Exhibit 10.1
J.P.Morgan
J.P. MORGAN SECURITIES
INC.
270 Park Avenue
New York, New York 10017
JPMORGAN CHASE BANK, N.A.
270 Park Avenue
New York, New York 10017
PERSONAL
AND CONFIDENTIAL
March 8, 2009
Merck &
Co., Inc.
One Merck
Drive
Whitehouse
Station, N. J. 08889−0100
Attention: Peter N.
Kellogg
Project Solar
Commitment Letter
Ladies and
Gentlemen:
Merck & Co., Inc. (“ Merck
,” “ you ” or the “ Company
”) has advised J.P. Morgan Securities Inc. (“
JPMorgan ”) and JPMorgan Chase Bank, N.A. (“
JPMorgan Chase Bank ”; together with JPMorgan, “
we ”, “ us ” or the “
Commitment Parties, ” each a “ Commitment
Party ”) that you intend to combine with
Schering−Plough Corporation (“ Saturn ”)
and consummate the other Transactions described in the introductory
paragraph of Exhibit A hereto. Capitalized terms used
but not defined herein are used with the meanings assigned to them
in said paragraph.
JPMorgan is pleased to advise you that it is
willing to act as the sole lead arranger and sole bookrunner for
the New Credit Facilities, and JPMorgan Chase Bank is pleased to
advise you of its commitment to provide the entire amount of the
New Credit Facilities. In addition, JPMorgan is pleased
to advise you that it is willing to arrange the Amendment and
JPMorgan Chase Bank is pleased to advise you (i) that it will vote
its loans and commitments under the Existing Credit Facility in
favor of the Amendment and (ii) of its commitment to either (A)
purchase and assume loans and commitments under the Existing Credit
Facility to the extent necessary to have the Amendment be approved
by the Majority Lenders (as defined in the Existing Credit
Facility) (the “ Amendment Commitment ”), or (B)
provide the entire amount of the Replacement Revolving Facility
(the “ Backstop Commitment ”). This
Commitment Letter and the Summaries of Terms and Conditions
attached as Exhibits A, B, C, D and E (the “ Term
Sheets ”) set forth the principal terms and conditions on
and subject to which JPMorgan Chase Bank is willing to make
available the Credit Facilities.
It is agreed that JPMorgan will act as the sole
lead arranger and sole bookrunner in respect of the New Credit
Facilities and any Replacement Revolving Facility (in
such capacities, the “ Lead Arranger ”), and
that JPMorgan Chase Bank will act as the sole administrative agent
in respect of the New Credit Facilities and any Replacement
Revolving Facility. You agree that, as a condition to
the commitments and agreements hereunder, no other agents,
co-agents or arrangers will be appointed, no other titles will be
awarded and no compensation (other than that expressly contemplated
by the Term Sheets and Fee Letter referred to below) will be paid
in connection with the Credit Facilities unless you and we shall so
agree.
We intend and reserve the right to syndicate the
Credit Facilities to a group of lenders (together with JPMorgan
Chase Bank, the “ Lenders ”) acting as arrangers
and committing to provide a portion of the Credit Facilities prior
to the effective date thereof (the “ Preliminary
Syndication ” and each such Lender committing during the
Preliminary Syndication, a “ Co-Arranger
”). The Lead Arranger intends to commence the
Preliminary Syndication promptly following the date
hereof. You acknowledge and agree that the Lead Arranger
will, in consultation with the Company, determine when the
Preliminary Syndication is completed. Following the
completion of the Preliminary Syndication, the Lead Arranger will
promptly commence efforts to arrange a syndicate of Lenders for the
Credit Facilities in a general syndication (the “ General
Syndication ” and, together with the Preliminary
Syndication, the “ Syndication ”, which term
shall, for the avoidance of doubt, include the management of the
amendment process for the Amended Revolving
Facility). You acknowledge and agree that the Lead
Arranger will, in consultation with the Company, determine when the
General Syndication is completed. During each
Syndication, the Lead Arranger will select the Co-Arrangers and
Lenders, as applicable, after consultation with the
Company. The Lead Arranger will, in consultation with
the Company, manage each Syndication, including determining the
timing of all offers to potential Lenders, any title of agent or
similar designations or roles awarded to any Lender and the
acceptance of commitments, the amounts offered and the compensation
provided to each Co-Arranger and Lender from the amounts to be paid
to the Lead Arranger pursuant to the terms of this Commitment
Letter and the Fee Letter. The Lead Arranger will, in
consultation with the Company, determine the final commitment
allocations for each Syndication (including the reallocation of a
portion of the commitments in respect of the Credit Facilities of
the Lead Arranger to the Co-Arrangers) and will notify the Company
of such determination. To assist with the General
Syndication, the Company agrees that it will use commercially
reasonable efforts to execute and deliver definitive documentation
with respect to the Credit Facilities (including any Amendment),
consistent with the terms set forth herein and in the applicable
Term Sheet and otherwise mutually acceptable to the Company and the
Lead Arranger, as soon as reasonably practicable following the date
hereof. We intend to commence efforts to secure the
necessary consents for the Amendment promptly following the date
hereof. If the Amendment is not executed and delivered
by the Majority Lenders and the Company prior to the launch of
General Syndication, the Amendment Commitment shall automatically
terminate and we intend to promptly thereafter commence syndication
of the Replacement Revolving Facility. If at any time
the Amendment is executed and delivered by the Majority Lenders and
the Company, the Backstop Commitment shall automatically
terminate.
