INCREMENTAL CREDIT AGREEMENT dated as of May 6, 2009 among MERCK & CO., INC., The GUARANTORS andLENDERS party thereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent ___________________________ J.P. MORGAN SECURITIES INC., Sole Bookrunner and Sole Lead Arranger and BANCO SANTANDER, S.A. NEW YORK BRANCH, BANK OF AMERICA SECURITIES LLC, BNP PARIBAS SECURITIES CORP., CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, HSBC BANK USA, NATIONAL ASSOCIATION, THE ROYAL BANK OF SCOTLAND PLC, AND UBS SECURITIES LLC, Co-Arrangers

INCREMENTAL CREDIT AGREEMENT     dated as of     May 6, 2009     among     MERCK & CO., INC.,   The GUARANTORS and LENDERS party thereto     and     JPMORGAN CHASE BANK, N.A., as Administrative Agent   ___________________________   J.P. MORGAN SECURITIES INC., Sole Bookrunner and Sole Lead Arranger   and   BANCO SANTANDER, S.A. NEW YORK BRANCH, BANK OF AMERICA SECURITIES LLC, BNP PARIBAS SECURITIES CORP., CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, HSBC BANK USA, NATIONAL ASSOCIATION, THE ROYAL BANK OF SCOTLAND PLC, AND UBS SECURITIES LLC, Co-Arrangers

 

 

 

TABLE OF CONTENTS

 

 

Schedule 2.01 -- Commitments

Schedule 6.01 -- Existing Liens

EXHIBITS:

Exhibit A - -- Form of Assignment and Assumption

Exhibit B – Form of Guarantor Joinder Agreement

Exhibit C – Form of Borrowing Request

Exhibit D – Form of Interest Election Request

Exhibit E – Form of Section 2.14(e) Certificate

 

CREDIT AGREEMENT dated as of May 6, 2009 (this “Agreement”), among MERCK & CO., INC., a company organized under the laws of the state of New Jersey (the “Company”), the GUARANTORS and LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

 

 

The Company has agreed to combine with (the “Merger”) SCHERING−PLOUGH CORPORATION (to be renamed Merck & Co., Inc. upon consummation of the Merger) (the “Parent”) pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”) dated March 8, 2009 (the “Signing Date”).  In connection therewith: (a) pursuant to the Merger Agreement, (i) a wholly-owned Subsidiary of the Parent will merge into the Parent and another wholly-owned Subsidiary of the Parent will merge into the Company so that the Company, as the surviving entity, will be a direct wholly-owned Subsidiary of the Parent, (ii) each share of common stock of the Parent will be converted into the right to receive cash and new common stock of the Parent and (iii) each share of common stock of the Company will be converted into one share of common stock of the Parent; (b) the Company has entered into the Amendment No. 1 (the “Amendment”) to the amended and restated credit agreement dated as of April 12, 2006 (the “Existing Credit Agreement”, and the Existing Credit Agreement as amended by the Amendment, the “Amended Credit Agreement”) among the Company, the lenders party thereto and Citicorp USA, Inc., as administrative agent; (c) the Company or the Parent will enter into a new $1,000,000,000 senior unsecured revolving credit facility on the terms set forth herein; (d) the Company or the Parent will obtain $3,000,000,000 in cash proceeds (before fees and original issue or market discount) from either (i) the issuance of senior unsecured notes (the “Senior Notes”) in a public offering or Rule 144A private placement or (ii) if the Company or the Parent, as the case may be, is unable to issue the full amount of the Senior Notes on or prior to the date (the “Closing Date”) on which the Merger is consummated, a senior unsecured bridge term loan facility dated as of the date hereof (the “Bridge Loan Facility”); and (e) the Company or the Parent will enter into a new $3,000,000,000 senior unsecured asset sale bridge revolving credit facility (“Asset Sale Facility”).  This Agreement, the Bridge Loan Facility and the Asset Sale Facility are sometimes herein referred to as the “New Credit Facilities.” The New Credit Facilities together with the Amended Credit Agreement are sometimes herein referred to as the “Credit Facilities.”

