<PAGE> 1
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MERCK & CO., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEW JERSEY 22-1109110
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
P.O. BOX 100
ONE MERCK DRIVE
WHITEHOUSE STATION, NEW JERSEY 08889-0100
(908) 423-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CELIA COLBERT
VICE PRESIDENT AND SECRETARY
MERCK & CO., INC.
P.O. BOX 100
ONE MERCK DRIVE
WHITEHOUSE STATION, NEW JERSEY 08889-0100
(908) 423-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
KENNETH C. FRAZIER, ESQ. ANN B. FISHER, ESQ.
MERCK & CO., INC. SULLIVAN & CROMWELL
P.O. BOX 100 125 BROAD STREET
ONE MERCK DRIVE NEW YORK, NEW YORK 10004-2498
WHITEHOUSE STATION, NEW JERSEY 08889-0100 (212) 558-4000
(908) 423-1000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2)(3) REGISTRATION FEE(4)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt securities.................... $1,000,000,000 100% $1,000,000,000 $278,000
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Or, if any debt securities (a) are denominated or payable in a foreign or
composite currency or currencies, such principal amount as shall result in
an aggregate initial offering price equivalent to $1,000,000,000 at the time
of the initial offering, (b) are issued at an original issue discount, such
greater principal amount as shall result in an aggregate initial offering
price of $1,000,000,000, or (c) are issued with their principal amount
payable at maturity to be determined with reference to a currency exchange
rate or other index, such principal amount as shall result in an aggregate
initial offering price of $1,000,000,000.
(2) Estimated in accordance with Rule 457 solely for the purpose of calculating
the registration fee.
(3) Excluding accrued interest and accrued amortization of discount, if any, to
the date of delivery.
(4) Pursuant to Rule 429, $670,000,000 of debt securities are being carried
forward from Registration Statement No. 333-36383 for sale under the
Prospectus filed herewith. A registration fee of $203,030 was paid with
respect to such debt securities.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
$1,670,000,000
[MERCK LOGO] MERCK & CO., INC.
DEBT SECURITIES
------------------------
Merck & Co., Inc. may from time to time issue up to a total of
$1,670,000,000 of debt securities. The accompanying prospectus supplement will
specify the terms of the securities.
Merck & Co., Inc. may sell these securities to or through underwriters, and
also to other purchasers or through agents. The names of any underwriters or
agents will be set forth in the accompanying prospectus supplement.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
Prospectus dated , 1999.
<PAGE> 3
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a shelf registration process. Under this shelf process, we may
sell any combination of the debt securities described in this prospectus in one
or more offerings up to a total amount of $1,670,000,000. This prospectus
provides you with a general description of the debt securities we may offer.
Each time we sell debt securities, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may also add to or update other information contained in
this prospectus. You should read both this prospectus and the accompanying
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information" on page 14.
2
<PAGE> 4
MERCK
We are a global research-driven pharmaceutical company that discovers,
develops, manufactures and markets a broad range of human and animal health
products and provides pharmaceutical benefit services. We have two reportable
business segments: Merck Pharmaceutical and Merck-Medco. Merck Pharmaceutical
products consist of therapeutic agents, sold by prescription, for the treatment
of human disorders. Merck-Medco revenues are derived from the filling and
management of prescriptions and health management programs.
Our human health products include therapeutic agents, sold by prescription,
for the treatment of human disorders, as well as preventative agents. Among
these are elevated cholesterol products, hypertension/heart failure products,
anti-ulcerants, vaccines/biologicals, osteoporosis products, antibiotics, a
protease inhibitor for the treatment of human immunodeficiency viral infection,
and ophthalmologicals.
A portion of our human health products business is conducted through joint
ventures with other companies, including joint ventures with Johnson & Johnson
and Pasteur-Merieux Connaught USA. We are also a limited partner in a
partnership with AstraZeneca PLC.
Through a joint venture with Rhone-Poulenc, we also conduct an animal
health and poultry genetics business. Animal health products include medicinals
used to control and alleviate disease in livestock, small animals and poultry.
Our Merck-Medco segment includes our sales of non-Merck products and our
pharmaceutical benefits services, principally managed prescription drug programs
and programs to help manage patient health.
We incorporated in the State of New Jersey in 1927 and maintain our
principal offices at Whitehouse Station, New Jersey. Our address is P.O. Box
100, One Merck Drive, Whitehouse Station, New Jersey 08889-0100 and our
telephone number is (908) 423-1000. The terms "Merck", "we", "us" or "our"
generally refer to Merck & Co., Inc. and its consolidated subsidiaries, except
that only Merck & Co., Inc. legally will be the issuer of the debt securities
offered under this prospectus.
RATIOS OF EARNINGS TO
FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for each of the fiscal
years ended December 31, 1994 through 1998 are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
- --------------------------------
1998 1997 1996 1995 1994
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
26 29 23 38 28
</TABLE>
For purposes of computing these ratios, earnings consist of income before
income taxes, cumulative effect of accounting changes, one-third of rents, which
is the amount we consider to be representative of the interest factor inherent
in rents, interest expense, net of amounts capitalized, and dividends on
preferred stock of subsidiary companies. Fixed charges consist of one-third of
rents, interest expense as reported in our consolidated financial statements and
dividends on preferred stock of subsidiary companies.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying prospectus supplement, we
will use the net proceeds from the sale of the debt securities for general
corporate purposes, including the reduction of short-term debt. We may
temporarily invest funds that we do not immediately need for these purposes in
short-term marketable securities.
DESCRIPTION OF DEBT SECURITIES
WE MAY OFFER
As required by Federal law for all bonds and notes that are publicly
offered, the debt securities are governed by a document called the indenture.
The indenture is a contract, dated as of April 1, 1991, which has since been
amended once and may be amended further in the future, between us and U.S. Bank
Trust National Association, which acts as trustee. The trustee has two main
roles. First, the trustee can enforce your rights against us if we default.
There are some limitations on the extent to which the trustee acts on your
behalf, described on page 12 under " -- Remedies if an Event of Default Occurs".
Second, the trustee performs administrative duties for us, such as sending you
interest payments, registering transfers of your debt securities to a new buyer
if you sell and sending you notices.
3
<PAGE> 5
The indenture and its associated documents contain the full legal text of
the matters described in this section. The indenture and the debt securities are
governed by New York law. The indenture is an exhibit to our registration
statement. See "Where You Can Find More Information" on page 14 for information
on how to obtain a copy.
We may issue as many distinct series of debt securities under the indenture
as we wish. This section summarizes all the material terms of the debt
securities that are common to all series unless otherwise indicated in the
prospectus supplement relating to a particular series.
Because this section is a summary, it does not describe every aspect of the
debt securities, and is subject to and qualified in its entirety by reference to
all the provisions of the indenture, including definitions of some of the terms
used in the indenture. We describe the meaning for only the more important
terms. We also include references in parentheses to some sections of the
indenture. Whenever we refer to particular sections or defined terms of the
indenture in this prospectus or in the prospectus supplement, those sections or
defined terms are incorporated by reference here or in the prospectus
supplement.
