever the
Company is required to use its best efforts to effect the registration of any of
the Shares under the Securities Act as provided in Articles 2 and 3, the Company
will as promptly as is practicable:
(a) prepare and file with the SEC a registration statement with
respect to such Shares and use its best efforts to cause such registration
statement to become effective (provided that before filing a registration
statement or prospectus or any amendments or supplement thereto, the Company
shall furnish to the counsel selected by the Holders of a majority of the Shares
covered by such registration statement copies of all such documents proposed to
be filed (which documents shall be subject to the review and comment of such
counsel, subject to paragraph (i) below));
(b) except in the case of a Shelf Registration, Convertible
Registration or Exchange Registration, prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all of the Shares until the earlier of (i) such
time as all of such Shares have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement or (ii) the
expiration of nine months after such registration statement becomes effective;
(c) in the case of a Shelf Registration (but not including any
Convertible Registration or Exchange Registration), prepare and file with the
SEC such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Shares subject thereto for
a period ending on the earlier of (i) 18 months after the
effective date of such registration statement and (ii) the date on which all the
Shares subject thereto have been sold pursuant to such registration statement
(the "Shelf Effective Period");
(d) in the case of a Convertible Registration or an Exchange
Registration, prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
of the Shares subject thereto until such time as the rules, regulations and
requirements of the Securities Act and the terms of the Convertible Securities,
if any, no longer require such Shares to be registered under the Securities Act
(the "Convertible Effective Period");
(e) furnish to the Selling Holders and to any underwriter of such
Shares such number of conformed copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and
such other documents as the Selling Holders or such underwriter may reasonably
request;
(f) use its best efforts to register or qualify all of the Shares
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as the Selling Holders or any underwriter of such
Shares shall reasonably request, and do any and all other acts and things which
may be necessary or advisable to enable the Selling Holders or any underwriter
to consummate the disposition in such jurisdictions of the Shares covered by
such registration statement, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction where it is not so qualified, or to subject itself to
taxation in any such jurisdiction, or to consent to general service of process
in any such jurisdiction;
(g) (i) furnish to the Selling Holders, addressed to them, an
opinion of counsel for the Company and (ii) use its best efforts to furnish to
the Selling Holders, addressed to them, a "cold comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included in such registration statement, covering substantially the
same matters with respect to such registration statement (and the prospectus
included therein) and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request, in each case, in form and
substance and as of the dates reasonably satisfactory to the Selling Holders;
(h) immediately notify the Selling Holders, at any time when a
prospectus relating to a registration pursuant to Article 2 or 3 is required to
be delivered under the Securities Act, of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and at the request of the Selling Holders prepare and furnish to the
Selling Holders a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Shares, such prospectus shall not include an untrue statement
of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
are made, not misleading;
(i) permit any Selling Holder which Selling Holder, in its sole
and exclusive judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such Holder and
its counsel should be included;
(j) to make available members of management of the Company, as
selected by the Holders of a majority of the Shares included in such
registration, for assistance in the selling effort relating to the Shares
covered by such registration, including, but not limited to, the participation
of such members of the Company's management in road show presentations;
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such registration statement for sale in any
jurisdiction, the Company shall use it best efforts promptly to obtain the
withdrawal of such order;
(l) use its best efforts to cause Shares covered by such
registration statement to be registered with or approved by such other
government agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Shares; and
(m) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of
twelve months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.
The Company may require the Selling Holders to furnish the Company with
such information regarding the Selling Holders and the distribution of such
Shares as the Company may from time to time reasonably request in writing and as
shall be required by law, the SEC or any securities exchange on which any shares
of Medco Common Stock are then listed for trading in connection with any
registration.
Section 4.2. Underwriting. If requested by the underwriters for any
underwritten offering in connection with a registration requested hereunder
(including any registration under Article 3 which involves, in whole or in part,
an underwritten offering), the Company will enter into an underwriting agreement
with such underwriters for such offering, such agreement to contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities to the
effect and to the extent provided in Article 6 and the provision of opinions of
counsel and accountants' letters to the effect and to the extent provided in
Section 4.1(g). The Company may require that the Shares requested to be
registered pursuant to Article 3 be included in such underwriting on the same
terms and conditions as shall be applicable to the other securities being sold
through underwriters under such registration; provided, however, that no Selling
Holder shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties regarding
such Holder and such Holder's intended method of distribution) or to undertake
any indemnification obligations to the Company or the underwriters with respect
thereto, except as otherwise provided in Article 6 hereof. The Selling Holders
shall be parties to any such underwriting agreement, and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
such Selling Holders.
Section 4.3. Listing. In connection with the registration of any
offering of the Shares pursuant to this Agreement, the Company agrees to use its
best efforts to effect the listing of such Shares on any securities exchange on
which any shares of the Medco Common Stock are then listed or otherwise
facilitate the public trading of such Shares.