 

The parties hereto agree as follows:

 

 

ARTICLE 1

Definitions

 

Section 1.01.  Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

“ABR,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

 

 “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with, such Person.

 

“Affiliate Guarantee” means, with respect to each Guarantor, its guarantee of the Guaranteed Obligations under Article 10 hereof or under Section 1 of a Guarantor Joinder Agreement.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters BBA LIBOR Rates Page LIBOR01 (or on any successor or substitute page of such page) at approximately 11:00 a.m. London time on such day.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Applicable Facility Fee Rate” means for any Rating Level Period, the rate per annum set forth below opposite the reference to such Rating Level Period:

 

 

“Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending Office in the case of ABR Borrowings and such Lender’s Eurodollar Lending Office in the case of Eurodollar Borrowings.

 

“Applicable Margin” means as of any date of determination during any period set forth below, the percentage per annum set forth below for the applicable Type of Loan at the applicable time given the Rating Level Period in effect at the time.

 

Following repayment in full of all amounts outstanding (to the extent loans thereunder are borrowed on the Closing Date), and termination of all commitments, under the Bridge Loan Facility, the Applicable Margin will be the percentage per annum set forth above for the Closing Date for the applicable Type of Loan given the Rating Level Period in effect on the date of determination.  Each change in the Applicable Margin resulting from a Rating Level Change shall be effective on the date of such Rating Level Change.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

 

“Approved Fund” has the meaning assigned to such term in Section 9.04.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

 

“Availability Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

 

“Availability Date Material Adverse Effect” means a material adverse effect on the business, financial condition or results of operations of the Parent and its Subsidiaries and the Company and its Subsidiaries, taken as a whole; provided that any effect resulting from any of the following Events shall not be considered when determining whether an Availability Date Material Adverse Effect shall have occurred: (i) any change or development in United States financial, credit or securities markets, general economic or business conditions, or political or regulatory conditions, (ii) any act of war, armed hostilities or terrorism or any worsening thereof, (iii) any change in law or United States generally accepted accounting principles or the interpretation or enforcement of either, (iv) any change in the pharmaceutical (including animal health, biotechnology and consumer health) industry, (v) the negotiation, execution, delivery, performance, consummation, potential consummation or public announcement of the Merger Agreement or the transactions contemplated by the Merger Agreement, including any litigation resulting therefrom or with respect thereto, and any adverse change in customer, distributor, employee, supplier, financing source, licensor, licensee, sub-licensee, shareholder, co-promotion, collaboration or joint venture partner or similar relationships resulting therefrom or with respect thereto, including as a result of the identity of the parties to the Merger Agreement, (vi) any failure of the Company or any of its Subsidiaries or the Parent or any of its Subsidiaries to meet, with respect to any period or periods, any internal or industry analyst projections, forecasts, estimates of earnings or revenues, or business plans (it being agreed that the facts and circumstances giving rise to such failure that are not otherwise excluded from the definition of Availability Date Material Adverse Effect may be taken into account in determining whether an Availability Date Material Adverse Effect has occurred), (vii) any change, in and of itself, in the market price or trading volume of the common stock of the Company or the Parent (it being agreed that the facts and circumstances giving rise to such change that are not otherwise excluded from the definition of Availability Date Material Adverse Effect may be taken into account in determining whether an Availability Date Material Adverse Effect has occurred), (viii) the taking of any action required by the Merger Agreement and (ix) matters relating to Singulair disclosed in the first bullet-point of clause (b) of Section 9.1 of the Mercury Disclosure Letter (as defined in the Merger Agreement and as delivered to the Administrative Agent on the Signing Date) and matters relating to Remicade disclosed in the first paragraph under clause (b) of Section 9.1 of the Saturn Disclosure Schedule (as defined in the Merger Agreement and as delivered to the Administrative Agent on the Signing Date); provided that the exception set forth in subclause (v) shall not apply with respect to matters or Events that render untrue or incorrect any of the representations and warranties set forth in Sections 3.4, 3.9(b), 3.13(h), 4.4, 4.9(b) and 4.13 of the Merger Agreement as in effect on the Signing Date.  Notwithstanding the proviso to the preceding sentence, if an Event described in any of subclauses (i), (ii), (iii) and (iv) of such provision has had a disproportionate effect on the business, financial condition or results of operations of the Parent and its Subsidiaries and the Company and its Subsidiaries, taken as a whole, relative to other participants in the pharmaceutical (including animal health, biotechnology and consumer health) industry, then the incremental impact of such Event on the Parent and its Subsidiaries and the Company and its Subsidiaries, taken as a whole, relative to other participants in the pharmaceutical (including animal health, biotechnology and consumer health) industry shall be taken into account for purposes of determining whether an Availability Date Material Adverse Effect has occurred or is reasonably expected to occur.

