EXHIBIT 1
MERCK & CO., INC.
$3,817,795,000
MEDIUM-TERM NOTES, SERIES F
DISTRIBUTION AGREEMENT
January 12, 2005
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
4 World Financial Center,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
▇.▇. ▇▇▇▇▇▇ Securities Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Citigroup Global Markets Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
Merck & Co., Inc., a New Jersey corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
from time to time its Medium-Term Notes, Series F (the "Securities"), at an
aggregate initial offering price of up to $3,817,795,000 (or the equivalent
thereof in one or more foreign currencies or currency units), subject to
reduction as the result of the concurrent sale of other Debt Securities (as
defined in the Prospectus) by the Company, and agrees with each of you
(individually, an "Agent", and collectively, the "Agents") as set forth in this
Agreement.
Subject to the terms and conditions stated herein, the Company
hereby (i) appoints each Agent as an agent of the Company for the purpose of
soliciting and receiving offers to purchase Securities from the Company pursuant
to Section 2(a) hereof
and (ii) agrees that whenever it determines to sell Securities directly to any
Agent as principal, for resale to others, it will, unless otherwise agreed by
the Company and the agents, enter into a separate agreement, substantially in
the form of Annex II hereto, relating to such sale or another agreement (which
may be oral and confirmed in writing) relating to the purchase by such Agent as
principal (each a "Terms Agreement"), in each case in accordance with Section
2(b) hereof. The Company reserves the right to sell Securities directly on its
own behalf and to enter into agreements substantially identical hereto with
other broker-dealers as Agents. This Distribution Agreement shall not be
construed to create either an obligation on the part of the Company to sell any
Securities or an obligation of any of the Agents to purchase Securities as
principal.
The Securities will be issued under the Indenture, dated as of April
1, 1991, as amended (the "Indenture"), between the Company and U.S. Bank Trust
National Association, as Trustee (the "Trustee"), and the terms and rights of
the Securities shall be as specified in or established pursuant to the
Indenture. The Securities shall have the maturity ranges, interest rates, if
any, redemption provisions and other terms set forth in the Prospectus referred
to below as it may be amended or supplemented from time to time. The Securities
will be issued, and the terms thereof established, from time to time by the
Company in accordance with the Indenture and the Administrative Procedures
attached hereto as Annex II (the "Administrative Procedures") and, if
applicable, will be specified in a related Terms Agreement.
1. The Company represents and warrants to, and agrees with, each
Agent that:
(a) Two registration statements on Form S-3 (File Nos. 333-118186
and 333-72456) in respect of debt securities of the Company, including the
Securities, have been filed with the Securities and Exchange Commission
(the "Commission"); such registration statements and any post-effective
amendment thereto, each in the form heretofore delivered or to be
delivered to such Agent, excluding exhibits to such registration
statement, but including all documents incorporated by reference in the
prospectus included in the latest registration statement, have been
declared effective by the Commission in such form; no other document with
respect to such registration statements or documents incorporated by
reference therein has been filed or transmitted for filing with the
Commission (other than the prospectuses filed pursuant to Rule 424(b)
under the Securities Act of 1933, as amended (the "Act"), each in the form
heretofore delivered to the Agents) on or prior to the date hereof; and no
stop order suspending the effectiveness of any such registration statement
has been issued and no proceeding for that purpose has been instituted or
threatened by the Commission (any preliminary prospectus included in such
registration statements or filed with the Commission pursuant to Rule
424(a) under the Act is hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statements, including all exhibits
thereto and the documents incorporated by reference in the prospectus
contained in such registration statements at the time such part of the
registration statements became effective but excluding Form T-1, each as
amended at the time such part of the
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registration statements became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus (including any
prospectus supplement) relating to the Securities, in the form in which it
has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter
called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the applicable
form under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus, including any
supplement to the Prospectus that sets forth only the terms of a
particular issue of the Securities (a "Pricing Supplement"), shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein by reference; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that
is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to and include the Prospectus as amended or supplemented (including
by the applicable Pricing Supplement filed in accordance with Section 4(a)
hereof) in relation to Securities sold pursuant to this Agreement, in the
form filed or transmitted for filing with the Commission pursuant to Rule
424(b) under the Act and in accordance with Section 4(a) hereof, including
any documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in
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writing to the Company by any Agent expressly for use in the Prospectus as
amended or supplemented to relate to a particular issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects
to the requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent expressly for
use in the Prospectus as amended or supplemented to relate to a particular
issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the consolidated
capital stock or any material increase in the consolidated long-term debt
of the Company and its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Prospectus;
(e) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of New Jersey, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(f) Each of the subsidiaries of the Company has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or the ownership or leasing of its property
requires such qualification, except where failure to qualify would not
have a material adverse effect upon the Company and its consolidated
subsidiaries taken as a whole;
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(g) The series constituting the Securities has been duly authorized
and established in conformity with the Indenture and, when the terms of a
particular Security and of the issue and sale thereof have been duly
authorized and established by all necessary corporate action in conformity
with the Indenture and such Security has been duly completed, executed,
authenticated and issued in accordance with the Indenture, and delivered
against payment therefor as contemplated by this Agreement and any
applicable Terms Agreement, such Security will have been duly executed,
authenticated, issued and delivered and will constitute a valid and
legally binding obligation of the Company entitled to the benefits
provided by the Indenture; the Indenture has been duly authorized and
qualified under the Trust Indenture Act and constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indenture conforms and the Securities will conform to
the descriptions thereof contained in the Prospectus as amended or
supplemented;
(h) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of the
Company or any of its subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation, as amended, or the By-Laws of the Company or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any court
or governmental agency or body is required for the solicitation of offers
to purchase Securities, the issue and sale of the Securities or the
consummation by the Company of the other transactions contemplated by this
Agreement, any Terms Agreement or the Indenture, except such as have been,
or will have been prior to the Commencement Date (as defined in Section 3
hereof), obtained under the Act or the Trust Indenture Act and such
consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the solicitation by such Agent of offers to purchase
Securities from the Company and with purchases of Securities by such Agent
as principal, as the case may be, in each case in the manner contemplated
hereby;
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(i) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or to which any property
of the Company or any of its subsidiaries is the subject, other than as
set forth in the Prospectus which, if determined adversely to the Company
or any of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and
(j) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of Securities
which shall have been issued and sold by the Company hereunder or under
any Terms Agreement and of any debt securities of the Company (other than
such Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement.
2. (a) On the basis of the representations and warranties, and
subject to the terms and conditions herein set forth, each of the Agents hereby
severally and not jointly agrees, as agent of the Company, to use its reasonable
efforts to solicit and receive offers to purchase the Securities from the
Company upon the terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. So long as the provisions of this Agreement
relating to the solicitation of offers to purchase Securities from the Company
shall not have been terminated pursuant to Section 10 with respect to any Agent,
the Company shall not, without the consent of such Agent, solicit or accept
offers to purchase, or sell, Securities except pursuant to this Agreement or any
Terms Agreement, or except pursuant to a private placement not constituting a
public offering under the Act or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does not provide for a
continuous offering of medium-term debt securities. However, (i) the Company
reserves the right to sell, and may solicit and accept offers to purchase,
Securities directly on its own behalf with persons other than broker-dealers,
and, in the case of any such sale not resulting from a solicitation made by any
Agent, no commission will be payable with respect to such sale; and (ii) the
Company shall have the right at any time to accept a specific offer to purchase
Securities solicited by a person other than one or more of the Agents or to
agree with another person that such person shall become an Agent hereunder or
that such person may from time to time solicit and receive offers to purchase
Securities from the Company (each such other person, an "Other Dealer"), in each
case without obtaining the prior consent of any of the Agents, provided that (x)
the Company shall give each of the Agents notice of its acceptance of such an
offer or making such an agreement and (y) any Other Dealer shall agree to be
bound by and subject to the terms and conditions of this Agreement binding on
the Agents (including the commission schedule set forth on Annex I, except for
any commission as agreed between such Other Dealer and the Company).
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Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedures attached hereto
as Annex III as they may be amended from time to time by written agreement
between the Agents and the Company (the "Administrative Procedures"). Each Agent
and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them in the Administrative
Procedures. The Company will furnish to the Trustee a copy of the Administrative
Procedures as from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities from the Company. As soon as
practicable, but in any event not later than one Business Day in New York City,
after receipt of notice from the Company, the Agents will suspend solicitation
of offers to purchase Securities from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed. Any time at which
no such suspension of solicitation of offers is in effect and any time at which
no suspension of solicitation of offers to purchase Securities pursuant to
Section 4(c) is in effect, and any time when either any Agent shall own any
Securities with the intention of reselling them or the Company has accepted an
offer to purchase Securities but the related settlement has not occurred, is
referred to herein as a "Marketing Time." During such time as the solicitation
of offers to purchase the Securities shall be suspended, the Company shall not
be required to comply with the provisions of Sections 4(h), 4(i) and 4(j),
provided that, at the commencement of the next Marketing Time, the Company
shall, if requested by any Agent, promptly deliver to the Agents the opinion,
accountants' letter and certificate required by Sections 4(h), 4(i) and 4(j),
respectively, except that the Company need deliver only one such opinion, one
such accountants letter and one such certificate, each of which shall relate to
the Registration Statement and the Prospectus as amended or supplemented at the
time such Marketing Time commences.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount in accordance with the schedule
set forth in Annex I hereto unless otherwise agreed.