Section 4.4. Holdback Agreements.
(a) The Company shall not effect, and shall not permit any of its
directors, officers or affiliates or [any other Person to whom the Company has
granted registration rights] to effect any sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during the [90] day
period beginning on the effective date of any registration statement in
connection with a Demand Registration (other than a Shelf Registration) or a
Piggyback Registration, except pursuant to registrations on Form S-8 or any
successor form or unless the Holders of a majority of the Shares included in
such Demand Registration or the underwriters managing any such public offering
otherwise agree.
(b) If the Holders of Shares notify the Company in writing that
they intend to effect an underwritten sale of Shares registered pursuant to a
Shelf Registration pursuant to Article 2 hereof, the Company shall not effect,
and shall not permit any of its directors, officers or affiliates or [any other
Person to whom the Company has granted registration rights] to effect any sale
or distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for its equity securities, during the seven days
prior to and during the [90]-day period beginning on the date such notice is
received, except pursuant to registrations on Form S-8 or any successor form or
unless the Holders of a majority of the Shares sought to be sold in such
underwritten sale or the underwriters managing any such public offering
otherwise agree.
(c) If the Company completes an underwritten registration with
respect to any of its securities (whether offered for sale by the Company or any
other Person) on a form and in a manner that would have permitted registration
of the Shares and no Holder requested the inclusion of any Shares in such
registration, the Holders shall not effect any public sales or distributions of
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, until the termination of the
holdback period required from the Company by any underwriters in connection with
such previous registration, but in no event more than 90 days from the effective
date of such registration.
(d) Notwithstanding anything in this Section 4.4 to the contrary,
no Holder of Shares shall be precluded from distributing to any or all of its
stockholders any or all of its Shares.
ARTICLE 5
PREPARATION
Section 5.1. Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering the
Shares under the Securities Act and each sale of the Shares thereunder, the
Company will give the Selling Holders and the underwriters, if any, and their
respective counsel and accountants, access to its financial and other records,
pertinent corporate documents and properties of the Company and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Selling Holders and such underwriters
or their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
ARTICLE 6
INDEMNIFICATION
(a) In the event of any registration of any of the Shares
hereunder, the Company shall, and shall enter into additional customary
indemnification arrangements to, indemnify and hold harmless each of the Selling
Holders, each of their respective directors and officers, each Person who
participates as an underwriter in the offering or sale of such securities, each
officer and director of each underwriter, and each Person, if any, who controls
each such Selling Holder or any such underwriter within the meaning of the
Securities Act (collectively, the "Covered Persons") against any losses, claims,
damages, liabilities, fees and expenses (including attorneys' fees and
expenses), joint or several, to which such Person may be subject under the
Securities Act or otherwise insofar as such losses, claims, damages, liabilities
or expenses (or actions or proceedings in respect thereof) arise out of are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in any related registration statement filed under the Securities
Act, any preliminary prospectus or final prospectus included therein, or any
amendment or supplement thereto, or any document incorporated by reference
therein, or (ii) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and the Company will reimburse each such Covered Person, as
incurred, for any legal or any other expenses reasonably incurred by such
Covered Person in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus or final prospectus, amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by such
Selling Holder or such underwriter specifically for use in the preparation
thereof. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such Covered Person and shall survive
the transfer of such securities by the Selling Holders.
(b) Each of the Selling Holders, by virtue of exercising its
respective registration rights hereunder, agree and undertake to enter into
customary indemnification arrangements to indemnify and hold harmless (in the
same manner and to the same extent as set forth in clause (a) of this Article 6)
the Company, its directors and officers, each Person who participates as an
underwriter in the offering or sale of such securities, each officer and
director of each underwriter, and each Person, if any, who controls the Company
or any such underwriter within the meaning of the Securities Act, with respect
to any statement in or omission from such registration statement, any
preliminary prospectus or final prospectus included therein, or any amendment or
supplement thereto, if such statement or omission is contained in written
information furnished by such Selling Holder to the Company specifically for
inclusion in such registration statement or prospectus; provided, however, that
the obligation to
indemnify shall be individual, not joint and several, for each Selling Holder
and shall be limited to the net amount of proceeds received by such Selling
Holder from the sale of Shares pursuant to such registration statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer or Person and
shall survive the transfer of the registered securities by the Selling Holders.
(c) Any Person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided, however, that the failure to give
prompt notice shall not impair any Person's rights to indemnification hereunder
to the extent such failure has not prejudiced the indemnifying party) and (ii)
permit such indemnifying party to assume or participate in the defense of such
claim with counsel satisfactory to the indemnified party. Notwithstanding the
foregoing, the Selling Holders shall have the right to assume the defense of any
claim with respect to which indemnification is sought by the Selling Holders
with one or more counsel selected by a majority of the Selling Holders for which
such indemnification is sought.