We may issue the debt securities as original issue discount securities,
which will be offered and sold at a substantial discount below their stated
principal amount. (section 101) A prospectus supplement relating to original
issue discount securities will describe federal income tax consequences and
other special considerations applicable to them. The debt securities may also be
issued as indexed securities or securities denominated in foreign currencies or
currency units, as described in more detail in a prospectus supplement relating
to any of these types of debt securities. A prospectus supplement relating to
indexed debt securities or foreign currency debt securities will also describe
any additional tax consequences or other special considerations applicable to
these types of debt securities.
In addition, the material specific financial, legal and other terms
particular to debt securities of each series are described in the prospectus
supplement relating to the debt securities of that series. The prospectus
supplement relating to debt securities of the series will describe the following
terms of the debt securities:
- - the title of the debt securities of the series;
- - any limit on the total principal amount of the debt securities of the series;
- - the date or dates on which the debt securities of the series will mature;
- - any rate or rates, which may be fixed or variable, per annum at which the debt
securities of the series will bear interest, if any, and the date or dates
from which any interest will accrue;
- - the date or dates on which any interest on the debt securities of the series
will be payable and the regular record date or dates we will use to determine
who is entitled to receive each interest payment;
- - the place or places where the principal and any premium and interest will be
payable;
- - any period or periods within which and the price or prices at which we will
have the option to redeem the debt securities of the series, and the other
detailed terms and provisions of any optional redemption right;
- - any obligation we will have to redeem the debt securities of the series under
a sinking fund or analogous provision or to redeem your debt securities at
your option and the period or periods during which, the price or prices at
which and the other specific terms under which we would be obligated to redeem
the debt securities of the series under any obligation of this kind;
- - if other than integral multiples of $1,000, the denominations in which we will
issue the debt securities of the series;
- - if other than United States dollars, the currency of payment of the principal
and any premium and interest on the debt securities of the series;
- - any index or other special method we will use to determine the amount of
principal or any premium or interest we will pay on the debt securities of the
series;
- - if we or you have a right to choose the currency or currency units in which
payments on any of the debt securities of the series will be made, the
currencies or currency units that we or you may elect, when the election may
be made and the
4
<PAGE> 6
other specific terms of the right to make an election of this kind;
- - if other than the principal amount, the portion of the principal amount of the
debt securities of the series which will be payable upon the declaration of
acceleration of the maturity of the debt securities of the series;
- - the applicability of the provisions described on page 11 under
"-- Defeasance";
- - if we will issue the debt securities of the series only in the form of global
securities as described below under "-- Global Securities", the name of the
depository for the debt securities of the series and the circumstances under
which the global securities may be terminated and separate debt securities may
be registered in the names of persons other than the depositary or its nominee
if other than those circumstances described on page 6 under "-- Special
Situations When a Global Security will be Terminated"; and
- - any other special terms of the debt securities of the series that are not
inconsistent with the provisions of the indenture.
The prospectus supplement relating to the debt securities of the series
will be attached to the front of this prospectus.
We may issue debt securities other than the debt securities described in
this prospectus. There is no requirement that any other debt securities that we
issue be issued under the indenture. Thus, any other debt securities that we
issue may be issued under other indentures or documentation, containing
provisions different from those included in the indenture or applicable to one
or more issues of the debt securities described in this prospectus.
LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT HOLDERS
Investors who hold debt securities in accounts at banks or brokers will
generally not be recognized by us as legal holders of debt securities. This is
called holding in street name. Instead, we would recognize only the bank or
broker, or the financial institution the bank or broker uses to hold its debt
securities. These intermediary banks, brokers and other financial institutions
pass along principal, interest and other payments on the debt securities, either
because they agree to do so in their customer agreements or because they are
legally required to. If you hold debt securities in street name, you should
check with your own institution to find out:
- - how it handles securities payments and notices;
- - whether it imposes fees or charges;
- - how it would handle voting if ever required;
- - whether and how you can instruct it to send you debt securities registered in
your own name so you can be a direct holder as described below; and
- - how it would pursue rights under the debt securities if there were a default
or other event triggering the need for holders to act to protect their
interests.
DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, run only to persons or entities who
are the direct holders of debt securities, i.e., those who are registered as
holders of debt securities. As noted above, we do not have obligations to you if
you hold in street name or through other indirect means, either because you
choose to hold debt securities in that manner or because the debt securities are
issued in the form of global securities as described below. For example, once we
make payment to the registered holder, we have no further responsibility for the
payment even if that registered holder is legally required to pass the payment
along to you as a street name customer but does not do so.
GLOBAL SECURITIES
WHAT IS A GLOBAL SECURITY? A global security is a special type of
indirectly held security, as described above under "-- Street Name and Other
Indirect Holders". If we choose to issue debt securities in the form of global
securities, the ultimate beneficial owners can only be indirect holders. We do
this by requiring that the global security be registered in the name of a
financial institution we select and by requiring that the debt securities
included in the global security not be transferred to the name of any other
direct holder unless the special circumstances described below occur. The
financial institution that acts as the sole
5
<PAGE> 7
direct holder of the global security is called the
depository.
Any person wishing to own a debt security included in a global security
must do so indirectly by virtue of an account with a broker, bank or other
financial institution that in turn has an account with the depository. The
prospectus supplement indicates whether your debt securities will be issued only
in the form of global securities.
SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES. As an indirect
holder, your rights relating to a global security will be governed by the
account rules of your financial institution and of the depository, as well as
general laws relating to securities transfers. We do not recognize you as a
registered holder of debt securities and instead deal only with the depository
that holds the global security.
You should be aware that if debt securities are issued only in the form of
global securities:
- - You cannot have debt securities registered in your own name.
- - You cannot receive physical certificates for your interest in the debt
securities.
- - You will be a street name holder and must look to your own bank or broker for
payments on the debt securities and protection of your legal rights relating
to the debt securities. See " -- Street Name and Other Indirect Holders" on
page 5.
- - You may not be able to sell interests in the debt securities to some insurance
companies and other institutions that are required by law to own their
securities as direct holders.
- - The depository's policies will govern payments, transfers, exchange and other
matters relating to your interest in the global security. We and the trustee
have no responsibility for any aspect of the depository's actions or for its
records of ownership interests in the global security. We and the trustee also
do not supervise the depository in any way.
- - The depository will require that interests in a global security be purchased
or sold within its system using same-day funds for settlement.
SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described later, the global security will terminate and
interests in it will be exchanged for separate certificates representing debt
securities. After that exchange, the choice of whether to hold debt securities
directly or in street name will be up to you. You must consult your own bank or
broker to find out how to have your interests in the debt securities transferred
to your own name, so that you will be a direct holder. The rights of street name
investors and direct holders in the debt securities have been previously
described in the subsections entitled, " -- Street Name and Other Indirect
Holders" and " -- Direct Holders" on page 5.