You agree actively to assist us in completing a
Syndication satisfactory to us (including in obtaining affirmative
votes for the Amendment). Such assistance shall include
(a) your using commercially reasonable efforts to ensure that
the Syndication efforts benefit materially from the existing
banking relationships of the Company and, to the extent consistent
with the Merger Agreement, Saturn, (b) direct contact between
senior management and advisors of the Company and the proposed
Lenders, and using your commercially reasonable efforts consistent
with the Merger Agreement to cause direct contact between senior
management and advisors of Saturn and the proposed Lenders,
(c) assistance from the Company and using your commercially
reasonable efforts consistent with the Merger Agreement to cause
Saturn to assist in the preparation of a customary confidential
information memorandum and other marketing materials to be used in
connection with each Syndication (collectively, the “
Confidential Information Memorandum ”), including
using commercially reasonable efforts to complete the Confidential
Information Memorandum as soon as reasonably practicable following
the date hereof; and (d) the hosting of, with us and senior
management of the Company and using your commercially reasonable
efforts consistent with the Merger Agreement to cause senior
management of Saturn to participate in, one or more meetings of
prospective Lenders at times and locations mutually agreed
upon. Without limiting your obligations to assist with
Syndication efforts as set forth above, each Commitment Party
agrees that completion of the Syndication is not a condition to
their commitments hereunder.
In its capacity
as Lead Arranger, JPMorgan will have no responsibility other than
to arrange the Syndication as set forth herein and in no event
shall be subject to any fiduciary or other implied
duties. To assist us in the Syndication, you agree
promptly to, and to use your commercially reasonable efforts
consistent with the Merger Agreement to cause Saturn to, prepare
and provide to us all customary information with respect to the
Company and Saturn, as applicable, and their respective
subsidiaries, the Transactions and the other transactions
contemplated hereby, including all financial information and
projections (the “ Projections ”), as we may
reasonably request in connection with the arrangement and
syndication of the Credit Facilities. You also agree to
provide, prior to the Closing Date, a pro forma consolidated
balance sheet of the Credit Group for the twelve month period ended
as at the most recent fiscal quarter ended prior to the Closing
Date, adjusted to give effect to the consummation of the
Transactions and the financings contemplated hereby as if such
transactions had occurred on such date or on the first day of such
period, as applicable, prepared in accordance with
Regulation S-X and consistent in all material respects with
information previously provided by the Company. At our request, you
agree to assist, and use your commercially reasonable efforts
consistent with the Merger Agreement to cause Saturn to assist, in
the preparation of a version of the information package and
presentation consisting exclusively of information and
documentation that is either publicly available or not material
with respect to the Company, Saturn or their respective affiliates
and any of their respective securities for purposes of United
States federal and state securities laws (all such information and
documentation being “ Public Lender Information
”). Any information and documentation that is not
Public Lender Information is referred to herein as “
Private Lender Information ”. You further
agree that each document to be disseminated by us to any Lender in
connection with the Credit Facilities will, at the request of the
Lead Arranger, be identified by you as either (i) containing
Private Lender Information or (ii) containing solely Public Lender
Information. The Company acknowledges and agrees that
the following documents may be distributed to “public
side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Company, Saturn
or their respective affiliates or securities) (provided that the
Company has been afforded an opportunity to comply with applicable
Securities Exchange Commission disclosure
obligations): (a) drafts and final definitive
documentation with respect to the Credit Facilities; (b)
administrative materials prepared by us for prospective Lenders
(such as a lender meeting invitation, bank allocation, if any, and
funding and closing memoranda); and (c) notification of changes in
the terms of the Credit Facilities.