 

“Availability Period” means the period from and including the Availability Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

 

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

 

“Borrower” means the Company; provided that if the Parent shall have been designated the Borrower pursuant to Section 2.18, then “Borrower” shall mean the Parent.

 

“Borrowing” means Loans of the same Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03.

 

“Bridge Loan Facility” has the meaning assigned to such term in the preamble to this Agreement, as such facility may be amended, amended and restated or modified from time to time.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

“Capital Lease Obligations” means as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real or personal property or a combination thereof, which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

 

“Capitalization” means at any time, the sum, without duplication, of (a) Total Debt, (b) consolidated stockholders’ equity of the Credit Group, determined on a consolidated basis in accordance with GAAP and (c) minority interests held by the Credit Group as reflected on the consolidated balance sheet of the Credit Group.

 

“Change in Control” means any of the following events:

 

(a)  any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable, except that for purposes of this paragraph (a) such person or group shall be deemed to have “beneficial ownership” of all shares that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), other than (i) the Company or (ii) any employee or director benefit plan or stock plan of the Company or a Subsidiary of the Company or any trustee or fiduciary with respect to any such plan when acting in that capacity or any trust related to any such plan, is or becomes the “beneficial owner” (as such term is used in Rule 13d-3 promulgated pursuant to the Exchange Act), directly or indirectly, of more than 25% of the aggregate voting power of all Voting Stock of the Company; provided that from the Closing Date, each reference in this clause (a) to the Company shall be deemed to be a reference to the Parent;

 

(b)  during any period of 25 consecutive calendar months, a majority of the Board of Directors of the Company shall no longer be composed of individuals (i) who were members of said Board on the first day of such period, (ii) whose election or nomination to said Board was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of said Board or (iii) whose election or nomination to said Board was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of said Board; provided that from the Closing Date, each reference in this clause (b) to the Company shall be deemed to be a reference to Parent; or

 

(c) on and after the Closing Date, the Company ceases to be a Wholly Owned Subsidiary of the Parent.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 2.12(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

 

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (including the Code), treaty, regulation or rule (or in the official application or interpretation of any law, treaty, regulation or rule, including a holding, judgment or order by a court of competent jurisdiction) relating to United States income taxation.

 

“Closing Date” has the meaning assigned to such term in the preamble to this Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Company” has the meaning assigned to such term in the preamble to this Agreement.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Loan Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.  The initial aggregate amount of the Lenders’ Commitments is $1,000,000,000.

 

“Contractual Obligation” means as to any Person, any obligation of such Person under any agreement or instrument to which such Person is a party or by which it or any of its Property is bound.

 

“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Facilities” has the meaning assigned to such term in the preamble to this Agreement.

 

“Credit Group” means (i) prior to the Availability Date, the Company and its Subsidiaries and (ii) on and after the Availability Date, the Parent and its Subsidiaries (including the Company and its Subsidiaries).

 

“Credit Party” means (i) prior to the Availability Date, the Borrower and (ii) on and after the Availability Date, the Borrower and each Guarantor.

 

“Default” means any Event of Default or any event that with notice or lapse of time or both would become an Event of Default.