The special situations for termination of a global security are:
- - When the depository notifies us that it is unwilling, unable or no longer
qualified to continue as depository,
- - When we notify the trustee that we wish to terminate the global security, or
- - When an event of default on the debt securities has occurred and has not been
cured. Defaults are discussed on pages 12 and 13 under " -- Events of
Default".
The prospectus supplement may also list additional situations for terminating a
global security that would apply only to the particular debt securities of the
series covered by the prospectus supplement. When a global security terminates,
the depository and not we or the trustee, is responsible for deciding the names
of the institutions that will be the initial direct holders. (sections 204 and
305)
In the remainder of this description "you" means direct holders and not street
name or other indirect holders of debt securities. Indirect holders should
read the previous subsection on page 5 entitled " -- Street Name and Other
Indirect Holders".
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- - ADDITIONAL MECHANICS relevant to the debt securities under normal
circumstances, such as how you transfer ownership and where we make payments.
- - Your rights under several SPECIAL SITUATIONS, such as if we merge with another
company or if we want to change a term of the debt securities.
6
<PAGE> 8
- - RESTRICTIVE COVENANTS contained in the indenture which specify particular
business actions that we promise not to take. Particular securities of a
series may have additional restrictive covenants.
- - Your rights if we DEFAULT or experience other financial difficulties.
- - OUR RELATIONSHIP WITH THE TRUSTEE.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND REGISTRATION OF TRANSFER
The debt securities will be issued:
- - only in fully registered form;
- - without interest coupons; and
- - unless otherwise indicated in the prospectus supplement, in denominations that
are integral multiples of $1,000. (section 302)
You may have your debt securities broken into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed. (section
305) This is called an exchange.
You may exchange or register a transfer of debt securities at the office of
the trustee. The trustee acts as our agent for registering debt securities in
the names of holders and registering transfers of debt securities. We may change
this appointment to another entity or perform it ourselves. The entity
performing the role of maintaining the list of registered direct holders is
called the security registrar. It will also register transfers. (section 305)
You will not be required to pay a service charge to register a transfer of
debt securities or to exchange debt securities, but you may be required to pay
for any tax or other governmental charge associated with the transfer or
exchange. The registration of transfer or exchange will only be made if the
security registrar is satisfied with your proof of ownership. (section 305)
If we have designated additional transfer agents, they are named in the
prospectus supplement. We may cancel the designation of any particular transfer
agent. We may also approve a change in the office through which any transfer
agent acts. (section 1002)
If the debt securities are redeemable and we redeem less than all of the
debt securities of a particular series, we may block the registration of
transfer or exchange of debt securities during the period beginning 15 days
before the day we mail the notice of redemption and ending on the day of that
mailing, in order to freeze the list of holders to prepare the mailing. We may
also refuse to register transfers or exchanges of debt securities selected for
redemption, except that we will continue to permit transfers and exchanges of
the unredeemed portion of any debt security being partially redeemed. (section
305)
PAYMENT AND PAYING AGENTS
We will pay interest to you on each date interest is due if you are a
direct holder listed in the trustee's records at the close of business on a
particular day in advance of each due date for interest, even if you no longer
own the debt security on the interest due date. That particular day, usually
about two weeks in advance of the interest due date, is called the regular
record date and is stated in the prospectus supplement. (section 307) Holders
buying and selling debt securities must work out between them how to compensate
for the fact that we will pay all the interest for an interest period to the one
who is the registered holder on the regular record date. The most common manner
is to adjust the sales price of the debt securities to pro-rate interest fairly
between buyer and seller. This pro-rated interest amount is called accrued
interest.
Unless otherwise stated in the prospectus supplement, we will pay interest,
principal and any other money due on the debt securities at the corporate trust
office of the trustee in New York City. (section 1002) That office is currently
located at 100 Wall Street, 16th floor, New York, New York 10005. You must make
arrangements to have your payments picked up at or wired from that office. We
may also choose to pay interest by mailing checks.
Street name and other indirect holders should consult their banks or brokers
for information on how they will receive payments.
We may also arrange for additional payment offices, and may cancel or
change these offices, including our use of the trustee's corporate trust office.
These offices are called paying agents. We
7
<PAGE> 9
may also choose to act as our own paying agent. We
must notify you of changes in the paying agents for any particular debt
securities of the series. (section 1002)
NOTICES
We and the trustee will send notices regarding the debt securities only to
direct holders, using their addresses as listed in the trustee's records.
(sections 101 and 106)
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
direct holders will be repaid to us. After that two-year period, you may look
only to us for payment and not to the trustee, any other paying agent or anyone
else. (section 1003)
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS
We are permitted to consolidate or merge with another company or firm. We
are also permitted to sell or lease substantially all of our assets to another
firm, or to buy or lease substantially all of the assets of another firm.
However, we may not take any of these actions unless the following conditions,
among others, are met:
- - Where we merge out of existence or sell or lease substantially all our assets,
the other firm must be a corporation, partnership or trust organized under the
laws of a U.S. state or the District of Columbia or under federal law and it
must agree to be legally responsible for the debt securities.
- - The merger, sale of assets or other transaction must not cause a default on
the debt securities, and we must not already be in default unless the merger
or other transaction would cure the default. For purposes of this no-default
test, a default would include an event of default, as described on page 12,
that has occurred and not been cured. A default for this purpose would also
include the occurrence of any event that would be an event of default if we
received the required notice of our default or if under the indenture the
default would become an event of default after existing for a specific period
of time. (section 801)
- - It is possible that the merger, sale of assets or other transaction would
cause some of our property to become subject to a mortgage or other legal
mechanism giving lenders preferential rights in that property over other
lenders or over our general creditors if we fail to pay them back. We have
promised to limit these preferential rights, as discussed under
"-- Restrictive Covenants" on pages 9 and 10. If a merger or other transaction
would create any liens on any of our property we must comply with those
restrictive covenants. We would do this either by deciding that the liens were
permitted, or by following the requirements of the restrictive covenants to
grant an equivalent or higher-ranking lien to you and the other direct holders
of the debt securities on the same property that we own.
MODIFICATION AND WAIVER
There are three types of changes we can make to the indenture and the debt
securities.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that cannot be
made to your debt securities without your specific approval. Following is a list
of those types of changes:
- - change the payment due date of any installment of the principal or any
interest on a debt security stated in the debt security;
- - reduce any amounts due on a debt security;
- - reduce the amount of principal payable upon acceleration of the maturity of a
debt security following a default;
- - change the place or currency of payment on a debt security;
- - impair your right to sue for payment;
- - reduce the percentage of direct holders of debt securities whose consent is
needed to modify or amend the indenture;
- - reduce the percentage of direct holders of debt securities whose consent is
needed to waive compliance with certain provisions of the indenture or to
waive certain defaults; and
- - modify any other aspect of the provisions dealing with modification and waiver
of the indenture. (section 902)
8
<PAGE> 10
CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the
indenture and the debt securities is the kind that requires a vote in favor by
direct holders of debt securities owning a majority of the principal amount of
the securities of the particular series affected. (section 902) Most changes
fall into this category, such as if we wish to obtain a waiver of all or part of
the restrictive covenants described below, or a waiver of a past default.