You hereby represent and covenant that (a) all
information other than the Projections and information of a general
economic or industry nature (the “ Information
”) that has been or will be made available to us by you or
any of your representatives (with respect to information relating
to Saturn and its affiliates, in each case to the best of the
Company’s knowledge) is or will be, when furnished, complete
and correct in all material respects and does not or will not, when
furnished, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the
circumstances under which such statements are made and (b) the
Projections that have been or will be made available to us by you
or any of your representatives have been or will be prepared in
good faith based upon reasonable assumptions at the time made and
at the time the related Projections are made available to us (it
being understood that projections are subject to uncertainties and
that no assurances can be given that any projections will be
realized). You understand that in arranging and
syndicating the Credit Facilities we may use and rely on the
Information and Projections without independent verification
thereof.
As consideration for the commitments and
agreements of the Commitment Parties hereunder, you agree to cause
to be paid the nonrefundable fees described in the Fee Letter dated
the date hereof and delivered herewith (the “ Fee
Letter ”).
Each Commitment Party’s commitments and
agreements hereunder are subject to:
(a) there not having been a Material Adverse
Change. “ 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, a 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 date hereof), (ii) the Mercury
Disclosure Letter (as defined in the Merger Agreement and as in
effect on the date hereof) or (iii) the annual report on Form 10-K
for the Company or Saturn 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 a Material Adverse Effect shall
have occurred under this clause (a), or (b) since the date hereof,
there has occurred any Event or Events that have had or would
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. “
Material Adverse Effect ” means a material adverse
effect on the business, financial condition or results of
operations of the Company and its subsidiaries and Saturn and its
subsidiaries, taken as a whole (a “ Material Adverse
Effect ”); provided that any effect resulting from
any of the following Events shall not be considered when
determining whether a 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 Saturn 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 Material Adverse
Effect may be taken into account in determining whether a 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 Saturn (it being agreed that the facts and
circumstances giving rise to such change that are not otherwise
excluded from the definition of Material Adverse Effect may be
taken into account in determining whether a 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 Lead Arranger on or prior to the date hereof)
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 Lead
Arranger on or prior to the date hereof); 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 date hereof. 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 Company and its subsidiaries and Saturn 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 Company and Saturn, 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 a Material Adverse
Effect has occurred or is reasonably expected to occur;
(b) such Commitment Party’s satisfaction
that prior to completion of a “Successful Syndication”
(as such term is defined in the Fee Letter) of the Credit
Facilities there shall be no competing offering, placement or
arrangement of any debt securities or bank financing (other than
the Notes, Permitted CP, other indebtedness incurred in the
ordinary course of business and which does not interfere with the
syndication of any Credit Facility, indebtedness permitted to be
incurred by Saturn pursuant to the Merger Agreement as in effect on
the date hereof and other financing agreed to by the Lead Arranger)
by or on behalf of the Company, Saturn or any of their respective
affiliates;
(c) the closing of the Credit Facilities on or
before December 8, 2009 or, subject to the provisions of the Merger
Agreement, such later date (not later than March 8, 2010) to which
the “End Date” is extended in accordance with the terms
of the Merger Agreement as in effect on the date hereof (the
“ Outside Closing Date ”); and
(d) the other conditions expressly set
forth in the Term Sheets.
There shall be no conditions to closing and
funding not expressly set forth herein (including the Term
Sheets).
