If he gets hurt, them's the breaks.
Not really, the understanding is if a pick gets hurt in mini's he gets contracted for the average price from the previous year plus the standard yearly % increase.
Example: Last years #X pick got $100, this years percentage (almost a cost of living type growth) increase is 3%, so a fair market for pick #X is $103.
So if a guy gets hurt in mini camp before contract he gets a 1 year contract under established terms and the team takes care of the medical side too.
Holding out is simply a tactic to use in negotiations, as in "I may be pick #X, but I'm freaking special and deserve more than the standard amount for my pick level. Oh, and I'm not coming in 'till you and my agent agree on how special I am."
This is why you virtually never hear of some dude from round 3 or lower holding out. The hundred dudes picked before you prove you're not very special and teams just say "later".
And some dudes (LT for example) prove they are special after the holdout and were worth the investment. But not many, especially in their first year (probably like Merriman, a guy adapting to a new pro position and techniques, along with everything else).