 

“Defaulting Lender” means any Lender, as reasonably determined by the Administrative Agent, that has (a) failed to comply with its obligation to fund any portion of its Loans as required hereunder, (b) notified the Borrower or the Administrative Agent in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under agreements in which it has committed to extend credit, (c) failed, within three Business Days after written request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans; provided that any such Lender shall cease to be a Defaulting Lender under this clause (c) upon receipt of such confirmation by the Administrative Agent, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian, appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of an Equity Interest in such Lender or a parent company thereof by a Governmental Authority or an instrumentality thereof.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Domestic Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” in such Lender’s Administrative Questionnaire, or such other office of such Lender as such Lender may from time to time notify the Borrower and the Administrative Agent.

 

“Effective Date” means the date on which the condition specified in Section 4.01(a) is satisfied.

 

“Eligible Assignee” shall mean (i) a Lender, (ii) an Affiliate of a Lender, (iii) a commercial bank organized under the Laws of the United States, or any State thereof, and having total assets in excess of $10,000,000,000, (iv) a commercial bank having total assets in excess of $10,000,000,000 or its equivalent in the relevant foreign currency and organized under the laws of any other country (or of any political subdivision of any other country) that (x) is a member of the Organization for Economic Cooperation and Development (or any successor thereto) (“OECD”) or (y) has concluded special lending arrangements with the International Monetary Fund associated with its assets; provided that in each case, such bank is acting through a branch or agency located in the country in which it is organized or another country that is described in this clause (iv), (v) the central bank of any country which is a member of the OECD, (vi) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans for its own account in the ordinary course of its business and having total assets in excess of $10,000,000,000 or its equivalent in the relevant foreign currency, (vii) any Approved Fund and (viii) any other Person approved by the Administrative Agent and, unless an Event of Default shall have occurred and be continuing, the Borrower, such approval not to be unreasonably withheld or delayed; provided that none of the Borrower, any Affiliate of the Borrower or an individual shall qualify as an Eligible Assignee.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Materials.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Credit Group directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Company (or, from the Availability Date, the Parent), is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of ERISA and the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, or any Lien shall arise in favor of the PBGC or a Plan on the property of the Company or any ERISA Affiliate, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan, (f) the incurrence by the Company or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning the imposition of withdrawal liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; provided that, from the Availability Date, each reference in this definition to the Company shall be deemed to be a reference to the Parent.

 

“Eurodollar,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

 

“Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” in such Lender’s Administrative Questionnaire (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time notify the Borrower and the Administrative Agent.

 

“Event” has the meaning assigned to such term in the definition of Material Adverse Change.

 

“Events of Default” has the meaning assigned to such term in Article 7.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under any of the other Loan Documents, (a) any Taxes imposed, deducted or withheld by reason of any present or former connection between the Administrative Agent or such Lender or other recipient (as the case may be) and the jurisdiction imposing such Taxes (other than solely on account of the execution and performance of, the enforcement of any right under or the receipt of any payment under, this Agreement or any of the other Loan Documents), (b) any branch profits taxes imposed by the United States of America or any comparable tax imposed by any foreign jurisdiction, and (c) in the case of a Foreign Lender, any Tax imposed, deducted or withheld (i) that is attributable to such Foreign Lender’s failure, inability or ineligibility at any time during which such Foreign Lender is a party to this Agreement to deliver the Internal Revenue Service forms and the Section 2.14(e) Certificate (as applicable) described in Section 2.14(e) certifying that such Foreign Lender is entitled to complete exemption from United States withholding taxation, except to the extent such Foreign Lender’s failure is due to a Change in Tax Law occurring after the date on which such Foreign Lender became a party to this Agreement or the date (if any) on which such Foreign Lender changed its Applicable Lending Office, or (ii) that is imposed on accrued amounts payable to such Foreign Lender at the time of the assignment to such Foreign Lender and its becoming a party to this Agreement, except to the extent that such Foreign Lender’s assignor was entitled, at the time of such assignment, to receive additional payments from the Borrower with respect to such accrued amounts pursuant to Section 2.14(a).

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fee Letter” means the fee letter dated as of March 8, 2009 between JPMorgan Chase Bank, N.A., J.P. Morgan Securities, Inc. and the Company.