You agree (a) to indemnify and hold
harmless the Commitment Parties, their affiliates and their
respective officers, directors, employees, advisors and agents
(each, an “indemnified person”) from and against any
and all losses, claims, damages and liabilities to which any such
indemnified person may become subject arising out of or in
connection with this Commitment Letter, the Credit Facilities, the
use of the proceeds thereof, the Transactions or any related
transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any
indemnified person is a party thereto, and to reimburse each
indemnified person upon demand for any legal or other expenses
incurred in connection with investigating or defending any of the
foregoing; provided that the foregoing indemnity will not,
as to any indemnified person, apply to (i) losses, claims, damages,
liabilities or related expenses to the extent (x) they are found by
a final, non-appealable judgment of a court to arise from the
willful misconduct or gross negligence of such indemnified person,
(y) they arise out of any claim, litigation, investigation or
proceeding that does not involve an act or omission (or alleged act
or omission) of you or any of your affiliates and that is brought
by an indemnified person against any other indemnified person or
(z) they arise from a material breach by such indemnified person of
its express obligations under the Commitment Letter, or (ii) any
settlement entered into by such indemnified person without your
written consent (such consent not to be unreasonably withheld or
delayed) and (b) whether or not the Closing Date shall have
occurred, to reimburse each Commitment Party and its affiliates on
demand for all reasonable documented out-of-pocket expenses
(including due diligence expenses, syndication expenses,
consultant’s fees and expenses, travel expenses, and
reasonable fees, charges and disbursements of Davis Polk &
Wardwell) incurred in connection with the Credit Facilities and any
related documentation (including this Commitment Letter and the
definitive financing documentation) or the administration,
amendment, modification or waiver thereof. No
indemnified person shall be liable for any damages arising from the
use by others of Information or other materials obtained through
electronic, telecommunications or other information transmission
systems or for any special, indirect, consequential or punitive
damages in connection with the Credit Facilities, except to the
extent any such damages are found by a final, non-appealable
judgment of a court to arise from the gross negligence or willful
misconduct of such indemnified person.
You acknowledge that each Commitment Party and
its affiliates (the term “Commitment Party” as used
below in this paragraph being understood to include such
affiliates) may be providing debt financing, equity capital or
other services (including financial advisory services) to other
companies in respect of which you may have conflicting interests
regarding the transactions described herein and
otherwise. No Commitment Party will use confidential
information obtained from you by virtue of the transactions
contemplated hereby or its other relationships with you in
connection with the performance by such Commitment Party of
services for other companies, and no Commitment Party will furnish
any such information to other companies. You also
acknowledge that no Commitment Party has any obligation to use in
connection with the transactions contemplated hereby, or to furnish
to you, confidential information obtained from other
companies. You further acknowledge that JPMorgan is a
full service securities firm and JPMorgan may from time to time
effect transactions, for its own or its affiliates’ account
or the account of customers, and hold positions in loans,
securities or options on loans or securities of the Company and its
affiliates and of other companies that may be the subject of the
transactions contemplated by this Commitment Letter. You
further acknowledge and agree that (a) no fiduciary, advisory or
agency relationship between you and the Commitment Parties is
intended to be or has been created in respect of any of the
transactions contemplated by this Commitment Letter, irrespective
of whether any Commitment Party has advised or is advising you on
other matters, (b) the Commitment Parties on the one hand, and you,
on the other hand, have an arms-length business relationship that
does not directly or indirectly give rise to, nor do you rely on,
any fiduciary duty on the part of any Commitment Party, (c) you are
capable of evaluating and understanding, and you understand and
accept, the terms, risks and conditions of the transactions
contemplated by this Commitment Letter, (d) you have been advised
that the Commitment Parties are engaged in a broad range of
transactions that may involve interests that differ from your
interests and that no Commitment Party has any obligation to
disclose such interests and transactions to you by virtue of any
fiduciary, advisory or agency relationship, and (e) you waive, to
the fullest extent permitted by law, any claims you may have
against the Commitment Parties for breach of fiduciary duty or
alleged breach of fiduciary duty and agree that the Commitment
Parties shall have no liability (whether direct or indirect) to you
in respect of such a fiduciary duty claim, or to any person
asserting a fiduciary duty claim on behalf of or in right of you,
including your stockholders, employees or
creditors. Additionally, you acknowledge and agree that
the Commitment Parties are not advising you as to any legal, tax,
investment, accounting or regulatory matters in any
jurisdiction. You shall consult with your own advisors
concerning such matters and shall be responsible for making your
own independent investigation and appraisal of the transactions
contemplated hereby, and the Commitment Parties shall have no
responsibility or liability to you with respect
thereto. Any review by the Commitment Parties of the
Company, Saturn, the Transactions, the other transactions
contemplated hereby, or other matters relating to such transactions
will be performed solely for the benefit of the Commitment Parties
and shall not be on behalf of you or any of your
affiliates.