However, we cannot obtain a waiver of a payment default or any other aspect of
the indenture or the securities listed in the first category on page 8 under
" -- Changes Requiring Your Approval" unless we obtain your individual consent
to the waiver. (section 513)
CHANGES NOT REQUIRING APPROVAL. The third type of change does not require
any vote by holders of debt securities. This type is limited to corrections and
clarifications and other changes that would not adversely affect holders of the
debt securities. (section 901)
FURTHER DETAILS CONCERNING VOTING. When taking a vote, we will use the
following rules to decide how much principal amount to attribute to a debt
security:
- - For original issue discount securities, we will use the principal amount that
would be due and payable on the voting date if the maturity of the debt
securities were accelerated to that date because of a default.
- - For debt securities for which the principal amount is undetermined because,
for example, it is based on an index, we will use a special rule for that
series of debt security that will be described in the prospectus supplement.
- - For debt securities denominated in one or more foreign currencies or currency
units, we will use the U.S. dollar equivalent.
Debt securities will not be considered outstanding and therefore will not
carry voting rights if we have deposited or set aside in trust for you money for
their payment or redemption. (section 107) Debt securities will also not be
eligible to vote if they have been fully defeased as described on page 11 under
" -- Full Defeasance". (section 101)
We will generally be entitled to set any day as a record date for the
purpose of determining the direct holders of outstanding debt securities that
are entitled to vote or take other action under the indenture. (section 301) In
some circumstances, the trustee will be entitled to set a record date for action
by direct holders.
Street name and other indirect holders should consult their banks or brokers
for information on how approval may be granted or denied if we seek to change
the indenture or the debt securities or request a waiver.
RESTRICTIVE COVENANTS
In the following description of restrictive covenants, we use several
specialized terms without explaining the meaning when we use the terms. We
define these terms, which appear in BOLD, ITALICIZED type without quotation
marks the first time they appear, in " -- Definitions Relating to our
Restrictive Covenants" at the end of this subsection on page 10.
RESTRICTIONS ON SECURED DEBT. Some of our property may be subject to a
mortgage or other legal mechanism that gives our lenders preferential rights in
that property over other lenders, including you and the other direct holders of
the debt securities, or over our general creditors if we fail to pay them back.
These preferential rights are called liens. Debt which is protected by these
preferential rights is called secured debt. In the indenture, we promise that we
will not become obligated on any new secured debt that is secured by a lien on
any of our PRINCIPAL DOMESTIC MANUFACTURING PROPERTIES, or on any shares of
stock or debt of any of our DOMESTIC SUBSIDIARIES, unless we grant an equivalent
or higher-ranking lien on the same property to you and the other direct holders
of the debt securities.
We do not need to comply with this restriction if the amount of all debt
that would be secured by liens on principal domestic manufacturing properties,
including the new debt, the debt securities which we would so secure as
described in the previous sentence, and all ATTRIBUTABLE DEBT, that results from
a sale and leaseback transaction involving principal domestic manufacturing
properties, is less than 10% of our CONSOLIDATED NET TANGIBLE ASSETS.
This restriction on secured debt does not apply to debt secured by certain
types of liens, and we
9
<PAGE> 11
can disregard this secured debt when we calculate
the limits imposed by this restriction. These types of liens are:
- - liens on the property of any of our domestic subsidiaries, or on their shares
of stock or debt, if those liens existed at the time the corporation became
our domestic subsidiary;
- - liens in favor of us or our domestic subsidiaries;
- - liens in favor of U.S. governmental bodies that we granted in order to assure
our payments to such bodies that we owe by law or because of a contract we
entered into;
- - liens on property that existed at the time we acquired the property, including
property we may acquire through a merger or similar transaction, or that we
granted in order to purchase the property, which are sometimes called purchase
money mortgages; and
- - debt secured by liens that extend, renew or replace any of these types of
liens.
We and our subsidiaries are permitted to have as much unsecured debt as we
may choose. (section 1008)
RESTRICTIONS ON SALES AND LEASEBACKS. We promise that neither we nor any
of our domestic subsidiaries will enter into any sale and leaseback transaction
involving a principal domestic manufacturing property, unless we comply with
this restrictive covenant. A sale and leaseback transaction generally is an
arrangement between us or a domestic subsidiary and a bank, insurance company or
other lender or investor where we or the domestic subsidiary sell a property to
a lender or investor more than 120 days after the completion of construction of
the property and the beginning of its full operation and we lease the property
back from the lender.
We can comply with this restrictive covenant in either of two different
ways:
- - First, we will be in compliance if we or our domestic subsidiary could grant a
lien on the principal domestic manufacturing property in an amount equal to
the attributable debt for the sale and leaseback transaction without being
required to grant an equivalent or higher-ranking lien to you and the other
direct holders of the debt securities under the restriction on secured debt
described on page 9.
- - Second, we can comply if we retire an amount of FUNDED DEBT, within 120 days
of the transaction, equal to at least the net proceeds of the sale of the
principal domestic manufacturing property that we lease in the transaction or
the fair value of that property, subject to credits for voluntary retirements
of debt securities and funded debt we may make, whichever is greater.
This restriction on sales and leasebacks does not apply to any sale and
leaseback transaction that is between us and one of our domestic subsidiaries or
between domestic subsidiaries, or that involves a lease for a period of three
years or less. (section 1009)
DEFINITIONS RELATING TO OUR RESTRICTIVE COVENANTS. Following are the
meanings of the terms that are important in understanding the restrictive
covenants previously described:
- - "ATTRIBUTABLE DEBT" means the total net amount of rent, discounted at 1% per
annum compounded semi-annually, that is required to be paid during the
remaining term of any lease.
- - "CONSOLIDATED NET TANGIBLE ASSETS" is the total amount of assets, less
reserves and certain other permitted deductible items, after subtracting all
current liabilities and all goodwill, trade names, trademarks, patents,
unamortized debt discounts and expenses and similar intangible assets, as such
amounts appear on our most recent consolidated balance sheet and computed in
accordance with generally accepted accounting principles.
- - A "DOMESTIC SUBSIDIARY" means any of our subsidiaries which transacts
substantially all of its business in the United States, has substantially all
of its fixed assets located in the United States, or owns or leases principal
domestic manufacturing property. However, a subsidiary whose principal
business is financing our operations outside of the United States is not a
domestic subsidiary. A subsidiary is a corporation in which we and/or one or
more of our other subsidiaries owns at least 50% of the voting stock, which is
a kind of stock that ordinarily permits its owners to vote for the election of
directors.