(d) Indemnification similar to that specified in the preceding
subdivisions of this Article 6 (with appropriate modifications) shall be given
by the Company and the Selling Holders with respect to any required registration
or other qualification of such Shares under any federal or state law or
regulation of governmental authority other than the Securities Act.
(e) The rights of Merck and its directors and officers to
indemnification hereunder shall be in addition to, and not in limitation of, the
indemnification they are entitled to under the Indemnification and Insurance
Agreement.
ARTICLE 7
BENEFITS AND TERMINATION OF REGISTRATION RIGHTS
Section 7.1. Benefits and Termination of Registration Rights.
Notwithstanding anything contained herein to the contrary, the Holders may
exercise the registration rights granted hereunder in such manner and
proportions as they shall agree among themselves. The registration rights
hereunder shall cease to apply to any particular Shares, and such securities
shall cease to be Shares, when: (a) a registration statement with respect to the
sale of such Shares shall have become effective under the Securities Act and
such Shares shall have been disposed of in accordance with such registration
statement; (b) such Shares shall have been sold to the public pursuant to Rule
144 under the Securities Act (or any successor provision); (c) such Shares shall
have been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not, in the judgment of the Holders
hereof, require registration or qualification of them under the Securities Act
or any similar state law then in force; and (d) such Shares shall have ceased to
be outstanding.
ARTICLE 8
REGISTRATION EXPENSES
Section 8.1. Registration Expenses. As used in this Agreement, the
term "Registration Expenses" means all expenses incident to the Company's
performance of or compliance with the registration requirements set forth in
this Agreement including, without limitation, the following:
(a) all registration and filing fees; (b) the fees, disbursements and expenses
of the Company's and the Holders' counsel and accountants in connection with the
registration of the Shares to be disposed of under the Securities Act; (c) all
expenses in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to the underwriters and dealers and directly to
security holders in the case of an Exchange Registration; (d) the cost of
printing and producing any agreements among underwriters, underwriting
agreements, and blue sky or legal investment memoranda, any selling agreements
and any amendments thereto or other documents in connection with the offering,
sale or delivery of the Shares to be disposed of; (e) all expenses in connection
with the qualification of the Shares to be disposed of for offering and sale
under state securities laws, including the fees and disbursements of counsel for
the underwriters in connection with such qualification and in connection with
any blue sky and legal investment surveys; (f) the filing fees incident to
securing any required review by the New York Stock Exchange and any other
securities exchange on which the Medco Common Stock is then traded or listed of
the terms of the sale of the Shares to be disposed of and the trading or listing
of all such Shares on each such exchange; (g) the costs of preparing stock
certificates; (h) the costs and charges of the Company's transfer agent and
registrar; (i) all road show expenses; and (j) the fees and disbursements of any
custodians, solicitation agents, information agents and/or exchange agents.
Registration Expenses shall not include underwriting discounts and underwriters'
commissions attributable to the Shares being registered for sale on behalf of
the Selling Holders, which shall be paid by the Selling Holders.
ARTICLE 9
DISPUTE RESOLUTION
ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE PARTIES HERETO ARISING OUT OF OR
RELATING TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, DISPUTES CONCERNING
THE VALIDITY, INTERPRETATION OR PERFORMANCE OF OR UNDER THIS AGREEMENT OR ANY
TERM OR PROVISION HEREOF, SHALL BE EXCLUSIVELY GOVERNED BY AND SETTLED IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE III OF THE INDEMNIFICATION AGREEMENT.
ARTICLE 10
MISCELLANEOUS
Section 10.1. No Inconsistent Agreements. The Company shall not on or
after the date of this Agreement enter into any agreement with respect to its
securities that violates or subordinates the rights expressly granted to the
Holders in this Agreement. The Company shall not take any action, or permit any
change to occur, with respect to its securities which would adversely affect the
ability of the Holders of Shares to include such Shares in a registration
undertaken pursuant to this Agreement.
Section 10.2. Entire Agreement. This Agreement, the Master Separation
Agreement, the other Ancillary Agreements and any Annexes, Exhibits and
Schedules attached hereto and thereto, constitutes the entire agreement among
the parties with respect to the subject matter hereof and thereof and shall
supersede all prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof and thereof.