Each Commitment Party may employ the services of
its affiliates in providing certain services hereunder and, in
connection with the provision of such services, may exchange with
such affiliates information concerning you and the other companies
that may be the subject of the transactions contemplated by this
Commitment Letter and, to the extent so employed, such affiliates
shall be entitled to the benefits afforded such Commitment Party
hereunder.
This Commitment Letter shall not be assignable
by you without the prior written consent of each Commitment Party
(and any purported assignment without such consent shall be null
and void), is intended to be solely for the benefit of the parties
hereto and is not intended to confer any benefits upon, or create
any rights in favor of, any person other than the parties hereto
and the indemnified persons. The Commitment Parties may,
in consultation with the Company, assign their commitments
hereunder, in whole or in part, to Lenders, as determined by the
Lead Arranger and, in each case, any such assignment will relieve
such Commitment Party of its obligations set forth herein or
otherwise to commit to fund such assigned commitment amount of the
Credit Facilities, subject to the terms and conditions of this
Commitment Letter. In connection with any such
assignments, you agree, at the request of the Commitment Parties,
that you will enter into appropriate documentation (including, if
requested by the Commitment Parties or by you, joinder agreements
under which the Co-Arrangers become parties to this Commitment
Letter and extend commitments directly to you) containing such
provisions relating to the allocation of titles, rights and
responsibilities in connection with the Preliminary Syndication and
compensation as the Lead Arranger may request (but which will not
add any conditions to the availability of the Credit Facilities or
change the terms of the Credit Facilities or the compensation
payable by you in connection therewith as set forth in the
Commitment Letter and the Fee Letter). Such
documentation will include a provision allowing the Company, at the
Company’s expense, to replace any Co-Arranger or Lender that
has (or is controlled by any person or entity that has) been deemed
insolvent or become subject to a bankruptcy, insolvency,
receivership, conservatorship or other similar proceeding, or that
refuses to execute, or materially delays in executing, definitive
documentation agreed with the Lead Arranger with respect to the
Credit Facilities, with another financial institution selected by
the Company in consultation with the Lead Arranger. The
Commitment Parties may not assign any of their rights under the Fee
Letter without the prior consent of the Company. This
Commitment Letter may not be amended or waived except by an
instrument in writing signed by you and each Commitment
Party. This Commitment Letter may be executed in any
number of counterparts, each of which shall be an original, and all
of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of
this Commitment Letter by facsimile transmission shall be effective
as delivery of a manually executed counterpart
hereof. This Commitment Letter and the Fee Letter are
the only agreements that have been entered into among us with
respect to the Credit Facilities and set forth the entire
understanding of the parties with respect thereto. This
Commitment Letter shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York;
provided , however , that with respect to whether a
Material Adverse Effect shall have occurred (as described in the
ninth paragraph of this Commitment Letter) or claims related
thereto, such matters shall be governed by and construed in
accordance with the laws of the State of New Jersey.
Notices to the Company provided for herein and
in the Fee Letter shall be delivered by hand, by overnight courier
service, mailed by certified or registered mail, or sent by
facsimile or by email to it at One Merck Drive, PO Box 100,
Whitehouse Station, NJ 08889-0100 Attention: Mark McDonough, VP
& Treasurer ( mark_mcdonough@Merck.com , fax: (908) 735
1275) and Jon Filderman, counsel ( jon_filderman@Merck.com ,
fax: (908) 735 1216).
This Commitment Letter is delivered to you on
the understanding that neither this Commitment Letter, the Term
Sheets or the Fee Letter nor any of their terms or substance shall
be disclosed, directly or indirectly, to any other person
(including, without limitation, other potential providers or
arrangers of financing) except (a) to your officers, agents
and advisors and, on a confidential basis, those of Saturn, who are
directly involved in the consideration of this matter (except that
Fee Letter may not be disclosed to the officers, agents and
advisors of Saturn) or (b) as may be compelled in a judicial
or administrative proceeding or as otherwise required by law (in
which case you agree to inform us promptly thereof);
provided , that the foregoing restrictions shall cease to
apply (except in respect of the Fee Letter and its terms and
substance) after this Commitment Letter has been accepted by
you.