- - "FUNDED DEBT" means all debt for borrowed money that either has a maturity of
12 months or more from the date on which the calculation of funded debt is
made or has a maturity of less than 12 months from that date but is by its
terms
10
<PAGE> 12
renewable or extendible beyond 12 months from that date at the option of the
borrower.
- - A "PRINCIPAL DOMESTIC MANUFACTURING PROPERTY" is any building or other
structure or facility, and the land on which it sits and its associated
fixtures, that we use primarily for manufacturing or processing and that is
located in the United States, other than a building, structure or other
facility that our board of directors has determined is not of material
importance to the total business that we and our subsidiaries conduct or a
building or structure which is financed by obligations issued by a U.S.
governmental entity, the interest of which is excludable from gross income of
the holders under provisions of the tax code.
DEFEASANCE
The following discussion of full defeasance and covenant defeasance will be
applicable to your debt securities of the series only if we choose to have them
apply to those securities. If we do so choose, we will state that in the
prospectus supplement. (section 1301)
FULL DEFEASANCE. If there is a change in federal tax law, as described
below, we can legally release ourselves from any payment or other obligations on
the debt securities if we put in place other arrangements for you to be repaid.
This is called full defeasance. In order to achieve full defeasance, we must do
the following:
- - We must deposit in trust for your benefit and the benefit of all other direct
holders of the debt securities any combination of money and U.S. government or
U.S. government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on their
various due dates.
- - There must be a change in current federal tax law or an IRS ruling that lets
us make the above deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit and just repaid
the debt securities ourselves. Under current federal tax law, the deposit and
our legal release from the debt securities would be treated as though we took
back your debt securities and gave you your share of the cash and notes or
bonds deposited in trust. In that event, you could recognize gain or loss on
the debt securities you give back to us.
- - We must deliver to the trustee a legal opinion of our counsel confirming the
tax law change described above.
If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the debt securities.
You could not look to us for repayment in the unlikely event of any shortfall.
Conversely, the trust deposit would most likely be protected from claims of our
lenders and other creditors if we ever become bankrupt or insolvent. (sections
1302 and 1304)
COVENANT DEFEASANCE. Under current federal tax law, we can make the same
type of deposit described above and be released from some of the restrictive
covenants in the debt securities. This is called covenant defeasance. In that
event, you would lose the protection of those restrictive covenants but would
gain the protection of having money and securities set aside in trust to repay
the debt securities. In order to achieve covenant defeasance, we must do the
following:
- - We must deposit in trust for your benefit and the benefit of all other direct
holders of the debt securities any combination of money and U.S. government or
U.S. government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on their
various due dates.
- - We must deliver to the trustee a legal opinion of our counsel confirming that
under current federal income tax law we may make the above deposit without
causing you to be taxed on the debt securities any differently than if we did
not make the deposit and just repaid the debt securities ourselves.
If we accomplish covenant defeasance, the following provisions of the
indenture and the debt securities would no longer apply:
- - Our promises regarding conduct of our business previously described on pages 9
and 10 under " -- Restrictive Covenants", and any other similar covenants
applicable to the debt securities of the series and described in the
prospectus supplement.
- - The condition regarding the treatment of liens when we merge or engage in
similar transactions, as described on page 8 under " -- Mergers and Similar
Events".
11
<PAGE> 13
- - The events of default relating to breach of covenants and acceleration of the
maturity of other debt, described below under " -- What Is an Event of
Default?"
If we accomplish covenant defeasance, you can still look to us for
repayment of the debt securities if there were a shortfall in the trust deposit.
In fact, if one of the remaining events of default occurred, such as our
bankruptcy, and the debt securities become immediately due and payable, there
may be such a shortfall in the trust deposit. Depending on the event causing the
default, you may not be able to obtain payment of the shortfall. (sections 1303
and 1304)
DEFAULT AND RELATED MATTERS
EQUAL RANKING WITH OUR OTHER UNSECURED CREDITORS
The debt securities are not secured by any of our property or assets.
Accordingly, your ownership of debt securities means you are one of our
unsecured creditors. The debt securities are not subordinated to any of our
other debt obligations and therefore they rank equally with all our other
unsecured and unsubordinated indebtedness.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
WHAT IS AN EVENT OF DEFAULT? The term event of default means any of the
following:
- - We do not pay the principal or any premium on a debt security of your series
on its due date.
- - We do not pay interest on a debt security of your series within 30 days of its
due date.
- - We do not deposit money into a separate custodial account known as sinking
fund when such deposit is due, if we agreed to maintain a sinking fund for
your debt securities and the other debt securities of the same series.
- - We remain in breach of either of the restrictive covenants described on pages
9 and 10 under " -- Restrictive Covenants" or any other covenant or warranty
in the indenture for 90 days after we receive a notice of default stating we
are in breach. The notice must be sent by either the trustee or direct holders
of at least 25% of the principal amount of debt securities of the affected
series.
- - We file for bankruptcy or other specific events of bankruptcy, insolvency or
reorganization occur.
- - Any other event of default described in the prospectus supplement occurs.
(section 501)
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an event of default has
occurred and has not been cured, the trustee or the direct holders of at least
25% in principal amount of the outstanding debt securities of the affected
series may declare the entire principal amount of all the debt securities of
that series to be due and immediately payable. This is called a declaration of
acceleration of maturity. A declaration of acceleration of maturity may be
canceled by the direct holders of at least a majority in principal amount of the
debt securities of the affected series. (section 502)
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the direct holders offer the trustee reasonable protection,
called an indemnity, against expenses and liability. (section 603) If reasonable
indemnity is provided, the direct holders of a majority in principal amount of
the outstanding debt securities of the relevant series may direct the time,
method and place of conducting any lawsuit or other formal legal action seeking
any remedy available to the trustee. These majority direct holders may also
direct the trustee in performing any other action under the indenture. (section
512)
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
- - You must give the trustee written notice that an event of default has occurred
and remains uncured.
- - The direct holders of at least 25% in principal amount of all outstanding debt
securities of the relevant series must make a written request that the trustee
take action because of the default, and must offer reasonable indemnity to the
trustee against the cost and other liabilities of taking that action.
12
<PAGE> 14
- - The trustee must have not received from direct holders of a majority in
principal amount of the outstanding debt securities of that series a direction
inconsistent with the written notice.
- - The trustee must have not taken action for 60 days after receipt of the above
notice and offer of indemnity. (section 507)
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your debt security on or after its due date. (section 508)
Street name and other indirect holders should consult their banks or brokers
for information on how to give notice or direction to or make a request of the
trustee and to make or cancel a declaration of acceleration.
We will furnish to the trustee every year a written statement of our
officers certifying that to their knowledge we are in compliance with the
indenture and the debt securities, or else specifying any default. (section
1004)
OUR RELATIONSHIP WITH THE TRUSTEE
U.S. Bank Trust National Association is the trustee under the indenture.
The trustee performs services for us in the ordinary course of business.
PLAN OF DISTRIBUTION
We may sell the debt securities through agents, underwriters or dealers, or
directly to one or more purchasers.
AGENTS
We may designate agents who agree to use their reasonable efforts to
solicit purchases for the period of their appointment to sell debt securities on
a continuing basis.
UNDERWRITERS
If we use underwriters for a sale of debt securities, the debt securities
will be acquired by the underwriters for their own account. The underwriters may
resell the debt securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Any initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time to
time.
DIRECT SALES
We may also sell debt securities directly to one or more purchasers without
using underwriters or agents.
Underwriters, dealers, and agents that participate in the distribution of
the debt securities may be underwriters as defined in the Securities Act of
1933, and any discounts or commissions they receive from us and any profit on
their resale of the debt securities may be treated as underwriting discounts and
commissions under the Securities Act. Any underwriters or agents will be
identified and their compensation described in the applicable prospectus
supplement. We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act. Underwriters, dealers and agents may engage in transactions
with or perform services for us in the ordinary course of their businesses.
We do not intend to list the debt securities on a securities exchange. Any
underwriters or dealers will not be obligated to make a market in the debt
securities. We cannot give you any assurance about how liquid or illiquid the
trading market for the debt securities will be.
VALIDITY OF DEBT SECURITIES
Mary M. McDonald, our Senior Vice President and General Counsel, will pass
upon the validity of the debt securities for us. Sullivan & Cromwell, New York,
New York will pass upon the validity of the debt securities for any underwriters
or agents. As of April 29, 1999, Ms. McDonald and her husband owned, directly
and indirectly, 88,674 shares of our common stock and exercisable options to
purchase 100,000 additional shares of our common stock. Sullivan & Cromwell has
from time to time provided legal services to us.
EXPERTS
Arthur Andersen LLP, our independent public accountants, audited our
consolidated financial statements as of December 31, 1998 and 1997 and for each
of the three years in the period ended December 31, 1998, which appear in our
annual
13
<PAGE> 15
report on Form 10-K for the fiscal year ended December 31, 1998, as indicated in
their reports. We incorporate those consolidated financial statements in this
prospectus, and we do so in reliance upon the reports of Arthur Andersen LLP and
upon the authority of them as experts in auditing and accounting.
WHERE YOU CAN FIND
MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference our annual report on Form 10-K for the year ended December 31, 1998
and any future filings made with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 until we sell all of the debt
securities.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Merck & Co., Inc.
One Merck Drive
Whitehouse Station, New Jersey 08889-0100
(908) 423-1000
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these debt securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front cover of
those documents.
14
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee........................................ $278,000
Accountants' fees and expenses.............................. 20,000
Attorneys' fees and expenses................................ 100,000
Printing and engraving expenses............................. 10,000
Fees and expenses of trustee................................ 35,000
Rating agencies' fees....................................... 100,000
Miscellaneous............................................... 10,000
--------
Total............................................. $553,000
========
</TABLE>
All fees and expenses in this table other than the SEC registration fee are
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The New Jersey Business Corporation Act provides that a New Jersey
corporation has the power to indemnify a director or officer against his or her
expenses and liabilities in connection with any proceeding involving the
director or officer by reason of his or her being or having been such a director
or officer, other than a proceeding by or in the right of the corporation, if
such a director or officer acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation; and with respect to any criminal proceeding, such director or
officer had no reasonable cause to believe his or her conduct was unlawful.
The indemnification and advancement of expenses shall not exclude any other
rights, including the right to be indemnified against liabilities and expenses
incurred in proceedings by or in the right of the corporation, to which a
director or officer may be entitled under a certificate of incorporation, bylaw,
agreement, vote of shareholders, or otherwise; provided that no indemnification
shall be made to or on behalf of a director or officer if a judgment or other
final adjudication adverse to the director or officer establishes that his or
her omissions (a) were in breach of his or her duty of loyalty to the
corporation or its shareholders, (b) were not in good faith or involved a
knowing violation of law or (c) resulted in receipt by the director or officer
of an improper personal benefit.
The Company's Restated Certificate of Incorporation provides that, to the
fullest extent permitted by the laws of the State of New Jersey, directors and
officers of the Corporation shall not be personally liable to the Corporation or
its stockholders, except that a director or officer shall not be relieved from
liability for any breach of duty based upon an act or omission (a) in breach of
such person's duty of loyalty to the Corporation or its stockholders, (b) not in
good faith or involving a knowing violation of law or (c) resulting in receipt
by such person of an improper personal benefit.
The By-Laws of the Company provide that a former, present or future
director, officer or employee of the Company or the legal representative of any
such director, officer or employee shall be indemnified by the Company:
(a) against reasonable costs, disbursements and counsel fees paid or
incurred where such person has been successful in the defense on the merits
or otherwise of any pending, threatened or completed civil, criminal,
administrative or arbitrative action, suit or proceeding, brought by reason
of such person's being or having been such director, officer or employee,
(b) with respect to the defense of any such action, suit, proceeding,
inquiry or investigation for which indemnification is not made under (a)
above, against reasonable costs, disbursements (which shall include amounts
paid in satisfaction of settlements, judgments, fines and penalties,
exclusive, however, of any amount paid or payable to the Company) and
counsel fees if such person acted in good faith and in
II-1
<PAGE> 17
a manner such person reasonably believed to be in or not opposed to the
best interests of the Company, and in connection with any criminal
proceedings such person also had no reasonable cause to believe the conduct
was unlawful, with the determination as to whether the applicable standard
of conduct was met to be made by a majority of the members of the Board of
Directors (sitting as a Committee of the Board) who were not parties to
such inquiry, investigation, action, suit or proceeding or by any one or
more disinterested counsel to whom the question may be referred by the
Board of Directors; provided, however, in connection with any proceeding by
or in the right of the Company, no indemnification shall be provided as to
any person adjudged by any court to be liable to the Company except as and
to the extent determined by such court.
The Company enters into indemnification agreements with its directors and
officers and enters into insurance agreements on its own behalf. The
indemnification agreements provide that the Company agrees to hold harmless and
indemnify its directors and officers to the fullest extent authorized or
permitted by the Business Corporation Act of the State of New Jersey, or any
other applicable law, or by any amendment thereof or other statutory provisions
authorizing or permitting such indemnification that is adopted after the date
hereof. Without limiting the generality of the foregoing, the Company agrees to
hold harmless and indemnify its directors and officers to the fullest extent
permitted by applicable law against any and all expenses, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by its directors and
officers in connection with the defense of any present or future threatened,
pending, or completed claim, action, suit, or proceeding by reason of the fact
that they were, are, shall be, or shall have been a director or officer of the
Company, or are or were serving, shall serve, or shall have served, at the
request of the Company, as a director or officer of another corporation,
partnership, joint venture, trust, employee benefit plan, or other enterprise.