As Agents, you are authorized to solicit offers to purchase the
Securities only in authorized denominations as set forth in the Prospectus at a
purchase price equal to 100% of their principal amount unless otherwise
indicated on the applicable pricing supplement to the Prospectus. Each Agent
shall communicate to the Company, orally or in writing, each offer to purchase
Securities other than those rejected by such Agent. The Company shall have the
sole right to accept offers to purchase Securities and may reject any proposed
purchase of Securities as a whole or in part. The Agents shall have the right,
in their discretion reasonably exercised, to reject any offer to purchase
Securities, as a whole or in part, and any such rejection by the Agents shall
not be deemed a breach of their agreements contained herein.
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(b) Unless the Company and the Agents otherwise agree, each sale of
Securities to any Agent as principal shall be made in accordance with the terms
of this Agreement and a Terms Agreement, which will provide for the sale of such
Securities to, and the purchase thereof by, such Agent. A Terms Agreement may
also specify certain provisions relating to the reoffering of such Securities by
such Agent. The commitment of any Agent to purchase Securities as principal
pursuant to any Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Securities to be purchased by any Agent
pursuant thereto, the price to be paid to the Company for such Securities, any
provisions relating to rights of, and default by, underwriters acting together
with such Agent in the reoffering of the Securities and the time (each, a "Time
of Delivery") and date and place of delivery of and payment for such Securities.
Such Terms Agreement shall also specify any requirements for officers'
certificates, opinions of counsel and accountants' letters pursuant to Section 4
hereof.
(c) Each Agent agrees that, with respect to any Security denominated
in a currency other than U.S. dollars, it will not (i) as agent, directly, or
indirectly, solicit offers to purchase, or (ii) as principal under any Terms
Agreement or otherwise, directly or indirectly, offer, sell or deliver, such
Security in, or to residents of, the country issuing such currency (or if such
Security is denominated in euros, not to residents of the 11 member states of
the European Monetary Union; or if such Security is denominated in a composite
currency, not to residents in any country issuing a currency comprising a
portion of such composite currency), except, in each case, as permitted by
applicable law.
3. The documents required to be delivered pursuant to Section 6
hereof on the Commencement Date (as defined below) shall be delivered to the
Agents at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, at 11:00 a.m., New York City time, on the date of this Agreement,
which date and time of such delivery may be postponed by agreement between the
Agents and the Company but in no event shall be later than the day prior to the
date on which solicitation of offers to purchase Securities is commenced or on
which any Terms Agreement is executed (such time and date being referred to
herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall
be disapproved by any Agent promptly after reasonable notice thereof or
(B) after the date of any Terms Agreement and prior to the related Time of
Delivery, which shall be disapproved by any Agent party to such Terms
Agreement promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant to
this Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and to file such Pricing Supplement
pursuant to and in accordance with Rule 424(b) under
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the Act; (iii) to make no amendment or supplement to the Registration
Statement or Prospectus, other than any Pricing Supplement, at any time
prior to having afforded each Agent a reasonable opportunity to review and
comment on it, and if the Company effects any amendment or supplementation
of the Registration Statement or the Prospectus to which an Agent objects,
such Agent shall be relieved of its obligations under Section 2(a) to
solicit offers to purchase Securities until such time as the Company shall
have filed such further amendments or supplements such that such Agent is
reasonably satisfied with the Registration Statement and the Prospectus,
as then amended or supplemented; (iv) to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities, and
during such same period to advise such Agent, promptly after the Company
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or has become effective or any
supplement to the Prospectus or any amended Prospectus (other than any
Pricing Supplement that relates to Securities not purchased through or by
such Agent) has been filed with or mailed for filing to the Commission, of
the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amendment or supplement of the Registration Statement or
Prospectus or for additional information; and (v) in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or
suspending any such qualification, to use promptly its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale
under the securities laws of such United States jurisdictions as such
Agent may request and to comply with such laws so as to permit the
continuance of sales and dealings therein for as long as may be necessary
to complete the distribution or sale of the Securities; provided, however,
that in connection therewith the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedures), in the form in which it is
filed with the Commission pursuant to Rule 424 under the Act, and with
copies of the documents incorporated by reference therein, all in such
quantities as such Agent may reasonably request from time to time; and,
if, during any Marketing Time a
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prospectus relating to the Securities is required to be delivered under
the Act, any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify such Agent
promptly by telephone (with confirmation in writing) and request such
Agent, in its capacity as agent of the Company, to suspend solicitation of
offers to purchase Securities from the Company (and, if so notified, such
Agent shall cease such solicitations as soon as practicable, but in any
event not later than one Business Day in New York City later) and to cease
making offers or sales of Securities which an Agent may then own as
principal; and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus as then amended or supplemented,
to so advise such Agent promptly by telephone (with confirmation in
writing) and to prepare and cause to be filed promptly with the Commission
an amendment or supplement to the Registration Statement or the Prospectus
as then amended or supplemented that will correct such statement or
omission or effect such compliance; provided, however, that if during such
same period such Agent continues to own Securities purchased from the
Company by such Agent as principal or such Agent is otherwise required to
deliver a prospectus in respect of transactions in the Securities, the
Company shall promptly prepare and file with the Commission such an
amendment or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than 90 days after the close of
the period covered thereby, an earning statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or other)
furnished to stockholders, and deliver to such Agent (i) as soon as they
are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company
as such Agent may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
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(f) That, from the date of any Terms Agreement with such Agent and
continuing to and including the earlier of (i) the termination of the
trading restrictions for the Securities purchased thereunder, as notified
to the Company by such Agent, and (ii) the related Time of Delivery, not
to offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company which both mature more than 9 months after such
Time of Delivery and are substantially similar to the Securities, without
the prior written consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder, and each execution and delivery by the Company of a
Terms Agreement with such Agent, shall be deemed to be an affirmation to
such Agent that the representations and warranties of the Company
contained in or made pursuant to this Agreement are true and correct as of
the date of such acceptance or of such Terms Agreement, as the case may
be, as though made at and as of such date, and an undertaking that such
representations and warranties will be true and correct as of the
settlement date for the Securities relating to such acceptance or as of
the Time of Delivery relating to such sale, as the case may be, as though
made at and as of such date (except that such representations and
warranties shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Securities);
(h) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement),
each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus and each time, if so
indicated in the applicable Terms Agreement, the Company sells Securities
to an Agent as principal, each such time to be referred to for purposes of
this Section 4(h) as a "Representation Date", the Company shall, if
requested by any Agent, furnish or cause to be furnished forthwith to such
Agent a written opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General Counsel of
the Company (or such other person who shall be General Counsel of the
Company at such time of delivery), dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as
the case may be, in form satisfactory to such Agent, of the same tenor as
the opinion set forth in Section 6(c) hereof; or, in lieu of such opinion,
an opinion that reconfirms matters set forth in a prior opinion delivered
under Section 6(c) or this Section 4(h), except that, in either case any
such opinion furnished under this Section 4(h) shall relate to the
Registration Statement and the Prospectus as amended or supplemented at
such Representation Date and shall state that the Securities sold in the
relevant Applicable Period (as defined below) or at such Time of Delivery,
as the case may be, have been duly executed, authenticated, issued and
delivered and constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject only to the
exceptions set forth in clause (v) of Section 6(c) hereof as to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and general equity
-11-
principles, and conform to the description thereof contained in the
Prospectus as amended or supplemented at the relevant settlement date or
dates for the sale of such Securities. For the purpose of this Section
4(h), "Applicable Period" shall mean with respect to any opinion delivered
on a Representation Date the period commencing on the date as of which the
most recent prior opinion delivered under Section 6(c) or this Section
4(h) speaks and ending on such Representation Date;
(i) That at each Representation Date on which the Registration
Statement or the Prospectus shall be amended or supplemented (other than
by a Pricing Supplement) or on which a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus (other than
the filing of an 8-K with an earnings release), in either case to set
forth financial information included in or derived from the Company's
consolidated financial statements or accounting records, and each time, if
so indicated in the applicable Terms Agreement, the Company sells
Securities to an Agent as principal, the Company shall, if requested by
any Agent, cause the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
forthwith to furnish such Agent a letter, dated the date of such
amendment, supplement, incorporation by reference or the Time of Delivery
relating to such sale, as the case may be, in form satisfactory to such
Agent, of the same tenor as the letter referred to in Section 6(d) hereof
but modified to relate to the Registration Statement and the Prospectus as
amended or supplemented to the date of such letter, with such changes as
may be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company, to the
extent such financial statements and other information are available as of
a date not more than five business days prior to the date of such letter;
provided, however, that, with respect to any financial information or
other matter, such letter may reconfirm as true and correct at such date
as though made at and as of such date, rather than repeat, statements with
respect to such financial information or other matter made in the letter
referred to in Section 6(d) hereof which was last furnished to such Agent;
(j) That at each Representation Date and each time, if so indicated
in the applicable Terms Agreement, the Company sells Securities to an
Agent as principal the Company shall, if requested by any Agent, furnish
or cause to be furnished forthwith to such Agent a certificate, dated the
date of such supplement, amendment, incorporation by reference or the Time
of Delivery relating to such sale, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such
Agent, to the effect that the statements contained in the certificate
referred to in Section 6(g) hereof which was last furnished to such Agent
are true and correct at such date as though made at and as of such date
(except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
-12-
date) or, in lieu of such certificate, certificates of the same tenor as
the certificates referred to in Section 6(g) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date; and
(k) To offer to any person who has agreed to purchase Securities as
the result of an offer to purchase solicited by such Agent, acting as
agent, the right to refuse to purchase and pay for such Securities if, on
the related settlement date fixed pursuant to the Administrative
Procedures, any condition set forth in Section 6(a), 6(e) or 6(f) hereof
shall not have been satisfied (it being understood that the judgment of
such person with respect to the impracticability or inadvisability of such
purchase of Securities shall be substituted, for purposes of this Section
4(k), for the respective judgments of an Agent with respect to certain
matters referred to in such Sections 6(a), 6(e) and 6(f), and that such
Agent shall have no duty or obligation whatsoever to exercise the judgment
permitted under such Sections 6(a), 6(e) and 6(f) on behalf of any such
person).
