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Exhibit 1(b)
MERCK & CO., INC.
$1,670,000,000
MEDIUM-TERM NOTES, SERIES C
DISTRIBUTION AGREEMENT
October 9, 1997
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
▇.▇. ▇▇▇▇▇▇ Securities Inc.,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Dear Sir or Madam:
Merck & Co., Inc., a New Jersey corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series C
(the "Securities"), at an aggregate initial public offering price of up to
$1,670,000,000, 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 and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, 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, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex II hereto,
relating to such sale in accordance
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with Section 2(b) hereof. 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 and supplemented (the "Indenture"), between the
Company and First Trust of New York, National Association, as Trustee (the
"Trustee"). 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 and rights of holders thereof established, from
time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with,
each Agent that:
(a) Two registration statements on Form S-3 (File Nos.
33-60322 and 333-36383) 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 relating to all such debt securities
contained therein, has been declared effective by the Commission in
such form; no other document with respect to such registration
statements or document incorporated by reference therein has been filed
or transmitted for filing with the Commission (other than the
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission 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) of the
rules and regulations of the Commission under the Act is hereinafter
called a "Preliminary Prospectus";
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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 such registration statements became effective but excluding
Form T-1, each as amended at the time such part thereof 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
by reference in such Preliminary Prospectus or the Prospectus, as the
case may be; any reference to any amendment to the Registration
Statement shall be deemed to 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 the
applicable Pricing Supplement filed in accordance with Section 4(a)
hereof) in relation to Securities sold pursuant to this Agreement, in
the form in which it is filed 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
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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 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 further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act 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 in the case of the Registration Statement and any
amendment thereto and as of the applicable filing date in the case of
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;
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(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 following subsidiaries of the Company: MSD
Ireland (Holdings) S.A., Merck Sharp & Dohme (Ireland) Ltd., MSD
Overseas Finance, Merck Sharp & Dohme Quimica de Puerto Rico, Inc.,
Merck Sharp & Dohme Limited, Merck Sharp & Dohme (Italia) S.p.A., Merck
Sharp & Dohme B.V., Laboratoires Merck Sharp & Dohme - Chibret SNC,
Banyu Pharmaceutical Co., Ltd., Financiere MSD S.A.S., MSD Overseas
Manufacturing Co. and Merck Sharp & Dohme Overseas Finance has been
duly incorporated, and 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 materially adverse effect upon the
Company and its consolidated subsidiaries taken as a whole;
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(g) The Securities have been duly authorized, and, when
Securities are issued and delivered pursuant to this Agreement and any
Terms Agreement (or other agreement for the sale of particular
Securities made pursuant to Section 2(b)), will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the Indenture; the Indenture has been duly authorized and
duly qualified under the Trust Indenture Act and constitutes a valid
and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, 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 of any particular issuance of Securities will conform to the
descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
(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 (or other agreement
for the sale of particular Securities made pursuant to Section 2(b)),
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, 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
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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 other agreement for the Sale of particular
Securities made pursuant to Section 2(b))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,
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;
(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 (or other agreement for the sale
of particular Securities made pursuant to Section 2(b)), 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
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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, any debt securities with a maturity at the time of
original issuance of nine months or more except pursuant to this Agreement or
any Terms Agreement (or other agreement for the sale of particular Securities
made pursuant to Section 2(b)), 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 request the
Agents to execute, prior to the date 15 Business Days in New York City after
such request, an amendment to this Agreement to provide for another person as an
Agent hereunder on substantially the same terms as the Agents hereunder on the
date of such request, and each Agent shall have the right either to execute such
amendment or to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company pursuant to
Section 10 with respect to such Agent. These provisions shall not limit Section
4(f) hereof or any similar provision included in any Terms Agreement.
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 it may be amended from time to time by written
agreement between the Agents and the Company (the "Administrative Procedures").
The provisions of the Administrative Procedures shall apply to all transactions
contemplated hereunder other than those made pursuant to a Terms Agreement. Each
Agent and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them in the
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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 solici tation 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."
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.
(b) Each sale of Securities to any Agent as principal shall be
made in accordance with the terms of this Agreement and shall either be made by
a Terms Agreement, substantially in the form of Annex II hereto, or by an oral
agreement to be followed by a written confirmation or communication, which
written confirmation or communication shall be deemed to incorporate the terms
specified in the applicable Pricing Supplement. Upon acceptance by the Company
of an offer to purchase Securities, unless the Company and any Agent otherwise
agree in writing, any such Terms Agreement or written confirmation or
communication transmitted by any Agent to the Company shall constitute an
agreement between such Agent and the Company for the sale and purchase of such
Securities. 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, whether pursuant to any Terms Agreement or
otherwise, 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
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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 and date and place of delivery of
and payment for such Securities. Such Terms Agreement shall also specify any
requirements for opinions of counsel, accountants' letters and officers'
certificates pursuant to Section 4 hereof.