 

“Financial Officer” of any Person means such Person’s chief financial officer, principal accounting officer or treasurer or any officer of such Person who succeeds to all or substantially all of the responsibilities thereof.

 

“Foreign Lender” means any Lender that is not a United States Person.

 

“GAAP” means generally accepted accounting principles in effect in the United States of America from time to time.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease Property or services for the purpose of assuring the holder of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for deposit or collection in the ordinary course of business.

 

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

 

“Guarantor” means Parent and each Subsidiary of Parent that shall, at any time from the Effective Date, become a “Guarantor” pursuant to Section 2.18, Section 5.09 or Section 10.09 (excluding, for the avoidance of doubt, any such entity that is a Borrower as of the date of determination).

 

“Guarantor Joinder Agreement” means a Guarantor Joinder Agreement substantially in the form of Exhibit B hereto.

 

“Hazardous Materials” means all radioactive substances or wastes and all hazardous or toxic substances or other wastes, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or combination of such transactions.

 

“Indebtedness” of any Person means (a) all obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or other similar instruments, (b) all obligations of such Person to pay the deferred purchase price of Property or services, except current accounts payable arising in the ordinary course of business, (c) all Capital Lease Obligations of such Person, (d) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien on any Property of such Person, whether or not such Indebtedness is assumed by such Person, (e) all Indebtedness of others Guaranteed by such Person, (f) all reimbursement obligations or other obligations (other than contingent obligations) with respect to bankers’ acceptances or letters of credit or similar instruments created or issued at the request of such Person and (g) the net liability of such Person under Hedging Agreements.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Index Debt” means the senior, unsecured, long-term Indebtedness for borrowed money of (i) prior to the Availability Date, the Company and (ii) from the Availability Date, the Parent, in either case that is not guaranteed by any other Person (other than a Person that is at the time a Credit Party) or subject to any other credit enhancements.

 

“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.05.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

 

“Interest Period” means the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”) from LIBOR01 Page, as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, charge, hypothecation, encumbrance or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“Loan Documents” means this Agreement, the Notes (if any), the Fee Letter and each Guarantor Joinder Agreement.

 

“Loan Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Loans at such time.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

 

“Material Adverse Change” means that either (a) since December 31, 2008, there has occurred any event, change, development, effect, condition, circumstance, matter, occurrence or state of facts (each, an “Event”) or Events that have had or would be reasonably expected to have, either individually or in the aggregate, an Availability Date Material Adverse Effect, except that any effect resulting from any matter disclosed in (i) the Saturn Disclosure Letter (as defined in the Merger Agreement and as in effect on the Signing Date), (ii) the Mercury Disclosure Letter (as defined in the Merger Agreement and as in effect on the Signing Date) or (iii) the annual report on Form 10-K for the Company or the Parent for the year ended December 31, 2008 (other than disclosures in the “Risk Factors” or “Forward Looking Statements” sections of such reports or any other disclosures in such reports to the extent they are similarly predictive or forward-looking in nature) shall not be considered when determining whether an Availability Date Material Adverse Effect shall have occurred under this clause (a), or (b) since the Signing Date, there has occurred any Event or Events that have had or would reasonably be expected to have, either individually or in the aggregate, an Availability Date Material Adverse Effect.

 

“Material Adverse Effect” means (i) on any date on or prior to the Availability Date, an Availability Date Material Adverse Effect and (ii) on any date after the Availability Date, a material adverse effect on (a) the business, condition (financial or otherwise) or operations of the Credit Group, (b) the ability of the Credit Parties to perform any of their obligations hereunder or under the other Loan Documents or (c) the rights or remedies of the Lenders or the Administrative Agent hereunder or under the other Loan Documents.

 

“Maturity Date” means the date that is 364 days after the Availability Date or, if such day is not a Business Day, the immediately preceding Business Day.

 

“Merger” has the meaning assigned to such term in the preamble to this Agreement.

 

“Merger Agreement” has the meaning assigned to such term in the preamble to this Agreement.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.

 

“Moody’s Rating” means at any time, the rating of Index Debt then most recently announced by Moody’s.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Note” has the meaning assigned to such term in Section 2.07(e).