Each of the Commitment Parties hereby notifies
you that, pursuant to the requirements of the USA Patriot Act,
Title III of Pub. L. 107-56 (signed into law on October 26, 2001)
(the “ Patriot Act ”), it is required to obtain,
verify and record information that identifies the Company and each
Guarantor (as defined in the Term Sheets), which information
includes names and addresses and other information that will allow
such Lender to identify the Company and each Guarantor in
accordance with the Patriot Act.
The compensation, reimbursement,
indemnification, syndication and confidentiality provisions
contained herein and in the Fee Letter and any other provision
herein or therein which by its terms expressly survives the
termination of this Commitment Letter shall remain in full force
and effect regardless of whether definitive financing documentation
shall be executed and delivered and notwithstanding the termination
of this Commitment Letter or the commitments hereunder.
If the foregoing correctly sets forth our
agreement, please indicate your acceptance of the terms hereof and
of the Term Sheets and the Fee Letter by returning to us executed
counterparts hereof and of the Fee Letter (together with fees
payable pursuant to the Fee Letter upon acceptance hereof) not
later than 11:59 p.m., New York City time, on March 8,
2009. This offer will automatically expire at such time
if we have not received such executed counterparts (and such fee)
in accordance with the preceding sentence.
[Remainder of page intentionally
left blank]
We are pleased to have been given the
opportunity to assist you in connection with this important
financing.
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Very truly
yours,
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J.P. MORGAN
SECURITIES INC.
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By:
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/s/
Thomas D. Cassin
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Name:
Thomas D. Cassin
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Title: Managing
Director
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JPMORGAN CHASE
BANK, N.A.
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By:
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/s/ Dawn
L. LeeLun
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Name: Dawn L. LeeLun
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Title: Executive
Director
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Accepted
and agreed to as of
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the date
first written above by:
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By:
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/s/
Peter N.
Kellogg
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Name: Peter N. Kellogg
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Title: Executive Vice
President and
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EXHIBIT A
PROJECT SOLAR
Summary of the Incremental
Facility
MERCK &
CO., INC. (the “ Company ”) intends to combine
with (the “ Merger ”) SCHERING−PLOUGH
CORPORATION (“ Saturn ”) pursuant to that
certain Agreement and Plan of Merger, dated as of March 8, 2009
(the “ Merger Agreement ”). In
connection therewith: (a) the Company, Saturn and two newly formed
wholly-owned subsidiaries of Saturn will enter into the Merger
Agreement pursuant to which (i) a wholly-owned subsidiary of Saturn
will merge into Saturn and another wholly-owned subsidiary of
Saturn will merge into the Company so that the Company, as the
surviving entity, will be a direct wholly-owned subsidiary of
Saturn, (ii) each share of common stock of Saturn will be converted
into the right to receive cash and new common stock of Saturn and
(iii) each share of common stock of the Company will be converted
into one share of common stock of Saturn; (b) the Company will
either (i) amend or amend and restate its existing $1,500,000,000
Amended and Restated Five-Year Credit Agreement dated as of April
12, 2006 among Company, as borrower, Citicorp USA, Inc., as
Administrative Agent, and the other lenders and agents party
thereto (as amended prior to the date of the Commitment Letter, the
“ Existing Credit Facility ”), such amendment or
amendment and restatement having the terms set forth in Exhibit B
hereto (the “ Amendment ”; the Existing Credit
Facility as amended or amended and restated by the Amendment, the
“ Amended Revolving Facility ”), or (ii) enter
into a new $1,500,000,000 revolving credit facility having terms
substantially similar to the Incremental Facility (the “
Replacement Revolving Facility ”), (c) the Company
will either (i) terminate its existing Letter of Credit
Reimbursement Agreement, dated as of March 27, 2008 (the “
Existing LC Facility ”), among Company, as obligor and
The Royal Bank of Scotland PLC, as Issuing Bank, and deposit
replacement cash collateral to back-stop its funding obligations
under the Settlement Agreement (as defined therein) or (ii) amend
the Existing LC Facility in a manner reasonably acceptable to the
Lead Arranger so as to permit such facility to remain outstanding
following the consummation of the Transactions, (d) the Company or
Saturn will enter into a new $1,000,000,000 senior unsecured
revolving credit facility (the “ Incremental Facility
”) having the terms set forth in this Exhibit A; (e) to the
extent outstanding on the date of consummation of the Merger, each