A Resolution adopted by the Company's Board of Directors provides, that to
the extent permitted by applicable law and not prohibited by the Company's
Certificate of Incorporation or By-laws, the Company shall (i) indemnify and
save harmless each and every past and present director and officer of the
Company against any and all losses, claims, damages or liabilities to which such
officer or director may become subject, under the Securities Act of 1933, the
Securities Exchange Act of 1934, any state Blue Sky or securities laws, domestic
or foreign or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise in connection with this Registration
Statement or any amendments (including, without limitation, post-effective
amendments) or supplements thereto and any Prospectus included therein, or other
agreements thereunder and (ii) reimburse each such director and officer for any
legal or other expenses reasonably incurred by him or her in connection with
investigating or defending any such action or claim.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1 Form of Underwriting Agreement.
4(a) Indenture, dated as of April 1, 1991, between Merck & Co.,
Inc. and Morgan Guaranty Trust Company of New York, as
Trustee (incorporated by reference to Exhibit (4) to the
Company's Registration Statement on Form S-3 (No.
33-39349)).
4(b) First Supplemental Indenture between Merck and First Trust
of New York, National Association, as Trustee (incorporated
by reference to Exhibit 4(b) to the Company's Registration
Statement on Form S-3 (No. 333-36383)).
5 Opinion and consent of Mary M. McDonald, Esq.
12 Computation of Ratios of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to Merck's Annual
Report on Form 10-K for the year ended December 31, 1998
(File No. 1-03305)).
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of counsel (included as part of Exhibit 5).
24 Power of Attorney (included in the signature page hereto).
25 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of U.S. Bank Trust National
Association.
</TABLE>
II-2
<PAGE> 18
ITEM 17. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration
Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 27th day of April, 1999.
By: /s/ RAYMOND V. GILMARTIN
------------------------------------
(Raymond V. Gilmartin)
Chairman of the Board,
President and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Celia A.
Colbert and Mary M. McDonald, and each of them, as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and all documents relating thereto, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing necessary or advisable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RAYMOND V. GILMARTIN Chairman of the Board, President, April 27, 1999
- --------------------------------------------------- Chief Executive Officer and
(Raymond V. Gilmartin) Director (principal executive
officer)
/s/ JUDY C. LEWENT Senior Vice President and Chief April 27, 1999
- --------------------------------------------------- Financial Officer (principal
(Judy C. Lewent) financial officer)
/s/ RICHARD C. HENRIQUES, JR. Vice President, Controller April 27, 1999
- --------------------------------------------------- (principal accounting officer)
(Richard C. Henriques Jr.)
/s/ H. BREWSTER ATWATER, JR. Director April 27, 1999
- ---------------------------------------------------
(H. Brewster Atwater, Jr.)
/s/ DEREK BIRKIN Director April 27, 1999
- ---------------------------------------------------
(Derek Birkin)
</TABLE>
II-4
<PAGE> 20
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ LAWRENCE A. BOSSIDY Director April 27, 1999
- ---------------------------------------------------
(Lawrence A. Bossidy)
/s/ WILLIAM G. BOWEN Director April 27, 1999
- ---------------------------------------------------
(William G. Bowen)
/s/ JOHNNETTA B. COLE Director April 27, 1999
- ---------------------------------------------------
(Johnnetta B. Cole)
/s/ CAROLYNE K. DAVIS Director April 27, 1999
- ---------------------------------------------------
(Carolyne K. Davis)
/s/ LLOYD C. ELAM Director April 27, 1999
- ---------------------------------------------------
(Lloyd C. Elam)
/s/ CHARLES E. EXLEY, JR. Director April 27, 1999
- ---------------------------------------------------
(Charles E. Exley, Jr.)
Director
- ---------------------------------------------------
(Carleton S. Fiorina)
/s/ WILLIAM N. KELLY Director April 27, 1999
- ---------------------------------------------------
(William N. Kelley)
/s/ EDWARD M. SCOLNICK Director April 27, 1999
- ---------------------------------------------------
(Edward M. Scolnick)
/s/ SAMUEL O. THIER Director April 27, 1999
- ---------------------------------------------------
(Samuel O. Thier)
/s/ DENNIS WEATHERSTONE Director April 27, 1999
- ---------------------------------------------------
(Dennis Weatherstone)
</TABLE>
II-5
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<C> <S>
1 Form of Underwriting Agreement.
5 Opinion and consent of Mary M. McDonald, Esq.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of counsel (included as part of Exhibit 5).
24 Power of Attorney (included in the signature page hereto).
25 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of U.S. Bank Trust National
Association.
</TABLE>
<PAGE> 1
Exhibit 1
MERCK & CO., INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
___________, 1999
TO THE REPRESENTATIVES OF THE
SEVERAL UNDERWRITERS NAMED IN THE
RESPECTIVE PRICING AGREEMENTS
HEREINAFTER DESCRIBED.
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 Under-
<PAGE> 2
writers and to Underwriters who act without any firm being designated as their
representative. 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. 333-36383 and
333-______)(together, 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
-2-
<PAGE> 3
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 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
-3-
<PAGE> 4
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, con formed 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
-4-
<PAGE> 5
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 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
-5-
<PAGE> 6
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., Cloverleaf International
Holdings S.A., 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., and MSD Overseas Manufacturing
Co. 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 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
-6-
<PAGE> 7
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
-7-
<PAGE> 8
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 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
-8-
<PAGE> 9
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 Under writers 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 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
-9-
<PAGE> 10
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;
-10-
<PAGE> 11
(d) To make generally available to its security holders 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); and
(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 con sent of the Representatives.
(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
-11-
<PAGE> 12
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.
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:
-12-
<PAGE> 13
(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) Mary M. McDonald, 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 her 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
-13-
<PAGE> 14
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.,
Cloverleaf International Holdings S.A., 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. 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
-14-
<PAGE> 15
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 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
-15-
<PAGE> 16
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
-16-
<PAGE> 17
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 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
-17-
<PAGE> 18
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 Deli
very, as to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the Representatives;
(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
-18-
<PAGE> 19
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 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 down grading 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; or (iv) the outbreak or
escalation of hostilities involving the
-19-
<PAGE> 20
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 the Representatives makes 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 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
-20-
<PAGE> 21
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 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.
-21-
<PAGE> 22
(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
-22-
<PAGE> 23
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 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 under written 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
-23-
<PAGE> 24
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 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
-24-
<PAGE> 25
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 8 hereof; but nothing
-25-
<PAGE> 26
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 Under writer 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
-26-
<PAGE> 27
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 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
-27-
<PAGE> 28
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.