 

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, the Loan Documents that are imposed by a Governmental Authority in a jurisdiction in which the Borrower is incorporated, organized, managed and controlled or otherwise has a connection (other than solely as a result of entering into, performing any obligations, receiving any payments or enforcing any rights under, this Agreement or any of the other Loan Documents).

 

“Outside Closing Date” has the meaning assigned to such term in Section 4.01(f).

 

“Parent” has the meaning assigned to such term in the preamble to this Agreement.

 

“Participant” has the meaning assigned to such term in Section 9.04(c).

 

“PATRIOT Act” has the meaning assigned to such term in Section 9.13.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

 

“Permitted Encumbrances” means:

 

(a) Liens imposed for taxes that are not yet due or which are being contested in compliance with Section 5.04;

 

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens arising in the ordinary course of business and securing obligations that are not overdue by more than 60 days or which are being contested in compliance with Section 5.04;

 

(c) pledges and deposits made in compliance with workers’ compensation, unemployment insurance and other social security laws or obligations, and deposits securing liability to insurance carriers under insurance or self-insurance arrangements;

 

(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (f) of Article 7;

 

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property that arise in the ordinary course of business and do not materially interfere with the ordinary conduct of business of any member of the Credit Group;

 

(g) any Liens securing industrial development, pollution control or similar revenue bonds; provided that such Lien is limited to the facility or facilities constructed with the proceeds of such bonds;

 

(h) Liens on Property of any Subsidiary (other than any Credit Party) securing Indebtedness owing by such Subsidiary to any member of the Credit Group;

 

(i) any Lien created under any Permitted Securitization; provided that such Lien is limited to the Property (plus improvements on such Property) that is the subject of such Permitted Securitization; and

 

(j) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Permitted Encumbrance referred to in the foregoing clauses; provided that the outstanding principal amount of the Indebtedness or obligations secured thereby is not increased.

 

“Permitted Securitization” means any transaction in which any member of the Credit Group sells or otherwise transfers, without recourse to such Person (other than in the case of breach of representation and other limited recourse customary in securitization transactions), an interest in accounts receivable or other present or future rights to payment and assets directly related thereto to a special purpose entity that (a) borrows against such accounts receivable, rights or assets, or (b) sells such accounts receivable, rights or assets to one or more third party purchasers.

 

“Person” means an individual, a corporation, a company, a voluntary association, a partnership, a trust, a joint venture, a limited liability company, an unincorporated organization, or a government or any agency, instrumentality or political subdivision thereof.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower (or, from the Availability Date, the Parent) or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A., as its prime rate in effect at its office located at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

 

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

 

“Rating Level Change” means a change in the Moody’s Rating or S&P Rating (other than as a result of a change in the rating system of such rating agency) that results in a change from one Rating Level Period to another, which Rating Level Change shall be effective on the date the relevant change in such rating is first announced by Moody’s or S&P, as the case may be.

 

“Rating Level Period” means a Rating Level 1 Period, a Rating Level 2 Period, a Rating Level 3 Period, a Rating Level 4 Period or a Rating Level 5 Period; and:

 

(a)           “Rating Level 1 Period” means a period during which the S&P Rating is at or above AA+ or the Moody’s Rating is at or above Aa1;

 

(b)           “Rating Level 2 Period” means a period that is not a Rating Level 1 Period during which the S&P Rating is at or above AA or the Moody’s Rating is at or above Aa2;

 

(c)           “Rating Level 3 Period” means a period that is not a Rating Level 1 Period or a Rating Level 2 Period during which the S&P Rating is at or above AA- or the Moody’s Rating is at or above Aa3;

 

(d)           “Rating Level 4 Period” means a period that is not a Rating Level 1 Period, a Rating Level 2 Period or a Rating Level 3 Period during which the S&P Rating is at or above A+ or the Moody’s Rating is at or above A1; and

 

(e)           “Rating Level 5 Period” means a period that is not a Rating Level 1 Period, a Rating Level 2 Period, a Rating Level 3 Period or a Rating Level 4 Period;

 

provided that if the Moody’s Rating and the S&P Rating differ by more than one rating level, then the applicable Rating Level Period shall be one level lower than the Rating Level Period resulting from the application of the higher of such ratings (for which purpose Rating Level 1 Period is the highest Rating Level Period).