Section 10.3. Governing Law; Forum. This Agreement shall be
construed in accordance with, and all Disputes (as defined in the
Indemnification Agreement) hereunder shall be governed by, the procedural
(except to the extent inconsistent with the procedures set forth in Article III
of the Indemnification Agreement) and substantive laws of the State of New York
as to all matters regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable thereto. Under no circumstances may
any party seek or be awarded punitive damages under this Agreement. Any state
court sitting in New York county, New York and/or the United States District
Court for the Southern District of New York shall have exclusive jurisdiction
and venue, and each party hereto hereby submits to such jurisdiction and venue
and irrevocably waives, to the fullest extent permitted by applicable law, any
objection it may now or hereafter have to such jurisdiction or the laying of
such venue over any Disputes between the parties that are permitted to be
brought in a court, or the enforcement of any decision of an arbitrator,
pursuant to Article III of the Indemnification Agreement. Each of the parties
hereby irrevocably waives any right to a jury trial with respect to a Dispute.
Section 10.4. Termination. This Agreement may be terminated at any
time prior to the consummation of the IPO by and in the sole discretion of Merck
without the approval of Medco. This Agreement may be terminated at any time
after the IPO Closing Date by the written consent of Merck and the Holders of a
majority of the Shares. In the event of termination pursuant to this Section, no
party shall have any liability of any kind to the other party, except to the
extent otherwise agreed by the parties.
Section 10.5. Notices. All notices and other communications required
or permitted to be given by any party pursuant to the terms of this Agreement
shall be in writing to and shall be deemed to have been duly given when
delivered in person, by express or overnight mail delivery by a nationally
recognized courier (delivery charges prepaid), or by registered or certified
mail (postage prepaid, return receipt requested), as follows:
if to Merck:
Merck & Co., Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
if to Medco:
MedcoHealth Solutions, Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
furnished to the other in writing in the manner set forth above. All notices and
other communication shall be deemed to have been given and received on the date
of actual delivery.
Section 10.6. Counterparts. This Agreement, including any Annexes,
Schedules and Exhibits hereto, and the other documents referred to herein, may
be executed in counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement.
Section 10.7. Binding Effect; Assignment; Third-Party Beneficiaries.
Medco may not, directly or indirectly, in whole or in part, whether by operation
of law or otherwise, assign or transfer this Agreement or its rights or
obligations hereunder, without Merck's prior written consent and, except as
otherwise permitted hereby, any attempted
assignment, transfer or delegation without such prior written consent shall be
voidable at the sole option of Merck. Nothing in this Agreement shall restrict
any transfer of this Agreement by Merck, whether by operation of law or
otherwise. Without limiting the foregoing, this Agreement shall be binding upon
Merck and the other members of the Merck Group and Medco and the other members
of the Medco Group and their respective legal representatives, successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 10.8. Offset. In addition to, and not in limitation of, any
other remedies any member of the Merck Group or any Merck Indemnitee (as defined
in the Indemnification Agreement) may be entitled to under the Master Separation
Agreement, any Ancillary Agreement (including this Agreement) or any
Intercompany Agreement (as defined in the Indemnification Agreement) , any
member of the Merck Group or any Merck Indemnitee may satisfy any amounts owed
to such member of the Merck Group or Merck Indemnitee by any member of the Medco
Group by means of an offset against any amounts any member of the Merck Group
may from time to time owe to any member of the Medco Group or an Medco
Indemnitee, whether under the Master Separation Agreement, any Ancillary
Agreement (including this Agreement), any Intercompany Agreement, any other
agreement or arrangement existing between any member of the Merck Group and any
member of the Medco Group, or otherwise.
Section 10.9. Severability. If any term or other provision of this
Agreement or any Annexes, Schedules or Exhibits attached hereto is determined by
a court, administrative agency or arbitrator to be invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement will nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party hereto.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties hereto
as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible. If the parties
are unable to reach an agreement on any such modification, the arbitrator
selected in accordance with Article III of the Indemnification Agreement shall
have the authority to determine such modification.
Section 10.10. Failure or Indulgence Not Waiver. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right.
Section 10.11. Amendment. No change or amendment will be made to
this Agreement except by an instrument in writing signed on behalf of each
of the parties hereto.
Section 10.12. Authority. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance by it of this Agreement has been duly authorized by all necessary
corporate or other actions, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors'
rights generally and general equity principles.
Section 10.13. Interpretation. The headings contained in this
Agreement, in any Annex, Exhibit or Schedule hereto and in the table or contents
to this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Any capitalized term used
in any Annex, Schedule or Exhibit but not otherwise defined therein, shall have
the meaning assigned to such term in this Agreement. When a reference is made in
this Agreement to an Article or Section, or an Annex, Exhibit or Schedule, such
reference shall be to an Article or Section of, or an Annex, Exhibit or Schedule
to, this Agreement unless otherwise indicated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date and year first written above.
MERCK & CO., INC.
By:
----------------------------
Name:
Title:
MEDCOHEALTH SOLUTIONS, INC.
By:
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Name:
Title:
