Exhibit 1.1
MERCK & CO., INC.
DEBT SECURITIES
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UNDERWRITING AGREEMENT
February 10, 2003
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
From time to time Merck & Co., Inc., a New Jersey corporation
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made
from time to time to the Underwriters of such Securities, for whom the firms
designated as representatives of the Underwriters of such Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters, to Underwriters who act
without any firm being designated as their representative, and to the sole
underwriter. This Underwriting Agreement shall not be construed as an obligation
of the Company to sell any of the Securities or as an obligation of any of the
Underwriters to purchase the Securities. The obligation of the Company to issue
and sell any of the Securities and the obligation of any of the Underwriters to
purchase any of the Securities shall be evidenced by the Pricing Agreement with
respect to the Designated Securities specified therein. Each Pricing Agreement
shall specify the aggregate principal amount of such Designated Securities, the
initial public offering price of such Designated Securities, the purchase price
to the Underwriters of such Designated Securities, the names of the Underwriters
of such Designated Securities, the names of the
Representatives of such Underwriters and the principal amount of such Designated
Securities to be purchased by each Underwriter and shall set forth the date,
time and manner of delivery of such Designated Securities and payment therefor.
The Pricing Agreement shall also specify (to the extent not set forth in the
Indenture and the registration statement and prospectus with respect thereto)
the terms of such Designated Securities. A Pricing Agreement shall be in the
form of an executed writing (which may be in counterparts), and may be evidenced
by an exchange of telegraphic communications or any other rapid transmission
device designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(a) Two registration statements on Form S-3 (File Nos.
333-77569 and 333-72546) (the "Initial Registration Statement") in
respect of the Securities have been filed with the Securities and
Exchange Commission (the "Commission"); such Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus contained in the
latest registration statement, to the Representatives for each of the
other Underwriters, have been declared effective by the Commission in
such form; other than a Registration Statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement or document incorporated
by reference therein has heretofore 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 Act),
each in the form heretofore delivered to the Representatives on or prior
to the date hereof; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment thereto
or the Rule 462(b) Registration Statement, if any, has been issued and
no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act,
being hereinafter called a "Preliminary Prospectus"; the various parts
of the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the registration
statement became effective but excluding Form T-1, each as amended at
the time such part of the registration statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, being hereinafter called the "Registration
Statement"; the prospectus
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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, being 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 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 Prospectus, as the case
may be; 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 the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(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 writing to the Company by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such 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
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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 an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such 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 materially adverse effect upon the
Company and its consolidated subsidiaries taken as a whole;
(g) The Securities have been duly authorized, and, when
Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will have been duly executed,
authenticated, issued and delivered and will
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constitute valid and legally binding obligations of the Company entitled
to the benefits provided by the Indenture, which will be substantially
in the form filed as an exhibit to the Registration Statement; the
Indenture has been duly authorized and duly qualified under the Trust
Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will
constitute 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 conforms, and the Designated
Securities will conform, to the descriptions thereof contained in the
Prospectus as amended or supplemented with respect to such Designated
Securities;
(h) 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 Pricing 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 or 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 such court or governmental agency or
body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement or the Indenture, except such as have
been, or will have been prior to the Time of Delivery, 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 Underwriters; and
(i) 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
incident to the kind of business conducted by the Company and its
subsidiaries 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
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results of operation 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.
3. Upon the execution of the Pricing Agreement applicable
to any Designated Securities and authorization by the Representatives of the
release of such Designated Securities, the several Underwriters propose to offer
such Designated Securities for sale upon the terms and conditions set forth in
the Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in the form
specified in such Pricing Agreement, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to the Representatives at least forty-eight
hours in advance or at such other place and time and date as the Representatives
and the Company may agree upon in writing, such time and date being herein
called the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant and in
accordance with Rule 424(b) under the Act; to make no further amendment
or any supplement to the Registration Statement or Prospectus as amended
or supplemented after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities which
shall be disapproved by the Representatives for such Securities promptly
after reasonable notice thereof; to advise the Representatives promptly
of any such amendment or supplement after such Time of Delivery and
furnish the Representatives with copies thereof; 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 such
Securities, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with 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
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such 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 amending or supplementing of the
Registration Statement or Prospectus or for additional information; and,
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 the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of such
Securities, provided 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) Prior to 10:00 a.m., New York City time, on the New York
business day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with copies of the Prospectus in New
York City as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Securities and if at such time any event shall have occurred
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 the Representatives
and upon their request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance;
(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)), an earnings 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) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the termination of trading restrictions for such
Designated Securities, as notified to the Company by the Representatives
and (ii) the Time of Delivery for such Designated Securities, not to
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company which mature more than one year after such
Time of Delivery and which are substantially similar to such Designated
Securities, without the prior written consent of the Representatives;
and
(f) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several
Underwriters 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 and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing 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;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) 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; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section; but the Company shall not in any event be liable
to any of the Underwriters for damages on account of loss of anticipated profits
from the sale by them of the Securities. It is understood, however, that, except
as provided in this Section, Section 8 and Section 11 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
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7. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Representatives, to the condition
that all representations and warranties and other statements of the Company in
or incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
the applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof 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 Representatives'
reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated the Time of Delivery for