16. 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:___________________________
Name:
Title:
Accepted as of the date hereof:
[NAME OF REPRESENTATIVE]
[NAMES OF CO-REPRESENTATIVE(S)]
By:___________________________
Name:
Tile:
-28-
<PAGE> 29
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............., 1999 (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
-1-
<PAGE> 30
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 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
-2-
<PAGE> 31
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(S) OF CO-REPRESENTATIVE(S)]]
By:
-------------------------------
Name:
Title:
On behalf of each of the Underwriters
-3-
<PAGE> 32
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............................................... $
-4-
<PAGE> 33
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[%] [Floating Rate] [Zero Coupon] [Notes] [Debentures] due
AGGREGATE PRINCIPAL AMOUNT:
[$]
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus accrued
interest [, if any,] from to [and accrued amortization[, if
any,] from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization[, if any,]
from to ]
FORM OF DESIGNATED SECURITIES:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[Wire transfer of immediately available] [New York] [Clearing House
(next day)] funds
-5-
<PAGE> 34
TIME OF DELIVERY:
a.m. (New York City time), , 19
INDENTURE:
April 1, 1991, as amended, between the Company and U.S. Bank Trust
National Association, as Trustee.
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates, commencing......................,19..]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the sinking
fund, in whole or in part at the option of the Company, in the amount of
[$ ] 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 ,
REDEMPTION
YEAR PRICE
---- -----
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
-6-
<PAGE> 35
[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]
[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].]
-7-
<PAGE> 36
[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].]
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):
-8-
<PAGE> 37
"; ( ) 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]:
-9-
<PAGE> 38
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; 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 statements and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been [separately] furnished to the representatives of the
Underwriters (the "Representatives")[and are attached hereto];
(iii) They have read the unaudited condensed consolidated statement
of income, consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus and/or included in the Company's
quarterly report on Form 10-Q incorporated by reference into the
Prospectus; and on the basis of specified procedures including agreeing
the amounts contained in the unaudited condensed consolidated
-1-
<PAGE> 39
financial statements referred to in paragraph (vi)(A)(i) with the
Company's accounting records and inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in the related in all
material respects with the applicable accounting requirements of the [Act
and the Exchange] Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements
of the [Act and the Exchange] Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's
Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) 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
-2-
<PAGE> 40
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made to
the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
-3-
<PAGE> 41
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified
by the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus
-4-
<PAGE> 42
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
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference) or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the
-5-
<PAGE> 43
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.
-6-
<PAGE> 1
Exhibit 5
[MERCK & CO., INC. LETTERHEAD]
April 30, 1999
Merck & Co., Inc.
One Merck Drive
Whitehouse Station, NJ 08889-0100
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as amended
(the "Act"), of $1,000,000,000 aggregate principal amount of debt securities
(the "Securities") of Merck & Co., Inc., a New Jersey corporation (the
"Company"), I, as Senior Vice President and General Counsel of the Company, or
attorneys under my general supervision, have examined such corporate records,
certificates and other documents and such questions of law as I have considered
necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, I advise you that, in my opinion:
1. The Company has been duly incorporated and is an existing corporation in
good standing under the laws of the state of New Jersey.
2. When the Registration Statement has become effective under the Act, the
terms of the Securities and of their issue and sale have been duly
established in conformity with the Indenture relating to the Securities so
as not to violate any applicable law or agreement or instrument then
binding on the Company, and the Securities have been duly executed and
authenticated in accordance with such Indenture and issued and sold as
contemplated in the Registration Statement, the Securities will constitute
valid and binding obligations of the Company, 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.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the heading "Validity of Debt
Securities" in the Prospectus. In giving such consent, I do not thereby admit
that I am in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
/s/ Mary McDonald
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Merck & Co., Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our report dated
January 26, 1999 incorporated by reference in Merck & Co., Inc.'s Annual Report
on Form 10-K, for the fiscal year ended December 31, 1998, and to all
references to our Firm included in or made a part of this Registration
Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
New York, New York
April 30, 1999
<PAGE> 1
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM T - 1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _________
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
13-3781471
(I. R. S. Employer
Identification No.)
100 Wall Street, New York, NY 10005
(Address of principal executive offices) (Zip Code)
FOR INFORMATION, CONTACT:
Dennis Calabrese, President
U.S. Bank Trust National Association
100 Wall Street, 16th Floor
New York, NY 10005
Telephone: (212) 361-2506
MERCK & CO., INC.
(Exact name of obligor as specified in its charter)
New Jersey 22-1109110
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
P.O. Box 100 08889-0100
One Merck Drive
Whitehouse Station, New Jersey
(Address of principal executive offices) (Zip Code)
DEBT SECURITIES
<PAGE> 2
Item 1. GENERAL INFORMATION.
Furnish the following information as to the trustee - -
(a) Name and address of each examining or supervising authority to which
it is subject.
Name Address
---- -------
Comptroller of the Currency Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. LIST OF EXHIBITS.
Exhibit 1. Articles of Association of U.S. Bank Trust National
Association, incorporated herein by reference to Exhibit 1 of
Form T-1, Registration No. 333-51961.
Exhibit 2. Certificate of Authority to Commence Business for First Trust
of New York, National Association now known as U.S. Bank Trust
National Association, incorporated herein by reference to
Exhibit 2 of Form T-1, Registration No. 33-83774.
Exhibit 3. Authorization to exercise corporate trust powers for U.S. Bank
Trust National Association, incorporated herein by reference
to Exhibit 3 of Form T-1, Registration No. 333-51961.
Exhibit 4. By-Laws of U.S. Bank Trust National Association, incorporated
herein by reference to Exhibit 4 of Form T-1, Registration No.
333-51961.
Exhibit 5. Not applicable.
Exhibit 6. Consent of First Trust of New York, National Association now
known as U.S. Bank Trust National Association, required by
Section 321(b) of the Act, incorporated herein by reference to
Exhibit 6 of Form T-1, Registration No. 33-83774.
Exhibit 7. Report of Condition of U.S. Bank Trust National Association,
as of the close of business on December 31, 1998, published
pursuant to law or the requirements of its supervising or
examining authority.
<PAGE> 3
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, U.S. Bank Trust National Association, a national banking
association organized and existing under the laws of the United States, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 30th day of April, 1999.
U.S. BANK TRUST
NATIONAL ASSOCIATION
By: /s/ Catherine F. Donohue
--------------------------------
Catherine F. Donohue
Vice President
<PAGE> 4
Exhibit 7
U.S. BANK TRUST NATIONAL ASSOCIATION
STATEMENT OF FINANCIAL CONDITION
AS OF 12/31/98
($000'S)
<TABLE>
<CAPTION>
12/31/98
---------
<S> <C>
ASSETS
Cash and Due From Depository Institutions $ 42,823
Federal Reserve Stock 3,384
Fixed Assets 486
Intangible Assets 68,104
Other Assets 7,261
---------
TOTAL ASSETS $ 122,058
LIABILITIES
Other Liabilities $ 9,462
---------
TOTAL LIABILITIES $ 9,462
EQUITY
Common and Preferred Stock $ 1,000
Surplus 120,932
Undivided Profits (9,336)
---------
TOTAL EQUITY CAPITAL $ 112,596
TOTAL LIABILITIES AND EQUITY CAPITAL $ 122,058
</TABLE>
To the best of the undersigned's determination, as of this date the above
financial information is true and correct.
U.S. Bank Trust National Association
By: /s/ Catherine F. Donohue
-----------------------------------
Vice President
Date: April 30, 1999