5. The Company covenants and agrees with each Agent that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Pricing
Supplements and all other amendments and supplements thereto and the mailing and
delivering of copies thereof to such Agent; (ii) the fees, disbursements and
expenses of counsel for the Agents in connection with the program contemplated
hereby, any opinions to be rendered by such counsel hereunder and the
transactions contemplated hereunder; (iii) the cost of printing, producing or
reproducing this Agreement, any Terms Agreement, any indenture, any Blue Sky and
Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iv) all expenses in
connection with the qualification of the Securities for the offering and sale
under state securities laws as provided in Section 4(b) hereof, including the
fees and disbursements of counsel for the Agents in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(v) any fees charged by securities rating services for rating the Securities;
(vi) any filing fees incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Securities; (vii)
the cost of preparing, and providing any CUSIP or other identification numbers
for, the Securities; (viii) the fees and expenses of the Trustee and any agent
of the Trustee and any transfer or paying agent of the Company and the fees and
disbursements of counsel for the Trustee or such agent in connection with any
Indenture and the Securities; (ix) the fees and expenses of any Depository (as
defined in the Indenture) and any nominees thereof in connection with the
Securities; (x) any advertising expenses connected with the solicitation of
offers to purchase and the sale of Securities so long as such advertising
expenses have been approved by the Company; and (xi) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise
-13-
specifically provided for in this Section. Except as provided in this Section,
Section 7 and Section 8 hereof, each Agent shall pay all other expenses it
incurs.
6. The obligation of any Agent, as agent of the Company, to solicit
offers to purchase the Securities and the obligation of any Agent to purchase
Securities as principal, pursuant to any Terms Agreement, shall be subject, in
such Agent's discretion, to the condition that all representations and
warranties and other statements of the Company herein (and, in the case of an
obligation of an Agent under a Terms Agreement, in or incorporated in such Terms
Agreement by reference) are true and correct at and as of the Commencement Date,
the date of each such solicitation, any settlement date related to the
acceptance of such an offer, and each Time of Delivery, the condition that, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of such Agent; and, in the
case of any settlement date or Time of Delivery, the Prospectus as amended
or supplemented (including the Pricing Supplement) with respect to such
Securities shall have been filed with the Commission pursuant to Rule
424(b) under the Act within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 4(a) hereof;
(b) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Agents, shall have
furnished to such Agent such opinion or opinions, dated the Commencement
Date, as such Agent may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Senior Vice President and General
Counsel of the Company (or such other person who shall be General Counsel
of the Company at such time), shall have furnished to such Agent such
counsel's written opinions, dated the Commencement Date and any applicable
date referred to in Section 4(h), in form and substance satisfactory to
such Agent, to the effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of New Jersey and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its
business or the ownership or leasing of its property requires such
qualification, except where failure to qualify would not have a
material adverse effect upon the Company and its consolidated
subsidiaries taken as a whole;
-14-
(ii) Each of the subsidiaries of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership
or leasing of its property requires such qualification, except where
failure to qualify would not have a material adverse effect upon the
Company and its consolidated subsidiaries taken as a whole;
(iii) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject, other than as set
forth in the Prospectus as amended or supplemented and other than
litigation or proceedings which individually and in the aggregate
are not material to the Company and its subsidiaries taken as a
whole; to the best of such counsel's knowledge, no such proceedings
are threatened by governmental authorities or others; and such
counsel has not received notice that any such proceedings are
contemplated by governmental authorities;
(iv) This Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
(v) Any series of Securities established on or prior to the
date of such opinion has been duly authorized and established in
conformity with the Indenture, and, when the terms of a particular
Security and of its issuance and sale have been duly authorized and
established by all necessary corporate action in conformity with the
Indenture, and such Security has been duly completed, executed,
authenticated and issued in accordance with the Indenture and
delivered against payment as contemplated by this Agreement, such
Security will constitute a valid and legally binding obligation of
the Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles, it
being understood that such counsel may (a) assume that at the time
of the issuance, sale and delivery of each Security the
authorization of such series will not have been modified or
rescinded and there will not have occurred any change in law
affecting the validity, legally binding character or enforceability
of such Security, (b) assume that neither the issuance, sale and
delivery of any Security, nor any of the terms of such Security, nor
compliance by the Company with such terms, will violate any
applicable law, any agreement or instrument then binding upon the
Company or any restriction imposed by any court or governmental body
having jurisdiction over the Company, and (c) state that as of the
date of
-15-
such opinion a judgment for money in an action based on Securities
denominated in foreign currencies, currency units or composite
currencies in a Federal or State court in the United States
ordinarily would be enforced in the United States only in United
States dollars, and that the date used to determine the rate of
conversion of the foreign currency, currency unit or composite
currency in which a particular Security is denominated into United
States dollars will depend upon various factors, including which
court renders the judgment;
(vi) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and
the Indenture has been duly qualified under the Trust Indenture Act;
(vii) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any applicable Terms Agreement with
respect to the Securities will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the property or assets of the Company or
any of its subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the Restated
Certificate of Incorporation, as amended, or the By-Laws of the
Company or any statute, order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any court or any such
regulatory authority or other governmental body is required for the
issue and sale by the Company of the Securities or the execution and
delivery and performance by the Company of this Agreement, any
applicable Terms Agreement or the Indenture, except such as have
been obtained under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications
as may be required under State Securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by
the Agents;
-16-
(viii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; such counsel has no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
or, in the case of other documents which were filed under the Act or
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and
(ix) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto
made by the Company prior to the date of such opinion (other than
the financial statements and related schedules therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder; such counsel has no reason to believe that, as of its
effective date, the Registration Statement or any further amendment
or supplement thereto made by the Company prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or
that, as of the date of such opinion, either the Registration
Statement or the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to
the date of such opinion (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in
-17-
light of the circumstances in which they were made, not misleading;
and such counsel does not know of any amendment to the Registration
Statement required to be filed or any contracts or other documents
of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference
into the Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as amended
or supplemented which are not filed or incorporated by reference or
described as required;
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and any applicable date referred to in Section 4(i), the
independent certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to such Agent
a letter, dated such date in form and substance satisfactory to such
Agent, to the effect set forth in Annex IV hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest financial statements included or
incorporated by reference in the Prospectus as amended or supplemented any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus as amended or supplemented
and (ii) since the respective dates as of which information is given in
the Prospectus as amended or supplemented there shall not have been any
change in the consolidated capital stock (except for the issuance of
shares of common stock pursuant to the Company's savings, incentive stock
and executive incentive plans and for purchases of shares of common stock
pursuant to the Company's treasury stock buyback program) or any increase
in the consolidated long-term debt of the Company and its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, the effect of which, in any such
case described in clause (i) or (ii), is in the judgment of such Agent so
material and adverse as to make it impracticable or inadvisable to proceed
with the solicitation by such Agent of offers to purchase Securities from
the Company or the purchase by such Agent of Securities from the Company
as principal, as the case may be, on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
(f) Between the date of this Agreement and the Commencement Date, if
different, between the date of acceptance by the Company of an offer to
purchase Securities and the related settlement and between the execution
of a Terms Agreement and the related Time of Delivery, there shall not
have occurred
-18-
any of the following: (i) a suspension of trading of the Company's Common
Stock by the Commission or the New York Stock Exchange precipitated by the
announcement by the Company of a material adverse event with respect to
the Company's business or financial position; (ii) a suspension or
material limitation in trading in securities generally on the New York
Stock Exchange; (iii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war or (v) the occurrence of any other calamity or crisis,
any material change in financial, political or economic conditions in the
United States or elsewhere or a material disruption in commercial banking
or securities settlement or clearance services in the United States if the
effect of any such event specified in clause (iv) or (v) in the judgment
of such Agent makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Securities or the purchase of
Securities from the Company as principal, pursuant to the applicable Terms
Agreement or otherwise, as the case may be, on the terms and in the manner
contemplated by the Prospectus as amended or supplemented; (vi) any
downgrading in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act; or
(vii) any public announcement by any such organization that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities; and
(g) The Company shall have furnished or caused to be furnished to
the Agents certificates of officers of the Company, dated the Commencement
Date and any applicable date referred to in Section 4(j), in such form and
executed by such officers of the Company as shall be satisfactory to the
Agents, as to the accuracy of the representations and warranties of the
Company herein at and as of the Commencement Date or such applicable date,
as the case may be, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Commencement Date
or such applicable date, as the case may be, as to the matters set forth
in subsections (a) and (e) of this Section 6, and as to such other matters
as the Agents may reasonably request.
7. (a) The Company will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, to which
such Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Agent for any legal or other
expenses reasonably
-19-
incurred by it in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Agent expressly for use therein;
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation.