such Designated Securities, with respect to the incorporation of the
Company, the Indenture, the Designated Securities, the Registration
Statement, the Prospectus as amended or supplemented and other related
matters as the Representatives 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) Xxxxxxx X. Xxxxxxx, Esq., Senior Vice President and
General Counsel to the Company (or such other person who shall be
General Counsel to the Company at such Time of Delivery), shall have
furnished to the Representatives his written opinion, dated the Time of
Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, 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 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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(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 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 the Pricing Agreement with
respect to the Designated Securities have been duly authorized,
executed and delivered by the Company;
(v) The Designated Securities have been duly
authorized, executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; and the
Designated Securities and the Indenture conform to the
descriptions thereof in the Prospectus as amended or
supplemented;
(vi) The Indenture has been duly authorized, executed
and delivered by the Company and duly qualified under the Trust
Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will
constitute 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;
(vii) The issue and sale of the Designated Securities
and the compliance by the Company with all of the provisions of
the Designated Securities, the Indenture, this Agreement and the
Pricing Agreement with respect to the Designated 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
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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 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 Designated
Securities or the execution and delivery and performance by the
Company of this Agreement, the Pricing 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 Designated Securities
by the Underwriters;
(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; and 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 Time of
Delivery for the Designated Securities (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to
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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 thereto made by the Company prior to the Time of
Delivery (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 Time of Delivery (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 Time of
Delivery, 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 Time of Delivery (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) On the date of the Pricing Agreement for such Designated
Securities and at the Time of Delivery for such Designated Securities,
the independent accountants of the Company 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 the Representatives a letter, dated (i) the date of such
Pricing Agreement or (ii) the effective date of the Registration
Statement or the date of the most recent report filed with the
Commission containing financial statements and incorporated by reference
in the Registration Statement, if the date of such report is later than
such effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex II hereto, and with
respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and
substance satisfactory to the Representatives;
-12-
(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 pursuant to the Company's Stock Repurchase 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 the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as amended or supplemented;
(f) On or after the date of the Pricing Agreement relating
to the Designated Securities (i) no downgrading shall have occurred 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 and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities;
(g) On or after the date of the Pricing Agreement relating
to the Designated Securities 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; 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 the Representatives makes it impracticable or
-13-
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated by the
Prospectus as amended and supplemented;
(h) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York business day next succeeding the date of this Agreement;
and
(i) The Company shall have furnished or caused to be
furnished at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to
the Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder to
be performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (e) of this Section and as to such other
matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter 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, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and 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 each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter 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, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and 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 any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
(b) Each Underwriter 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, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as
-14-
amended or supplemented and 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, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and 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
Underwriter through the Representatives 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.
(d) If the indemnification provided for in this Section 8 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 the Underwriters
of the Designated Securities on the other from the offering of the Designated
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
-15-
only such relative benefits but also the relative fault of the Company on the
one hand and the Underwriters of the Designated Securities 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 such Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by such Underwriters. 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 such Underwriters 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 the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters 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), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the applicable Designated Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter 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 the Underwriters of Designated
Securities in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations with respect to such Securities and
not joint.
(e) The obligations of the Company under this Section 8
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 Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters 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.
9. (a) If any Underwriter shall default in its obligation
to purchase the Designated Securities which it has agreed to purchase under the
Pricing Agreement relating to such Designated Securities, the Representatives
may in their discretion arrange
-16-
for themselves or another party or other parties to purchase such Designated
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Designated Securities, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Designated
Securities on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Designated Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to postpone
the Time of Delivery for such Designated Securities for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Designated Securities of a defaulting Underwriter or
Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate principal amount of such Designated Securities which
remains unpurchased does not exceed one-eleventh of the aggregate principal
amount of the Designated Securities, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the principal amount of
Designated Securities which such Underwriter agreed to purchase under the
Pricing Agreement relating to such Designated Securities and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on
the principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Designated Securities of a defaulting Underwriter or
Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate principal amount of Designated Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the Company
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Designated Securities of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to such
Designated Securities shall thereupon terminate, without liability on the part
of any non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section
-17-
8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to
Section 9 hereof, the Company shall not then be under any liability to any
Underwriter with respect to the Designated Securities covered by such Pricing
Agreement except as provided in Section 6 and Section 8 hereof; but, if for any
other reason Designated Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through
the Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Representatives as set
forth in the Pricing Agreement; and if to the Company shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement: Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8 (c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the Company
and, to the extent
-18-
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, 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 such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and each Pricing 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 deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
Very truly yours,
MERCK & CO., INC.