For each sale of Securities to an Agent as principal that is
not made pursuant to a Terms Agreement, the procedural details relating to the
issue and delivery of such Securities and payment therefor shall be as set forth
in the Administrative Procedures. For each such sale of Securities to an Agent
as principal that is not made pursuant to a Terms Agreement, the Company agrees
to pay such Agent a commission (or grant an equivalent discount) as provided in
Annex I hereto and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities
to be purchased by an Agent as principal, whether set forth in a Terms Agreement
or in accordance with the Administrative Procedures, is referred to herein as a
"Time of Delivery". For purposes of Rule 15c6-1 under the Securities Exchange
Act of 1934, the settlement date (if later than the otherwise applicable
settlement date) shall be the date for payment of funds and delivery of
securities for all the Securities sold pursuant to an offering of Securities
having identical terms (including the issue date) and terms of sale (whether or
not set forth in a single Terms Agreement).
(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, except 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
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offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, 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 or other agreement
by an Agent to purchase particular Securities as principal and prior to
the related Time of Delivery which shall be disapproved by any Agent
party to such Terms Agreement or so purchasing as principal 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 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
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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 its
withdrawal;
(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 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
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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 eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), 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);
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(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);
(f) That, from the date of any Terms Agreement with such Agent
or other agreement by such Agent to purchase Securities as principal
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 (including any purchase by such Agent as
principal not pursuant to a Terms Agreement), 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
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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), and each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus, each
such time to be referred to for purposes of this Section 4(h) as a
"Representation Date", the Company shall, notify each Agent of each
such amendment, supplement or filing and if requested by any Agent
shall, (a) concurrently if such Representation Date shall occur during
a Marketing Time, or (b) immediately at commencement of the next
Marketing Time if such Representation Date shall not occur during a
Marketing Time, furnish or cause to be furnished forthwith to such
Agent a written opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel for
the Company, or such other person who shall be General Counsel to the
Company at such time of delivery, dated the date of such amendment,
supplement, incorporation or the Time of Delivery relating to such
sale, as the case may be, in form satisfactory to such Agent, to the
effect set forth in Section 6(c) hereof; provided, however, that to the
extent appropriate such opinion or opinions may reconfirm matters set
forth in a prior opinion delivered under Section 6(c) or this Section
4(h); provided further, however, that any opinion or opinions 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) 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
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
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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 each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement) and each time that 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, such
time to be referred to for purposes of this Section 4(i) as an
"Accountants' Representation Date", the Company shall notify each Agent
of each such amendment, supplement or filing and if requested by any
Agent shall, (a) concurrently if such Accountants' Representation Date
shall occur during a Marketing Time, or (b) immediately at the
commencement of the next Marketing Time if such Accountants'
Representation Date shall not occur during a Marketing Time, 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;
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(j) At each Representation Date referred to in Section 4(h)
the Company shall notify each Agent of each such amendment, supplement
or filing and if requested by any Agent shall, (a) concurrently if such
Representation Date shall occur during a Marketing Time, or (b)
immediately at the commencement of the next Marketing Time if such
Representation Date shall not occur during a Marketing Time, 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 certificates referred to in Section 6(g) hereof which were 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 date) or, in lieu of such certificate,
certificates of the same tenor as the certificates referred to in said
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 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
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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 specifically provided for in this Section. Except as provided in
Sections 7 and 8 hereof, each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at
any time ("Solicitation Time") to solicit offers to purchase the Securities and
the obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the
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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 and any applicable date referred to
in Section 4(j) hereof that is prior to such Solicitation Time or Time of
Delivery, as the case may be, and at and as of such Solicitation Time or Time of
Delivery, as the case may be, the condition that prior to such Solicitation Time
or Time of Delivery, as the case may be, the Company shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be, 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;
(ii) 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 (iii)
all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such
Agent;
(b) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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 for the Company (or such other person who shall be General
Counsel to the Company at such Time of Delivery), shall have furnished
to such Agent such counsel's written opinions, dated the Commencement
Date, in form and substance satisfactory to such Agent, to the effect
that:
(i) The Company has been duly incorporated, and is validly
existing as a corporation in good standing under the laws of the State
of New Jersey
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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 property requires such
qualification, except where failure to qualify would not have
a materially adverse effect upon the Company and its
consolidated subsidiaries taken as a whole;
(ii) Each of the following subsidiaries of the Company:
MSD Ireland (Holdings) S.A., Merck Sharp & Dohme (Ireland)
Ltd., MSD Overseas Finance, Merck Sharp & Dohme Quimica de
Puerto Rico, Inc., Merck Sharp & Dohme Limited, Merck Sharp &
Dohme (Italia) S.p.A., Merck Sharp & Dohme B.V., Laboratoires
Merck Sharp & Dohme - Chibret SNC, Banyu Pharmaceutical Co.,
Ltd., Financiere MSD S.A.S., MSD Overseas Manufacturing Co.
and Merck Sharp & Dohme Overseas Finance has been duly
incorporated, and 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 materially 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 and other than
litigation or proceedings which individually 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;
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(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 such opinion a judgment for money in an action based
on Securities denominated in foreign currencies or currency
units 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 or currency unit in
which a particular Security is denominated into United States
dollars will depend upon various factors, including which
court renders the judgement;
(vi) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally
binding instrument,
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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 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 proper ties; 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;
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(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 and supplemented and any further amendments and
supplements thereto made by the Company prior to the date of
such opinion for the Securities (other than the financial
statements and related schedules therein, as to which 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 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 the date of such opinion, the Prospectus as
amended or supplemented or any
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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 in 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 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, 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 the
Commencement Date, as the case may be, 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 audited 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
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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) 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) There shall not have occurred 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 if the effect of any such event specified in this clause (iv) 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
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supplemented; (v) 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 (vi) 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 such Agent certificates of officers of the Company dated the
Commencement Date, in such form and executed by such officers of the
Company as shall be satisfactory to such Agent, 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 such
Agent 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, 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 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, the
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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, 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, 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
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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.
(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 required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the Company
on the one hand or by any Agent on
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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 per capita 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.
(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 or otherwise), is acting solely as agent for the Company and not
as principal. Each Agent will make
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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 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.
11. Except as otherwise specifically provided herein or in the
Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing,
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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 ▇.▇. ▇▇▇▇▇▇ Securities Inc. shall
be sufficient in all respects when delivered or sent by facsimile transmission
or registered mail to ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10260- 0060, facsimile
transmission no.: ▇▇▇-▇▇▇-▇▇▇▇, Attention: Medium Term Note Desk, Third Floor;
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 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 (or other agreement
for the purchase of particular Securities pursuant to Section 2(b)) 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 personal representatives, 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", 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.
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32
14. THIS AGREEMENT AND ANY TERMS AGREEMENT (OR OTHER AGREEMENT
FOR THE PURCHASE OF PARTICULAR SECURITIES MADE PURSUANT TO SECTION 2(B)) SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
15. This Agreement and any Terms Agreement (or other agreement
for the purchase of particular Securities made pursuant to Section 2(b)) 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.
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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/▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President and Treasurer
Accepted in New York, New York
as of the date hereof
/s/▇▇▇▇▇▇▇, Sachs & Co.
---------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
34
ANNEX I
The Issuer 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.
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ANNEX II
MERCK & CO., INC.
MEDIUM TERM NOTES, SERIES C
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
TERMS AGREEMENT
____________, 19__
[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
October 8, 1997 (the "Distribution Agreement"), between the Company on the one
hand and ▇▇▇▇▇▇▇, Sachs & Co., ▇.▇. ▇▇▇▇▇▇ Securities Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated (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.
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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:
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37
Schedule to Annex II
Title of Purchased Securities:
[ %] Medium-Term Notes, Series C
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 First Trust of New York, National Association, as
Trustee
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
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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:
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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 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;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited 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 American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, prospective financial
information 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 Agents;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for 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 the
five such fiscal years which were included or incorporated by reference
in the Company's Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not
constituting an audit in accordance with generally accepted auditing
standards, consisting of a reading of
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40
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) the unaudited condensed 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 do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with the basis for
the audited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Annual
Report on Form 10- K for the most recent fiscal year;
(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 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
IV-2
41
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 net assets or other items specified by the Agents,
or any increases in any items specified by the Agents, 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 revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Agents, or any increases in any items specified by the Agents,
in each case as compared with the comparable period of the
preceding year and with any other period of corresponding
length specified by the Agents, 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
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(v) In addition to the audit 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 (iv) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Agents 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 Agents or
in documents incorporated by reference in the Prospectus specified by
the Agents, 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