-20-
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and each Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by any Agent on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and each Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if all Agents were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), an Agent
shall not be required to contribute any amount in excess of the amount by which
the total public offering price at which the Securities purchased by or through
it were sold exceeds the amount of any damages which such Agent has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of each of the Agents under this subsection
(d) to contribute are several in proportion to the respective purchases made by
or through it to which such loss, claim, damage or liability (or action in
respect thereof) relates and are not joint.
-21-
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Agent within the meaning of the Act; and the obligations of each Agent under
this Section 7 shall be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement), is acting solely as agent for the Company and not as principal. Each
Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Securities from the
Company was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company or its officers set
forth in or made pursuant to this Agreement shall remain in full force and
effect regardless of any investigation (or any statements as to the results
thereof) made by or on behalf of any Agent or any controlling person of any
Agent, or the Company, or any officer or director or any controlling person of
the Company, and shall survive each delivery of and payment for any of the
Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 7, Section 8 and Section 9 hereof are concerned.
-22-
11. Except as otherwise specifically provided herein or in the
Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telephone no.: ▇▇▇-▇▇▇-▇▇▇▇, facsimile
transmission no.: ▇▇▇-▇▇▇-▇▇▇▇, Attention: Registration Department; and if to
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered mail to
4 World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telephone
no.: ▇▇▇-▇▇▇-▇▇▇▇, facsimile transmission no.: ▇▇▇-▇▇▇-▇▇▇▇, Attention: Product
Management - MTN, and if to ▇.▇. ▇▇▇▇▇▇ Securities Inc. shall be sufficient in
all respects when delivered or sent by facsimile transmission or registered mail
to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, facsimile transmission no.:
▇▇▇-▇▇▇-▇▇▇▇, Attention: Transaction Execution Group, ▇▇▇ ▇▇▇▇▇; and if to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, facsimile
transmission no.: ▇▇▇-▇▇▇-▇▇▇▇, Attention: Manager, Credit Department with a
copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, facsimile transmission no.: ▇▇▇-▇▇▇-▇▇▇▇, Attention: Managing Director,
Debt Syndicate; and if to Citigroup Global Markets Inc. shall be sufficient in
all respects when delivered or sent by facsimile transmission or registered mail
to Citigroup Global Markets Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, facsimile transmission no.: ▇▇▇-▇▇▇-▇▇▇▇, Attention: Medium-Term Note
Department; and if to the Company shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to the address of
the Company set forth in the Registration Statement, Attention: Secretary.
12. This Agreement and any Terms Agreement shall be binding upon,
and inure solely to the benefit of, each Agent and the Company, and to the
extent provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that place of payment are authorized or obligated by law or executive order
to close.
14. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
-23-
15. This Agreement and any Terms Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
-24-
If the foregoing is in accordance with your understanding, please
sign and return to us five counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
MERCK & CO., INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President and Treasurer
Merck Distribution Agreement
Accepted in New York, New York
as of January 12, 2005
▇▇▇▇▇▇▇, SACHS & CO.
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
-------------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇▇ Thong
-------------------------------
Name: ▇▇▇▇▇▇ Thong
Title:Vice President
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ III
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III
Title:Executive Director
CITIGROUP GLOBAL MARKETS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:Managing Director
ANNEX I
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of Securities sold to purchasers
solicited by such Agent:
Commission Rate
(as a percentage of
Term principal amount)
-------------------
From 9 Months to less than 12 months .125%
From 12 months to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to and including 30 years .750%
More than 30 years *
------------------
* To be determined at the time of issuance.
I-1
ANNEX II
MERCK & CO., INC.
MEDIUM TERM NOTES, SERIES F
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
TERMS AGREEMENT
____________, 20__
[NAME(S) AND ADDRESS(ES)
OF AGENT(S)]
Dear Sir or Madame:
Merck & Co., Inc. (the "Company") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated January 12,
2005 (the "Distribution Agreement"), between the Company on the one hand and
▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇.▇.
▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Citigroup Global
Markets Inc. (the "Agents") on the other, to issue and sell to [NAME(S) OF
AGENT(S)] the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [NAME(S) OF AGENT(S)] and [NAME(S) OF AGENT(S)] agree[s] to
purchase from the
Company the Purchased Securities, at the time and place, in the principal amount
and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us _______ counterparts hereof, and upon acceptance hereof by
you this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
MERCK & CO., INC.
By: ____________________________
Name:
Title:
Accepted:
[NAME(S) OF AGENT(S)]
By: ____________________________
Name:
Title:
II-2
Schedule to Annex II
Title of Purchased Securities:
[ %] Medium-Term Notes, Series F
Aggregate Principal Amount:
[$ or units of other Specified Currency]
[Price to Public:]
Purchase Price by [Name(s) of Agent(s)]:
% of the principal amount of the Purchased Securities [, plus
accrued interest from to ] [and accrued amortization, if any,
from to ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order
of the Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in
[next day] [immediately available] funds]
Indenture:
Indenture, dated as of April 1, 1991, as amended and supplemented,
between the Company and U.S. Bank Trust National Association, as Trustee
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
II-3
Redemption Commencement Date (if any):
Redemption Periods (if any):
Redemption Prices (if any):
The Redemption Price shall initially be ____% of the principal
amount of such Notes to be redeemed and shall decline (but not below par) on
each anniversary of the Redemption Commencement Date by ____% of the principal
amount to be redeemed until the Redemption Price is 100% of such principal
amount.
Documents to be Delivered:
The following documents referred to in the Distribution Agreement
shall be delivered as a condition to the Closing:
[(1) The opinion of the General Counsel of the Company referred to
in Section 4(h).]
[(2) The accountants' letter referred to in Section 4(i).]
[(3) The officers' certificate referred to in Section 4(j).]
Other Provisions:
II-4
ANNEX III
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series F, due nine months or more from their
issue date (the "Notes") are to be offered from time to time on a continuing
basis by Merck & Co., Inc. (the "Company"). ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& Co. Incorporated and Citigroup Global Markets Inc., as agents (individually,
an "Agent" and collectively, the "Agents"), have each agreed to use reasonable
efforts to solicit offers to purchase the Notes. The Notes are being sold
pursuant to a Distribution Agreement, dated January 12, 2005 (the "Distribution
Agreement"), among the Company and the Agents, and will be issued pursuant to an
Indenture, dated as of April 1, 1991, as amended and supplemented (the
"Indenture"), between the Company and U.S. Bank Trust National Association, as
trustee (the "Trustee"). The Notes will rank equally and ratably with all other
unsecured and unsubordinated indebtedness of the Company and will have been
registered with the Securities and Exchange Commission (the "Commission"). For a
description of the terms of the Notes and the offering and sale thereof, see the
sections entitled "Description of Notes We May Offer" and "Supplemental Plan of
Distribution" in the Prospectus Supplement relating to the Notes, dated January
12, 2005, and hereinafter referred to as the "Prospectus Supplement", and the
sections entitled "Description of Debt Securities We May Offer" and "Plan of
Distribution" in the Prospectus relating to the Notes, dated December 16, 2004,
and hereinafter referred to as the "Prospectus".
The Notes will be represented by either book-entry notes delivered
to The Depository Trust Company ("DTC") or its nominee and recorded in the
book-entry system maintained by DTC ("Book-Entry Notes") or a certificate
delivered to the Holder thereof or a Person designated by such Holder
("Certificated Notes"). Owners of Book-Entry Notes will generally not be
entitled to receive a certificate representing such Notes. Notes for which
interest is calculated on the basis of a fixed interest rate are referred to
herein as "Fixed Rate Notes". Notes for which interest is calculated at a rate
or rates determined by reference to an interest rate formula are referred to
herein as "Floating Rate Notes".
Administrative procedures and specific terms of the offering are
explained below -- Part I indicating specific procedures for Certificated Notes,
Part II indicating specific procedures for Book-Entry Notes, and Part III
indicating procedures applicable to all Notes. Administrative and record keeping
responsibilities will be handled for the Company by its Treasury Department. The
Company will advise the Agents in writing of those persons handling
administrative responsibilities with whom the Agents are to communicate
regarding offers to purchase Notes and the details of their delivery.
Unless otherwise defined herein, defined terms used herein shall
have the meanings given such terms in the Distribution Agreement, the
Prospectus, as amended or supplemented, or the Indenture.
III-1
PART I: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
Issue Date
Each Certificated Note will be dated the date of its authentication.
Each Certificated Note will also bear an original issue date (the "Issue Date")
which, with respect to any such Note (or portion thereof), shall mean the date
of its original issuance and shall be specified therein. The Issue Date will
remain the same for all Certificated Notes subsequently issued upon transfer,
exchange or substitution of a Certificated Note, regardless of their dates of
authentication.
Price to Public: Denominations: Registration
Except as otherwise specified in a Pricing Supplement, each
Certificated Note will be issued at 100% of principal amount. The denominations
of the Certificated Notes will be $1,000 and any larger denomination which is an
integral multiple thereof or, except as otherwise specified in a Pricing
Supplement, in the case of Notes denominated other than in U.S. dollars, the
approximate equivalent of $1,000 in such other Specified Currency. Certificated
Notes will be issued only in fully registered form.
Transfers and/or Exchanges
A Certificated Note may be presented for transfer or exchange at the
principal corporate trust office in The City of New York of the Trustee.
Certificated Notes will be exchangeable for other Certificated Notes of any
authorized denominations and having identical terms and provisions and for a
like aggregate principal amount, upon surrender of the Certificated Notes to be
exchanged at the corporate trust office of the Trustee. Certificated Notes will
not be exchangeable for Book-Entry Notes.