 

“Register” has the meaning assigned to such term in Section 9.04.

 

“Regulation D” and “Regulation U” means, respectively, Regulations D and U of the Board of Governors of the Federal Reserve System (or any successor), as the same may be amended or supplemented from time to time.

 

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

“Required Lenders” means, at any time, Lenders having Loan Exposures and unused Commitments representing more than 50% of the sum of the total Loan Exposures and unused Commitments at such time.

 

“Requirement of Law” means, as to any Person, any law, treaty or regulation, or any order of any Governmental Authority, that is applicable to or binding upon such Person or any of its Property or to which such Person or such Property is subject, and the certificate of incorporation, by-laws or other organizational or governing documents of such Person.

 

“S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto.

 

“S&P Rating” means at any time, the rating of Index Debt then most recently announced by S&P.

 

“SEC” means the Securities and Exchange Commission.

 

“Section 2.14(e) Certificate” has the meaning assigned to such term in Section 2.14(e).

 

“Senior Notes” has the meaning assigned to such term in the preamble to this Agreement.

 

“Significant Subsidiary” means, at any time, a Subsidiary that as of such time satisfies the requirements of Rule 1-02(w) of Regulation S-X of the SEC as in effect on the date of this Agreement.

 

“Signing Date” has the meaning assigned to such term in the preamble to this Agreement.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Subsidiary” means, with respect to any Person (the “parent”), any Person of which at least a majority of the outstanding shares of Voting Stock is at the time directly or indirectly owned or controlled by the parent, or by one or more Subsidiaries of the parent, or by the parent and one or more Subsidiaries.  Unless the context requires otherwise, “Subsidiary” shall refer to (i) prior to the Availability Date, a Subsidiary of the Company and (ii) from the Availability Date, a Subsidiary of the Parent.

 

“Subsidiary Guarantor” has the meaning assigned to such term in Section 10.03.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

 

“Total Debt” means, at any time and without duplication, the then aggregate outstanding principal amount of all Indebtedness (other than Indebtedness specified in clause (g) of the definition thereof) of the Credit Group at such time, plus the aggregate principal amount then outstanding under Permitted Securitizations, all determined on a consolidated basis in accordance with GAAP.

 

“Total Debt to Capitalization Ratio” means at any time, the ratio, expressed as a percentage, of (a) Total Debt to (b) Capitalization.

 

“Transactions” means, collectively, (a) the execution, delivery and performance by the Company and Parent of the Merger Agreement and the consummation of the Merger and the other transactions contemplated thereby, (b) the execution, delivery and performance by the Credit Parties of the Loan Documents and loan documentation with respect to the other Credit Facilities, (c) the issuance of the Senior Notes, (d) the use of the proceeds of any of the foregoing or of any permanent financing entered into to finance the Merger or refinance the Credit Facilities and (e) the payment of fees in connection with the foregoing.

 

“Type,” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“United States” and “United States Person” have the meaning specified in Section 7701 of the Code.

 

“Voting Stock” means Equity Interests in a Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors, or persons exercising similar functions, of such Person.

 

“Wholly Owned Subsidiary” means with respect to any Person, any Subsidiary of such Person, 100% of the Voting Stock of which (other than directors’ qualifying shares or other shares held to satisfy legal or regulatory requirements), at the time of any determination, is owned by such Person, or by one or more Wholly Owned Subsidiaries of such Person, or such Person and one or more Wholly Owned Subsidiaries of such Person.

 

Section 1.02.  Types of Borrowings.  Borrowings are classified for purposes of this Agreement by reference to the Type of Loans comprising such Borrowing (e.g., a “Eurodollar Borrowing” is a Borrowing comprised of Eurodollar Loans).

 

Section 1.03.  Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

Section 1.04.  Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.