of (i) Saturn’s existing unsecured term loan facility in the
original amount of €1,250,000,000 (the “ Existing
Saturn Term Loan ”) and revolving credit facilities in
the amount of $2,000,000,000 (the “ Existing Saturn
Revolving Facility ,” and, together with the Amended
Revolving Facility or the Replacement Revolving Facility, as
applicable, the Incremental Facility and the Asset Sale Facility,
the “ Surviving Revolving Facilities ”), (ii)
commercial paper issued by the Company or Saturn in the ordinary
course of business or to provide financing for
the Merger (and commercial paper issued to refinance
such outstanding commercial paper) (“ Permitted CP
”), (iii) the Existing LC Facility, as amended, and (iv) the
existing bonds, notes and other debt issued by the Company and
Saturn (collectively, clauses (i) through (iv), the “
Existing Debt ”) will remain outstanding and in effect
without amendment after giving effect to the Merger; (f) the
Company or Saturn 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 “ Notes
”) in a public offering or Rule 144A private placement or
(ii) if the Company or Saturn, as the case may be, is unable to
issue the full amount of the Notes at or prior to the time the
Merger is consummated, a senior unsecured bridge term loan facility
(the “ Bridge Loan Facility ”) having the terms
set forth in Exhibit C; and (g) the Company or Saturn will enter
into a new $3,000,000,000 senior unsecured asset sale bridge
revolving credit facility (“ Asset Sale Facility
”) having the terms set forth in Exhibit D. The
Incremental Facility, 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 Revolving Facility or the Replacement Revolving
Facility, as applicable, are sometimes herein referred to as the
“ Credit Facilities ”. In lieu of
drawing on the Surviving Revolving Facilities to finance the Merger
and to fund working capital in the ordinary course of business, the
Company and/or Saturn may issue Permitted CP. The
foregoing transactions and the other transactions contemplated by
the Commitment Letter or the Exhibits attached thereto and any
permanent financing entered into to finance the Merger or refinance
the Credit Facilities are referred to herein collectively as the
“ Transactions ”. Terms not otherwise
defined herein have the meaning specified in the Commitment Letter
to which this Exhibit A is attached. Set forth below is
a summary of the material terms and conditions for the Incremental
Facility.
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Either the
Company or Saturn, as agreed between the Borrower and the Lead
Arranger (the “ Borrower ”).
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Whichever of
the Company or Saturn is not the Borrower (the “
Guarantor ” and together with the Borrower, the
“ Credit Parties ”) will guarantee (the “
Guarantee ”) the obligations of the Borrower under the
Incremental Facility. In addition, each guarantor of any
other Credit Facility and of the Notes shall guarantee the
Incremental Facility.
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“
Credit Group ” shall mean (a) prior to the Closing
Date, the Company and its subsidiaries and (b) on and after the
Closing Date, the Credit Parties and their respective subsidiaries
(after giving effect to the Merger).
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The proceeds of
the Incremental Facility may be used for general corporate
purposes, including, without limitation, to fund the Transactions
(including paying Transaction expenses in connection with the
Merger) and backstop Permitted CP.
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Sole Lead
Arranger
and Sole Bookrunner:
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J.P. Morgan
Securities Inc. (in such capacity, the “ Lead Arranger
”).
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JPMorgan Chase
Bank, N.A. (in such capacity, the “ Administrative
Agent ”).
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Incremental
Facility Lenders:
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A syndicate of
banks, financial institutions and other entities, including
JPMorgan Chase Bank, N.A., selected by the Lead Arranger in
accordance with the Commitment Letter (each, an “
Incremental Facility Lender ” and, collectively, the
“ Incremental Facility Lenders ”).
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Amount of
Incremental Facility:
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Up to $1.0
billion 364-day senior unsecured revolving credit facility (the
“ Incremental Facility ”; the commitments
thereunder, the “ Incremental Facility Commitments
”; the loans thereunder, the “ Incremental Facility
Loans ”).
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The date, on or
before the Outside Closing Date, on which the Merger is
consummated; provided that all of the conditions precedent
set forth under the heading “Conditions Precedent to Closing
Date” have been satisfied (the “ Closing Date
”).
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Amounts
available under the Incremental Facility may be borrowed, repaid
and reborrowed on and after the Closing Date until the Incremental
Facility Maturity Date (as defined below); provided that all
of the conditions precedent set forth under the heading
“Conditions Precedent to the Closing Date” shall have
been satisfied on the Closing Date and “Conditions Precedent
t
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