Interest Payments
Interest on each Certificated Note will be calculated and paid in
the manner described in such Note and in the Prospectus Supplement.
It is understood that the Company may have access to the electronic
timesharing facility known as the Securities Processing and Note System
("SPANS") for information on interest payments. If the Company does not use
SPANS or SPANS is inoperative, the Trustee will, promptly following each Record
Date, furnish to the Company's Treasury Department a list of interest payments
(to the extent then known) due on the following Interest Payment Date and, on or
about the first Business Day in New York City of each month, furnish to the
Company's Treasury Department a list of the principal and interest to be paid on
Certificated Notes maturing in the next succeeding month. The Trustee will
assume responsibility for withholding taxes on interest paid as required by law
to the extent Holders have not produced a taxpayer identification number
("TIN").
III-2
Redemption
Except as otherwise provided in a Pricing Supplement the Notes will
not be subject to any sinking fund and, unless a Redemption Commencement Date is
specified in the applicable Pricing Supplement, will not be redeemable prior to
their Stated Maturity.
Payment at Maturity
Upon presentation of each Certificated Note at Maturity, the Trustee
(or a duly authorized Paying Agent) will pay the principal amount thereof,
together with accrued interest due at Maturity. Such payment will be made in
immediately available funds, provided that the Certificated Note is presented in
time for the Trustee (or any such Paying Agent) to make payment in such funds in
accordance with its normal procedures. The Company will provide the Trustee (and
any such Paying Agent) with funds available for immediate use for such purpose.
Certificated Notes presented at Maturity will be canceled by the Trustee as
provided in the Indenture.
Determination of Settlement Date
The receipt of immediately available funds by the Company in payment
for a Certificated Note and the authentication and issuance of such Note shall,
with respect to such Note, constitute "settlement". All offers accepted by the
Company will be settled on the third Business Day in New York City next
succeeding the date of acceptance unless otherwise agreed by any purchaser and
the Company. The settlement date shall be specified upon acceptance of an offer.
The Trustee will deliver the Certificated Notes to the Presenting Agent no later
than 2:15 p.m., New York City time, on that day.
Details for Settlement
For each offer accepted by the Company, the Agent who presented such
accepted offer (the "Presenting Agent") will communicate to the Company's
Treasury Department, prior to 3:00 p.m., New York City time, on the Business Day
in New York City preceding the settlement date, by facsimile transmission or
other acceptable means, the following information (the "Purchase Information"):
1. Exact name in which the Certificated Note or Notes are to be
registered ("registered owner").
2. Exact address of registered owner and, if different, the address for
delivery, notices and payment of principal and interest.
3. TIN of registered owner.
III-3
4. Principal amount and Specified Currency of each Certificated Note in
authorized denominations to be delivered to the registered owner.
5. In the case of a Fixed Rate Note, the Interest Rate, Interest
Payment Dates and Regular Record Dates of each Certificated Note; in
the case of a Floating Rate Note, the Initial Interest Rate (if
known at such time), Index Maturity, Interest Rate Basis (and any
other matters to be specified in connection with such Interest Rate
Basis), Spread or Spread Multiplier (if any), Maximum Interest Rate
(if any), Minimum Interest Rate (if any), Interest Reset Period,
Interest Reset Dates, Interest Payment Period, Interest Payment
Dates, Interest Determination Dates and the Calculation Agent, in
each case, to the extent applicable.
6. Stated Maturity of each Certificated Note.
7. Redemption provisions, if any, of each Certificated Note.
8. Trade Date of each Certificated Note.
9. Settlement date (Issue Date) for each Certificated Note.
10. Presenting Agent's Commission (to be paid in the form of a discount
from the proceeds remitted to the Company on settlement).
11. Price.
12. Any additional applicable terms of each Certificated Note.
The Issue Date of, and the settlement date for, Certificated Notes
will be the same. Before accepting any offer to purchase Certificated Notes to
be settled in less than three Business Days in New York City, the Company will
verify that the Trustee will have adequate time to prepare and authenticate the
Certificated Notes.
All Note issuance instructions shall be given by the Company by
means of SPANS; provided that such instructions may be given by telephone, by
facsimile transmission, or in writing if the Company does not use SPANS OR SPANS
is inoperative. Instructions given by telephone, by facsimile transmission, or
in writing, shall be given by the Company or by any person, including any
employee of an Agent, who has been designated by the Company in writing to the
Trustee as a person authorized to give such instructions hereunder.
Immediately after receiving the details for each offer from the
Presenting Agent, but in no event later than 3:00 p.m. on the Business Day
preceding the Settlement Date, the Company will, after recording the details and
any necessary calculations, communicate the Purchase Information into SPANS or,
if the Company does not use
III-4
SPANS or such system shall not be operative, by telephone, facsimile
transmission or other acceptable means, to the Trustee.
The Company will deliver to the Trustee a preprinted four-ply packet
for such Certificated Note, which packet will contain the following documents in
forms that have been approved by the Company, the Agents and the Trustee:
1. Certificated Note with customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
The Trustee will complete such Certificated Note and after
authentication of such Certificated Note pursuant to the procedures set forth
below, the Trustee will deliver it (with the Confirmation) and Stubs One and Two
to such Presenting Agent, and such Presenting Agent will acknowledge receipt of
the Certificated Note by stamping or otherwise marking Stub One and returning it
to the Trustee and delivering a broker's receipt. The Trustee will send Stub
Three to the Company by first-class mail.
Confirmation
For each accepted offer, the Presenting Agent will issue a
confirmation to the purchaser, with a copy to the Company's Treasury Department,
setting forth the Purchase Information and delivery and payment instructions;
provided, however, that, in the case of the confirmation issued to the
purchaser, no confirmation shall be delivered to the purchaser prior to the
delivery of the Prospectus referred to in Part III.
Settlement; Note Deliveries and Cash Payment
The Company will deliver to the Trustee at the commencement of the
program and from time to time thereafter a supply of duly executed Certificated
Notes with pre-printed control numbers adequate to implement the program. Upon
the receipt of appropriate documentation and instructions from the Company in
accordance with the applicable Officers' Certificate and verification thereof,
the Trustee will cause the Certificated Notes to be completed and authenticated
and hold the Certificated Notes for delivery.
The Trustee will deliver the Certificated Notes in accordance with
instructions from the Company, to the Presenting Agent, as the Company's agent,
for the benefit of the purchaser only against receipt. The Presenting Agent will
acknowledge receipt of the Certificated Note. Delivery of the Certificated Note
by the Trustee will be made only against such acknowledgment of receipt from the
Presenting Agent. Upon the Presenting Agent's determination that such
Certificated Note has been authenticated,
III-5
delivered and completed as aforesaid, the Presenting Agent will make, or cause
to be made, payment to the Company at such account of the Company as it may
specify in writing, in immediately available funds, of an amount equal to the
principal amount of such Certificated Notes, less the applicable commission. If
the Presenting Agent in any instance advances its own funds, the Company shall
not use any of the proceeds of such sale to acquire securities.
The Presenting Agent, as the Company's agent, will deliver the
Certificated Notes (with the written confirmation provided for above) to the
purchaser thereof against payment therefor by such purchaser. Delivery of any
confirmation or Certificated Note will be made in compliance with "Delivery of
Prospectus" in Part III.
Fails
In the event that a purchaser shall fail to accept delivery of and
make payment for a Certificated Note on the settlement date, the Presenting
Agent will notify the Trustee and the Company by telephone, confirmed in
writing. If the Certificated Note has been delivered to the Presenting Agent, as
the Company's agent, the Presenting Agent will return such Certificated Note to
the Trustee. If funds have been advanced by the Presenting Agent for the
purchase of such Certificated Note, the Trustee will, immediately upon receipt
of such Certificated Note, debit the account of the Company for the amount so
advanced and the Company will refund the payment previously made by the
Presenting Agent in immediately available funds. Such payment will be made on
the settlement date, if possible, and in any event not later than the Business
Day in New York City following the settlement date. If such fail shall have
occurred for any reason other than the failure of the Presenting Agent to
provide the Purchase Information to the Trustee and the Company or to provide a
confirmation to the purchaser, the Company will reimburse the Presenting Agent
on an equitable basis for its loss of the use of funds during the period when
they were credited to the account of the Company.
Immediately upon receipt of the Certificated Note in respect of
which the fail occurred, the Trustee will cause the Security Registrar to make
appropriate entries to reflect the fact that the Certificated Note was never
issued and the Certificated Note will be canceled and disposed of as provided in
the Indenture.
PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representation (the "Letter")
from the Company and the Trustee to DTC dated as of the date of the Distribution
Agreement, and a Medium-Term Note Certificate Agreement between the Trustee and
DTC dated as of January 31, 1991, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
III-6
Issuance
All Book-Entry Notes having the same Issue Date, interest rate,
Stated Maturity and redemption and repayment terms, if any, will be represented
initially by a single global note (the "Book-Entry Security") in fully
registered form without coupons representing up to $500,000,000 aggregate
principal amount of all such Book-Entry Notes which are Fixed Rate Notes that
have the same Original Issue Date, Interest Rate, Interest Payment Dates, Stated
Maturity, and redemption and repayment provisions, if any, or a single
Book-Entry Security in a fully registered form without coupons representing up
to $500,000,000 aggregate principal amount of all such Book-Entry Notes which
are Floating Rate Notes having the same Original Issue Date, redemption and
repayment provisions, Interest Rate Basis, Initial Interest Rate, Index
Maturity, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any),
Maximum Interest Rate (if any), Interest Determination Dates, Interest Reset
Dates, Interest Reset Periods, Interest Payment Dates, Interest Payment Periods
and Stated Maturity Date (collectively, the "Terms"). Each Book-Entry Security
will be dated and issued as of the date of its authentication by the Trustee.