By: /s/ Xxxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President and
Treasurer
-19-
Accepted as of the date hereof:
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
-20-
ANNEX I
PRICING AGREEMENT
[NAME OF REPRESENTATIVE]
[NAMES OF CO-REPRESENTATIVE(s)],
As Representative[s] of the several
Underwriters named in Schedule I hereto,
[C/O] [NAME OF REPRESENTATIVE]
-----------------------------
-----------------------------
[DATE]
Ladies and Gentlemen:
Merck & Co., Inc., a New Jersey corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated , 2003 (the "Underwriting Agreement"), [BETWEEN THE
COMPANY ON THE ONE HAND AND [NAME OF REPRESENTATIVE] [AND (NAMES OF
CO-REPRESENTATIVES NAMED THEREIN)] ON THE OTHER HAND], to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representative[s] herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representative[s] designated
to act on behalf of the Representative[s] and on behalf of each of the
Underwriters of the Designated Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the Representative[s] referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated 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
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to
-1-
each of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the time and place and at the purchase
price to the Underwriters set forth in Schedule II hereto, the principal amount
of Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us [ONE FOR THE COMPANY AND EACH OF THE REPRESENTATIVES PLUS ONE
FOR EACH COUNSEL] counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on the part of
the Representative[s] as to the authority of the signers thereof.
Very truly yours,
MERCK & CO., INC.
By:
-----------------------------
Name:
Title:
Accepted as of the date hereof:
[NAME OF REPRESENTATIVE]
[NAME OF CO-REPRESENTATIVE(s)]]
By:
------------------------------
Name:
Title:
On behalf of each of the Underwriters
-2-
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
[Name of Representative]........................................... $
[Name(s) of Co-Representative(s)]..................................
[Name(s) of other Underwriters]....................................
------------------
Total............................................ $
==================
-3-
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[%] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
AGGREGATE PRINCIPAL AMOUNT:
[$]
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus accrued
interest [, if any,] from to [and accrued
amortization[, if any,] from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued
amortization[, if any,] from to ]
FORM OF DESIGNATED SECURITIES:
[Definitive form to be made available for checking and packaging at
least twenty-four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[Wire transfer of immediately available]
[New York] [Clearing House (next day)] funds
TIME OF DELIVERY:
a.m. (New York City time), , 20_ _
INDENTURE:
April 1, 1991, as amended, between the Company and U.S. Bank Trust
National Association, as Trustee.
-4-
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates, commencing. . . . . . . . . . . . . . .. . ,20. .]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the sinking
fund, in whole or in part at the option of the Company, in the amount of [$ ] or
an integral multiple thereof,
[on or after , at the following redemption prices (expressed in percentages of
principal amount). If [redeemed on or before , %, and if] redeemed during the
12-month period beginning ,
YEAR REDEMPTION
---- PRICE
------
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
[on any interest payment date failing on or after , ,
at the election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
-5-
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$ ] principal amount of Designated Securities on in
each of the years through at 100% of their principal amount plus
accrued interest[, together with [cumulative] [noncumulative] redemptions at the
option of the Company to retire an additional [$ ] principal amount
of Designated Securities in the years through at 100%
of their principal amount plus accrued interest.]
[If Designated Securities are extendable debt
securities, insert--
EXTENDABLE PROVISIONS:
Designated Securities are repayable on ,
[insert date and years], at the option of the holder, at their
principal amount with accrued interest. The initial annual interest rate
will be %, and thereafter the annual interest rate will be adjusted
on , and to a rate not
less than % of the effective annual interest rate on U.S. Treasury
obligations with -year maturities as of the [insert date 15 days
prior to maturity date] prior to such [insert maturity date].]
[If Designated Securities are floating rate
debt securities, insert--
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through [and
thereafter will be adjusted [monthly] [on each , ,
and ] [to an annual rate of % above the average rate for
-year
[month][securities][certificates of deposit] issued by and
[insert names of banks].] [and the annual interest rate
[thereafter] [from through ] will be the
interest yield equivalent of the weekly average per annum market
discount rate for -month Treasury bills plus % of
Interest Differential (the excess, if any, of (i) the then current
weekly average per annum secondary market yield for -month
certificates of deposit over (ii) the then current interest yield
equivalent of the weekly average per annum market discount rate for
-month Treasury bills); [from and thereafter the rate
will be the then current interest yield equivalent plus % of
Interest Differential].]
-6-
DEFEASANCE PROVISIONS:
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
ADDITIONAL CLOSING CONDITIONS:
Paragraph 7(g) of the Underwriting Agreement should be modified in the
event that the Securities are denominated in, indexed to, or principal
or interest are paid in, a currency other than the U.S. dollar, more
than one currency or in a composite currency. The country or countries
issuing such currency should be added to the banking moratorium and
hostilities clauses and the following additional clause should be added
to the paragraph (the entire paragraph should be restated, as amended):
"; ( ) the imposition of the proposal of exchange
controls by any governmental authority in [insert the country or
countries issuing such currency, currencies or composite currency]".
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
-7-
ANNEX II
FORM OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters 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 (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;
(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 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;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below and agreeing the amounts contained therein
with the Company's accounting records, 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
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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 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
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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
(v) 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 paragraph (iv) 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 II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
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