Each Book-Entry Security will bear an "Original Issue Date", which will be (i)
with respect to an original Book-Entry Security (or any portion thereof), its
Issue Date, and (ii) following a consolidation of Book-Entry Securities, the
most recent Interest Payment Date to which interest has been paid or duly
provided for on the predecessor Book-Entry Securities, regardless of the date of
authentication of such subsequently issued Book-Entry Security. No Book-Entry
Security will represent both Fixed Rate and Floating Rate Book-Entry Notes or
any Certificated Note.
Identification Numbers
The Company has arranged with the CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a series
of CUSIP numbers (including tranche numbers), such series consisting of
approximately 900 CUSIP numbers and relating to Book-Entry Securities
representing Book-Entry Notes. The Company has obtained from the CUSIP Service
Bureau a written list of such reserved CUSIP numbers and has delivered it to the
Trustee and DTC. The Trustee will assign CUSIP numbers serially to Book-Entry
Securities as described below under Settlement Procedure "C". DTC will notify
the CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has
assigned to Book-Entry Securities. The Trustee will notify the Company at the
time when fewer than 100 of the reserved CUSIP numbers remain unassigned to the
Book-Entry Securities; and the Company will reserve an additional 900 CUSIP
numbers for assignment to Book-Entry Securities representing Book-Entry Notes.
Upon obtaining such additional CUSIP numbers, the Company shall deliver a list
of such additional CUSIP numbers to the Trustee and DTC.
Registration
Each Book-Entry Security will be registered in the name of Cede &
Co., as nominee for DTC, on the Security Register maintained under the
Indenture. The
III-7
beneficial owner of a Book-Entry Note (or one or more indirect participants in
DTC designated by such owner) will designate one or more participants in DTC
(with respect to such Note, the "Participants") to act as agent or agents for
such owner in connection with the book-entry system maintained by DTC, and DTC
will record in book-entry form, in accordance with instructions provided by such
Participants, a credit balance with respect to such Note in the account of such
Participants. The ownership interest of such beneficial owner in such Note will
be recorded through the records of such Participants or through the separate
records of such Participants and one or more indirect participants in DTC.
Transfers
Transfers of a Book-Entry Note will be accomplished by book entries
made by DTC and, in turn, by Participants (and, in certain cases, one or more
indirect participants in DTC) acting on behalf of beneficial transferors and
transferees of such Note.
Exchanges
The Trustee may upon notice to the Company deliver to DTC and the
CUSIP Service Bureau at any time a written notice of consolidation (a copy of
which shall be attached to the Book-Entry Security resulting from such
consolidation) specifying (i) the CUSIP numbers of two or more outstanding
Book-Entry Securities that represent Book-Entry Notes having the same Terms, and
for which interest has been paid to the same date, (ii) a date occurring at
least thirty days after such written notice is delivered and at least thirty
days before the next Interest Payment Date for such Notes, on which such
Book-Entry Securities shall be exchanged for a single replacement Book-Entry
Security and (iii) a new CUSIP number to be assigned to such replacement
Book-Entry Security. Upon receipt of such a notice, DTC will send to its
Participants (including the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Book-Entry Securities
to be exchanged will no longer be valid. On the specified exchange date, the
Trustee will exchange such Book-Entry Securities for a single Book-Entry
Security bearing the new CUSIP number and a new Original Issue Date and the
CUSIP numbers of the exchanged Book-Entry Securities will, in accordance with
CUSIP Service Bureau procedures, be canceled and not immediately reassigned.
Redemption
The Trustee will comply with the terms of the Letter and the
Indenture with regard to redemptions of the Book-Entry Notes. If a Book-Entry
Security is to be redeemed in part, the Trustee will cancel such Book-Entry
Security and issue a Book-Entry Security which shall represent the remaining
portion of such Book-Entry Security and shall bear the CUSIP number of the
canceled Book-Entry Security.
III-8
Payment upon Redemption
In the case of Book-Entry Notes stated by their terms to be
redeemable prior to maturity, at least 60 calendar days before the date fixed
for redemption (the "Redemption Date"), the Company shall notify the Trustee of
the Company's election to redeem such Book-Entry Notes in whole or in part and
the principal amount of such Book-Entry Notes to be so redeemed. At least 30
calendar days but not more than 60 calendar days prior to the Redemption Date,
the Trustee shall notify DTC of the Company's election to redeem such Book-Entry
Notes. The Trustee shall notify the Company and DTC of the CUSIP numbers of the
particular Book-Entry Notes to be redeemed either in whole or in part. The
Company, the Trustee and DTC will confirm the amounts of such principal and
interest payable with respect to each such Book-Entry Note on or about the fifth
Business Day in New York City preceding the Redemption Date of such Book-Entry
Note. The Company will pay the Trustee, in accordance with the terms of the
Indenture, the principal amount necessary to redeem each such Book-Entry Note or
the applicable portion of each such Book-Entry Note, together with interest due
on such principal amount of each such Book-Entry Note on such Redemption Date.
The Trustee will pay such amount to DTC at the times and in the manner set forth
herein. Promptly after payment to DTC of the principal and interest due on the
Redemption Date for such Book-Entry Note, the Trustee shall cancel any such
Book-Entry Note; the Trustee shall cancel any such Book-Entry Note redeemed in
whole and shall deliver it to the Company with an appropriate debit advice.
Denominations
The denominations of the Book-Entry Notes will be $1,000 or any
larger denomination which is an integral multiple thereof. Book-Entry Securities
will be denominated in principal amounts not in excess of $500,000,000.
Interest
Interest on each Book-Entry Note will be calculated and paid in the
manner described in such Note and in the Prospectus Supplement.
Notice of Interest Payment and Regular Record Dates
To the extent then known, on the first Business Day in New York City
of March, June, September, and December of each year, the Trustee will deliver
to the Company and DTC a written list of Record Dates and interest payment dates
that will occur with respect to Floating Rate Book-Entry Notes during the
six-month period beginning on such first Business Day.
Payments of Principal and Interest
(a) Payments of Interest Only. Promptly after each Regular Record
Date, the Trustee will deliver to the Company and DTC a written notice
specifying by CUSIP
III-9
number the amount of interest to be paid on each Book-Entry Security on the
following Interest Payment Date (other than an Interest Payment Date coinciding
with Maturity) and the total of such amounts. The Company will confirm with the
Trustee the amount payable on each Book-Entry Security on such Interest Payment
Date. DTC will confirm the amount payable on each Book-Entry Security on such
Interest Payment Date by reference to the daily or weekly bond reports published
by Standard & Poor's Corporation. The Company will pay to the Trustee the total
amount of interest due on such Interest Payment Date (other than at Maturity),
and the Trustee will pay such amount to DTC at the times and in the manner set
forth below under "Manner of Payment".
(b) Payments at Maturity. On or about the first Business Day in New
York City of each month, the Trustee will deliver to the Company and DTC a
written list of principal and interest to be paid on each Book-Entry Security
maturing in the following month. The Company, the Trustee and DTC will confirm
the amounts of such principal and interest payments with respect to each such
Book-Entry Security on or about the fifth Business Day in New York City
preceding the Maturity of such Book-Entry Security. The Company will pay to the
Trustee, as the paying agent, the principal amount of such Book-Entry Security,
together with interest due at such Maturity. Upon surrender of a Book-Entry
Security, the Trustee will pay such amounts to DTC at the times and in the
manner set forth below under "Manner of Payment". If any Maturity of a
Book-Entry Security representing Book-Entry Notes is not a Business Day in New
York City, the payment due on such day shall be made on the next succeeding
Business Day in New York City and no interest shall accrue on such payment for
the period from and after such Maturity. Promptly after payment to DTC of the
principal and interest due at Maturity of such Book-Entry Security, the Trustee
will cancel and dispose of such Book-Entry Security in accordance with the terms
of the Indenture.
(c) Manner of Payment. The total amount of any principal and
interest due on Book-Entry Securities on any Interest Payment Date or at
Maturity shall be paid by the Company to the Trustee in immediately available
funds on such date. The Company will make such payment on such Book-Entry
Securities by wire transfer to the Trustee. The Company will confirm
instructions regarding payment in writing to the Trustee. Prior to 10:00 a.m.
New York City time, on each date of Maturity or as soon as possible thereafter,
the Trustee will pay by separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified by DTC, in funds available for
immediate use by DTC, each payment of principal (together with interest thereon)
due on Book-Entry Securities on such date of Maturity. On each Interest Payment
Date, interest payment shall be made to DTC in same day funds in accordance with
existing arrangements between the Trustee and DTC. Thereafter, on each such
date, DTC will pay, in accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes represented by such Book-Entry
Securities are recorded in the book-entry system maintained by DTC. NEITHER THE
COMPANY NOR THE TRUSTEE
III-10
SHALL HAVE ANY DIRECT RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO SUCH
PARTICIPANTS OF THE PRINCIPAL OF AND INTEREST ON THE BOOK-ENTRY NOTES.
(d) Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments and materials directly to
the beneficial owner of such Note.
Settlement
The receipt by the Company of immediately available funds in payment
for a Book-Entry Note and the authentication and issuance of the Book-Entry
Security or Book-Entry Securities representing such Note shall constitute
"settlement" with respect to such Book-Entry Note. All orders accepted by the
Company will be settled on the third Business Day in New York City from the date
of the sale pursuant to the timetable for settlement set forth below unless the
Company and the purchaser agree to settlement on a different date.
Settlement Procedures
Settlement Procedures with regard to each Book-Entry Note sold by
the Company through an Agent shall be as follows:
A. Such Agent will advise the Company by telephone of the following
settlement information:
1. Principal amount.
2. Stated Maturity.
3. In the case of a Fixed Rate Note, the Interest Rate, Interest
Payment Dates and Regular Record Dates of each Certificated Note; in
the case of a Floating Rate Note, the Initial Interest Rate (if
known at such time), Index Maturity, Interest Rate Basis (and any
other matters to be specified in connection with such Interest Rate
Basis), Spread or Spread Multiplier (if any), Maximum Interest Rate
(if any), Minimum Interest Rate (if any), Interest Reset Period,
Interest Reset Dates, Interest Payment Period, Interest Payment
Dates, Interest Determination Dates and the Calculation Agent, in
each case, to the extent applicable.
4. Redemption provisions, if any.
5. Trade Date of each Book-Entry Note.
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6. Settlement date (Issue Date) for each Book-Entry Note.
7. Presenting Agent's commission (to be paid in the form of a discount
from the proceeds remitted to the Company on settlement).
8. Price.
9. Any additional applicable terms of each Book-Entry Note.
B. The Company will advise the Trustee by electronic transmission via SPANS
or by facsimile or by another mutually acceptable method of the settlement
information set forth in Settlement Procedure "A" above and the name of
the applicable Agent.
C. The Trustee will assign a CUSIP number to the Book-Entry Security
representing such Book-Entry Note and will telephone the Company and
advise the Company of such CUSIP number and, as soon thereafter as
practicable, the Company shall notify the Agent of such CUSIP number. The
Trustee will enter a pending deposit message through DTC's Participant
Terminal System, providing the following settlement information to DTC
(which shall route such information to Standard & Poor's Corporation) and
the relevant Agent:
1. The applicable information set forth in Settlement Procedure "A".
2. Initial Interest Payment Date for such Book-Entry Note and number of
days by which such date succeeds the Regular Record Date.
3. Identification as either a Fixed Rate Note or a Floating Rate Note.
4. CUSIP number of the Book-Entry Security representing such Note.
5. Whether such Book-Entry Security will represent any other Book-Entry
Note (to the extent known at such time).
6. Interest payment periods.
7. Numbers of the participant accounts maintained by DTC on behalf of
the Trustee and the Agents.
D. The Trustee will complete and authenticate the Book-Entry Security
representing such Note.
E. DTC will credit such Note to the Trustee's participant account at DTC.
F. The Trustee will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit such Note to the Trustee's
participant account and credit such Note to such Agent's participant
account and (ii) debit such
III-12
Agent's settlement account and credit the Trustee's settlement account for
an amount equal to the price of such Note less such Agent's commission.
The entry of such a deliver order shall constitute a representation and
warranty by the Trustee to DTC that (i) the Book-Entry Security
representing such Note has been executed, delivered and authenticated and
(ii) the Trustee is holding such Book-Entry Security pursuant to the
Medium-Term Note Certificate Agreement between the Trustee and DTC.
G. Such Agent will enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Note to such Agent's
participant account and credit such Note to the Participant accounts of
the Participants with respect to such Note and (ii) to debit the
settlement accounts of such Participants and credit the settlement account
of such Agent for an amount equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. The Trustee, upon confirming receipt of such funds, will wire transfer the
amount transferred to the Trustee in accordance with Settlement Procedure
"F", in funds available for immediate use, for the account of Merck & Co.,
Inc., to an account to be specified by the Company.
J. Such Agent will confirm the purchase of such Note to the purchaser either
by transmitting to the Participants with respect to such Note a
confirmation order or orders through DTC's institutional delivery system
or by mailing a written confirmation to such purchaser.
Settlement Procedures Timetable
For orders of Book-Entry Notes solicited by an Agent, and accepted
by the Company for settlement on the first Business Day in New York City after
the sale date, Settlement Procedures "A" through "J" set forth above shall be
completed as soon as possible but not later than the respective times (New York
City time) set forth below:
Settlement
Procedure Time
--------- -----------------------------
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 9:00 a.m. on settlement date
E 10:00 a.m. on settlement date
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Settlement
Procedure Time
--------- ----------------------------
F-G 2:00 p.m. on settlement date
H 5:00 p.m. on settlement date
I-J 5:30 p.m. on settlement date
If a sale is to be settled more than one Business Day in New York
City after the sale date, Settlement Procedures "A", "B" and "C" shall be
completed as soon as practicable but not later than 11:00 a.m., noon and 2:00
p.m., as the case may be, on the first Business Day in New York City after the
sale date.
If the initial interest rate for a Floating Rate Book-Entry Note has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 12:00 noon and 2:00 p.m., as the case may be,
on the Business Day in New York City before the settlement date. Settlement
Procedure "H" is subject to extension in accordance with any extension of
Fedwire closing deadlines and in the other events specified in the SDFS
operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or canceled, the
Company shall notify the Trustee, and upon receipt of such notice, the Trustee
will deliver to DTC, through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m., New York City time, on the
Business Day in New York City immediately preceding the scheduled settlement
date.
The Company will provide the Trustee with the necessary details and
instructions by 12:00 noon on any day on which the Trustee is required to send
any message to DTC by 2:00 p.m. on such date.
Failure to Settle
If the Trustee has not entered an SDFS deliver order with respect to
a Book-Entry Note pursuant to Settlement Procedure "F", then upon written
request (which may be evidenced by telecopy transmission) of the Company, the
Trustee shall deliver to DTC, through DTC's Participant Terminal System, as soon
as practicable, but no later than 2:00 p.m. on any Business Day in New York
City, a withdrawal message instructing DTC to debit such Note to the Trustee's
participant account. DTC will process the withdrawal message, provided that the
Trustee's participant account contains a principal amount of the Book-Entry
Security representing such Note that is at least equal to the principal amount
to be debited. If withdrawal messages are processed with respect to all the
Book-Entry Notes represented by a Book-Entry Security, the Trustee will ▇▇▇▇
such Book-Entry Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Book-Entry Security to the Company. The CUSIP
number assigned
III-14
to such Book-Entry Security shall, in accordance with CUSIP Service Bureau
Procedures, be canceled and not immediately reassigned. If withdrawal messages
are processed with respect to one or more, but not all, of the Book-Entry Notes
represented by a Book-Entry Security, the Trustee will exchange such Book-Entry
Security for two Book-Entry Securities, one of which shall represent the Note or
Notes which are the subject of such withdrawal messages and shall be canceled
immediately after issuance and the other of which shall represent the remaining
Book-Entry Notes previously represented by the surrendered Book-Entry Security
and shall bear the CUSIP number of the surrendered Book-Entry Security.
If the purchase price for any Book-Entry Note is not timely paid to
the Participants with respect to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Agent for such Note may enter an
SDFS deliver order through DTC's Participant Terminal System debiting such Note
to such Agent's participant account and crediting such Note free to the
participant account of the Trustee and shall notify the Trustee and the Company
thereof. Thereafter, the Trustee, (i) will immediately notify the Company, once
the Trustee has confirmed that such Note has been credited to its participant
account, and the Company shall immediately transfer by Fedwire (immediately
available funds) to such Agent an amount equal to the price of such Note which
was previously sent by wire transfer to the account of the Company in accordance
with Settlement Procedure "I", and (ii) the Trustee will deliver the withdrawal
message and take the related actions described in the preceding paragraph. Such
debits and credits will be made on the settlement date, if possible, and in any
event not later than 5:00 p.m. on the following Business Day in New York City.
If such failure shall have occurred for any reason other than failure by the
applicable Agent to perform its obligations under the Distribution Agreement,
the Company will reimburse such Agent on an equitable basis for its loss of the
use of funds during the period when the funds were credited to the account of
the Company.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Book-Entry Security, the Trustee will provide, in accordance
with Settlement Procedures "D" and "E", for the authentication and issuance of a
Book-Entry Security representing the other Book-Entry Notes to have been
represented by such Book-Entry Security and will make appropriate entries in its
records.
PART III: ADMINISTRATIVE PROCEDURES APPLICABLE TO ALL NOTES
Maturities; Minimum Purchase; Calculation of Interest
Each Note will mature on a date, selected by the purchaser and
agreed to by the Company, which will be at least 9 months after its Issue Date.
The minimum
III-15
aggregate amount of Notes which may be offered to any purchaser will be $1,000
or its approximate equivalent in another Specified Currency. Interest on Fixed
Rate Notes will be computed on the basis of a 360-day year of twelve 30-day
months.
Regular Record Dates for Interest
Except as otherwise specified in a Pricing Supplement, the Regular
Record Date for Fixed Rate Notes with respect to any Interest Payment Date shall
be April 15 or October 15. Unless otherwise specified in a Pricing Supplement,
the Regular Record Date with respect to Floating Rate Notes shall be the date 15
calendar days prior to each Interest Payment Date, whether or not such date
shall be a Business Day in New York City.
Notes Denominated in a Specified Currency other than U.S. dollars
Unless otherwise specified in the applicable Pricing Supplement,
payments of principal of (and premium, if any) and interest on all Notes will be
made in the applicable currency or composite currency ("Specified Currency");
provided, however, that payments of principal (and premium, if any) and interest
on Notes denominated in other than U.S. dollars will nevertheless be made in
U.S. dollars (i) at the option of the Holder thereof if the registered Holder of
such Note on the relevant Regular Record Date or at Maturity, as the case may
be, has transmitted a written request for such payment in U.S. dollars to the
Trustee at its Corporate Trust Office in The City of New York on or prior to
such Regular Record Date or the date 15 days prior to Maturity, as the case may
be and (ii) at the option of the Company in the event the Specified Currency is
not available due to the imposition of exchange controls or other circumstances
beyond the control of the Company; provided, further, that payments of principal
(and premium, if any) and interest on Book-Entry Notes denominated in other than
U.S. dollars will be made in U.S. dollars except to the extent beneficial owners
take action to request payment in the Specified Currency as set forth in the
Prospectus Supplement.
If a payment with respect to a Certificated Note denominated in a
Specified Currency other than U.S. dollars cannot be made by wire transfer
because the required designation has not been received by the Trustee on or
before the requisite date or for any other reason, a notice will be mailed to
the Holder at its registered address requesting a designation pursuant to which
such wire transfer can be made and, upon the Trustee's receipt of such a
designation, such payment will be made within 5 Market Days with respect to such
Note of such receipt.
Procedures for Establishing the Terms of the Notes
The Company and the Agents will discuss from time to time the rates
to be borne by the Notes that may be sold as a result of the solicitation of
offers by the Agents. Once any Agent has recorded any indication of interest in
Notes upon certain terms, and communicated with the Company, if the Company
plans to accept an offer to purchase Notes upon such terms, it will prepare a
Pricing Supplement to the Prospectus, as then
III-16
amended or supplemented, reflecting the terms of such Notes and, after approval
from the Agents, will arrange to have the Pricing Supplement filed with, or
transmitted by a means reasonably calculated to result in filing with, the
Commission pursuant to and in accordance with Rule 424(b) under the Securities
Act of 1933, as amended (the "Act"). The Company will supply at least 10 copies
of the Prospectus, as then amended or supplemented, and bearing such Pricing
Supplement, to the Agent who presented such offer (the "Presenting Agent"). The
Company will supply such copies of the Pricing Supplement to each Agent, not
later than 5:00 p.m., New York City time, on the Business Day in New York City
following the date of acceptance of such offer, or if the Company and the
purchaser agree to settlement on the date of such acceptance, not later than
noon, New York City time, on such date. The Company will send a copy of each
Pricing Supplement to the Trustee. No settlements with respect to Notes upon
such terms may occur prior to such transmitting or filing and the Agents will
not, prior to such transmitting or filing, mail confirmations to customers who
have offered to purchase Notes upon such terms. After such transmitting or
filing, sales, mailing of confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions of "Delivery of Prospectus"
below.
If the Company decides to post rates and a decision has been reached
to change interest rates, the Company will promptly notify each Agent. Each
Agent will forthwith suspend solicitation of purchases. At that time, the Agents
will recommend and the Company will establish rates to be so "posted". Following
establishment of posted rates and prior to the transmitting or filing described
in the preceding paragraph, the Agents may only record indications of interest
in purchasing Notes at the posted rates. Once any Agent has recorded any
indication of interest in Notes at the posted rates and communicated with the
Company, if the Company plans to accept an offer at the posted rate, it will
prepare a Pricing Supplement reflecting such posted rates and, after approval
from the Agents, will arrange to have the Pricing Supplement filed with, or
transmitted by means reasonably calculated to result in filing with, the
Commission and will supply at least 10 copies of the Prospectus, as then amended
or supplemented, and bearing such Pricing Supplement, to the Presenting Agent.
No settlements at the posted rates may occur prior to such transmitting or
filing and the Agents will not, prior to such transmitting or filing, mail
confirmations to customers who have offered to purchase Notes at the posted
rates. After such transmitting or filing, sales, mailing of confirmations and
settlements may resume, subject to the provisions of "Delivery of Prospectus"
below.
Outdated Pricing Supplements, and copies of the Prospectus to which
they are attached (other than those retained for files), will be destroyed.
Suspension of Solicitation; Amendment or Supplement
As provided in the Distribution Agreement, the Company may instruct
the Agents to suspend solicitation of offers to purchase at any time. As soon as
practicable, but in any event not later than one Business Day in New York City
after receipt of notice
III-17
from the Company, the Agents will each forthwith suspend solicitation until such
time as the Company has advised them that solicitation of offers to purchase may
be resumed as provided in the Distribution Agreement.
If the Company decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes, it will promptly advise each
Agent and will furnish each Agent with the proposed amendment or supplement in
accordance with the terms of the Distribution Agreement. The Company will file
such amendment or supplement with the Commission, provide the Agents with copies
of any such amendment or supplement, confirm to the Agents that such amendment
or supplement has been filed with the Commission and advise the Agents that
solicitation may be resumed.
Any such suspension shall not affect the Company's obligations under
the Distribution Agreement; and in the event that at the time the Company
suspends solicitation of offers to purchase there shall be any offers already
accepted by the Company outstanding for settlement, the Company will have the
sole responsibility for fulfilling such obligations. The Company will in
addition promptly advise the Agents and the Trustee if such offers are not to be
settled and if copies of the Prospectus as in effect at the time of the
suspension may not be delivered in connection with the settlement of such
offers.
Acceptance of Offers
Each Agent will promptly advise the Company, at its option orally or
in writing, of each reasonable offer to purchase Notes received by it, other
than those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, without notice to the Company, reject any offer received by it, in
whole or in part. The Company will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. If the
Company accepts or rejects an offer, the Company will promptly notify the Agent
involved.
Delivery of Prospectus
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof (except as provided below) must be delivered to a
purchaser prior to or together with the earlier of the delivery of (i) the
written confirmation provided for above, and (ii) any Note purchased by such
purchaser. Subject to the foregoing, it is anticipated that delivery of the
Prospectus, confirmation and Notes to the Purchaser will be made simultaneously
at settlement. The Company shall ensure that the Presenting Agent receives
copies of the Prospectus and each amendment or supplement thereto (including
appropriate Pricing Supplements) in such quantities and within such time limits
as will enable the Presenting Agent to deliver such confirmation or Note to a
purchaser as contemplated by these procedures and in compliance with the first
sentence of this paragraph. If, since the date of acceptance of a purchaser's
offer, the Prospectus shall have been supplemented solely to reflect any sale of
Notes on terms different from
III-18
those agreed to between the Company and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus.
Authenticity of Signatures
The Company will cause the Trustee to furnish the Agents from time
to time with the specimen signatures of each of the Trustee's officers,
employees or agents who have been authorized by the Trustee to authenticate
Notes, but no Agent will have any obligation or liability to the Company or the
Trustee in respect of the authenticity of the signature of any officer, employee
or agent of the Company or the Trustee on any Note or Book-Entry Security.
Advertising Expenses
The Company will determine with the Agents the amount of advertising
that may be appropriate in offering the Notes. Advertising expenses will be paid
by the Company.
Business Day
"Business Day", when used with respect to any place of payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that place of payment are authorized or obligated
by law or executive order to close.
SPANS
It is understood that SPANS timesharing services which may be
utilized by the Company and the Trustee in the issuance of the Securities and
maintenance of the Security Register are furnished to the Trustee by Financial
Sciences Corporation ("FSC"). FSC has granted permission to the Trustee to allow
its clients to use such timesharing services, and in consideration for such
permission, it is understood and agreed that, if the Company shall have elected
to use SPANS, such services will be supplied to the Company "as is," without
warranty by FSC. The Company hereby waives any claims it may have against FSC
arising out of any use of such timesharing services.
Trustee Not to Risk Funds
Nothing herein shall be deemed to require the Trustee to risk or
expand its own funds in connection with any payment made to the Company, or the
Agents, or DTC, or any Noteholder, it being understood by all parties that
payments made by the Trustee to the Company, or the Agents, or DTC, or any
Holder shall be made only to the extent that funds are provided to the Trustee
for such purpose.
III-19
ANNEX IV
ACCOUNTANTS' LETTER
Pursuant to Section 4(i) and Section 6(d), as the case may be, of
the Distribution Agreement, the Company's independent certified public
accountants shall furnish letters to the Agents to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder adopted by
the Securities and Exchange Commission ("SEC") and the Public Company
Accounting Oversight Board (United States) ("PCAOB");
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the PCAOB of the consolidated
interim financial statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed financial
statements derived from audited financial statements of the Company for
the periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the representatives of the
Agents (the "Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the PCAOB of the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or included in the
Company's quarterly report on Form 10-Q incorporated by reference into the
Prospectus; and on the basis of specified procedures including inquiries
of officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A)(i) below comply as
to form in the related in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for
IV-1
the five most recent fiscal years included in the Prospectus and included
or incorporated by reference in Item 6 of the Company's Annual Report on
Form 10-K for the most recent fiscal year agrees with the corresponding
amounts (after restatement where applicable) in the audited consolidated
financial statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(v) On the basis of limited procedures, not constituting an
examination in accordance with the standards of the PCAOB, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made to
the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements
IV-2
included or incorporated by reference in the Company's Annual Report
on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified
by the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in clause (E) there were any
decreases in consolidated net sales or the total or per share
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred
or may occur or which are described in such letter; and
IV-3
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an examination
in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference) or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex IV to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(i) thereof.
IV-4